Montenegro Emerging as Europe’s Tourist Hotspot
The tiny nation of Montenegro, one of Europe’s newest countries, has been attracting the attention of both holidaymakers and large-scale real estate investors in recent years. Developers are building golf resorts, marinas and residential and hotel resorts aimed at a sophisticated international audience who are attracted to the natural beauty and easy accessibility of this Balkan country.
Montenegro, dubbed the Pearl of the Mediterranean, lies south of Croatia and north of Albania. It is small in size – just 14,000km² with a population of 650,000 – but big on beauty with mountains, canyons and stone Venetian architecture. Inland there are five National Parks, ski resorts and the Balkans’ largest lake and deepest canyon but it is the slim and rocky Adriatic coastline, extending just under 300kms and in particular the waters of UNESCO Heritage site Kotor Bay that is attracting most international attention.
Back in the 1960s the region was something of a celebrity hangout, popular with stars including Sophia Loren and Elizabeth Taylor but the Balkan Conflict of the 1990s marked the end of that era. After years of destruction, modern Montenegro was created in 2006 from part of the former Yugoslavia and Serbia and today the country, which uses the euro as its currency, has applied to join NATO and the EU.
Tourism in Montenegro has increased hugely in recent years, with visitors from across Europe and Russia helping to make tourism the fastest growing economic sector in the country with revenues rising 17% annually. The latest data form the World Travel and Tourism Council placed Montenegro at the top of a list of 184 countries for predicted tourism growth over the coming decade.
International brands have taken note of this allure and acted on it. Mighty Asian-based hotel company Aman opened their vive star 188-suite resort on the small island of Sveti Stefan in 2009, transforming the former fifteenth century fisherman’s homes into an oasis of simplicity and beauty with night room charges from €700. Last year, leading tennis player Novak Djokovic chose the resort as the venue for his summer wedding in the country.
In August 2014 Regent Hotel in Porto Montenegro became the second five-star international brand to open and will be joined in the coming years by One & Only and Four Seasons.
Montenegro has plenty to interest second homeowners seeking waterfront properties with the outstanding beauty of Kotor Bay, with its glassy waters surrounded by brooding dark mountains – Montenegro means ‘Black Mountains’ – and it’s the perfect location for boating and sailing activities. Meanwhile the country’s position in the Mediterranean provides thousands of islands to the north and south to explore as well as Venice, Corfu and Croatia within a short distance.
Porto Montenegro’s marina is a hugely popular destination for property investors in the country. The marina has more than 400 berths including space to moor the world’s longest yacht and plans for another 70 super-yacht berths by the end of the year. There is a newly opened Regent Hotel, seven residential blocks with over 200 apartments, a tennis club, sports facilities including pools and a gym together with a range of smart shops and restaurants.
Montenegro’s government are taking steps to stimulate the property market with a range of measures including the abolishment of all buying costs on new-build property. Resale homes meanwhile incur a 3% property tax to avoid the pre-recession days of escalating property prices, driven by the consistent popularity for older Venetian-style stone houses in prime areas.
Kiernan Kelleher, managing director of Savills associates Dream Estates Montenegro said: ” To really delve into the market, it is important to know that there are two distinct breeds: the shiny, spanking new apartments at Porto Montenegro or Lŭstica Bay for instance which sell for over €5,000/m2 and the traditional perfect stone houses and apartments which dot Kotor Bay “.
” There is still excellent value to be had on the coast whether you want to dock your big yacht next to your penthouse or get out your paint scraper and renovate an older beauty, ” Kelleher continued.
” Both are still priced well below more established destinations and experts forecast continued growth in Montenegro as additional 5-star hotels, the lifeblood of any property market we say, are introduced. Phase One of Montenegro’s transformation into a world-class, high-end tourism and property destination is complete “.
Article by +Roxanne James on behalf of Propertyshowrooms.com
UAE on Course for 9.8bn EUR Hotel Revenues by 2020
Profits for the UAE hotel sector are expected to increase almost two-fold over the next four years, ahead of the 2020 World Expo being hosted by Dubai, in preparation for which the Emirates have invested heavily in tourist infrastructure in recent years.
The UAE’s considerable investment in tourism has led to predictions that annual revenue is set to increase from €5.3bn in 2013 to a whopping €9.8bn by 2019.
