Renting is becoming unaffordable in many metropolitan cities, a new report reveals.

According to Zillow, renting is more expensive than buying in 94 of the country's 100 biggest metropolitan areas.

The report suggests the rental market didn't see a precipitous drop in prices stemming from the financial crisis, as illustrated in the housing market, which explains the slow and steady upward trend in rents. Plus, the study says consumers spent an average of 29.5% of their income on rent, compared to 15.3% for home buyers with mortgages.

Home buying affordability stems from the low interest environment, which isn't expected to last, especially as the Federal Reserve scales back its bond stimulus, known as quantitative easing.

On Thursday, Freddie Mac said the average rate on a 30-year fixed mortgage held steady at 4.10%, compared to 4.51% during the same time last year.

Rising rents could prove to be a vicious cycle for the real estate market.

"As rents keep rising, along with interest rates and home values, saving for a down payment and attaining homeownership becomes that much more difficult for millions of current renters, particularly millennial renters already saddled with uncertain job prospects and enormous student debt," said Zillow Chief Economist Dr. Stan Humphries. "In order to combat this phenomenon, wages need to grow more quickly than they are, particularly for renters, and growth in home values will need to slow."

Wages aren't showing robust growth, and rising inflation is making matters worse. The Bureau of Labor Statistics said that while average hourly wages grew 2% year-over-year in July, the consumer price index also grew 2% during the same period.

Some consumers have been shut out of the mortgage market, stemming from tightened credit spigots as a result of the 2008 recession.

As MainStreet reported, lending standards have eased slightly, but banks still remain prudent.

The uptick in cash buyers as of late is also helping to push up rents. "Cash buyers are either investors or retiring baby boomers who are downsizing," says Dani Babb, Broker/President of The Babb Group Real Estate, Inc.

RealtyTrac says 38% of all sales during second quarter were cash purchases, down from 42% during first quarter, which was the highest level in three years.

"Investors with less cash should help ease rental increases," Babb adds. "But investors may rely on home equity lines of credit as a source for more cash, so it's unclear how it will play out."

Cash buyers have more flexibility, as they don't have to rely on a bank's rigorous credit and application process that mortgage seeking buyers deal with.

SEE ALSO: Ask Yourself These Questions Before Buying Something Major

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Jane Fonda is selling her very, very large Santa Fe ranch for $19.5 million.

The actress' 'Forked Lightening Ranch' includes 2,300-deeded acres with over three miles of The Pecos River (one of the "finest trout fisheries in the state") Rocky Mountain terrain, and American ruins.

Meanwhile, the 9,585-square-foot home itself, which is referred to as 'River House,' was personally designed by the former aerobics queen with six beds, five baths, a galleria, and a bell tower.

Fonda incorporated the modern Spanish colonial style home with energy-efficient resources, while still making it look like it's over 100 years old, according to the actress in a promotional video.

The ranch bordered by the Santa Fe National Forest and is located within 25 minutes of the city of Santa Fe and is being listed by Swan Land Company. 

Welcome to Forked Lightening Ranch, aka the 2,300-acre customized ranch of celebrity activist Jane Fonda.

The property includes 3.5 private miles of the Pecos River, allowing for plenty of fly fishing for rainbow and brown trout.

The river is surrounded by sedimentary-rock formations, Rocky Mountain wildlife, and stone cliffs.

The World Architecture Festival is one of the largest architecture events in the world, with attendees from 40 different countries presenting their buildings to be judged as the best of the best.

This year's festival will be held from October 1st to 3rd in Singapore at the Marina Bay Sands.

Nearly 300 projects made the official 2014 shortlist, and the architects responsible will each have a chance to make their case to a panel of architecture super-judges in October. Categories this year include Civic & Community, Housing, Shopping, and Culture, among others. 

Each of the 27 categories can only have one winner, and only one structure can win the prestigious World Building of the Year award. We picked some of our favorite buildings in the running.

Akiha Ward Cultural Center by Chiaki Arai Urban and Architecture Design, Niigata, Japan (shortlisted in Culture)

Stamp House by Charles Wright Architects, Queensland, Australia (shortlisted in House)

Yalikavak Marina Complex by Emre Arolat Architects, Bodrum, Turkey (shortlisted in Shopping)

I don't spend much time worrying that tornadoes, earthquakes or other acts of God will destroy my northern Virginia home. But, sinkholes freak me out. In May, a block-long sinkhole swallowed parts of a Baltimore neighborhood less than an hour's drive from mine. And a 12-foot-deep hole collapsed two backyards and threatened homes in Stafford, Virginia, about 50 miles south of mine.

