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Private renters living in hazardous homes thanks to ‘weak regulations’, says Citizens Advice

Hundreds of thousands of tenants in England are living in hazardous homes with problems such mould or faulty fire alarms due to “weak and confusing” regulation, according to Citizens Advice.

The charity found that almost one in three tenants surveyed said their house did not have a carbon monoxide alarm despite requiring one. That equates to 900,000 homes across the UK.

Three-fifths of tenants identified disrepair in their home during the last two years that was not caused by them and that their landlord was responsible for fixing. One in six of those said the disrepair was a major threat to their health and safety.

Citizens Advice also polled landlords, finding widespread gaps in knowledge of their legal responsibilities to tenants.

A quarter of landlords failed to ensure that there was a smoke alarm on each floor of all of their properties.

Almost half (49 per cent) did not know they face a penalty of up to £5,000 for not checking smoke and carbon monoxide alarms are in working order on the first day of the tenancy. The same proportion didn’t know the penalty for not carrying out a gas safety check.

“Too many private renters live in hazardous homes – often with potentially fatal flaws,” said Gillian Guy, chief executive of Citizens Advice.

“Weak and confusing regulation means landlords can struggle to understand their legal obligations, while tenants find it hard to get problems in their homes resolved.

It suggests creating a home “MOT”, setting a “fit-and-proper-person” test for landlords and standardising rental contracts.

The government has made reforms in the private rented sector in recent years, such as laws to ensure all rented homes are fit to be lived in, banning most tenant fees, and proposed the abolition of “no-fault” section 21 evictions.

But Citizens Advice claims that renters still lack the power they need to ensure standards are consistent, and landlords and tenants lack the knowledge they need for standards to be upheld.

Polly Neate, chief executive of Shelter, said: “It is truly alarming that so many private renters are living in homes which aren’t up to scratch and compromise their safety. A safe home is a basic standard that every renter has the right to expect.

“It’s critical that every landlord is aware of their responsibilities and stays in step with the new Fitness for Human Habitation Act, which sets out standards to keep renters safe.

“But if landlords don’t follow these rules, renters should be armed with the power to challenge their poor behaviour.

“That’s why the government’s planned ban on no-fault evictions must become law as quickly as possible, so that private renters can speak up about safety concerns without living in fear of a revenge eviction.”

Indian property Group Shapoorji Pallonji Targets Middle-Class Kenyan Housing Market

Shapoorji Pallonji Real Estate (SPRE), the property arm of one of India’s largest conglomerates, this week launched “Mi Vida Homes”, a $117m housing joint venture with growth-markets investor Actis that will target the middle income housing market in Kenya.

The pair have already delivered thousands of such homes in India.

In Kenya their first project will a 624-unit scheme at Actis’ Garden City mixed use development in Nairobi, consisting of one-, two- and three bedroom apartments.

Construction of the first phase comprising 208 units will start in the third quarter of this year.

“Over the last 15 years we have established that there is a notable lack of institutional quality homebuilders with the expertise, capital and consumer trust to truly address the opportunity at scale,” said Actis director Koome Gikunda. “We are therefore confident that this venture is designed to bridge this gap and offer a great investment opportunity for local home buyers within the middle income market.”

SPRE chief executive, Venkatesh Gopalkrishnan, said: “There is a huge demand for middle-income homes and as partners we are committed to bridging the gap in this market and to exceed customers’ expectations.”

Chris Coulson, managing director of Garden City, has been appointed chief executive of Mi Vida Homes.

“This is a great time to launch and bring the much needed buyer confidence into the local residential market,” Coulson said at the 3 July launch in Nairobi.

Designed to promote healthy lifestyles, Mi Vida, which means “my life” in Spanish, will have health and sports facilities.

Actis is the largest real estate private equity investor-developer in sub-Saharan Africa.

Source: globalconstructionreview

Halfway Into 2019, How Is The Housing Market Holding Up?

Hard to believe we’re already halfway through 2019.

Headed into the year, all eyes were on the housing market as it showed signs of softening for the first time in recent memory. A sharp rise in inventory, talk of more rate hikes and shrinking home price gains in the fourth quarter of 2018 created a cloud of uncertainty.

