NEWS
Cypriot Property Tops Popularity Charts for Chinese Investors
According to the Chinese property portal Juwai.com, the most property searches among Chinese buyers overseas were focused on the island of Cyprus during the second quarter of 2015.
The Juwaui.com Purchasing Intent Index showed that potential property buyers from China were principally looking for real estate in Cyprus , followed by Spain, Italy, Greece and Portugal from April to June this year.
Limassol and Paphos were the most popular destinations within the sunny Mediterranean island, with Cyprus’ major cities also identified as having increasing appeal to British buyers by UK property portal Rightmove.co.uk.
According to the study by Juwai.com, which indexes trends in sentiment among Chines property buyers overseas: ” Chinese interest in Cyprus starts from a particularly low base, given the island’s small size and the difficulties that investors have faced there – due to the banking crisis, the title deeds scandal and allegations of overpricing “.
The average price for Chinese property hunters in Cyprus was €720,058 in the second quarter of 2015, down 3% from the prior quarter’s average price of €739,952. ” The index for Cyprus has climbed highest, by 450% for the period – albeit from a low starting point in absolute numbers. This trend points to growth in future property transactions by Chinese buyers which will benefit these hard-hit economies, ” the study added.
It also revealed the index increased 102% since the previous quarter and 351% since last year and points to the appeal of Cyprus’ golden visa programme, currently one of the most affordable countries in Europe for residency to Chinese property buyers. Cyprus is outside the EU Schengen visa zone but it is unique in its offering of immediate citizenship by investing €2.5m in property. This grants a Cypriot passport and EU citizenship then allowing the freedom to work, travel, study and live anywhere within the EU, importantly including the UK.
The Juwai.com Purchasing Intent Index tracks online property hunting activity on one of China’s largest property portals, such as property searches, property detail page viewings, email enquiries, clicks to view, agent phone numbers and more. The data is not based specifically on transaction activity but on the property hunt activity that precedes and leads to transactions.
President of Cyprus Nicos Anastasiades, currently in China announced on Saturday that he would create 15 authorised centres for processing visa applications in Chinese cities where there are no Cypriot diplomatic missions.
China’s state shipping company COSCO is among several international companies interested in acquiring part of the operations of its main port at Limassol under a scheme to privatise state-owned businesses, according to the Chinese news agency Xinhua .
Addressing the China Business Forum, Anastasiades told potential investors how Cyprus could become China’s gateway to Europe and Africa. The forum was organised by the China Chamber of International Commerce, the Cyprus Chamber of Commerce and Industry as well as the Cyprus-China Business Association.
Cyprus’ President said the government was currently implementing a series of measures which included the simplification of procedures for the faster issuing of permits and licensing of investment projects and operation of businesses, as well as the speedier granting of residence permits to foreign investors.
” Opportunities for growth exist in the majority of economic sectors of Cyprus including commerce, tourism, privatisation of ports, electricity and telecommunications, shipping, real estate, large-scale development projects, education, health, research and innovation, ” he said.
Article by +Roxanne James on behalf of Propertyshowrooms.com
read moreChinese Investors Pull-Out of London’s Commercial Property Market
After a prolonged period of sustained and large scale Chinese investment in London’s commercial real estate market, some of the biggest players are now ditching deals at the eleventh hour of negotiations.
Concerns have been mounting that Chinese capital will seek refuge in dollar markets, particularly in view of sterling’s recent volatility, reducing its appeal as a safe haven currency for real estate investment.
According to the UK Property Weekly, a publication targeted at the Chinese-speaking community in Britain, a Shanghai-based private property conglomerate Shenglong Group has withdrawn from a £195m deal to acquire Thames Court office tower in the City of London. They also reported the Chinese mainland’s Anbang Insurance Group, which bought New York’s Waldorf Astoria hotel for US$2bn last year, has now abandoned its plan to buy one of the tallest buildings in London’s financial district, the 46-storey Heron Tower.
Furthermore, the South China Morning Post Sunday revealed that China Minsheng Investment, China’s largest private investment fund, withdrew from a £1.7bn integrated development in East London, seven months after a letter of intent was signed with the project’s owner in Shanghai.
In recent years, China’s government has made concerted efforts and taken strong measures to prevent capital flowing out of the country. However in the face of the government-induced devaluation of the yuan and the volatile stock market conditions in August, Chinese investors have relentlessly bought swathes of big ticket residential and commercial real estate in the prime markets of the US, UK and Europe.
