SEATTLE: Amazon has announced $2 billion in loans and grants to secure affordable housing in three U.S. cities where it has major operations, including a Seattle suburb where the online retail giant employs at least 5,000 workers.
Amazon said it would give $185.5 million to the King County Housing Authority to help buy affordable apartments in the region and keep the rents low, The Seattle Times reported Wednesday.
The agency is expected to pair bond funding with the $161.5 million in loans and $24 million in grants from Amazon to fund its recent purchase of three apartment buildings, including 470 units in Bellevue, about 10 miles (16 kilometers) west of Seattle.
Other tech companies have invested large sums recently to boost affordable housing, following years of complaints that they have worsened inequality in cities by pushing housing prices higher.
Two years ago, Microsoft launched its own initiative and is spending $750 million to help provide market-rate or below-market-rate loans to developers who want to build affordable housing in the Seattle area.
In the latest effort by Amazon, money also was directed to Arlington, Virginia, and Nashville, Tennessee, where it has hubs. Company officials projected the $2 billion would preserve or create 20,000 affordable housing units over the next five years.
The funding will “help local families achieve long-term stability while building strong, inclusive communities,” Amazon CEO Jeff Bezos said.
While Amazon and Bezos have given large amounts toward affordable housing and homelessness services, including opening a homeless shelter on the campus of its Seattle headquarters, the company has also drawn scorn for successfully pressuring the Seattle City Council to rescind a tax on large companies that would have funded homelessness services in 2018.
Stephen Norman, executive director of the King County Housing Authority, said affordable housing is often renovated and rents are increased, worsening economic and racial segregation.
“This is a long strategy ensuring … that this community doesn’t get hollowed out,” he said.
Norman added that the money is estimated to cover about 45% of the cost of the three apartment buildings.
SYDNEY: Australian home prices climbed for a third straight month in December as 2020 ended on a strong note across major cities and regional markets, with analysts expecting more gains this year as buyers outnumber sellers.
The turnaround from the COVID-19-led crunch has provided a much-needed windfall to consumer wealth and confidence, with the country’s housing stock already valued at A$7.2 trillion ($5.55 trillion) by September.
Data from property consultant CoreLogic out on Monday showed national home prices rose 1.0% in December, from November when they added 0.8%. Values were up 3.0% on the previous December.
Prices across the major capitals rose 0.9% in December from November, while the regional market surged 1.6% as city dwellers smarting from coronavirus lockdowns sought more living space and houses with gardens.
Sydney managed a gain of 0.7%, while Melbourne increased 1.0%. Brisbane, Perth and Adelaide all rose 1.1% in the month. Values for the combined capitals were 2.0% higher for the year, while regional prices jumped 6.9%
“As remote working opportunities became more prevalent and demand for lifestyle properties and lower density housing became more popular, regional areas saw housing market conditions surge,” said CoreLogic’s head of research, Tim Lawless.
The gains have been concentrated in houses, with the apartment sector hit by a glut of new supply and a fall off in demand amid restrictions on international tourism and migration.
While home sales recovered strongly in the last few months, listings remained below average.
“Low advertised stock levels reflect a rapid rate of absorption; put simply there are more active buyers than new listings being added to the market,” said Lawless.
“With home buyers outnumbering sellers, most areas around the country represent a seller’s market.”
BEIJING: Prices of new homes in China rose at a slower pace in December, with tightening policies continuing to cool the market, a private survey showed on Friday, but price growth in 2020 still topped the previous year’s pace despite the coronavirus pandemic.
New home prices in 100 cities rose 0.25% in December from a month earlier versus a 0.32% gain in November, moderating for the second straight month, according to data from China Index Academy (CIA), one of the country’s largest independent real estate research firms.
More cities reported monthly gains, however, with the number climbing to 79 from 71 in November, and 19 cities saw lower home prices compared with 28 in the preceding month, the CIA data showed.
Dongguan and Guangzhou, two cities in the southern Greater Bay Area, led the price rises. While central and northern cities like Luoyang and Zhangjiakou saw the biggest monthly price drops.
“With the government’s market-cooling steps taking hold, the overall price gains remained on a mild level,” said Cao Jingjing, Research Director with CIA.
“The cooling growth is also weighed by deepening price drops in some smaller cities which saw a withered local economy and continued population outflow.”
On an annual basis, new home prices rose 3.46% in December, versus November’s 3.63% gain.