Six months in, it’s safe to say that the sky isn’t falling. But you might think of the real estate market right now as behaving like a C student that isn’t living up to its full potential.

“The housing market is doing fine,” said Lawrence Yun, Chief Economist for the National Association of Realtors. “But it certainly can do better given what’s happening with job creation and the historically low mortgage rate that is currently in place.”

To make sense of this transitional period, it’s time for a midyear market pulse check. Here’s how leading industry economists are piecing together the first stretch of 2019 and what they say is in store for the future of housing.

Affordability challenges yank back price growth 

“For the first time in a long time, we’re starting to see prices correct,” said Skylar Olsen, Director of Economic Research at Zillow. “And the big thrust that’s changing that narrative is the affordability challenge.”

She explains that when home values outpace incomes so aggressively, the two “have to snap back together eventually,” which is in effect what’s happened.

In April, the S&P Case-Shiller Home Price Index dropped for the 13th month in a row. To be clear, home values are still going up nationally; they’re just rising at a more moderate rate. Annual gains for April clocked in at 3.5%, down from 3.7% in March.

But in some markets the shift has been far more dramatic.

Take Seattle. For two years price growth accelerated faster there than anywhere else in the country. Then between April 2018 and April 2019, the year-over-year price change shrunk from 13.8% growth to a 0.0% flatline. Over the same time frame, San Francisco fell from 10.9% to 1.8% annual gains.

Notice a trend? The markets with the fastest growth fell the hardest. Some exceptions bucking the norm have been Las Vegas, Phoenix and Tampa, their resilience due to how hard they were hit by the 2008 housing crisis.

“I would say the price appreciation of 3% is a healthy development,” added Yun.

Mortgage rates drop, but buyers aren’t jumping the gun

After four benchmark rate hikes in 2018, the Federal Reserve signaled it planned on two more increases this year. That gave analysts every reason to believe mortgages were well on their way 5.5%.

But in March the Fed moved away from that intent and showed signs of even lowering the interest rate (whether that will happen is still TBD). As expectations changed, mortgage rates dropped from 5.09% to 4.09% between November 2018 and June 2019.

However, low interest rates aren’t like an immediate caffeine jolt for the housing market. “It doesn’t impact the down payment,” said Olsen. “And that’s the real struggle, right? Just because mortgage rates dropped doesn’t mean I can suddenly reenter the housing market.”

Demand is also tied to homebuyer sentiment, which isn’t necessarily strong right now. In June, consumer confidence dropped 9.8 points to the lowest level since September 2017 as a result of tensions surrounding the trade wars, according to the Conference Board.

“Consumers are picking up on that lack of certainty about the economic outlook,” said Danielle Hale, Chief Economist at “And that’s not necessarily going to inspire them to make large purchases like a house.”

Inventory challenges persist on the low-end price points 

Overall inventory has started to creep up a bit this year, though it’s deceiving to try and judge the state of affairs without seeing how the market is truly split in half.

“There is plentiful inventory on the upper end market, so the housing shortage is really on the mid-priced and low ends,” said Yun. “Because the property tax deduction has been limited, there is less desire or greater financial burden from owning than before, so the upper-end market appears to be generally softer.”

In addition experts say builders have faced a number of obstacles to ramping up new construction, including high land prices, labor barriers, material costs, and the onerous process to obtain permits.

All this puts pressure on profit margins so when builders do construct a new house, it tends to be more on the luxury end.

Finally, as people move less often and more boomers decide to age in place rather than downsize, “that’s just kind of holding up a lot of the inventory that otherwise would be lubricating the whole system,” Olsen added.

So together these dynamics have created a tale of two markets.

“If you’re selling an entry level home, you’re probably still looking at a pretty competitive market in most places,” said Hale. “But if you’re selling a more expensive home you probably have to adjust your expectations.”

Cost of living and taxes sway local market conditions 

Nationally, housing conditions could be described as a seller’s market that’s gradually moving more in favor of buyers.

Drill down to the regional or local level though, and it varies. For one, some metro areas outside of major cities have stayed warmer as they catch the spillover of priced-out buyers (see: Tacoma). Strong job creation and reasonable cost of living has kept Midwest markets like Louisville and Indianapolis thriving, along with markets that resemble the Midwest in affordability. Rochester, New York is a prime example.