Sinkholes routinely swallow parts of Florida, the sinkhole capital of the U.S. And a 37-acre sinkhole in Assumption Parrish, Louisiana, opened two years ago and continues to devour land as I write.

So, I'm not insane for worrying that a sinkhole has my name on it, even though I don't live in Florida, Texas, Alabama, Missouri, Kentucky, Tennessee and Pennsylvania — places that see the most damage from sinkholes, according to the U.S. Geological Survey.

Signs of a Sinkhole

A sinkhole is a depression where rainwater pools and seeps through the soil, dissolving rock and creating spaces and caverns underground. The land can stay intact forever. Or, one day the spaces grow too big, and the earth gives way.

Most sinkholes don't open up over night; it's mostly a gradual process.

Here are warning signs that your home is sinking.

· Stair step-shaped cracks appear in your home's exterior and/or foundation.
· Cracks widen in interior walls, ceilings, floors and around door and window frames.
· Doors and windows are difficult to close without scraping frames or the floor.
· Trees and fence posts slump for no obvious reason.
· Circles of plants wilt because that can't get enough water, which drains into holes beneath the surface.
· Rainwater pools in areas that once drained well.
· A sunken area around your foundation, or an actual cavity, appears.
· Water bills suddenly climb because a sinkhole is damaging your plumbing.

What You Should Do

I'd run screaming down the street. But you should follow these tips.

1. If a sinkhole threatens your house, get out immediately, and call your local emergency management organization, then your insurance company.

2. If you suspect a sinkhole is beginning, call your insurance company, which will send an adjuster to determine if the hole or depression needs further investigation. If it does, your adjuster will send a professional engineering company to your property to begin testing.

3. If a small hole opens, rope off the area to keep curiosity seekers away, and then call your insurance company and your local emergency management organization. If it's only 1 to 3 feet in diameter and depth, you may be able to fill it in with concrete and sand.

Sources:
http://www.sinkhole.org/CommonSigns.php
http://www.usgs.gov/blogs/features/usgs_top_story/the-science-of-sinkholes/
http://knowbefore.weatherbug.com/2013/08/21/that-sinking-feeling-sinkhole-101/
http://championfoundation.com/faq/

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Luke Clark Tyler is living small.

The New York City contract architect rents a 78-square-foot shoebox studio for $750 a month in Hell's Kitchen, according to Inhabitat. The tiny apartment includes a bed that flips into a couch, a mini-fridge, work desk, and a cabinet where he keeps his personal belongings.

Sustainability reference website faircompanies recently documented Tyler's living conditions. In the video, he goes through his studio, explaining his day-to-day life in the minuscule apartment.

Using plywood and paint from Home Depot, Tyler built his own bed, which converts into a couch when flipped open. He said all the materials only cost him $170. 

It doesn't leave much leg space, but he jokes to faircompanies, "I just use it as an excuse not to buy an ottoman because... I can just prop my feet right up on the wall."

He keeps his microwave, printer, clothes, dishes, books, toiletries and cleaning supplies in a large built-in cabinet. 

He says in the video, "If I do want to get something else, I have to be very careful. I have to say, well, what can I get rid of?"

His kitchen consists of a mini-fridge located under his work desk. (Did we mention that Tyler also works from home?)

Tyler shares a bathroom with three neighbors on his floor. He heads right across the hall to use the sink to make tea. 

Tyler doesn’t see living small as a sacrifice and is happy in what he dubs his "Midtown Mansion." 

"I was living in Kenya in a place half the size of this that was made of mud. So for me, this is like a big step up," he says in the video. "I guess it's all relative, but for me this is comfortable. Maybe one day I'll have a bigger place, but for now it's good."

And check out the full video below:

SEE ALSO: This Tiny House-On-Wheels Is Nicer Than A Lot Of Studio Apartments In Cities

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When playing Monopoly, the conventional wisdom is that the best property to own is Boardwalk because it commands the highest rent.

However, savvy players know the most valuable property is actually Illinois Avenue. How can that be?

Well, one of the biggest reasons is that Illinois Avenue's board position — two "seven" rolls from Jail — gives it the distinction of being the game's most-landed on property; Boardwalk is ranked fourteenth.

The bottom line: When buying real estate, the three most important factors are always location, location and location — regardless of whether you're paying for it with Monopoly money or real cash.

SEE ALSO: Monopoly Is Filled With Terrible Financial Advice

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An "unresponsive" plane that entered Cuban airspace on Friday and later crashed belonged to the owner of Buckingham Properties, a company that calls itself as "Rochester, New York's largest and most diverse real estate development and property management company."

