China Property Developer Defaults on HSBC Loan

hed In Belgium, Battle Builds Between Brewers and ‘Beer Architects’ Expat Treasures From Home Help Bridge the Distance: A Taiwanese Expat in the U.S. Small Business Economy Boosts Small-Business Optimism NY Heard & Scene Cultural Evolution: What’s On in 2015 World News France’s Piketty Refuses State Honor Gear Learn to Embrace the Digital Detox Technology Making Change: Mobile Pay in Africa Economy PLAY Yield-Hungry European Investors Face Tough 2015 New property owner begins building a home on former 'swamp of doom' in Ann Arbor neighborhood For several years, a large cement pit in a southeast Ann Arbor neighborhood that residents labeled "the swamp of doom" was a constant source of irritation and frustration for residents upset with the owner and city over the property. The half-finished home foundation filled with water when it rained, and, as it continued deteriorating, wildlife took up residence and it became a danger for neighborhood kids. Now, the old foundation has been cleared, the pit filled, plans for a new home approved and work on the house is underway. "They got the new foundation in, the wall framed in and they're doing well. It's a new person in charge of it. The old owner's uncle," said Ralph Welton, the city's chief development official. "The neighbors are happy." Early in the year, Ann Arbor City Council Member Stephen Kunselman, who lives nearby, circulated photos of ducks floating on the swamp's waters and called for the city to press its former owner, Mahmoud Alkahla, to address the situation. Officials discovered the backfill around the pit was actually composed of old tires, car parts, lumber and other debris covered in soil. After months of pressure from the city in mid-2014, Alkahla hired a contractor to remove the foundation at 3300 Nordman Drive, but the pit remained for months. In September, Alkhala, at the city's behest, finally quit-claimed the property to his uncle, who is now managing the project and hiring contractors to complete work. "He's got paid contractors doing everything and it looks very good," Welton said."I've been by there and there have been inspections. It's moving along." Alkahla demolished a home on the property after purchasing it out of foreclosure in 2010, then planned a 2,000-square-foot house. But instead of hiring a construction company or contractors to execute those plans, Alkahla moved forward on the foundation project alone, despite having no prior homebuilding experience, Welton said. The foundation was poured with plywood forms instead of steel forms as is standard, and the plywood forms blew out during the first pour in 2012. The city ordered the property cleared and secured in June. Tom Perkins is a freelance writer for The Ann Arbor News.

Real estate sales market in Dubai has outperformed

The real estate sales market in Dubai has outperformed the rental market in the last year, sparking a squeeze in yields and prompting concerns that the fundamentals of the market are becoming skewed. Malaysia_real_estate_low_res Soaring house prices in Dubai led the global rankings for four quarters according to real estate agency Knight Frank, and in some areas, prices were back to near pre-crisis levels, prompting the UAE Central Bank to issue a warning in June of “growing imbalances” and “an overheating real estate market”. A month later, the IMF said that action may be necessary if real estate prices continue to rise rapidly. All eyes on yields The trend of low yields has been particularly evident in the apartment segment, where sales prices increased 25% year-on-year (y-o-y) in the third quarter. The rental market, in comparison, rose 16% during the same period, according to commercial real estate services company CBRE. A report compiled by Unitas Consultancy and the real estate data analytics firm Reidin found that residential rents across the emirate contracted by 1% in the third quarter over the previous quarter, with net yields ranging from 3.5% to 7.6%. In June rental yields in Dubai stood at 70 basis points below historical averages according to the report released in late July 2014. Christopher Seymour, head of property UAE at consultancy EC Harris, points to the investment market, in terms of buy-to-let properties, as a key barometer of confidence in a property market and an early warning sign of potential future trouble. “In all sectors, if the investment market dies away, it shows there’s no growth. And the yield compression in the Dubai residential market is really telling us that story now,” he told OBG. Supply versus demand In spite of a growing consensus that Dubai’s residential property market is edging towards a peak, most experts do not believe the emirate is heading for a repeat of the last property crash. “Between 40,000 and 50,000 units were handed over each year in the 2007-08 period,” Matt Green, head of research at CBRE Middle East told OBG. “We’re certainly not there at the moment, with around 62,000 units scheduled for completion by the end of 2017.” In November, ratings agency Standard & Poor’s said prices are likely to soften due to supply in the market. “Developers are likely to continue to feed the market with new supply − particularly the top-tier players, such as UAE-based Emaar Properties, which can attract off-plan buyers for their launches, meaning they sell properties before they’re built,” said S&P. “We thus expect supply additions to outpace demand over the next few years and believe prices are likely to stabilise or soften.” Dubai’s reputation as a safe haven, at a time when much of the region remains weighed down by instability, has helped it to maintain strong investment inflows, but, simultaneously, has made it difficult to estimate levels of sustainable demand. Reidin and Unitas point out that the sales segment continues to be dominated by cash buyers, which accounted for 72% of transactions at the beginning of the year. Unlike the last boom cycle, the injection of supply is more gradual in the both the residential and commercial segment. “Population and employment growth is enough to support 15,000 to 20,000 residential units each year and this is the current pipeline, so we don’t think there’s an oversupply problem,” Craig Plumb, head of research for the Middle East and North Africa at real estate services company Jones Lang LaSalle told OBG. Reassuring investors Measures introduced by the Real Estate Regulatory Agency since 2008 aimed at cooling speculation have proved largely effective. Stamp duty (a registration fee) has been raised from 2% to 4%, while new obligations imposed on developers looking to sell off-plan are now in force. An interactive investment map, brought in by the Dubai Land Department, is supporting the measures by providing greater clarity for investors. Prices in Dubai’s luxury homes market fell 0.2% y-o-y in the third quarter, after rising 6.3% y-o-y in the second quarter. Knight Frank, which compiled the data, attributed the drop to a mortgage cap, which imposes even stricter borrowing criteria for those purchasing properties above $1.36m. The off-plan market has already eased in recent years with broker estimates placing current sales at between 2000 and 3000 units per year. “The biggest issue is whether there will be any exogenous shocks and liquidity drying up, but at this stage I do not see this happening,” Rehan Akbar, analyst for EMEA corporate finance at Moody’s Investors Service Middle East told OBG. Fundamental demand, analysts conclude, remains relatively strong. “There is continued investment demand so we don’t think there will be a major correction,” Plumb said. Caution, rather than pessimism, seems to sum up the current mood. Do you have a story or an article to publish? Please email us at spyghana79@gmail.com.