Saturday, 23 December 2017

Philippine 2018 property forecast

2018 property forecast
By: Amy R. Remo - Reporter / @amyremoINQ
Philippine Daily Inquirer / 05:09 AM December 23, 2017

There is no doubt that the Philippine real estate industry can anticipate another stellar year in 2018.

But the factors that are expected to drive that promising growth will slightly differ compared to what has driven the industry in the past decade.

Such factors include a diversified office tenancy as well as the rising demand for flexible workspaces and warehousing, according to the latest report of Colliers International Philippines entitled, “Top 10 Predictions For 2018.”

Other factors that have and will help drive the strong performance for the property sector include a sustained GDP growth over the next three to five years.

“Perennial growth drivers such as household consumption remain robust while manufacturing and foreign investments’ combined contribution to aggregate economic output continues to expand,” Joey Roi Bondoc, manager for research at Colliers, said in a separate interview with the Inquirer

“Overall, OFW (overseas Filipino worker) remittances and outsourcing revenues should sustain strong domestic demand, partly shield the Philippine economy from global economic shocks, and provide trickle-down benefits to key segments of the economy, including property,” Bondoc further explained.

Here meanwhile are the Top 10 predictions for the real estate industry according to Colliers.

1 Infrastructure-led GDP to buoy property

Much of the country’s growth will hinge on ramped-up infrastructure spending, which should support the Duterte administration’s commitment to build crucial projects throughout the country.

The ushering in of the “golden age of infrastructure” also lends support to the government’s decentralization push which should unlock land values in areas outside of Metro Manila and stimulate business activities in the countryside.

Ultimately, we see the government’s infrastructure policy dictating the strategies of both local and national developers.

2 Metro Manila condominium leasing to remain challenging

Residential condominium leasing in Metro Manila remains challenging, driven by the influx of new condominium completions in major business districts and fringe locations.

Colliers expects developers to continue venturing into residential projects in second-tier and third-tier cities all over the country, where demand primarily comes from end-user buyers. The markets may be smaller compared to Manila but more stable in terms of end user housing demand.

3 Diversified office tenancy mix to be led by non-BPOs

Offshore gambling has filled the void left by business process outsourcing comapnies (BPOs). With the Philippine Amusement and Gaming Corp. (Pagcor) issuing 51 Philippine Offshore Gaming Operators (Pogo) licenses thus far, requirements from Pogos have sprung across Metro Manila.

We see less office launches next year following the decline in BPO companies’ office space demand. Colliers expects traditional companies taking on a bigger role in 2018 in terms of space absorption.

4 Flexible workspace to accelerate

There are over 2.15 million sq.ft. of (available) flexible office space in Metro Manila. The profile of tenants varies from start-ups, to law firms, Fortune 500 companies and freelancers.

As mobility, connectivity and flexibility become the norm in working in the 21st century, occupier demands will also change sharply, requiring more flexible office spaces over the near to medium term.

The challenge for the developers is to adapt to the demands of the market to remain competitive in this growing office segment especially as international co-working brands enter the market. Outside Metro
Manila, growing hubs for flexible workspace are Iloilo, Bacolod, and Davao.

5 Growing popularity of e-commerce to drive warehousing, logistics demand

The warehousing and logistics market in Metro Manila is tight, operating at an average of 98 percent occupancy. Warehouses in the country’s capital have been dwindling as land values rise and demand for residential and commercial projects increase.

We see logistics and warehousing to be a major driver of Northern/Central Luzon economy over the medium term in light of the planned expansion of Clark airport and construction of Subic-Clark cargo railway.

Opportunities abound and are enticing developers to acquire warehousing and logistics businesses. Among the most aggressive are the SM Group and Davao-based businessman Dennis Uy of Udenna.

6 Industrial park developers head north of Luzon

Major developers are heading north of Manila. Recently, DoubleDragon acquired a 6.2-hectare lot in Luisita Industrial Park in Tarlac.

A proof of Northern and Central Luzon’s rising viability as an industrial hub is the Xu Liang Dragon Group’s commitment to develop a 3,000-ha mixed-use special economic zone in Pangasinan. Other industrial developments in Pampanga are Ayala’s 31-hectare industrial park in Alviera estate in Porac and Filinvest’s 100-hectare industrial estate in Clark Green City.

7 More townships outside Metro Manila

Colliers expects developers to continue pursuing satellite communities in and outside of Metro Manila. Townships offer a better value proposition (live-workplay-shop lifestyle) than standalone projects since they offer mixed-use developments.

We see developers pursuing more township projects in areas outside of Metro Manila such as Cavite, Laguna, Bulacan, Pampanga, Cebu, and Davao over the near to medium term as land values are being unlocked by an aggressive expansion of road networks.

8 More resort-oriented hotels across the country

We believe that the development of 3- and 4-star hotels in resort destinations will be more visible over the next two to three years. Colliers believes that among the most attractive locations for these developments are Cebu, Bacolod, Iloilo, Palawan, Davao, and Bohol.

New airport infrastructure is essential in further expanding both local and foreign tourism. Colliers believes that the expansion of international airports in major destinations such as Bohol, Bacolod, Iloilo, and Davao will allow foreign tourists to bypass Manila.

9 Continued growth of e-commerce and experiential retail

To attract more customers, we encourage malls to provide more lifestyle amenities and technology-driven customer experiences that generate a sense of destination.

Developers and retailers in the Philippines do not migrate totally to e-commerce but in fact use online shopping and social media platforms to complement their physical stores.

10 Leisure, industrial to drive Cebu property expansion

The completion of the Mactan-Cebu International Airport expansion project should further boost Cebu’s attractiveness as a tourist destination.

Cebu’s attractiveness as a tourist spot and growing competitiveness as an investment destination should support a 15 to 20 percent growth in tourist arrivals over the next 12 months. This should sustain hotel occupancy of between 65 percent and 70 percent across Metro Cebu over the next 12 months.

Demand for warehouses and container yard spaces may become more pronounced over the next 12 months.

We see industrial land values in the northern parts of Mandaue, Consolacion, and Lilo-an growing by at least a tenth annually over the next two to three years. Cebu remains as one of the most feasible industrial locations outside of Manila due to its strategic location and skilled manpower.

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Friday, 22 December 2017

Bitcoin Index down as much as 51% in one week.

Has BITCOIN Finally Burst?

Myself and some of the top financial advisors in the world had been warning investors that the Bitcoin bubble was going to burst.

Down 51% in 5 Days

In just the last five trading days Bloomberg's BITCOIN INdex has dropped  almost 51%. 

That's an average of 10% per day!

Could this be the start of a Bear Market?

"A bear market is a condition in which securities prices fall and widespread pessimism causes a downward spiral to be self-sustaining. Investors anticipate losses as pessimism and selling increases."

I warned investors not to get involved recently  when I saw the typical greater fool theory come into place where inexperienced, naive fools were walking into an area where primarily, sophisticated investors had ventured before.

A strong indicator of any balloon market in the future will be every time you see a multitude of  Facebook posts with most advising to buy or sell an investment that will be the time to sell or buy the investment.

Possible another Up move:

Now that there is a futures market for BITCOINS the big money may jump on this bandwagon and probably try to push it back up to new highs.

But sooner or later there won't be any fools left and it would then have the worst crash of any investments in history.