Buckingham Properties' CEO Larry Glazer and his wife, Jane, were on the plane, which reportedly crashed in Jamaica after leaving Cuban airspace. 

According to Buckingham Properties' website, the company led by Glazer owns and manages "more than 60 properties." 

According to AIN News, the plane, a single-engine Socata TBM 900 with tail number N900KN, was purchased by Glazer — a pilot with over 5,000 hours of experience in TBMS — earlier this year. The plane is registered to a company called NEW 51LG LLC. As the Democrat & Chronicle newspaper reported, NEW 51LG LLC is housed at the address of Buckingham Properties' headquarters in Rochester.

Glazer cofounded Buckingham in 1970. In July, Rochester City Newspaper published a profile of Glazer that began by saying, "Much of what you see when you catch a glimpse of the city's skyline is part of Larry Glazer's real estate empire. His biography on the Buckingham Properties website says Glazer began his career managing a private hedge fund after getting a master's degree in finance at Columbia University in 1969. He became the CEO of a Rochester-based printing company in 1971 and began focusing on real estate when it was sold 12 years later. 

The plane took off from Greater Rochester International Airport. Ted Soliday, the executive director of the Naples Airport Authority, told Business Insider it was scheduled to land in Naples, Florida, at 2:20 p.m. Soliday said the plane's owner was a "regular customer" who would fly through the airport every few months and bought fuel there.

"The last time they were here was July 6 — two months ago," Soliday said.

Glazer's biography on the Buckingham Properties site ended with a description of his family life and flying:

"Larry spends some of his spare time on the ground — gardening around his house with his wife, Jane; and some in the sky — flying his plane. Larry serves as President of the TBM Owners and Pilots Association."

Business Insider has made multiple calls to Buckingham to ask if any staffers were on board. We have not received a response.

The North American Aerospace Defense Command (NORAD), which had fighter jets escorting the plane before it entered Cuban airspace, said the people on board may have been suffering from hypoxia, or oxygen deprivation. Hypoxia can occur when aircraft cabins become depressurized and supplemental oxygen systems do not engage in time. 

Additional reporting by Christina Sterbenz. 

This post was updated at 3:35 p.m. ET. 

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The real estate CEO whose company was linked to the small plane that crashed in Jamaica on Friday was called the "patron saint" of Rochester, New York for his extensive claim on the city's skyline.

Tim Louis Macaluso of City Newspaper in Rochester profiled Larry Glazer, who owns Buckingham Properties, in July. 

Glazer and his wife were on the plane Glazer owned when it crashed, his son confirmed. The plane became unresponsive over the Atlantic Ocean.

Here's what Macaluso wrote about Glazer just a couple of months ago:

Glazer's company, Buckingham Properties, either owns, co-owns, or manages nearly 13 million square feet of real estate space, including some of downtown Rochester's most iconic buildings: Midtown Tower, Xerox Square, and the Bausch and Lomb building.

Glazer, Buckingham's CEO and managing partner, began the company in the late 1960's when he partnered with a friend on a duplex. Now with 60 buildings in the Rochester area as well as projects in Florida, Buckingham is a rapidly growing, highly diversified real estate development company.

Glazer had big plans to improve downtown Rochester. One proposed development, dubbed "The Grove," was slated to include retail space, a movie theater, and possibly a hotel, according to City Newspaper.

He told the newspaper: "My vision starts with the idea that downtown can come back and it will be vibrant. It will be different than it was. But I've spent the last few years traveling around this country looking at downtowns, and I see what they've done. And I'm telling you that there's no reason why Rochester can't do it, too."

Glazer founded Buckingham Properties in 1970, according to the company's website.

SEE ALSO: Crashed Plane Linked To Real Estate Company CEO

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A French-inspired mansion has just hit the market for an astronomical $139 million, making it the most expensive home for sale in the U.S.

The 60,000-square-foot estate, called "Le Palais Royal," sits on over 4 acres and 465 feet of beachfront on Millionaires Mile in Hillsboro Beach, Florida.

The "palace" features 11 bedrooms, 17 bathrooms, and the first-ever private IMAX Theater with seating for 18, a bar, and a lounge. It also has a 492-foot private dock for a megayacht, an underground garage with space for 30 cars, a putting green, and 4,500-square-foot infinity pool.

"This grand palace will be a landmark that rivals Europe’s greatest palaces. A true masterpiece, it is adorned with custom detailing exclusive to its design and incomparable finishes," said listing agent William P.D. Pierce of Coldwell Banker Previews International.

While the home is currently under construction, the property is owned by a trust connected to construction magnate Robert Pereira, according to The Wall Street Journal.

The house is currently in its final phase of construction and slated for completion before the end of 2015.

