Consumers Late payers of most of the loan since recession

Americans are falling further behind on consumer loans, with late payments rising to the highest level since the nation’s last recession in 2001, data released Thursday show.In its quarterly study of consumer borrowing, the American Bankers Association said the percentage of loans at least 30 days past due rose to 2.44 percent in the July-to-September period from 2.27 percent in the previous quarter.

The delinquency rate, which covers eight loan categories, was the highest since a 2.51 percent rate in the second quarter of 2001. Late payments on some types of loans rose to levels not seen since the 1990s.

The ABA attributed some of the summer increase to rising oil prices and the inability of thousands of homeowners to keep up with mortgage payments.

“Those little expenses that keep sucking dollars out of wallets every month are what have the most impact on people’s ability to pay their consumer loans,” Chief Economist James Chessen said in an interview.

“My concern is that delinquencies will continue to rise, because the housing problem will worsen, and disposable income will not stretch as far,” he added. “Lenders will need to take a second or third look at any consumer loans they make.” Reuters Reports

Housing affordability pressures to continue- In Australia

Rising interest rates, population growth and price increases caused by a shortfall in the supply of new homes are contributing to a 22-year low in affordability.

As a result many home buyers are considering medium and higher density housing as more affordable options, institute president Noel Dyett said in a statement.

“In 2008, the main challenges facing the real estate market will be low home loan affordability, the possibility of more interest rate rises, the ongoing fallout from the US sub-prime problems, and an extremely tight rental market driving rents up,” he said.

During 2007 the real estate market was split between established home owners, who enjoyed a “vintage” year, and new entrants who experienced a “less fortunate” time.

The institute’s outlook for 2008 suggests house prices will continue to rise in all states except NSW, where the market is more subdued, and Western Australia, where activity has settled. More Reports

Tier II Cities- Best Bet

The upcoming tier-II cities across the country would still remain the best bet for real estate investors, according to Jones Lang LaSalle Meghraj. The real estate consulting company that recently announced an investment of more than $1 billion in the Indian property market says cities such as Chandigarh, Guwahati, Nashik, Indore, Dehradun, Vadodara and Vizag would be the hottest real estate destinations for 2008.

US-based Jones Lang LaSalle, the world’s leading integrated global real estate services and money management firm, recently merged with Mumbai-based property consultant Trammel Crow Meghraj. The saturation of metros and other tier-II cities is one of the factors for the drift. However, in addition to this, the proliferation of IT companies despite the poor performance of IT stocks in the latter half of 2007 would be the other impacting factor.

According to Jones Lang Lasalle Meghraj chairman and country head Anuj Puri, IT companies — the primary drivers in Indian real estate market, are not dependent on central business locations. Since it makes more sense for foreign-based companies to offload back-office functions and even serious research processes to India than to undertake these in situ, IT/ITeS companies can operate from anywhere in India, as long as there is access to skilled manpower and necessary resources.

Therefore, MNCs would want to benefit from cheaper real estate prices and set up shops in tier-II and III towns, driving up the retail, residential and infrastructure sectors wherever they go.

For sound investments in the real estate sector, emerging areas are the market drivers as they offer low entry level prices compared to the saturated markets where getting space for market drivers such as malls is often very difficult.
Hence, places like Vizag that offers cheaper land compared to Hyderabad, low cost manpower, low competition, better infrastructure coupled with high purchase power, are making it one of the most sought after cities. Designated areas in Vizag like Dwarakanagar, Seethamadhara, Gajuwaka, Rushikonda, Anakapalli, Bheemili and Paarwada for commercial development and Madhurawada, Pendurthy, Parawada, Bheemunipatnam and the areas towards the Anakapalli Corridor for residential investment are considered hot.

On similar lines comes Vadodara with prime residential areas in Alkapuri, Race Course Road, Old Padra Road, Jetalpur, Akota and Fatehganj. The Uttaranchal government is making a 60-acre IT Park in its capital Dehradun which is also driving the real estate markets skywards. Places like Chakrata Road, Mussoorie Bypass and Sahastradhara Road are the best locations for small to medium investors.

In Indore, low-entry costs in places like Vijay Nagar, Bypass, A B Road, Rau, Gulmohur Colony and Green Park Colony offer great investment opportunities. While Nashik with its proximity to Mumbai and connectivity makes suburbs of Anandwalli (Gangapur Road), Indiranagar, Untwadi, Aadgaon (off Mumbai-Agra Road) and along Pathardi Link Road a good catch. An upsurge in the retail market in Guwahati has made the Khanapara, Zoo-Narengi Road, Basistha and Beltola as the new residential hot spots.

