Weak Euro Boosts Investment in Luxury Alpine Resorts
According to Savills’s Spotlight on the Alpine Property Market Report, the recovery in the Alpine real estate market, led by the ultra-prime resorts, has spread to the rest of the region with infrastructure investment spurring new development. British buyers are returning as a weak euro poses buying opportunities in France , Austria and Italy.
Courchevel 1850 tops the Savills Ultra-Prime Ski Resorts Index with typical prices of €31,340/m² for the best properties. The French resort is followed by the premier Swiss destinations of Gstaad, St Moritz, Zermatt and Verbier at between €26,450 and €31,220 per sqm. In spite of limited price growth, a strong Swiss franc has pushed these markets up the rankings in currency terms.
In North America, only Vail is on par with the top European competition at €25,200/m2.
Courchevel 1850 and Gstaad continue to lead the Ultra Prime Ski Resort Index, with 92% of buyers purchasing for both personal use and investment. A strong Swiss franc has made Swiss property expensive to foreign buyers, however a weaker euro poses buying opportunities in France, Austria and Italy.
Paul Tostevin, associate director, Savills World Research, said, ” A home in a top-tier Alpine resort is a key component of global property portfolios for the world’s wealthy. A property in Courchevel 1850, Gstaad or St Moritz complements a city residence in London, Paris or Moscow “.
Jeremy Rollason, managing director, Alpine Homes, in association with Savills, said, ” 2015 has been a tale of two currencies for UK buyers in the Alps. The de-peg of the Swiss franc caught markets off guard, but sterling has since recovered and now trades within a 5% range of the pre-January 2015 exchange rate. The weakening euro has helped buyers in euro denominated countries. Currency swings have the effect of either suppressing or stimulating markets through affordability, but the net effect has little influence on property values per se “.
Buying activity in the Swiss resorts cooled in 2015 with foreign buyers, particularly important to the top end of the market, impacted by the strong Swiss Franc. However, despite limited supply of second homes, investment in infrastructure continues and the cache of Swiss resorts remains.
Villars, a year round Swiss resort with high quality international schools, has seen high levels of new supply in recent years and has suffered from poor snowfall. This has had some impact on pricing and, for those who shop around; there are deals to be done. Prime apartments here trade at between €9,000 and €11,000 per sqm.
The Austrian Alpine resort market has remained strong on the back of a vibrant local economy, which has generated house price growth nationally of 41% since 2008. The country continues to offer excellent value for money compared to the more established French and Swiss resorts. Committed investment in resort infrastructure and investor appetite means there is still room for upward price movement.
Over in France, sales volumes in the ski regions of Haute-Savoie and Savoie have held up better than the rest of the country whilst a weaker euro has opened up investment opportunities for dollar and sterling denominated buyers.
Val d’Isere has seen premium restaurants and boutiques open. Popular with the UK market, there is strong rental potential with yields of circa 3.5% gross achievable for top chalets. The Chamonix Valley continues to see demand led recovery and prices are now at or around the pre-crisis peak of €10,000/m².
” We anticipate a continued globalisation of Europe’s top ski resorts as the customer base broadens and attracts a more diverse and market savvy investor, ” concludes Rollason
The report identified five emerging destinations and resorts opening up to an international market. The Balkans, on the edge of the large European market, and already attract British and Russian skiers. Pyeongchang, South Korea, is the 2018 host for the Winter Olympics. International investors have been attracted by special visa investor programmes.
Article by +Roxanne James on behalf of Propertyshowrooms.com
Is Qatari Real Estate Booming towards a Bubble?
Property prices in Qatar have been growing at an explosive pace, with banks stepping up lending as the real estate market heats up. Real estate prices rose 18% in the year to September, according to Qatar Central Bank data, beating the previous 2008 in June last year and continuing to rise at a double-digit rate.
Activity in the property market has been fueled by increases in the amount of credit provided by local banks to the real estate sector. Commercial credit to Qatar’s property market grew by 17% from June 2014 to June 2015, now accounting for around one sixth of all lending by Qatari banks, according to the central bank.
However, this is only part of the lending story in Qatar right now. The data doesn’t give a clear indication of how much credit to the public sector and private individuals is spent on real estate. It is likely that mortgages and government building projects account for a significant chunk of this lending, making the overall amount of credit directed at the sector much higher.
Jason Tuvey, emerging markets economist at Capital Economics said: ” If you look at Qatar now it looks like the UAE in 2008 and 2009 – rapid price rises in housing, high lending and banks borrowing from abroad to sustain credit growth “.