Can you imagine if you were a person living from month-to-month and you took your life savings, because you finally got tired of hearing your friends bragging about the BITCOIN profits and you invested last week  and now you're down 50%. Many sold already in a panic.

Will they likely go back in after they lost all their available cash.

Many friendships will dissolve as a result of poor advice from friends to buy BITCOINS. I may even lose a few friends for even posting this because they believed that it would go on forever. 

I was even hesitant to post the last several weeks that I felt that the bubble was going to burst for their sake but I can't be biased because of a few friends owning BITCOINS. 

My goal in the future is to be an advisor to many more people based on my 40 years of investment experience. 

And don't think the other Cryptocurrencies will be immune.

Precious Metals Surge :

In the meantime one of my favorite investments, Silver which as my readers know I loaded up on heavily at $15.50 to $15.75 the last couple of weeks ago is now sitting in $16.40. With leveraged accounts I am earning huge profits.

Silver is a good long-term investment when you buy it below $20 an ounce. In my professional opinion it is a no-brainer.The beautiful thing is anybody can afford to buy it, unlike BITCOINS One ounce of silver can be purchased for as little as $18 - $20 per ounce.

As I sit up on a Canadian mountain skiing this week and looking at the world literally from outside the forest I am starting to see signs of inflation picking up heavily next year.

Inflation can be your friend or your enemy it all depends where you put your money.

Inflation is like the tide it raises all boats. 

It will raise the value of tangible investments, things that you can touch and feel such as real estate, precious metals, diamonds, coins and collectibles.

It will sink the value of intangible investments such as stocks, bonds. 

Next year may very well be the beginning of the end of the stock bull market that I predicted in February 2009 which has now had one of the longest bull market runs in history.

The Trump rally will probably end as Trump falls from grace under the burden of official FBI investigations into his possible collusion with Russia in the elections.

Even more dangerous  I believe will be that many women may come out of the woodwork and accuse him of sexual crimes. 

It may be the beginning of the end for Trump and America which means the American dollar will probably continue to fall. Therefore anything that will benefit from a American dollar fall will  rise.

Stay tuned for further predictions for 2018 in the coming weeks as I literally look at the forest from outside the trees.

 My family and I wish you a very very Merry Christmas .

Wednesday, 13 December 2017

Asian investors pouring money into Europe’s real estate - Bali Will be the next hot Chinese real estate market.

Bali news and views editor's comments:2017-12-14

Lawrence writing weekly newsletter while on vacation in Macau China

History has taught us over the last 30 years wherever the Chinese real estate investor goes you want to be there at the start and you want to get out when they leave.

"Wherever the Chinese investor goes you want to be there at the start"

Thirty years ago at a Las Vegas investment conference in front of 500 Americans I was booed off the stage when I said China would be the next economic power the world. Guess who is now number 1.

Nine years ago when I was speaking on behalf of the Indonesian government at three major travel conferences in Beijing, Guangzhou and Shanghai I was laughed at when I told over 1,000 Chinese travel agents that the Chinese would be the number one tourist to Bali. At the time they were 18th.
Lawrence speaking to over one thousand Chinese travel agents on behalf of the Indonesian government  in 2008 predicted "China will be number one tourist to Bali "
Both of the two above predictions came true. 

I will now give you another prediction, China will be the number one real estate investor in Bali the next 5 to 10 years.

"China will be the number one real estate investor in Bali the next 5 to 10 years."

Why? Well, they are now the number one tourist to Bali.

I coined the saying 17 years ago that "Bali real estate investment is directly proportional to Bali tourist arrivals".

"Bali real estate investment is directly proportional to Bali tourist arrivals"

 Many Chinese tourists that come to Bali and go back home will tell there friends how cheap Bali real estate is! 

If they do their research they will discover that they can earn 15% to 25% per annum by buying a Villa or home for as little as $158,888 and renting it out to Chinese Tourists.
Three-bedroom four bathroom 650 m² Bali luxury Villa with 9 m swimming pool. Only $158,000

The demand from Chinese real estate investors for Bali real estate will increase exponentially as each Chinese returns home  and boasts about their profits they are making in Bali while owning a beautiful huge Bali Villa or home that they and their family can use for free whenever they wish.

When they learn that they can use their Bali Villa, or home for exchanging for homes and villas around the world saving tens of thousands of dollars while they explore the world they will be even more interested in buying more holdings in the future.

When they also realize that Bali just finished its first downturn in modern history and that they can buy at prices that are down 20% to 50% from 2014 highs they will take advantage of today's low prices.

If you want us to have any idea what can happen to Bali real estate when the Chinese start investing think about Singapore 30 years ago.
In a 20 year period they drove Singapore prices up 500% to 1000%.

I issued my first sell signal on Singapore four years ago when I saw a 2,000 m² property selling for $20,000,000. Since my sell signal prices have collapsed.

Recently, the Australian government has became very fearful when Chinese bought up a large amount of their properties. Australian voters complained the Chinese had made Australian Properties unaffordable for Australians so the Govt. put serious curves to try to curtail their buying.

Cities like Perth are already down 20% to 30%. Sydney, Brisbane and Melbourne all look like they're set to go down further.

If you want to see the the future of Bali Real Estate look towards Canada, my home country, Since the Chinese started buying prices have gone up 200% to 500% in places like Vancouver and Toronto.
I am not bullish on those markets anymore. In fact I got in and got out at the perfect time.

So Mark my words, the Chinese will be the number one investor in Bali real estate the next 5 to 10 years and will drive prices up 100% and 300%.

After my current vacation when I come back I will focus on these markets.

In the meantime you can take a look at what the most recent discounted properties we have available the last two months that are bargain prices on the most modern real estate web site in Indonesia

Happy Holidays and never forget these predictions I made today.

PUBLISHED : Wednesday, 13 December, 2017, 7:00am
UPDATED : Wednesday, 13 December, 2017, 7:00am

Investments in commercial property and logistics real estate have lifted non-European investors’ share of the market to 40 per cent, while markets outside the UK are attracting more attention.

Louise Moon

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Asian capital is pouring into Europe’s real estate markets, led by commercial property deals by Hong Kong and Chinese investors and by logistics platform acquisitions, and is increasingly looking beyond the traditional favoured destination of London to other cities across the continent.

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In the fourth quarter of 2017 alone, Asian investors put some 16 billion euros (US$18.8 billion) into European property in deals worth over 5 million euros, up from just below 6 billion euros the quarter before and compared to around 6 billion euros in total for deals of the same size in the whole of 2012, according to property data analysis firm Real Capital Analytics.

North American investors have spent more than Asian players so far in 2017, but the lift from Asia has led to a record share for non-European investors of almost 40 per cent of the European market, roughly double that of 2012, the company said.

“The wave of capital is really starting here in Asia and coming up against the European shores. We are seeing a huge amount of capital flow into the market,” said Simon Mallinson, executive managing director at Real Capital Analytics, speaking at the MIPIM Asia property conference in Hong Kong. “What that is leading to is a record share for global players in Europe.”

Hong Kong players alone have spent US$7.3 billion in London so far this year, according to Real Capital.

In March London’s Leadenhall Building, better known as the “Cheesegrater”, was bought by Hong Kong-listed property developer CC Land Holdings for £1.13 billion (US$1.5 billion), while in July the

20 Fenchurch Street property, known as the “Walkie-Talkie”, was sold to sauce maker Lee Kum Kee International Holdings for £1.3 billion in a record transaction for a single building in the UK.