However, there is a definite loss of appetite for UK commercial real estate assets among Chinese investors, whereas across the Atlantic, the story is quite different. Chinese buyers continue to love US real estate and some analysts are indicating that the appeal of dollar investments is causing them to abandon ship in European property markets.
According to research by global property consultancy CBRE, total Chinese investment in American commercial real estate stood at US$3.7bn in the first half of the year, more than 1.5 times the annual cash flows seen in 2015. Experts predict that Chinese investors will continue to invest in London’s residential markets, despite declining interest in the commercial sector.
Fred Richardson, a director at Hanover Private Office, which helps Chinese buyers acquire properties in and near London said that he doesn’t believe that there is a trend after the three recent incidents in the commercial real estate market. Many industry insiders are of the same opinion that London’s residential market activity is unlikely to be hugely affected by the loss of Chinese appetite for commercial property.
There is still much room for growth in the UK’s property markets although investment activity is now more concentrated in the regions rather than the capital. There are also many more vehicles for property investment that allow armchair investors access to the profits of huge funds with residential property holdings, through crowdfunding platforms with low entry levels.
Despite the small decline of Chinese money in London’s commercial real estate, it is largely due to the considerable force of their investment in recent years, that there is still plenty of buoyancy. In many respects, the path is now much clearer for other investors to profit from what is an undeniably – and at times illogically – an exceptionally rich real estate investment market.
Article by +Roxanne James on behalf of Propertyshowrooms.com
read moreSarajevo Rises in Popularity with Middle East Property Buyers
Bosnia has seen an influx of tourists from the Middle East in recent years and a growing number of property buyers from the GCC are seeking investment opportunities, particularly in the country’s capital, Sarajevo.
In response to rising demand from both tourists and investors, Dubai-based developer Buroj Property Development said on Saturday it plans to invest €4.3bn to build a luxury tourist resort just outside the capital, in what could be the biggest foreign investment of its kind in the Balkan country.
Bosnia, where Muslim Bosniaks are the largest of its three ethnic groups, holds significant cultural appeal to holidaymakers from the Middle East, something that Buroj seek to capitalize on with their largescale investment in the country’s tourist infrastructure.
” The initial investment in the project is worth around €920m, while the total investment will amount to €4.3bn ” over the next eight years, Ismail Ahmed, the company’s manager told a news conference.
The project, named the ‘Buroj Ozone’ will stretch over an area of 1.3 million m² and include thousands of housing units, hotels and the largest shopping centre in Bosnia, Ahmed said, adding that the project will create at least 10,000 local jobs.
Located in the municipality of Trnovo which lies below the Bjelasnica and Igman mountains, the venue of the 1984 Winter Olympic Games, around 20km from Sarajevo. Ahmed said construction is scheduled to commence in April or May 2016, pending a resolution of regulatory issues and necessary permits from the Trnovo municipality, which will lease the land the Buroj for 99 years.
” The aim of this unique project is to turn Bosnia and Herzegovina into a tourism leader of southeast Europe and to put its rich natural resources at the disposal of local and international clients. Many people associate this country with the war and this project will help change that image “, he said.
Since the end of the 1992-95 Bosnian war, which claimed 100,000 lives, Bosnia has fallen out of favour with foreign property investment. However, as tourism in the country continues to expand, property investors are starting to investigate opportunities in Bosnia, particularly in Sarajevo.
Tourism is now seen as an expanding industry that could provide Bosnia with a significant boost to its economy. Visitor arrivals in the first five months of 2015 were up almost 26% from the same period last year, and so it would appear that there is significant growth being experienced in the country. In fact, a World Tourism Organization study predicts that Bosnia is likely to have the third highest tourism growth rate in the world by 2020.
All of which is good to know from the perspective of the savvy property investor. Rising tourism indicates increasing yield opportunities, particularly in tourist hotspot areas and in Bosnia, the action is happening in Sarajevo.
Foreigners are showing rising interest in real estate across Bosnia and Herzegovina, Arabs and Russians in particular. Sarajevo is very attractive for Arabs who generally buy houses, apartments and land for the construction of office buildings. Apart from Arabs, investors from Syria, Jordan and Kuwait are also increasingly focusing on property investment, particularly in the luxury apartment market in Sarajevo.