Chandigarh scores very high on property market, people, physical infrastructure, social infrastructure and business environment. Coupled with rapid development on its outskirts, the city has seen very encouraging real estate and retail trends. Other than the city itself Panchkula, Mohali, Dera Bassi and Zirakpur offer interesting investment options. var RN = new String (Math.random()); var RNS = RN.substring (2,11); b2 = ‘ ‘; if (doweshowbellyad==1) bellyad.innerHTML = b2;

Bulgaria attracts more FDI in Real Estate

Every day ex-communist Bulgaria proudly announces yet another foreign investment project for a new shopping mall, a golf course or a residential complex.

The real estate boom has created new jobs and the government boasts an economic growth of 6 percent a year. But investing in construction alone cannot bring long-term prosperity to the poorest European Union member.

Bulgaria’s problems, analysts say, include underinvestment in infrastructure and manufacturing, a large grey economy, eroding education, growing consumer indebtedness, crippling inflation and a ballooning current account deficit at a time of global credit jitters.

They say the Balkan country faces troubled times ahead if it does not move quickly to address the looming economic risks.

“We are seeing building of shopping malls and investment in real estate but not in product-generating sectors that can boost potential for the future. That is certainly a problem,” said Ivailo Vesselinov, senior economist at Dresdner Kleinwort. The European Bank for Reconstruction and Development (EBRD) said the investment pattern was worrying and Bulgaria was likely to feel a negative impact in the medium term.

“There should be more efforts in dealing with issues like human capital, education, the brain drain,” EBRD’s economist Fabrizio Coricelli said. Out of a total of 4.36 billion euros in foreign direct investment attracted last year, nearly 3.2 billion went into real estate and construction, financial services and trade. Manufacturing received just 804 million euros.

The World Bank warned recently that Bulgaria would never reach EU income levels if its labour productivity continues to rise by only 2 percent a year.

The share of services — banking, trade and real estate in particular — now makes over half of the country’s annual economic output, while industry’s share stays roughly unchanged at around 30 percent and agriculture has shrunk threefold.

With global borrowing conditions getting tighter, analysts expect the fast pace of property price growth in post-communist Europe — at an average annual of 20 percent — to slow down and investment to moderate.

A decline in foreign capital flows would hurt Bulgaria, which relies entirely on foreign direct investment to cover a yawning current account gap of over 20 percent of GDP this year, driven by surging imports.

“The credit crisis will not end tomorrow…over the years there will be a negative impact on Bulgaria,” said Daniel Gros of the Brussels-based Centre for European Policy Studies.

Another headache is racing inflation, which hit an annual 12.6 percent in November. Analysts warn that without some slowdown in explosive consumer lending and demand, Bulgaria’s emerging economy faces a serious risk of overheating.

Bulgarians readily run up debt in their zeal to buy flat screen TVs, new cars and houses after decades of communist austerity.

Inflation adjusted lending rates are negative or close to zero, which draws queues for more loans. Credits have jumped 60 percent by October, while deposits rose 30 percent.

The central bank, worried by the credit boom, urged banks earlier this month to raise lending rates and tighten rules in line with the international situation. It said it was ready to intervene with fresh measures to cool down the trend.

And while a financial crisis like the 1996/97 one that wiped out a third of Bulgaria’s banks is unlikely, the country could feel the pinch if western banks, which control most of the local sector, tighten funding for their arms, analysts said.

The Socialist-led government has repeatedly pledged to keep its prudent fiscal policy and run a budget surplus of over 3 percent of GDP next year to counter external risks.

But analysts say it remains to be seen whether the ruling coalition, whose popularity is waning, will not succumb to growing public pressure for higher wages.

The government’s main tool to steer the economy is fiscal policy as Bulgaria operates under a currency board regime, which limits monetary policy and fixes the lev currency to the euro. reuters

India to introduce REITs despite fears

INDIA is poised to jump aboard the bandwagon of real estate investment trusts in what could be a major step in deregulating its burgeoning real estate market.

The Securities and Exchange Board of India is considering introducing REITs as early as next year, according to board chairman Meleveetil Damodaran. “The SEBI is interested in introducing REITs since it is an established product in some other markets and there is an appetite for such a product in India,” Mr Damodaran said.

