Wednesday, 17 April 2024, 10:04
After a slight drop in the third quarter of last year, the price of housing has risen once again in Malaga province, according to the latest data.
In the first three months of this year, the average price per square metre of a property for sale in the province has climbed to 2,412 euros, according to estate appraisal firm Gesvalt. It is 1.2% more than the figure recorded at the end of 2023 and about the same figure as a year ago, when the valuer’s studies showed an average price of 2,419 euros per square metre. The data shows the 4% drop in the prices of property for sale in Malaga in the third quarter of last year was a one-off event.
Additionally, rental prices continue to soar in both Malaga city and throughout the province. According to Gesvalt data, the average rental price at provincial level is 14.32 euros per square metre, which is 13.5% more than a year ago and 3.2% more than three months ago.
However, the increase in rent is most noticeable in Malaga city, where the average cost has risen to 14.41 euros per square metre, 16% more than a year ago, according to the data.
In Malaga city, the average price of housing for sale stands at 2,374 euros per square metre, which is 8% more than in the first quarter of 2023 and 2.5% more than in last year’s year-end report.
According to Gregorio Abril, Gesvalt’s regional director for Andalucía and Extremadura, house prices in Malaga are set to continue “the upward trend of recent months, but at a more moderate pace than in recent years, tending towards stabilisation, after the slight slowdown in demand caused by successive interest rate increases and a general economic slowdown”. “Once this phase has been overcome, and with the prospect of the next interest rate cuts, demand has once again been reactivated in a market that remains under pressure, pushing prices up again,” Abril said.
One of most active real estate markets in Spain
Malaga is one of the most active real estate markets in Spain, “with demand, both national and international, very active, compared to a supply that, despite the efforts of the city council and the great developer activity, is still insufficient to satisfy it”, the real estate expert added. “All these factors lead us to believe that there will not be a change in trend in the coming months and it is not possible to foresee when price rises will be limited.”
As for the unstoppable rise in rent, Abril pointed out that this is a “more paradigmatic issue than that of buying and selling”. “While supply is more limited than for sales, there is a transfer of demand from the buying and selling to the rental market, due to the number of buyers who are unable to afford the purchase of a home at current prices and decide to opt for renting as a way of life. Our forecast is that the current trend will continue over the next few years,” he added.
Throughout the province, Marbella continues to lead in rental prices with an average of 18.8 euros per square metre, 12% more than a year ago. Also noteworthy is the rise in rent in towns such as Torremolinos and Benalmádena, possibly due to the increase of prices in Malaga city leading to an increase in demand for rentals in these municipalities. In the case of Torremolinos, rent has risen to 14.6 euros per square metre and is now at the same level as Estepona, with a year-on-year increase of 12%, the data shows. At the other extreme, Velez-Malaga offers rents at half of those registered on the Costa del Sol, with prices around 7.5 euros per square metre.
In terms of homes for sale in Malaga municipalities with more than 50,000 inhabitants, Marbella continues to lead the way with an average cost of 3,202 euros per square metre, followed by Benalmádena, with 2,423 euros per square metre. In contrast, in the eastern part of Malaga province, the price drops to 1,391 euros, according to the data.
By Brett Lackey For Daily Mail Australia
01:23 03 Apr 2024, updated 03:31 03 Apr 2024
A young woman who runs a successful property investing business has revealed how she had to choose between proper meals and cracking into the tough real estate investing market.
Maggie Zhang from Melbourne works as a healthcare management consultant and also runs her real estate venture, which now includes six properties, with a business partner.
Her purchases include her own Melbourne home, a unit in Heathmont that she is renovating with a friend, and rental properties in Broadmeadows and Frankston.
‘I was happy to eat brown rice, baby broccolis and chilli sauce for dinner for a year when things were tight rather than miss out on a property opportunity,’ Ms Zhang told real estate.com.au this week.
‘It wasn’t easy, but I’m very glad I did it.’
Ms Zhang said the string of interest rate rises that were implemented between November 2020 November 2023 – which brought the cash rate up from a record low of 0.10 per cent to its current level of 4.35 – were particularly tough.
But she added that with inflation now appearing to ease, most economic analysts believe that interest rate cuts will happen this year, and that should make for better conditions for borrowers.
‘I think now is a really good time to get into the market, investors are really aware rate cuts are imminent although no-one knows when,’ Ms Zhang said.
All four big banks are forecasting the rate cuts, with CBA suggesting there could even be three 25-basis point reductions by the end of the year.
The bank’s head of Australian economics Gareth Aird said the rate cuts will be likely this year with inflation nearing the central bank’s target band of 2-3 per cent.
‘The six-month annualised pace of price increases on track to be 3.2 per cent for the current quarter … just outside the target band,’ he said.
He added the rate cuts would be required as the RBA’s focus shifted this year to concerns about the unemployment rate and consumer spending rather than inflation.
The high interest rates over the last few years have forced some landlords to sell up, which in turn has forced renters to look elsewhere for a roof over their head, making the rental market even tougher.
Research by Suburbtrends found that in January and February this year hundreds of ex-rental properties went on the market in Melbourne alone.
Mount Waverley had the most with 270, followed by South Yarra with 160, Point Cook with 122, Richmond with 108, St Kilda with 102, and Hawthorn with 93.
But despite the cost-of-living crunch and rate hikes, Australian homes added about $12,000 in value in the first three months of the year, fresh data has revealed.
CoreLogic’s latest data, released on Tuesday, shows that housing values so far this year were rising faster than the pace of growth that was occurring at the end of 2023.
