‘The Tulip’ set to become London’s tallest skyscraper

Developers have submitted plans to build a dramatic 305-metre viewing attraction dubbed ‘The Tulip’, which would be built alongside The Gherkin in the heart of London’s financial district.

Unlike its neighbouring skyscrapers throughout the Square Mile, The Tulip, which is just one metre smaller than the Shard, has not been proposed with office space in mind.

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Instead, the building would act as a “new public cultural and tourist attraction” to draw in visitors and schoolchildren to the City.

It is one of the most ambitious proposals to be put forward to the City of London Corporation since the historic body unveiled its draft plan late last month to allow for more skyscrapers in the Square Mile’s eastern cluster.

Appetite to relax the financial district’s development laws has mounted in recent months amid growing corporate demand for commercial property within the Square Mile.

While the City’s draft plan to broaden tower development will not be reviewed until later next year, growth of tall developments in the Square Mile has already been seen through a number of major developments in the last year.

Among the current skyscrapers under development are 22 Bishopsgate – known as Twenty two – which has already secured tenants such as insurers Hiscox and Beazley.

According to the New London Architecture’s most recent survey, London had more than 500 towers in the pipeline in 2017, compared with 455 in the previous year. The City of London is also the only borough to have an average height of more than 40 storeys in London.

If planning permission, put forward by J. Safra Group and Foster & Partners (owners and architects respectively) is given the green light, construction would be set to begin in 2020 with the project completed by 2025.

SOURCE:BBC

600,000 Homes Lay Vacant Across England

A new study has revealed the shocking extent of England’s empty homes crisis, with more than 600,000 homes remaining vacant. The study, conducted by Good Move, has found that a third of empty homes are classed as long-term vacant, after being empty for more than six months.

The city of Liverpool takes the crown for the most vacant properties, with a staggering 10,512 properties laying empty last year. The data comes despite efforts by Liverpool City Council to reduce the amount of unused homes with a free matchmaking service to introduce buyers and sellers of empty homes, in a bid to bring more empty homes into use.

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Birmingham follows closely behind, with 10,386 empty homes. The city famous for its Bullring accounts for 17% of West Midlands’ total number of unoccupied homes. The Yorkshire city of Leeds has the third highest number of empty homes throughout the country, with 10,263 properties vacant. Leeds’ empty homes equates to 14% of Yorkshire and the Humber’s empty homes.

The North West has the most unoccupied properties, with 102,847 homes laying empty across the region, and 38% of those being vacant for longer than six months. Liverpool has the most empty homes in the North West, and the country as a whole, with 10,512 properties that are not in use in 2017.

Following closely behind the North West is the South East, with a staggering 86,693 vacant properties last year. Of the 86,000 empty homes, 29% of those have been unoccupied for longer than six months.

SOURCE: bdcmagazine.com

London real estate lures overseas clients despite BREXIT ‘no deal’ fears

Central London has seen sustained levels of both leasing and investment activity so far in 2018 and corporate property consultant JLL anticipates that the final numbers will match, if not exceed those recorded in 2017.

£12.2 billion of central London offices have been traded in the first three quarters of 2018 following a strong Q3 performance where £4.3 billion of transactions were recorded. These latest year-to-date figures are only 6 per cent down on the corresponding period for 2017, a year that saw record investment volumes of £17.7 billion.

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Currently, £4 billion of assets are identified as under offer and another £4 billion of stock on the market and although this suggests that activity towards the end of the year will remain strong, it also highlights the lack of investment opportunities compared with the same period of 2017 when £16 billion was available.

Take-up of offices across central London reached 8.3 million square feet at the end of Q3 2018, with 3.1 million sq ft leased in the West End and 4.5m sq ft in the City.Active demand remains well above the 10-year average, with over 9 million sq ft of enquiries currently searching for space – with demand spread across the occupier spectrum.

Looking towards the transition at Brexit, and especially in the event of ‘no deal’, the leasing market could become relatively subdued as occupiers reconsider embarking on any new commitments in the short term.This will be relatively mild, however, as most demand is driven by unavoidable lease events rather than expansion, says JLL.

Julian Sandbach, head of Central London Capital Markets at JLL, said: “At the beginning of the year it seemed unlikely that investment volumes would reach similar levels to the bumper numbers we saw in 2017, and now it looks possible that they could even be surpassed. Despite the degree of uncertainty around the outcome of Brexit, London continues to attract significant levels of overseas capital who continue to target prime assets.

“As the record levels of foreign capital demonstrate the majority of international investors feel that whilst London is subject to some short-term uncertainty, the long-term prospects for London as a global gateway city with a secure investment platform, underpinned by the long-term commitments of occupiers, remain unchanged.”