Despite political uncertainty after the UK voted to leave the European Union in June 2016, London remained the top target market for Asian property investors, with Frankfurt coming in second and Amsterdam third.

Hong Kong buyers make beeline for London assets, lured by stable rent, rule of law, cheap money

“London remains the major destination for Asian buyers, especially first-time buyers, due to liquidity, a sophisticated legal system, a simple tax structure and it being an English-speaking country,” said Henry Chin, head of research for the Asia-Pacific at CBRE.

“However, we see that Asian investors are expanding their radar outside London as well as outside the UK”, he said, with many South Koreans targeting cities like Frankfurt, Berlin, Austria and Amsterdam, for higher yields.
Germany has been a particular target, with the total amount of Asian property investment into Germany for the first half of 2017 surpassing that for the whole of 2016, according to Chin.

“Germany has always been a safe haven,” said Jan Jescow Stoehr, director of risk management at real estate investment firm KamAm Grund Group, at the conference. “It is a very strong country with a strong economy – there is a small layer of political uncertainty but it won’t have an impact globally. Business is driving investment demands from outside.”

Several international banks including Morgan Stanley and Citigroup have said they are planning to move thousands of London-based jobs out of the UK following Brexit, and may choose Frankfurt as their new trading hub inside the European Union.

But competition from domestic players in Germany could hinder Asian investment, according to Tom Leahy, a senior director at Real Capital Analytics. While UK institutions have largely left prime assets to overseas buyers from Asia and the Middle East, German domestic competition is stiffer, he said.

Another area where Asian money is increasing its prominence in Europe is in logistics properties, with investors showing signs of looking beyond the traditional UK market in search of higher yields.

In October Asia’s biggest warehouse operator, Singapore-listed Global Logistic Properties, acquired European industrial property company Gazeley for US$2.8 billion in its first push into the continent.

Private equity group Blackstone sold the European logistics real estate company Logicor in June to China Investment Corporation for 12.25 billion euros in the largest recorded private equity real estate deal in Europe.

“Some big American players are building big logistics platforms which are then being sold on to more long-term investors: built using American-backed capital and sold to Asian-backed capital. Logistics is powering ahead in terms of activity,” said Real Capital’s Mallinson.

Singapore condo rents slip 0.3% in November; HDB rents ease 0.5%:

WED, DEC 13, 2017 - 10:44 AM
UPDATED WED, DEC 13, 2017 - 6:52 PM

Rental volumes for private non-landed homes decreased by 0.2 per cent in November compared to October, but was 0.3 per cent higher year on year.

PRIVATE non-landed home rentals slipped by 0.3 per cent in November from a month ago, a gentler decline from the 0.7 per cent dip in October, flash estimates from SRX Property on Wednesday showed.

The main drag in November came from the Outside Central Region (OCR), which saw rents drop by one per cent in November, followed by a 0.5 per cent fall in the Rest of Central Region (RCR).

Rents in the Core Central Region (CCR), however, increased by 0.8 per cent.

Year-on-year, overall rents in November declined 1.2 per cent, with the RCR posting the biggest decline of 1.9 per cent. Rents in November remain 19.8 per cent below a January 2013 peak.

Rental volumes for private non-landed homes decreased by 0.2 per cent in November versus October, but were 0.3 per cent higher year-on-year.
SEE ALSO: Singapore condo rents slip 0.3% in Nov; HDB rents ease 0.5%: SRX

On the public housing front, HDB rents fell by 0.5 per cent in November from a month ago, the flash estimates show. Rentals for housing board three- and five-room flats decreased by 1.5 per cent and 0.3 per cent respectively, while rentals for HDB executive flats increased by 0.2 per cent. Those for four-room flats remained unchanged.

HDB rents remain 14.7 per cent below their August 2013 peak.

Nonetheless, HDB rental volume rose in November. SRX Property estimates that 1,877 HDB flats were rented last month, representing a 13.8 per cent increase from October, and a 0.1 per cent increase year-on-year.

Singapore land supply for private housing in H1 2018 almost steady

DECEMBER 13, 2017 / 11:11 AM / UPDATED 17 HOURS AGO

Singapore land supply for private housing in H1 2018 almost steady

SINGAPORE (Reuters) - Singapore kept the amount of land it plans to sell for private housing almost steady in the first half of 2018 as the government seeks to strike a balance between a potential future glut of residential units and current demand from developers.

A general view of private condominiums and public housing estates in Singapore June 29, 2016. REUTERS/Edgar Su/File Photo

The market has been awaiting the Ministry of National Development’s (MND) biannual decision on government land sales (GLS) as hungry developers have been aggressively bidding for sites in public auctions and collective sales.

The MND recognized there was strong demand for sites by real estate developers, and a pick-up in transaction volumes. But it said there was large potential supply of around 20,000 units from awarded en-bloc sale and GLS sites that will add to 18,000 unsold units that already have planning approval.

This came as more than 30,000 existing private housing units remained vacant, the MND said.

“Taken together, the total supply in the pipeline, including the units from the 1H2018 GLS Program, will be adequate to meet the purchase demand for new private housing from home buyers over the next 1-2 years,” it said in a statement.

The MND said it would release sites that could yield a total of 8,045 private residential units for the first half of next year. That compares with 8,125 private residential units in the GLS program for the second half of 2017.

“The rationale behind this new program is that the government is adhering to its cautious approach on the supply front,” said Christine Li, director of research at Cushman & Wakefield in Singapore.

The first-half 2018 program will consist of 2,775 units through six confirmed list sites, which are launched regardless of demand. The list includes one site for executive condominiums, which are considered a hybrid of public and private housing, that could yield 450 units.

The government’s reserve list of sites, which will only be put up for tender if a developer’s minimum bid price is deemed acceptable, can yield 5,270 private housing units.

Alice Tan, head of research at real estate services firm Knight Frank, Singapore, said the GLS, in terms of number of potential private housing units, was lower than her expectations. “It could drive developers to look at collective sales opportunities,” she said.

Reporting by Aradhana Aravindan; Editing by Sunil Nair
Our Standards:The Thomson Reuters Trust Principles.


Tuesday, 12 December 2017

The evolution of the vacation rental market in Airbnb

Opinion | Online

By Amiad Soto - Guesty | December 12, 2017

In recent weeks, we have witnessed two significant moves by Airbnb that will have interesting implications on the international, short-term and vacation rental industry.

Firstly, the platform has introduced Host Tools; and secondly, Airbnb has said that it will be following London’s cap on urban rentals, with a similar cap for Paris, coming into effect in January.

The booking giant is both courting the traditional vacation rental market, and putting some restraints on urban short-term rentals.

The global vacation rental industry, traditionally fragmented and with a large ecosystem of small players, is currently going through a period of rapid transformation and growth. It’s an exciting time to be in the short-term and vacation rental industry.
Embracing traditional vacation rentals with Host Tools

In October of this year, Nate Blecharczyk, co-founder and chief strategy officer for Airbnb, announced the launch of Airbnb’s Host Tools at the Vacation Rental Managers Association (VRMA) annual conference in Orlando.

With the new Host Tools, vacation rental management companies can directly integrate their vacation rental technology, like Guesty, to manage their operations more efficiently.