Visitor attraction revenues are also forecast to double from €465m recorded in 2013 to more than €1.07bn over the next four years, according to a report published by Euromonitor International ahead of The Hotel and Leisure Shows in Dubai 2015 , which both opened this week.
In 2015, UAE hotel revenues are forecast to reach €6.5bn, while visitor attraction revenues will hit €570m. The UAE is the number one market in the Middle East and North Africa in terms of hotel room revenues, with over three times the amount recorded for Saudi Arabia and Egypt. The UAE also leads the region in new hotel construction, according to Christine Davidson, group event director of DMG events, organisers of the Hotel and Leisure shows.
Saudi Arabia currently leads the market for visitor attractions with €4.1bn in revenues forecast for 2015 compared with €569m for the UAE. ” But with massive leisure development currently underway across the UAE including five theme parks, three major museums and two safari parks, UAE’s visitor attraction revenues are forecast to almost double to €1.07bn by 2019. As more developments enter the pipeline, including last month’s announcement of the record-breaking Meydan One project featuring the world’s largest indoor ski slope, the UAE’s future for leisure and entertainment tourism looks exceedingly good, ” said Davidson.
According to a study by investment bank Alpen Capital, the UAE’s hospitality industry is expected to grow at a compound annual growth rate of 10% between 2013 and 2018. In the GCC, the sector is forecast to grow to €32bn by 2018 from €20.3bn in 2013, at an annual rate of 9.5%.
With much of UAE’s investment in tourism infrastructure taking place in Dubai, hosts of the 2020 World Expo, the outlook for the Emirate’s property market is bright and all fears that a property bubble is forming have diminished considerably. Mario Volpi, managing director of Prestige Real Estate in Dubai said: ” Dubai will be heading for very positive growth between now and 2020. Predicting a property bubble is difficult but assuming all the fundamentals are in place – interest from property buyers (not just flippers), population growth, job opportunities and a continuation of infrastructure improvements, I do not believe Dubai will suffer another large-scale downturn. Corrections may come but at present there is no real threat “.
Hotel rooms are the most popular investment vehicle in Dubai’s real estate market. When asked where best to investment in the Emirate, Volpi responded: ” The hotel market, as there will be a shortage of rooms, even with all the new hotels being built. The target of 20 million tourists per year will have to stay somewhere, so this new investing concept should bring about a good return from rent and capital appreciation “.
Developers are buoyed by the prospect of continued growth in Dubai’s property market. Mahesh Tourani director of Indigo Properties , a developer based in the Emirate with a number of completed developments and more in the pipeline said:
” Securing rights to host World Expo 2020 has set in motion faster-paced sale and resale activity in Dubai. This trend is expected to slowly accelerate and plateau somewhat towards the end of 2019 into early 2019. Keeping in mind the overall improvement in the world economy as well as its projected growth, the inflow of funds into the UAE from surrounding troubled nations and with Expo 2020 in the bag, the next few years are expected to see sustained growth in the city led by hotels, serviced apartments, commercial and residential buildings “.
Development activity across the UAE is presenting plenty of investment opportunity for those seeking high-quality income-generating property assets and its significantly improving tourist sector is set to underpin the security of real estate investments in the Emirates even further in coming years.
Article by +Roxanne James on behalf of Propertyshowrooms.com
Demand for Family Homes Surges in Melbourne, Australia
Family homes are in hot demand in Australia, being snapped up enthusiastically in some of the busiest property auctions the country has ever witnessed, particularly in the metropolis of Melbourne.
Property in Australia is increasingly sold by auction in preference to the traditional ‘offer and acceptance’ method conducted through estate agents. Property auctions are particularly popular where there is a strong supply of property and in some Australian states, auction is the dominant method of sale.
Sales of houses and redevelopment sites continued to outclass Melbourne’s apartment market last Saturday, which saw the busiest property auction since May this year. Almost 1,100 properties were up for grabs on Saturday and buyers zoomed in on houses, with 78% falling under the hammer with a lower 59% clearance rate for units and apartments. Senior economist Andrew Wilson commented that the volume of sales at the auction was a ‘solid result’ given the high number of auctions taking place in Melbourne.
Although auction property clearance rates have improved since the beginning of September, real estate agents suggest there are significantly more family home buyers than sellers.
Demand for renovated ‘turnkey’ houses and well located land is resilient in many areas of Australia, although some established units are struggling to sell due to heightened competition from new housing units on the market. Property sector insiders suggest that the strongest bidding and sales activity is in the middle ring of Melbourne’s suburbs such as Doncaster and Mount Waverley.