SOURCE: bdcmagazine.com

Impact of the U.S. Mortgage Market on the Midterm Elections

Mortgage availability might be at historical highs but according to a new study, that’s not going to help U.S. President Donald Trump—nor his party—come 2020.

According to “Mortgage Market Credit Conditions and U.S. Presidential Elections,” the availability of mortgage credit, or really, the lack thereof, can have a serious impact on who wins presidential elections.

When credit availability is low, voters take it out the incumbent—or the incumbent’s political party. In 2008, it might have even lost John McCain the election. Without the shrinking of mortgage credit during George W. Bush’s tenure from 2004 to 2008, the study found that nine swing states could have gone to McCain rather than Barack Obama.

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In fact, according to Charles Calomiris, professor of financial institutions at Columbia Business School and one of the study’s authors, the housing collapse, along with the decline in mortgage availability during Bush’s administration, played a “dramatic role in state-by-state outcomes in the 2008 election.”

“Pundits, political analysts and campaign operatives on a national level need to be looking at mortgage availability for everyday Americans to understand who’s going to win the White House,” Calomiris said. “We discovered that mortgage credit crunches are far more powerful than rising unemployment as a barometer for electoral success.”

But could those same findings translate to smaller-scale elections, like the midterms in November? According to Calomiris, in theory, yes. But will they? Probably not this time around.

That’s because the study also found that when mortgage availability is high—as it is now—there’s not much impact on voter behavior.

“I don’t really think [today’s high mortgage availability] is going to help the Republicans in this election because people don’t really credit the incumbent party when they get their mortgage,” Calomiris said. “Our sort of interpretation, which is a mixture of psychology and economics, is like this: When your mortgage gets approved, you think you did it. When your mortgage gets denied, you think somebody else did it.”

Still, the possibility that it could impact midterm elections this November is there. According to Milton Ezrati, chief economist at Vested, it would likely impact Senate races more than House ones.

“It might have more impact on senatorial elections because senators are associated with larger questions than representatives,” Ezrati said. “Mortgage availability has improved, but, of course, the study points out that such improvements help a lot less than deterioration would hurt. Still, it removes one problem incumbents would otherwise face.”

More likely though, the mortgage market will play a bigger role come 2020.

“I would say that the real interesting question might be about the presidential election of 2020,” Calomiris said. “It’s certainly not impossible to imagine that sometime between now and two years from now, you could start to see a real decline in mortgage availability.”

SOURCE:FORBES

Why disruptive technologies matter for affordable housing: The case of Indonesia

Big Data. Blockchain. Drones. E-Wallets. Artificial Intelligence. These are words that one would expect to hear at the latest conference in Silicon Valley, not during a discussion of Indonesia’s affordable housing challenges. Yet they were buzzing through the captive crowd in Jakarta at the Disruptive Technologies Workshop for Affordable Housing on September 17, 2018. The event, hosted by Indonesia’s Ministry of Public Works and Housing with support from the World Bank’s National Affordable Housing Program (NAHP), was attended by 150 participants from local public agencies, developers, lenders, and community organizations. The workshop’s goal was to explore one big question: How might Indonesia harness the power of disruptive technologies to transform its housing ecosystem?

Indonesia cities are growing faster than those of its Asian neighbors at a rate of 4.1% a year. However, the benefits of urbanization – economic growth and poverty reduction – won’t be fully realized until the country can increase access to basic services and invest in affordable housing for its residents. An estimated 820,000 to 1 million housing units are needed on a yearly basis to meet the growing demand between now and 2030.

Indonesia’s current housing situation dovetails with the rapid development of its technology sector. There is strong start-up culture that has birthed local giants like Go-Jek, which started as a simple ride-hailing app for motorcycle taxis and expanded to over a dozen services, including food delivery, massage booking, and mobile payments. Go-Jek is currently valued at close to $5 billion. Through its ascent, it has revolutionized aspects of life in Indonesia’s cities and contributed to a booming gig economy.