This is a significant move, showing that Airbnb is now both ready, and very willing, to embrace the traditional vacation rental market and move away from focusing solely on short-term rentals by individual owners. The vacation rental industry is estimated to achieve a global market value of $194 billion by 2021, a significant rise from $138 billion in 2016, and quite rightly Airbnb wants to be a big part of this.

Up until now, Airbnb has had a complicated relationship with property managers outside of the core urban areas. The reputation of the platform, as the natural home for accommodation sharing and private rentals, has been hard to shake.

Property managers, managing listings of multiple properties in traditional vacation or resort locations, have been both suspicious and underwhelmed by the platform. Essentially, they’ve not been convinced that the platform is part of their solution.

With the Host Tools, this is all set to change. The new developments will ensure that managing hundreds or even thousands of vacation rental listings through the platform will be easier and more accessible.

Vacation rental managers will now be able to work with the platform to improve pricing rules, create a professional listings page, have more accurate and up-to-date calendars and develop integrated messaging. These are all solutions that professional managers need in order to be profitable with Airbnb and work closely with their property management system of choice.
Exploring opportunities around rental caps

The next significant development of recent weeks is Airbnb’s announcement that it will be putting in place a cap of 120 nights on rentals in the 1st to 4th arrondissements of Paris. Paris currently has 400,000 Airbnb listings, making France the second largest market after the United States.

The decision, which goes into effect January 2018, mirrors initiatives already in place in London and Amsterdam. The cap will force hosts to comply with France’s officia

On the surface, this looks like it could be a way to keep urban rental hosts on their toes, however, there is a bigger story at play here.

The restrictions being put into play in these key urban hot spots simply means that urban property managers are having an impact on the real estate market. The caps don’t necessarily spell bad news. There are opportunities.

Property managers will need to really show they have an edge in order to win the owners over.

We’ve had in-depth conversations with some of our Guesty clients running operations in both Paris and London, and the feedback to the restrictions has been mostly

Property managers that are prepared to make adjustments can find profitable opportunities in these urban centers, but there will need to be changes made.

For instance, the number of listings in these prime hot spots will decrease as fewer properties are available on the rental market. With this decrease, prices will naturally rise and competition for attracting owners will increase. Property managers will need to really show they have an edge in order to win the owners over.

Savvy property managers are also looking at ways in which they can increase revenue from a smaller number of bookings. One solution is to approach their guests’ stays in a more “hotel-like” fashion and offer add-ons that enhance guest experience and increase the overall income from each guest’s stay.

We’ve heard of urban property managers even stocking their fridges with chargeable treats and alcohol in an attempt to replicate a minibar and add to the revenue of each guest. Another way of increasing revenue from fewer guests is to upsell late check-outs and early check-ins. Service levels will improve and there will be more professionalism.

The short-term and vacation rental industry is changing rapidly, and in order to succeed, property management businesses within it need to be prepared to move at the same speed (or faster) and to use tools that will help them make the most of available opportunities.

It will be interesting to see how the vacation rental and urban landscape evolve over the next 12 months. Stay tuned.

Opportunities Open in Australian Property Market as Chinese Capital Controls Take Effect

By Reuters
December 8, 2017 12:58 am Last Updated: December 8, 2017 1:21 am

The Sydney Opera House and Harbour Bridge can be seen behind real estate agent and a potential buyer from Shanghai, during an inspection of a property for sale in the Sydney suburb of Vaucluse, Australia, July 11, 2015. (Reuters/David Gray/File Photo)

SYDNEY–On a recent Sunday morning in the sun-drenched Australian city of Brisbane, about 50 ‘property tourists’ boarded a bus tour with a difference.

The group – all local Aussies looking to purchase their first homes – were shuttled to five new apartment projects where brochures promised they could “capitalize on international deposit defaults” and snap up properties at sharp discounts.

The homes were mostly being sold by Chinese investors unable to make settlement on their investments as Beijing cracks down on money flowing out of China and restrictions on Australian banks lending to foreign investors bite, the company behind the tour said.

“Getting money out of China is very hard now. That’s a big factor for these discounts,” said Property Direct founder David Beard, who sold some two-bedroom units on the bus tour at 15-20 percent lower than list prices.

“Property sales have fallen because of that, and it has got progressively harder to get bank loans in Australia.”

The cut-price sales have sent a tremor through the once-booming Australian property market, where Chinese are the top international real estate investors and which is the most exposed globally to a slowdown in Chinese buying.

While nationwide hard data on such sales are not available, UBS estimates one in five apartment buyers in Brisbane, Australia’s third-largest city, are failing to settle.

Several analysts said they expected a similar response in the larger markets of Sydney and Melbourne if house prices soften further.

Homes can be seen near a river and bordering bushland in south-western Sydney, Australia, Dec. 7, 2017. (Reuters/David Gray)

Official data is already signaling a slowdown.

Housing starts, which peaked at $116,000 in 2015, are now down to around $96,000. Completions are running faster at close to $110,000, a significant portion of which is expected to come up for settlement in 2018, industry experts warned.

“There is a large amount of stock that the market has to absorb,” said Nigel Stapledon, chief advisor at property consultancy MacroPlan Dimasi. “At the very least it is going to take away the upward momentum in prices.”

Already, home values in Sydney have started to fall, down 0.7 percent in November, a third straight monthly decline.

Even so, a 74 percent rise in the city’s house prices since 2012 means many investors who paid a 10 percent deposit to buy off the plan are still well in the money, providing a strong incentive for them to settle if possible.
“Almost Impossible”

Chinese buyers account for nearly a quarter of all new-built purchases in Sydney and about 15 percent in Melbourne, according to a Credit Suisse analysis of government taxation records between January to June 2017.

But analysts think that proportion could fall as Chinese investors struggle to move money out of the mainland after Beijing this year imposed a curb on “irrational investment overseas” and clamped down on individuals transferring funds internationally.

Regulations only allow Chinese nationals a foreign exchange quota of US$50,000 a year and since July, the nation’s banks have been required to report any overseas transfers by individuals of $10,000 or more.

While the rules were often flouted in the past, doing so now has become increasingly difficult, some money transfer agents told Reuters.

“It is almost impossible to send the full (settlement) amount from mainland China,” said Felix Su, financial adviser at foreign exchange firm KVB Kunlun.

At the same time, under pressure from regulators to douse risky lending in the real estate sector, Australia’s biggest banks stopped loaning money to foreigners.

That double whammy has made it more difficult or expensive to raise money locally, forcing investors to forfeit their deposits or try to on-sell their properties.

Cooling Demand

Chinese developer Poly Real Estate Group Co’s Australian subsidiary is switching its focus to local buyers as investors from China find sealing deals harder.

“There’s a lot lower risk with domestic buyers,” who can also more easily tap domestic credit markets, Jay Carter, New South Wales state sales and marketing director at Poly Australia told Reuters.
New homes and land for sale are pictured in southern Sydney August 14, 2014. (Reuters/Jason Reed/File Photo)

At the same time, agents say new interest from China has plunged since several Australian states hiked taxes on international property purchasers.

“A lot of investors are thinking about other countries where there are less barriers to entry,” said Ian Chen, founder and Chief Executive Officer of China-focused Jalin Realty, who has seen his China sales roughly halve since July.

While the impact of China’s capital crackdown is less obvious in other markets popular with Chinese investors such as Canada, the United States and London, demand has cooled more generally, according to agents.

