Month: November 2022

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China property stocks surged amid warnings of weak reality, high expectations

China property stocks surged amid warnings of weak reality, high expectations

China’s housing prices fell in October due primarily to falling prices in less developed, so-called Tier-3 cities, according to Goldman Sachs analysis of official data.

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BEIJING — China’s real estate sector isn’t yet poised for a quick recovery, despite a rally this month in stocks of major property developers.

That’s because recent support by Beijing don’t directly resolve the main problem of falling home sales and prices, analysts say.

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Stocks could rally as much as 20{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} in 2023, predicts Wharton's Jeremy Siegel

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Stocks could rally as much as 20{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} in 2023, predicts Wharton’s Jeremy Siegel

Last week, property developer stocks surged after news the central bank and banking regulator issued measures that encouraged banks to help the real estate industry. It comes alongside other support measures earlier this month.

Shares of Country Garden, the biggest Chinese developer by sales, have more than doubled in November, and those of Longfor have surged by about 90{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d}. The stocks have already given back some of this month’s gains.

Meanwhile, iron ore futures surged by about 16{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} this month — Morgan Stanley analysts say about 40{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} of China’s steel consumption is used in property construction.

The situation is one of “strong expectations, but weak reality,” and market prices have deviated from the fundamentals, Sheng Mingxing, ferrous metals analyst at Nanhua Research Institute, said in Chinese translated by CNBC.

Sheng said it’s important to watch whether apartments can be completed and delivered during the peak construction period of March and April.

This really is a temporary relief in terms of the developers having to meet less debt repayment needs in the near future…

The new measures, widely reported in China but not officially released, stipulate loan extensions, call for treating developers the same whether they are state-owned or not and support bond issuance. Neither regulator responded to CNBC’s request for comment.

“This really is a temporary relief in terms of the developers having to meet less debt repayment needs in the near future — a temporary liquidity relief rather than a fundamental turnaround,” Hong Kong-based analyst Samuel Hui, director, Asia-Pacific corporates, Fitch Ratings, said Wednesday.

“The key is that we still need the fundamental underlying home sales market to improve,” he said, noting homebuyer confidence relies on whether developers can finish building and delivering apartments.

Earlier this year, many homebuyers refused to continue paying mortgages on apartments when construction was delayed. Homes in China are typically sold ahead of completion, generating a major source of cash flow for developers.

A drawn-out recovery

Analysts differ on when China’s property market can recover.

Fitch said a timeline “remains highly uncertain,” while S&P Global Ratings’ Senior Director Lawrence Lu expects a recovery could occur in the second half of next year.

“If this policy is implemented promptly, this will stop the downward spiral to the developers, this will help to restore the investors’ confidence [in] the developers,” he said.

Residential housing sales for the first 10 months of the year dropped by 28.2{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} from a year ago, the National Bureau of Statistics said last week. S&P Global Ratings said in July it expects a 30{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} plunge in sales for 2022, worse than in 2008 when sales fell by about 20{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d}.

A slowdown in economic growth, uncertainty about ongoing Covid controls and worries about future income have dampened appetite for buying homes.

Much burden is on China despite its rules-based system: World Bank

Adding to those worries are falling prices.

Housing prices across 70 cities fell by 1.4{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} in October from a year ago, according to Goldman Sachs analysis of data released Wednesday.

“Despite more local housing easing measures in recent months,” the analysts said, “we believe the property markets in lower-tier cities still face strong headwinds from weaker growth fundamentals than large cities, including net population outflows and potential oversupply problems.”

The report said housing prices in the largest, tier-1 cities rose by 3.1{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} in October from September, while Tier-3 cities saw a 3.9{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} drop during that time.

About two years ago, Beijing began to crack down on developers’ high reliance on debt for growth. The country’s most indebted developer, Evergrande, defaulted late last year in a high-profile debt crisis that rattled investor confidence.

Worries about other real estate companies’ ability to repay their debt have since spread to once-healthy developers.

Trading in shares of Evergrande, Kaisa and Shimao is still suspended.

Read more about China from CNBC Pro

While Covid controls have dragged down China’s growth this year, the real estate market’s struggles have also contributed significantly.

The property sector, including related industries, accounts for about a quarter of China’s GDP, according to analyst estimates.