Workshop participants were keen to discover: were there other budding technologies out there, like Go-Jek, which could change the way Indonesia approached housing? Here are a few of the promising pitches that were presented to the group.

iBuild 
Citizen-centric mobile application that facilitates home self-construction processes

Who it’s for Households; construction workers; contractors; lenders; developers; policymakers
Why it’s needed Most housing is self-built, as it’s often the only financially affordable option. Access to credit is limited, and the construction sector is largely unorganized and informal. Government subsidies given towards self-build projects are difficult to track and highly vulnerable to fraud.
How it works Using the mobile platform, users find contractors and get quotes for projects, purchase materials, track the progress of construction projects, rank quality of services and make mobile payments to vendors.  E-wallets help ensure that government subsidies are being used for intended purpose.
Why it’s promising ·         Empowers citizens to take control of the home construction process

·         Improves transparency, organization, and competition in a huge informal construction sector

·         Aggregates data on previously informal transactions to boost inform policy-making

 

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City Planning Lab Affordable Housing Suitability Tool 

Geospatial planning tool that identifies optimal locations for affordable housing developments

Who it’s for Spatial planning agencies, central and local government, and developers
Why it’s needed Government-subsidized housing projects are often poorly located on multiple factors. They tend to be far from the central business district, geographically risky, and lack access to basic services and employment centers.
How it works Using the online tool, which combines geospatial and satellite data, users can generate a heat map that displays optimal locations, based on a detailed list of critical factors such as access to
Why it’s promising ·         Boosts local government capacity to identify more optimal, and thus more successful, locations for affordable housing

·         Facilitates collaborative and informed decision making

IBM Blockchain  
Secure, transparent, and efficient digital ledger that streamlines land titling processes

Who it’s for Low-income and informal populations; NGO’s; Land Planning Agencies; lenders
Why it’s needed Nearly 20% of urban slum dwellers don’t have formal tenure on their homes, which means they can’t access formal financing for home improvement. The process for obtaining this tenure in Indonesia is inefficient and costly.
How it works Networks of community workers survey and map land/ property ownership in a “fit for purpose” manner, and use blockchain – a public, secure, decentralized digital ledger – to streamline the mapping process and accelerate land titling.
Why it’s promising ·         Streamlines the process and reduces the transaction costs of obtaining formal tenure

·         Provides a uniquely secure, transparent, and tamper-proof method of documentation

Property PriceTag  
Use of Big Data and new technologies to track housing supply and demand for informed decision-making

Who it’s for Public agencies; developers; lenders; other key stakeholders
Why it’s needed Data on the housing market is currently scattered across public and private agencies, and difficult to analyze in real time and on a large scale.
How it works Big Data is consolidated across various sources, including public and private data, and data gathered through innovative methods (i.e. trained Artificial Intelligence bots that can count the number of individual homes on satellite images).
Why it’s promising ·         Equips policymakers and companies to make more timely and informed decisions with regard to the housing market

·         Technologies to be incorporated into the development of NAHP’s Housing Real Estate Information System, a real-time housing database used for decision-making by both the public and private sector

The technologies described above are just the tip of the iceberg of what was discussed at the workshop.  No longer a luxury of advanced economies, these disruptive innovations hold vast potential to empower informed decision-making, formalize the informal, and radically reinvent housing value chains to transform the affordable housing sector and improve the lives of millions. Of course, as with any technological advancement, there are serious issues to consider and plan for such as consumers’ privacy rights protection and cybersecurity in an age of interconnectedness. It’s a tricky task for any government to navigate, but one well worth the waterfall of benefits.

 

SOURCE: WORLDBANK

Builders report that construction growth is slowing in the UK

Small and medium sized builders in the UK remain positive about the construction outlook but the number of new homes being built is slowing and costs are continuing to have an impact.

Overall construction grew at a slower rate in the third quarter of 2018 compared to the previous quarter, according to the latest state of the trade survey from the Federation of Master Builders, the only quarterly assessment of the SME building sector.

Overall some 32% of members reporting rising workloads compared with 41% in the second quarter of the year and activity rose at a slower pace in England, Scotland and Northern Ireland, with Wales being the country to see activity increasing at a faster rate.

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There have been 22 consecutive quarters of positive growth, which means that construction SME workloads have now been on the rise for more than five and a half years, but there are still challenges, the survey also shows.

Indeed, some 86% of builders believe that material prices will rise in the next six months, 58% foresee wage increases over the next six months, up from 54% in the previous quarter and 68% are struggling to hire bricklayers, a peak figure last reached in the fourth quarter of 2017, while 59% are struggling to hire carpenters and joiners.

According to Brian Berry, FMB chief executive, a number of factors are contributing to the current outlook. ‘Anecdotally, we are hearing worrying reports of banks withholding previously agreed funding for projects which is delaying start dates and dampening growth. This may or may not be related to Brexit nerves,’ he said.

‘The construction skills shortage is also taking its toll. More than two thirds of construction SMEs are struggling to hire bricklayers and brickies are easily the most sought after tradespeople in the building industry currently. These latest figures match the highest we’ve noted since records began a decade ago,’ he pointed out.

