Latest news with #propertyboom
South China Morning Post
a day ago
- Business
- South China Morning Post
China Evergrande nears delisting as 18-month trading suspension expires
China Evergrande Group is edging closer to delisting from the Hong Kong stock exchange, as the trading suspension imposed following its court-ordered liquidation hit the 18-month mark. Advertisement The company's shares have been suspended from trading since January 29, 2024 – the same day a Hong Kong court ordered its liquidation after it failed to present a viable restructuring plan. Under the exchange's rules, a company that remains suspended for 18 consecutive months is subject to delisting. Evergrande, founded by Hui Ka-yan in 1996 and listed in Hong Kong in 2009, was a poster child of China's property boom. The company aggressively diversified into sectors ranging from bottled water to electric vehicles and football clubs to theme parks, amassing more than US$300 billion in liabilities at its peak. Its financial troubles came to the fore in 2021, after Beijing rolled out the 'three red lines' policy to rein in overleveraged developers and cool down the housing market. 08:36 A vanishing fairyland dream: how China Evergrande rose, then crashed A vanishing fairyland dream: how China Evergrande rose, then crashed The move later triggered a cash crunch that led to widespread stoppages in construction, missed payments and a sharp drop in investor confidence. The cash-strapped developer defaulted on its offshore bonds in late 2021, sparking global concerns about contagion from China's housing downturn. Advertisement
Telegraph
4 days ago
- Business
- Telegraph
There's still one way that Britain can awaken from this nightmare
Sorry to keep banging on about how much worse things were in Britain in the 1970s. This must be like being lectured by your grandmother on how their generation survived the Blitz. But for those who lived through that pre-modern era when ordinary people were held hostage by titanic monopoly powers against which elected governments appeared to be helpless, it is difficult to see today's problems as the end of the world. It wasn't just the daily power outages which brought darkness and the shut down of all electrical equipment for hours at a time. There were as well the horrendous economic pressures which put today's difficulties into a sobering perspective. It may be true – as the young point out with some bitterness – that property was unbelievably cheap. At the end of the 1960s, it was possible to buy a suburban house in London for under £10,000. (TEN THOUSAND POUNDS.) The first great property boom soon quadrupled those prices but even in 1979 you could buy a four bedroomed semi-detached house in a good neighbourhood for around £50,000. But that home owning idyll is deceptive. What followed was a staggering, scarcely credible by today's standards, rise in inflation. At its height in 1975, the inflation rate was 26.9 per cent – which makes the obsessive concern over today's inflation increases look rather silly. What did that mean for all those people who had bought their homes at what we would now consider absurdly low prices? Their mortgages which had originally been linked realistically to their incomes – and all their household bills which were also being hit by the inflationary spiral – became terrifyingly unaffordable. This was a personal, familial crisis for countless households who suddenly discovered that they could not go on living as they had reasonably expected to do. The cost of their homes was suddenly way beyond the reach of their pay levels. The quality of life and the purchasing power of even well paid people, crashed with a suddenness that was deranging. It was now almost impossible for a mortgaged household to survive on one income so women had no choice but to go out to work. (Even though most mortgage lenders at the time would not take a wife's income into account which made practical planning problematic.) But it was not only the economics that was going badly wrong. The later 60s and the 70s produced some ugly social dynamics that are scarcely recalled now, perhaps because they are so shaming. There were menacing mobs of skinheads whose racism and anti-social delinquency were blatantly violent. My husband and I once stood over a pair of Asian boys on the tube to shield them from a pack of shaven headed thugs who were threatening to pull them off the train. Somehow London had gone from its world-conquering moment in the Swinging Sixties to this: rubbish piling up in the streets, endless transport strikes and a great many people deciding that it was time to leave the country forever. Those who lament today that 'nothing works' can scarcely imagine the havoc of unreliability that was everyday life in that chaotic decade. The antagonism toward the trade unions and the closed shop nationalised industries famously dominated the historic account of this awful period but what may be forgotten is the political despair that accompanied it. A succession of governments and party leaders had revealed themselves, to the disgust of the electorate, to be utterly useless. The 60s as we remember them had got under way with Harold Wilson