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We Have Got It Starting To Show Its Face

A report from Mortgage Broker News in Canada. “Readers will be all too familiar with the pitch from realtors who specialize in pre-construction condo sales: Put down your deposit, sit back and watch as that piece of paper appreciates faster than any completed condo unit in the city. But those days are over. Pre-construction investors considering this classic, once tidy speculation strategy need to understand that assigning a condo unit to a second buyer is no longer the slam dunk it once was.”

“The reason is simple enough. ‘The bank’s not going to finance it at the appraised value,’ says Anthony Venuto of InTouch Mortgage Solutions. ‘They’re going to finance at the original purchase price – and not a dollar more. They began asking, ‘What exactly is the collateral here? The condo corporation has not registered. All you really have here is a piece of paper, and our mortgage is really not registered against anything, so we can’t do these anymore,’ Trail says.”

“Lending on assignments becomes even less attractive in an environment where condo inventory is increasing and values are softening, a novel situation most condo investors didn’t see coming. ‘Is it going to last two weeks? Is it going to last six months? Is it going to last two years? We don’t know,’ Trail says. ‘All of a sudden, we have an asset class that’s no longer appreciating. The assignment sale problem is just going to increase if the values continue to come down.'”

From CBC News in Canada. “Condo owners at Fort McMurray’s Hillview Park complex are finally moving back home, four years after they were burned out in the Horse River wildfire. The homeowners say they’re happy to be home, but the threat of bankruptcy still looms and there are some issues with the homes. Robert Coppard bought his Hillview Park unit in 2008. Eric Rosina has the keys to his unit but isn’t in his home yet. His property doesn’t have a dishwasher, refrigerator or stove. ‘I consider myself extremely fortunate to be in the position I’m in right now, but I’m teetering,’ he said. ‘If things don’t start improving … I’ll probably be another one to hand in the keys.'”

“Shelley Paulin moved back home and, in an emotional interview, said she’s grateful to be home. ‘I’m definitely going to struggle,’ she said. ‘I look across the street and a next-door neighbour that actually babysat me as a kid, he’s not coming back home. He walked away from his place.'”

From The Scotsman. “The plans from the Government could see Airbnb owners who operate without a licence fined up to £50,000 and would see safety requirements brought into line with the rules around private tenancies. Following a poll of 1,000 ASSC members, one-in-three Airbnb operators said they faced become ‘unviable’ due to the plans, while half said they would leave the industry altogether. Of those, a third said they would leave their properties empty or convert them into private use if unable to operate them as Airbnbs.”

“ASSC chief executive Fiona Campbell said: ‘Our members are rightly concerned by the potential impact of this ill-timed and ham-fisted licensing scheme. At this time of uncertainty and chaos, the Scottish Government should pause, reflect, and further consider the negative consequences of further impediments to our sector doing what we do best.'”

From Arabian Business. “Out of the total 104.9 million sq ft of office stock in Dubai, nearly 25.2 million sq ft is vacant, with the volume of vacant stock gradually increasing over the last five years. The Dubai Market Update for Q3 also said that Dubai saw nearly 21,500 residential units come to market so far in 2020, bringing total residential stock to 571,500 units. There are over 10,500 units expected to be handed over in Q4, taking the total 2020 deliveries to 32,000 units – albeit significantly lower than the initial conservative forecast of 49,000 units at the beginning of the year.”

“The weakest performing apartment areas were Dubai Sports City (-20 percent), Dubailand (-18 percent), The Greens and Views (-15 percent), and JLT (-14 percent). The villa communities witnessing the sharpest year-on-year declines are Reem-Mira and The Villa in Dubailand (-21 percent) followed by The Springs and The Meadows (-13 percent) and Jumeirah Village Circle (-12 percent).”

“With many districts transacting nearly 35 percent lower than their 2014 peaks, sales prices remain at a cyclical low and investor buyer interest remains strong, particularly for competitively priced ready units.”

From Smart Property Investment on Australia. “Domain’s Q3 2020 Rental Report has sparked concern for some unit owners, with prices in Australia’s two largest property markets – Sydney and Melbourne – dropping to some of the lowest points seen in recent times. ‘This is the deepest fall over two consecutive quarters and steepest annual fall since the start of Domain’s Rent Report in 2004,’ said Domain senior research analyst Dr Nicola Powell. ‘Unit rents have now fallen $55 a week from peak prices in 2017 and are now the lowest in six years. Since March, house and unit asking rents in the city and east region have had the largest decline in Sydney – by $125 and $80 a week, respectively. This is followed by a $70 a week reduction to unit asking rents in the lower north shore. Tenants are now paying the same price they were in 2013.'”

