Source : The Business Times, November 11, 2008
(WELLINGTON) New Zealand house prices fell sharply in the year to October, reflecting an economy in recession and caution in the market, government agency Quotable Value (QV) said yesterday. QV's residential house price index fell 6.8 per cent in the month from a year earlier, its fourth monthly decline in a row, after a 5.8 per cent drop in September and a 4.5 per cent fall in August.
Sales volumes were unusually low, reflecting widespread caution in the market, said QV's Blue Hancock. 'Many buyers and sellers are waiting to see any impact from the financial crisis, dropping interest rates and the election before committing to property transactions,' Mr Hancock said in a statement.
New Zealand held its general election on Saturday, although the outcome is seen as having little impact on the broader economy and markets. The housing market, once a key inflationary concern for the Reserve Bank of New Zealand, has been falling steadily through this year in the face of high borrowing costs and as surging food and oil prices crimp consumers' spending power. The RBNZ has cut its official cash rate by a total of 175 basis points to 6.5 per cent since July as the New Zealand economy entered its first recession in a decade in the first half of the year.
The latest Reuters poll has 14 of 16 economists expecting a cut of 50 basis points at the next meeting on Dec 4, with interest rates picked to be 5 per cent by the middle of 2009.
QV said that house prices in Auckland, the biggest population and commercial centre, fell 7.7 per cent from a year ago compared with a 7 per cent drop in September, while the capital, Wellington, fell 6.1 per cent after a 5.4 per cent drop the month before. The average sale price for New Zealand houses was virtually unchanged at NZ$379,290 (S$339,00).
The monthly residential price report is based on sale prices of properties over the past three months compared with sales over the corresponding three-month period a year earlier.
The data is not seasonally adjusted. -- Reuters
Tuesday, November 11, 2008
Dubai Property Exec Upbeat About Sector
Source : The Business Times, November 11, 2008
(DUBAI) A top Dubai property development executive said on Sunday that the emirate's booming real estate sector would maintain growth despite the global crisis as demand continued to outstrip supply.
'Domestic demand for real estate continues to outstrip supply, and it will be so for several years,' Mohammed Alabbar, chairman of real estate giant Emaar, told participants at a World Economic Forum meeting in Dubai.
'This demand is real, and there is a positive shift now towards an end-user market,' he said, in an apparent reference to a reported exit by speculators from the sector which saw a significant overheating in past years.
Mr Alabbar shrugged off claims that Dubai's thriving economy was poised to slow down due to a drop in real estate, stressing that the city's economy has other driving sectors.
'For several analysts, the 'Dubai Inc' story is tied in to its real estate sector. They miss the mountain for the hill,' he said. 'The Dubai economy is driven by traditional sectors such as re-exports and trading; tourism and retail; transportation and logistics; manufacturing; the free zones and the business hubs for IT, media, financial services, education and health care,' he argued.
He claimed the impressive growth in real estate was 'Dubai's answer to the demand created by these traditional sectors'. -- AFP
(DUBAI) A top Dubai property development executive said on Sunday that the emirate's booming real estate sector would maintain growth despite the global crisis as demand continued to outstrip supply.
'Domestic demand for real estate continues to outstrip supply, and it will be so for several years,' Mohammed Alabbar, chairman of real estate giant Emaar, told participants at a World Economic Forum meeting in Dubai.
'This demand is real, and there is a positive shift now towards an end-user market,' he said, in an apparent reference to a reported exit by speculators from the sector which saw a significant overheating in past years.
Mr Alabbar shrugged off claims that Dubai's thriving economy was poised to slow down due to a drop in real estate, stressing that the city's economy has other driving sectors.
'For several analysts, the 'Dubai Inc' story is tied in to its real estate sector. They miss the mountain for the hill,' he said. 'The Dubai economy is driven by traditional sectors such as re-exports and trading; tourism and retail; transportation and logistics; manufacturing; the free zones and the business hubs for IT, media, financial services, education and health care,' he argued.