Article by +Roxanne James on behalf of Propertyshowrooms.com
read moreBrits Snap Up One in Five Spanish Homes Sold to Foreigners
According to reports in The Independent newspaper, British property investors are taking full advantage of a weak euro in Spanish property markets in 2015, with one fifth of all foreign purchases in the country being snapped up by savvy buyers capitalising on the significantly increased purchasing power of the pound.
New figures published by the Spanish land registry show that Britons, more than any other nationality are taking advantage of a combination of favourable economic factors. In the last 12 months, the euro has fallen from around 80p to the pound to just over 70p, making holiday homes in the Spanish Costas more appealing to British buyers.
Slow price growth in Spain, coupled with rapidly rising property prices in the UK – in some instances by more than 10% a year – mean that Spanish property is making less of a dent in Britons’ wallets. In a report published by the Colegio de Registradores , 19.8% of all property bought by non- Spanish buyers in the first six months of 2015 went to UK buyers. German and other northern Europeans are stymied by the weak euro, while buyers from Russia and China have reduced activity in Spain’s property markets after being hit by sanctions or weakening domestic economies.
As many as 750,000 Britons live in Spain for at least part of the year. “The British market is by far the most important,” said Marc Pritchard, the Majorca-based sales and marketing director of Taylor Wimpey España, which develops homes in popular coastal areas. “There are several factors at play but people are starting to realise that after years of the Spanish housing market being depressed, it is beginning to pick up.”
Spain was one of the biggest victims of the global financial crisis, suffering one of the sharpest economic downturns in the Eurozone, sending property prices plummeting. Many British buyers suddenly found themselves heavily indebted and holding an asset that was worth a fraction of what they paid for it, after many had ploughed retirement savings into a dream home in the sun.
But greater confidence of economic stability at home is allowing people, especially those with plenty of cash, to look abroad for what are still bargain prices, some at 30% discount to peak levels in 2007. “Prices, while rising, are still low,” said Mr Pritchard. “Even in prime locations, properties are still at 2002 levels.”
The most popular destinations are the sun-kissed coastal areas, with some communities in Alicante and Marbella dominated by English-speaking residents. The house-moving website, Rightmove, says it is the grey pound that is driving the market. Britons aged between 55 and 64 are the most active in Spain, making up almost half of all enquiries about holiday homes. Those aged between 45 and 54 make up one third of all requests.
The research is in line with analyst-predictions made at the beginning of the year, ahead of changes to pension legislation in the UK which took effect from April, allowing pension savers to withdraw lump sums from their pension pot for any purpose. It was widely believed that this would stimulate property investment markets, particularly in BTL opportunities in the UK and Europe.
However, the dynamic of sharply increasing property prices in the UK has led to a shortage of investible asset opportunities, leading pension investors to look closer at overseas markets. When viewed with other countries in the Eurozone, Spain’s property markets remain consistently appealing to British buyers and this sentiment has increased further throughout 2015.
Crowdfunding opportunities are on the rise in Spain, as boutique investment companies get creative to capitalise on the increasing interest among British investors in income-generating property assets in the country. Housers, a Spanish-based crowdfunded investment group is hoping to raise around £90m to invest in 500 properties, most of them in Madrid, with a view to renting them out. House prices in the Spanish capital have risen by more than 5% this year.
Crowdfunding provides a real estate investment vehicle with entry levels from as little as £1,000, enabling investors to get in on lucrative property deals, while mitigating the risk considerably in the shared ownership arrangement. With the increased purchasing power of sterling buyers, Spain’s property markets offer the perfect opportunity to grow wealth from a lower base than at home and it’s perennial popularity amongst holidaymakers ensures a reliable return on investment and sustainable long term value.
Article by +Roxanne James on behalf of Propertyshowrooms.com
read moreLatest Archaeological Discovery in Turkey set to Boost Tourism
Turkey has been investing heavily in its tourist sector in recent years to great success and much of its capital has been spent in uncovering the country’s rich history which draws tourists like a magnet from all over the world.
Among the many areas being excavated to uncover Turkey’s ancient and fascinating history is the town of Anazarbus, formerly an ancient Cilician city situated in modern-day Antalya , and a popular area for tourism and international property investment. Archaeological digs have been underway since mid-2014 and the discovery of a gladiatorial ring, buried underground for centuries, has just been announced.