However, that 1.6 per cent jump in the three months to March was half the 3.3 per cent quarter-on-quarter price rises that were occurring in the middle of 2023.
‘Rate hikes, cost of living pressures and worsening housing affordability are all factors that have contributed to softer housing conditions since mid-last year,’ CoreLogic’s research director Tim Lawless said.
‘However, an undersupply of housing relative to demand continues to keep upwards pressure on home values despite these headwinds.’
Every capital city apart from Darwin experienced an increase in house values in March which fell 0.2 per cent.
CoreLogic’s home value index has increased $71,832 or 10.2 per cent since January, 2023.
Regional housing markets are also booming, although Victoria stood out with a 0.3 per cent drop in home values.
Home sales across the country in the past three months were estimated to be 9.5 per cent higher in comparison to last year’s first quarter.
On rents, unit prices continue to rise faster than leasing a house, but the analysis shows a gradual narrowing of the gap between house and unit rental growth trends.
‘A rise in rental yields alongside an expectation that housing values could rise and rental markets remain tight for an extended period of time is likely to be seen as an attractive opportunity for property investors,’ Mr Lawless said.
However, he warned that with mortgage rates averaging six per cent, investors new to the market could expect to make a loss on their rental unless they ‘stump up a sizeable deposit’.
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Mortgage rates initially ticked up a little bit following the release of Tuesday’s slightly hotter-than-expected Consumer Price Index data. But they’ve since trended back down and remain well below last month’s levels. Rates are still expected to go down this year.
Last month, average 30-year mortgage rates rose to 6.52%. So far this month, they’ve been trending a bit lower, and they could drop below 6% by the end of the year, according to Fannie Mae’s latest forecast.
But mortgage rates probably won’t drop substantially until we get more data showing that inflation is continuing to slow.
In February, prices rose 3.2% year over year, according to the Bureau of Labor Statistics. This is a slight uptick from the previous month, which showed prices rising 3.1% on an annual basis.
Federal Reserve officials want to see more data that inflation is coming down before they start lowering the federal funds rate. Once we get closer to a likely Fed cut, mortgage rates should start to fall.
Right now, investors still believe the Fed could start cutting rates as soon as June, according to the CME FedWatch Tool. So we could see mortgage rates go down in just a few months.
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- Paying a 25% higher down payment would save you $8,916.08 on interest charges
- Lowering the interest rate by 1% would save you $51,562.03
- Paying an additional $500 each month would reduce the loan length by 146 months
By plugging in different term lengths and interest rates, you’ll see how your monthly payment could change.
Mortgage Rate Projection for 2024
Mortgage rates increased dramatically for most of 2023, though they started trending back down in the final months of the year. As the economy continues to normalize this year, rates should come down even further.
In the last 12 months, the Consumer Price Index rose by 3.2%, a significant slowdown compared to when it peaked at 9.1% in 2022. This is good news for mortgage rates — as inflation slows and the Federal Reserve is able to start cutting the federal funds rate, mortgage rates are expected to trend down as well.
For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of the best HELOC lenders to start your search for the right loan for you.
A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you’re borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you’d do with a cash-out refinance.
Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans.
When Will House Prices Come Down?
We aren’t likely to see home prices drop anytime soon thanks to extremely limited supply. In fact, they’ll likely rise this year as mortgage rates drop.
Fannie Mae researchers expect prices to increase 3.2% in 2024, while the Mortgage Bankers Association expects a 4.1% increase in 2024.
Lower mortgage rates will bring more buyers onto the market, putting upward pressure on prices. But prices aren’t currently expected to increase as much as they have in recent years.
Fixed-Rate vs. Adjustable-Rate Mortgage Pros and Cons
Fixed-rate mortgages lock in your rate for the entire life of your loan. Adjustable-rate mortgages lock in your rate for the first few years, then your rate goes up or down periodically.
So how do you choose between a fixed-rate vs. adjustable-rate mortgage?
ARMs typically start with lower rates than fixed-rate mortgages, but ARM rates can go up once your initial introductory period is over. If you plan on moving or refinancing before the rate adjusts, an ARM could be a good deal. But keep in mind that a change in circumstances could prevent you from doing these things, so it’s a good idea to think about whether your budget could handle a higher monthly payment.
Fixed-rate mortgage are a good choice for borrowers who want stability, since your monthly principal and interest payments won’t change throughout the life of the loan (though your mortgage payment could increase if your taxes or insurance go up).
But in exchange for this stability, you’ll take on a higher rate. This might seem like a bad deal right now, but if rates increase further down the road, you might be glad to have a rate locked in. And if rates trend down, you may be able to refinance to snag a lower rate
How Does an Adjustable-Rate Mortgage Work?
Adjustable-rate mortgages start with an introductory period where your rate will remain fixed for a certain period of time. Once that period is up, it will begin to adjust periodically — typically once per year or once every six months.
How much your rate will change depends on the index that the ARM uses and the margin set by the lender. Lenders choose the index that their ARMs use, and this rate can trend up or down depending on current market conditions.
The margin is the amount of interest a lender charges on top of the index. You should shop around with multiple lenders to see which one offers the lowest margin.
ARMs also come with limits on how much they can change and how high they can go. For example, an ARM might be limited to a 2% increase or decrease every time it adjusts, with a maximum rate of 8%.
When a finance professor got a request from an investment bank to visit campus in October to talk to sophomore students about post-junior-year summer internships, he was shocked.
