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Zara Founder Unveils $17.2 Billion Global Real Estate Empire

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(Bloomberg) — After making a fortune in clothing, Amancio Ortega turned his attention to real estate.

The Spanish billionaire’s property holdings have soared to 15.2 billion euros ($17.2 billion), his firm revealed Tuesday for the first time, giving him the largest real estate portfolio among Europe’s super-rich.

Ortega, 84, the founder and owner of fashion label Zara, invested 2.1 billion euros in real estate last year through various subsidiaries of his holding company Pontegadea, according to an emailed statement. Pontegadea, which owns 59.3% of Zara parent Inditex SA, had a net income of 1.8 billion euros for 2019, including 1.64 billion euros in Inditex dividends and 621 million euros from real estate assets.

Ortega, Spain’s richest man, has diversified his fashion fortune to preserve his sizable wealth, investing more than $3 billion in U.S. real estate in recent years.

Acquisitions include landmark properties like Manhattan’s historic Haughwout Building and Miami’s tallest office tower. Last year, his investment firm completed a $72.5 million deal for a downtown Chicago hotel, which followed purchases of a building in Washington’s central business district and two Seattle office buildings.

As well as being landlord to tech giants such as Amazon.com Inc and Facebook Inc, Pontegadea also counts Inditex rivals Hennes & Mauritz AB and The Gap Inc as tenants.

The son of a railroad worker, Ortega has a net worth of $58.5 billion, according to the Bloomberg Billionaires Index, the bulk of which comes from his majority stake in Inditex. His fortune has slumped more than a fifth this year in the wake of the coronavirus pandemic, which has forced Inditex to close stores. The company’s shares have fallen 22% this year.

Aside from real estate, Ortega has also invested in energy and telecommunications, buying a 5% stake in Enagas last year. In 2018, Pontegadea bought a 9.99% stake in Telefonica SA’s tower unit for 378.8 million euros.

Pontegadea said it expects to receive 646 million euros in dividends from Inditex in 2020.

 

Source: – Financial Post

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Greater Victoria real estate sales numbers tell two stories for July – Victoria News

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Despite fewer listings than the same time last year, and with agents working within the challenges of COVID-19, property sales in Greater Victoria for July showed a significant increase on two fronts.

The Victoria Real Estate Board reported sales of 979 properties, which amounts to a 38 per cent jump from July of 2019, and a 21.2 per cent increase over sales in June of this year.

Board president and local agent Sandi-Jo Ayers provided an explanation for the 2020 comparison, if not the year-over-year numbers.

“If we look at the numbers alone, June and July were unseasonably busy months and the number of sales this month are on the higher end of our market for a typical July,” she said in a release.

“But we are not in a typical season. We cannot derive an ongoing trend nor forecast by looking at [July] activity, because we know the market is subjected to unusual factors amidst a health crisis. Our spring market was delayed because of the pandemic. It is likely that our spring demand moved into summer, now that folks are moving around our community more freely. Time will tell if these factors are resulting in a very compressed cycle of activity or if this trend will persist in the fall.”

RELATED STORY: Real estate sales in Greater Victoria drop almost 60 per cent in April

The sales of single family homes in the region last month drove the major increase over last year, with 559 sales – a major 61 per cent climb over July 2019. Condo sales showed a modest 11 per cent increase over last year, with 239 units sold.

The number of active listings at the end of July was 2,653, 10 per cent fewer than at the same point last summer and a shade under the 2,698 listings that were active as of June 30 this year.

Ayers said the market is continuing to produce a long-term, low supply of inventory, “which puts pressure on our market and prices.”

“Though we had a good number of new listings come to market this month, many of those listings were snapped up by buyers,” she says. “Our average active listings for July over the past 10 years is 3,767 but our current local inventory is more than a thousand properties less than that. We have a lot of demand for single family homes – without the numbers to meet that demand.”