Welcome to Le Palais Royal, the new most-expensive home for sale in the country.

It's expected to be completed by the end of 2015, so this exterior shot is just a rendering of the $139 million "palace."

When you pull up to the estate, there will be a 13-foot, 22-carat gold-leaf gate, and conveniently, a water fountain right next to the garage.

Click here to see the story > 

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A London home being billed as the "smallest house in the world" can be yours for £275,000 ($450,000), according to The Guardian.

The modern micro-home, set in the pricey North London neighborhood of Islington, has only one room and is 188 square feet.The tiny house includes a lofted bed, accessible by way of the kitchen counter, a toilet in the shower, and a platform that acts as both a living room and dining room.

"It's possibly the smallest house in the world,"the listing agent told the Guardian. "It's just been developed and put on the market. I think it will probably sell to an investor who'll let it as a short-let on Airbnb. It's a great crash pad for the area. It's got everything a house would have and the space is cleverly used. There's storage under the raised part of the living area, a patio out the front and a window. I've been to the property and it's a really sweet house – it works."

SEE ALSO: My Mom And I Spent 3 Days Together In A 'Tiny House'

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There are many great advantages of owning a home, but, frankly, some go unappreciated or underreported.

For that reason, let’s take a fresh look at 10 of these advantages, including those that may not be on your radar:

1. Tax benefits

As a homeowner, you get to deduct both mortgage interest (up to $1 million) and property taxes from your annual income taxes.

If you’re a new homeowner, you enjoy even more benefits because most of the money you pay on your mortgage goes to interest.

Top earners have the most to gain from these tax advantages. For example, if you’re in the top tax bracket (39.6%), every dollar you pay in mortgage interest saves you 39.6 cents in federal income taxes. You save on state income taxes, too.

The government is subsidizing your purchase.

2. Price appreciation

Houses generally go up in value over time. For example, according to the Price-Shiller Index, the price of existing homes increased 3.4% annually from 1987 to 2009, on average. That annual percentage rate may not seem like a lot, given the popular S&P index of 500 stocks shot up about 30% in 2013. But 3.4% annually over 30 years is a big deal.

After 30 years, a $200,000 becomes a $545,313 house. That’s a 172.7% increase. A $500,000 house today at an annual appreciation rate of 3.4% interest rate becomes a $1,363,283 house in 2044.

3. Inflation hedge

Housing costs and rents tend to outpace the rate of inflation. Although the Federal Reserve has kept U.S. interest rates artificially low, inflation will break out sooner or later, making it more expensive to make all kinds of purchases, including homes. Ask yourself why so many investors are buying houses in the United States. Housing is a hard asset that protects investment dollars in the long run.

4. Credit builder

Payment history on your debts makes up the largest portion (35%) of your FICOscore, which financial institutions use to determine the amount, rate and terms for loaning you money. If you continue to make your full mortgage payment on time, your FICO should go up. As you reduce your mortgage loan balance, your FICO should incrementally rise as well, as 30% of your FICO is tied to how much you owe. Conversely, late payments will ding your FICO score. For example, a mortgage payment 30 days past due could drop your score of 720 to between 630 and 650. So, pay up and on time and your FICO will increase, making it possible to finance future purchases at favorable rates.

5. Equity builder

Equity is the portion of the house that the owner has already paid off, or the difference between the home’s value and the owner’s total debt to the mortgage lender. So, if you put down 20% and financed the rest through your lender, your starting equity would be 20%. With each loan payment, your home equity would grow and give you more borrowing and purchasing power, as noted below.

6. Borrowing power

More home equity means the chance to borrow more money with a second mortgage in the form of a home equity loan or a home equity line of credit. These loans provide money for funding home improvements, paying medical bills, funding a child’s education or buying consumer goods like a new car, boat, or RV.

7. Move-up power

Home equity also allows the owner to profit more from selling the home and apply that money toward a new house. Equity buildup and appreciation in a first home help in the move-up to a second. According to the National Association of Realtors, first-time home buyers’ median down payment is 3%; repeat buyers, meanwhile, put down 22%.

8. Owning a home can act as a personal finance management tool.

Especially with a fixed-rated amortized mortgage, you know exactly what your payments will be over the life of your loan. Knowing your fixed costs each month, makes it easier to budget, plan, and invest for the future.

9. Easy savings plan

By paying your mortgage every month, you’ve embarked on a forced savings plan. If you want to supercharge that savings plan, simply add an amount that exceeds your combined monthly principal, interest, taxes and insurance payment.

For example, on a $220,000 30-year mortgage with a 4% interest rate, if you were to make an extra house payment each quarter, you’ll save $65,000 in interest and retire your loan 11 years early.

