Foreign Banks Reduce Lending to U.K. Commercial Real Estate

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North American banks cut new lending for U.K. commercial property by more than half last year as a market slowdown reduced the number of big deals being done.

Banks focused more on refinancing existing loans than extending new credit, a trend that favored domestic firms, according to a survey of 77 lenders by De Montfort University. U.K. banks and building societies were the only group to record an increase in lending in a market hurt by the vote to quit the European Union.

North American banks active in the U.K. are generally focused on providing acquisition finance in larger transactions, of which there were far fewer last year, partly because of Brexit,” Jon Rickert, investment director at money manager GAM Holding AG, said in an interview.

The weakness of Britain’s commercial mortgage-securities market also prompted a “general rethink by several North American banks around the resources they want to commit to the U.K.,” he said.

Lenders from across the Atlantic extended 3.3 billion pounds ($4.2 billion) in new credit to British commercial property deals in 2016, down 56 percent from the previous year, according to De Montfort’s survey, published Thursday. German and other international banks cut new lending by 18 percent and 25 percent, respectively.

U.K. commercial-property investment shrank by more than a quarter last year with investment at the lowest level since 2012, researcher Costar Group Inc. said in February. The overall volume of new loans fell 17 percent to 44.5 billion pounds, with uncertainty in the run-up to the June 23 referendum on EU membership weighing on first-half activity, according to De Montfort.

New lending for acquisitions no longer accounted for the majority of the market last year. Banks also became more conservative about where they were willing to extend credit, with 48 percent of commercial-property debt secured against central London real estate, the most in at least 12 years, the survey showed.

For More Information:- Jack Sidders

Clearer process needed in hot Toronto real estate market, Tory says

Officials hint that new rules and tougher penalties could help in the drive to cool the market.

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Mayor John Tory and Ontario Finance Minister Charles Sousa have hinted that changes to real estate industry practices could be part of the solution to cooling — without killing — the over-heated Toronto housing market.

While he wouldn’t provide specifics, Tory said there needs to be more transparency in real estate transactions.

Asking prices for homes rarely reflect their true value and desperate consumers are subject to bidding wars often with little to no information on the number or the nature of competing offers, he said.

“How could that do anything but contribute to the frothiness of the real estate market and the frenzied increase in prices,” Tory told the Toronto Star on Wednesday.

He also said he is concerned that home buyers are being pushed to waive conditions such as home inspections, on their offers.

Some Toronto realtors say it’s common for the successful purchaser in competitive bidding wars to far exceed all the other offers on the table. Buyers can’t know what the competition is offering. Only the seller sees all the offers and realtors aren’t permitted to disclose that information.

Ontario Real Estate Association (OREA) CEO Tim Hudak is calling for an overhaul of the 2002 provincial rules and code of ethics that govern real estate practices.

He says the majority of realtors are honest and ethical. But there are problematic practices including double-ending sales, says Hudak.

Double-ended sales, where one agent represents both the buyer and the seller, means more commission for the realtor and can potentially shut out competing offers.

Hudak called for tougher regulations and penalties for agents who break the rules. In a hot market, penalties meted out by industry regulator the Real Estate Council of Ontario (RECO) can be just the cost of doing business, he said.

RECO registrar Joseph Richer said “If there is a call for greater fine level, certainly we can look at that.”

But in any market situation where there is more demand than supply, some people will take advantage, said Richer.

“When you have 10 or 20 people knocking on your door to buy your house, I’m not sure what the individual (realtors) could be doing to drive prices higher,” said Richer.

RECO fines range from about $5,000 to $25,000.

Toronto realtor David Fleming has called for more severe RECO penalties for some rule breaches. But on Wednesday, he accused the mayor of politicking.

Fleming said, the “easiest, slam-dunk policy change” to cool the Toronto market is a non-resident foreign buyers tax that Premier Kathleen Wynne was expected to announce as early as Thursday.

Foreign buyers “are getting rich off our backs and the hard-working, tax-paying Canadians that live here can’t afford real estate,” said Fleming.

The Toronto Real Estate Board referred questions about unethical or improper business practices to RECO.

“TREB members adhere to a strict code of ethics as set out by RECO, and TREB not only welcomes a review of the Real Estate and Business Brokers Act but has officially asked for it,” said the board’s CEO John DiMichele in an emailed statement..

For More Information:- John Tory

How To Get Rich In Real Estate – Without Being A Landlord

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Today I’m going to show you, hands-down, the easiest way to add rental real estate to your portfolio.

