17 May Negative equity growth in the US + Hong Kong’s forthcoming boom + Welfare groups slam a scare campaign and more!
We’re back with Nicola McDougall and Kevin Turner as they discuss interesting stories in the real estate industry this week.
Our first story is about welfare groups slamming a “scare campaign” by real estate agents across Australia. Agents are warning tenants that Labor’s negative gearing policy will send rents soaring and lift the unemployment rate.
The Real Estate Institute of Australia is co-ordinating the campaign, with REIA president Adrian Kelly claiming that they are only providing “the truth, plain and simple.” We’ve had guests from the Institute on our show and they’ve been quite vocal over the last few months about the impact of labor.
Now, every industry body is entitled to represent its members interests. When a policy that can have a detrimental impact on the livelihoods of the hundreds of thousands of people that are employed directly or indirectly in the property sector, naturally people are going to be concerned.
It’s a very emotive issue leading into the election as housing is emotive subject anyway. So we are seeing two very strong opinions on one side or the other of Labor’s policy to restrict negative gearing.
For our second story, negative equity homes in the US are on the rise in 2019. 9.1% (over 5.2 million) of all US properties are classified as seriously underwater based on the Q1 2019 U.S. Home Equity & Underwater Report by ATTOM Data Solutions.
“With home prices increasing at a slower pace in 2018, than in previous years, the potential for people to climb out from mortgages that are underwater or advance into equity-rich territory, tends to be reduced,” said Todd Teta, chief product officer at ATTOM Data Solutions. “However, only one in 11 mortgages are seriously underwater today, compared to nearly one in three during the depths of the recession. Although, if the latest trend continues, it will raise another clear signal of a market slowdown, which will be good for buyers, but not so good for sellers. But if the pattern of the past few years takes hold – with levels of underwater and equity rich mortgages turning around – it will mean the market remains strong for sellers, with fewer needing to get out from under financial distress.”
Our third story is about the sunflower tower designed by ODD architects. A residential tower in Ecuador has facades made of rhythmic archways and terraces which aim to create a bioliphic barrier between the structure and its urban setting. The sunflower tower was built, according to the firm, to serve as an example against increasing urbanization without regard for the natural landscape.
The beautiful tower is inspired by the formation of sunflower seeds and petals. Stacked floor plans create a repeated pattern of archways that frame the terraces of each apartment. Every apartment contains a ‘mini forest’ which surrounds the apartment, creating pockets of plant life at each junction.
Check out the pictures at the article linked above.
Now that we’ve seen Ecuador’s unique architecture, let’s take a trip to Hong Kong, where they’re predicting a boom to occur over the next 10 years.
Hong Kong’s property bull market has another 10 years to run, as housing supply fails to keep up with the new population pouring in from the Greater Bay Area, said the Swiss bank UBS, which correctly picked the bottom in the city’s short-lived price correction last year.
Buyers are actually competing to get their hands on residential property. And despite increasing prices, analyses predict that demand will stand at 60,000 units. This bullish forecast by UBS and Moody (which both predict a rise between 8 to 10 per cent) pose a policy challenge for Hong Kong’s Chief Executive Carrie Lam Cheng Yuet-ngor and her administration, which have made affordable housing a key policy objective.
“Although housing demand from local residents is likely to decline due to an ageing population over the next 10 years, we believe demand from non-locals will be more than enough to outweigh it,” Lam said. “Given limited housing supply and the integration with the Greater Bay Area, we forecast the housing shortage to persist and widen, supporting long-term property prices.”
Our last story for the week is a canal home in LA with a Beatle pedigree. California hot spot Venice Beach has drawn celebrities, surfers, bohemians and sun worshipers since the beginning of the 20th century. A recent addition to the Venice market is the sophisticated home of the son of Beatles guitarist George Harrison, priced at $3.99 million.
Starting out as a sedate seaside-resort town, today it’s a whirlwind of activity attracting those who enjoy having the party atmosphere always available around the corner. One of Venice’s most recent additions feature the sophisticated home of George Harrison’s son.
The sheer beauty of this house is enough to make someone sing Oh My Sweet Lord. Dhani Harrison, also a musician like his father, has recently decided to sell his glamorous canal home that enjoys the sunrise from the rear balcony, the sunset from the west, 360-degree views from the rooftop terrace and water views from the canal-side terrace and decks. Measuring in at 2,826 square feet, the two-bedroom, three-bath home has an open floor plan with soaring ceilings. Second-level glass walls and open first-floor ceilings bathe the interior with sunlight as does the large skylight above the wide spiral stair. Updated in crisp contemporary style, the home offers multiple choices for entertaining on all three levels and has recently appeared in Architectural Digest.