Miami residential property market prices still growing

Residential property in Miami, one of the most popular locations with overseas buyers in the United States is seeing prices continue to rise, the latest index figures show.

The median sales price for single family existing homes rose 10.3% year on year in February to $270,221 while that for condominiums increased 9.5% to $206,950, according to the data from the Miami Association of Realtors.

However, median prices are still significantly below their peak in 2007 and currently remain around 2004 levels despite some sectors seeing strong growth. For example the condo market has recorded prices rises in 56 of the last 57 months.

‘Miami real estate remains a bargain especially compared to other world class cities, and domestic and international consumers proved that in February as total dollar sales volume in single family homes increased 7% compared to the previous year,’ said Mark Sadek, chairman of the association’s board.

Sales, which posted a record year in 2013 and near record years in 2014 and 2015, fell by 5.8% year on year but total sales for February remain in line with Miami historical averages.

A breakdown of the figures shows that single family home sales fell by just 0.3% in February while condo sales fell by 10.4%. The index report suggests that this is due to a strong new home construction market.

Single family home sales spiked 18.5% year on year in February in the $200,000 to $600,000 sector which represented about 59.6% of all total single family home sales in February 2016.

Existing condos priced at $150,000 to $300,000 range experienced an 8.6% jump in February sales, representing about 38% of all total condo home sales in February 2016.

The median number of days between the listing and contract dates for Miami single family home sales decreased 6% year on year to 63 days. The median number of days between the listing date and closing date for single-family properties decreased 0.8% to 120 days.

For condos, the median time to contract decreased 12% year on year to 72 days. The median number of days between the listing date and closing date decreased 2.4% to 122 days.

Miami real estate is selling close to listing price. The median percent of original list price received for single family homes was 95.2% in February 2016, an increase of 0.4%. The median of original list price received for existing condominiums was 93.8%, a 0.2% increase.

Only 23.4% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 35% in February 2015. Short sales and REOs accounted for 5.7% and 17.8% respectively, of total Miami sales in February. Short sale transactions dropped 25.6% year on year while REOs fell 39.9%.

Cash sales in Miami are still twice the national average and due to the high number of overseas buyers. Cash transactions comprised 52.4% of February total sales compared to 58.7% last year.

Inventory of single family homes increased 4.7% in February while condominium inventory increased 16.3% and the data also shows that there is a 5.7 month supply of Miami single family homes, an increase of 3.6% from February 2015 and continues to be a sellers’ market. There is a 10.6 month supply of condominium inventory, a year on year increase of 20.5% and continues to be a buyers’ market. A balanced market between buyers and sellers offers between six and nine months’ supply of inventory.

New listings of Miami single family homes increased 24.7% from 1,635 in February of last year to 2,039 last month. New listings of condominiums increased 13.4% to 2,826 last month, compared to 2,491 during the same time period in 2015.

Resource: http://www.propertywire.com

Residential Property

Residential Property

The top seven property developers did better last year with a 15% jump in presales - but aggregate profit inched up just 2% as income from the condo presales will be booked over the next several years. We estimate presales growth of 19% this year for our top seven, with demand largely in the mid to high end segment, where household debt to income is lower. However, profit will grow less as backlog is less. An extension of the government's incentive program offers little earnings upside at 3%, unlikely to bring stock rerating.

Rising new supply and presales in 4Q15. In 4Q15, the value of new launches rose 24% YoY and 30% QoQ while presales of the seven leading property developers (AP, LH, LPN, PS, QH, SIRI, and SPALI) grew 38% YoY and 25% QoQ, both driven by strong momentum for low-rise. This brought 2015 new launches to Bt424bn (+28% YoY) and total presales to Bt181bn (+15% YoY) thanks to condo recovery.

4Q15 best. Combined net profit rose 11% YoY, but jumped 47% QoQ to Bt11bn in 4Q15, 35% of 2015 profit of Bt31bn - growth of just 2% YoY. The rise in 4Q15 indicated the return of transfers, aided by government incentives, plus more housing completions. Revenue rose 25% QoQ to Bt57.8bn and gross margin improved 110bps to 33.7%.

More presales in 2016. The top seven developers target Bt215.6bn in presales in 2016, +19% YoY, gaining Bt20.5bn or 10% of target in 2M16. Demand will be largest in the mid to high income group since they feel the slow economy least and have the most room for borrowing. The household debt/income ratio was nearly unchanged for this group at 19-24% in 2009 versus 19-25% in 2013 (latest survey by NSO), far below the bank's threshold of 50-70%. Those in the low income group are heavily indebted with household debt/income ratio rising to 50percent from 47%, meaning they are less able to buy despite incentives. Presales will peak in 2Q16-3Q16 as condo launches multiply.