From Domain News in Australia. “A Lidcombe house bought at the height of the property market in 2017 sold at a loss under the hammer on Saturday. The successful buyers were an inner-west couple who bought the property as an investment for their children for $1.61 million, outbidding a developer.”

“‘The owner was very happy because he could no longer hold onto it. He said, ‘Look, I’ve paid enough interest and haven’t seen the gain in it,’ said selling agent George Lattouf.”

“Selling agent Gill Somers said while the lack of stock was buoying prices, some vendors were preparing to list homes before they were forced to sell. ‘We have got it starting to show its face … we definitely know they can’t keep doing what they’re doing so they’re starting to clear some debts,’ Mr Somers said.”

The South China Morning Post. “China Evergrande, the world’s most indebted developer, failed to offload leftover units at its The Emerald Bay Phase 2 project in Hong Kong on Friday. It had sold just seven out of 262 units as of 7pm local time, which agents attributed to an oversupply of new flats in the district. Several projects, such as New World Development and MTR Corporation’s The Pavilia Farm in Tai Wai, have diverted buyers’ attention.”

“‘The purchasing power [for such flats] has dried up,’ Patrick Yu, district sales manager at Centaline Property Agency, said, adding that such small flats were new when the project was first launched in October last year and its first two launches were fully sold out.”

“Friday’s dismal sales follow a share sale by Evergrande, which is trying to raise funds to reduce its gearing amid suspected cash-flow issues, that failed to deliver the goods. Even though Evergrande was able to entice several big-name buyers, the share sale – priced at a steep discount on the previous close – ended up raising about half the targeted amount.”

From Asia One. “A year after splashing out $73.8 million on Singapore’s most expensive penthouse, James Dyson, 73, is selling the property for $62 million at a loss. At 21,108 sq ft, the super penthouse is reported to be the largest non-landed residence in the country.”

This Post Has 65 Comments
  1. ‘I’m teetering,’ he said. ‘If things don’t start improving … I’ll probably be another one to hand in the keys’

    ‘A year after splashing out $73.8 million on Singapore’s most expensive penthouse, James Dyson, 73, is selling the property for $62 million at a loss’

    Well, it was cheaper than renting.

      1. And hand dryers. Saw an interview where he simultaneously claimed patent attorneys were useless money sinks yet competitors don’t copy his invention. 🤦‍♀️

        1. And hand dryers.

          The first time I saw one of his hand driers was at the Denver Convention Center. They are pretty neat, but I’ll bet they cost a pretty penny.

          1. Personally, I thought they did work better than the old school ones that just blow air out a hole. But a Dyson costs as much as $1300, while an old school costs $400. I guess that’s why the Dysons are rare.

  2. ‘It had sold just seven out of 262 units as of 7pm local time, which agents attributed to an oversupply of new flats…such small flats were new when the project was first launched in October last year and its first two launches were fully sold out’

    So what’s happened to the people who stood in line last October?

    They are fooked!

    1. The very notion of standing in line for the privilege of handing over more money than most people will earn in a lifetime for an airbox is simply mind boggling.

      1. Yeah, but that’s not what they thought they were doing. They thought they were doing a hard days work for a six figure payoff. Most of us would be willing to do that. We just know it’s gambling, not a straight money for work transaction like they thought.

      2. same thing as folks being ‘guided’ by their realtor to put in bids $s over listing on the first day the house is on the market.

        Crazy

    2. “Pre-construction investors considering this classic, once tidy speculation strategy need to understand that assigning a condo unit to a second buyer is no longer the slam dunk it once was.”

      And just why is it no longer considered to be a slam dunk?

      “The reason is simple enough. ‘The bank’s not going to finance it at the appraised value,’ says Anthony Venuto of InTouch Mortgage Solutions. ‘They’re going to finance at the original purchase price – and not a dollar more. They began asking, ‘What exactly is the collateral here? The condo corporation has not registered. All you really have here is a piece of paper, and our mortgage is really not registered against anything, so we can’t do these anymore,’ Trail says.”

      Ah, so it’s the bankers who decide whether or not it will remain a “slam dunk”. Bahahahaha … as I always like to say, bankers rule, others drool.

      Bankers allow values to be given to it because they supply the funding to support these values. Then whenever the mood strikes them the bankers withdraw their funding and – presto! – just like magic these values evaporate.