“I think the real estate sector will become lesser of a drag to the economy in 2023,” Tommy Wu, senior China economist at Commerzbank AG, said Wednesday.

“It is too early to tell whether the measures rolled out so far will be enough to rescue the real estate sector,” he said. “But it feels more assuring now because it seems more likely that more forceful measures will be rolled out if the real estate downturn still doesn’t turn around meaningful in the coming months.”

A longer-term transformation

Ultimately, China’s real estate industry is undergoing a state-directed transformation — to a smaller part of the economy and a business model far less reliant on selling apartments before they’re completed.

The property market has shrunk by roughly one-third compared to last year, and will likely remain the same size next year, S&P’s Lu said.

State-owned developers have fared better during the downturn, he pointed out.

In the first three quarters of the year, Lu said sales by state-owned developers fell by 25{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d}, compared to the 58{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} sales decline for developers not owned by the state.

And despite recent policy moves, Beijing’s stance remains firm in dissuading home purchases at scale.

Whether it’s messaging from the National Bureau of Statistics or the People’s Bank of China, official announcements this month reiterated that houses are for living in, not speculation — the mantra that marked the early beginnings of the real estate market slump.

Chinese property giant Evergrande has a huge debt problem – here's why you should care
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7 tips to engage your real estate sphere of influence

7 tips to engage your real estate sphere of influence

Any agent doing work in today’s market is aware of, that despite the ongoing struggles, you nonetheless have to carry in new organization somehow. For new agents who have not seasoned a down current market ahead of, this can appear especially scary. 

Fortunately, market veteran Kristin Inexperienced, sat down with RealTrends to examine her most effective procedures for achieving her sphere of impact that are foolproof even in a down sector.

Green is an agent and broker environment documents in Florida real estate. In 2020 she was the #1 agent in Orlando for all Coldwell Banker workplaces and in 2021 she did around $30 million in quantity. These stats do not take place right away, as she can inform you. Eco-friendly goes the additional mile to secure her report-higher generation level and achieve her sphere of affect as generally as possible. 

1. Make a brand name

“I like to have fun. My purchasers like to have enjoyment. So, I try and retain every thing fascinating and a celebration,” mentioned Inexperienced. Any superior model will reflect your values and priorities, for Eco-friendly that signifies producing a manufacturer that focuses on exciting. 

Just after several years of expertise in the field, homebuyers and sellers in Florida know to transform to her if they want to make their transaction a exciting just one. The pleasure of the working experience of getting and providing a property has turn into Green’s manufacturer. For Inexperienced, enjoyable is an critical element of the sport. 

2. Fulfill a single on a single

Primarily in a down marketplace, assembly facial area-to-deal with with clients can be the instant that wins you their company in excess of an additional agent. 

“I consider our customers want us to be sincere with them about wherever the current market is at,” Eco-friendly reported. “I go back again to the basics. I meet just one on just one with opportunity customers to enable guide them by way of their unique journey. I consider being targeted on our purchasers is in which we are heading to be most effective. Being available, consistent and owning the consumers’ greatest curiosity at coronary heart is what is likely to generate us the trust to keep on representing them as we navigate these new waters.”

3. Acquire hazards

“I am very liberal with my risks,” stated Green. 

For her business enterprise, Environmentally friendly has hosted competitions, parties and even a ‘big head’ contest that prompted individuals to choose photographs with lower-outs of Green’s own deal with. Some of these pitfalls haven’t paid out off for her quickly, but even years down the highway, they make her company unforgettable. Inexperienced explained the threats she takes as, “Always stunning individuals. They like the creativity and they like recognizing you will do regardless of what it takes— in a superior market or lousy —to aid them acquire or promote their dwelling.”

4. Be artistic

When brainstorming techniques to get to your sphere of influence, creativeness can be vital. 

“Anyone that is aware of me appreciates that I have finished some off-the-wall things to generate my client’s organization,” said Green. 

Even though holding all concepts in line with your brand, recall to have fun with it and embrace creative imagination like Green in purchase to seize your client’s awareness. Buying and offering a residence is a major selection, and performing with a inventive agent who can make the experience a fun one is crucial to some homebuyers and sellers. 

5. Be reliable

“I consider when you aren’t currently being genuine to who you are as a man or woman and as a model you shed trustworthiness with your sphere of impact,” claimed Environmentally friendly. 