The survey also shows that expectations for the future have become weaker with 36% of respondents forecasting higher workloads, down from 46% in the previous quarter. In contrast, those predicting no change to workloads grew, to 51% from 41%.

Berry believes that the slowdown in growth should ring alarm bells for the Government and give rise to a total rethink of its post-Brexit immigration proposals. ‘Currently, the Government wants to significantly limit the number of construction workers coming into the UK post-Brexit, labelling them low skilled and therefore somehow surplus to requirements,’ he explained.

‘Migrant construction workers are indispensable with 13% of our construction workers being from outside of the UK. If construction firms are unable to hire migrant workers post Brexit, the already severe skills crisis will worsen. This will mean we won’t be able to the build the new homes the Government is keen on delivering and infrastructure projects will grind to a halt,’ he said.

‘It is imperative that the post-Brexit immigration system allows construction firms to continue to hire workers of varying skill levels. We hope the Government heeds the warning that these latest results show, before it is too late,’ he added.

Source: Property Wire

Property prices, rents continue to fall in Dubai, latest data show

Residential property price falls in Dubai have been more pronounced than rental rate changes, with values down 4 per cent in the third quarter of 2018, the latest index report shows.

Prices for villas fell by 13per cent over the quarter and apartment prices were down by 14per cent, according to the Asteco Dubai real estate report.

In the lettings sector apartment rents were down by 3per cent and villa rents down by 3per cent quarter on quarter. On an annual basis they fell by 11per cent and 9per cent respectively.

 

A relatively new trend are initiatives such as rent to own schemes and crowdfunding to stimulate the market and tap into, what Asteco believes, is a significant amount of pent-up demand from end users and/or first time buyers.

In addition, real estate professionals and participants have been increasingly vocal in urging the UAE Central Bank to lower existing loan to value ratios to facilitate home ownership for those unable to afford the current mortgage deposit requirements.

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“Although no such changes have yet been announced there appears to be a consensus among many that these reforms would provide the stimuli needed to boost the real estate market,’ the report says.

“With the 2018 Dubai Cityscape around the corner, it will be interesting to see the extent of new project launches and how developers plan to entice Investors, whether with proven schemes or by offering new and improved incentives and payment terms,’ it added.

In the rental market, locations with high handover volumes recorded the sharpest rental rate declines and a significant rise in tenant turnover and the report points out that wider economic uncertainties resulted in many residents downsizing, or to seek value for money properties in less established areas.

Conversely, many tenants continued to take advantage of the abundance of choice and decreasing rents to upgrade to larger units, better quality specifications and/or more popular locations and rental rates are expected to come under further pressure this year, a trend that is likely to spill over into early 2019.

The total anticipated delivery for 2018 is now estimated at 16,750 residential units an d the report says that this while still a significant volume, this figure represents a notable decline on previous projections.

Although the number of project delays is substantial, it is noteworthy that construction milestones have in general been met with delays ultimately resulting from overly ambitious handover programmes.

As such, a sizeable number of units previously forecasted for completion in the second half of the year will fall into 2019.

Source: Guardian

Sri Lanka Chooses India Over China in US$300 Million Housing Deal U-turn

Sri Lanka has reversed a decision to award a US$300 million housing deal to China in favour of a joint venture with an Indian company, the government said, ahead of a visit by the prime minister to its South Asian neighbour.

Prime Minister Ranil Wickremesinghe will meet his Indian counterpart Narendra Modi on Saturday in New Delhi, the Indian capital, for talks. The two countries have long-standing ties, partly because of cultural and ethnic links with Tamils, many of whom live in the island’s north and east.

In April, state-run China Railway Beijing Engineering Group won a tender worth more than US$300 million to build 40,000 houses in Jaffna in Sri Lanka’s north, with China’s Exim bank to provide funding.

But the project was halted after residents demanded brick houses, saying they preferred their traditional type of dwelling instead of the concrete structures the Chinese firm had planned.

On Wednesday, government spokesman Rajitha Senaratne said the cabinet had approved a new proposal for 28,000 houses worth 35.8 billion rupees (US$210 million) to be built by Indian firm ND Enterprises and two Sri Lankan firms in the north and east.

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The planned homes are part of a total requirement of 65,000, he added.

“The rest of the houses will be given to firms which are ready to build them at lower prices,” Senaratne told reporters in Colombo, the Sri Lankan capital, adding that China could also be considered in future for the remaining housing projects.

In Beijing on Thursday, foreign ministry spokesman Lu Kang told a regular news briefing China’s cooperation with Sri Lanka was derived from consultations on an equal footing and he hoped that cooperation would be viewed objectively.

