From the Sydney Morning Herald:
DIRECT property returns continue to tumble across Europe, and rental contraction in the office and industrial sectors in Britain is adding to property market woes, the Investment Property Databank survey has found.
In its British monthly results to last month IPD's index showed all property total returns fell to minus 3.8 per cent.
Last month's results were more negative than those for last December, making it the weakest month on record. Commercial property capital values in Britain have plummeted by the largest monthly figure in IPD's 22-year history, minus 4.3 per cent.
This is more bad news for the Australian real estate investment trusts with exposure to British and European property markets.
Jonathan Kriska, an analyst at the financial services company Patersons, said the latest International Monetary Fund report forecast global growth to slow from 5 per cent last year to 2 per cent next year.
He said several Australian REITs had large exposures to European property.
Sunday, November 30, 2008
Plunging Interest Rates
From the Washington Post:
Several readers complained that policy changes by Fannie Mae and Freddie Mac are limiting investors' ability to buy more of the surplus housing inventory.
Richard Moroscak Jr., a vice president with OlympiaWest mortgage in Lansdowne, wrote: "I get a call once a day from borrowers who are interested in purchasing an investment property. They have 780 credit scores, full documentation, cash for a 30 percent down payment or more, great assets besides real estate, etc. In other words, they're the perfect borrower in most lenders' eyes. But if they own more than four properties they do not qualify to purchase another investment property. Investors tend to own multiple properties.
"If they take a short-term hard-money loan, which is insane, they generally cannot refinance out of them. The result is foreclosure unless they find another hard-money loan. Investors are on the prowl, but in my humble opinion, the market would stabilize much quicker if they actually had access to cash."
A column about the risks to consumers' deposits if someone they're doing business with files for bankruptcy drew hard-earned advice from one reader.
"This happened to me, and I should know better because I used to be a lawyer who did a lot of debtor-creditor and bankruptcy work," said Ellen Paul of Chevy Chase.
"I wrote to my state legislators to suggest legislation that would require companies that take advance payment or deposits to be bonded for an amount reflecting the amount of deposits or pre-payments they held over the previous year. That way, we unsecured creditors would actually get our money back."
Several readers complained that policy changes by Fannie Mae and Freddie Mac are limiting investors' ability to buy more of the surplus housing inventory.
Richard Moroscak Jr., a vice president with OlympiaWest mortgage in Lansdowne, wrote: "I get a call once a day from borrowers who are interested in purchasing an investment property. They have 780 credit scores, full documentation, cash for a 30 percent down payment or more, great assets besides real estate, etc. In other words, they're the perfect borrower in most lenders' eyes. But if they own more than four properties they do not qualify to purchase another investment property. Investors tend to own multiple properties.
"If they take a short-term hard-money loan, which is insane, they generally cannot refinance out of them. The result is foreclosure unless they find another hard-money loan. Investors are on the prowl, but in my humble opinion, the market would stabilize much quicker if they actually had access to cash."
A column about the risks to consumers' deposits if someone they're doing business with files for bankruptcy drew hard-earned advice from one reader.
"This happened to me, and I should know better because I used to be a lawyer who did a lot of debtor-creditor and bankruptcy work," said Ellen Paul of Chevy Chase.
"I wrote to my state legislators to suggest legislation that would require companies that take advance payment or deposits to be bonded for an amount reflecting the amount of deposits or pre-payments they held over the previous year. That way, we unsecured creditors would actually get our money back."
Friday, September 19, 2008
Commercial Property Recovery In UK
LONDON (Reuters) - Property fund managers and analysts have written off all hope of a British commercial real estate recovery in the next year-and-a-half, consensus data showed on Friday.
According to the quarterly survey by Investment Property Forum (IPF), property experts have slashed their expectations for the UK market in the last three months and now project an average 15.7 percent drop in capital values in 2008 and a 5.5 percent capital loss in 2009.
Compared with the previous quarter's report, forecast total returns -- which combine rental income and capital growth -- fell by more than half to minus 10.6 percent for 2008 and sank to broadly flat from 4.7 percent for 2009.
Less pessimistic was the expert prognosis for 2010, where total return forecasts slipped only marginally to 8 percent.
"This is clearly where hope of recovery lies, both in the commercial property markets and the wider economy," IPF said in a note.
Capital growth forecasts for both 2008 and 2009 were deep in the red for all property sectors -- office, industrial, and retail.
According to the quarterly survey by Investment Property Forum (IPF), property experts have slashed their expectations for the UK market in the last three months and now project an average 15.7 percent drop in capital values in 2008 and a 5.5 percent capital loss in 2009.
Compared with the previous quarter's report, forecast total returns -- which combine rental income and capital growth -- fell by more than half to minus 10.6 percent for 2008 and sank to broadly flat from 4.7 percent for 2009.
Less pessimistic was the expert prognosis for 2010, where total return forecasts slipped only marginally to 8 percent.
"This is clearly where hope of recovery lies, both in the commercial property markets and the wider economy," IPF said in a note.
Capital growth forecasts for both 2008 and 2009 were deep in the red for all property sectors -- office, industrial, and retail.
Buying Investment Property
From the American Chronicle:
The barrage of negative reports about the economic outlook in the UK may have caused many consumers to feel nervous about the market. But surprisingly a recent survey from Nationwide revealed that the gloom doesn´t stop them from becoming more hopeful about purchasing a property. In fact professional property investors are actively snapping up investment properties at distressed sale prices.