Authenticity can be a wrestle as far more and far more agents rely on automation to run parts of their organization. But, if you dial in and concentration on building articles and messaging that matches your personality and your model, then even your automatic procedures can occur across as authentic. 

6. Have all the information and facts

Homebuyers and sellers can glimpse up just about everything on the net, so you have to get them turning to you for their facts alternatively of other sources. 

“Becoming a concierge of details and support is so vital. You will be their go-to for all things— like genuine estate,” Eco-friendly said. 

7. Develop traditions

Inexperienced returns to some of her outreach concepts once more and yet again. Her go-to strategies are a Xmas time “Grinching” outing wherever “My 9-year-previous attire up as The Grinch and my 5-calendar year-previous is Cindy Lou Who,” Green discussed.

 “We produce Grinch-themed present baskets and wish everyone a content vacation,” she ongoing. “We want our clientele to know how essential they are not just to me, but my family.” 

When you produce a tradition that consumers can depend on year following 12 months, it creates a feeling of protection and closeness that translates nicely to your organization. 

Next some or all of Kristin Green’s guidance when it will come to reaching your sphere of influence could be the boost your organization wants in this down sector. No matter the marketplace conditions, there will normally be people today in need to have of a new home, and they’ll will need you to tutorial them by the procedure. 

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Airbnb aims to convince more people to rent out their homes

Airbnb aims to convince more people to rent out their homes

Convinced that the boom in leisure travel is permanent, Airbnb aims to expand its listings by convincing more people to turn their homes into short-term rentals.

The company said Wednesday that it will increase the amount of liability coverage for hosts, up to $3 million, in a play for owners of nicer houses in high-cost places such as California. It will also pair newbies with a “superhost” to guide them through the process of becoming a short-term landlord, from signing up through welcoming their first guest.

More listings would not seem to be Airbnb’s biggest challenge.

CEO Brian Chesky says the San Francisco company is taking steps to make price more transparent when consumers browse Airbnb listings, and he predicts that will reduce sky-high cleaning fees that many hosts tack on well into the booking process — a major complaint of consumers.

The company also continues to try to crack down on large parties at rentals, a few of which have turned violent. And it faces efforts to increase regulation of short-term rentals.

Through it all, Airbnb has fared better than most travel companies during the pandemic. This month, it reported a record $1.21 billion profit for the third quarter. Its stock fell, however, because earnings and bookings were less than Wall Street expected and the company gave a cautious fourth-quarter outlook.

Investors worry that consumers paying more for food, gas and housing — and facing predictions of recession — will cut back on discretionary spending like travel, hurting Airbnb.

Some current hosts are worried that might already be happening. Last month, a post on a Facebook page for Airbnb “superhosts” asked, “Has anyone seen a huge decrease in bookings over the last 3 to 4 months? We went from at least 50{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} occupancy to literally 0{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} in the last two months.”

Other hosts on social media have suggested theories ranging from a fragile economy to pent-up travel demand finally running out, and some think the problem might be that Airbnb already has too many listings.

Chesky said in an interview that Airbnb has enough hosts now — he didn’t say it has too many — but needs more because leisure travel will keep growing. And, he said, a recession could push more people to turn their homes into Airbnbs. After all, he likes to point out, Airbnb launched during the great recession in 2008.

“People are pulling back spending in tons of areas, but not travel,” he said. “And with a looming recession, we felt like more people than ever are going to want to make extra money.”

Potential hosts sometimes hesitate, Chesky said, because they are uncomfortable having strangers in their homes. The company’s response is to triple the amount of coverage for hosts — from $1 million to $3 million — against damage, including to vehicles, boats and a wider range of art on the property.

Chesky is betting that will persuade more owners of nice homes to list them on Airbnb.

“Exactly, and home values have increased since we wrote the $1 million plan,” he said. “We just noticed more than 20{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} of the homes on Airbnb, and maybe even more than that, were over the $1 million limit in value.”

The company said it is also launching a system to verify the identity of guests and flag potential parties, immediately in the U.S. and Canada and worldwide by next spring. Chesky said the system is “not a silver bullet,” and he didn’t provide many details but said in the U.S. it will include a check of criminal and sex-offender records.