      Again, bankers rule.

      Bahahahahahahahahahahahahahahahahaha.

      1. I’ve said this to you pukes once or twice before and because I am such a wonderful person I will say this to you once again:

        There are two factors that need to be in place for a mania to be sustained:

        1. An ample supply of ignorant pukes and

        2. An ample supply of money that can be accessed by these ignorant pukes.

        Since there is not now nor will there ever be a shortage of ignorant pukes the sustainability or lack of sustainability of a mania relies on the availability of an ample supply of money to this ample supply of ignorant pukes.

        And guess who it is that controls this supply of available money?

        Bahahahahaha … bankers rule, others drool.

      2. “And just why is it no longer considered to be a slam dunk?”

        The buyers get slammed and then they get dunked. So the description remains apropos, after a slight reinterpretation.

  3. ‘Our members are rightly concerned by the potential impact of this ill-timed and ham-fisted licensing scheme’

    Have you tried stamping yer little feet Fiona?

  4. Following a poll of 1,000 ASSC members, one-in-three Airbnb operators said they faced become ‘unviable’ due to the plans, while half said they would leave the industry altogether.

    Die, speculator scum.

  5. At this time of uncertainty and chaos, the Scottish Government should pause, reflect, and further consider the negative consequences of further impediments to our sector doing what we do best.’”

    Ruining the quality of life in neighborhoods and making home prices unaffordable? The sooner the STR speculators are driven out of business, the better.

  6. <em. “A year after splashing out $73.8 million on Singapore’s most expensive penthouse, James Dyson, 73, is selling the property for $62 million at a loss.

    You’ll feel better, James, when you see what the knife catcher sells it for.

    1. You’ll feel better, James, when you see what the knife catcher sells it for.

      So, will Dyson invent a new and better knife catcher?

  7. If you oppose government overreach and attempts to strip you of your Second Amendment rights, or to systematically marginalize you as a white male, you are, ipso facto, a white supremacist extremist, per the globalist media.

    #KnowYourNarrative

      1. It’s dunny, BLM/Antifa have turned plenty of downtowns into war zones, Burning, Looting and Murdering; but somehow it’s “white supremacists” who are they threat.

        1. On the liberal side, I am now hearing Trump’s “stand back and stand by” comment interpreted as a blanket license for open season on POCs. Afraid to walk down the street, etc. 🤨 None of them appear to remember the comment about “we’re coming to the suburbs.”

          1. We have a MATH problem not a race problem …..if poc committed crimes at the same rate as white people we would eliminate all private prisons close hundreds of jails and lay off 100,000 police officers, lawyers court personnel, because there would be millions less arrests and places needed to put these people, all within a decade. So how do we get them to co-operate with us?

          2. So how do we get them to co-operate with us?

            Trump’s Platinum Plan for Black America might be a good start. It’s a $500 billion investment to: increase access to capital, fuel Black owned businesses, cut taxes, increase education opportunities, lower the cost of healthcare, further criminal justice reform, make Juneteenth a National Holiday, prosecute the KKK and ANTIFA as terrorist organizations, and make lynching a national hate crime.

    1. Nobody elected the Southern Poverty Law Center to become America’s speech police.

      They have zero legitimacy, and exist only to smear, defame, and lie. It’s time to stop giving clicks and ad revenue to publications that cite them as an authority. Using the archive site to share articles from them is how to effectively deny them that revenue.

  8. “Out of the total 104.9 million sq ft of office stock in Dubai, nearly 25.2 million sq ft is vacant, with the volume of vacant stock gradually increasing over the last five years.

    Is that a lot?

    1. Dubai. What does the word mean? Let’s take a look:

      https://en.m.wikipedia.org/wiki/Dubai

      “Many theories have been proposed as to origin of the word ‘Dubai’. One theory suggests the word used to be the souqin Ba. An Arabic proverb says ‘Daba Dubai’ (Arabic: دبا دبي‎), meaning ‘They came with a lot of money.'”

      😁

      Or, if you do not like this explanation here is another one:

      “The poet and scholar Ahmad Mohammad Obaid traces it to the same word, but to its alternative meaning of ‘baby locust’ (Arabic: جراد‎) due to the abundance of locusts in the area before settlement.”