The IMF, in its annual report on the Qatari economy, singled out price rises in the real estate sector as an area that needs closer attention paid. ” Although the banking system as a whole appears cushioned from real estate sector volatility, developments at weaker banks need to be closely monitored, ” the Fund said.
A considerable part of the spending on real estate is focused on Qatar’s hospitality sector and with the country aiming to attract 7 million tourists by 2030, adding 60,000 hotel rooms to existing stock, it is likely to be significant. This is a red flag to analysts. ” The 2009 property bubble in the UAE wasn’t just a real estate bubble, ” says Sanyalaksna Manibhandu, senior researcher at the National Bank of Abu Dhabi. ” You also had an overheated hospitality sector “.
Nevertheless, the mortgage business continues to attract investment because of significant demand in some housing market segments in Qatar. Dr. Raghavan Seetharaman, chief executive of Doha Bank said there is ” a need to be cautious of property market prices because land prices in the recent past have been climbing and a time will come for it to stabilize or correct “.
There are indications that price growth may starting to slow in Qatar’s real estate sector, as the low oil price hits deposits. Year-on-year price increases were close to 40% in September 2014. As the oil price drop has led to project slowdowns and redundancies in the hydrocarbons sector, demand for mid-range real estate and office space has taken a small hit.
Housing supply is expected to more than double in 2018 compared to current levels which could lead the Qatari property market from undersupply to oversupply in just three years. However, many analysts believe that housing supply is driven by government policy rather than demand for real estate. For that reason, growth in Qatar’s real estate sector is not considered dynamic which places another element of risk into the equation for property investors.
Article by +Roxanne James on behalf of Propertyshowrooms.com
Portugal Makes Golden Visa More Attractive to Investors
Portugal’s Golden Visa scheme offering residency in exchange for non-EU investment in its real estate has become one of the cheapest in Europe, following a decision to reduce the minimum investment amount from €500,000 to €350,000.
Only the Greek residency programme is cheaper but despite the lure of a full Greek passport as part of the deal, the country is fast losing popularity among wealthy investors due to its economic instability.
The Portuguese Golden Visa Programme offers investors from outside the EU several alternatives to qualify for residency. A candidate can transfer an amount of €1m into a local Portuguese bank; create at least 10 local jobs in the country; invest €500,000 in the capitalisation of small or medium enterprises or €250,000 into a national heritage project or artistic production.
A recent report described Portugal’s residency scheme as one of the best in the world. The country’s location in Europe’s Schengen zone makes it particularly attractive to non-EU buyers as it allows visa-free access to 25 countries. Additionally, investors are not taxed unless they sell a business property or real estate. Other attractive features of the scheme include better processing time than in other countries and more relaxed rules for bringing in spouses or dependents.
Investors under the scheme are initially provided residency for two years which is then renewed twice for two-year increments. To qualify for renewals the investor is required to provide proof that they have resided in the country for at least seven days during their first year and at least fourteen days in each of the subsequent years. After six years of Portuguese residency, the investor becomes eligible for citizenship although there is a requirement of additional criteria including learning the Portuguese language.
Portugal boasts an excellent reputation, with a very high Human Development Index ranking according to the UN and the country is considered one of the world’s most globalised and peaceful nations with a great quality of life. It is among the oldest countries in Europe with a rich history, vibrant culture, stunning beaches and beautiful countryside. The tax burden on residents of Portugal is among the lowest both on corporate and personal levels and the country’s compliance standards and due diligence are comparatively high.
According to figures released by the Portuguese Immigration Service in February, as of 31st January 2015 more than €1.25bn had poured into the Golden Visa scheme since its inception in October 2012.
This level of investment is very significant for Portugal and reflects the importance of the residency programme to its economy. Property acquisitions represent the majority of selected investments under the scheme, totalling more than €1.1bn at the end of January. Nevertheless there has been a significant increase in capital investments also, which have risen to almost €120m.
Portugal’s Golden Visa has performed very well and continues to be the top choice for foreign investors in Europe. The Portuguese Immigration Service has issued 2,100 residency permits for investors and over 3,100 to extended family members since the launch of the programme.
Portugal’s housing market continues to recover with property prices rising 1.81% during the first quarter of this year to an average price of €1,011/m2, based on figures released by Statistics Portugal (INE) . Following more than three years of recession, house prices started to show the green shoots of recovery during 2014, despite Portugal’s struggling economy.
Article by +Roxanne James on behalf of Propertyshowrooms.com
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