In the meantime, the company is working on a plan to display the all-in price of a stay up front on its app and website — an amount that would include cleaning fees, which can be very high and only appear later in the booking process.

Chesky said he didn’t want to bar or cap cleaning fees — that’s a decision for hosts, he said. But including fees in the upfront price — and in the order in which search results are displayed — “is going to correct the market,” he said.

This story was originally published November 16, 2022 8:00 AM.

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EY Future Workplace Index reveals surprisingly rosy attitudes on commercial real estate investment despite economic tightening

EY Future Workplace Index reveals surprisingly rosy attitudes on commercial real estate investment despite economic tightening

Index finds that 58{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} of US C-suite and business leaders will invest in real estate decision-making amid the current inflation and interest rate environment 

NEW YORK, Nov. 16, 2022 /PRNewswire/ — Ernst & Young LLP (EY US) today announced the launch of its second annual EY Future Workplace Index (the Index), which tracks executive sentiment and behavioral data around the workplace of the future. The survey reveals surprisingly optimistic attitudes from company leadership on real estate investment despite economic tightening.

Which of the following programs, if any, has your organization deployed to encourage employees to return to the office?
Which of the following programs, if any, has your organization deployed to encourage employees to return to the office?

The US economy is undeniably cooling, and a recession is anticipated in 2023. However, regardless of investment decisions, the macroeconomic outlook is forcing leaders to scrutinize their office portfolios from a new perspective. Amid the current inflation and interest rate environment, the Index found that just 33{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} of US C-suite business leaders will downsize their investment in commercial real estate, while 58{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} say they will invest in commercial real estate, which could include enhancing or expanding the real estate footprint.

“The economic downturn will force leaders to make important decisions regarding their real estate portfolios — from investments, to space optimization, to workforce models,” says Mark Grinis, EY Americas Real Estate, Hospitality & Construction Leader. “Employers are beginning to understand that they need to earn the commute time of their employees, and many are investing in the ‘office of the future’ to achieve this.”

The latest EY Future Workplace Index also reveals the following:

  • More than 70{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} of employees are working from home at least two to three days a week. This is up from last year’s Index, which found that only about 42{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} of employers were using a hybrid approach. New and complicated working patterns have a major effect on a company’s real estate strategy, including the amount of office space required and the cost of using that space. Almost 60{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} are either using, or will soon be using, reservation systems for space utilization and/or occupancy tracking.
  • Of survey respondents, 64{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} are either leasing or considering leasing suburban office space since the pandemic. Employers have responded to the deurbanization of the workforce seen during the pandemic by investing in hyperlocal offices to promote a return to the office. The physical office is still a crucial component to a company’s ability to thrive now and in the future, and employers believe the connection employees experience within the physical office is worth the investment. In addition to predictable flexibility, companies are also investing in other avenues, such as in-person events (50{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d}), providing meals (45{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d}), reimbursement for commuting costs (38{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d}) and childcare support programs (33{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d}), to encourage employees to come into the office.
  • Sixty-four percent of executives believe flexible working options motivate employees. A mix of flexibility and technology in the workplace is top priority. Most are looking at the use of health and wellbeing management apps and other hybrid work technologies, such as digital and virtual collaboration resources, to optimize the workplace. For example, 44{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} of company leadership have activated or are beginning to invest in the metaverse for social interaction, training and/or recruiting purposes, and 62{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} have activated or are beginning to invest in health and safety innovations and monitoring, such as indoor air quality, touchless offices, etc.
  • Of the companies surveyed, 40{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} have either started using a four-day workweek or are in the process of implementing one. A prolonged, tight labor market and changing work patterns have employers doing all they can to attract and retain their workforce, and many are adjusting the role of the office to stay competitive. A company’s overall working model must accommodate hybrid working or risk employees searching for more flexible options. The Index found that 69{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} of company leadership has implemented or is in the process of implementing hybrid work technologies (video collaboration platforms, virtual whiteboards, etc.) to meet employees where they are.

“Data is paramount to understanding your workforce and creating the best space for a new era of work,” says Francisco J. Acoba, Principal, EY Americas Strategy and Transactions; Co-lead – Corporate Real Estate Consulting and Technology. “Data-driven insights that uncover employees’ work habits will shape how executives design and approach the workplace moving forward.”

To learn more about the EY Future Workplace Index, please visit EY Workplace reimagined.

