ALL THE WORLD'S A HOME

GLOBAL PROPERTY MARKET FORECAST 2014

2014-01-08T08:30:00.000-08:00

Developed Nations in Favour

Sometimes the global property market resembles Alice in Wonderland. Only the unexpected can be expected with certainty. Look back at forecasts for 2013 and we can see how difficult it is to predict what might happen in 2014. For example, highly respected economists said British property values would drop 2 per cent last year. In reality, they rose 7 per cent. Continued high levels of foreign investment in London, the introduction of Government subsidies for home-buyers in its Help-to-Buy scheme and a stronger-than-forecast economic recovery were unexpected events that helped lift British home prices.

Whilst calculating accurate property price rises can be problematic, some broad-brush trends are easier to forecast. East Asian governments, like Singapore, implemented measures to cool their overheating property markets in 2013, and they can be expected to try and keep a lid on prices again in 2014. This means values could fall by as much as 15 per cent in Hong Kong and rise modestly at best in China property consultancy, Knight Frank, forecasts. In the BRIC cities of Moscow, Mumbai, Hong Kong and Shanghai investment returns will be low in 2014, because of deteriorating market conditions forecasts property consultancy, Savills.

Bric buyers busy

With their home countries increasingly less favourable for investment, growing numbers of Russians, Chinese and Indians will buy properties elsewhere in 2014. According to Savills, Chinese investment overseas will grow by at least 20 per cent per year over the next decade, a reflection of their increasing wealth. Middle Eastern investment abroad is likely to grow in 2014, as business people seek to avoid conflict zones within their region and others look to re-invest oil and gas profits in international property markets.

Keen to attract Asian and Russian investors are many western countries, whose governments want to stoke up activity in housing markets to fuel faltering economies. Spain and Greece joined Portugal, Ireland and Cyprus in offering residency to overseas investors in 2013, and if the initial rise in buyer enquiries is a guide, this ought to result in increased property sales in 2014.

Small hints of a turnaround in the holiday home markets of battered southern European property markets were recorded in late 2013, with prices rising in Spain's Balearic islands, for example. An influx of wealthy overseas buyers may help to stabilise luxury home prices in Europe's Mediterranean markets in 2014. In Paris, the outflow of wealthy French seeking tax exile abroad is likely to be balanced by an inflow of wealthy foreigners taking advantage of price cuts to purchase trophy homes in this architectural oasis.

eurozone monster

But the Jabberwock, a monster that terrorised characters in Alice's Wonderland, has a European, real-life equivalent – the unresolved eurozone crisis. Continued fear of possible economic collapse among Europeans will suppress home-buying activity within the eurozone, counteracting increased investment by foreigners. The European Central Bank has pumped money into the region's financial system to ensure banks don't go bust and loaned money to individual countries like Greece, but the debt mountains remain, unemployment is high and strong economic growth a distant memory.

In some respects, eurozone members resemble chaotic characters at the Mad Hatters Tea Party, because some countries, like Portugal, are cutting property taxes to attract investment and then contradicting those moves by raising other property taxes to fund debt repayments, or even, as is the case with Italy, introducing additional property taxes in 2013 and then considering whether to abolish them in 2014 for the same reasons.

Britain "too strong?"

In Britain, estate agents fret that politicians' talk about the imposition of a possible “mansion tax” is deterring foreign buyers. Prices in central London, where foreign buyers are most active, slipped 2 per cent in the final months of last year. However, the capital's record high prices are likely to be a bigger issue for buyers, and this could lead to a slow down in the number of sales made in 2014.

Outside of London, property prices are likely to strengthen as more Britons enter the housing market this year. And yet, Savills warns that Britain's housing market may fall victim to the country's economic success in 2014 if the Pound strengthens on international exchanges, because that might make its bricks and mortar prohibitively expensive for overseas investors.

Tax havens boom

Some Caribbean tax havens have extended residency schemes to attract more High Networth Individuals to their shores, and this could lead to increased property sales in 2014. For example, Barbados introduced Special Entry and Reside Permits last September which allow wealthy individuals to come and go from the island as they please.

The Caribbean's emerging rivals for beach-combing tax exiles, the Indian Ocean nations of Seychelles, Maldives and Mauritius, will continue to grow in our collective consciousness during 2014, as more luxurious resort communities are built on their sandy sea shores.

Key hotspots

The United States housing market resembles a patchwork quilt. At one extreme, property prices in Manhattan are above their 2007 peak, while at the other end, the bankrupt city Detroit is having much of its housing razed to the ground as inhabitants leave to start new lives in towns and cities with brighter economic futures. Perhaps the US city to watch in 2014 is Miami where Savills says prices for luxury condos are within a whisker of their 2007 peak following an influx of South American second home buyers over the past couple of years.

Other cities around the world that might attract growing numbers of homebuyers in 2014 are Tokyo, Dubai and Hamburg. Tokyo may be ripe for investment, because the city's capital values and rental returns are rising. Dubai's property market, which temporarily topped some international indices for price growth in 2013, will continue to perform strongly in 2014, as its economy bounds forward.

Few international property buyers considered Hamburg in the past, but that is changing. “International standard” housing projects in Germany's largest port city are being marketed to overseas buyers for the first time, including the water-front, Sophienterrassen project where developer Frankonia, is building 191 homes with Karl Lagerfeld-designed communal areas.

Brands popular

Operating at the top end of the housing market Frankonia is a well-known brand in Germany. Increasingly, when buying newly-built properties overseas, home-buyers want to purchase from reputable brands, because they feel more confident about how the development will turn out. The services and facilities available to residents at branded schemes, including gyms and home cleaning, appeal too. With growing numbers of developments branded and serviced by top hotel chains like the Mandarin Oriental, their popularity is likely to grow stronger in 2014.