Don’t worry—you won’t have to leave your computer! Instead of hitting the streets to buy a four-plex or apartment building to rent out, we’re going to purchase a recession-proof real estate income stream straight from your online brokerage account.

And believe it or not, thanks to a current market anomaly, we can snag better deals online right now than we can in person. I’ll explain the details in a moment—including 2 stocks with yields that double what your average stock pays, and double-digit payout growth, too!

First, let me give you the lay of the residential real estate landscape.

A Bait-and-Switch Market

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As I write, apartment vacancy rates across the US are tight—sitting at 6.9%, the lowest level in 24 years!

And if you happen to own a rental abode in the nation’s hottest locales, congrats! Squeezing more income out of it has never been easier. Check out the year-over-year gains in the five best places to be a landlord:

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All this makes buying a residential rental property a no-brainer, right?

No way.

Because outside those scorching markets, fatter rent checks could soon be history: in March, for example, rents nationwide rose 2.4% from a year ago, which is below the 2.7% inflation rate.

Think about that for a moment: if you can’t raise the rent above inflation, it’s the same as a dividend cut!

And the trend is looking worse.

This year’s rise is down from 2.8% in 2016 and way off from 3.7% in 2015. And late-to-the-party developers are about to throw open the doors on scores of new units, clamping another weight onto rent growth.

That leaves you betting on capital gains—but with mortgage rates rising and more rate hikes ahead, there’s no free lunch here, either.

Which brings me back to those great real estate deals I mentioned earlier.

REITs: No-Hassle Real Estate Profits

They’re real estate investment trusts (REITs)—or companies that own or finance income-producing properties.

They’re a way better option than going DIY, because the REIT does all the work—it buys the properties, fixes the broken elevators and collects the rent—and passes the cash on to you.

Plus, REITs don’t pay federal income tax, so long as they payout 90% of their profits as dividends, which means high yields are common in this corner of the market. The best REITs are throwing out reliable dividend hikes year in and year out, too.

Those are two things your average landlord can only dream about.

And there’s one more thing he’s missing: a decent yield! That’s because the average condo in the US:

  •     Sells for $264,000
  • Rents for $959/month (or $11,508/year) before expenses

Which yields the condo investor a paltry 4.4% on his initial capital. No, thanks!

We’re also ignoring the value of our property baron’s time—to fix leaky faucets, find new tenants, collect rent and dozens of other things that come with the job.

For More Information:- Brett Owens

Is Real Estate Still A Man’s Domain?

Over the years, real estate has traditionally been a man’s domain. It was the men in the family who decided which house to buy or rent. But just like in any other field, women are making their presence felt in the real estate world too. Single as well as married women are realizing the importance of owning a property in their name. It is for this reason that, just like their male counterparts, women closely follow news and updates on the real estate scenario in their homeland. Women are gradually emerging in the forefront as they are making worthwhile contributions towards buying and selling homes. The last few years have witnessed the emergence of more and more female real estate agents. Here are a few reasons for the growing success of women in real estate:

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Women listen carefully

It has been proven time and again that men and women communicate differently. Women are known to be better listeners than men. This works to their advantage in a field like real estate because agent needs to listen carefully to their potential buyer’s needs. Only when you understand what the buyer is looking for, will you be able to make a successful sale.

Women are more detail oriented

This goes hand-in-hand with the first point. When you listen carefully to what your buyer is saying, you are able to pick on the details that are most important to him. For example, if the buyer addresses his concern about the neighborhood not being child-friendly, you can pick on his concern and address the issue by providing a solution. When the buyer is assured that his concern has been successfully taken care of, he is more likely to consider buying the house.

Women understand families and children better

Women are naturally more nurturing than their male counterparts, and this gives them an edge in a field like real estate. For example, if a family consisting of a mother, father, and two young children are looking to buy a house, they’ll opt for friendly neighbourhoods with lots of children and a good school nearby. Instead of showing them around 10 houses that may or may not meet their criteria, women are more likely to show them three or four houses that they’ll take a liking to immediately.

Women inspire trust

Buying a house is a huge emotional and financial commitment. It’s not like you enter a shop to buy a laptop, have a 10 minute conversation with the salesperson and walk out with your purchase. You need to build a relationship of trust and understanding with your agent and men and women both find it easier to establish a connection with female agents.

For More Information:- Munira Rangwala