In the UK, for example, property buying enquiries have likely fallen 10-15 percent in 2017 compared to a year ago and many buyers have reduced their budgets, said Carrie Law, CEO of China’s largest international property website,

“We have also seen less-expensive but otherwise desirable countries, like Thailand and Malaysia, shoot up in the rankings of top countries for Chinese buyers,” Law said.

By Tom Westbrook and Swati Pandey

Monday, 11 December 2017

Australia's property market has reached a turning point - Sydney's housing market trumped by Canberra and Hobart By business reporter David Chau

Updated 2 Dec 2017, 12:55pm

Australia's property market has reached a turning point, with smaller cities taking more of a front row seat in the growth story.

Key points:
Canberra (+0.9pc), Hobart (+0.6pc) and Melbourne (+0.5pc) were the best performing capital cities in November
Sydney (-0.7c) and and Darwin (-0.4pc) were the cities with the steepest property price drops last month
Median dwelling prices: Sydney ($904,041), Hobart ($398,093) and national ($546,694)

CoreLogic's monthly figures show the capital cities with the biggest property price increases in November were Canberra (+0.9pc) and Hobart (+0.6pc).

Melbourne dwelling values, on average, rose 0.5 per cent last month to take third place. The median price in Australia's second largest city is about $718,000.

Sydney prices fell by 0.7 per cent in November, and by 1.3 per cent over the last quarter — September to November.

But buyers should not get too ahead of themselves as Sydney is still the most expensive property market by far, with a median price of about $904,000.

The only other capital city which saw its property prices drop was Darwin (-0.4pc in November, and -5.5pc in the last year).

"Darwin's property market peaked in 2014, and has fallen by about 21 per cent since then," CoreLogic's head of research Tim Lawless told the ABC.
INFOGRAPHIC: Graph shows change in dwelling values in Australia's capital cities. (CoreLogic )

What's driving the biggest gains?

Hobart was the best performing housing market by far — with prices up by 3.3 per cent in the last three months, and 11.5 per cent over the last year.

When asked why, Mr Lawless said it was "sheer affordability of housing" which drove the Tasmanian capital's gains.

The typical price of a house in Hobart is about $420,000, versus over $1 million in Sydney.

But when apartments are factored in, the median dwelling values in Hobart and Sydney are $398,000 and $904,000 respectively.

"Buying power is much more substantial in Hobart, especially if you're cashing out of Melbourne and Sydney," he said.

"People's money goes a lot further in Hobart, and there's a renewed trend towards buying into lifestyle markets.

"Also, the rental market is strong, with yields here much higher compared to other capital cities — which attracts more investment."

Canberra's housing values gained 10.6 per cent over the last year (beating the national average of 9.2 per cent).

Its property prices also lifted by 0.9 per cent in November (the highest of any capital city), and 1.3 per cent in the last three months.

As for the reasons behind Canberra's gains, Mr Lawless said it was due to "reasonably strong jobs growth" and public sector wages growth outperforming the private sector (since the nation's capital has a high concentration of public service roles).
A tale of two cities — Melbourne beats Sydney

When it comes to housing prices, Melbourne has beaten Sydney.

Melbourne prices lifted by 1.9 per cent over the last quarter, and by 10.1 per cent in the last year.

In comparison, Sydney prices property prices fell by 1.3 per cent in the last quarter. But on a yearly basis, Sydney prices increased by 5 per cent — which was just half of Melbourne's annual gain.

"Tightening lending conditions" are also behind Sydney's downturn, as it is feeling much sharper and "more immediate" effects compared to other cities, Mr Lawless said.

He attributed that to the higher concentration of investor housing purchases in the nation's largest city.

On the other hand, Mr Lawless said Melbourne was "very resilient to a slowdown, as it has less problematic housing affordability compared to Sydney".

The median price of a dwelling in Melbourne was about $718,000 — which is almost $200,000 cheaper compared to Sydney's median price.

He also said Melbourne had "high rates of population growth, from interstate and overseas, a stronger labour market, and higher levels of job creation".
INFOGRAPHIC: Graph shows annual change in dwelling values in Australia. (CoreLogic)

Regional property trumps Perth, Adelaide and Brisbane

It also appears the Perth market has begun to recover, as housing prices lifted by 0.3 per cent in the last three months.

"If this is indeed the start of a recovery phase in the Perth housing market, it comes after dwelling values have fallen 10.8 per cent since peaking in mid-2014," he said.

For Brisbane and Adelaide, they will face a "continuation of slow and steady growth".

While Brisbane property prices rose by a slight 0.1 per cent in November, Adelaide's prices remained firmly flat.

The regional property markets also performed strongly.

The strongest gains were seen in the regional markets of Newcastle and Lake Macquarie in NSW — its housing values lifted by 13 per cent in the past year.

Properties in the Gold Coast, Sunshine Coast and Byron Bay (the "lifestyle markets") were also popular — rising by more than 5 per cent each year.

Mr Lawless said that was driven by buyers who wanted to buy a second home or holiday house, wanted a sea change, or were getting ready for retirement living.

Topics: housing-industry, economic-trends, business-economics-and-finance, australia
First posted 1 Dec 2017, 2:04pm

Saturday, 9 December 2017

Airbnb a lure for some property agents out to make a quick buck

By WONG PEI TING Published 07 DECEMBER, 2017

SINGAPORE — From time to time, property agent William, 46, would get calls from homeowners asking him to list and manage their units or vacant rooms on home-sharing site Airbnb.

These include property owners based overseas or those in Singapore with spare rooms who are looking to “skip the hassle of managing (the short-term rental of their units) themselves” while cashing in on the gig economy. “Or else, they will get a lot of calls and messages (to enquire about the listings),” said Mr William, who declined to give his full name.

Each time, Mr William would decline the offers as they could cost him his agent licence. Nevertheless, he admitted being tempted by the lure of additional income especially when the property market was lacklustre.

Apart from getting requests from homeowners, some property agents would also tap on their database of clients, and rent units from them, only to illegally sublet them on Airbnb on short-term leases of less than three months. TODAY understands that this was what two former Savills Residential property agents Yao Songliang, 34, and Terence Tan En Wei, 35, allegedly did.

Yao and Tan were charged on Tuesday (Dec 5) with illegally leasing housing units for short stays - the first cases hauled to court since laws were passed to address short-term rentals via popular websites such as Airbnb. They each faced four charges under the Planning Act, which forbids the rental of apartments and rooms for a short term. Some time around May 15, the duo allegedly worked together to lease four different apartments - at the D’Leedon condominium in Farrer Road - for a period under six months through Airbnb.

Private residential properties were previously subjected to a minimum stay duration of six consecutive months. This was reduced to three months in June.

Industry players said that while what Yao and Tan allegedly did is relatively rare, it is fairly common for owners to try and beat the law by renting out their apartments for short-term stays via Airbnb. And property agents could be tempted into breaking the law when faced with regular requests from clients, they added.

OrangeTee & Tie property agent Timothy Chew, 54, said that in a year, he receives about 10 calls from people looking for short-term accommodation. They are mostly foreigners holding short-term visit passes who are in Singapore for medical reasons, or Singapore residents who need a place to stay while their houses are being renovated.

Mr Chew said he would refer them to serviced apartments, which can be rented for a minimum of seven days. However, he noted that some agents would refer such clients to properties listed on Airbnb given that rentals for serviced apartments are much higher.

