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Commercial property may trigger new financial crisis: central bankFriday 03 February 2012 The Netherlands may be hit by a third financial crisis, this time caused by problems in the property sector, the Dutch central bank's regulatory chief Jan Sijbrand says in Friday's Financieele Dagblad. 'Property is a problem for the sector because there is a structural surplus supply of offices and retail premises. And there is less demand because of new ways of working and internet shopping,' Sijbrand told the paper. Banks, pension funds and insurance companies have billions of euros invested in commercial property. Valuations The sector will have to work fast to ensure accurate commercial property valuations, he said. 'As long as there are doubts about the value there will be no confidence in the market and financiers and investors will not come forward,' Sijbrand told the paper. One option would be to put weak property portfolios into a 'bad bank' owned by the government, he said, adding that he doubted taxpayers would support this option. Last year, property fund Uni Invest failed to sell its office property portfolio despite a 40% discount. Warning Last year, the financial services authority AFM warned investors to be careful when putting money into non-listed property funds because a number are currently under investigation for providing misleading information. The property sector is currently dealing with rising vacancy rates and reduced rents, coupled with refinancing problems. This means many funds are in trouble and investors are facing higher risks. © DutchNews.nl
Why not make these properties available to high income people in social housing and give them a discount to renovate them to living spaces. This would kill 2 birds with one stone -- too many high earners in social housing and too many empty commercial spaces. By Quest | February 3, 2012 10:29 AM There is a structural shortage of student housing in all the major cities. There is a structural surplus of supply in the office and retail market. There is a crisis in the construction sector with no new projects and unemployment. It seems obvious to buy these empty office blocks at 40- 50% discount and put the construction sector to work, converting them for student accomodation. By jaycee | February 3, 2012 12:15 PM "Banks, pension funds and insurance companies have billions of euros invested in commercial property." ? Oh dear. Have they really invested lots of money in companies that "are currently under investigation for providing misleading information"? And will we really have to bail them out (again) via a Bad Bank owned by the taxpayer? Has this scenario become the financial sector's definitive model for the benefit of society? By Mike Hardman | February 3, 2012 12:32 PM this has been obvious to anyone's naked eye for years and years, but the building of new commercial and office space simply continued. Why? By Bill | February 3, 2012 1:14 PM Socialise the losses, pay out the gains to shareholders and managers. Why does this sound familiar? By John | February 3, 2012 4:14 PM Turn commercial space into residential. Problem solved. By Vlad | February 3, 2012 4:19 PM Once again, a note: commercial property it not readily developable into residential estates. It is fairly expensive to do so, sometimes more than building new houses in Vinex etc. That is because usually commercial properties are built on open plan (few walls), and can't sustain the extra weight of walls, plumbing, all heavy appliances, separate warming systems, much more bathrooms etc. By Andre L. | February 3, 2012 4:51 PM Here's an idea: a nice hefty tax on banking bonuses that goes to fund this "bad bank". They caused the problem, they can pay to fix it. By H. | February 3, 2012 5:00 PM It's just so incredibly sad that once this particular bubble bursts, it will be pensioners who have been 'saving' all their lives for a comfortable life once retired, will now be scraping an existance instead. Young people have stopped saving for retirement, such is their lack of confidence in the 'funds' the pension companies invest in. There won't be a third finaincial crisis, there will be a fourth, a fifth, and they will become a regular occurance. A savings scheme under my matress seems to me the best bet at this moment in time. Soon they will realise that investing in people - in families, in decent rental homes - is the way forward (no 'vast' contracts = no mortgages) By osita | February 3, 2012 7:07 PM It's a risk, yes. Why investor should be protected? By woland | February 4, 2012 9:41 PM
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Global Debt Crisis
The greatest private fraud of human history.
Who are the great fraudsters who are becoming the murderers of the human kind? How does the economy "illness" threaten Democracy and the freedom of people?
http://eamb-ydrohoos.blogspot.com/2012/01/global-debt-crisis.html
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By knowing what happened in indebted Greece, where loan sharks created “bubbles” and the current inhuman debt, one can understand the inhuman plan in total ...understand where this plan started just to bring all states at the same end ...understand how this type of plans are established...
Authored by PANAGIOTIS TRAIANOU
By Olympia | February 3, 2012 9:21 AM