If you make one extra payment each year, 13 payments annually instead of the usual 12, you’ll shorten the term of your mortgage by four years and save $24,000.

10. Capital gains

How do you spell relief? According to the Taxpayer Relief Act of 1997, you spell relief by exempting homeowners from paying any capital gains tax on the first $250,000 of gain if you’re single, and $500,000 of gain if you’re married, provided you have lived in the residence two of the last five years. You can take advantage of this exemption every two years. By contrast, capital gains tax on stocks is 15% if you’re in the 25-35% tax bracket and 20% for the 39.6% tax bracket.

SEE ALSO: The Most Valuable Monopoly Property Isn't The Boardwalk

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Sarah Jessica Parker and Matthew Broderick just re-listed their Greenwich Village brownstone for a whopping $22 million, according to Zillow.

The 6,800-square-foot townhouse, which is located on East 10th Street, has five bedrooms, seven fireplaces, a landscaped garden, and a hand-carved stone tub (score!). 

The historic house was originally put on the market in 2012 for $25 million, but they took it off this April. The celebrity couple bought the place in 2011 for $19 million.

The listing is exclusive with John Gomes and Fredrik Eklund of Douglas Elliman.

Welcome to Sarah Jessica Parker and Matthew Broderick's 25-foot-wide Greenwich Village townhouse.

The bottom floor, or 'Garden Floor' includes the stainless steel and walnut eat-in kitchen.

The dining room contains direct access to the split-level garden.

As the housing market continues to stabilize and show more signs of health and improved conditions, you might be thinking more seriously about purchasing a home, right? Here are some reasons why it's (still) a good idea to get off the fence — sooner, rather than later.

Mortgage rates are (still) low.

During the recession, the rate on the 30-year, fixed-rate loan averaged 4.32 %. Now, rates are close to that, and there's no recession! That means they've got nowhere to go but up — particularly because the Federal Reserve is expected to end its bond-buying program, which has been credited with pushing mortgage rates to historic lows, in October.

Granted, rates aren't expected to skyrocket overnight, but don't think that a small uptick wouldn't affect your budget. In fact, if rates were to go up by just 1 percentage point, your purchasing power would be reduced by a whopping 11%. To put this in further perspective: If you could afford a $400,000 loan at 4% mortgage rates, you could afford a loan of just $356,000 at 5%. An even smaller rise in rates — say from 4.5% to 5% — would add $75 to the monthly payment on a $300,000 house with $50,000 down. To see how much waiting could cost you, specifically, check out Zillow's recent analysis here.

Home prices are (still) affordable.

While home prices, nationally, continue to rise, up nearly 7% from July 2013, they are still 11% below their 2007 peak. And get this: Home buying is more affordable now than ever before. According to a recent Zillow analysis, U.S. home buyers at the end of the second quarter spent 15.3% of their incomes on a mortgage, far less than the 22.1% share homeowners devoted to mortgages in the pre-bubble days. This situation won't last forever, especially as mortgage rates continue to rise.

Buying is (still) cheaper than renting.

No doubt, buying a house is a significant purchase, but in a majority of the country, it's (still) cheaper than renting. In fact, in half of metros in the U.S., buying beats renting after only two years. This can be attributed to historically high rental prices that have helped skew the rent vs. buy decision toward buying for those who can afford it. So if you can afford to buy, now is the time as rents aren't getting any cheaper!

SEE ALSO: It Might Be Cheaper To Buy A Home Than To Rent

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Only in New York. 

A new residential building in Soho is selling its 10 underground parking spots for $1 million a pop, The New York Times reports.

Even for Manhattan, the price is astronomical. According to the Times, residential parking spots run an average of $136,052, or about an eighth the cost of the spots at 42 Crosby Street.

But with the condos selling for $8.7 million to $25 million, maybe a million for parking isn't out of the question.

"We’re looking at setting the benchmark," Shaun Osher, the founder and chief executive of the brokerage firm which is handling the sales and marketing at 42 Crosby, told the Times. "In real estate, location defines value and parking is no exception to that rule."

According to the Times, residents would be shelling out between $5,000 and $6,666 per square foot for the parking spots, in comparison to about $3,150 per square foot for their actual apartment.

Owners will essentially have the parking spot for life (or 99 years), but would have to sell if they ever moved out of the Annabelle Selldorf-designed building.

SEE ALSO: 33 Things Every New Yorker Should Do This Spring

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Millions of Americans dream of one day owning a home on the water, and for good reason: The views are often to die for, the array of activities is seemingly endless and the peace of mind gained by knowing you'll never have a neighbor on at least one side of your home is priceless. But the very things that make waterfront living so appealing can also make it incredibly expensive.