It’s an annual ritual for banks to visit certain schools to recruit prospective interns through presentations and meet-and-greets, explained Steve Sibley, co-director of the investment banking program at Indiana University’s Kelley School of Business. But never had one come this early — one year and eight months ahead of said internship’s start date.
“It felt like the spring of sophomore year was the earliest it was going to get,” Sibley told Business Insider, “but this year violated that.”
Presentations and campus visits are a precursor to the actual internship recruitment process, which usually kicks off in the months after and involves jockeying for “coffee chats” and multiple rounds of online and in-person interviews. Each year, there are tens of thousands of student applicants vying for very limited spots at top-tier firms. (Goldman Sachs, as BI previously reported, accepted just 1.5% of candidates into its 2022 summer internship class out of more than 236,000 applications worldwide.)
The stakes are high because an impressive performance during the summer can lead to a full-time return offer after graduation (if you miss the boat, it’s immeasurably harder to break into the industry later).
While it has always been competitive, the investment banking summer internship process has gotten increasingly premature. Before 2018, Sibley said, many banks made offers during the fall semester of junior year. Now, he estimates that about 20% of his sophomores have already signed internship offers, while others are doing final-round interviews this week.
The timing is pretty much in the hands of the banks. They go through the school or finance clubs to schedule presentations. The competition for talent between banks, he said, is what keeps edging up the timeline.
“We say yes because if we don’t let them come, we’re putting our students at a disadvantage,” he said. “We weren’t prepared for it this year.”
Some of his students returned from winter break in a scramble to submit their applications, network, and prep for interviews. Super Days — an industry term referring to the final stage of recruitment where firms invite applicants to the office and put them through several rounds of interviews with senior bankers — were happening as early as the second week of January for some banks this year, he said.
“Students feel like they haven’t really had time to figure out what they’re looking for in a bank before they’re asked to make decisions,” Sibley said. “If you didn’t network over the winter break, you feel behind now and need to catch up.”
He fears it will continue creeping up.
“I worry for next year. I could see banks doing Super Days in December,” he said. “The bankers I talk to about it recognize it’s not ideal, but it’s just the way things are being done. It’s a lot to put on young people.”
What does this mean for aspiring investment bankers? It means the window of opportunity to get that all-important investment banking internship is starting to open (and close) earlier than ever. As a result, wannabe financiers may want to start getting ready for the process as early as their freshman year.
BI compiled 15 tips to help students adjust to the new reality. They include advice for current freshmen, incoming freshmen, and sophomores who may have missed the recruiting boat. We spoke to the finance professor, a college senior who has successfully completed an investment-banking internship and was a leader in her campus finance club, and a former IB analyst who was a recruiting captain at her firm. The latter two’s identities are known to BI but are kept anonymous in this article to protect their current and future jobs.
“I absolutely hate kids who have a tone in their email that sounds like they’re assuming I will talk to them.” — former investment-banker.
Take finance classes ASAP
College students often spend their freshman year knocking out the most basic, non-major-specific courses required to graduate. But if you can, Sibley said, try to enroll in at least some finance classes your first year. Take any finance or accounting classes that are offered.
“Take financial accounting as soon as possible,” he said. “Any finance class you can take the first or second semester, take it.”
If you wait until sophomore year, you’ll be just learning the basics of the industry while simultaneously trying to recruit into it. Gain the foundational knowledge as soon as possible so you don’t feel lost or behind. If it’s not possible to get into a Finance 101 class, study up on your own.
“If you’re not in an undergrad business program, buy Financial Accounting for Dummies or a book like that and teach yourself,” Sibley added. “The earlier, the better.”
Get involved right away
Getting into campus clubs as a freshman may seem daunting, but it’s a priority for aspiring bankers.
“The key is to show up at school and hit the ground running,” Sibley said.
If the school has finance-related clubs, join them.
“It’s tricky because there’s an application process [to get into] finance clubs at most schools, but even if you don’t get accepted the first semester, they will likely take you the second semester,” said the college senior. “Just applying will help you have a better shot next semester. They take students who are involved.”
The clubs probably have some events open to everyone, she added. Go to those and meet people.
“I would go to most of the speaker events as a freshman to understand what finance was and what I wanted to do in finance.”
If you attend a school where banks actively recruit talent, known as “target schools,” attend recruitment events when you can, even if you can’t participate.
“Go to the sophomore presentations as a freshman,” Sibley said. “Even if you can’t apply, sit in on the presentation to learn about it, the bank, and investment banking.”
If the event is closed to members only or advertised for sophomores, ask leaders of the organizations if you can listen in and observe.
Network with upperclassmen first
Networking is one of the most important aspects of getting a competitive investment banking internship. As a freshman, it’s too early to talk to bankers, said Sibley and a former analyst.
Instead, you should network with the upperclassmen at your own school.
“Look at juniors and seniors at your school to see what clubs they’re in and to meet them,” said Sibley.
If you go to a business school, chances are some juniors or seniors will already have internships and full-time jobs secured. Take note of what they were involved in, and ask what the recruiting process was like for them and how they got their offer.
Resist reaching out to bankers as a freshman. “I never replied to a single freshman,” said the former analyst, who was also the recruiting captain at her firm in New York City. The only exception is if you are a freshman trying to land a sophomore summer internship. Many bulge-bracket banks offer these programs, like Bank of America and Citi, and they do look great on your résumé, said the former analyst.
“There is such value to having a sophomore summer internship early so you can market yourself as having that while recruiting for a junior summer internship,” said the former analyst.
When doing networking outreach for a sophomore internship, she added, just make sure to specify in your email what you’re applying to so people don’t think you’re just some way over-eager kid.