He claimed the impressive growth in real estate was 'Dubai's answer to the demand created by these traditional sectors'. -- AFP
Buyers Snap Up KL's The Binjai
Source : The Business Times, November 11, 2008
UNHINDERED views of the iconic Petronas Twin Towers, 20 hectares of park land at your doorstep for leisurely daily walks, plus conveniences a stone's throw away. That in a nutshell is the essence of The Binjai On The Park, Malaysia's premier development in the Kuala Lumpur City Centre (KLCC).
In just two months, nearly a third of the 171 units have been snapped up - its average cost of RM3,000 per sq ft (S$1,258) is apparently not a deterrent to those wanting a piece of what is arguably the country's most desired residential address. At current prices, it is certainly the most expensive.
So appealing is the proposition of a freehold residential address - the only such one in the KLCC precinct, which incidentally has its own exclusive postcode - that 51 individuals have put down a deposit.
The moneyed buyers are 'a good mix of businessmen, professionals, entrepreneurs, old money as well as new money', revealed Hashim Wahir, chief executive of Layar Intan, the developer of The Binjai, and KLCC Property Holdings during a recent media tour of the top-end real estate many have heard of, but not too many have had the privilege to view.
Although the spectre of a global melt-down in stock markets and a worldwide recession could prove a damper for really big-ticket items, Mr Hashim maintains The Binjai's 20 per cent premium to other similar developments is not unreasonable. In any event, 'time for us is not a factor', he declared alluding to the company's considerable holding power.
Layar Intan is a subsidiary of KLCC Holdings, which is in turn the parent company of Bursa Malaysia-listed KLCC Property Holdings. KLCC Property is the real estate arm of national oil company Petronas.
Both the parent and listed companies have what financial analysts describe as a 'virtual monopoly' on the existing commercial properties surrounding the KLCC precinct. These include two of its most well known, the Petronas Twin Towers and the shopping mall Suria KLCC.
Although one thousand odd people have registered their interest in The Binjai, its starting price of RM6 million obviously positions the development for a different class of owners. Prospective buyers are by-invitation only and vetted, and Mr Hashim makes it clear he would rather have purchasers 'wanting to buy for home-stay'.
A third of those who have bought units are foreign, mostly expatriates who live in Malaysia or who often travel to the country. For foreign buyers whose currencies dwarf the local ringgit, the value proposition is undeniable.
UNHINDERED views of the iconic Petronas Twin Towers, 20 hectares of park land at your doorstep for leisurely daily walks, plus conveniences a stone's throw away. That in a nutshell is the essence of The Binjai On The Park, Malaysia's premier development in the Kuala Lumpur City Centre (KLCC).
In just two months, nearly a third of the 171 units have been snapped up - its average cost of RM3,000 per sq ft (S$1,258) is apparently not a deterrent to those wanting a piece of what is arguably the country's most desired residential address. At current prices, it is certainly the most expensive.
So appealing is the proposition of a freehold residential address - the only such one in the KLCC precinct, which incidentally has its own exclusive postcode - that 51 individuals have put down a deposit.
The moneyed buyers are 'a good mix of businessmen, professionals, entrepreneurs, old money as well as new money', revealed Hashim Wahir, chief executive of Layar Intan, the developer of The Binjai, and KLCC Property Holdings during a recent media tour of the top-end real estate many have heard of, but not too many have had the privilege to view.
Although the spectre of a global melt-down in stock markets and a worldwide recession could prove a damper for really big-ticket items, Mr Hashim maintains The Binjai's 20 per cent premium to other similar developments is not unreasonable. In any event, 'time for us is not a factor', he declared alluding to the company's considerable holding power.
Layar Intan is a subsidiary of KLCC Holdings, which is in turn the parent company of Bursa Malaysia-listed KLCC Property Holdings. KLCC Property is the real estate arm of national oil company Petronas.
Both the parent and listed companies have what financial analysts describe as a 'virtual monopoly' on the existing commercial properties surrounding the KLCC precinct. These include two of its most well known, the Petronas Twin Towers and the shopping mall Suria KLCC.