But there’s always exceptions. Go to Chicagoland, and you’ll hear agents tell a very different story.

“It’s definitely a buyer’s market here,” said Kim Alden, a Realtor with Baird & Warner in the Chicago suburb of Barrington, Illinois. “Inventory is a lot higher. Buyers are negotiating harder than ever because there’s a lot of people who want to sell their house and they’re using that to get the lowest price that they can.”

Alden says that 65%-75% of her listings come from people who want to leave the state of Illinois altogether to escape new and existing state tax laws.

With supply high, she’s seeing sellers experience disappointment that they can’t get as much money for their house as they expected, with one exception: updated, smaller homes are “flying off the shelves.”

“I listed a little three-bedroom, bath and a half for $178,000, and in the first weekend we had 33 showings,” Alden recalled.

Apparently anywhere, an affordable turn-key home remains a hot commodity.

But high-end sellers will need to bust out the paint and spruce up their curb appeal to attract buyers.

What about the rest of the year? 

Real estate experts remain optimistic about housing’s prospects for the latter half of 2019. Olsen expresses that even if GDP growth weakens and wages slow, it’s likely that the market is primed for some kind of a rebound.

The biggest reason for this is that as huge waves of millennials continue to reach peak home-buying age, that will put pressure on demand not only this year but in the years to come. And it’s hard to argue with long-term demographics. If a recession does hit at some point as part of the economic cycle, housing would therefore be impacted though perhaps not devastated.

Ultimately after a long post-recession hot streak, housing was due to break fever. The hope is that the market will heat up a little slower next time and create some normalcy. For now, consider it a short-term correction, and hope that more homes will come on the market that people can actually afford.

“The perfect scenario going forward,” Yun said, “even off into the next couple of years, is if there can be a robust increase in new home construction, the housing market will be more of a bright spot for the broader economy.”

The 10 Best Places to Retire in Canada

Retiring in Canada

Canadian seniors are generally more satisfied with their lives than those in younger age groups. Older Canadians are especially appreciative of their safety, the quality of their local environment and their personal relationships, but are generally less satisfied with their health, according to a Statistics Canada report. However, life satisfaction among Canadians also varies by metro area and ranges from 7.8 out of 10 in Vancouver, Toronto and Windsor, to 8.2 in St. John’s, Trois-Rivières and Saguenay, according to a Statistics Canada analysis of Canadian Community Health Survey and General Social Survey data about average life satisfaction from 2009 to 2013. Here’s where Canadians are the most likely to be satisfied with their current lifestyle.

Chicoutimi City and the Saguenay River

Saguenay, Quebec

Saguenay is best known for its dramatic fjord leading into the St. Lawrence River, which can be enjoyed at Saguenay Fjord National Park. Residents of Saguenay rate their life satisfaction as an average of 8.2 out of 10, Statistics Canada found. Some 77.8% of Saguenay residents report their life satisfaction as 8 or higher, more than any other metro area in Canada. Only 8.6% of the survey respondents in Saguenay say their life satisfaction is 6 or lower.

Trois-Rivières is a city in the Mauricie administrative region of Quebec, Canada, located at the confluence of the Saint-Maurice and Saint Lawrence Rivers. Trois-Rivieres has a population of 119,693 making it the 9th biggest city in Quebec

Trois-Rivières, Quebec

Located at the junction of the Saint Maurice and Saint Lawrence rivers, the city’s name means “three rivers” in English, due to the three streams of water where the rivers meet. It was founded in 1634 and settled by French colonists. Foreign language skills will be helpful in this French-speaking city. While many of the French structures were destroyed in a fire, you can still stroll among a few of the original buildings, including the Musée des Ursulines and the Manoir Boucher de Niverville. The average life satisfaction in Trois-Rivières is 8.2 out of 10, according to Statistics Canada. Just over three quarters (76%) of residents rate their quality of life as an 8 or higher, but 9.8% of people say it is 6 or lower.

St John's Harbour in Newfoundland Canada.   Panoramic view, Warm summer day in August.