Critics have said a big Chinese port project and related infrastructure in Sri Lanka’s south have been dragging the country of 21 million people deep into debt.

India has built 44,000 houses in the country’s north in the first phase of reconstruction after a 26-year war with Tamil Tiger rebels, and plans to rebuild Palaly airport and Kankesanthurai harbour, both heavily damaged in the conflict.

But in recent years, China has swept in, building ports, power plants and motorways as part of Beijing’s String of Pearls strategy to build a network of friendly ports across Asia.

India has long considered Sri Lanka, just off its southern coast, as within its sphere of influence and sought to push back against China’s expanding maritime presence.

Source: South China Morning Post

Nomura to Pay US$480 Million to US Over ‘Fraudulent’ Mortgage-backed Securities

NEW YORK: Nomura Holdings Inc has agreed to pay US$480 million to resolve civil claims by the U.S. government that it misled investors in marketing residential mortgage-backed securities, U.S. authorities said on Tuesday.

Nomura knowingly bundled defective mortgage loans into marketable securities from 2006 to 2007 and misled investors about their quality, authorities said. The settlement stems from an investigation by federal prosecutors in New York.

“This settlement holds Nomura accountable for its fraudulent conduct in connection with its residential mortgage-backed securities offerings, which caused substantial harm to investors and contributed to the financial crisis of 2008,” said Richard Donoghue, the U.S. Attorney for the Eastern District of New York, whose office conducted the probe.

Nomura said in a statement it did not admit any wrongdoing in connection with the settlement, and disputed the allegations.

Authorities accused Nomura of falsely telling investors that it conducted extensive due diligence on the home loans that it securitized, when in fact they did not comply with underwriting guidelines or relied on fraudulent appraisals.

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Nomura continued the practices despite warnings from its due diligence staff, who warned that Nomura was “turning into the lemming of the mortgage business” and dealing with “extremely dysfunctional” loan originators, authorities said.

Nomura’s misconduct caused “significant losses” for its investors, including retirement funds and university endowments, according to Donoghue’s office.

Nomura was previously ordered to pay a total of US$839 million together with Royal Bank of Scotland Plc in a lawsuit brought by the Federal Housing Finance Agency, which has acted as conservator of mortgage agencies Fannie Mae and Freddie Mac since their 2008 takeover by the federal government after the collapse of the U.S. housing market.

Source:    Brendan Pierson in New York; Editing by Dan Grebler and Jeffrey Benkoe, Reuters

Vancouver Leads Canada’s First Home Sales Decline in Five Months

Canadian home sales declined for the first time in five months as activity in Vancouver and Toronto weakened.

Sales in Vancouver fell by 1.5 per cent in September and benchmark prices declined 1.2 per cent, the Canadian Real Estate Association said Monday. In Toronto, the nation’s biggest city, sales fell 0.5 per cent and benchmark prices rose 0.1 per cent.

Activity across the country fell by 0.4 per cent, bringing the 12-month decline to 8.9 per cent, according to the Ottawa-based realtor group. Sales fell in about half of the country’s real estate markets, with buyers and sellers still being influenced by rising mortgage rates and tougher qualification rules introduced at the start of the year, CREA president Barb Sukkau said.

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Some markets nonetheless saw sales increase in September, including an eight-per-cent rise in the Fraser Valley.

Sukkau says rising mortgage rates and the new mortgage stress test will continue to influence the balance between supply and demand with most markets expected to “become even more restrictive” in months to come.

The group’s chief economist, Gregory Klump, adds that time will tell how these factors will play out for certain cities.

“In markets with an abundant supply of homes and slower sales activity, buyers have the upper hand when it comes to negotiations over price,” he said in a statement. “However, in places where buyers are keen to make a purchase but there’s a shortage of homes for sale, sellers are in the driver’s seat when it comes to price. It will be interesting to see how supply and demand respond to rising interest rates amid this year’s new mortgage stress test.”

The mortgage stress test came into effect in January, adding downward pressure on property values that were still adjusting to other newly introduced measures such as a 15-per-cent foreign-buyer tax in Ontario.

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TD Economics says the report points to a more “moderate pace” for the Canadian housing market in the coming quarters.

“This is consistent with our forecast calling for resale activity to rise at a more moderate pace in coming quarters, as increasing borrowing costs and stretched affordability conditions in key markets keep a lid on demand,” bank economist Rishi Sondhi said in a note.

The real estate association says the national average price for a home sold in September was just under $487,000, up 0.2 per cent compared with a year ago.

Excluding the Greater Toronto and Greater Vancouver areas, the average price was just over $383,000.

Source:  VancouverSun

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