With a $335,000 grant from Turkey’s Ministry of Culture and Tourism also intend to excavate a nearby amphitheatre in the 4 million square meter city.
Beneath the amphitheatre are what are believed to be the arches and chambers where wild animals, including lions and tigers, waited to be brought into the stadium to fight the gladiators, according to Çukurova University archaeologist Fatih Gülşen, who is in charge of the project.
Anazarbus is on the outskirts of present-day Dilekkaya in the Kozan district of Adana Province, where the ruins are fast-becoming a major tourist attraction. The city had the only known two-lane road in the ancient world, stretching 2,700 metres and lined with monumental columns, which archaeologists are now restoring.
Now known as Antalya, the city is the hub of the Turkish Mediterranean and has a diverse landscape and dynamic economy, making it an investment hotspot for savvy property buyers. Antalya’s buoyant property market has transformed the region into one of the most exciting destinations for investment capital on the Turkish Riviera and with property prices remaining at significantly discounted levels from their peak in 2007, there are plenty of bargains to be found.
Antalya’s rapid economic growth has seen the city’s population double in ten years to more than a million in 2013 and property investors are increasingly looking for BTL rental opportunities in the local private rental market, achieving significant yields from occupying Turkish nationals in its up- and-coming suburbs. Antalya’s galvanised economy and subsequent positive growth throughout the region has bolstered real estate values together with the area’s international profile and there has been a flurry of investor interest in particular from buyers in the Middle East in 2015.
Turkey is a country where East meets West, giving it a diverse cultural history that has enormous international appeal. It’s wealth of ancient monuments and historical sites are a significant pull for tourists from all ethnicities and cultures and, for that reason, the country’s property markets are becoming much more active in terms of transaction volume which ultimately is pushing up prices in Turkey’s popular investment destinations, like Antalya.
The whole region is a goldmine of rental potential with annual yields reaching as high as 8% for exceptional sea view and exclusive Antalya properties and homes in Antalya Konyaalti and Lara Beach areas can be let out throughout the year for a steady annual income. Average property prices have increased by more than a staggering 100% over the past 10 years, making the area exceptionally desirable to property investors from all over the world.
Article by +Roxanne James on behalf of Propertyshowrooms.com
read moreFrench Regional Cities in Focus as Investors Look Beyond Paris
As property prices in Paris continue with their upward movement, restricting yield opportunities for international investors, many are now seeking value in regional cities such as Lyon, Marseille, Toulouse, Bordeaux, Nantes, Lille and Strasbourg.
According to JLL, France is one of the only European markets having a worse 2015 than 2014 although it is largely due to lack of product. At a presentation at the recent Munich trade fair, David Green-Morgan, JLL’s global capital markets research director said: ” Over the past 2-3 years we have seen a change in behaviour. Now investors, particularly from Asia are seeing real estate, particularly in Europe as a safe haven – and the emphasis on wealth preservation especially from Asia has become more important “.
Although many investors tend to focus on bigger cities such as Paris, a lot of capital is looking to generate more aggressive returns and therefore there is a rising interest in regional opportunities. This is a trend that is also happening outside London in the UK and outside the Big Six in the German market, (Munich, Düsseldorf, Frankfurt, Berlin, Hamburg and Cologne).
Peter Rawls, investor relations director for the huge Euroméditerranée urban renewal project on the sea front in Marseille, said yields in prime offices in the city are between 5.76% and 6.1%, comparable to other regional cities in France. Availability of capital is not the problem and many large investors such as Germany’s Union Investment Real Estate and US manager Pramerica are already allocated. ” The main challenge is that those who are already invested don’t want to sell “, he said.
However, regional cities are attracting families through quality of life and industry is stepping up to provide employment. The Airbus group has it’s headquarters in Toulouse with divisions in other French regions and its main helicopter arm is based near Marseille airport. Marseille also acts as a gateway to Africa which is attractive for commercial real estate investors, particularly from China.
Jean-Philippe Blangy, managing director of UK-based fund manager Tristan Capital Partners said his firm hasn’t yet developed a strategy for French regions but is beginning to look at more opportunities in France. All the major regional cities are attractive for potential office investment, while retail value can be found throughout France, even in smaller locations. ” We have €5bn of assets under investment and most of that so far in Germany, UK and Spain – but there is no specific focus on the regions “, he said. ” In France our investments are 100% in Paris and zero in the regions “.