While India will follow the lead of a number of European and Asian countries that have adopted the REIT structure of public ownership of real estate in the past few years, the discussions of the SEBI come at an interesting time. There is expected to be widespread interest in Indian REITs, thanks to robust growth. But REITs launched this year in Germany and Britain have taken a beating, partly because of the credit crunch. That serves as a reminder that REIT stocks, while attractive for their dividends, are not without risks for investors.

The establishment of an REIT industry would provide a badly needed capital infusion to India’s underdeveloped real estate market, which has been hobbled by foreign ownership property restrictions, some of which were lifted in 2005. If foreign investors are allowed to invest in Indian REITs, interest is expected to be high, due to India’s strong economic growth and rapidly growing real estate market.

It is estimated that real estate development in India could grow to $US90 billion by 2015 from $US12 billion in 2005. LaSalle Investment Management Securities has $US7 billion invested in global real estate securities, of which around 85 per cent is invested in REITs. It would consider investing in India’s public real estate market once it was large enough, said Todd Canter, a Baltimore-based global strategist for LaSalle.

While the structure of Indian REITs still had to be finalised, it was likely to be similar to that of British REITs, said Anurag Mather, head of real estate advisory firm Cushman & Wakefield in India. As in Britain – in contrast to the US – there is likely to be a limit on how much an Indian REIT can borrow. But investors in India will hope that REITs get off to a better start than they did when introduced in Britain and Germany this year. About 35 per cent has been wiped off the value of British REITs since they were launched in January.

Commercial real estate sales fall

It would be a record year for commercial real estate investments in the Denver area, if not for the financing woes plaguing the housing market. Still, investors are projected to snap up about $4 billion in office, retail and industrial properties this year, almost a 25 percent drop from the record $5.3 billion in sales volume in 2006.

“That is a pretty significant decrease, but this is still going to be the second-strongest year in Denver’s history,” said Patrick Devereaux, a senior director at Cushman & Wakefield Colorado who released a report on the commercial real estate market Tuesday. During the first half of the year, there had been $2.7 billion in deals, about 23 percent higher than the $2.2 billion in sales in the first six months of 2006.

Chennai is recognized as a preferred place of corporate people and MNC.

Chennai is recognized as a preferred place of corporate people and MNC. This city has earned a benchmark on three major classes – financial costs, expert manpower and outstanding business environment. Chennai is a home of chief automobile sectors also and on the northern area port is gearing up with expansion of housing units. In fact the Chennai residential real estate sector is going though a change in market dynamics and over increase in real estate purchasing activity. City home loans and augmenting rates have resulted in major price escalation in past few months in Chennai.

India is zooming away in real estate industry no lesser than any other part of the world. In fact India real estate is booming in all the direction – be it Chennai real estate, Hyderabad real estate or Cochin real estate, all the cities are skyrocketing when it comes to real estate. A few year back Chennai real estate has shortage of housing options, but now it has superfluity of residential options. Chennai is recognized as a preferred place of corporate people and MNC. This city has earned a benchmark on three major classes – financial costs, expert manpower and outstanding business environment. Chennai is a home of chief automobile sectors also and on the northern area port is gearing up with expansion of housing units. In fact the Chennai residential real estate sector is going though a change in market dynamics and over increase in real estate purchasing activity. City home loans and augmenting rates have resulted in major price escalation in past few months in Chennai.

In the last 12 months Chennai real estate sector has faced an extremely enthusiastic trend. With about magnified costs driven by BPOs, real estate had gone through an incredible growth and it has become a dream of commoner. Such a tremendous growth could be visible in Chennai, Bangalore and Hyderabad that has extensive plans and lucrative commercial projects. Some places in Chennai such as MGR nagar and Anna nagar, which was about rupees 70 lakhs per ground in 2002, are not quoting Rupees 95 lakhs per ground. When looked on the wider term, Chennai real estate had contributed a lot to the story of increasing over all India real estate. As per a recent study Chennai real estate have established a addition of 3.5 million square feet of housing sector in past quarter and now the market is likely to catch up excellent time ahead in winter. Especially, the demand for real estate in Chennai is on a large part obsessed by the growth of IT and BPO industry. It has not only perked up the capital value of commercial property, but also fuelled the demand of residential areas.

Industry experts believe that Chennai real estate has massive demand impending in almost every sector — particularly commercial, residential and retail. It has also proved that investing in real estate Chennai has been providing many investors with activist cash flow, tax advantages and pleasure of making an impact on people’s lives. Investment property is generally the loveliest aspects of your monetary portfolio. Even the foreign funds and investors are now investing in Chennai real estate as it is fourth largest metropolitan city in India and has lot to offer the foreigners. Before investing do your required homework and do consult any expert real estate agent to defend yourself from hidden troubles. Chennai real estate is known as the recurrent wealth builder, but everything has to be done with knowledge and skills. With real estate property boom all across Chennai, you can touch the new heights of money making.