However, some market commentators have noted that buyers are not displaying the sense of urgency that was apparent at auctions earlier in the year. Agents said ‘fear of loss’ was causing buyers to up their budgets because they believed house prices were increasing on a weekly basis at that time.
However, some market watchers say the urgency to buy is not as strong as it was in May because of the large increase in housing stock in the city’s suburbs. According to data from Australian estate agents James Buyer Advocates’, measuring how many bidders there are per auction for million-dollar-plus properties, the figure is down from three bidders per auction seen earlier this year, to two bidders.
” Every agent will say, ‘there is not that much stock’, ” the company’s head Mal James said. ” But that is just a standard line. As you come into spring, it is high stock level time and high-quality time. If you can’t find a house in the next few months, you are either unlucky or unrealistic “.
Several prominent agents in Melbourne suggest that its property market peaked a few weeks ago, with evidence that some wealthy home owners think that selling this spring may be a better strategy than waiting until 2016 or 2017.
Jellis Craig, director of Melbourne-based agents Craig Shearn said wealthy vendors are prudent and well advised. ” When you see their properties hitting the market after 20, 30 or 40 years, it can’t be all because they’re getting old, ” he said. “I am sure some of them are downsizing but I suspect there is an element of opportunism in there as well “.
Melissa Opie of Keyhole Property Investments said the Melbourne property market was patchier compared with April. In some areas properties were cheaper than they were four or five months ago. ” The AUD1m to AUD1.5m home market was a really tough market a few months ago but it has now come back a little “, she said.
Michael Cooney director of auction organisers Hodges said that last Saturday’s open house attendances were high and increased buyer activity is expected to continue. ” Stock levels are up by 20% to 30% this year. More stock means more buyer activity and we’re seeing a lot more higher-end family homes coming to the early October market “.
The Reserve Bank of Australia (RBA) commented that house price inflation was concentrated on detached houses in Sydney and Melbourne. ” Members noted that rapid growth in the construction of new apartments had helped to hold down inflation of their prices”, September’s board minutes said. “There had been a notable decline in the growth in lending for investment housing in July “.
Article by +Roxanne James on behalf of Propertyshowrooms.com
More South African Buyers Expected in UK Property Market
With economic woes starting to affect the domestic housing market in South Africa, more nationals are expected to look to UK property assets for more security for their capital.
The South African property market has lost momentum in recent quarters and investors have increasingly looked to diversify into the British real estate market, as property transaction activity at home continues to decline.
According to the FNB South African Estate Agent Survey published by South African First National Bank (FNB), estate agents in the country point to a decline in residential market activity, suggesting slowing demand. The main factor behind the slow-down of domestic demand for property in South Africa is predominantly the issue of affordability, as income inflation fails to keep pace with property price growth.
Property prices continue to outstrip income growth in South Africa
Although some of the supply issues in South Africa are starting to ease, agents have already seen a reduction in viewings, meaning many of these new properties could be left unsold. John Loos, household and property sector strategist at FNB said: ” This shift to a slowing direction may finally be starting to reflect a multi-year stagnation in South African economic growth as well as gradual interest rate hiking by the South African Reserve Bank “.
He explained there are several economic reasons why demand will continue to weaken, most notably the fact that incomes have failed to keep up with house prices. House price inflation has spurred many South Africans to consider making a property investment but the rand’s underlying weakness and the volatile economy has taken its toll. In South Africa, prices have risen 27% in the last four years, but due to the devaluing rand, investors have lost 23% in value in real terms.
As this realisation hits more and more South African property investors, buy-to-let home buying in the country has declined from 9% of the overall market to 8% in the last three months, according to FNB.
UK BTL markets offer greater security and value growth potential for SA investors
The UK has become a favoured destination for many South African property investors, citing continued economic growth and sterling-based returns as the primary reasons for buying British real estate.
Propwealth is a UK-based company owned by South Africans that is taking advantage of heightened interest in UK income-generating property assets from wealthy South African investors by providing a comprehensive service from sourcing BTL investment opportunities in the UK to rental and property management, creating ideal armchair investments for South Africans.