About EY 
EY exists to build a better working world, helping to create long-term value for clients, people and society and build trust in the capital markets. 

Enabled by data and technology, diverse EY teams in over 150 countries provide trust through assurance and help clients grow, transform and operate. 

Working across assurance, consulting, law, strategy, tax and transactions, EY teams ask better questions to find new answers for the complex issues facing our world today. 

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. EY member firms do not practice law where prohibited by local laws. For more information about our organization, please visit ey.com.

Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US.

About the EY Future Workplace Index The EY Future Workplace Index anonymously surveyed more than 500 US C-suite and business leaders spanning a multitude of industries.

Media contact:
Elizabeth Feigenbaum
[email protected] 

SOURCE EY

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Fayetteville-area homes for sale rise to $299,700 median price

Fayetteville-area homes for sale rise to 9,700 median price
Fayetteville-area homes for sale rise to 9,700 median price

A typical Cumberland County home listed for $299,700 in October, up 1.6{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} from the previous month’s $294,875, an analysis of data from Realtor.com shows.

The median list home price in October was up about 54.1{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} from October 2021. Cumberland County’s median home was 2,100 square feet for a listed price of $142 per square foot.

The Cumberland County market was busy, with a median 46 days on market. A month earlier, homes had a median 43 days on market. The market added 448 new home listings in October, compared with the 632 added in October 2021. The market ended the month with some 505 listings of homes for sale.

High interest rates are making mortgage payments more expensive. With prevailing mortgage rates and 20{0cd64a0a8f98edc6e1a333a4649a39f4fde229418ea626ab6b5ac18b9de2691d} down, the mortgage payment on Cumberland County’s median home would cost $1,608 per month, not including insurance, closing fees, homeowner association dues or other costs, according to a USA TODAY Network analysis. A month earlier, the median home mortgage would have cost $1,522. A year earlier, the median home mortgage would have cost $668.

The median home prices issued by Realtor.com may exclude much, or even most, of a market’s homes. The price and volume represent only homes that are single-family homes, condominiums or townhomes. They include existing homes, but exclude most new construction as well as pending and contingent sales.

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This Is How Luxury Real Estate Agents Spend Their Sundays

This Is How Luxury Real Estate Agents Spend Their Sundays

Real estate duo Tal and Oren Alexander, most known for co-representing the buyer of a 24,000 square foot penthouse sold for $238 million in 2019, which was the most expensive residential home transaction in the U.S., know what it takes to make it in the luxury real estate market.

Founding their own team at Douglas Elliman Real Estate, the duo then used their track record and namesake to start their own ultra-luxury real estate company, Official Partners earlier this year, which operates in the luxurious New York and Miami markets.
Read also: 10 Most Expensive Celebrity Homes, Elon Musk Does Not Make The List

Tal, 36, resides in Manhattan with his girlfriend, who is a partner at a venture capital firm.

The majority of the year, Oren, 35, and his fiancée live in Miami where he manages the Florida branch of the company, which primarily serves customers from New York.

Most people spend Sundays relaxing or catching up on their hobbies — not the Alexander’s.

“For Oren and myself, there are no days off. Sunday’s an important day because a lot of clients who are buyers want to go see open houses,” Tal said to the New York Times. “I start off early, about 8 a.m., and take a class at Barry’s Bootcamp or if the weather’s nice, I’ll run in Central Park.”

Tal’s brother, Oren, said he also starts off his Sundays with a workout.

Both brothers admitted to going to brunch, with Tal saying he meets clients while eating and Oren saying he likes taking long walks afterward to look at architecture, what’s the latest hotel that’s opened and the new restaurant openings

You don’t have to be a luxury real estate agent, or even a real estate agent to make money in the housing market. Here’s how to invest as little as $100 in rental properties to earn passive income and build long-term wealth.

Tal said that he spends the afternoon showing various penthouses to clients, then ends the afternoon at a social wellness club.

“Then usually we’ll go home and try to watch some NFL football,” Tal said. “We’re both big Dolphins fans. About 7:30 or 8 we’ll head out to dinner.”

The duo said they like to spend time going over any emails from the previous week, to make sure everything was covered, with both agreeing that midnight was about the time they go to bed.
To read about the latest developments in the industry, check out Benzinga’s real estate home page.

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