For the whole year of 2020, new home prices rose 3.46%, slightly more than 3.34% seen in 2019, the CIA data showed.
China’s property market has recovered quickly from the COVID-19 pandemic early last year, thanks to cheaper credit and looser purchase restrictions.
But with the economy nearly fully recovered to pre-coronavirus levels, policymakers have been turning their attention back to containing financial risks in the highly leveraged sector, ramping up scrutiny of financing activities of developers and buyers.
Land sales by volume rose 7% in 2020 from 2019, while the average transaction price per square metre rose 7% last year,buoyed by double-digit growth of land prices in tier-1 cities, separate CIA data showed.
STOCKHOLM: Sweden may have too many shops and offices after the pandemic. It doesn’t have enough homes. It spies an opportunity.
A seismic shift towards online shopping and working from home has been painful for many businesses, but has given the Nordic nation the chance to address an intractable social and economic ill: a chronic housing shortage.
The government is now examining whether empty commercial real estate in the wake of COVID-19 could be converted to help plug a shortfall of around 140,000 homes.
The plans are one example of how countries are looking ahead to rebuild, in a new reality spawned by a pandemic that has exacted a huge human and economic toll and reshaped behaviour.
The housing market has long been the Achilles’ heel of the Swedish economy.
Complex regulations make construction costs among Europe’s highest. Mortgage tax relief, zero property tax and a highly regulated rental market have driven up prices for homebuyers and sent household debt levels through the roof, with the central bank regularly warning of a risk to economic stability.
Boosting the pace of conversions from commercial to residential property could help ease the pressure, a drive that could potentially be replicated in other countries with housing shortages in some areas, including Britain and the Netherlands.
Sweden’s National Board of Housing, a state agency, has been tasked with simplifying the country’s complex building rules to help the property conversion plans and will report to government officials at the end of February.
“The corona pandemic has meant that all the more sectors are considering making distance and work-at-home solutions permanent, which may mean that there are properties … that can instead be used for housing,” Deputy Finance Minister Per Bolund said.
Repurposing real estate is nothing new – think of New York’s Meatpacking District which went from a residential area in the 1800s to an industrial hub a century later and back again to a chic residential and shopping area over the last 20 years.
But the pandemic has given fresh impetus to the idea.
Around a fifth of Sweden’s 5 million workers are likely to stay at home after the pandemic eases, according to a study by the European Institute for Behavioural Analysis and the universities of Gothenburg and Lund, meaning many companies will need smaller offices.
“We are not going to go back to the situation we had before the pandemic, so it is not sensible to rent as big an office space as we had originally intended,” said Helen Stoye, the deputy director general of Sweden’s Statistics Office, which recently signed a deal for new premises.
The new office will have 200 fewer desks and its total area will be 7,900 square meters, down from almost 15,000 currently.
Stoye acknowledged her organisation – like many others – had previously frowned on working from home.
“But during the pandemic we have seen that working from home functions really, really well,” she added.
Ailing high street
With footfall in city centres down, many shops are also being shuttered, while online players like Amazon – which launched a Swedish website earlier this year – are taking a bigger share of shoppers’ cash.
PostNord, the Swedish postal service, reckons online revenues in the retail sector will be up around 40% this year.
“The pandemic has only accelerated the effect of e-commerce,” said Mikael Soderlundh, head of research at property advisers Pangea. “It is going to very hard for many physical shops going forward.”
With demand for commercial real estate set to fall, property firm Wallenstam, which manages a roughly 56 billion crown ($6.6 billion) portfolio in Sweden, is already looking at options.
CEO Hans Wallenstam said there was too much retail space in the centres of Gothenburg and Stockholm as a result of COVID-19.
“We have said that COVID has hit shops hard and there are many shops in residential areas which are empty now,” he said.
His firm is looking at converting 10-20 properties – mainly second-floor shops – into offices or homes.
Some commercial buildings are not suitable for homes, however, lacking sufficient light or water, or being too close to main roads. Others are simply too expensive to convert.
Such snags mean a lack of homes will remain a headache for years to come, even if the pace of conversions picks up.
“The biggest contribution to solving the housing problem will be new-builds,” said Christoffer Jarkeborn, regional head of new housing at developer Skanska, which recently finished converting the former Ericsson HQ in the Nacka district of Stockholm into 286 apartments.