Although one thousand odd people have registered their interest in The Binjai, its starting price of RM6 million obviously positions the development for a different class of owners. Prospective buyers are by-invitation only and vetted, and Mr Hashim makes it clear he would rather have purchasers 'wanting to buy for home-stay'.
A third of those who have bought units are foreign, mostly expatriates who live in Malaysia or who often travel to the country. For foreign buyers whose currencies dwarf the local ringgit, the value proposition is undeniable.
Approvals For Aussie Home Loans Fall For 8th Month
Source : The Business Times, November 11, 2008
House buyers scrap spending plans as economy slows, banks tighten loans
(SYDNEY) Australian home-loan approvals fell in September for an eighth month as tighter lending standards and slowing economic growth prompted house buyers to scrap spending plans.
Reversing the slide: An index measuring the weighted average price for homes in the nation's eight capital cities fell 1.8% in Q3 from the previous three months. Still, demand for home loans may rebound in coming months as lenders pass on the interest-rate cuts on to consumers
The number of loans granted to build or buy homes and apartments declined 2.7 per cent to 47,435 from August, when they slid a revised 2.1 per cent, the statistics bureau said in Sydney yesterday. The median estimate of 18 economists surveyed by Bloomberg News was for a 2.8 per cent drop.
A weakening housing market is among reasons the central bank cut its 2008 and 2009 growth forecasts yesterday and signalled it's prepared to add to the most aggressive interest-rate cuts in 17 years.
House prices fell in the third quarter by the most since 1978 and the building industry shrank in October for an eighth month, reports showed last week.
'We don't think falling interest rates will start to help these housing statistics until after Christmas,' said Brian Redican, a senior economist at Macquarie Group Ltd in Sydney. 'Consumer confidence has fallen so much that people aren't thinking about expanding into the housing market.'
The Australian dollar fell to 68.66 US cents at 12.54 pm in Sydney from 68.95 cents just before the report was released. The two-year government bond yield rose 2 basis points to 3.87 per cent. A basis point is 0.01 percentage point.
The Reserve Bank of Australia yesterday lowered its 2008 expansion forecast to 1.5 per cent from 2 per cent and said it had been forced to make 'unusually large' reductions in the overnight cash rate target in October and November because renewed global turmoil raised the risk growth will stall.
The government last week said the economy will expand 2 per cent in the 12 months through June 2009, the slowest pace in eight years, as fallout from the global financial crisis prompts companies such as Qantas Airways to fire workers and drive up unemployment.
Consumer confidence plunged last month by the most in more than two years, triggering the biggest drop in retail sales since April 2005.
To help reverse the slide in domestic demand, governor Glenn Stevens cut the overnight cash rate target by three quarters of a percentage point last week, adding to a one percentage point reduction in October and a quarter-point easing in September.
'The board will be seeking to strike the appropriate balance between avoiding an unduly sharp weakening in demand and the need for inflation to fall back' within its target range of 2 per cent to 3 per cent 'over a reasonable period,' yesterday's quarterly monetary policy statement said.
Mr Stevens will cut the rate by another half point to 4.75 per cent next month, according to 12 of 19 economists surveyed by Bloomberg News on Nov 7. Five expect a quarter-point reduction, one tipped a three-quarter point move and one forecasts a one percentage point adjustment.
Credit provided by banks and financial institutions to home buyers rose 9.2 per cent in the 12 months through September, the smallest increase since October 1983, Reserve Bank figures published on Oct 31 showed.
An index measuring the weighted average price for established homes in the nation's eight capital cities dropped 1.8 per cent in the third quarter from the previous three months, the Bureau of Statistics said on Nov 3.
Still, demand for home-loans may rebound in coming months as the central bank's interest-rate cuts are passed on to consumers by lenders.
The Reserve Bank's reductions since Sept 2 have cut repayments on an average home loan of A$300,000 (S$309,300) by about A$400 a month.
The government is also trying to spur house building by tripling a grant to first-time buyers of new homes to A$21,000.
The total value of lending fell 1.6 per cent to A$17.2 billion in September, yesterday's report showed.