Even if you aren’t certain about IB as a career, participate in recruiting
If you still aren’t 100% sure you want the life of an investment banker, that’s fine. It’s a lot to ask a 20-year-old to make such a big decision on behalf of their post-grad self. But the three industry experts who spoke to BI agreed that students even remotely interested in IB should participate in the recruiting process during their sophomore year.
As previously discussed, banks source most of their full-time analysts out of their internship cohorts. And, like it or not, they recruit for those internships a year and a half in advance. So if you don’t participate and decide later you do want to do investment banking, it will be much harder to break into a top firm.
“Better to do it and regret it later rather than not do it and not be able to,” said the former analyst. “This is an industry that’s very inaccessible – you have to get in early.”
Even if you change your mind later, you can learn a lot by going through the process and, if you do land a spot, by doing the internship.
“A lot of kids don’t realize they don’t want to do it until they’ve done it for 10 weeks after the internship,” Sibley said.
Investment banking can also be a stepping stone to other parts of the finance industry like private equity, venture capital, and hedge funds.
“If you do an internship, you will see if it’s actually for you and if you can survive it,” said the finance student. “Even if you don’t end up pursuing it after graduation, it’s a great experience to build on. You learn so many key skills – modeling, valuation, using Excel. People who come from IB go off and do many roles.”
Start networking with bankers fall semester of sophomore year
The former analyst said her “biggest piece of advice” is to start networking with potential employers “as soon as the school year starts sophomore year.”
Doing this will give you an edge and a much higher response rate, she said. The process is uber-competitive. So when recruiting season kicks into high gear in the spring semester, analysts’ inboxes and LinkedIn are already being flooded.
“By January, every analyst is receiving upwards of five or six cold emails per day, every day,” said the former analyst.
She suggested starting in September or October. “The response rate earlier in the fall is much higher,” she said.
Having a targeted approach is also important, said the college senior. If, for example, you want to work at Goldman in tech, media, and telecom banking, then first contact people in the TMT group. You’ll also learn more about the group that way.
Target first-year analysts
Something newbies might not realize is that, at many top firms, the initial intern recruitment process — coffee chats, résumé reviews, first-round interviews — is handled by first-year investment bankers (not HR or senior bankers or headhunters). Though senior referrals are still a thing, seniors only get involved in the interview process at the time of Super Days.
“It’s pretty standard across different types of banks unless you’re in a diversity program,” the former analyst said.
At one point, she recalled, HR sent a 500-odd-page PDF of résumés to the analysts. “Then they asked us, ‘So who are you interviewing?’”
“The hit rate with first-year analysts will be much higher,” she said. “They might not have as much power in the internal recruiting process as the second-years, but a lot of the second-years will look to the first-years to ask them who the good kids they’ve spoken to are.”
The first-year investment-banking analysts may also be more sympathetic listeners being new to the industry themselves, she added.
“During my first year as an analyst, I was doing a million of these coffee chats and genuinely wanted to help these kids,” she said. “But as a second-year analyst, I just didn’t give a shit anymore, unless there was some sort of strong connection.”
How to ask for the ‘coffee chat’ networking call
When reaching out to analysts, do so by email rather than LinkedIn, Sibley said.
“Find them on LI, figure out the common email format for the firm, and try to guess their email,” he said. “An email is more likely to be responded to than a LinkedIn message.”
Be careful with the tone of your email, warned the former analyst.
“I absolutely hate kids who have a tone in their email that sounds like they’re assuming I will talk to them.”
She added:“I like them telling me a little about themselves or if they have talked to XYZ other person at my firm; show you are doing your diligence.”
You can include your availability to talk, but avoid sounding like you’re the one squeezing them in. Don’t overwhelm them with “I’m available from 12 to 1 or 3:30 to 4,” the former analyst said. The better approach, she said, would be: “Anytime in the afternoon this Wednesday or Thursday” or “Next Monday or Tuesday in the morning time.”
“Saying ‘looking forward to chatting’ before I have even replied is a no-no,” the former analyst added. “You should word it like: “If you are willing to speak and have time, here is my availability. Thank you for considering a chat.”
And always attach your résumé, she added.
“Most people do this at this point, but the ones who don’t, it’s like auto-delete,” said the former analyst. “I always enjoyed looking at the résumés to see their experiences and to see if it’s someone good for the firm.”
Ask for more connections
Avoid coming off as too transactional during your networking chats, Sibley said. You may be doing it for the internship, but try to show genuine interest in the person you’re talking to and their path.
“You aren’t doing networking just for the internship; ideally you’re making networking connections for life,” he said. “Being grateful for the time an analyst takes with you on the phone is critical.”
After each call, make sure to send an email thanking them for their time and politely asking if there’s anyone else in their group or at their firm they recommend you also speak to.
“I wish I’d done that more, thinking back,” said the finance student. “As a freshman or sophomore, it’s difficult to ask for something. But doing it can be super helpful.”
Take advantage of winter break
You’ll want to study for the recruitment interviews that happen in the spring, and the winter break is a great time to do this.
There are a ton of resources out there, from YouTube videos to online courses and guidebooks with interview questions. BI has also published several articles with interview tips and practice questions from execs at firms like Lazard and Goldman.
Don’t just memorize the questions and answers, the finance student warns. Really try to get a grasp of the deeper reasoning and function behind the finance technicals. Also, take the time to figure out why you want to work in finance.
“Having and knowing two or three reasons you want to work in the industry can go a long way both for your own sake and can help when you’re speaking with upperclassmen,” said the finance student. “It makes you seem like you’re not just doing it because everyone else is.”