Mr William said that for example, rental for a mid-tier serviced apartment here would cost about S$5,000 a month. Property agents usually do not get any commission for referrals to service apartments, he said.

In general, the practice of subletting units is uncommon among property agents because the margins are low. While they can get more money - albeit illegally - by subletting the units on Airbnb, the returns are not high, said Mr Aaron Lin, 30, a Propnex Realty agent.

For example, nightly rentals on Airbnb could be priced at S$150 for a unit which could fetch S$2,500 a month on the legitimate rental market.

On paper, a person who sublets a unit via Airbnb would need to lease out the unit every other night in order to break even. In comparison, property agents typically earn a one-time commission of about S$880 to S$1,120 for a unit being rented at S$2,500 a month for a year.

Agents who strike a deal with clients illegally, and help them list and manage their properties on Airbnb could also earn a higher commission, since they cut out their agencies from the transactions.

Mr Lin said he gets a request once every two months, either from a landlord or a tenant asking him to manage short-term rentals. But he pointed out: “Is it worth it to take such risks? You still have to clean up the place every two to three days.” Errant agents run the risk of getting sacked by their agencies if they were found out, or worse, being brought to court.

Property agents TODAY spoke with agreed there is constant demand for short-term accommodation for less than three months, despite it being outlawed for now unless permission is granted by the Urban Redevelopment Authority (URA).

A regulatory framework is being developed that would allow such rentals while addressing the concerns of residents and relevant stakeholders, URA said in response to TODAY’s queries.

A public consultation will be conducted on the draft framework when it is ready. “While the review is ongoing, the public is reminded that the prevailing minimum stay duration of three consecutive months must be observed for private residential properties,” URA said.

The authority has investigated 750 cases of unauthorised short-term accommodation in private residential units from January to November this year, with a majority of them taking place in condominiums. In comparison. URA dealt with 985 such cases in 2015 and last year combined.

“In dealing with such infringements, URA will assess the circumstances and severity of each case and calibrate our enforcement action accordingly,” URA said. In most cases, the offenders complied with enforcement notices to cease the unauthorised use within a month. “Nonetheless, we will not hesitate to prosecute recalcitrant offenders and those who blatantly disregard the regulations,” URA added.

Mr Colin Tan, director of research and consultancy at Suntec Real Estate Consultants, warned that property agents “should know better” than to risk their livelihoods for a quick buck. “These people are doing it quite blatantly... it forces the authorities to come down hard on them,” he added.

Friday, 8 December 2017

Three signs that the Singapore property market is recovering

For one, unsold inventories have been declining for two years already.

The stars have begun to align for Singapore's property market after the private residential price index showed growth after 15 quarters of decline.

DBS Equity Research said the property market recovery is expected to be gradual in the next 12 months with more real estate transactions.

The firm is expecting transaction value to hit $40b in 2017, $42.2b in 2018, and $44.3b for 2019 for the total private residential market, which includes both primary and secondary markets.

DBS Equity Research is also expecting price recovery of 3-5% per annum over the next two years.

They also said three factors driving the recovery include low unsold inventories.

The total number of unsold private residential units, including executive condominiums (EC), has been declining for the past two years and reached 17,178 as at 30 September 2017.

Another factor driving recovery is affordability. DBS cited Cushman & Wakefield data which showed Singapore’s housing to income ratio of 4.8 in 2016 is lowest compared to other global cities like Hong Kong with 18.1, New York with 5.7, and London with 8.5.

"This could mean that transactions in Singapore will likely remain robust and international investors could look to invest in Singapore given the relative affordability of its houses," said DBS analyst Lee Keng Ling.

The last factor that DBS cited is the increasing demand from foreigners.

The growth in the number of high net worth individuals and wealth per capita, coupled with the still low-interest rate environment, has led to many capital inflows into the property market, Ling said.

However, the proportion of foreign buying is still low at 6%, below the historical average of 9%.

Australian homes on market for more than 18 months

Research shows that more than 400 properties — within just 20km of Sydney and Melbourne — have been listed since early 2016. Here’s a look at why these owners just can’t sell their homes.
The Daily TelegraphDECEMBER 8, 201712:00AM

Bodalla on NSW’s south coast has a median of 233 days on market..Source:Supplied

FOR thousands of Australians the wishlist this Christmas is simple.

All they want for Christmas is to sell their home.

Sydney-wide, the average number of days on market for a property is 28, but for a patient group of Aussie homeowners it’s a different story — their properties have been on the market for well over 18 months, and some even for several years.

Research from shows that more than 400 properties — within just 20km of booming real estate hubs Sydney and Melbourne — have been listed on the market since 2016.

317 McCarrs Creek Rd, Terrey Hills has been on the market since 2016.Source:Supplied

And one owner who knows the pain of having a long-term listing is Wonsik Kwon.

Mr Kwon listed his property in Terrey Hills, on Sydney’s northern beaches, back in June 2016.

It’s not necessarily within everyone’s budget — but a tour of the property reveals, for the right buyer, it could be worth every cent.

The house at 317 McCarrs Creek Rd, known as Apadana, is jam-packed with features; including a full-sized synthetic grass tennis court; a 15m heated indoor pool; a leisure set-up with gym, spa, sauna and steam room.

“As much as I love this home, I’d love to sell this house to somebody as a great Christmas gift,” Mr Kwon said.

Mr Kwon, who has owned the home for a decade, describes the house as one-of-a-kind in Sydney.

‘You can’t normally have a property like this in Sydney,” he said.

“The best thing about (my home) is just sitting on the balcony, sipping a glass of wine and enjoying the view at the evening.”

But despite the home’s dreamy inclusions, Mr Kwon has failed to sell it, and he’s one seller who is hoping for a Christmas miracle.

Mr Kwon’s home is jam-packed with inclusions.Source:Supplied

Meanwhile, on the other side of the Harbour, Dr Steven Wang has been trying to find a new owner for his Dover Heights home for over a year.

The house, at 4 George St, has plenty to offer — including north facing ocean views, cul-de-sac living, four bedrooms and an enviable rooftop terrace.

But Sothebys agent Spencer Sun said he thought buyers were put off by styling and perceived work involved.

“When (the owner) moved in here, he kept the shell of the home but re-did everything inside,” Mr Sun said.

“Now, I think buyers might be looking for a more neutral palate, and the feedback I’ve had is the styling isn’t for everyone.”

4 George St, Dover Heights.Source:Supplied

Owner, Dr Steven Wang bought the home in 2015 for $4.2 million, and according to Mr Sun it was meant to be a “forever home”.

But then he opened a medical practice in Cabramatta, and the daily commute and changing life situation prompted him to list the home 18 months later.

Now, after more than a year on the market, Dr Wang is hoping someone will buy his home, with a price guide of $5.8 million, before Christmas.

But it isn’t just Sydneysiders who are feeling the pain of long-term house listings, the latest figures from Core Logic show that in Australia, Riverglades in SA leads the way for median days on market, over the last 12 months, at 247 days.

Cannon Valley in Queensland has the next highest median, with 243 days, followed by Jamieson in Victoria with 237 days.

Bodalla on NSW’s south coast comes in fourth longest nationwide — with a median of 233 days.