According to Blangy, the yield spread between Paris and Marseille is much wider than that between Berlin and London, and even regional cities in Germany are closer to less attractive capital market yields.
” But in France the yields are still more attractive and the good thing in France is that you can still get decent financing “, he said, adding that foreign investors have an inaccurate perception of value in French residential property where he believes rent restrictions are no more hindrance than in Germany.
Green-Morgan indicated there is a reversal of the global trend out of the regions and into the major cities. In France, the efficient rail infrastructure is helping this trend. A lot of Asian capital is coming to Europe and holding long term, he said.
” Most of the Asian capital is focusing in general on locations where it can close deals more easily. But what we are seeing particularly from the Chinese capital is that it is much more inclined to go into regional markets now, and particularly on the development side “.
Article by +Roxanne James on behalf of Propertyshowrooms.com
read moreUAE Property Portal Raises $9m Venture Capital for GCC Expansion
One of the UAE’s most successful property portals, Bayut.com has announced plans to expand further into GCC property markets, after securing $9 million in venture capital from three global investment funds.
Bayut.com ‘s holding company Zamzama Property Group, which also controls Zameen.com, Pakistan’s leading property portal, has received investment from three funds including Vostok New Ventures, which also invested $34m in BlaBlaCar, the world’s largest long distance ride-sharing community last month.
Vostok’s managing director Per Brilioth has joined Bayut’s board of directors and the portal also welcomed Middle East property experts Simon Baker, Roland Tripard and Gilles Blanchard to its team as part of its significant push towards expansion in the GCC.
Haider Ali Khan, CEO of Bayut said: ” Bayut has been busy working on its business intelligence and gathering quality resources for expansion into Saudi Arabia and other GCC markets. The results have been overwhelming and, with the right people on board who possess the right know-how for expanding into new markets, we’re set to move forward aggressively “.
Property markets across the Middle East have shown mixed performance in 2015, with speculation swinging like a pendulum between boom and bust forecasts, particularly in residential markets. A shortage of affordable supply across the region has significantly reduced transaction volumes, according to official statistics.
However, foreign investment in GCC property is on the up, as property price declines outstrip falls in rental values, resulting in significant yield opportunities. This dynamic is particularly strong in Saudi Arabia which has seen transactions plummet 14% since last year, according to figures released by the Ministry of Justice in August. The Saudi Gazette reported that the total value of real estate deals completed so far this year has reached $74bn, including commercial and residential transactions.
Saudi property developer Ibrahim Al Subaie was quoted in the Saudi Gazette as saying: ” The percentage of real estate deals in some parts of north and south Jeddah and in Asfan and Dhahban dropped by 20% since the beginning of the summer holiday. In areas with low population density the rate dropped by 30% “.
Despite difficult market conditions, Bayut has continued from strength to strength, returning more than 100% year-on-year growth across all metrics so far in 2015, including paying agencies and traffic while its competition stagnated in the face of a slow UAE market .
The portal’s newly appointed Chairman Gilles Blanchard, one of the founders of SeLoger, the largest French property portal commented: ” Bayut not only has the best brains in the business but also boasts the requisite expertise and resources for providing the best solutions to the industry’s needs. With the excess capital at our disposal, we are going to invest further in technological innovation and providing an unprecedented quality of service in the markets we tap into “.
There are plenty of opportunities for price growth in Saudi’s property market, with realtors Colliers International identifying an investment hotspot called Half Moon Bay, located south of Al Khobar and Dhahran. The region is frequently visited by Saudi families during weekends and holidays and it’s a popular place to own a vacation home.
With significant residential development in the area and more in the pipeline, Half Moon Bay has experienced high demand, achieving 152% higher than average selling rates in 2014 and on target for a similarly stellar performance this year. Colliers attribute the significant rise in interest in Half Moon Bay to its leisure focus, with villas and chalets in midscale and upscale resorts in the area.
Bayut’s considerable experience of operating successfully in difficult conditions and identifying growth areas ahead of the competition through its dedication to top quality property market research is set to project the portal to dominance in the Middle East, as it expands further into other GCC markets.
Article by +Roxanne James on behalf of Propertyshowrooms.com
read moreLondon Still Tops Popularity Polls for European Property Investors
According to the latest LaSalle Investment Management’s European Regional Growth Index (E-REGI) , which ranks Europe’s top 100 cities, London has once again taken first position in the ranking.
