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Updated: Thursday, October 23, 2014

China and Its Demand For Global Property

After being a net recipient of foreign inward investment for decades, China is now turning the tables, with by far the biggest part of its overseas investing going into real estate. In fact, investment in foreign property projects reached a massive US5.4 billion in the first six months of 2014, representing an increase of 17 year on year. So what exactly is driving China and its demand for global property?

There is little doubt that the key incentive for Chinese investors is the slowing of the domestic property market, combined with soaring house prices, which seems to threaten increasing market instability. In contrast, the stable property markets in the West, providing both high yields and a safe haven, look increasingly attractive. This is against the backdrop of the slowdown in the Chinese economy, and the Chinese governments increasing curbs on real estate ownership.

These are some of the "push" factors driving Chinese investors to seek markets abroad, but there are also many "pull" factors making Western markets especially attractive. Education and healthcare systems are a particular draw, along with the ability to own property outright, and the greater affordability of premium properties, thanks to the strength of the yuan. On the continent of Europe, the Golden Visa schemes in Spain and other countries provide residence rights to purchasers of properties over a certain value, along with freedom of travel and education across the Schengen zone.

The result of this in fact is that in 2014, Madrid has moved into 5th place in the table of Chinas top property investment destinations. Top of the list is London, UK, followed by US cities New York and San Francisco. In 4th place is Sydney, Australia, confirming that Chinese overseas investment indeed has a truly global reach.

However, although in cities like London, Chinese property investment has been growing for several years, the pattern is changing, with residential property sales now being outstripped by investment in the commercial property sector. These include massive Chinese acquisitions in the City and Canary Wharf, as well as a huge redevelopment of the historic Ram Brewery in Wandsworth. There is a similar pattern in other key gateway cities, including the 5 billion Atlantic Yards redevelopment in Brooklyn, New York, the acquisition of a large commercial development site in north-west Sydney, and the purchase of a massive skyscraper from Santander in Madrid.

This reflects the fact that although Chinas overseas expansion began with individual investors, looking for properties mainly for personal use, it has increasingly moved into the big league, as developers snap up prime sites. Insurance companies and sovereign wealth funds SWFs are now able to purchase prime assets and strategic property portfolios. These big investors are able to bring economies of scale to the purchase of equipment and materials, as well as plentiful financing through their access to funding from big Chinese banks.

Although the influx of Chinese investment in all these countries has been welcomed as a boost to their economies, it has also given rise to some concerns. In many of the key gateway cities, notably London and Sydney, there is evidence that demand from cash-rich Chinese investors could be pricing domestic buyers out of the market. Local and national governments have to decide how far they are willing to intervene in the market, to protect the welfare of their own citizens.

You can gain further insights into these and other vital issues by visiting CBRE TV, the no.1 for expert opinion and analysis on real estate consultancy and investment.


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Best Canadian Cities For Attracting Newcomers

A report that ranks 50 Canadian cities on their attractiveness to migrants says that Waterloo, Calgary, Ottawa, Richmond Hill, Vancouver and St. Johns get top marks, based on 43 indicators grouped into seven categories: society, health, economy, environment, education, innovation and housing. The six top cities also received top marks when The Conference Board of Canada conducted the last study in 2010.

Waterloo has a reputation for innovation and education, ranking first in education, second in innovation and third in the economy category. Calgary ranked first in economy and innovation. Ottawa scored high marks in the society, education, innovation and economy sections.

Richmond Hill, a Toronto suburb, is the third-most diverse city in Canada and has the highest number of graduates in engineering, science and math per capita, says the Conference Board of Canada. Vancouver did well in the society, education and environment categories, while St. Johns ranked high in the economy and health categories.

Although these six cities didnt have the best marks in all categories, their overall scores earned them an "A" in the study.

Those that scored a "B" include Toronto and its suburbs of Mississauga, Oakville and Markham. Toronto had top marks in the society category but was dragged down by poor marks in the innovation, health and environment categories. Other larger communities that received a "B" are Edmonton, Regina, Saskatoon, Winnipeg, Victoria, Halifax, Quebec City and Kingston.

There were 17 cities that received a "C" including Montreal, which got poor marks in the economy and society sections. Thirteen cities were given a "D" grade, which means they are struggling to attract newcomers and in some cases have seen their populations decline. These cities include Hamilton, Brantford, Cambridge, Oshawa, Abbotsford, Trois-Rivieres and Saint John.

The housing category includes three indictors: the percentage of household income spent on mortgages, the percentage of tenant household income spent on rent and the percentage of homes in need of major repair.

The report says the top city for housing in Canada is Levis, Que. "On average, homeowners in Levis spend only 12 per cent of their income on mortgage payments, compared with 19.9 per cent for homeowners in Brampton, Ont. who are the worst off," says the report. "To put this in perspective, Canadians on average spend 14.5 per cent of their income on mortgage payments."