Welcome to Bodalla.Source:Supplied

Newly appointed REI NSW president Leanne Pilkington said there’s no excuse for a quality home sitting on the market for longer than a year, and she has one piece of advice: “I’d be telling vendors, it might be time to ‘stop being so greedy’.”

Ms Pilkington said “in this market, at the end of the day, there’s only one contributing factor, and that’s price.”

“With the way the market has been, it’s phenomenal to think that a property could be listed for that long (over one year),” she said.

“You’d have to assume that they’re overpriced.

Originally published as All I want for Xmas ... is to sell my home

“Crunch time” ahead as interest-only lending slumps and foreign property purchases fall


A collapse in the number of interest-only loans being written by big banks is said to be combining with a drop in Chinese buyers of Australian property to create a “crunch time” for the economy next year.

Pressure will be put on the Reserve Bank to abandon its path toward hiking interest rates and further cuts to inflation and growth targets could lie ahead, according to Credit Suisse.

Figures released by the Australian Prudential Regulation Authority this week showed the share of new interest-only loans written by major banks nosedived to 16.9 per cent in the third quarter from 30.5 per cent, following an ongoing clampdown on the lending practice, while banks’ high loan-to-value ratio fell slightly to 6.8 per cent from 6.9 per cent.

“Taking the two measures together, it appears that mortgage lending standards are at their tightest since the early 2000s,” Credit Suisse economists wrote to clients on Thursday.

“This is bad timing considering that foreign property buying is already waning.”

“It appears that mortgage lending standards are at their tightest since the early 2000s.”Credit Suisse

The economists said credit tightening was “amplifying a global shock” and that the Reserve Bank would be faced with weakening national growth in 2018 – making its goal of raising interest rates even more difficult.

Furthermore, the RBA cannot afford to “let bygones be bygones” and will need to further downgrade its growth and inflation targets, the economists said, adding that annualised GDP growth may slow to just 1 per cent.

“The bank is trying to deliver a credibly hawkish narrative to lift confidence and hopefully prevent the need for more rate cuts,” the Credit Suisse report reads.

“However, we remain of the view that the RBA cannot afford to simply let bygones be bygones, because the accumulation of growth undershoots (relative to its forecasts) is signalling a wider output gap, and eroding its inflation-targeting credibility.”
How many foreign property buyers are there in Australia? And are they losing interest?

While Credit Suisse hangs much of its gloomy forecast on two factors – weakening foreign demand in Australian real estate, and tighter lending standards – ANZ research poses a challenge to one of those forces.

The foreign-owned segment of the Australian housing market “is not large enough for us to be particularly concerned about a foreign exodus”, according to senior ANZ economist Daniel Gradwell, who notes concrete data to support the Credit Suisse claim that foreign, particularly Chinese, purchasing of Australian real estate is sliding are “hard to come by”.

Foreign investors bought between 35,000 and 60,000 Australian homes in the 2015-16 financial year, Mr Gradwell wrote in a report on Thursday, which accounted for a relatively small 7 to 13 per cent of overall housing turnover.

A more significant 15 to 25 per cent of newly constructed dwellings in some states are accounted for by foreign buyers.

But overall current foreign ownership of Australian housing stock sits at between 2.5 and 4 per cent, according to 20 years of Foreign Investment Review Board data – ANZ said this is an imperfect estimate and does not include properties bought before 1995.

“The sizeable foreign-buyer share of newly constructed housing implies that foreign demand has been an important contributor to Australia’s recent construction boom,” Mr Gradwell said.

“But the relatively lower share of total market activity suggests that foreign buyers have not been the primary driver of the price growth in recent years.”

The bank concludes that only a large shock, causing a high share of foreign owners to sell their Australian property, would be significant enough to drive sale prices lower.

Thursday, 7 December 2017

A big Negative for Bit Coin - Wall Street banks push back on launch of bitcoin futures Letter to US regulators says financial system ill-prepared for cryptocurrencies

Bali News Views Editor's Comments: Warning one of the biggest selling points on Bitcoin recently has been that they expected Wall Street to market as legitimate investment.

According to this article it looks like Wall Street is reconsidering.

Frankly, I didn't know what they were thinking in the first place. Why would they want to launch a new investment that is up something like a thousand percent this year and recent moves like this week

Bitcoin tops $17,000 on one exchange, surging more than $5,000 in less than two days

Surely they would want to get involved after dropped 40% to 60%.

That is, of course, given the is a viable investment that not driven by a bunch of idiots or first-time investors.

Why is season maturer investors. Our primary not investing, but coin at this point, not because it's not maybe not in a good investment, but because it's been fueled by a bunch of ignorant first-time investors following Facebook advertisements and buying solely on the basis of crowd buying.

Throughout history, there is been examples of this type of buying into the Tulip crisis in the late 1800s when people could buy a business with the Tulip just because everybody was making money on.

Our recent I person was involved in the precious metals, pool men crash in the late 70s when I was young and naïve didn't realize investments would continue to what plagues silver from $5-$15 to $30 and Ashley to $50 when it was manipulated by the Hunt brothers.

I have wiser my older. It needs when I warn people of getting out of real estate in America in 2007 after I realized that women were having house selling parties instead of Tupperware parties and everybody including all the naïve first time this is where investing in homes and flipping them to make money
we also saw the same type scenario with crisis that had the same type of increases and then a massive selloff and decrease.

It's not a matter of if this bit coin and crypto currency fad crashes the matter of when. And after his fallen 40 to 60% and stay down for months to watch the charts and watched the fundamental supply and demand see if professional investors are getting into it before I ever touch it.

Up for debate 4000% on real estate year the last 15 years. Yes, the long hard way, but thousand percent will "wealthy man.

Yes I missed out on Bitcoin but at least I can sleep at night.


Wall Street banks push back on launch of bitcoin futures Letter to US regulators says financial system ill-prepared for cryptocurrencies Read next Chaotic trading marks new surge in bitcoin price.

 The Chicago Mercantile Exchange plans to start listing bitcoin futures with a centralised clearing mechanism © Bloomberg Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Save Save to myFT Philip Stafford in London YESTERDAY 102 

The world’s largest banks are pushing back on the introduction of bitcoin futures, raising concerns with US regulators that the financial system is ill-prepared for the launch of the contracts as the value of the volatile cryptocurrency has soared. 

 The price of bitcoin has risen to a new high of more than $15,000 on several exchanges. Institutional investors have been keen to trade the asset but only via a regulated market. 

 However, the planned launch in the next 10 days of futures contracts by the Chicago exchanges CME Group and CBOE Global Markets, given a green light from the Commodity Futures Trading Commission last week, has prompted a backlash among the major brokers who backstop trading across the industry. 

 According to a letter from the Futures Industry Association, the main futures industry lobby group whose members include all the largest Wall Street banks, to the CFTC, the rapid introduction of bitcoin futures “did not allow for proper public transparency and input”. 

 The lobby group represents some of the world’s largest brokers, including Goldman Sachs, Morgan Stanley, JPMorgan and Citigroup. The CME and CBOE agreed to operate under a self-certified regime for their upcoming contracts, meaning regulators had minimal time to review them formally. The letter, sent to the CFTC on Thursday, insists that using a self-certification scheme for “these novel products does not align with the potential risks that underlie their trading and should be reviewed”. 