who seemed to have achieved a fairly jolly accommodation with the most powerful trades unions. The 'beer and sandwiches at Number 10' technique of conciliation and kinship – which actually involved caving in to most union demands to avert strike action – seemed to offer some kind of sustainable mode of operation. Until it didn't. The unions would not be bought off indefinitely and their growing militancy was undermining major British industries like car manufacturing. The country then turned, more in desperation than hope, to the Conservatives under Edward Heath who promised legislation to curb the spread of disruptive union activism. When that proved an ineffectual disaster Harold Wilson was returned to power. He then retired from office (due sadly to the onset of dementia) and was followed by James Callaghan who had the misfortune to preside over the 1979 Winter of Discontent. The deterioration of confidence in the political leadership of the country, by this time, seemed irreversible. It was genuinely believed by a great many responsible people that national decline was not just inevitable but was already fully under way, and that this was attributable to the low standard of government performance: lack of conviction, failure of nerve and the poverty of ideas for dealing with the modern, post-imperial world. And what is more, this low standard was believed to be incurable. British politics was exhausted intellectually and morally. You know what happened next. The Callaghan government lost a vote of confidence in the House (dramatically by one vote). A general election followed which was won by Margaret Thatcher's new model Conservative party and – not overnight but over a period of several years – confidence was restored not just in the economic future but in the possibility of effective government. British politics was not dead after all: it had simply sunk into a defeatist depression. The Left which had been broken and demoralised first by its experience in government and then by the public renunciation of its trades union wing which had propelled the Thatcher Tories into power, now had to reinvent itself. First came the Social Democrats with their extreme Centrism, who were determined to 'break the mould' of party politics – which is to say, replace Labour and challenge the Tories' all out commitment to free markets. A lot of initial excitement was generated by this development, but it subsided into a footnote as the Thatcherite spirit of the 1980s swept it aside. Finally, Tony Blair's plagiarism of the Tory philosophy brought Labour back into the game. And so, confidence in recognisable party politics returned. What it took was nerve and fresh ideas. There must be a lesson there.
Bloomberg
19-07-2025
- Business
- Bloomberg
Milan Corruption Probe Casts Shadow Over City's Property Boom
For the past decade Milan has been in the grip of an extraordinary property boom. Now, a sprawling corruption probe into the city's real estate industry threatens to cast a shadow over Italy's financial capital. Prosecutors are investigating more than 70 people, including mayor Giuseppe Sala, while the city's best-known developer will be questioned by the police and faces arrest, according to reports and documents seen by Bloomberg.
Zawya
18-07-2025
- Business
- Zawya
UAE developer Arada seeks $500mln Islamic bond as construction booms
United Arab Emirates property firm Arada Developments is seeking up to $500 million from an Islamic bond, or sukuk, two sources familiar with the matter said, as it joins other property firms tapping debt markets amid a construction boom in the Gulf state. Sharjah-based Arada would join a slew of Gulf property firms to issue bonds this year, which have tapped debt markets for financing needs and to capitalise on a real estate boom as Gulf countries accelerate economic diversification strategies. Arada plans to launch the bond next week and use funds from the debt sale to acquire new land, the sources said, declining to be named because they were not authorised to speak publicly. The plan was not yet finalised, they said. A spokesperson for Arada did not respond to a Reuters request for comment. Arada last tapped debt markets in September for a $150 million tap of its $400 million sukuk due 2029 which attracted strong demand and offered a yield of more than 7%. In the Middle East and North Africa, issuers raised a record $32.2 billion through sukuk in the six months to June 30, according to LSEG data, defying tariff uncertainty, geopolitical tensions and volatile oil prices. Regional developers which have raised Islamic debt this year include Dubai's Sobha Realty and Omniyat, both raising $500 million in May. Arada was established in 2017 by Sharjah's deputy ruler, Sheikh Sultan bin Ahmed AlQasimi and Prince Khaled bin Alwaleed bin Talal AlSaud, the son of Saudi billionaire Prince Alwaleed Bin Talal. It has projects and assets in its home country, and expects to launch sales and construction in Australia by the end of 2025. The company posted total revenue of $1.1 billion last year, up around 40% from 2023, according to a company presentation. (Reporting by Hadeel Al Sayegh and Federico Maccioni; Editing by Anousha Sakoui and Rachna Uppal)
