European Real Estate Deals Slump to Lowest Level in 13 Years
The deep freeze that’s gripped Europe’s real estate markets since borrowing costs jumped worsened at the start of the year as deals plunged to their lowest levels since 2011.
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The deep freeze that’s gripped Europe’s real estate markets since borrowing costs jumped worsened at the start of the year as deals plunged to their lowest levels since 2011.
Investors are looking for the next policy domino to fall in Asia amid an escalating campaign against a resurgent dollar, after Indonesia used a surprise interest rate hike to defend the rupiah.
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Macrotech Developers Ltd., a real estate firm that operates under the brand name Lodha, expects pre-sales to grow about 20% in the year to March after reporting its highest ever quarterly revenue.
Distressed Indonesian property developer PT Agung Podomoro Land has hired financial advisory firm Kroll Inc. to advise on an exchange of $132 million of bonds due in June, according to people familiar with the plan.
Oct 21, 2016
Reuters
,OTTAWA - Canada's finance department laid out possible ways to spread mortgage risk on Friday, kicking off consultations to force lenders to take on more responsibility for the loans they dole out amid fears the nation's hot housing market could end badly.
The call for submissions to change the way mortgage risk is shared between banks and insurers - including the government-backed Canada Mortage and Housing Corp - comes after criticism from the IMF and OECD that taxpayers could be on the hook if a U.S.-style housing collapse happened in Canada.
Under rules designed 60 years ago to encourage mortgage lending, banks and other lenders must take out insurance when borrowers put down less than 20 percent of a home's value. They often also insure mortgages even when buyers have more than 20 percent equity in their homes in a bid to transfer more risk to insurers in the case of default.
In addition to the CMHC, the changes would affect the risk level taken on by Genworth Financial Mortgage Insurance Co Canada and Canada Guaranty Mortgage Insurance Co.
The system has been criticized by the International Monetary Fund and the Organisation for Economic Cooperation and Development, among others, because it makes lenders less motivated to ensure their loans are good.
"Experiences in other countries have shown that high household indebtedness can exacerbate an adverse economic event, leading to negative impacts on borrowers, lenders, and the economy," the finance department said in its call for submissions.
"A high level of public sector involvement, for example through government guarantees of mortgage loans, may dampen market signals and lead to excessive risk taking."
The department outlined two ways to shift the risk back to lenders, including a "first loss" approach where lenders are responsible for losses up to a fixed amount of the outstanding loan balance in case of default.
Alternately, lenders could be responsible for "proportionate loss" calculated as a fixed percentage of total loan losses, putting a greater burden on lenders in the case of big loans that go bad.
Stakeholders, including banks, lenders, insurers and consumer protection groups have until Feb. 28, 2017, to submit proposals or concerns about the changes. The finance minister is expected to announce new rules in the spring.