Tag Archives: green
Canadian And Chinese Investors Chase US Property Market
by Mark Benson on September 4, 2013 While the historic link between Canada and the USA continues to see billions of dollars invested in US property by Canadian investors, there is no doubt that China is now playing a pivotal role in the US property market. A report by the National Association of Realtors confirmed that Chinese investors accounted for 12% of overseas investment in US properties in 2012 which equates to around $8.2 billion. Even though this is a 10% decrease on the 2011 figure it is still a very large element of the US property market especially bearing in mind the ongoing economic difficulties in the USA and around the world. While there has always been overseas investment interest in California and other prominent states of the US, it is interesting to see that areas such as Detroit, which recently filed for bankruptcy, are attracting record amounts of overseas investment. What is pushing US property prices higher? If you look at the US economy in isolation you could easily assume that the ongoing economic difficulties are set to prevail for many years to come. However, the economy is showing signs of life, the US Federal Bank is actively looking at scaling back its fiscal stimulus program and slowly but surely budget issues which continue to hover over the US government are starting to fade away. Nobody is suggesting that the US economy is set to return to more traditional growth rates seen in recent times but it does seem as though the short to medium-term outlook is perhaps not as bad as many people had assumed. Quote from PropertyForum.com : “Residential property sales and prices in Miami, one of the United States most active real estate markets, continued to surge last month due to tight supply. The current situation is generating rapid sales and offers close to asking prices, according to the latest report from the Miami Association of Realtors.” Interestingly the fact that US property prices are moving ahead, broadly across a number of states, will also loosen the financial noose around the necks of many US citizens who were stuck in a very difficult situation, with many facing negative equity issues. Is overseas investment welcome? In recent times the more prominent US property investors have come from the likes of the UK, China, Canada, Mexico and India. These are areas of the world which have experienced differing economic climates over the last few years with China and India powering ahead up until recently, Canada showing enormous resilience in the face of a difficult worldwide situation, while Mexico continues to benefit from the re-emergence of Latin America with the UK only recently showing signs of recovery. The reality for many investors is that if the US economy does not recover then the worldwide economy will struggle therefore acquiring US property is a long-term play on the worldwide and US economies. As we mentioned above, the ongoing increase in property prices will in many cases loosen the financial noose under which many US families have lived for some time. It will also be interesting to see how US property prices perform as and when the worldwide economy, in particular the European Union, finally show signs of life. Conclusion The simple fact is that US property is in many ways a play on a worldwide economic recovery although it is interesting to see areas such as Detroit, which have effectively been cut adrift for many years, attracting significant overseas investment. Perhaps now is the time to look at underperforming US property sectors of the past? Perhaps the worldwide economy is on a recovery path? Or are we forgetting the enormous amounts of sovereign debt which are still building up each and every day around the world? Continue reading
Chinese Investors Target UK Property Market
by Mark Benson on October 19, 2013 In what could be a major development for the UK property market, last week’s trade mission by Boris Johnson and Chancellor George Osborne seems to have attracted the attention of Chinese investors. This comes at a time when more Chinese investors have been signed up to the ongoing ABP’s Docklands regeneration project which is one of the major UK property projects ongoing at the moment. While there has always been genuine interest from Chinese investors toward UK property there is no doubt that interest has increased in light of the trade mission and ongoing relationship between China and the UK. Welcoming Chinese visitors When we look at the trade mission, further Chinese investment in the docklands regeneration project on top of the UK government’s announcement that wealthy Chinese individuals will now find it easier to live in the UK, through simplified immigration procedures, it seems we can expect a wave of Chinese investment in the medium to long term. If you look at many areas of the world, both property and non-property sectors, the Chinese government, Chinese investors and Chinese companies have become ever more prominent. Quote from PropertyForum.com : “Historically the UK property market has been dominated by home owner properties as opposed to rented properties which have often been the mainstay of markets such as the US.” One area which has attracted the attention of massive Chinese investment is South America where the vast majority of governments in the region have financial support programs in place with the Chinese government. Further overseas investment in the UK property market The general consensus of opinion is that the UK property market will move higher in the short to medium term although there is an outside chance we could see the creation of a house price bubble which might hold back short-term performance. It now looks as though Chinese investors could well pick up the slack, from any investors who are perhaps a little concerned about the UK property market, supporting further forward momentum. At this moment in time the main focus of property investment by Chinese entrepreneurs and businesses is mainly in and around London. London has gained a reputation over the last 50 years or so as one of the safest and most lucrative property markets in the world. Indeed in many ways the London property market moves ahead of the overall UK property market, both upwards and downwards, and is seen as an indicator of short to medium term performance across the whole market. Demand outstrips supply While there is no doubt that genuine interest in the UK property market is helping to support forward momentum there is also no doubt that a lack of suitable properties to quench demand is also a major issue. Whether or not some UK property owners will see this recent surge in property prices as a means of downsizing in the short to medium term remains to be seen. While a number may have been in the “negative equity” zone, the current economic situation in the UK will have improved this situation for many. It will be interesting to see whether there is an increase in the supply of properties for sale across the UK, and more predominantly in London, because this will be a major element dictating how far and how quickly UK property prices move. These are certainly interesting times for those with exposure, or those looking for exposure, to the UK property market! Continue reading
Auctions May Help Define Direction Of Illinois Farmland Prices
Murray Wise Associates | October 18, 2013 After spending much of the year on the biggest set of auctions in the company’s history, the Murray Wise Associates team now faces a new challenge, with a lineup of Illinois sales that may give a hint at what’s ahead for farmland prices. The company will conduct two Illinois farmland auctions in a single day Thursday, Nov. 7, with two other auctions following close behind in Clay and Crawford counties. “The first few sales at the end of harvest usually tell us a good bit, and this year, it will be especially interesting,” said Joe Bubon, executive vice president of the auction company. “The Chicago Fed recently reported that while Illinois farmland prices were up 17 percent for the year ending July 1, they were actually down a percentage point for the quarter.” But, Bubon added, the volume for that quarter was low. “We’ll get a clearer picture now as to whether that was a blip or whether a flatter market will establish itself,” he said. Murray Wise Associates hopes to build on the momentum from its $75 million set of auctions of vegetable land, packing plants and other assets – primarily in Florida and Virginia – in the bankruptcy of tomato packing giant East Coast Brokers and Packers. “That was a unique opportunity for us, and kept us busy through the summer months. But the timing was good because it occurred during a lull in the Midwest, and we set numerous company records with it. Now, we’re getting back to our bread and butter, with an opportunity to gauge the market for Midwestern land,” he said. In the first of the two Nov. 7 auctions, bidding will begin at 10 a.m. at the Royal Community Center for the sale of three tracts in Ogden Township. That afternoon, the auction team will move to the Franks Center in Philo for the sale of 200 acres in Crittenden Township. “Both of these are very productive farms with good soils, and I think we will see some interest by investors as well as area farmers. The Clay and Crawford properties both have substantial tracts of contiguous farmland and recreational land. It will be telling to see if these sell to smaller buyers or what role the larger institutional buyers might play,” said Bubon. “For quite a while, there has been a shortage of available farmland relative to demand, so this will be a very nice opportunity for someone to add to existing holdings.” Continue reading