ALSO READ: Victoria houses take barge to San Juan, Gulf Islands

The MLS Home Price Index benchmark value for a single family home in the Victoria core also continues to go up. In July that number reached $910,400, up nearly $50,000 from last year and roughly $14,000 from June 2020. The Victoria core benchmark value for condos was $529,900 in July – $9,000 higher than last July.

For more information on market trends, visit vreb.org.


 

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Real estate market remains hot – Times Colonist

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Last month’s real estate sales set a another record for the average selling price for a single-family home in Greater Victoria as rising sales of luxury homes, demand for single-family houses, low interest rates and tight supply combined to fuel the market.

July’s average price for a single-family house moved to $1.033 million from the previous record of $1.014 million in June, said the Victoria Real Estate Board.

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Multiple bids are coming in for desirable properties despite worldwide uncertainty about the implications of the pandemic.

Justin Cownden, real estate agent with Pemberton Holmes Real Estate, said a client decided not to make an offer on a Shawnigan Lake house last month because 10 offers had already been submitted. The successful bid came in above asking price with no conditions.

Cownden is seeing a “lot of activity,” in all levels of the market as it rebounds after cooling during the first months of the pandemic.

Similar to last month, sales of $2-million-plus properties in the capital region climbed. High-end sales skew the average price.

In July a total of 30 single-family-homes sold for more than $2 million and of those, four went for more than $4 million. In July of last year, there were nine single-family sales of more than $2 million, the board said Wednesday.

As well, five condominiums sold for more than $1 million.

In June, 23 single-family houses sold for more than $2 million.

Developer Stan Sipos earlier sold 80 per cent of the 57 units in his Customs House luxury condominium project overlooking Victoria Harbour and expects to release the remaining units for sale in the fall. Those will probably be priced at $1.8 million to $6 million. The penthouse sold for $11 million.

“We are getting lots of calls. Lots of interest from all over the place,” including the U.S., Sipos said.

Victoria is appealing because it is quiet, offers a good lifestyle and has fared well during the global crisis, he said.

Sipos has heard of multiple offers for Oak Bay properties and of two sales which took place over video applications without the buyer being present.

Real estate board president Sandi-Jo Ayers said sales numbers in the capital region were unusually high for June and July.

“But we are not in a typical season. We cannot derive an ongoing trend nor forecast by looking at activity because we know the market is subjected to unusual factors amidst a health crisis.”

It is likely that spring demand moved into the summer, she said.

“Time will tell if these factors are resulting in a very compressed cycle of activity or if this trend will persist in the fall.”

The benchmark value for a single-family house in the core area was $910,400 last month, up from $861,100 in the same month a year ago.

A benchmark represents changes in value for a typical home in a specific area, a measure which real estate boards say is more representative than an average price. The core area is made up of Victoria, Saanich, Esquimalt, Oak Bay, and View Royal.

A long-term, low supply of properties for sale is continuing in this area, Ayers said.

“Though we had a good number of new listings come to market this month, many of those listings were snapped up by buyers.

By the end of July, there were 2,653 active listings — 10 per cent fewer properties than in July 2019.

“Right now we have a lot of demand for single-family homes without the numbers to meet demand — prospective buyers are often entering into multiple offer, competitive situations or are unable to find appropriate properties,” Ayers said.

For the area north of the Malahat, Vancouver Island Real Estate Board president Kevin Reid also noted interest in single-family homes.

“An interesting development we’re noting is that there seems to be more demand for single-family homes and less interest in condominiums and townhouses at the moment.

“It makes us wonder whether quarantine and lockdown have instilled a desire for more space among buyers.”

A total of 892 units sold last month, a four per cent decline from July of last year.

The benchmark price of a single-family home board-wide was $545,700 in July, an increase of six per cent from the previous year.

cjwilson@timescolonist.com

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Toronto and Vancouver Real Estate Delinquencies Rise, While The Rest of Canada Falls

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Canadian real estate markets are seeing mortgage delinquencies fall… just not in Toronto or Vancouver. Equifax data crunched by the CMHC shows the national rate of delinquencies fell in Q1 2020. Breaking down the numbers, this trend is stronger in some real estate markets than others. Montreal for instance, is seeing their delinquency rates drop to multi-year lows. Toronto and Vancouver are on the flip side of the stat, and are actually seeing delinquencies rise.