St. John’s, Newfoundland and Labrador

North America’s easternmost city is also one of the continent’s oldest European settlements. The city has colorful houses that line the sides of steep hills, and you can hike up Signal Hill to Cabot Tower for dramatic views of Atlantic Ocean waves crashing against the cliffs. People who live in St. John’s rate their life satisfaction as an average of 8.2 out of 10, with 74.3% of residents giving a score of 8 or higher. There are 12% of residents who rate their life satisfaction as 6 or less.

Float plane taking off Ramsey Lake Sudbury Ontario
 Greater Sudbury, Ontario

Sudbury has 330 lakes within the city limits, the most of any city in Canada. A popular science museum, Science North, includes two snowflake-shaped buildings connected by a tunnel that contains evidence of an ancient meteorite impact and passes through a geological fault. The science center sits atop glacially carved bedrock and overlooks Ramsey Lake. Greater Sudbury residents have an average life satisfaction score of 8.2 out of 10, and 72.7% of residents list a score of at least 8. Only 11.3% of residents rate their life satisfaction as 6 or lower.

Old Quebec City view Canada

Quebec City

This atmospheric city on the Saint Lawrence River is among the oldest in North America. Quebec has quaint cobblestone lanes reminiscent of a city in Europe, as well as the Canadian pleasures of poutine and maple syrup. The locals speak French, although many are bilingual. The average life satisfaction score in Québec is 8.1 out of 10, Statistics Canada found. Three quarters of residents report life satisfaction of 8 or higher, compared to just 9.3% giving a rating of 6 or lower.

Photo of Saint John, New Brunswick, from a park near the Reversing Falls Bridge. An empty wooden bench is in Foreground.

Saint John, New Brunswick

Located on the Bay of Fundy, Saint John is a major port city. There’s a scenic drive along the Bay of Fundy between Saint John and the U.S. state of Maine, and it’s about a 3-hour drive to Bangor. Retirees with an interest in geology can work or volunteer at the Stonehammer UNESCO Global Geopark. Some 72.9% of Saint John residents rate their life satisfaction as an 8 or higher, versus 13.2% who list their satisfaction as 6 or less. The average life satisfaction rating is 8.1 out of 10.

Photo Taken In Canada, Sherbrooke

Sherbrooke, Quebec

Sherbrooke has trails for downhill skiing, cross country skiing and snow tubing right in the center of town at Mont-Bellevue Park. Locals get to enjoy the fresh maple syrup the region produces. The city is also known for its fresco murals that decorate the downtown buildings. The average life satisfaction score is 8.1 out of 10. Three quarters of residents rate their life satisfaction as 8 or higher, compared to 11.8% who say it’s 6 or lower.

 Thunder Bay, Ontario, Canada

Thunder Bay, Ontario

Hockey fans can cheer on the Lakehead Thunderwolves and the Thunder Bay North Stars, or play a game at one of the city’s many outdoor rinks. Located on the southeastern shore of Lake Superior, Thunder Bay is also an ideal retirement spot for those interested in boating, fishing and swimming during the summer months. The scenic sites surrounding the city include Mount McKay, the Sleeping Giant and Kakabeka Falls. Most Thunder Bay residents (72.5%) rate their life satisfaction as 8 or higher, with 14.1% giving a score of 6 or lower. The average life satisfaction score is 8.1 out of 10.

Moncton Downtown

Moncton, New Brunswick

Moncton is known for its scenic beauty and unique natural features. The city is within an hour’s drive of two national parks, Fundy National Park and Kouchibouguac National Park, the Hopewell Rocks and the Joggins Fossil Cliffs. The average life satisfaction rating among residents is 8 out of 10. Some 69.9% of people in the metro area rate their life satisfaction as 8 or higher, while 14.1% say it is 6 or lower.

Saskatoon, Saskatchewan

The South Saskatchewan River cuts Saskatoon in half, but several bridges unite the city. This college town is home to the University of Saskatchewan. The city is named after an edible berry, often enjoyed locally in pies and jams. The new Remai Modern museum provides a unique space where retirees can enjoy and create art, including an extensive collection of linocuts by Pablo Picasso. The majority of residents (72.1%) rate their life satisfaction as 8 or higher, but 12.7% report a satisfaction score of 6 or lower.

Sunrise in Quebec city, Canada. Chateau Frontenac.