Nationwide, the typical oceanfront or lakefront single-family home is worth more than double the median value of all homes, and in some communities the median waterfront house could be worth more than 10 times the median value of non-waterfront houses, according to a new analysis by Zillow. The median single-family home in the U.S. is worth about $171,600, while the median waterfront house is valued at $370,900, a waterfront premium of 116.1%.

Zillow analyzed the 250 largest communities with at least 100 waterfront homes. The analysis only considered oceanfront homes or those on a lake larger than 10 square kilometers. Homes also had to be within 150 feet of the waterline to be considered waterfront. Riverfront and water-view homes were not considered.

Overall, the most expensive waterfront homes are found in communities in coastal California. Laguna Beach tops this list with median waterfront home values of almost $10.1 million. Malibu ($6.3 million) and Hermosa Beach ($4.8 million) round out the top three.

The most affordable waterfront homes in the country are found in Holiday, FL, with median waterfront home values of $103,000. In the top 10 least valuable waterfront communities, eight of the remaining nine cities with the cheapest waterfront homes are located in Florida. In other words, potential buyers looking for the lowest entry point into the waterfront market should consider the lesser-known cities of the Sunshine State.

Among the largest of the 250 cities analyzed (those with populations of 100,000 or greater), the biggest difference between median non-waterfront single-family home values and median waterfront house values are in Tampa (waterfront premium of 733%), Honolulu (waterfront premium of 334.5%) and Long Beach, CA (waterfront premium of 321.6%).

"The allure of ocean and lakefront living is powerful and undeniable, and millions of homeowners nationwide dream of one day owning a home on the water. But those dreams come at a price," said Zillow Chief Economist Dr. Stan Humphries. "Waterfront properties are both relatively scarce and highly coveted, and that high demand and limited supply leads to higher home prices."

"Additionally, added insurance, floods, environmental mitigation and infrastructure costs are often part of the tab when buying a waterfront home. Still, as long as buyers understand the added costs and potential headaches, waterfront living is likely to remain one of life's simple pleasures for many, many years to come."

SEE ALSO: 8 Questions To Ask Yourself Before Buying A Second Home

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After a sharp five-year rally in US real estate stocks, investors are questioning whether they may be vulnerable to a rise in interest rates. Our research suggests that global real estate stocks may be more likely to weather a changing rate environment.

US real estate stocks, commonly organized as REITs, have been strong performers since the global financial crisis. The FTSE NAREIT All Equity index of US real estate stocks has climbed 20% in 2014 through August. Since March 2009, the index has nearly quadrupled — outpacing both global property stocks and the broader US market. No wonder that US mutual fund investors have pumped $28 billion of net inflows into US real estate stocks over the last three years, in contrast to just $8 billion for their global peers.

Why all the love for US REITs? Despite the recovery in global equities, investors still seem to prefer securities with relatively safe and secure cash flows, including both bonds and higher-yielding stocks such as utilities and REITs.

US REITs have been especially prized for the relative safety of the US and improving cash flows of the stocks, bolstered by steadily improving demand in an environment of limited new supply of commercial properties such as office buildings and retail malls. But while US property market fundamentals remain quite healthy, the valuation of US REITs isn’t nearly as attractive as a few years ago — even when compared with government bonds.

Comparing US and Non-US Real Estate

Outside the US, it’s a different story for two reasons. First, valuations of non-US real estate stocks look relatively attractive. For example, the cash-flow yield for US real estate stocks versus the 10-year Treasury — a widely used valuation metric — is now only slightly above its long-term average, even with interest rates at rock bottom. In contrast, the cash-flow yield for non-US real estate stocks relative to a composite of 10-year sovereign bonds remains well above its long-term average (Display). And, as in the US, fundamentals are generally healthy for property stocks outside the US, with improving demand and limited new supply in most major markets.

More than Just a Bond Proxy

Second, non-US real estate stocks prices have recently been less sensitive to changes in sovereign yields. We analyzed the correlation of changes in sovereign yields with the outperformance of overall equity-market returns relative to real estate stock returns, both inside and outside the US. The trend varies over time. But today, this correlation is near a record high in the US whereas it is about average outside the US (Display). In other words, US REITs recently have reliably outperformed the S&P500 when Treasury rates declined and have reliably underperformed when rates rise, probably because investors are treating US REITs as bond substitutes given their perceived safety. But non-US REITs have generally not behaved as a sovereign-bond proxy in the same way.