Lending to owner-occupiers declined 1.9 per cent, while the value of lending to investors who plan to rent or resell homes, slipped 1.1 per cent. -- Bloomberg
House buyers scrap spending plans as economy slows, banks tighten loans
(SYDNEY) Australian home-loan approvals fell in September for an eighth month as tighter lending standards and slowing economic growth prompted house buyers to scrap spending plans.
Reversing the slide: An index measuring the weighted average price for homes in the nation's eight capital cities fell 1.8% in Q3 from the previous three months. Still, demand for home loans may rebound in coming months as lenders pass on the interest-rate cuts on to consumersThe number of loans granted to build or buy homes and apartments declined 2.7 per cent to 47,435 from August, when they slid a revised 2.1 per cent, the statistics bureau said in Sydney yesterday. The median estimate of 18 economists surveyed by Bloomberg News was for a 2.8 per cent drop.
A weakening housing market is among reasons the central bank cut its 2008 and 2009 growth forecasts yesterday and signalled it's prepared to add to the most aggressive interest-rate cuts in 17 years.
House prices fell in the third quarter by the most since 1978 and the building industry shrank in October for an eighth month, reports showed last week.
'We don't think falling interest rates will start to help these housing statistics until after Christmas,' said Brian Redican, a senior economist at Macquarie Group Ltd in Sydney. 'Consumer confidence has fallen so much that people aren't thinking about expanding into the housing market.'
The Australian dollar fell to 68.66 US cents at 12.54 pm in Sydney from 68.95 cents just before the report was released. The two-year government bond yield rose 2 basis points to 3.87 per cent. A basis point is 0.01 percentage point.
The Reserve Bank of Australia yesterday lowered its 2008 expansion forecast to 1.5 per cent from 2 per cent and said it had been forced to make 'unusually large' reductions in the overnight cash rate target in October and November because renewed global turmoil raised the risk growth will stall.
The government last week said the economy will expand 2 per cent in the 12 months through June 2009, the slowest pace in eight years, as fallout from the global financial crisis prompts companies such as Qantas Airways to fire workers and drive up unemployment.
Consumer confidence plunged last month by the most in more than two years, triggering the biggest drop in retail sales since April 2005.
To help reverse the slide in domestic demand, governor Glenn Stevens cut the overnight cash rate target by three quarters of a percentage point last week, adding to a one percentage point reduction in October and a quarter-point easing in September.
'The board will be seeking to strike the appropriate balance between avoiding an unduly sharp weakening in demand and the need for inflation to fall back' within its target range of 2 per cent to 3 per cent 'over a reasonable period,' yesterday's quarterly monetary policy statement said.
Mr Stevens will cut the rate by another half point to 4.75 per cent next month, according to 12 of 19 economists surveyed by Bloomberg News on Nov 7. Five expect a quarter-point reduction, one tipped a three-quarter point move and one forecasts a one percentage point adjustment.
Credit provided by banks and financial institutions to home buyers rose 9.2 per cent in the 12 months through September, the smallest increase since October 1983, Reserve Bank figures published on Oct 31 showed.
An index measuring the weighted average price for established homes in the nation's eight capital cities dropped 1.8 per cent in the third quarter from the previous three months, the Bureau of Statistics said on Nov 3.
Still, demand for home-loans may rebound in coming months as the central bank's interest-rate cuts are passed on to consumers by lenders.
The Reserve Bank's reductions since Sept 2 have cut repayments on an average home loan of A$300,000 (S$309,300) by about A$400 a month.
The government is also trying to spur house building by tripling a grant to first-time buyers of new homes to A$21,000.
The total value of lending fell 1.6 per cent to A$17.2 billion in September, yesterday's report showed.
Lending to owner-occupiers declined 1.9 per cent, while the value of lending to investors who plan to rent or resell homes, slipped 1.1 per cent. -- Bloomberg
No Indication Of Default From Las Vegas Sands, Says DBS Group
Source : Channel NewsAsia, 07 November 2008
US gaming firm Las Vegas Sands intends to finish a casino project it is building in Singapore and there are no indications it will default on loans, lender DBS Group said on Friday.