The 10 Best Places to Retire in Canada

  • Saguenay, Quebec
  • Trois-Rivières, Quebec
  • St. John’s, Newfoundland and Labrador
  • Greater Sudbury, Ontario
  • Quebec City
  • Saint John, New Brunswick
  • Sherbrooke, Quebec
  • Thunder Bay, Ontario
  • Moncton, New Brunswick
  • Saskatoon, Saskatchewan

Here’s why Falling Mortgage Rates won’t Spark Recovery in the Housing Market

The housing market won’t recover much in the second half of 2019, says Capital Economics.

Mortgage interest rates have fallen this year, but that hasn’t spurred much action in the housing market, and things are unlikely to turn around for the remainder of the year as concerns about the economy continue to grow, the economists say.

“The fact interest rates are declining because of concerns that the economy is slowing argues against a strong rise in home purchase demand,” Capital Economics writes in a recent report. “That is reflected in measures of buyer sentiment. The decline in interest rates earlier this year failed to provide much of a boost to the share of households saying now is a good time to buy.”

That said, the report did indicate that rental demand will be solid thanks to strong wage growth and subdued home sales. And, the drop in rates has helped spur refinance activity, with applications jumping in the first half of June and signals indicating the likelihood of an upward trend for refis.

But purchase demand is less sensitive to changes in mortgage rates, the economists say, and home sales have therefore seen less of a lift from the drop in financing costs.

Also, the drop in rates was somewhat offset by tighter lender standards, the report says, including a recent pullback from the Federal Housing Administration that may make it harder for some riskier borrowers to qualify.

But on the bright side, homes are still affordable, the economists say.

“The fall in mortgage interest rates, slower house price gains and the rise in earnings growth have led to a drop in mortgage payments as a share of income,” the report says. “And, based on our forecasts for those variables, the payment burden is set to stay at around 16% over the next couple years, low by past standards.”

But the housing market is plagued by a lack of inventory, and this will prevent any meaningful rise in existing home sales, the report predicts.

“While the number of existing homes for sale has seen some improvement since reaching a record low at the end of 2017, at 1.8 million in May market conditions are still tight,” the report says. “And with interest rates falling back, we doubt existing inventory levels will see much of an improvement over the next couple of years.”

Source: housingwire

Statewide PSA Warns Real Estate Scams Put You at Risk

The growing threat of wire fraud scams targeting real estate transactions is prompting the Utah Division of Real Estate to launch a statewide campaign in warning the public. A real estate email scam is trying to dupe unsuspecting buyers out of their down payment right before settlement.

The Utah Division of Real Estate has produced a public service announcement video that is airing on local television stations as well as a statewide billboard campaign through the end of August.

The email scam—affecting transactions across the country—targets real estate agents’ and title companies’ email accounts. Scammers learn when transactions are scheduled and, usually within 24 hours of a transaction closing, they’ll use the email account to send new wiring instructions to the buyer, seller, title, or escrow agent, lender, real estate agent, or broker. The new wiring instruction will have the funds directed to a bank account outside of the country. After the funds are transferred, they are usually quickly dispersed to multiple banks and quickly become untraceable and unrecoverable.

More than $149 million was lost by consumers nationwide in 2018 from this type of email real estate fraud, according to a Federal Bureau of Investigation report.

“All parties in a real estate transaction should be very wary of any last-minute changes over email,” says Jonathan Stewart, director of the Utah Division of Real Estate. “Once criminals gain access to your email account, they can make anything sound legitimate. We hope by educating consumers about this statewide email scam, we can prevent Utahns from becoming victims.”


New Orleans: Housing advocates say Lower property taxes could spur affordable housing growth

The increasing cost of housing in New Orleans — both rented and owned — is no small concern for people needing affordable housing, and those advocating on their behalf say freezing or reducing property taxes for some landlords and homeowners could help the growing crisis. Maxwell Ciardullo, Director of Policy and Communications for the GNO Fair Housing Action Center said rent costs can be overwhelming for some residents. “Two-bedroom apartments are now a thousand dollars a month,” Ciardullo said.

According to a national study, for many people, the cost of rent outpaces their earnings. The National Low-Income Housing Coalition reported across Louisiana, there is a shortage of rental homes that are affordable and available to “extremely low income” households.

