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The bulk of the increase was in Japan, where aggressive monetary stimulus has stoked the economy and generated confidence that the country might finally win its long battle with deflation. Investment in Japanese commercial real estate totaled US$20.8 billion in the first half, up 50% from a year earlier. Of that, US$19 billion came from Japanese investors, including US$10.9 billion from real-estate investment trusts that began buying late last year following the election of Prime Minister Shinzo Abe.
Can Japan keep it up? Will a sales-tax hike derail their progress? Can they overcome the demographic problems of an aging population not being replaced with a high enough birth and/or immigration rate?
Read the source article … https://stream.wsj.com/story/latest-headlines/SS-2-63399/SS-2-321357/
- Cash for Homes: Policy Implications of an Investor-Led Housing Recovery | RISMedia
… irresponsible investors can…destroy them [communities] by allowing properties to sit empty, declining to bring rental properties up to code, and neglecting tenants’ needs in instances where the home is occupied. Additionally, investors that buy large quantities of properties in a single area can cause prices to overheat and increase market volatility. Conversely, if institutional investors following a set business plan sell numerous properties in the same time frame, prices in those neighborhoods could decline again.
Deutsche Bank may soon begin selling securities backed by rental payments from properties owned by institutional investors. Such an innovation will propel this industry’s growth even more.
Institutional investors such as the Blackstone Group L.P. are also working with financial institutions to create new securities based on rental payments from investor-owned homes. If the market for these securities grows, institutional investors will be able to access more capital and buy more properties to convert to rental homes, which would fuel demand for investor-owned homes and may make it more lucrative for a mortgage holder to sell or foreclose on homeowners rather than keep them in their homes. These transactions would occur outside the reach of a regulatory structure that oversees mortgages, not cash purchases.
The cheaper the money, the more profit even in a tight market. So, don’t count the institutional investors out quite yet.
Read the source article … https://rismedia.com/2013-09-09/cash-for-homes-policy-implications-of-an-investor-led-housing-recovery/
India’s real estate collapsing:
NEW DELHI: Prices of homes in upscale South Delhi have dropped by 20 per cent-35 per cent over the last one year, with developers and cash-strapped investors offering big discounts to dispose off their assets in a slowing economy.
Till about six months ago, discounts on new homes in the area were being offering only by developers facing oversupply. But with the economic situation worsening, this category of sellers has expanded to include cash-strapped investors and businessmen who are keen to sell the high-end apartments they had picked up some years ago.
“Some people over leveraged themselves by buy multiple properties when the going was good. Now with the market slowing down, they are looking at exiting but are unable to find buyers,” said Sunil Bhandari, managing director of Royale Realtors India. “They have no option but to reduce their price expectations, hence profits.”
Read the source article … https://articles.economictimes.indiatimes.com/2013-09-10/news/41937957_1_south-delhi-defence-colony-crore
Most Chinese homebuyers are using cash to pay for expensive homes in the United States.
According to the National Association of Realtors, Chinese buyers made up 12 percent of the market of foreign homebuyers in the 12 months ending March 31. They shelled out a median $425,000, compared with the median of nearly $276,000 spent by other foreign homebuyers. Close to 70 percent of the transactions by Chinese buyers were all-cash.
Read the source article … https://www.bankrate.com/financing/mortgages/chinese-homebuyers-emerging/
- Dubai House Prices World-Beating, but Bubble Talk Grows – Middle East Real Time – WSJ
Jonathan Morris, Standard Chartered’s U.A.E. chief executive, said recently that everything looked fine at the moment. “Are we seeing an asset bubble in house prices?” he said. “The answer is today: no. We’re seeing a normal pricing dynamic happening. What we have is a demand-led price increase, demand-led because of the stronger growth, stronger jobs market here. The job market here is very strong at the moment so people are buying houses to live in, creating personal wealth, and that is a good thing.”
Is this time really different? An added layer of regulation does alter the landscape somewhat, of course, and the feverish pitch of the earlier bubble arguably hasn’t yet been reached. Only time will tell.
Read the source article … https://blogs.wsj.com/middleeast/2013/09/10/dubai-house-prices-world-beating-but-bubble-talk-grows/