Daily Mail
18-07-2025
- Business
- Daily Mail
Dishing out super-sized mortgages won't solve the problem of high house prices: SIMON LAMBERT
'Up, up, up go the house prices.' That was the TV news reporter's opening line the first time I was invited to go on the television. It was November 2006 and the reason that a much younger version of your correspondent had got ITV's call to comment was that I had reported on a plan by a major lender to offer bumper mortgages. Abbey, at the time the UK's second biggest mortgage lender, had decided first-time buyers and home movers should be allowed to borrow up to five times their joint salary. The early 2000s property market boom was about to hit its peak and an Abbey spokesman said: 'Lending five times salary may sound high but really is something we have to do given what is happening with house prices.' You can read the This is Money article on Abbey's five times salary mortgages here. It noted that while Abbey had made a fanfare about extending its lending, it wasn't alone - some other banks and building societies including RBS and Cheltenham & Gloucester were also offering supersized loans. We had written: 'Some lenders go even higher - Northern Rock said its maximum loan was 5.9 times salary but added that it rarely allows borrowers to stretch that far.' Almost 19 years later, the big financial news this week was that Chancellor Rachel Reeves is planning to allow mortgage borrowers to stretch that far. Rules put in place to protect borrowers in the aftermath of the financial crisis will be swept aside to usher in a new era of bigger mortgages. Banks and building societies will no longer be bound by rules that say only 15 per cent of their mortgage lending can be at more than 4.5 times income. Instead, individuals and couples will be able to borrow up to six times their salary. For a couple on a combined £80,000, this means potential borrowing would rise from £360,000 to £480,000. Understandably, there are some deep concerns about the impact of allowing a pair of near average earners to take on an extra £120,000 of mortgage debt. The ratio of house prices to earnings has fallen from its recent peak, as wages have risen faster than home values - but it remains far higher than the long-term average Stretching your mortgage to the limit in this way dramatically increases the risk of discovering you have overextended your finances, particularly if you come off a fixed rate mortgage term at a time when interest rates have jumped. First-time buyers and those moving up the property ladder also have a habit of discovering that the cost of running their new home comes in at more than they budgeted for. Many of us who are lucky enough to be homeowners will have been there. You take an optimistic view of what your bills and running costs will be to justify thinking: 'Yes, we can afford that home we really want'. Reality bites about six months in. Something that was especially true for those of us who bought in the pandemic and then got whacked by bills soaring in the cost-of-living crisis. When it comes to mortgages, we are in a very different financial world to 2006. It was a lot easier to borrow and overstretch back then and banks were eager to dish out interest-only loans. The eagle-eyed will notice all the banking brands named above didn't make it through the credit crunch-driven financial crisis that arrived in 2008. The banks that are around now are much more robust. Meanwhile, the rules may say six times salary is possible, but that doesn't mean you will get a mortgage that big. Lenders assess now on affordability and if your incomings and outgoings don't tick the boxes, they won't lend you that much. It's also very easy to criticise this from both the comfortable position of being a homeowner and from a top-down zoomed out viewpoint. Whereas, on an individual level, if a prospective borrower is already paying more per month in rent, then who can blame them for being very happy to take on a mortgage instead and at least be working towards owning the property. Nonetheless, I can't help but think this mortgage bonanza is a bad idea, as it will only serve to drive house prices up further. You don't need to be an economic genius to work out that if you lend people more money to buy homes, the price of homes will rise. And this is unfortunate timing, as homes have got more affordable in recent years. The house price to earnings ratio has fallen from its pandemic boom peak, as wages have risen faster than home values. Looked at from a broader perspective, homes are still very expensive though, at about 5.7 times earnings compared to the long-term average of 4.6. Albeit, this long-term average itself has been pulled up by the very high levels over the past 20 years. Ideally, we need a prolonged period of wages rising faster than house prices to correct the market not a short-term fix of bunging people bigger mortgages, Extending borrowing on the demand end also undermines the benefit of building more homes on the supply end. I would argue too high house prices are a root cause of much of Britain's economic ills over the past 20 years. Bumper mortgages only make things worse.