The report highlights London’s resilience combined with its deep investment market, justifying the city as a target for a wide range of investment strategies. Other UK cities increasingly coming to the fore include Manchester, ranked 17 th and Bristol at 25 th position, both having climbed three spots in the European ranking, while Birmingham is up two places at 37.
” Having published this index for 16 years, we now have an unrivalled understanding of the different economic patterns in Europe’s leading cities, ” said Mahdi Mokrane, LaSalle Investment Management’s head of research and strategy for Europe.
” The index not only determines which real estate markets are likely to out or underperform in the medium term, but combined with our on the ground expertise, we also use the index as a strategic framework to match cities with the most relevant investment styles, ” he explained.
Paris takes second place once again according to the survey and the top two cities are Europe’s most consistent performers, although balanced scores and consistent performance over time are not limited to the top of the ranking. Munich, Frankfurt, Hamburg, Stuttgart and Amsterdam are also suited for value-add or opportunistic strategies, the report states. Düsseldorf, Mannheim-Karlsruhe, Cologne-Bonn, Rotterdam-The Hague, Utrecht, Edinburgh and Leeds are also included in the group but the report says core investment in prime markets would be more suited given their smaller market size.
Emerging markets that are receiving increased attention from real estate investors seeking enhanced returns are found in Turkey the report states, with Istanbul scoring highest due to strong growth performance and outlook and the cities of Izmir and Ankara as solid contenders. The cities of Warsaw and Prague continue to benefit from balanced economies and progressive policies, leading to increased growth and investment activity in the Polish and Czech Republic capitals.
Meanwhile in London, there seems to be no let-up in foreign buyer interest in the city’s real estate and there are still plenty of entrants in the market wanting to buy in the capital. Foreign investors are particularly dominant at the top end of the market. Of the 111 deals worth £150m in the past three years, 84% involved foreign buyers, according to international estate agents Cushman & Wakefield.
Total investment volumes in the central London market hit a record £24.6bn last year, Cushman & Wakefield’s data shows, and the agent predicts that this year could exceed that figure. The autumn deal-making season is usually the busiest, as investors seek to empty their bank accounts before the year-end and experienced advisers expect the coming months to see a particularly large number of transactions.
Stephen Down, head of central London and international sales at estate agency Savills, says there will be a ” fairly substantial uptick in stock coming on to the market “.
” The temptation is to think that this means they are calling the market, but that’s not the case, ” he adds. ” It is often private equity companies looking to take profits and return them to investors “.
The extended global downturn after the financial crisis meant that London’s commercial property market took a long time to recover, Mr Down says, and some fund managers that brought early in the cycle are reaching the end of their fund’s life and need to cash-in.
It seems that those leaving through the revolving door of London’s property market are still bumping into newcomers heading in the other direction. Despite prices and yields being back at pre-crisis levels, plenty of investors are still piling in.
The biggest buyers in the city in the year to date have been Canadian and US investors, according to Cushman data, investing £6.5bn between them so far this year. They are ” the bedrock of the market “, Mr Down says. ” The market in the US has recovered and there is limited stock to be bought, so as a result that money is flowing over here “.
Article by +Roxanne James on behalf of Propertyshowrooms.com
read moreMontenegro 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
read moreUAE 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
read moreDemand 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
read moreMore 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
read moreTurkish 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
read morePortuguese 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
read moreUS 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
read moreAmerica’s Property Markets Officially in ‘Clear Buy Territory’
A new report published by academics in Florida reveals that the US as a whole is moving deeper into buy territory, with home ownership expected to produce greater wealth on average than renting.
The Beracha, Hardin & Johnson Buy vs Rent Index (BH&J Index) reveals that as of the end of the second quarter of 2014, the housing market in the US is generally trending towards home purchase, as numbers of households in private rented accommodation have started to decline.
” The US as a whole is still in clear buy territory,” said Ken Johnson PhD, a real estate economist who is one of the index’s authors. “The cities of Cincinnati, Chicago, Cleveland and New York City are deep into buy territory “.
As prices for property in the US start to reflect better core value in certain areas, more affordable opportunities for home ownership are becoming available and American buyers are responding positively to the improved dynamics. Miami and Portland, two cities which in recent years have been edging further into rent territory have ” pulled back from the edge, ” Johnson said. ” It’s coming back toward a toss-up between buying and renting. That’s a good sign for home pricing in Miami and Portland as it suggests prices are going to level off in these metro areas “.