Other cities that received an "A" in the housing category are Saguenay, Oakville, Waterloo, Calgary and Quebec City.

The report says small and mid-sized cities dominate the top tier of the housing category. "The big cities that do well Calgary, Ottawa, Edmonton are those where high average incomes compensate for high housing prices."

Strong rent control regulations are in place in many of the communities at the top of the housing rankings.

"Tenants -- who tend to be younger and have less income -- spend a greater proportion of their income on housing than homeowners spend," says the report. "For tenants, there are only three A cities: Surrey, B.C. joins Saguenay and Levis as the most affordable places to rent." All of the top seven cities on rental affordability are in B.C. or Quebec, where rent control measures are in place.

The laws of supply and demand dictate that the most popular cities become more expensive as rising demand for housing outstrips demand. This gives Vancouver a D rating in the housing category.

"It is a conundrum that is difficult to solve as cities become more and more popular, attracting young and talented workers," says the Conference Board of Canada report. "Recent reports on the housing affordability crisis in London, U.K. underscore this dilemma," noting that some observers think that as younger, creative workers get priced out of the city, it becomes more bland and boring.

But the report says there is no indication this is happening yet in Canadian cities. "The proportion of young adults 25 to 34-years-old is still highest in the big cities and this rate has increased over the past five years."

The city that ranked dead last in the housing category rankings is Victoria, a popular tourism and retirement destination. A combination of poor affordability and low marks on housing condition doomed the city to last place.

The home repair indicator measures the percentage of homes in need of major repair defective plumbing or electrical wiring and structural repairs to walls, floors or ceilings.

The Toronto suburbs of Vaughan, Markham, Richmond Hill and Brampton, where most development has taken place within the last 30 years, get top marks for housing in good repair. At the bottom of that list are Thunder Bay, Montreal, Winnipeg, Regina and Saint John.

"Attracting skilled workers is crucial to Canadas competitiveness," says the report. "Cities that fail to attract new people will struggle to say prosperous and vibrant."


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10 Festive and Functional Ways to Use Fall Leaves

Fall leaves. Theyre not just a wonder to gaze at - and a nuisance to rake up. They also offer countless opportunities for home dcor and arts and crafts. Whats better than making your house look good and giving your kids something fun to do? Not much.

1. Make some artwork

Leaves are: 1 free, 2 abundant, and 3 capable of providing many hours of funwith a little something extra on the other side.

Leaf rubbings are a fun way to play with shape, color, and texture. "Place a leaf upside down on a hard surface with the veins facing toward you," said Nanny Magazine. "Put a piece of white paper on top of the leaf. Use a crayon any color to gently rub on the paper over the leaf."

2. Make more artwork

Tracing around the perimeter of leaves provides a good start to some great art. Make sure your kids add in the veining for a realistic look.

Then, they can color in the leaves with crayons, pens, pencils, or paint.

3. Make even more artwork

If you dont have fall leaves, you can still make a beautiful piece of art.

Grab a few sturdy specimens and create translucent leaves by soaking them in Arm amp; Hammer Washing Soda.

4. Make a collage

A handful of leaves in different colors, some glue or Mod Podge, and a piece of construction paper is all you need. If you have a laminator, you can create placemats for the kids table to use for Thanksgiving dinner.

5. Create leaf-covered candles

Martha Stewart shows you how to transform these candles into artistic autumn dcor.

6. Line a bowl for a colorful table setting

A collection of gourds or mini pumpkins, or winter fruit like apples and pears, look festive when gathered on top of a bed of fall leaves.

7. Stuff a vase

Pick leaves with the stems attached to create a centerpiece, individual table settings, or a pretty addition to your fall mantle.

8. Customize a tablecloth and napkins

Another craft that can be turned into useful items, leaf-stamped tablecloths and napkins are easy and fun to make, and can become a holiday tradition.

9. Make an autumn wreath

"After collecting an assortment of leaves, glue them on paper in a circle," said Nanny Magazine. "Decorate with glitter glue and dont forget to add a bow."

10. Make an adult version of an autumn wreath

Festive and fantastic, this version from Huffington Post can grace your front door all season.

Get some more fun craft ideas for fall leaves here.


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Quelling The Quarrel In Your HOA

"Quar>

Conflict is a natural part of human >

Know Whats What: The board wasnt elected to babysit or police neighbor squabbles. Some issues are association, some are not. Dont take on personality conflict issues. People that cant get along often look for others you to blame. Dont get involved unless it affects the harmony of the community.

Let Them Deal With It: If the issue is a personality conflict, suggest they discuss and resolve it like adults. If they wont, let it go. Dont encourage immature behavior.

