A subprime lender told the Reuters Global Real Estate Summit that the market’s meltdown is a healthy thing.
Mass-market retailers putting together their orders for the holiday season might want to prepare for the worst. Mark Zandi, the chief economist at Moody’s Economy.com, said home price weakness may well worsen in the autumn, hurting consumer sentiment and retail demand heading into the end of the year. “I think retailing will be very, very soft, particularly for lower, middle-income households,” he told the Reuters Global Real Estate Summit in New York. However, luxury retailers should do fine as the well-off will be relatively unscathed by a housing downturn, Zandi said.
Home owners in the low- and middle-income brackets are most vulnerable in the U.S. housing slump. Click here to hear Moody’s Economy.com chief economist Mark Zandi’s thoughts on the problems these people face with their adjustable-rate mortgages.
Affordability is now eroding because of higher interest rates and more restrictive lending standards following the subprime market meltdown, Zandi said at the Reuters Global Real Estate Summit.
It’s not often that a top executive acknowledges that his company did a deal at the worst possible moment. But such rare candor was evident when Larry Sorsby, the chief financial officer of Hovnanian Enterprises, was asked at Monday’s Reuters Global Real Estate Summit about a costly move the company made into the market in Fort Myers-Cape Coral area of Florida in August 2005. “We were in the perfect timing in terms of ‘how not to do it’ because we bought in at the peak in a market that instantly collapsed upon our acquisition,” he said.
Growth is slowing in the UK commercial property market, but it’s still set to deliver double-digit percentage returns this year, the index compiler Investment Property Databank said Monday.
RREEF, Deutsche Bank’s property investment arm and one of the world’s biggest property fund managers, plans to allocate around 30 percent of the private equity funds it raises in the future to Asia. Here, Kurt Roeloffs, RREEF’s chief executive for the Asia Pacific region, talks about two of his favourite Asian markets at the moment — Japan and India. He’s also moving from New York to Singapore in the very near future (possibly adding to the rising rents for luxury apartments in the island-state?)