Don’t wait to apply
Most applications open at the beginning of the year, around mid-January. Even though many will list “deadlines to apply” in May or even June, you don’t actually have that long to submit your application. The reality is that by the end of March, many top firms have already filled their classes, Sibley said. In fact, interviews at some banks were taking place as early as January this year, he added.
If possible, submit your materials within the first two days of an application opening, he said.
It all comes down to your résumé
Outside of networking and cold emailing, there are two aspects that determine whether you get an interview and how you are evaluated: GPA and involvement, said the former analyst and recruiting captain.
“If you have below a 3.9 heading into sophomore year, I think that is pretty pathetic based on the classes I know you take,” she said. “If I see a 3.6 GPA after freshman year, it’s an auto cut for me.”
That may seem cutthroat, she said, but with the amount of applications they get, they have to bring down the ax.
“Assuming two résumés are the same, why would I take a 3.7 versus a 3.9? It’s unfortunate, but it’s like, come on, there’s not much else to go off of when evaluating a résumé.”
Your résumé should also show a commitment to the industry. You need to be in the finance or consulting club at minimum, said the former analyst.
“Your résumé needs to scream finance,” she said. “If I have two kids’ résumé, and one kid is super involved in a student investment club, and the other is in theater club, I’m choosing the finance kid.”
The professor suggested activities to make the résumé stand out. If, for example, you want to be on a bank’s healthcare team, consider adding a minor in biology or joining a biotech club.
“Do something to make your résumé look different than an average business student who is only in business-related stuff,” said Sibley.
The former analyst added: “I don’t think you always have to be a finance major, but you should be able to demonstrate your interest in the subject, that you know what you’re getting into, and that you aren’t going to hate the job.”
Handle your emails well
When it comes time for interviews, firms will email applicants directly.
Taking too long to reply can be a red flag for firms, Sibley said. You may have a valid enough excuse, but it doesn’t matter. Investment bankers are expected to be available and responsive pretty much all the time. So what does it say if you’re a lackadaisical replier?
“If you don’t respond to emails in a timely manner, you aren’t going to be a top performer. If you respond within five minutes, it looks good. If it takes you a day and a half to respond, you might’ve just eliminated yourself out of that process.”
Make sure to check your junk mail, he added — a common and unfortunate mistake he has seen.
“How much would it suck to lose a Super Day from your No. 1 bank because you didn’t check your spam folder?”
Do mock interview sessions
About one or two months before interviews begin, sophomores should reach out to upperclassmen who have offers secured and ask them to do mock interviews, the college senior said.
“I’m more willing to help than they might think.”
If you feel awkward or sheepish asking for their time, buying them lunch or coffee while you’re practicing could be a nice way to thank them.
Don’t freak out
There are many reasons someone else could have gotten an interview email before you. For example, diversity recruitment — efforts by firms to hire more interns from traditionally underrepresented groups on Wall Street — typically happen a few weeks earlier than regular recruiting events. Some firms may also just have fewer employees to review the applications.
“Everyone’s experiences are different,” the finance student said. “I know some people who got offers two or three months after the initial people did, and they landed even better internships.”
If you’re a sophomore late to the game, consider regional banks
If you are just learning about or getting into the process as a sophomore, your internship options are probably limited — but you’re not completely out of luck. There are firms that will continue to hire into the fall for junior-year internships, said Sibley.
He suggested searching for opportunities at smaller, regional firms outside of New York City, which tend to have later recruitment timelines. This means looking for internships in cities like Chicago, Charlotte, Atlanta, and Houston, he said. It’s just about getting a seat at the table somewhere.
“If you belong at a top bank, you’ll get to a top bank. Just because the ship has sailed at your top bank doesn’t mean your potential career at that bank is over.”
You can always move to New York later on (but when applying, have a compelling reason why you want to live in that city — they don’t want to know you are only there to get to New York, he said).
“You’re getting a late start, so you need to cast a wider net than you would’ve had you been networking in December. And you’re gonna have to be more aggressive about it. I have some students who were sending 100 emails every week over December. If you weren’t doing that, you have a lot of emailing to do.”
The digital consultancy Bounteous is merging with Accolite Digital, and together they plan to become a billion-dollar company in five years.
Bounteous and Accolite Digital offer different, yet complementary services. The private equity firm New Mountain Capital, which invested in both companies in 2021, instigated the idea for this merger late last year.
Bounteous, a Chicago-based consultancy, mostly works with chief marketing officers in North America and designs customer-facing experiences. Its clients include Coca-Cola, Caesars Entertainment, Domino’s, and others, and it largely competes with other consultancies like Accenture and Deloitte Digital, Bounteous CEO Keith Schwartz told Business Insider.
Accolite, based in Dallas, builds products that large enterprises use internally. For instance, it built a wearable device for FedEx that detected fatigue among drivers and pilots and ran predictive analytics to identify potential accidents, Accolite CEO Leela Kaza told Business Insider. FedEx used this data to make pilots’ schedules and truck drivers’ routes more efficient, and now licenses that software to other carriers, Kaza said.
Accolite’s clients include telecommunications and financial services companies, including Goldman Sachs, Prudential, and BT. It mostly works in India, but it also has presences in the US, Canada, Mexico, and Europe.
The decision to merge happened when New Mountain noticed that Accolite clients would ask for design services that are Bounteous’ expertise, and Bounteous clients would ask for help with their cloud infrastructure and data analytics, which is Accolite’s focus, said New Mountain managing director Prasad Chintamaneni.