      So the attraction just might be due to the abundance of locusts. Or, maybe it is the climate. Let’s take a look at the climate:

      “Dubai has a hot desert climate (Köppen BWh). Summers in Dubai are extremely hot, prolonged, windy, and humid, with an average high around 40 °C (104 °F) and overnight lows around 30 °C (86 °F) in the hottest month, August. Most days are sunny throughout the year. Winters are comparatively cool, though mild to warm, with an average high of 24 °C (75 °F) and overnight lows of 14 °C (57 °F) in January, the coolest month. Precipitation, however, has been increasing in the last few decades, with accumulated rain reaching 110.7 mm (4.36 in) per year.[65] Dubai summers are also known for the very high humidity level, which can make it very uncomfortable for many with exceptionally high dew points in summer. Heat index values can reach over 60 °C (140 °F) at the height of summer.[66] The highest recorded temperature in Dubai is 48.8 °C (119.8 °F).”

      Just so you know.

      So what is the attraction? Perhaps it is the climate:

    2. ‘Out of the total 104.9 million sq ft’

      Picture the space taken up by a 100′ wide x 200 mile long rectangle of land. Office space.

  9. Have you ever noticed how steadily rising real estate prices are fully predictable, while falling prices are always something that nobody could have ever seen coming?

    “…in an environment where condo inventory is increasing and values are softening, a novel situation most condo investors didn’t see coming. ‘Is it going to last two weeks? Is it going to last six months? Is it going to last two years? We don’t know,’ Trail says.”

    1. nobody could have ever seen coming

      I think we’re gonna be hearing this phrase A LOT these next few years.

        1. …which makes it perfectly OK to use bailouts to spread the gambling losses of those who gambled like drunken sailors across the wage, tax, and monetary bases.

  10. Dumb question of the day: Where’s the upside for the Democrats to compromise on stimulus tomorrow if it might result in a stock market rally that provides Trump with the tail winds he needs to get reelected? I’m missing the upside for Democrats to agree to anything before the election.

    1. Associated Press
      Asian markets pull back as hopes fade for U.S. stimulus
      Published: Oct. 19, 2020 at 11:45 p.m. ET
      By Associated Press
      Moderate losses in Tokyo, Hong Kong as caution reigns
      Pedestrians cross a street during a rainy evening in Tokyo.
      AFP via Getty Images

      TOKYO — Asian shares fell moderately Tuesday, echoing Wall Street’s decline as hopes faded Washington will come through with badly needed aid for the economy before the U.S. presidential election.

      Market focus has been on the U.S. aid amid global uncertainty about the continuing economic damage from the coronavirus pandemic, which has slammed growth with social distancing restrictions, unemployment, crimped trade, as well as tourism and business closures.

    2. Mr Market seems to think a stimulus agreement is in the bag. I wonder what the Republicans had to give up to make it happen…

      1. Stawk only goes up. End of story! No stimulus agreement now = higher stawk. Stimulus agreement now = even higher stawks and more free monies to buy robinhood, housing, and toys. Freeeeeeee!!!!

      2. Mr. Market thinks that the other participants think there will be a stimulus.

        Narrator: There was no stimulus

    3. IIRC, I heard a comment a week or so ago (probably from Stephen Moore on Fox Business) that any stimulus agreed to now wouldn’t hit the economy until next year and would potentially help Biden should he win.

      1. Biden will make it rain … he’ll have congress on his side too. The economy will continue crashing, hard. He’ll probably only get one term. Either he’ll die, or get run out by whatever populist best seizes on everyone’s discontent.

        Make no mistake though, he’s gonna be president.

          1. Could be. They’re pretty good at keeping geriatrics propped up though. Unless he snaps into permanent “Dog faced pony solider” mode, they’ll be wheeling him out for all the presidential appearances.

          1. Needs sad tuba music. I believe they call that expression “dyspeptic”. Senator BigBootay must have eaten something that didn’t agree with him.

        1. “Make no mistake though, he’s gonna be president.”

          Will the voters have forgotten all of the BLM arson, riots and promised benefits for illegal aliens before November? I know lots of people are not happy with Trump’s antics, but they know better than to de-fund their police departments and empty the prisons at the same time, which Biden would love to do just to spite the conservatives. It’s really unfortunate, but our Congress has exhausted America’s prosperity in the Middle-East, an investment with no return.

          1. “If you’re white, you’re racist” didn’t go over well. Whites are still the largest voting block. The Dems screwed the pooch again.

    1. At the moment? Food, health/beauty consumables, books from the used bookstore and gas to fuel a few leaf-peeping drives. And that’s IT.

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