The continued interest in buying bricks and mortar stems from the fact that property is one investment that holds many benefits. For a start, property has always been one of the best-performing investments in the UK. But apart from that, here are the other major reasons why property remains on the public´s radar:
Security is one of the major reasons why people purchase properties. Provided that they are up to date with their mortgage obligations, they can stay in their property for as long as they like. The fact that banks readily lend money to people to invest in property implies that the institutions perceive the investment to be one of the most secure and stable asset there is. Despite what doomsayers are trumpeting, banks are aware that the underlying pressures experienced by the market in terms of supply and demand signify that property prices will go on increasing, providing investors with long term security.
Investing in property offers stability compared to other forms of investment. While share prices can cave in in a matter of few hours, property prices are unlikely to move more than 2% each month. Add to that the fact that the housing market is strengthened by the fact that property is a necessity and people will always need somewhere to live. If prices spiral downwards, there will be fewer people who will opt to sell. Therefore supply immediately decreases and demand causes prices to become stable. You must make sure that you are buying in areas with good rental demand and stable prices.
Property allows you to add value. Property allows you to come up with all kinds of improvements that will help to enhance your asset´s value. Plus, when the property you bought goes up in value and you will want to have more home improvements in the future or if you want to make a major purchase such as a car, you can have your mortgage extended instead of having to apply for other more expensive types of loans.
Property allows for the release of capital without you having to give up your asset. If you choose to collect your profits you do not have to sell your property. You can instead remortgage it and have the capital released. The strategy allows you to keep your property earning income and growth.
With all the advantages that buying investment property provides, it becomes all too obvious that property is indeed a genuinely appealing proposition. But there is still a need for you to perform necessary research and due diligence to determine the right investment property for you at the right price and in the right location.
The barrage of negative reports about the economic outlook in the UK may have caused many consumers to feel nervous about the market. But surprisingly a recent survey from Nationwide revealed that the gloom doesn´t stop them from becoming more hopeful about purchasing a property. In fact professional property investors are actively snapping up investment properties at distressed sale prices.
The continued interest in buying bricks and mortar stems from the fact that property is one investment that holds many benefits. For a start, property has always been one of the best-performing investments in the UK. But apart from that, here are the other major reasons why property remains on the public´s radar:
Security is one of the major reasons why people purchase properties. Provided that they are up to date with their mortgage obligations, they can stay in their property for as long as they like. The fact that banks readily lend money to people to invest in property implies that the institutions perceive the investment to be one of the most secure and stable asset there is. Despite what doomsayers are trumpeting, banks are aware that the underlying pressures experienced by the market in terms of supply and demand signify that property prices will go on increasing, providing investors with long term security.
Investing in property offers stability compared to other forms of investment. While share prices can cave in in a matter of few hours, property prices are unlikely to move more than 2% each month. Add to that the fact that the housing market is strengthened by the fact that property is a necessity and people will always need somewhere to live. If prices spiral downwards, there will be fewer people who will opt to sell. Therefore supply immediately decreases and demand causes prices to become stable. You must make sure that you are buying in areas with good rental demand and stable prices.
Property allows you to add value. Property allows you to come up with all kinds of improvements that will help to enhance your asset´s value. Plus, when the property you bought goes up in value and you will want to have more home improvements in the future or if you want to make a major purchase such as a car, you can have your mortgage extended instead of having to apply for other more expensive types of loans.
Property allows for the release of capital without you having to give up your asset. If you choose to collect your profits you do not have to sell your property. You can instead remortgage it and have the capital released. The strategy allows you to keep your property earning income and growth.
With all the advantages that buying investment property provides, it becomes all too obvious that property is indeed a genuinely appealing proposition. But there is still a need for you to perform necessary research and due diligence to determine the right investment property for you at the right price and in the right location.
Getting Started With Investment Property
Report:
How do I start being a landlord? Whether you have a small apartment in your basement or own a large high-rise, as a landlord you are subject to rules and regulations that define your responsibilities and what you can and cannot do.
Since each province and territory has its own landlord and tenant legislation, make sure you know the rules and regulations that apply to your province (there are some surprising differences). The collection of Provincial and Territorial Fact Sheets is great reference material to get you started. You can also look for books, booklets, and guides published for new landlords (since legislation can change, make sure that the publication is up to date).
When it comes to buying real estate in Victoria BC we can help you with just about all the information you need. Having said this, it is advisable to get some expert legal advice. This is a specialized area of law, so make sure you consult a specialist. Further you should also talk to your accountant to see how it effects your unique financial situation.
Thursday, May 22, 2008
How To Be A Confident Kisser
http://lukeford.net/ I didn't have my first French kiss until I was 16, but when I met this 14 yo girl, she opened up a whole new world to me. I've never been kissed better than I was that Saturday night at Dr. Zane Kime's home.
Investment Property Vs Inflation
Reuters says:
Based on the relatively transparent British market, commercial property has generated an inflation-adjusted return of more than 5 percent a year since 1970, according to data from Investment Property Databank (IPD).
But much like gold -- another classic inflation hedge -- real estate's relationship with inflation can fluctuate, not least if economic activity slows and corporate tenants and rental growth come under pressure.
"Because property returns are not linked to inflation in the short-term there is no rush to move back into property just because we have inflation," said Rupert Clarke, chief executive of Hermes Real Estate, which helps to manage the retirement savings of
"Stagflation" is a term coined in the
The ramifications for property are complex.
"When we've had inflation-only in the economy, real estate has provided an inflation hedge," she said.
The question is, which kind of inflation?
Commercial property investments are better placed to generate consistent above-inflation returns when price pressures are a symptom of a healthy economy and result from higher spending and income.
LEASES
In the long-term, the rent commercial property would be expected to attract on the open market at any given time -- the Estimated Rental Value -- is highly correlated with inflation.
"All the analyses show that over the long-term property is a good inflation hedge," Hermes's Clarke said.
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