Mortgage Delinquency Rates

The mortgage delinquency rate is the percent of mortgages overdue. Today’s Equifax numbers are mortgages that are more than 90 days overdue. Pretty straight-forward, but there’s two things to keep in mind – seasonality and level.

Mortgage delinquency rates, like other forms of credit delinquencies, tend to be seasonal. When looking at seasonally sensitive numbers, quarterly changes don’t tell us a lot. Unless there’s a sudden and abrupt change that’s not seasonally observed. Instead, it’s the year-over-year change of the quarter that’s more important.

The next note to keep in mind is there’s no universally high or low level for delinquencies. Some regions like Montreal, have always had higher levels of delinquencies. Cities like Toronto and Vancouver are always lower than the national level. With regional variances like this, it’s more important to focus on the velocity of change. If Vancouver had the same level of delinquencies as Montreal, but with Vancouver supersized mortgages – it would be catastrophic for the economy. It only needs to be up a few points for real estate markets to be in trouble, before it becomes an emergency.

Canadian Mortgage Delinquencies Fall

Canadian mortgage delinquencies were falling across the country in the first-quarter. The rate of mortgage delinquencies fell to 0.29% in Q1 2020, unchanged from the previous quarter. Compared to the same quarter last year, this was 3.3% lower. Since delinquencies are seasonal, the quarter over quarter change is less significant than the annual change. In this case, the delinquency rate was improving on the national level.

Canada Q1 Mortgage Delinquecies

The rate of mortgages that are 90 days overdue.

Source: Equifax, CMHC, Better Dwelling.

Toronto Mortgage Delinquencies Rise 10%

Toronto mortgage delinquencies are rising from all-time lows a few years ago. The rate reached 0.11% in Q1 2020, unchanged from the quarter before. Compared to the same quarter last year, this was 10.0% higher. This was the biggest Q1 for mortgage delinquencies since 2017. A key difference between then and now being it was falling back then, and it’s rising now.

Toronto Q1 Mortgage Delinquecies

The rate of mortgages that are 90 days overdue.

Source: Equifax, CMHC, Better Dwelling.

Vancouver Mortgage Delinquencies Rise 8%

Vancouver real estate is seeing mortgage delinquencies climb once again. The rate of delinquencies reached 0.13% in Q1 2020, unchanged from the previous quarter. Compared to the same quarter last year, this is 8.33% higher. Vancouver hasn’t seen a Q1 rate this high since 2017, which wasn’t all that long ago. However, like Toronto, it’s going in the opposite direction right now.

Vancouver Q1 Mortgage Delinquecies

The rate of mortgages that are 90 days overdue.

Source: Equifax, CMHC, Better Dwelling.

Montreal Real Estate Delinquencies Fall Over 13.3%

Montreal real estate is following the national trend, and seeing falling delinquencies. The rate of mortgage delinquencies fell to 0.26% in Q1 2020, down 1 bp since the previous quarter. Compared to last year, the rate is 13.3% lower. Montreal normally has a higher delinquency rate than most of Canada. However, it’s at the lowest level in at least 5 years.

Montreal Q1 Mortgage Delinquecies

The 12 month percent change of real estate prices in Montreal, according to the TNB HPI.

Source: Equifax, CMHC, Better Dwelling.

Rising mortgage delinquencies are easy to dismiss as pandemic related. That is, until you realize it takes 90 days of non-payment for a loan to become delinquent. This means the rising rate is an issue that presented itself before the pandemic hit. The government’s mortgage deferral plan that began in Q2 is likely to slow the number of reported delinquencies. However, this trend is expected to resume and triple by the end of this year.

Source: – Better Dwelling

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