Clarify the Issue: If the issue impacts the whole community, clarify it. What seems to be isnt always what is. Ask each party what they think "it" is.

Facilitating Discussion: If the associations interests are involved, here are several tips for facilitating the discussion:

Schedule a convenient time to talk

Agree on a neutral place for the meeting.

Stick the facts. Steer clear of "He said, she said".

Avoid blaming, insults and exaggerations which make it difficult to consider other viewpoints.

Listen, even if you disagree, to better focus on the issues.

Defuse hostility. Let them know you understand they are angry or upset. Explore whats behind the emotion.

Direct the conversation toward solutions.

Question their assertions:

  • Too many/much/little/few. Compared to what?
  • You never... What would happen if we did?
  • Weve tried that already... What was the outcome?
  • The only way is... Yes, thats one option. Any others?
  • It will never work... What would work?

Good conflict resolution focuses on needs, not positions. It is indeed possible to quell the quar>

For more innovative homeowner association management strategies, subscribe to http://www.Regenesis.net.


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Semantics Wont Avoid Liquidated Damages Limit

If it walks like a duck, and quacks like a duck You know the rest. Common sense tells us that you cant change the nature of a thing simply by deciding to call it something else. In at least one situation Allen v. Smith et al. a California Court of Appeal seems to agree with common sense.

The issue at hand was an attempt to circumvent Californias statutory 3 limit on liquidated damages in a residential purchase agreement.

Liquidated damages are an amount that contracting parties may in advance agree to be the measure of damages that would be suffered should there be a default. Thus, if there is a default there will be no need to prove how much the injured party has been damaged. The amount will already have been agreed upon.

Liquidated damages provisions are commonly used in residential purchase agreements. When buyer and seller agree that the deposit and sometimes a second, increased deposit will be subject to liquidated damages they are saying that, should the buyer default, the deposit amount is the damages amount that will be owed to the seller. California Civil Code section 1675 generally limits the valid amount of liquidated damages in a residential purchase agreement to 3 of the purchase price. This limitation is specifically stated in most residential purchase contracts.

Sometimes sellers want to be able to exact more from defaulting buyers than the 3 liquidated damages limit; and sometimes their agents can get creative in trying to help them do so. That is what happened in Allen v. Smith, and the court didnt like it.

Allen submitted an offer to the Smiths to purchase their Rancho Santa Fe home for 1,775,000. With the offer Allen submitted a 20,000 deposit along with an agreement to increase the deposit by 33,250 after the removal of inspection contingencies. The entire 53,250 3 of the purchase price would be subject to the liquidated damages provision.

The Smiths wanted to receive a larger amount, specifically 100,000, if Allen were to default. In order to get around the 3 limit the agent wrote this in the counter offer: "Buyers increased deposit to be 80,000 -- total deposit of 100,000 to be >

Allen agreed to the counter offer, the deal went forward until, you guessed it, Allen defaulted. Naturally, the Smiths held on to the 100,000, so everyone went to court.

Allen, or Allens lawyer, said that the Smiths shouldnt be able to keep the full 100,000 because they had "sought to circumvent the policy of the law concerning liquidated damages in residential sales contracts through a sham mechanism in which [they] labeled the deposit monies falsely as option monies."

The San Diego County Superior Court agreed with the Smiths and let them keep the 100,000 "nonrefundable option fee"; but the Fourth District Appellate Court disagreed. On examining the contract they found that it had none of the characteristics of an option, except for the reference to the deposit amount. For that reason the court agreed with Allen. It allowed the Smiths to keep the 53,250 3 of purchase price but required that the rest be returned, along with Allens court costs.

There were other issues in Allen v. Smith,and I have presented a simplified version here in order to keep focus. Still, a general lesson emerges. While creativity may be an admirable quality in real estate agents, be careful when it extends to attempting to change reality.

Bob Hunt is a director of the California Association of Realtors. He is the author of Real Estate the Ethical Way.


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Developers Must Be Honest

Note: Although the material discussed below deals with high court cases in both Washington, D.C. and Maryland, courts in many other states will begin adopting the reasoning and the decisions of these two cases.

Did you know that if you bought a new condominium in the District, you can sue the developer if the unit wasnt in the good condition you expected it to be even if it wasnt the one selling it?

And if you bought a resale condo in Maryland, did you know you can sue the association and property management for misrepresentations they made in the resale package, even if they were not the ones selling the unit?

Thats the decision of the high court in Maryland..

When you are considering buying an older unit, the condo association is required to prepare a resale package. This contains lots of material about the association, including declaration, bylaws, rules, and plats and plans as well as financial data and insurance information.

Marylands law is based on a case called MRA Property Management v. Armstrong. In that case, a number of buyers alleged that a property manager and the Tomes Landing Condominium Association in Port Deposit, provided resale packages which failed to disclose major defects in the condominium buildings - defects which were known at the time of the disclosure.