Andreanecia Morris is executive director of HousingNOLA and is heavily involved in the affordable housing debate. “It’s highlighting the problem at a national level, but it also gives us the chance to look at what’s happening locally, and the fact that New Orleans is one of the most expensive places to live in the state of Louisiana, it’s got some of the highest housing rent costs in the state of Louisiana,” Morris said. Ciardullo agreed.

“We have new data that shows that you now have to make $19.38 an hour to afford a modest two-bedroom apartment in New Orleans, and that is far more than a lot of the folks in our hospitality and tourism economies make,” he said. Morris added that many factors affect what landlords charge renters.

“It’s not just simply people being stubborn. When you look at construction costs, when you look at property taxes, when you look at insurance, that justifies some of the increase,” Morris said. “And so, that’s why we’ve got to have policies to intervene to bring those costs down, so landlords can then pass that on to their renters. Bills approved by the state legislature allow for voters to decide a constitutional amendment that would let the city reduce property taxes for small landlords. Morris said there would be a lot of public discussion before an election happens. “Landlords who are already interested in renting to the average New Orleanians, but the numbers just don’t work, this can give them the chance to do that. And again, they’re still going to kick in on their taxes,” Morris said. “We’re not talking about tax obliteration, we’re talking about tax freezes, a little bit of tax relief, so that you can pay your property taxes.”

Also, the city would be able to do the same for some homeowners struggling to afford property taxes. “We have created thousands of first-time homeowners with millions of dollars post-Katrina to become first-time homeowners, and they’re at risk of losing their homes now. So, we want to see those folks take advantage of those kinds of programs once it comes to bear,” Morris said. Ciardullo thinks it’s the right approach for an area with a shortage of affordable housing. “I think it is maybe one of the best opportunities we’re going to have to address the affordable housing crisis that we have at the scale that we need it. It’s going to support renters by ensuring that builders who build small new rental properties, if they accept these tax incentives, will have to rent them at affordable rates. And, it’s going to support our longtime, low-income homeowners who are seeing their tax assessments skyrocket,” he said.

Gilbert Montano, the city’s chief administrative officer, said increasing the amount of affordable housing remains a top priority for Mayor Latoya Cantrell’s administration. However, he said any proposed change to property taxes must be thoroughly explored. “I think there’s always a couple of sides to each and every proposal that we have to be thorough as we deal with property taxes, because certainly that’s a lifeblood of the city as well. But, if it’s used as a scalpel instead of a hatchet, I think proposals can be looked upon much more favorably,” Montano said. City services like police and fire departments benefit from property taxes, as do a number of other local entities.

“It’s going to require a lot of thoughtful discussion, you know, there’s always unintended consequences whenever you take from certain thresholds as it relates to the city budget,” Montano said. The proposed constitutional amendment would be voted on statewide. According to Morris, a shortage of existing housing in New Orleans is not the issue. “There’s a lot of room, there’s enough blighted and vacant properties, there are homes that are sitting,” she said. Morris also said she is urging senior citizens to take advantage of the program which already freezes their property taxes at a certain level. “We see how the freeze program works for seniors, it gives senior citizens the chance to stay in their home. We’re talking about building wealth, especially in a community like this, that’s majority African-American, where we want to talk about that wealth building, closing that wealth-divide, being able to pass that property on to the next generation is how you get to closing that racial wealth gap,” Morris said. “You can’t do that if you’re going to lose that house to speculators and investors who are going to pick it up for the property taxes.”

Source: Fox 8

National Association of Realtors: ” Real Estate will continue to see growth, amid a strong economy”

National Association of Realtor’s chief economist Lawrence Yun’s remarks came during a talk at the Realtors Conference & Expo in Boston last week, where he added that in his opinion another recession seems unlikely in the short term due to the country’s sound economic fundamentals.

Yun also forecast around six million new and existing home sales by the end of this year, and slightly more in the next couple of years. The economist also believes home prices will continue to grow at a modest rate, around 4.7 percent in 2018, 3.1 percent in 2019 and 2.7 percent in 2020.