Non-US REITs offer another advantage because they are exposed to diverse interest-rate environments. Today, in several major markets like Japan, the euro area and Australia, low rates are still embedded in the financial landscape and are unlikely to rise soon.

So by looking beyond the US, we believe that investors can stay in real estate stocks without returns being too tightly linked to sovereign yields. For those who still want the steady cash flows and dividends that real estate stocks can offer, we think global REITs may be a good way to maintain exposure to the asset class while reducing the vulnerability to rate hikes.

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SEOUL (Reuters) - Hyundai Motor Group will pay a record $10 billion for the site of its new headquarters in Seoul's high-end Gangnam district, out-bidding Samsung Electronics Co Ltd. and sparking investor concerns that it is wasting cash on a trophy property.

The conglomerate smashed the previous record auction price for a single plot of land in South Korea with its 10.55 trillion won ($10.14 billion) bid, more than triple the appraisal value.

It would be the highest price by far for a single piece of land in Asia since the global financial crisis, according to CBRE Research, topping the $3.6 billion paid last year by Hong Kong's Sun Hung Kai Properties for a site in a commercial district in Shanghai.

Investors and analysts expressed alarm at the price that Hyundai was willing to pay for a site at a time when it could be pouring money into higher dividends or more factories. At the site, it plans to build an auto theme park and a hotel as well as new offices."The bid price is nonsense. I was stunned," said Kim Sung-soo, a fund manager at LS Asset Management and an investor in all the three Hyundai companies in the bidding group.

"Even taking into account competition with Samsung, the bid price is excessive," Kim said, adding that he expected it to cost another $6 billion to develop the property.

Hyundai Motor Co. shares fell 9 percent, their biggest drop in three years, after the bid was announced by the seller, state-run Korea Electric Power (KEPCO). Sister firm Kia Motors closed 7.8 percent lower and parts maker Hyundai Mobis Co., also in the bid group, declined 7.9 percent. Between them, the three lost nearly $8 billion in market value on Thursday.

Although Hyundai Motor Group has plenty of cash, Hyundai Motor Co and Kia, which together rank fifth by global auto sales, have been posting slowing profits as a strong local currency saps overseas earnings.

"This deal is going to take a huge chunk out of Hyundai's vault, and dipping their hands into a cash stash that could have otherwise been used for higher dividend payouts and R&D is going to aggravate many investors, especially foreigners," said Ko Tae-bong, auto analyst at HI Investment & Securities.The companies also need to fund new factory projects in Mexico and China, which are expected to go into production in 2016.

KEPCO shares gained 5.8 percent after Hyundai won the auction by what a KEPCO official called "a wide margin". The official did not disclose the size of Samsung's bid and a Samsung Electronics spokeswoman declined to comment.

CASH-RICH

Hyundai Motor Group's 10 listed companies, excluding financial firms, had 42.8 trillion won in cash and equivalents at the end of the first quarter, according to public filings compiled by data consulting firm CEO Score.

The South Korean economy is dominated by sprawling conglomerates, or chaebol, and Seoul-listed stocks have tended to trade at discounts to shares elsewhere partly due to low dividends and investor worries about corporate governance.

Shareholder activism in South Korea tends to be muted, as many fund houses manage money on behalf of chaebol or are themselves part of big corporate groups, said Chae Yi-bai, an analyst at Solidarity for Economic Reform, an activist group.

Foreign investors own 46 percent of Hyundai shares.

"Hyundai Motor needs to proactively reach out to shareholders to convince them on the rationale of the deal and provide adequate explanation," he said.

Chung Sun-sup, CEO of research firm Chaebul.com, said Hyundai was keen to secure the land because its current headquarters on the outskirts of Seoul is not befitting of its stature, and the KEPCO land is the only prime plot available. He said 76-year-old Chairman Chung Mong-koo may want to leave "something big" when he passes control to his son, Chung Eui-sun.

He also figures that about 30 Hyundai Motor affiliates pay a combined 220 billion won in office rent. "If you flip that around, that's roughly equal to the amount of interest you'd get on 10 trillion won in bank deposits. So in some sense that is a rationale for such a high bid for the Kepco land."

CAR THEME PARK

While some investors were shocked, Hyundai's big bid for a landmark in the heart of Seoul's trendiest district may help ease its tax burden under proposed rules that would tax excess corporate cash.

Based on last year's earnings, companies that belong to the Hyundai Motor Group would have the largest exposure to the law, facing 284 billion won in further taxes if the government required conglomerates to spend at least 60 percent of net profit on investment, wages and dividends, CEO Score has said.Hyundai Motor Group has said it plans to build a vast complex on the 79,342 square metre site that will house its headquarters as well as a hotel, convention center and a theme park. It noted that rivals such as BMW and Volkswagen have tourist attractions around their headquarters.