The combined firm will have 5,000 people and be headquartered in Chicago. Schwartz and Kaza will both lead the combined company. For now, the merged company will be called Bounteous X Accolite, although Kaza said they will finalize its new name in May.
Kaza will oversee areas like human resources and operations, and Schwartz will oversee sales, marketing, and finance. The companies will have minimal layoffs post-merger, Kaza said, though there will be some redundancies in support functions.
“I look at all sorts of mergers and possibilities, and sometimes there’s a tremendous amount of overlap,” said Schwartz. “In this case, there’s a tremendous amount of white space.”
The road to $1 billion
The two companies’ combined revenue is nearing half a billion, and they have big plans to hit the billion-dollar mark in about five years.
To get there, Bounteous X Accolite is banking on 2024 as a year of modest growth, with real acceleration in 2025 and 2026, said Kaza.
“That’s when you’re going to start heading towards that billion-dollar figure,” Kaza said.
The company will then supplement its projected organic revenue growth with M&A, looking for “strong firms” that can work with marketing tech from Salesforce and Adobe in regions like Latin America and Eastern Europe, Kaza added.
“You do these things to make the company better, not bigger,” Schwartz said. “If you make the company better, clients reward you with more work, and you will grow.”
China Evergrande — the world’s most indebted property developer — received a liquidation order from a Hong Kong court on Monday, but there may be little left to recover, said experts.
The order came more than two years after Evergrande sent the country’s property sector into a tailspin.
Liquidators will now take control of the company’s assets and prepare to sell them in order to repay the company’s debts, which total $300 billion.
An offshore investor named Top Shine Global brought the winding-up lawsuit against Evergrande in 2022. Its proceedings were adjourned multiple times as Evergrande sought more time to restructure its debts.
On Monday, Evergrande applied for another adjournment. But Judge Linda Chan said Evergrande had been unable to offer a concrete restructuring plan and ordered its liquidation.
“It is time for the court to say enough is enough,” said Chan, according to Reuters.
Trading in the shares of Evergrande and its subsidiaries was halted on Monday following news of the order. Hong Kong-listed China Evergrande Group’s stock price plunged 21% before the court hearing.
Evergrande did not immediately respond to a request for comment from BI.
Monday’s court order is a far cry from Evergrande’s heyday as China’s top developer by sales in 2016.
Evergrande has been mired in a liquidity crisis since 2021. It first defaulted on an offshore dollar bond in December of that year. The company filed for bankruptcy protection in the US in August and scraped a restructuring plan in October due to worse-than-expected property sales.
‘There are only losers in the collapse of Evergrande’
Siu Shawn, Evergrande’s CEO, told local media in China that the real-estate company will still ensure the delivery of homes in China, state-owned Securities Times reported on Monday.
But several experts BI spoke to prior to Monday’s court order said Evergrande’s liquidation will be challenging.
It’s bad news for creditors, Mat Ng, the managing director at Grant Thornton, a professional services firm that specializes in restructuring, told BI.
“Given its scale, a liquidation of Evergrande would be a challenging process and the likely return to creditors would be expected to be low,” said Ng.
That’s particularly since the Chinese property sector is in the dumps amid sluggish demand and falling home prices — which means any sale of Evergrande’s assets is likely to be at fire-sale prices, John Bringardner, the head of Debtwire, a fixed-income data and news provider, told BI in November.
“At this point in the process, there are only losers in the collapse of Evergrande,” Bringardner added.
In July, Evergrande cited an analysis by Deloitte that estimated a recovery rate of 3.4% on its debt if the company is liquidated, per Reuters. Creditors now expect the recovery rate at less than 3%, according go the news agency.
Investors also appear to be out of luck, particularly if they’re outside of China, and the process of getting their investments may take years.
“Onshore stakeholders are busy working to ensure home purchasers will eventually receive the homes they have paid for one way or another, but retail ‘mom and pop’ investors in the company’s offshore securities will be facing even further uncertainty and delay which would likely continue for years,” Daniel Margulies, a partner at Dechert, a law firm that specializes in restructuring in Asia, told BI.
The court order to liquidate Evergrande also signals that problems of this size in China “seemingly cannot be restructured and will likely end up in some form of liquidation, whether onshore or offshore,” said Margulies.
Evergrande’s liquidation comes as China’s economy continues to struggle
Evergrande’s liquidation comes as China’s economy faces significant headwinds from a property crisis, deflationary pressure, and a demographic crisis.
Market sentiment over China’s economy is so bad that the country’s stock markets sold down massively last week as investors made a dash for the exit door.
Despite the complications that could come with Evergrande’s liquidation, there may be some upside in the longer run.
“Evergrande’s liquidation is a sign that China is willing to go to extreme ends to quell the property bubble,” Andrew Collier, a managing director at Orient Capital Research, told Reuters.
“This is good for the economy in the long term but very difficult in the short term,” he added.
”There are known knowns; there are things we know that we know.
”There are known unknowns; that is to say, there are things that we now know we don’t know.
”But there are also unknown unknowns – there are things we do not know we don’t know.”
Try pulling that pithy rhetoric out at a cocktail party!
While these three sentences are a hot mess, there are some surprising parallels that can be drawn between this phrasing and the Australian property as we head into 2024.
Real estate markets across the nation are being “taffy pulled” in many directions by multiple drivers. It is perhaps one of the most divergent periods we’ve seen in the sector in recent memory. Rising interest rates, tighter lending restrictions, anti-investor legislations and tax changes, increased inflation and cost of living all dragging the market down. But driving values higher has been record immigration, strong buyer demand for quality assets, wage growth, low unemployment and historically tight vacancy rates.