Key Takeaways

  • Yun forecast around six million new and existing home sales by the end of this year
  • New homes are being added to the market at a rate of around 1.2 million per year, but that’s below the historical average
  • Yun said there’s little chance of a recession happening as inflation remains under control, and so any interest rate increases by the Federal Reserve will likely be moderate.

However, Yun said these positive trends would only occur if homebuilders are able to keep up with demand by adding new inventory to the market. New homes are being added to the market at a rate of around 1.2 million per year, but that’s below the historical average and well off the 1.9 million homes that were built in 2004.

There are no signs of a housing bubble at least, Yun added. He said that even though home prices have been outpacing income for several years now, the overall economy in the U.S. is still fundamentally sound, that mortgage quality is high, and that due to the persisting inventory shortages in many markets, there is no danger of the overbuilding that preceded the Great Recession.

Some risks do exist though. Yun said the threat of a full-scale trade war between the U.S. would hamper economic growth, and lead to higher interest rates for long-term debt instruments. If that happened, it’s likely a recession would occur, Yun said.

One piece of good news is that Realtors themselves can help do their bit by reminding their clients that the economy is still healthy and that all signs point towards positive home price increases. Yun said there’s little chance of a recession happening as inflation remains under control, and so any interest rate increases by the Federal Reserve will likely be moderate.

In other words, it’s a good time to buy a home, Yun said.

“All indications are prices will keep moving higher, and buyers who wait risk missing out on wealth gains,” he said.

Source: Realty Biz News

It’s Green Shoots for the Housing Market, Home Builders say

New-home sales at a five-month low. Home contract signings below their year-earlier levels for 18 months in a row. Bond yields near recession territory, and taking mortgage rates down in their wake.

The housing market has been weak for a while, but there are some glimmers of hope, according to fresh information this week from two home builders.

“Our results reflect the fact that the housing market strengthened throughout Q2,” said Stuart Miller, executive Chairman of Lennar Corp. LEN, +0.06%  , which reported its second quarter earnings Tuesday.

“We don’t see any storm clouds on the horizon in the housing market,” said Jeffrey Mezger, president and CEO of KB Home, KBH, +1.34%   when the company took analyst questions on Thursday.

To some extent, the executives’ bullishness came down to some fairly straightforward principles.

Miller cited those lower mortgage rates, and slower price increases, and said “and that, together with low unemployment, wage growth, consumer confidence and economic growth, drove the consumer to return to a more affordable housing market.”

But there were some curious sentiments in the comments, as well. “We believe that the housing market is generally running in a performance channel that is bounded on the downside by the production deficit that has persisted for the past decade,” Miller added.

Translation: we producers haven’t been making enough homes for a decade, so pent-up consumer demand keeps a floor under potential results.

KB Homes’s version was also curiously passive: “supply remains insufficient to meet demand, stemming from the under-production of new homes over multiple years,” Mezger said.

Still, other than keeping business strong by doling out new houses sparingly to a supply-starved market, there are some other signs from both builders that should be encouraging for the housing market.


Lennar said it had struck a deal to produce single-family houses for rental purposes, seeking both to capitalize on a wave of interest from investors, but also meet consumer demand for renting rather than buying.

KB Home stressed that it was continuing to try to meet demand for lower-priced housing, even in higher-priced areas. In Seattle, for example, its products for first time and first move-up buyers have an average sales price of $385,000, compared to median new-home prices there of $620,000 – and even lower than the median existing-home price of $465,000.

It’s also worth pointing out that if the supply-demand imbalance remains as sharp as it has been, that could benefit the overall market – existing homeowners, for example – not just publicly-traded builders, even if the broader economy falters.

As Lennar President Jonathan Jaffee put it in response to an analyst question, “it’s just a reflection of a long upcycle but one that is defined as slow and steady which in a lot of respects is more healthy than one that is very robust because that can’t last very long.”

Source: marketwatch

Solving Nigeria’s 22 million Housing Deficit With The Blockchain

We have seen pockets of progress over the years with rising numbers of property listing companies and tech landlord-house-seekers intermediaries, but housing deficit continues to prevail in Nigeria.

Rising population, rapid urban migration and uncoordinated policy direction of the government are some of the critical factors deepening the housing gap. Because of the scale of this deficit, innovative investment solutions are all-important right now.

