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MAY 2012 |

NEWS Assetz warns of Detroit hell By Geoff Hadwick

A leading overseas property consultancy has warned agents and developers to be very careful about working on and/or selling distressed homes based in Detroit, Michigan. Stuart Law, the chief executive of

Assetz International Limited, told OPP that although many international investors have done well in the city, recent high profi le company failures have left a number of buyers from abroad in a diffi cult position. “We would no longer recommend

Detroit,” says Law. “Buyers are going to fi nd that the product there can be made to work, but there are easier and safer places to put your money.” “The city does not have a lack of

tenants, it is the local politics that are the problem. They cannot get their act together, the Section 8 paperwork does not come through on time, we hear they are running out of funding and too many people have had their fi ngers burned.” “However, it is still possible to buy

very cheaply and to renovate very cheaply there, and to make a good profi t.


NEWS IN BRIEF U.S. market looking up

Red alert | Assetz chief Stuart Law would no longer recommend investing in Detroit

It is just too high risk now for us to continue sales there.” Law has been horrifi ed to see a

number of other high profi le sales agents leave their Detroit buyers high and dry. “You simply don’t walk away from buyers in this situation and avoid talking to people about what has happened,” he says. “And we are seeing it through with all of our buyers.” He also disputes press stories in the

States that imply the buyers involved were foolish. “That’s just not true,” says Law. “Almost all buyers did everything

right – they went over there on site visits, they carried out their own due diligence on top of that which we carried out, they looked into the rental market, but still got caught out.” Any housing investment claiming it

can guarantee a Section 8 housing tenant should raise red fl ags, said Eugene Jones, executive director of the city of Detroit’s Housing Commission. “It just doesn’t work that way. It’s a lengthy process for any property to be qualifi ed, and there is no guarantee that the property will be chosen,” Jones adds.

Singapore facing twin body-blow

Singapore’s international property sector is facing a double whammy as overseas buyers pull out and developers panic about a series of new regulations. Overseas property buyers have

pulled out of the Singapore market in spectacular fashion. Homes sold to buyers from abroad imploded by 78% in the fi rst quarter in the fi rst quarter of this year following the Singapore government’s decision in late 2011 to


A fi fth of UK homes could be banned from the rental sector in 2015. Buildings rated F or G on their Energy Performance Certifi cate cannot be rented after 2018. But UK-based fi rm McBains Cooper says it believes the measure may be introduced earlier.

increase stamp duty and stop the market from overheating. There were only 293 transactions in

the fi rst three months of 2012 compared with 1,358 in the last quarter of 2011, according to a report this month from the Straits Times. And, to add further misery, developers

in Singapore are increasingly worried about a change in the law that says that from May 18 2012, they will have to provide accurate information,


INCREASING demand in New Zealand has seen residential building consents rise to their highest level for two years in March. Statistics NZ revealed that building consents rose by a third to 1,394, worth around $415 million in the third month of the year.

show proof of their track record and seek consent for changes in a unit from home buyers under a new rule to protect consumers. This new approach is being driven

forward by the Urban Redevelopment Authority (URA), which says that the changes to Housing Developers Rules (HDR) will “enhance transparency in the real estate industry and enable home- buyers to make better informed decisions when buying a home.”


VILLAS in Dubai’s Springs community put up for auction by the DLD, sold for up to 40% above reserve prices. One property, a two-bed apartment villa, was bought for Dh1.26 million despite a reserve of Dh 900,000, according to news agency Emirates 24/7.

THE United States’ housing market is looking up, according to a survey of American agents. 80% of agents believe home prices won’t decline further, while 70 believe prices will be rising soon, said the fi ndings in a RE/ MAX survey. RE/MAX chief executive Margaret Kelly said: “To active real estate agents, this market is defi nitely heating up.”

IMF urges for debt help

THE International Monetary Fund (IMF) told OPP that it has analysed 99 housing busts across 25 advanced economies over three decades and found that economic downturns preceded by large surges in household debt tend to be the most severe downturns of them all. They usually last for 5 years and the IMF has encouraged the U.S government to help struggling homeowners with their debt in order to increase consumer activity and as a result increase consumer demand and employment.

China prices still growing CHINESE house prices are continuing to fall in the majority of cities according to the government. The National Bureau of Statistics said that 46 out of 70 major cities tracked recorded home price falls, compared to 45 in February. “New home prices are generally continuing to go lower,” it said in a statement. Analysts say that ongoing price curbs will push prices down even further. “The policies have already aff ected the real economy,” said Xu Sitao, global forecasting director for China at the Economist Intelligence Unit. “Looking at current property prices, they still have not fallen to the government’s we think this will continue.”


RESIDENTIAL rent levels in Abu Dhabi fell sharply during the fi rst quarter as a glut of new developments came to market. Average residential rents plunged 18% year-on-year in Q1, international agency CBRE told OPP in its latest market overview.

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