Global Housing Bubbles Deflating [Housing Tracker]

Global Home Prices

Japan's Tokyu Land Pledges US$4.5 Bln In Urban Renewal Projects. “Nikkei: With foreign funds winding down their property investments in Japan, Toky Land Corp. will go on the offensive by spending as much as ¥500 billion (US$4.55B) through fiscal 2010 on urban renewal projects… The Tokyo developer is setting its sights mainly on Tokyo's Shibuya, Chiyoda, Chuo and Minato wards as well as other big cities including Osaka and Nagoya, with plans to spend an unprecedented 450-500 billion yen on 12 projects over a three-year period.” (Trading Markets, Aug. 12)

Japanese Property Feels The Pinch. “Japan has had little to do with the US subprime mortgage debacle and has avoided a UK-style housing bubble, but the country's real estate sector is suffering a painful credit crunch. Teikoku Data Bank, a private research group: In the past few months, an increasing number of real estate companies have gone under. In July, 43 developers filed for bankruptcy, a year-on-year increase of 79%. The bankruptcies were largely triggered by a failure to access funds… Even in the relatively healthy commercial real estate market, sales are not closing.” (Financial Times, Aug. 12)

U.K. July House Prices Drop as Loan Squeeze Locks Out Buyers. “Royal Institution of Chartered Surveyors: U.K. house prices fell in July as the squeeze on credit locked out buyers and brought the property market to a “virtual standstill.'' The number of real-estate agents and surveyors saying prices dropped exceeded those reporting gains by 83.9 percentage points... The reading was 94.7 percentage points in April, the most since the series began in 1978. U.K. banks approved the fewest mortgages since at least 1999 in June and data yesterday showed that they haven't passed on most of the Bank of England's interest-rate cuts since December.” (Bloomberg, Aug. 12)

Property Woes Hit Italy's Aedes H1, Finances Weak. “Italian property company Aedes turned in a first-half net loss of €49.3 million ($74.77M) in a real estate market it said had slumped. It forecast a slightly higher full-year loss, provided it was able to complete certain disposals and said a plan to restore financial stability should be ready by October… Italy's property sector is suffering like many others from the ripple effect of a crisis in U.S. subprime mortgage lending. Aedes said in its statement that the slump on the domestic real estate market had prevented it from selling some assets.” (Reuters, Aug. 8)

Northern Ireland House Prices Fall By 4%, Sales Plunge By 50%. “University of Ulster quarterly house price index: Northern Ireland house prices fell by 4% in Q2 from Q2’07… The average price of property in Northern Ireland fell by 4% to £226,934 ($443,300) in Q2, from Q2’07. House sales plunged 50% to 1,044 in Q2 from Q2’07. Bank of Ireland economist Alan Bridle: “With a very quiet resale market, I believe there is a high probability of the average price dropping closer to the 200,000 pounds level before the end of the year, with a period of readjustment stretching into 2009.” House prices in Northern Ireland rose by 79% between 2005-2007.” (Bloomberg, Aug. 6)

Starwood Hotels & Resorts, Q2 2008 Earnings Call Transcript. “Vasant M. Prabhu, CFO, EVP: “We are starting to see a few non- U.S. markets also being impacted by these same factors, like London, Paris, and Tokyo. And some countries like Spain, the UK and Ireland have similar force residential bubble issues, like the U.S. But, the slowdown is not here across the board in the U.S. And large parts of the world are growing very strongly… Other natural resource economies around the world like Australia, Brazil, Chile and Argentina are also holding up well… We are projecting a softer second half than we had previously anticipated driven by the deterioration we saw in the U.S. starting mid-May, the issues in continental Europe in particular Italy and Spain and in our vacation ownership business.” (Seeking Alpha, July 24^th)

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