Throw in the high cost of construction (bad for new homes and renovations, good for established housing) plus the ups and downs of remote working, and we should be seeing a market that’s bouncing about like a pinball.
But … it isn’t! The general resilience of Australian real estate shines through. That said, the new year brings new considerations.
My ongoing analysis of data and conversations with industry experts have led me to several conclusions about what’s in store for 2024.
Here’s what I think is set to unfold in the year ahead.
Construction
For new home builders and renovators, the first bit of good news is that the rate of price growth for building costs has slowed.
This will no doubt assist some project bottom lines; however, the cost of labour is rising, and I don’t see that retreating anytime soon. In fact, increased labour costs have offset lower price growth in materials to the extent that the net result will still be higher overall project costs.
Why do they keep increasing? Well, governments across all tiers are ramping up infrastructure programs. Couple that with the federal government setting an unrealistic construction target to address the housing crisis, and the level of demand for builds is steaming. The target of building 1.2 million homes over five years from 1 July 2024 is fanciful at best, but nigh on impossible given the fact that it’s a pace the country has never achieved. In addition, it’s being targeting during a period where close to a third of all construction companies are reporting job vacancies.
Rental crisis
Frankly, the rental crisis is unlikely to ease this year.
New construction supply is consistently overstated as the panacea for the rental crisis, but the pipeline of higher density residential projects is a third of the normal figures at present. Developers’ margins are being screwed down by construction costs and the price of developable sites in near-city suburbs remains high.
And demand isn’t going away anytime soon. Immigration remains at record levels, and these new Aussies typically rent on arrival. I suspect we will see further increases in average household densities this year as a result, and vacancy rates that continue to hover around 1 per cent to 1.5 per cent.
Interest rates
Interest rate increases were influential during 2022 and early 2023, particularly as we saw many loans move from fixed to variable rates. However, the shock and influence of rate rises faded somewhat towards year’s end.
There’s now speculation the next move will be a cut in the latter half of 2024.
My thoughts are that if there’s any upward shift in rates, the impact would be insignificant and diluted.
Interestingly, if rates were cut the outcome would be more substantial. A fall in the cash rate would open up borrowing capacity – particularly for those at the affordable end of markets. An easing in the cash rate also flags that the Reserve Bank of Australia is comfortable with the inflation figure. This will feed directly in property stakeholder confidence and, subsequently, property prices.
Consumer sentiment
Property is reliant on stakeholder confidence to drive price growth.
The rising cost of living has affected overall consumer confidence as demonstrated by the Westpac/Melbourne Institute’s Consumer Sentiment Index, which remains weak.
That said, when it comes to property, the story is a little different. The gap between consumer sentiment around property prices and the “time to buy a dwelling” measure indicates many Aussies actually believe values in major population centres will continue to grow in 2024. Further evidence of the faith our nation has in real estate as a secure, long-term vehicle for building wealth.
So … what’s the net outcome for 2024?
In short, I think it will be an overall positive story for residential property this year.
Market experts are predicting the national property market to grow anywhere between 1.5 per cent and 8 per cent. It’s a wide range, but then that is across multiple opinions. Meanwhile, there are bank economists expecting some locations (i.e. Perth and Brisbane) will come close to, or even exceed, double-digit capital gains in 2024.
I tend to agree with these assessments. The fundamental supply/demand imbalance across capital city markets will continue to bolster the chance of capital gains. I wouldn’t be surprised to see properties achieve more than 10 per cent over the next 12 months in some instances.
I also believe there’s plenty of steam in larger regional markets, especially where there is a diverse range of employers, and major infrastructure projects, like the inland rail corridor, are underway. Diversified locations with median price points under $600,000 will perform strongly – particularly with investors. Our own data shows Aussies are now extremely comfortable with investing in assets well away from their hometowns if the numbers stack up.
Apartment prices will remain strong too, with some good upside potential. High construction costs are restricting the supply pipeline for this property type. Less supply plus high renter and home owner demand equals robust price growth.
As I alluded to at the start of this article, there are multiple drivers pulling the property market in all directions but, in the end, I think the only way is up in 2024. As such, those who act earlier in the year look set to benefit most.
Mike Mortlock is the managing director of MCG Quantity Surveyors.
Ultimately, that attribute led the 44-year-old to a career she never imagined: a real-estate agent and investor.
“All I wanted to be when I grew up was a lawyer,” Casey, who graduated from SUNY Albany in 2001 with criminal justice and psychology degrees, told Business Insider. “I had no other plans.” Until she started her first job as a paralegal at one of the biggest law firms in New York City, that is.
The job was demanding and often required 18-hour work days.
“There were times when I slept in the office,” she recalled. A particularly intense case that went to trial and relocated her to Florida for two months prompted her to reevaluate her career path. “That case just killed me. I gained 20 pounds, I never saw my friends, and when you’re in your early 20s, you want to have a little bit of a life.”
At the end of the case, which her team won, Casey gave her two weeks’ notice and walked away from a comfortable salary.
Draining 6 months’ worth of savings and becoming a real-estate agent
Casey didn’t have another job lined up when she quit, but she had about six months’ worth of expenses set aside.
“Because I worked so much — and when you’re on trial, after a certain time, you get double time — I just saved my money,” she said, but her savings went fast in a city as expensive as New York. “I just needed to really destress, and that’s what I did.”