According to the report, Dallas and Denver dipped slightly deeper into rent territory, making renting the preferred method of wealth accumulation on average. Houston however, was plunged alarmingly into historic levels of rent territory.
” Housing is particularly worrisome coming in with a score or .633, ” Johnson said. ” Rapid property appreciation combines with shaky economic prospects to put Houston on the watch list for a near-term dip in housing pricing “. Relatively flat income growth and rising index scores that strongly favour renting are attributed to growth in the rented sectors of Dallas and Houston.
Honolulu, Pittsburgh, San Francisco and Seattle all sit on the fence in terms of preferences for ownership and renting. The report concludes that in these areas, the spread between monthly rent payments and ownership payments is at the point where neither ownership nor renting is statistically favoured.
The BH&J Index attempts to answer one of the toughest questions American consumers face: Is it better to rent or buy a home in today’s housing market? The quarterly index is designed to signal whether current market conditions favour buying or renting a home in terms of wealth creation over a fixed holding period in a particular market, relative to historical market conditions and alternative investment opportunities. The study examines the entire housing market in the United States and isolates the markets of 23 key cities.
The results of the index are standardised between 1 and -1, with negative scores favouring ownership and positive scores, renting. The BH&J Index provides information on both the direction and health of varying housing markets as well as collateral information for real estate professionals, developers, lenders and housing policy makers.
Realtytrac , a real estate information company, compiled data on 285 counties across the United States analysing the economics of buying versus renting a home in 2015. They found the average cost to rent or own a 3-bedroom house and determined the percentage an average worker would have to spend from their weekly income.
The report revealed some surprising results: ” The separate Buy-or-Rent analysis released today found that making monthly house payments on a 3-bedroom property is more affordable than paying fair market rent on a comparable property in 188 of the 285 counties analysed, representing 66% of the areas included in the survey “.
In general, the US is experiencing an increase in confidence among domestic home buyers that gives a strong indication economic recovery is improving nationally. Property prices in the majority of areas in America have reached levels that are more affordable meaning the rental option is becoming less attractive for those looking to increase their wealth prospects.
Article by +Roxanne James on behalf of Propertyshowrooms.com
read moreThai Property Market Showing Signs of Resilience
The outlook for Thailand’s property sector remains positive as domestic demand picks up to outweigh recently declining investment of foreign capital.
Foreign investment in Thailand’s property market took a hit from the Bangkok bomb blast in August but the sector is resilient and the long-term outlook is positive according to analysts and developers in the country.
James Pitchon, executive director of consultancy CBRE Thailand said: ” The tragic blast at the Erawan [Shrine] has hurt the overall market sentiment a bit. We were quite worried in the week afterwards but the overall state of the economy is a far more important issue driving the performance of the property market rather than a single tragic event “.
Koh Keng-Shing, the chief executive of Hong Kong-based Landscope Christie’s International Real Estate said one of his Thai clients, the developer Ananda, postponed its project sale campaign in Hong Kong to late September, although none of its buyers had backed off from deals in late August because of the bombing.
Thailand’s real estate sector is more domestically driven, reliant upon large-scale foreign capital. International buyers have been concentrated in the country’s luxury property sector, where prices are usually over €250,000. In central Bangkok, approximately 20% of high-end condo buyers are foreign, Pitchon said, with investors from Hong Kong and Singapore snapping up the lion’s share.
The blast in Bangkok also took a toll on Thailand’s tourist arrivals which had potential to hit the country’s hotel sector and resort related developments, although according to a recent report from Daiwa Capital Markets , it may only take three months for Thailand’s tourism to rebound after the blast.
Jonathan Umali, director of asset management at Arch Capital said: ” The market is very resilient. It dips down for a quarter or six months and it goes back up “. Umali is planning to launch phase one of his mixed-use 13 hillside villas and 75 beachfront condos that are priced from €200,000.
For tourism-driven resort properties such as Umali’s, being far from Bangkok gives it some insulation from urban upheaval. In the past, these types of properties have been popular among foreign expatriates, but since the global financial crisis in 2009, demand has cooled slightly, according to analysts.
