I don’t usually print other people’s articles, but as we all start looking towards the future (hopefully having learned something from the past) I thought it appropriate to do so. This is a letter by Prudential’s COO Bernard Winograd and worth reading. I will be seeking out other opinions in the future to republish.
More on Property Investment – The Credit Crisis and – The Future Part One
Whatever happened to getting a loan to buy an investment property with? They went out of the window with the world’s financial health when Lehman brothers bit the dust, that is what. The continuing devaluation of real estate around the world is continuing to put pressure on the loan markets and the credit crunch is still affecting property investment markets. The banks are well aware of the likely losses in the commercial property sector that are – as we speak – being announced. So, they are hoarding their money for the time when they must announce more losses and write off more outstanding debts.
To listen to some of the headlines produced around the latest CB Richard Ellis report on Singapore’s property investment market, you could be forgiven for thinking the second coming had arrived.
More on Investment properties in Singapore start selling again
The over valued, over leveraged buy-to-let property market in the UK is now coming to terms with a new reality. The lenders had written clauses into many buy-to-let mortgages which insist on a certain level of equity being held in a property, and most buy to let mortgages taken out in the last few years are now falling below that ratio. Terms vary, but several banks have already exercised their right to insist on a capital injection from the borrower, as property prices in Britain continue to decline.
It looks as though even the ruling family of Dubai is not immune to the stunning amount of lawsuits and court cases flying around the property investment world at the moment. An Iranian businessman is suing members of Dubai’s ruling family for close to two billion dollars over real estate investments, in a case which opened on Wednesday.
Numis Securities, a City investment bank, expects amateur buy-to-let landlords to begin “panic selling,” their investment properties as house values continue to decline in the UK, causing the average home value to fall below £100,000. Their recent report stated:
More on British Property Prices could fall another 55 percent
Thinking of buying an investment property in Dubai? Wait and see is our best advice right now. The credit crunch is having a big impact in the UAE, and particularly in Dubai, where many ex-pats went to work in the construction and real estate sector, only to discover they had 30 days to find another job or get out of the country when their job vanished along with the rest of the credit market.
Developers in Dubai are beginning to face the same issues as other property developers around the world. Falling prices and dried up credit means that customers are not so keen to pay for off-plan developments that are now worth considerably less than the agreed prices.
More on Property Developers in Dubai Facing Non-Payment Issues
Is it just me – or has the world gone mad – starting with the property markets? Some news for your consideration.
If you were wondering just how bad things can get, the very same day President Obama committed $800 billion to fixing the world’s woes, the median price for a home sold in Detroit, Michigan in December was…………….. 7,500 dollars. Good grief ! I can barely buy a motorcycle for that much money, so if you are interested in a “bargain,” Detroit’s the place. Chicago Tribune. Suburbs in the US are already turning into slums as the foreclosure rates continue climbing.