"In order to achieve production capacity of 10 million cars and bolster brand value that befits a global top-five company, we need a global business center. The bid is the result of comprehensively reviewing its value as a symbol of the group's second growth phase," a Hyundai Motor Group spokesman said.

Hyundai and Kia have been keen to build a premium image around their brands to better compete with the likes of German rivals that are taking a rising share of the domestic market.

This was not the first time cash-rich Hyundai Motor Group drove up the price in a big auction.

A consortium of the same three Hyundai Motor Group companies bid around 5 trillion won in 2011 to buy Hyundai Engineering & Construction, which had been expected to fetch around 3 trillion won but had symbolic value as the original company of the Hyundai empire, founded in 1947 by Chung Ju-yung.

(Additional Reporting by Meeyoung Cho, Se Young Lee and Joonhee Yu; Editing by Tony Munroe, Stephen Coates and Ryan Woo)

SEE ALSO: Brilliant! Hyundai Is Making A Google Glass App For Its New Car

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The Scottish housing market is expected to show a flurry activity in the coming days and weeks as buyers and sellers who had been putting off making a decision react to the referendum result, industry figures said.

A report from the ONS earlier this week showed that average house prices in Scotland have now passed their pre-financial crisis peak of June 2008, and, along with average prices in England are at record levels. But a number of estate agents in Scotland said they had seen housing activity virtually stall in the last fortnight as homeowners became nervous about the impact of a yes vote.

“We had a brilliant start to the year and the busiest July since the recession,” said Blair Stewart, partner in charge of Edinburgh property at estate agents Strutt & Parker. “In August activity dropped off as expected but in early September the market just dropped off a cliff. That was just after a YouGov poll showed that the yes campaign was winning, which set off a wave of panic.”

He said that while buyers continued to look for properties, sellers were reluctant to transact. Other homeowners decided to sell but with a clause in the contract stating that completion would be subject to a no vote. He said there was already evidence that business was returning to normal following the result.

“Just this morning we have already seen a turnaround in activity,” said Stewart. “There were two £1m property deals that we lost last week as the international buyers didn’t want to commit in the uncertain political climate. Both those buyers are back on board today and we have also had calls this morning about flats that last week had had no viewings.”

Ran Morgan, head of Knight Frank in Scotland agreed. “We expect we will be very busy in the coming months as vendors and buyers, many of whom have put off making a decision to buy or sell a property in Scotland due to the referendum, return to the market,” he said. “This will lead to an increase in the number of transactions at all levels of the market. Our forecast is that prime values will rise by 3% by the end of this year and by a further 3% to 6% in 2015.”

Some analysts took a more subdued view. Buying agent Henry Pryor said that while Scotland and Scottish property “had woken from a nightmare” that it would continue to be hungover for some time to come.

“The Scots now face a period of negotiation – just how much more powers will be devolved? Will that allow Mr Salmond to raise stamp duty to the 7% that was talked about in the referendum campaign for instance?” he said. “There will be more headaches to come but the result this morning is fundamentally good for anyone looking to transact. Certainty has returned and gradually so will confidence.”

However, many of the richest property owners in Scotland may now look to buy elsewhere because of the continued uncertainty over what the devolved powers would mean for property taxation, one lawyer claimed.

“Any relief felt as a result of today’s news may sadly be temporary,” said Chris Groves, a partner at commercial law firm Withers. “While we should be glad that the immense potential upheaval of Scottish independence has been averted, individuals with assets in Scotland would be well advised to keep a close watch on changes to property and tax rules. We expect that the Scottish authorities will seek to introduce a mansion tax of some sort and also secure more direct powers over properties.”

He said his clients in Scotland were not planning to “sell up and run for the border” but many of them said they would buy more property in England rather than Scotland or put off further property transactions altogether. “Uncertainty is the biggest brake on investment there is,” he said.

This article originally appeared on guardian.co.uk

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Donald Trump might be bringing his glitzy hotels to the capital of glitz itself: Dubai.

He is "in talks" to open a hotel in Dubai with developers Damac Properties, according to Arabian Business.

The hotel would be built in the Akoya Oxygen development construction along Umm Sequim Expressway.

He's already building a second 18-hole golf course in the same spot — so it's not a surprising location choice.

A Damac Properties managing director, Ziad El Chaar, told Arabian Business that the new hotel is "already" part of the development's plan, and that "he was discussing options with Trump."

Trump had plans to develop luxury real estate in Dubai in the past, but ultimately he never completed the project after the global financial crisis.

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