Why The Commercial Real Estate Market Will Obviously Fall

Of course commercial real estate is going to fall. Why? For the exact same reason residential real estate is falling. But, there hasn’t been an oversupply of commercial real estate, you say. Well, the oversupply is not the core reason why residential is falling right now. Residential RE’s problem is that easy, cheap money brought upon wreckless, imprudent speculation from players who were not well versed in the real estate game – and even those who should have known better. The current oversupply is a byproduct of that liquidity induced speculation. Why split hairs? Because the devil is in the details. The downfall of CRE is the rampant speculation that caused many to significantly overpay for assets that are quite illiquid and take significant expertise and time to improve (or even sell), even incrementally. Not only did they overpay, but they applied significant leverage as well, much more than the industry norm. Seeking Alpha Reports

Internet Lead Generation For The Real Estate Market Has Just Gotten Easier

Scott Thompson, author of Internet Real Estate Agent: A Guide To Dominating Internet Real

Estate Leads & Marketing, is a leading Real Estate Realtor® in California. His experience hasled to the amazing secrets you will find in this book. “Ninety percent of my business comes from the internet” states Scott, “Whether you’re new to the industry or an experienced Realtor®, this revolutionary book will be beneficial to you.”

 In this fast paced world, time is of the essence, and time is money. How much time and money are you throwing way? Now, Scott Thompson, a fellow Real Estate guru has written for you an exciting book on Internet real estate. This thorough and easy to read book works as a Real Estate insider’s guide to Internet leads, marketing how-to’s, easy to use websites, how to use pay per click for maximum effectiveness, and so much more.

Throughout the years, the Real Estate industry has continually proven how crucial certain key elements are to making it big in the Real Estate world. Thompson’s coveted strategies let you tap into an endless stream of deals and leads and endless advertising methods that really work. If you are serious about Real Estate, you can make it BIG if you follow the advice in this book.

Scott Thompson, author of Internet Real Estate Agent: A Guide To Dominating Internet Real Estate Leads &Marketing, is a leading Real Estate Realtor® in California. His experience has led to the amazing secrets you will find in this book. “Ninety percent of my business comes from the Internet” states Scott, “Whether you’re new to the industry or an experienced Realtor®, this revolutionary book will be beneficial to you.” The goal of Internet Real Estate Agent is to show the readers the hidden gems of online real estate marketing;

teach the many secrets of internet technologies to help save them time and money and help them to avoid the pitfalls. “No one is currently teaching real internet advertising skills to agents, only old traditional advertising”Scott Thompson adds, “I want to educate real estate professionals to increase their business by using the power of the internet.”

Unitech eyes core sector, global market

India’s second-largest real estate developer, Unitech has major plans up its sleeves, which look beyond real estate.
After announcing its plans of entering the telecom business, Unitech now wants to concentrate on positioning itself as a full fledged infrastructure development company with interests in power, roads, airports, in short wherever it sees an opportunity.

Besides, it also plans to enter the international market, talks for which are on with a number of foreign players. Unitech wants to own and operate these infrastructure projects unlike contractual work which it used to take up in the past for developing captive power projects or even some road projects.

Infact, it would not be dependant only on real estate for its future growth. “Infrastructure has a fantastic scope. We have aggressive plans for infrastructure development business in addition to expanding our existing road and highway construction business,” Unitech chairman Ramesh Chandra told SundayET.

This would help the company grow at over 50 % over the next three years. “Over the next five years, we plan to grow 5 to 6 times our current size of around Rs 3,388 crore,” he said. The realtor’s recent initiative to bid for airport development rights falls in line with this larger gameplan. But it’s not just infrastructure development which is on their mind.

Commenting on the proposed international business Mr Chandra said that though things are yet to develop, it will first look at the hospitality sector on foreign shores. The real estate player already has plans to go into hospitality in a big way in the domestic market with a target of as many as 28 hotels by 2010.

Having been more involved in luxury and niche projects, Unitech also doesn’t rule out moving into the mass housing sector in the near future. “Mass housing accounts for nearly 30-35% of the market. Hence it is necessary to build projects for this segment. We will be seriously thinking of building projects for them as well,” added Mr Chandra. Unitech, meanwhile, is already involved in the finance market and operates two real estate funds. Besides, it is also developing a couple of SEZs, one of which is in partnership with the Salim group.