The Maryland Court of Appeals decided that the manager and association violated the Maryland Consumer Protection Act, despite not being the actual sellers of the units. In this case, the plaintiffs reviewed the misleading resale package and based their purchase decision at least in part on >

In the District, prospective new condo buyers receive a public offering statement, which contains a lot of information on improvements the developer made, such as the installation of a new roof or replacement of outdated plumbing and wiring.

In D.C., a dispute between condo buyers and developers is playing out in a suit filed by Adam Wetzel and Jonathan Rushbrook, who signed a contract to buy a new condo unit. Before they took title, they were living abroad and did not see the property. According to papers filed in the case, Wetzel and Rushbrook "had >

However, before they went to closing, the first-floor area was destroyed when large amounts of rain entered through the walls and the windows. After buying, they spent more than 14,000 just on mold cleanup.

The defendants accused the developer, Capital City Real Estate, of fraud and violating the Districts consumer protection laws. The case made its way to the Court of Appeals, which came to the same conclusion as in Maryland: You can sue the developer even if it was not the actual seller of the property. The case was sent back to the Superior Court where it is pending.

"Developers will need to be very careful in making representations about residential homes and condominiums in which they are involved, including on developer Web sites and in other advertising, public offering statements, sales contracts and other materials provided to consumers," said Roger Winston, a real estate attorney with the law firm of Ballard Spahr in the District.

Whatever the outcome of the Wetzel case, the takeaway is this: Buyers in Maryland, the District and Virginia which has no similar reported cases should beware.

Obviously, if you plan to buy into a community association, you must carefully read the documents about the property. But you must do more.

Go over to the building on a weekend, introduce yourself to some of the owners and ask them about the project. Talk directly to the president of the board; ask if there are any problems with the building units or if there are special assessments in the planning stage but not yet formally authorized.

Its your investment. Do your homework.

Benny L. Kass is a Washington and Maryland lawyer. This column is not legal advice and should not be acted upon without obtaining legal counsel. For a free copy of the booklet "A Guide to Settlement on Your New Home," send a self-addressed stamped envelope to Benny L. Kass, 1050 17th St. NW, Suite 1100, Washington, D.C. 20036.
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Financing You Can Feel Good About

The mortgage industry has a history of screwing things up. Maybe the intentions are good but the process couldnt be more confusing. Throw in all the confusing lender jargon like amortization or APR and the borrower gets foggy at the outset.

Mortgage loan officers can have a hard time translating what they know into language the borrower can understand. Try to compare a 30-year loan with 20 percent down to a 20-year loan with 25 percent down. Throw in paying a point on one loan but not the other and you can see why comparing loans leaves many borrowers ready to give up and just do what their loan officer tells them to do.

One borrower was so frustrated with the process of refinancing her home, that she started her own software company two years ago to take the confusion out of purchase loans or refinancing. Based out of New York, Nicole Hamilton founded Tactile Finance to provide loan officers with a patent-pending tool that visually displays mortgage loan choices instead of simply quoting an interest rate. Its a "data visualization meets the mortgage industry" thing and loan officers can use it to explain various mortgage choices for their clients.

From that, a consumer site was born called Tacfi.com, where consumers can log in on their own and enter various financing scenarios to see how their choices affect building equity over time, financing costs and accrued interest. Theres even a tool that shows borrowers what they would net out of the sale proceeds should they sell their home at a specific point in the future. Thats kind of amazing.

Whats even better, its a lender-free zone. There are no banner ads nor does Tacfi sell borrowers information. If the borrower does want to speak with a loan officer, they can find one on the site but theres no requirement to do so. The site also contains articles about the lending process as well as a fun-to-read blog written by Realty Times alumnus David Reed.

When a loan officer quotes rates, this comparison is sent to his prospect. You can compare different scenarios and move the "mouse" that appears on the equity screen.

Immediately below, notice the "Share Screen" button. Its a patent pending app that allows a loan officer and multiple borrowers at different locations to share the loan officers screen as the loan officer walks them through different scenarios. Its similar to "Gotomeeting" but theres no need to download anything, its all in the email link.

To see the benefit, you should get your hands on the site and get the tactile feel for yourself. Youll find its very different from going on a lenders site and getting a rate quote or looking at a bar chart that may be far afield of what you can actually expect from the loan.


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Updated: Thursday, October 23, 2014

Semantics Wont Avoid Liquidate...
If it walks like a duck, and quacks like a duck You know the rest. Common sense tells us tha...

Developers Must Be Honest...
Note: Although the material discussed below deals with high court cases in both Washington, ...

Copyright ©2014Realty Times®. All Rights Reserved

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