 The CFTC warned last week during its approval process that the emerging cryptocurrency markets were largely unregulated and the agency had “limited statutory authority”. “It is also our understanding that not all risk committees of the relevant exchanges were consulted before the certification to launch these products,” the letter added. Futures brokers are worried they will bear the brunt of the risk associated with bitcoin futures, because the margin that backstops the contract is placed in a clearing house. 

 Clearing houses stand between two parties in a trade, managing the risk to the rest of the market if one side should default. They are mutually funded in part by banks to guard against the failure of their largest members. Several brokers among the top 10 largest providers have privately confirmed to the Financial Times that they will not clear the products immediately. ABN Amro told clients it would clear bitcoin futures but only if they submitted requests in writing, and said it would assess the customer’s trading systems and track record in meeting risk limits. “Other factors may be considered [by ABN] in its sole and absolute discretion,” it said in a notice. CBOE said its futures exchange did not have a risk committee, but it consulted with its board and regulatory oversight committee. 

The OCC, its clearing house, also has a risk committee that reviewed the product. In its filing, CME said it had discussed the specifications of the contracts with customers for around six months. It did not have an immediate comment on Wednesday. The backstory San Francisco reporter Chloe Cornish selects the stories that explain the concerns behind cryptocurrencies like bitcoin

China's property market will see smaller price gains ahead, major developer says

Property price gains in China are likely to slow due to official efforts to rein in the market, said SOHO China CEO Zhang Xin

Geoff Cutmore | Akiko Fujita | Huileng TanPublished 23 Hours Ago Updated 20 Hours

It looks like China's property prices could finally slow 20 Hours Ago | 01:23

Property price gains in China are likely to slow due to official efforts to rein in the market, a top real estate executive said Thursday.

"For years, the Chinese government has had the effort to control the speed of the fast-rising property price, so there's always been policies coming out to control the market, but now this becomes a real nation-wide effort," said SOHO China CEO Zhang Xin.

Speaking on the sidelines of the Fortune Global Forum in Guangzhou, China, Zhang said she expects smaller annual price increases in key cities going forward.
Runaway property prices have fueled concerns about the risk of a bubble in the world's second-largest economy for years and present a real level of social risk for the government.

The Chinese government last month indicated that it could implement a property tax in the near future to help curb speculation.

Even so, authorities in Beijing have indicated that they will release land supply for rental and for lower income citizens that will add "a lot more supply" to the market, SOHO's Zhang noted.

China's largest prime office developer, SOHO is focused on commercial real estate and has ventured into co-working spaces.

Wednesday, 6 December 2017

Siargao, Philippines: Can Asia's Newest Resort Destination Develop In A Sustainable Way?

One can’t help but wonder, if Siargao will be able to escape the fate of islands such as Boracay, Phuket or Bali

Surfers coming back to the beach in Siargao after an afternoon in the water

There is no doubt that tourism is a double-edged sword. On one hand it brings the awareness of a beautiful place, economic development and growth for the local population, on the other, the exposure often leads to over pollution, damage of the ecosystem and ultimately, the ruin of the community. I was overwhelmed with a sense of both excitement and dread during a recent visit to Siargao (pronounced shar-GOW), a teardrop-shaped island, one of the 7,000-plus islands making up the Philippine archipelago, which is presently standing at the floodgates of a massive tourism boom.

The island is known as the surfing capital of the Philippines with its famous break called Cloud 9, a fast and powerful fiend with monumental tubes that sweep in from the Pacific Ocean. Local legend has it that a foreign surfer, called Max Walker, put Cloud 9 on the map — and in the decades since, it has drawn world pros for international tournaments, including the Siargao International Women's Surfing Cup, sanctioned by the World Surf League for the very first time, this May 2017.

Located 800 kilometres South East of the Philippine capital, Manila, in the province of Surigao del Norte, the island was not even well known to Filipinos until a few years ago. Before the airport opened in 2011, getting to the island meant an overnight ferry ride from Cebu. Today there are six direct flights, which operate daily, two from Manila and four from Cebu, and according to local travel agents, starting 2018, these flights will continue to increase, with an international airport rumoured to be in the pipeline for 2019.

As I write this, it seems as if everyone on the island has turned into a real estate broker. Locals and foreign developers alike are snatching up beachfront property. Big hotel and resort chains have staked their claim on prime, ocean-facing acreages. Foreign chefs and entrepreneurs are moving to Siargao, setting up boutique hotels, restaurants, coffee shops, lounge bars, retails shops and a casino is even in the works.

A Stand Up Paddle Boarder Enjoying Sugba Lagoon in Siargao

Indeed, the island is at a pivotal time in its development, quickly getting a reputation as Asia’s newest heartthrob resort destination. It has so much on offer: perfect white sand, enchanting lagoons, 48 islets, coral reefs, unusual rock formations, exotic wildlife - including crocodiles. It boasts endless rice fields, waterfalls, large mangrove forests and of course, world-class surfing - but likewise, it has so much at stake. One can’t help but wonder, if Siargao will be able to escape the fate of islands such as Boracay, Phuket or Bali , which have undoubtedly turned into overdeveloped, overcrowded and overpolluted resort meccas.

A local NGO called the Siargao Environmental Awareness (SEA) Movement, ​which focuses on marine conservation, believes this is achievable if we act now. Made up of surfers, artists, writers, entrepreneurs, journalists and policy-makers, SEA Movement wants to preserve the natural resources and beauty of the island of Siargao, while developing it in a sustainable way to provide jobs and opportunities for the local community.

Pia de Lima, who runs SEA Movement says, “It is crucial that all sectors - government, businesses and NGOs like us - work together to tackle the risk of environmental degradation. As the influx of tourism keeps intensifying, empowering the local community is vital so that it doesn’t remain passive to the changes taking place. For starters, we need a proper waste management system, both solid and sewage. This is by far the biggest challenge facing the island. We also require access to good medical facilities, affordable quality education, typhoon-proof housing, clean water, a sustainable tourism plan and real jobs with salaries. These things should be prioritized over international airports and massive bridges.”

Moreover, SEA Movement says it can count on supporters beyond the Philippine shores. Recently an all female Surf & Stand Up Paddle Board team from Singapore visited Siargao to help SEA Movement kick-start an ocean-conservation, bag-making livelihood programme. 

The project aims to benefit 120 underprivileged Filipino women living on the island. The team, under the banner of HER Planet Earth - a women's advocacy group headquartered in Singapore that promotes gender equality and the integrity of the environment - wants to highlight the importance of ocean conservation and the urgency of supporting women affected by climate change. The programme focuses on recycling plastic from the sea to create fashionable items and accessories for sale and the expectation is that it will provide the local community with a livelihood opportunity, while simultaneously reducing plastic waste from the ocean.

Filipino women in Siagao taking part in the SEA Movement Grassroots Programme supported by HER Planet Earth

Thankfully Siargao is classified as a conservation area and in October 2017, the Philippine government’s Department of Science and Technology announced that it would bring Eco-Sep to Siargao. Eco-Sep is a septic water management system technology, which will stop contamination of wastewater in sewage systems. It’s a start, and all these programmes can certainly impact the development of Siargao in a positive way, but so much more needs to take place. It’s increasingly clear that if the government continues to invest in the right infrastructure, if the local community and developers make environmental conservation a top priority and if organisations such as SEA Movement get a say in the island’s development plans, then Siagao will have a fighting chance of growing in a sustainable way.

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