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
Portuguese Real Estate Boosted by Foreigner-Friendly Investment Climate
A combination of improved fundamentals and government measures to relax tax and visa rules applying to foreign property investors has kick-started sustainable recovery in Portugal’s property market.
Recovering property prices, low mortgage rates and a more investor-friendly tax climate are helping to make Portugal one of Europe’s most attractive overseas property destinations this year, according to the Algarve office of PortugalBuyingGuide.com.
Elaine Ferguson, head of the resource centre at OverseasGuidesCompany.com said: ” Our PortugalBuyingGuide.com office in Vilamoura has noted an upturn in demand in 2015, partly fuelled by the weaker euro but also by the favourable mortgage deals available in Portugal now. Meanwhile there is evidence of limited supply of new-build in some areas of the Algarve, which is also putting upward pressure on the market. In terms of mortgages, since Portugal’s exit from the bailout last year, there has been more confidence in the home finance market, with Portuguese banks becoming more competitive, typically offering 80% LTV (loan-to-value) and rates of below 3.5%, helped by the incredibly low Euribor rate “.
Improving fundamentals and bargain prices continue to attract foreign property investors in Portugal
In the August publication of the RICS’ Portuguese Housing Market Survey , the dynamic of solid demand and falling supply is expected to support house price recovery in Portugal. The report highlights the imbalance between rising buyer enquiries and falling new sales listings continue to underpin a steady increase in house prices. Likewise, in the lettings market, solid tenant demand growth has pushed rents up marginally although a relatively flat trend is still projected by the RICS in the near term.
The report goes on to indicate that sales volumes are expected to pick up at a smart pace in coming months, with the backdrop of solid demand from foreign property investors underpinning price growth.
With demand outstripping supply in Portugal’s housing market, property prices have continued to recover across all regions. What’s more, the latest data suggest the rate of house price inflation accelerated across each market during August. The survey’s respondents – all real estate professionals operating in Portugal – remain confident that house prices will rise further at both the three and twelve month horizons. ” Indeed, over the year ahead contributors forecast national prices will increase by around 3% and by (on average) roughly 5% per annum over the next five years, ” the report states.
Portugal’s government has been actively engaged in stimulating foreign investment in its property market by improving the investment climate through improved taxation and schemes like the Non-Habitual Residents (NHR) programme which guarantees considerable tax breaks on pension and income in the first ten years of residency.
Comparatively low taxation to other EU nations attractive to non-EU buyers in Portugal
Other attractive incentives for overseas property investors in Portugal is that there is no wealth tax at all and negligible inheritance tax compared with other EU countries, adding to its appeal to non-EU property buyers.
Portugal’s Golden Visa scheme has continued to attract foreign buyers in its real estate market, predominantly from China, Brazil and Russia. Many purchase properties in Lisbon where relaxed rental controls from 2012 have triggered the rehabilitation of many of the city’s older, imposing buildings, many of which are being converted into luxury apartments.
Tourism has been booming in Portugal in 2015 with Porto, the country’s second city seeing more visitors this year after EasyJet launched direct flights from Bristol, Luton and Manchester in April. Porto has been rebranded to convey a more ‘youthful, cosmopolitan’ feel that is attracting holidaymakers like a magnet to the historic city, set on the banks of the Douro in the north of Portugal.
Improved tourism infrastructure and increasing visitor numbers has elevated interest among foreign property investors in Portugal through 2015. However, in the recovery of Portugal’s housing market, there is clearly a shift in interest from investing in the country’s traditional hotspots in The Algarve more towards buying for the domestic and holiday rental markets in Lisbon and Porto.
With supply still gathering pace to meet the huge demand for Portuguese real estate, there are still some bargains to be found although opportunities will become increasingly scarce unless there’s a pick-up in construction in the near term.
Article by +Roxanne James on behalf of Propertyshowrooms.com
US Hotel Performance Climbs to Record Levels in 2015
According to credit agency Fitch Ratings, hotels in America are reaching record levels of occupancy and profit, although in some markets the sector appears to be moving beyond its peak. In its quarterly update of the four major property types, Fitch recorded stability in hotel, multifamily and office, while the retail sector struggles on.
The US hotel sector has posted 59 consecutive months of revenue per average room (RevPAR) growth through July, benefitting from the tailwinds of favourable demand barometers and with low oil prices working in their favour. Fitch also sees positive signs for refinancing existing commercial mortgage-backed security deals, increasing property values in a landscape of continued low interest rates and limited supply
In its report, Fitch Ratings identifies four markets, including its hometown of New York City that should be watched for potential oversupply. Along with New York, which has by far the largest number of rooms under construction, other development hot spots include Houston, Seattle and Miami.
Although low oil prices bode well for most US hotel markets, they are detrimental for Houston and Calgary, as both areas dominate America’s oil and gas sector and have been hit hard by declining oil values. Other macro events, such as the impact of California’s drought laws on resorts with water attractions of golf courses, need to be taken into account, as does the possible dampening effect of the strong dollar on international tourism.
Another property sector with five years’ strong growth behind it as well as tailwinds for its future, multifamily also is marked by the prospect of ” significant ” increases in supply for some markets, Fitch says. That portends vacancy increases in some markets; citing data from commercial real estate researchers Reis, Fitch says Washington DC is already there. The apartment vacancy rate in the nation’s capital has moved upward from 4.2% in the second quarter of 2012 to 6.9% in Q2 of this year, as ” record new supply in the market over the past two years has been slow to be absorbed “.
Reis predict a vacancy increase for Houston as well, according to Fitch, with the energy hub’s new supply outpacing demand by 2019. That’s the case even as some multifamily projects may be postponed amid uncertainty over the impact of low oil prices on its economy. Conversely, Fitch notes that the diversity of Houston’s economy makes it difficult to gauge that impact, while in the near term, the city’s apartment vacancy has continued to trend downward, falling 100 basis points year-on-year to 5.7% at the end of the second quarter of 2015.
Conversely, the office sector in Houston has seen vacancies increase to 15.6% from 14.2% a year earlier. Its construction pipeline is the largest of any US city with 11 million square feet to be developed in coming years, exceeding even the 9.5 million square feet in the pipeline across New York City.
Outside of Houston, Fitch is keeping an eye out for a potential ” tech bubble ” in the Bay Area as well as Seattle, Boston and New York. That’s the case especially as certain tech-heavy submarkets in those cities, such as Midtown South in Manhattan and Cambridge/Route 128 North in Boston, have seen year-on-year rent increases of more than 7%.
Retail vacancy across the US has reached a new low, while rents have achieved modest growth of around 0.6% over the last 12 months. Fitch note its concern that continued store closings along with underperforming class B and C malls in secondary and tertiary markets will drag the retail sector down. Among the retailers announcing or having implemented closings recently include Gap, Macy’s and Golf Galaxy.
Despite mixed results from the different sectors of America’s commercial real estate sector, in general the outlook is highly positive, despite declining oil prices dampening growth. As a testament to improved affluence resulting from economic recovery, America’s residential housing sector is proving to have the most potential for continued growth as buyers seek the security of home ownership as confidence increases.
Article by +Roxanne James on behalf of Propertyshowrooms.com
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