Despite a moderate decline in foreign in interest in Thailand’s property, Chinese buyers are stepping up activity in the country and according to Chinese property portal, Juwai.com, Chinese appetite for Thai property is larger than for any other country.
The average price of real estate searches by Chinese buyers has also increased significantly by 39% since the beginning of the year, representing an increase in budget of 111% on 2014 with Chinese buyers seeking properties with an average price of €534,723.
Juwai.com CEO Andrew Taylor said: ” Chinese buyers are taking advantage of their strong currency and proximity to Thailand to invest in vacation homes and investment properties. Over the past five years the renminbi has gained 19% on the baht. Chinese businessmen with commercial interests in Thailand were among the first buyers of local residential real estate. Now you see vacationers and investors joining their ranks. The top destinations in Thailand are Pattaya, Koh Samui, Phuket, Chiang Mai and Bangkok “.
” Thailand could greatly profit from the projected massive increase of Chinese international property investment in the coming decade. It could easily displace other countries that are currently more popular with Chinese buyers. Thailand has advanced from the 10th most popular country with Chinese buyers to the 9th,” he added.
Increasing Chinese tourism in Thailand has been a particular incentive for Asian developers to pour investment capital into the country’s commercial real estate market. The hotels and hospitality sector is booming in 2015 as major international brands steam into Thailand’s most popular resorts such as Bangkok and Pattaya, building to meet ever-increasing tourist demand, particularly from China.
Article by +Roxanne James on behalf of Propertyshowrooms.com
read moreDubai’s Real Estate Sector Shows Signs of Slowing
According to the latest Dubai Real Estate Tracker survey published by UAE bankers Emirates NBD, the majority of real estate agents in Dubai are suggesting that price declines over the last three months strongly indicate a slowdown in its property market.
Just 13% of the estate agents surveyed by the bank in the report, produced by financial information services provider Markit, recorded increasing sale values. An alarming 60% of respondents are of the opinion that Dubai’s real estate market has embarked on a downward spiral, reflecting a general loss of appetite among international property investors.
The latest data from buyer enquiries generated by estate agents in the Emirate shows that softer market conditions have resulted in great caution among buyers in the last three months, with 54% of agents noting declining investor sentiment over the period.
Khatija Haque, head of MENA research at Emirates NBD said: ” The Dubai Real Estate Tracker survey is consistent with price data and shows a further slowing in the residential real estate sector over the summer months. While the slowdown is partly seasonal, other factors including concerns about the economic outlook and US dollar strength have weighed on demand “.
The survey confirms increasing reports from leading analysts and consulting firms in the UAE that prices for property in Dubai are witnessing a sharp decline as the real estate sector continues to soften.
Global real estate consultants CBRE recently revealed that property sales in Dubai during the third quarter of the year were around 2% lower than the sales during the previous quarter, while property prices declined by 6% over the same period. Price data shows that property values in Dubai’s residential market are currently 3.1% lower from the same period a year ago and 21% below the 2008 market peak.
Nevertheless, the Dubai Real Estate Tracker indicates a rebound in confidence in its outlook for the next 12 months, with 45% of agents expecting a rise in average property prices, outstripping the 30% forecasting further declines.
Rents in Dubai’s residential segment remained stable over the three months to August, with estate agents reporting both a rise in newly-agreed rentals and increasing levels of new enquiries, according to the survey. ” However, the lettings market remains robust both in terms of the volume and price, suggesting that population dynamics are supportive of the real estate sector, ” adds Khatija.
Some real estate professionals believe that the current downturn in Dubai’s property market is better characterised as a stabilisation rather than a softening and remain of the opinion that the time is right for a price correction, following the rapid growth experienced over the last two years. Fears of a potential property bubble have now been replaced with growing confidence that stabilisation in Dubai’s real estate sector will continue to attract investment from overseas.
The report shows that residential real estate prices and sales volumes for apartments in the Emirate appear to be holding up better than villa prices, with just 56.8% of agents reporting declining apartment prices compared with 62.2% recording lower villa sale values.
The survey covered nine apartment communities and five villa communities in investor zones in Dubai and showed declines of 2.7% and 2.6% for apartments and villas respectively over the research period. However, transaction volumes remain broadly unchanged, indicating there is still a healthy appetite for investment property in the Emirate and declining prices may actually go some way to boosting buyer interest in the coming months.
Article by +Roxanne James on behalf of Propertyshowrooms.com
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