Director of Propwealth, Anthony Doyle says the formula is simple. ” We invest in below market properties; we get the best yields possible, buy in up-and-coming areas and set up full management. This guarantees a strong tenant base and no headaches for the investor as the property is fully managed. Best of all, our South African investors own a piece of real estate in the UK. It’s all safe and secure “.
Propwealth’s main focus of investment is both in London and Liverpool which according to the company’s website ‘offer both cash flow and capital growth for investors developing a balanced portfolio. London is performing extremely well and offers exceptional capital growth. Liverpool is entry level investing and offers very good cash flow return’.
As a further incentive for wealthy South Africans looking to secure investment capital in the UK’s lucrative property markets, Propwealth works with large banks to secure their investors excellent offshore mortgages, normally at 70% loan-to-value (LTV), at interest rates of 3.99%.
Article by +Roxanne James on behalf of Propertyshowrooms.com
Turkish Real Estate Exceeds Price Growth Expectations
Turkey took pole position among the list of European countries expected to sustain real estate price increases in the next 12 months, according to a recently released survey conducted by ING bank .
The 15-country survey features responses form more than 14,000 people and the anticipation of a rise in real estate prices in Turkey rose to 82%, a 10% increase from last year. Of the Turkish participants, 55% said they felt that real estate prices would increase if interest rates fell.
A full 42% of Turkish homeowners surveyed said they have a monthly mortgage obligation whereas the figure was considerably lower on average in Europe at 25%. While 46% of Europeans polled said they viewed purchasing a home as an investment, the figure was significantly higher among Turkish participants at 79%.
In a separate report published by the Turkish Statistics Institute (TurkStat) last week indicates that in August, 112,463 homes were sold in Turkey, an increase of 6.5% year-on-year. The number of homes sold in Turkey to foreign Nationals increased 15.2% year-on-year last month. Citizens of Iraq, Saudi Arabia, Kuwait, Russia and England respectively, were the top five foreign buyers of homes in Turkey in August.
Investor interest concentrated in Istanbul, Ankara and Izmir
Across the total of 2,044 homes sold to foreigners, interest was highest in Istanbul, Ankara and Izmir, Turkey’s three largest provinces each recording home sales accounting for roughly one-third of all homes sold in the country. During the month of August, 47.3% of homes sold were brand new while the remaining 52.7% were resale properties.
Nationally, property sales were overall considerably more encouraging in August, compared to July. Home sales recorded a 13.5% increase in July, compared to the same month a year ago; yet transaction volume proved to be the lowest in the last six-month period which saw sales edge above the 100,000 mark.
The 13.5% rise was the lowest increase on record this year, indicating a slowdown in market activity. Significant interest was shown in high-investment Turkish real estate projects by Gulf investors at the recent Cityscape Global real estate fair held in Dubai at the beginning of September that featured heavy participation from Turkish contractors, with 50 exhibitors representing the country.
Property buyers from GCC on the rise in 2015
At the event, Diana Doğan, head of research for CBRE Turkey said: ” In the second home holiday market there has been a significant increase in private investors in the residential sector from the Middle East with activity firmly focused in the country’s northwest, particularly the Marmara Sea and Black Sea regions, as well as Istanbul, Bursa and Yalova “.
” At the corporate investment level this demand has in turn created a yet untapped potential opportunity to develop homes specifically tailored to the Arab market. The Turkish banking sector has seen the most active interest with Arab financial institutions looking to gain a foothold or expand their presence within Turkey’s lucrative banking industry “.
Wouter Molman, director of event organisers Cityscape Group said: ” Turkish participation has grown by 50% this year and there are no signs of it slowing down. In 2014, Gulf investors spent US$4.3bn in Turkish real estate, reaching a total investment influx of US$16.29 over the past six years “.
” With Istanbul and Mediterranean coastal cities proving popular with GCC investors due to their close links with the region both geographically and culturally, Cityscape Global is the perfect platform for foreign investors to learn about the market and see what new projects are currently available “.
Turkish developers are making concerted efforts to attract further GCC investment and Dumankaya Construction believe their projects in the heart of Istanbul will be particularly successful among the Arab community. Uğur Dumankaya, chairman of Dumankaya’s board of directors said: ” Istanbul is an attractive real estate market for foreign investors. With its economic stability, social welfare, geographical position and return on investment all pointing in the right direction, buyers form around the world are flocking to take ownership of prime developments in the city and surrounding areas “.
Article by +Roxanne James on behalf of Propertyshowrooms.com
Business Partners
