US Home Sales Jump, While Prices Fall
The sale of new houses in the US have hit a six-year high, with 500,000 units sold in the year to August 2014. That’s the news from the US Department of Housing and Urban Development, whose chief economist David Crowe predicted that ‘historically low mortgage rates, attractive home prices and firming job and economic growth should keep the housing market moving forward in 2014.’
However, the changes took place against the background of falling home construction and prices decline, which has turned the attention of US investors toward homebuilding land. Michael Pralle, of property firm J. E. Roberts, called land prices irresistibly cheap, and reported buying up lots in the Southeast at a ‘phenomenal’ 60% discount. This may lead to a shift toward higher volume and away from a luxury-led market in the US.
A Remade London Could Guide the World’s Cities
Plans to remodel London could be the basis for changes in other cities across the world. The Thames Estuary is set to be rebuilt by 2020, with floating villages of eco-friendly homes already going up in the docklands, and a ‘garden bridge’ planned for Victoria Embankment. How this will pan out for residents of a city where 81% of new home developments are bought by overseas purchasers remains to be seen, but the development is exciting.
Go West, Young Investment Firm
The west is an emerging market. That turns our traditional view on its head, but it reflects the fact that a massive wave of investment and purchase money is likely to com out of Asia in the next few years, and it is forecast to break on the shores of Europe, America and the UK, Australia and New Zealand. ‘Instead of talking about emerging markets in Asia, now emerging markets could be in the US,’ according to Yu Lai Boon, chief investment officer of state-owned investment firm Dubai World. ‘As investors in the Middle East,’ Mr. Boon went on, ‘we’re seriously looking at the US and European markets right now as the beginning of investment for the next golden era.’
In Sao Paulo, Luxury Residencies Defy Downturn
Sao Paulo’s luxury neighbourhoods remain almost unaffected by Brazil’s recession, with prices in the most expensive areas surging by 10% this year to August. Apartments in luxury locations like Vila nova Conceicao are selling for about 25,000 reais (US$10, 600/£600) per square metre. In the rest of Brazil, meanwhile, the economy slipped into full recession in the second quarter, contracting by 0.6%, while inflation accelerated to 6.51% in August.
When The Floor Falls Out of the Cuban Housing Market…
Cuba’s housing market is still struggling to reform itself. After two and a half years of the first legitimate housing market in fifty years in the country, several serious problems remain. First among these is the shortage of housing construction and the dilapidated state of much of the country’s housing stock, meaning there’s approximately a 500,000 – unit shortfall and up to 60% of the national housing stock is in serious disrepair, according to Havana Consulting Group.
That can mean buildings at serious risk of floors, ceilings and roofs suddenly falling in and leaving residents homeless. But there are other issues too, including the absence of a credible mortgage industry. Without this, the demand for the market has faltered, and the market has begun to stagnate. Initial stimulation was provided by government investment which has now ceased, and there’s increasing suspicion that many homeowners are selling up so they can move house – to somewhere outside Cuba.
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