Household debt accumulation slowing. BoT data shows high outstanding household debt at ~81% of GDP at end-2015, but there is a bright spot - new debt is growing at a much slower rate in both absolute terms and percentage of GDP. Our view is that household debt bottomed out and will stabilize: good news for housing.

Small profit growth. With low aggregate backlog of Bt135bn at end-4Q15, -21% YoY, we expect small revenue growth of 6% with net profit growth of 4% (core profit growth of 11%) in 2016. Earnings visibility is also lower with backlog securing only 39% of 2016 versus 50-59percent for 2013-2015.

Would incentive extension help? The uncertainty about extension leads us to leave this out of our model, where we assume an April 29 end date. We continue to hold that these are not boosting demand, simply helping transfers especially for condos, which were purchased several years ago. If it is extended, the benefit to developers in the lower transfer fee will raise earnings by merely 3%, not enough for stock rerating.

Top pick: LH. We like LH, as its earnings are turning the corner to a growth cycle in 2016-2017 with good core profit growth of 18% in 2016 and 23% in 2017. With record backlog of Bt20.4bn, LH's earnings visibility is improving and forecast risk is reduced.

Resource: http://www.nationmultimedia.com

China to apply VAT to some residential property sales - finance ministry

China will apply value-added tax to residential properties sold less than two years after their purchase, the country's finance ministry said on Thursday.

The government will introduce a 5 percent value-added tax (VAT) on the sale of all residential property held for less than two years.

In Beijing, Shanghai, Guangzhou and Shenzhen - cities which have seen some of China's fastest property price increases - capital gains on the sales of larger homes held for at least two years will be subject to a 5 percent VAT levy.

Sales of smaller homes in the four cities will not be subject to the VAT levy, according to the statement.

For the rest of the country, sales of properties held for at least two years will be exempt from VAT.

Resource: http://www.reuters.com

Indian residential property to attract $ 1 bn investment

Singapore: Residential property in India is expected to recieve USD 1 billion investment this year, given its attractive rate of returns averaging at a high of 20-22 per cent per annum, an industry expert said here today.
"Private Equity funds in Indian real estate sector has already raised USD 420 million in the first two months of this year, compared to USD 520 million for the whole of last year," said Rubi Arya, executive vice chairman of the Mumbai-based Milestone Capital Advisors Ltd.

Mid-segment housing and affordable housing can take returns to as high as 20-22 per cent per anum through hybrid investing, that is capital security plus equity upside, she said.
"We feel that with the Real Estate Bill mandate, availability of deals for Private Equity firms will certainly go up," she said, adding that the reforms in the real estate sector will also help further accelerate fund raising and investment opportunities both for residential and commercial sectors.

"With such positive developments, the India story is growing by leaps and bounds and it is just a matter of time when this sector begins its upward journey once again, albeit after a prolonged period of gloom," she added.

Costs on real estate construction are seeing stability with fuel prices down, which leaves developers with overall margins for positive growth.

"Investors can look forward to far higher transparency and ease of doing business with developers with the recently passed real estate bill. This has led to a lot of warming up of Non Resident Indians (NRIs) and Foreign Direct Investments towards Indian real estate," she noted.

The availability of foreign capital will naturally increase with the government permitting NRI investments into domestic Alternate Investment Funds.

The Real Estate Investment Trusts will soon see listings by developers and thus lifting the commercial reality market to a highly profitable investment climate, according to Arya.

Milestone manages USD 800 million or 25 million sq ft residential, warehousing, commercial and office spaces since it began operating as PE funding concern in 2008.


Resource: http://zeenews.india.com

Editorial: Dallas housing projects audit shows City Hall still has work to do

Dallas City Hall still has renovation work to do on its own Housing Department.

That’s the takeaway from a just-released city audit regarding oversight of $30 million in taxpayer financing for affordable housing projects.

The report doesn’t accuse anyone of wrongdoing, but it does criticize the lack of adequate documentation — from drawing board to ground breaking. The audit covers 2012 through 2014, the end of former Housing Director Jerry Killingsworth’s 11-year tenure and the first year after his departure.

Killingsworth’s work included pushing high-profile projects in the southern half of the city. Some of those have done pretty well; others not so much.

In early 2014, City Manager A.C. Gonzalez called for a full-scale review of the department — including this latest audit. We applauded Gonzalez’s decision at the time, noting that the plainly named Housing Department was among the most inscrutable of all City Hall departments.

Now the audit results echo our assessment of two years ago: It’s all but impossible to unravel what was spent where and whether taxpayers got their money’s worth.

Gonzalez told us Monday that he agrees with the audit’s findings and that the Housing Department has already begun improving internal controls on its projects. But he cautioned that the work is far from finished.

“We needed to be doing things far differently in that department — and in a lot of departments — and we’ve begun that process,” Gonzalez said.

That’s good to hear.