An artist's impression of Marina Bay integrated resort in Singapore
DBS is one of 40 banks that formed a syndicate to fund the Marina Bay Sands casino development, which is estimated to cost more than four billion US dollars.
"All signals I'm getting from the management of Las Vegas Sands is that they intend to finish the project and move on," DBS chief executive Richard Stanley said at a news conference on the bank's third-quarter earnings.
"I have to accept what they say and I have seen in recent days a strong commitment to the project from Las Vegas Sands... There's been no default, there's been no indication of default," he said, adding there was no need to provide for loan provisions.
"As of now, all the equity commitments have been made, the project is proceeding in pace."
Stanley's comments followed a filing by Las Vegas Sands on Thursday with the US Securities and Exchange Commission in which it sounded out a warning about its financial situation.
In the filing, the gaming giant said it may have to stop or ease up the pace of its global projects should it fail to secure the necessary funding or obtain favourable credit terms.
"If the company is not able to obtain the requisite financing or the terms are not as favourable as it anticipates, the company may be required to slow or suspend its global development activities... until such financing or other sources of funds become available," Las Vegas Sands said.
"These factors raise a substantial doubt about our ability to continue as a going concern." It said Las Vegas Sands' projects in Macau's Cotai Strip will be among those affected.
The company, headed by billionaire gaming tycoon Sheldon Adelson, operates the Sands Macao and The Venetian Macao Resort Hotel in Macau.
Citi Singapore, which is also providing loans for the project, said the long-term viability of Marina Bay Sands has not changed.
Citi's head of corporate banking, Silas Lee, said the fundamentals of the project still stand although short-term uncertainty is expected, given the current market conditions.
According to reports, Sands held talks this week with the Singapore government over the Marina Bay project.
The Singapore Tourism Board said last month that it was in talks with Marina Bay Sands to facilitate the successful completion of the project. - AFP/CNA/ir/so
US gaming firm Las Vegas Sands intends to finish a casino project it is building in Singapore and there are no indications it will default on loans, lender DBS Group said on Friday.
An artist's impression of Marina Bay integrated resort in SingaporeDBS is one of 40 banks that formed a syndicate to fund the Marina Bay Sands casino development, which is estimated to cost more than four billion US dollars.
"All signals I'm getting from the management of Las Vegas Sands is that they intend to finish the project and move on," DBS chief executive Richard Stanley said at a news conference on the bank's third-quarter earnings.
"I have to accept what they say and I have seen in recent days a strong commitment to the project from Las Vegas Sands... There's been no default, there's been no indication of default," he said, adding there was no need to provide for loan provisions.
"As of now, all the equity commitments have been made, the project is proceeding in pace."
Stanley's comments followed a filing by Las Vegas Sands on Thursday with the US Securities and Exchange Commission in which it sounded out a warning about its financial situation.
In the filing, the gaming giant said it may have to stop or ease up the pace of its global projects should it fail to secure the necessary funding or obtain favourable credit terms.
"If the company is not able to obtain the requisite financing or the terms are not as favourable as it anticipates, the company may be required to slow or suspend its global development activities... until such financing or other sources of funds become available," Las Vegas Sands said.
"These factors raise a substantial doubt about our ability to continue as a going concern." It said Las Vegas Sands' projects in Macau's Cotai Strip will be among those affected.
The company, headed by billionaire gaming tycoon Sheldon Adelson, operates the Sands Macao and The Venetian Macao Resort Hotel in Macau.
Citi Singapore, which is also providing loans for the project, said the long-term viability of Marina Bay Sands has not changed.
Citi's head of corporate banking, Silas Lee, said the fundamentals of the project still stand although short-term uncertainty is expected, given the current market conditions.
According to reports, Sands held talks this week with the Singapore government over the Marina Bay project.
The Singapore Tourism Board said last month that it was in talks with Marina Bay Sands to facilitate the successful completion of the project. - AFP/CNA/ir/so
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