Additionally, she spent time thinking about what she wanted her days to look like. For starters, she wanted more flexibility: “I wanted something where I wasn’t sitting in an office, and I wanted something where I can control the income that I could make,” she said.
Becoming a real-estate agent satisfied both of those criteria. Plus, she hoped it would set her up to one day invest in properties.
“I grew up in New York City. I’ve seen the changes as far as property values go,” said Casey. “So yes, becoming a real-estate agent was about time freedom, but the major factor was I was going to learn how to be a landlord and do leases and figure out how to get a building.”
She executed the first part of her plan and got her real-estate license in February 2006. Over the next 15 years, she worked on the leasing side of the business while pursuing various side projects in her spare time, from Amazon FBA to launching a YouTube channel — but she didn’t buy an investment property.
From agent to investor: Buying her first property in her 40s and cash flowing $1,000 a month
Casey spent her 20s and 30s in no rush to become a real-estate investor.
“I’m single, no kids, so I definitely have a different lifestyle and a different timeline than other people,” she noted. Since she plans to adopt, “I have never been on a clock. Being single has really helped me, but also hindered me: I can do whatever I want at any point, and so that’s helped me in leading a very stress-free life, but it has hindered me because I’ve always thought, ‘I’ve got so much time, I got so much time, I’ve got so much time.'”
Her mindset changed when she turned 40.
For Casey, who has been self-employed for most of her career and doesn’t have a traditional 401(k) plan, owning real estate has always been synonymous with retirement. When her 40th birthday rolled around, she realized that taking out a 30-year mortgage would mean she’d be 70 when she paid it off.
“I don’t want to retire at 70; I want to retire at 55, maybe 59,” she said, “So I was like, ‘Wait a minute, now that I’m 40, I need to get it into gear.'”
She decided to pause the serial entrepreneurship and dedicate the next three to five years to buying real estate. Specifically, she aimed to build a $5 million portfolio.
It was a number that felt like “enough,” she said. “As long as I have my retirement set, that will allow me to feel more comfortable jumping around from thing to thing.”
Her first step was to find an affordable market. New York City, where Casey has lived her entire life, was out of the question. She had about $40,000 in savings. While that wouldn’t go far in her home city, it was enough to get started in Baltimore.
Casey settled on Maryland’s largest city after researching various markets online. One of her strategies was to follow real-estate content creators on social media and pay attention to where they were investing and their returns. After selecting her market, she contacted a Baltimore-based investor she followed on YouTube, Charles Blair, and asked for a consultation.
At the time, she’d never set foot in the city she intended to invest in.
Blair put her in touch with his agent, and Casey was off to the races. She bussed back and forth between New York and Baltimore for about six weeks before finding her first property. It was an off-market deal she found on a real-estate wholesale website.
“I put in an offer, and that was that,” recalled Casey, who used a hard money lender and personal funds to close on a $105,000 single-family home in December 2021. “When I make a decision, it’s go time. What are we waiting for? Does this look good? Do the numbers make sense? That’s it.”
The purchase nearly wiped out all of her savings, she said: “Because I was a first-time investor, I had to put down 20%, three points to the lender. Including all closing costs, it was around $37,000, almost every dime I had.”
The property also required renovations.
“When you get a hard money loan, they give you 80% of the purchase price and 100% of the renovation. But it’s in draws, so you have to front the money first, and then they refund you,” explained Casey, who used business credit cards to start the renovation project. It ended up taking three months and cost her $45,000.
“I definitely made quite a few mistakes,” she said, noting that the renovation could have been done in three weeks on a $36,000 budget. But at the end of the process, she’d converted a four-bed, one-bath into a five-bed, two-bath with a fully finished basement in an emerging Baltimore neighborhood.
A tenant placement company helped her fill the rental with a Section 8 tenant. Casey started bringing in $2,350 a month, which the government covered for her tenant. Her mortgage was $1,433 at the time, she said, meaning she started profiting nearly $1,000 a month. Insider verified her property ownership by looking at a copy of her mortgage statement and confirmed the rental price by looking at a letter from the Housing Authority of Baltimore City. She profits even more now, as rent has increased and her mortgage has decreased.
Using creative financing to expand her portfolio and focusing on appreciation over cash flow
After draining her savings to acquire her first property, Casey decided: “I don’t want to spend my money on properties anymore. It’s not really scalable using your own money.”
She started researching creative financing strategies and how investors buy properties without tapping into their own savings.
Casey bought three more properties in Baltimore over the next year and a half, including one flip, using subject to financing (when the buyer takes over the existing financing) and seller financing (when the seller acts as the lender and provides a loan).
She considers her first deal a “slam dunk,” she said. “To get $1,100 right now in gross cash flow on your first deal in a low market is really, really good, especially in Baltimore where the average is $300.”
But cash flow has never been her main objective. For her, real estate is a retirement plan. She’d rather focus on long-term appreciation.
Her latest deal, which she purchased for $250,000, was purely an “appreciation play,” she said. She had to convert it into a rooming house just to cover the mortgage, but she’s bullish on the neighborhood: “I took the chance because I’ve seen the property values just in the last two years go from $300,000 to $500,000, $600,000. The property around the corner sold for $570,000.”
The way she sees it, going for big appreciation will help her get to her $5 million goal faster.
“I don’t need the cash flow. It’s nice, but that’s what working is for,” said Casey, who documents her real estate journey on YouTube and is aiming to buy her first multi-family property in 2024. “Also, I’m the type of person that, when I have a lot of money, I’m less motivated to do things, so I try to keep myself as poor as possible.”