If the city isn’t able to fully verify each project every step of the way, taxpayers are justifiably uneasy. Not to mention that inadequate documentation leaves no road map for lessons learned that can benefit future projects.

Killingsworth had a well-earned reputation of trying to get projects moving on an ad hoc basis. The result was that decisions regarding affordable housing and the redevelopment of neighborhoods often appeared to be handled in the shadows of City Hall.

No doubt Killingsworth was trying to do deals amid an economic bust. But ingenuity is no excuse for poor accountability.

City auditor Craig Kinton’s report, released Monday, sampled records of 30 of 54 single-family and apartment projects completed in the audited years. The city gave $29.9 million to finance those developments, and the City Council approved the funding.

Now Gonzalez and Housing Director Bernadette Mitchell must continue to work to assure that documentation is based on set guidelines with solid internal controls. Likewise, the bidding process must be formalized.

City Council member Scott Griggs, chair of the council’s Housing Committee, is right when he says that these policies should have been in place long ago. Perhaps his panel, alongside city staff, can do more to assure this happens.

No punch list in the Housing Department is more important.


Resource: http://www.dallasnews.com

Urbanising Angola, one housing project at a time

Kora Angola is working in partnership with the Angolan Government to construct 40,000 affordable, high-quality housing units across 15 Angolan municipalities and 6 provinces, including one of its most ambitious undertakings, the Horizonte Housing Project

Kora Angola is one of the country’s main players in the push for urbanisation. As a semi-private real estate company, its goal is to develop sustainable infrastructure and real estate initiatives that meet the needs of the local population, large swathes of which remain isolated in rural areas, far from the resources and opportunities that could dramatically help rebuild their lives. Working in partnership with the Angolan Government, one of the company’s main projects involves the construction of 40,000 affordable, high-quality housing units across 15 Angolan municipalities and 6 provinces. Angola’s emerging middle-class families are the target consumers of these properties, which are intended to satisfy a need for housing, but more holistically, to serve as the foundation for a healthy, more urbanised society. The properties will come with courtyards, parks, and open public spaces, in addition to being strategically located near educational institutions and the basic social services that will promote more interconnected neighbourhoods and a higher quality of life.

One of Kora Angola’s most ambitious undertakings, the Horizonte Housing Project, is currently unfolding in the province of Uige and the municipality of Quilomoço. Following reinforcement of the soil to ensure a secure foundation, plans to build a first phase of 1,010 housing units have begun in Quilomoço. According to Nimrod Gerber, the CEO of Kora Angola: “This is a special project bringing with it the realisation of the dream of many families in Uige – their own home and a safe and comfortable environment where they can raise their children. Kora Angola is leading in the construction sector and in the market through the positive impact it’s consolidating for the people, communities and local economies.”

Also taking into account the need to nurture a local economy, the housing units will come equipped with commercial areas where inhabitants can start small businesses, thereby contributing to what Gerber refers to as an “Urban Community,” or “open spaces for the growth of new centres of social and economic development that will promote the decentralisation of population growth in Angola.”

Ultimately, providing affordable housing and fostering the creation of vibrant, urban communities is one of the most effective means of reducing poverty and empowering people to make the best of local resources and networks.  Angola’s government approach is doing this by allowing and aiming large scale development, creating the right conditions for investors and committing to build the complementary infrastructures. The Ministry of Urbanism has made a huge impact in insisting on summoning and including different government entities in each and every process. Therefore, the government vision of “new centralities” and Kora’s concept of “urban communities” building combine very well.

Resource: http://www.theworldfolio.com

'1MDB yet to propose housing project to monetise Penang land'

PARLIAMENT 1MDB has not yet put forth development proposals to monetise its land in Penang, the Finance Ministry said.

1MDB had in February last year said it planned to monetise the land in Air Itam and Air Putih through joint projects or by selling the plots.

"(But) as of now 1MDB or its agencies have not submitted its housing or development project plans to the Penang state government," the Finance Ministry said in a written reply to Parliament yesterday.

It was responding to a question from Lim Guan Eng (DAP-Bagan) on why the federal government had not fulfilled its promise to build affordable houses in Penang through 1MDB.

1MDB had first announced the affordable housing project in 2013.

The Star reported today that two more companies had submitted bids for the 1MDB land, bringing the total number of bidders to four.

Citing sources, daily named the bidders as Suiwah Corp Bhd, a supermarket chain operator; Titijaya Land Bhd, a Klang Valley-based property developer; a joint-venture between Ideal Property and BSG group and a company related to a well-known developer in the state.

The property is currently valued at RM1.325 billion, compared to the RM1.06 billion 1MDB originally paid for the land.

1MDB has sold off two of its assets, Edra Global Energy and Bandar Malaysia, in order to cover its massive RM42 billion debts.

However, the government has consistently maintained that 1MDB is not in trouble as it has more assets than debts.


Resource: https://www.malaysiakini.com