Nigeria’s housing deficit

The head of the federal mortgage bank in Nigeria, Ahmed Dangiwa, put the country’s present housing deficit at 22 million units; and the bulk of that is in urban areas — Lagos, Port Harcourt and Abuja.

As the urban population expands — almost half of the country’s population now live in urban areas — building additional units would require more than N6 trillion (US$16 billion) investment yearly. Of this, we can expect very little to come from government funding.

Nigeria's Housing Deficit

Crowdfund financing

Crowdfunding is a permissionless way of raising money. So far, the trend of pooling capital from several retail investors to finance a new or existing business venture has proven successful in Nigeria. The growth of AgricTech platforms has provided a template for other poorly funded areas of the country.

Thrive Agric, which crowdfunds investments for smallholder farmers, have funded more 14, 000 farmers with over ₦180 million ($500,000) raised in February, 2019 alone; and providing returns of up to 20 per cent for retail investors. Currently, there are up to ten different crowdfunding startups providing value in the agric space.

These platforms have unlocked an untapped financing opportunity for farmers who are mostly locked out of the Nigerian credit system and also lowered the investment threshold for many middle -class Nigerians who have been shut out of the capital market.

Real estate developers could also leverage this financing model. It won’t be a significant shift from the traditional model of most real estate projects: already, developers often raise capital from private investors to finance massive projects.

However, there are additional costs and risks with raising small amounts from 500, 000 retail investors rather than 50 high-net worth private investors, for instance. This is where blockchain startups could provide a unique value.

Tokenisation in real estate

Tokenisation on the blockchain makes it possible to represent ownership in a property on an open, distributed digital ledger. Simply, it means converting rights to an asset into a digital token.

Hypothetically, say an apartment of 50, 000 square metres cost N30,000,000. That can be converted into 500,000 tokens (a token representing 10 square metres).

These tokens can then be freely bought and sold on a designated platform. Every holder of the token becomes an investor/part-owner of the property, and would be entitled to a share of the profit when the property is sold.

I recently had a chat with Uba Nnamdi Chukwuebuka, the co-founder of one of the blockchain startups in the real estate industry solving the problem of lack of funds to build houses in Nigeria. HouseAfrica allows retail investors to own a small fraction of a home and also provides rent-to-own services.

Using the Waves Blockchain, it converts real housing assets into digital assets backed by a square meter of the house. The digital asset is called Square Meter Token (SQMT). 5 SQMT represents 1 physical square meter of the property.

“We are solving housing deficits and lack of funds to build these houses [bridging the housing deficit],” he told me.

Nigeria's Housing Deficit

“We are giving everyone access to fund real estate project and enjoy rental returns, sales profits and price appreciations. So you own house on your mobile via blockchain technology and make returns from a real house,” he explained.

The company raises funds for developers, who build these houses, they are then either sold or rented, and the revenues are shared with the co-owners. The projected return for the first project is about 38 per cent for 3 years.

Mr. Uba told me that they partnered with “an SEC [Securities and Exchange Commission] approved trustee company that holds and protect our investors’ funds.” And Allianz Insurance insures the building projects.

Though blockchain is nascent and there are still few regulations around the industry, there are some apparent advantages to tokenising crowdfunded real estate projects.

Tokenisation creates liquidity

Liquidity is the ability to convert an asset into cash within a short period. Currently, to sell a property or land in Nigeria, it would likely take months to close a deal but with fractional real estate investing through blockchain technology, you could complete a transaction in minutes.

Cost reduction in processes

Cost is reduced by removing the administrative effort of record keeping and transaction reconciliation. The blockchain handles all that.

Other benefits include improved administrative efficiency and greater transparency.

What about protection for investors through regulations?

When it comes to regulation, it often follows innovation. When these blockchain startups successfully start raising funds for major projects in the country, regulatory bodies would definitely start applying appropriate measures to weed off companies that might want to defraud investors.

Like Mr. Uba Nnamdi told me, the regulation would “build up confidence among the investors” in a market plagued with pyramid schemes.

At the moment, the potential of the blockchain technology is not been tapped in the country. But through the cooperation of market participants, regulators and technologists, this new technology could yield significant results especially in the real estate sector.

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