Real estate sales in Jordan plummet; Qatar house rents have fallen 35%; Dubai prices fall 17%; Hawaii’s luxury condo market hit by swine flu fears and recession; Hugh Hefner needs to sell a house as financial problems increase.
If anyone was thinking of believing the twisted statistics being pumped out by the governments and newspapers, this is a representative selection of headlines that might persuade you that perhaps, just perhaps, the problems are not all over in the housing markets.
According to the Telegraph, the house price correction in the UK is now over, so everyone can relax. They reference a report by the Centre for Economics and Business research which apparently states, house prices will actually “grow,” between the fourth quarter of 2009 and end-2010 and that, “there is a good chance that they will rise even more quickly, thanks to the unprecedented collapse in new homebuilding.”
With US real estate prices still on the way down, most would-be real estate investors are facing issues if they need to refinance a mortgage on a property they were renting out. The mortgage resets are not exclusive to residential buyers and a lot of investors are facing problems also. Refinancing a mortgage is the big issue currently, because, whatever mis-information might be being spread around by the banks and governments, credit markets remain tight.
The Directorate of Real Estate in Lebanon has released a report which was published by Bank Audi Weekly Monitor this week. The report states that the total value of property sales in Lebanon in the first half of 2009 was at L£3.7033 trillion (Dh90.59 billion), down by 5.2% from the same period 2008.
Worldwide economic downturn brings with it the expectation of mergers and acquisitions, unpredictable pricing in the realms of the sales and rent markets and cautious lending, in a bid to reach a (supposedly) smooth road to market and economic recovery.
Dubai-based developer, Emaar properties saw another slide in share prices after closing it’s offices in Algeria due to “a lack of progress which is beyond the company’s control.” The action came after announcements that Emaar will be merging with several other government-owned developers, and threw more confusion and lack of confidence into Dubai’s stock and real estate markets. Investors reacted badly to the proposed merger and, Emaar’s shares fell sharply on the announcement. Several analysts have stopped rating the company, because of lack of transparency in the deal, but one thing is clear – the merger is highly likely to damage existing shareholders. Emaar shares dropped another 7.2%, to close at 2.60 dirhams (71 cents) Sunday after the Algerian announcement.
Whatever the government press release farms (newspapers) might be saying, those who have tried to refinance with poor credit will know that the economic crisis is alive and well currently. The news from the UK is frankly shocking at the moment, and any suggestion of a house price recovery should be taken with a very large pinch of salt.
Following on from Emaar’s recent announcement that they will merge with selected parts of Dubai Holdings, another merger has just been announced - Standard & Poor’s Ratings Services said today that it had decided to keep its ‘A’ long-term credit ratings on Dubai-based real estate developer and hotel operator Dubai Holding Commercial Operations Group LLC after an announcement that the company will now merge with Emaar. This is the S&P press release: