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Business Times
2 days ago
- Business
- Business Times
Record fall in July UK property prices: Rightmove
[LONDON] Asking prices for newly advertised British houses and apartments recorded their biggest July fall in more than 20 years this month, property site Rightmove said on Monday. Prices for property put on sale during Rightmove's July period - which runs from June 8 to July 12 - were 1.2 per cent lower than for property marketed a month earlier, the biggest June to July drop since the series began in late 2001. Compared with a year ago, asking prices were 0.1 per cent higher. 'With the number of available homes still at a decade-high level, summer sellers are pricing even more competitively to attract buyer interest,' Rightmove said. British property sales surged earlier this year but then fell sharply after the end of a temporary tax break on many purchases in April. 'Discerning buyers can quickly spot when a home looks over-priced compared to the many others that may be available in their area,' Rightmove property expert Colleen Babcock said. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up While sales volumes are still running at around 5 per cent above 2024 levels, Rightmove said it was cutting its forecast for price rises over 2025 as a whole to 2 per cent from 4 per cent due to the high level of competition between sellers. Overall, Rightmove expects 1.15 million property sales in 2025. Prices fell most in inner London, which saw a 2.1 per cent monthly drop, while the biggest rise was in north-east England where there was a 1.2 per cent rise. Earlier this month Nationwide Building Society, Britain's second-biggest mortgage lender, said its house price index dropped by 0.8 per cent in June, the biggest seasonally adjusted monthly fall since November 2022. Official data, which is based on completed purchases, showed that house prices in May were 3.9 per cent higher than a year earlier, down sharply from annual growth of 7.0 per cent in March. Rightmove said smaller price rises, combined with strong pay growth and lower mortgage rates, were making property purchases more affordable. Typical mortgage rates for a two-year fixed period have dropped to 4.53 per cent from 5.34 per cent over the past year, while average wages rose 5.0 per cent in the year to May. REUTERS
Business Times
4 days ago
- Business
- Business Times
China's inaction deepens peril for struggling property stocks
INVESTORS are growing skeptical that Chinese developer stocks will stage a rebound this year, as Beijing's reluctance to unleash sweeping stimulus deepens pessimism about the sector. A gauge of developers' shares notched its biggest weekly drop in four months after a key meeting on Tuesday failed to yield any concrete measures to revive the industry. Property sales are likely to remain weak in the third quarter, with better-than-expected economic growth data undermining the case for stimulus in the near term, according to Morgan Stanley. A four-year slump in China's property sector is showing few signs of easing after a decline in home prices accelerated in June, and major developers reported lackluster earnings for the first half of the year. That has left investors pinning their hopes on government support to spark a turnaround, with speculation about an aid package fueling the biggest one-day jump in developer shares in five months earlier in July. 'I haven't touched property stocks since 2014 as all the existing housing demand had already been met,' said Sun Jianbo, president of asset manager China Vision Capital. 'Policies can make the real estate slump much milder, but won't give it a chance to recover.' A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up The Bloomberg Intelligence gauge of developers' shares has fallen nearly 9 per cent this year to underperform the Hang Seng China Enterprises Index's 23 per cent gain. The real estate index jumped 8.5 per cent on July 10, its biggest one-day advance since February, amid speculation that authorities would roll out supportive measures at the Central Urban Work Conference. But Chinese President Xi Jinping refrained from announcing aggressive stimulus at the event, and instead advocated a more measured approach to urban planning and upgrades. 'Modest policies release won't help much,' said Shujin Chen, head of China financial and property research at Jefferies Hong Kong. 'You'll see some market speculations or rumour that may lead to a temporary stock rally, but later find they're just mostly noises.' Given such dampened expectations, many in the market are pivoting away from the sector altogether. Six of 20 brokers who cover China Vanke, one of the nation's largest builders by contracted sales, have stopped updating research reports on the firm, according to data compiled by Bloomberg. The Shenzhen-based company said earlier this month its loss for the first half of 2025 may reach US$1.67 billion. Meanwhile, Poly Developments and Holdings Group reported a 63 per cent drop in preliminary net income for the first half due to market fluctuations and decreasing profitability of carried-over projects. Shanghai-based real estate firm Greenland Holdings posted a preliminary net loss of 3 billion yuan (S$536.8 million) to 3.5 billion yuan for the period. The firms are among those that have seen multi-year lows in analyst coverage with the latter having none, data compiled by Bloomberg showed. Developers are seeking ways to boost liquidity via asset sales, an extension in bank loans and debt restructuring. The regulator has introduced a requirement for state-owned developers to avoid defaulting on publicly issued debt, but the overall sentiment remains bearish. 'Fundamentally, it's not a sector worth holding,' said Kenny Wen, head of investment strategy at KGI Asia. 'Property sector now has a different, much less important role in China's economy from what it was a decade ago.' But for the bold, there are still pockets of opportunities. JPMorgan Chase & Co. tags the sector as a tactical buy amid growing hopes for further policy support in the coming months. Its fundamental top picks are China Resources Land, China Resources Mixc Lifestyle Services and China Overseas Property Holdings, analyst Karl Chan wrote in a note. The shares of the firms are up at least 8 per cent this year in Hong Kong. Morgan Stanley recommends that investors stay defensive and stick with state-owned enterprises with good visibility, analysts Stephen Cheung and Cara Zhu wrote in a note. High-dividend-yield plays such as C&D International Investment Group and Greentown Management Holdings are among its top picks. C&D's shares are up 26 per cent this year while Greentown has declined 13 per cent. Left with little hope for a broad revival, some investors are rotating out of property and into sectors that offer better earnings upside and stronger policy tailwinds. For Yang Junxuan, a fund manager at Shanghai Junniu Private Fund Management, the property market is 'more influenced by the whole economic backdrop, which is still weak. Compared with property stocks, we're now more inclined to buy military and AI stocks.' BLOOMBERG
Business Times
4 days ago
- Business
- Business Times
Los Angeles sues Airbnb for alleged price gouging following wildfires
LOS Angeles sued Airbnb, accusing the home rental company of allowing price gouging affecting at least 2,000 properties during January's wildfires in Southern California, City Attorney Hydee Feldstein Soto said on Friday. According to a complaint filed in Los Angeles Superior Court, rental prices rose more than 10 per cent for 'at least two thousand—and possibly more than three thousand' Airbnb properties in the city between Jan 7 and 17. Los Angeles said the increases occurred before Airbnb disabled its 'smart pricing' tool, which lets owners have rental prices adjust automatically based on demand, for Los Angeles and Ventura counties. Airbnb was accused of violating a California law that prohibits prices of essential goods and services from rising more than 10 per cent following a state of emergency. Governor Gavin Newsom declared a state of emergency in Los Angeles on Jan 7, triggering the state's anti-gouging law, and it has been extended several times. Feldstein Soto said that while Airbnb, with an estimated 80 per cent market share in the city, has taken steps to curtail price gouging, evidence indicates it may be continuing. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up She separately accused the San Francisco-based company of misrepresenting to prospective renters that it has 'verified' hosts and property locations on its website, some of which don't exist. In a statement, Airbnb said the company, chief executive Brian Chesky, and its affiliated nonprofit have contributed nearly US$30 million to fire recovery efforts, including free emergency housing to nearly 24,000 people. It also said Airbnb hosts receive error messages if they try to boost prices more than 10 per cent from pre-emergency rates. The lawsuit accuses Airbnb of violating California's unfair competition law. It seeks an injunction to stop illegal rents during the state of emergency, plus civil fines of up to US$2,500 per violation. The Southern California wildfires killed at least 30 people and destroyed or damaged more than 16,000 structures. Much of the damage came from the Palisades Fire in Pacific Palisades and the Eaton Fire in Altadena. The fires charred an area larger than Paris. REUTERS
Business Times
5 days ago
- Business
- Business Times
European real estate stuck in 'zombieland' as recovery proves elusive
[LONDON/FRANKFURT] Europe's commercial real estate market is defying expectations of a recovery as investor caution pins property sales to near-decade lows. Some investors and banks, recognising that the outlook remains weak, are even beginning to step in to offload or restructure distressed assets, one executive said, though they added that an 'extend and pretend' approach to bad debts is still commonplace. It is a marked change in mood from the beginning of 2025 when there were hopes for an end to a three-year pandemic-induced downturn, but unpredictable US trade policy, the promise of stronger returns in other private markets and a refusal by sellers to recognise lower prices have hit activity. Year-on-year commercial property sales in Europe were flat in the first quarter of 2025 at 47.8 billion euros (S$71.2 billion), less than half the level of three years earlier, according to the latest revised MSCI data. Early indicators suggest a poor second quarter – cross-border investment into property in Europe, the Middle East and Africa fell about a fifth from a year earlier to 17.2 billion euros, the worst April-June period in a decade, property agency Knight Frank said, citing preliminary MSCI data. Sluggish sales have affected most sectors including hard-hit offices and even data centres, a previous bright spot, although the under-supplied rental housing market continues to attract interest. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up 'We have 'zombieland' ... no recovery, stranded assets, no liquidity coming back,' said Sebastiano Ferrante, head of European real estate at US fund giant PGIM. While logistics and hotels also presented buying opportunities, out-of-town offices and old shopping malls are among assets struggling to find buyers, Ferrante added. Canada's Brookfield asked bondholders to approve the restructuring of a loan secured against its London CityPoint office tower in April, according to a regulatory filing, after shelving a sale when bids fell short of its expectations. In Germany, one of the country's most prominent property casualties – the Trianon skyscraper in Frankfurt – has been put up for sale by its administrator, Reuters reported last week, in a rare test of the fragile German market. There is also fierce competition for funds from other private markets such as credit. Private credit funds in Europe raised US$39.9 billion in the first half of 2025, nearly double the US$20.6 billion for real estate funds, according to Preqin data. However, both were on track to top their 2024 totals, with property already ahead of last year's poor tally. Survey data nonetheless points to ongoing caution. Investor sentiment towards European real estate fell to its lowest in over a year in June, according to trade body INREV, mirroring the US market, where sentiment has also soured this year. 'In some parts of the market the recovery is well under way... However there are out of favour assets and sectors where there is almost no liquidity and more pain to come,' said Cecile Retaureau, head of private markets at the investment arm of insurer Phoenix. Germany, Europe's largest economy, has been particularly hard hit by the property slump, with sales down another 2% in the first half of this year, according to data from CBRE. 'Transaction volumes will not jump. It will not kickstart in a very dynamic way,' said Konstantin Kortmann, CEO of property agency JLL in Germany, who expects a gradual recovery. While still-high interest rates mean property investors have to be selective to make money, the prospect of international cash shifting to Europe from the volatile US market could help, the property executives said. At least two of PGIM's German clients have cancelled planned property investments in the United States, reprioritising Europe and Asia, Ferrante said. REUTERS
Business Times
7 days ago
- Business
- Business Times
China Vanke seeks to extend some bank loans by up to 10 years
[BEIJING] China Vanke is seeking to extend some of its domestic bank loans by as much as 10 years, according to sources familiar with the matter, a move that could help the state-backed developer reduce liquidity risks. The Shenzhen-based builder, one of China's largest by contracted sales, has made a preliminary proposal to several major Chinese banks in recent weeks for the extension, according to the sources, who asked not to be identified as the matter is private. While some banks are still evaluating the plan, others are reluctant to agree until they get further guidance from regulators, the sources added. Such long-term extensions could offer the company some breathing room on its repayment obligations. Vanke, which has been pummelled by China's prolonged property slump, recently said that its first-half loss may widen to as much as US$1.67 billion, underscoring its financial challenges. China's financial regulators have pledged to step up support for real estate financing, though banks have been constrained by worsening profitability and concerns over a resurgence in bad debt. Commercial banks' net interest margin dropped to a record low of 1.43 per cent at end of March. The measure has been below the 1.8 per cent threshold that helps maintain reasonable profitability for more than two years. Total non-performing loans in the banking system reached a record 3.4 trillion yuan (S$609 billion) as at the end of March. While extending or restructuring some of these troubled loans may help contain headline bad debt figures and temporarily cushion the impact on bank profits, it risks obscuring the extent of asset quality deterioration, potentially leading to more severe consequences in the long run. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Vanke had about 361 billion yuan of interest-bearing borrowings as at last year, 43.8 per cent of which will mature within 12 months, according to its latest annual report. The majority of those were bank loans, which accounted for 257.9 billion yuan of Vanke's total liabilities. The company did not immediately respond to a request for comment. Chinese officials have taken a number of steps to stabilise Vanke's operations and finances since the start of this year. Some of the firm's dollar bonds fell about 40 per cent to deeply distressed levels in January before an official from Shenzhen Metro Group, its largest shareholder, took over as chair and local governments vowed to 'pro-actively support' Vanke's operations. The state-owned shareholder has since offered multiple loans totalling more than 15 billion yuan so far this year, according to data compiled by Bloomberg. Early this month, Vanke said it would apply for another loan of as much as 6.25 billion yuan from Shenzhen Metro. Excluding shareholders' loans, Vanke said in a filing this week that it had secured 24.9 billion yuan of new financing and refinancing during the first half, and had successfully completed repayment of 16.5 billion yuan in public debt. No offshore public debt is due before 2027, it added. BLOOMBERG