Lastly, a look at an overhyped housing market - Rio. Estate agents say hosting the FIFA World Cup 2014 and Olympic Games 2016 will result in increased international attention which will boost sales of homes to foreigners. However, the chaotic organisation of these sporting events, street riots and high levels of crime are generating the kind of publicity that most estate agents could do without. Also, much of the promised new infrastructure will not be completed.

If the property market still appears a bit bewildering in 2014, consider the Cheshire Cat's advice to Alice: “You just go where your high-top sneakers sneak, and don't forget to use your head.”

MALDIVES HOLIDAY HOMES FOR SALE

2013-10-10T09:37:00.000-07:00

Sonu Shivdasani is the first resort operator to sell holiday homes in the Maldives since the archipelago's government gave permission for this in 2010.

Located at his Soneva Fushi resort on the island of Kunfunadhoo, a 35 minute seaplane-ride away from the capital, Male, the villas look out over the turquoise waters of the Indian Ocean.

Shivdasani has sold eight villas, mainly to Europeans, since marketing began in 2011. A total of 16 private residences are on sale through agents, Savills, at prices starting from GBP3 million for a three bedroom home with 20 metres of beach frontage. Built from wood and thatch, each villa can be altered in consultation with the architects, and has its own swimming pool. Construction of each villa starts when a buyer's offer is accepted, and takes about eight months.

Barefoot millionaires

The resort operator says there will be a maximum of 65 villas. At least one-third of the island, which is 1.4 kilometres long and 400 meters wide, will remain undeveloped jungle, he promises.

Leases for villas are only 50 years, but can be renewed on expiry. Buyers can look forward to annual returns of 4 to 5 per cent if they place their properties in the rental pool says Shivdasani who is chief executive officer of the Soneva Group.

Although gourmet dinners and fine wine tasting is available, life at the resort is mainly about walking around barefoot and enjoying the sea and beach.

“We offer intelligent luxury,” says Shivdasani, “we offer unique experiences, things that people can't do in London or New York, such as dolphin cruises and having an overnight stay in a tent on a sandbank.”

Forty-six treatments are available at the resort spa.

Private islands

Owning your own private island in the Maldives is possible. Many of the 1200 islands in the Maldives are available for sale for private use. They include Kendhivaru, a 17 hectare private island in the Noonu Atoll, which is on offer for GBP2.5 million through real estate web site, Private Islands Online. It has a new, five bedroom, five bathroom bungalow and separate staff quarters, plus two generators, desalination plant and fruit and vegetable garden. The owner will sell for GBP1.9 million if the buyer is a resort developer who agrees to share future proceeds.

Floating homes

Prospective holiday home buyers concerned about the possibility of rising sea levels brought about by climate change can purchase a property that floats. Dutch Docklands, a Netherlands headquartered developer of floating structures, is building five “lagoons” that will be anchored to the seabed in the North Male Atoll and which will rise with sea levels. More than 700 homes for sale will be built on these lagoons.

The lagoons include Ocean Flower, a flower-shaped quay that will provide access to 185 water villas situated over the sea. Starting prices for villas which will have two, three or four bedrooms, start from GBP1 million. Scheduled for completion in 2014, the villas are on offer through sales agents, Christies International Real Estate, which is also marketing Amillarah, an archipelago of 43 floating private islands, the scheme's second “lagoon”. Depending on client specifications, prices for these private islands start from GBP6.3 million.

Other lagoons include the world's first floating 18-hole golf course, which will have villas overlooking the greens, and Greenstar, a floating star-shaped hotel, shopping mall and convention centre. Plans for a Venice-inspired floating village with townhouses completes the project.

HOW TO FORECAST PROPERTY PRICE RISES

2013-08-05T05:26:00.000-07:00

Follow the agents who follow the money

Want to know where property prices will rise next? Follow this blog's Property Hotspotter column which tracks estate agency branch openings. This shows where property markets are hot or heating up.

Estate agents open or expand operations in an area when their research shows transaction levels are rising. When buyer demand goes up, prices usually do too.

Here's proof that Property Hotspotter works. In August 2012, this blog showed four agencies had expanded in six UK districts. One year later, prices have risen in each district by the following amounts:

Henley +7 per cent

South Kensington +8 per cent

Central Kensington +7.4 per cent

Stockwell +3 per cent

Tooting +7 per cent

Mitcham +4 per cent

(source: zoopla)

See my Financial Times article on where and why agents expand by clicking on this link http://www.ft.com/cms/s/2/28b251d0-428d-11e1-93ea-00144feab49a.html#axzz1rARj2Xfz

Here are estate agency openings for summer 2013 -

Notting Hill – Chesterton Humberts

Greenwich – Winkworth

St Albans - Winkworth

Bangalore, India – Winkworth (Franchises in New Delhi and Chennai to follow later in 2013)

Belgravia, Pimlico, Westminster, Knightsbridge (lettings) – Belvoir (purchased lettings agency, Soames)

Shropshire (lettings) – Belvoir Telford (purchased managed portfolio)

Suffolk (lettings) – Belvoir Ipswich (purchased lettings agency, Prime Residential)

If you want to add any branch openings/expansions to this list please add them to the comments section or tweet me @richardgwarren or email me at richard.warren@rocketmail.com

BRITISH PROPERTY BOOM STARTS

2013-07-29T09:11:00.001-07:00

Where will house prices rise?

You read it here first. Britain is about to have a property boom.

British homeowners will owe their good fortune to the “ripple affect”, a phenomenon that has characterised every modern British housing boom.

The ripple affect works like this, property prices rise in London, then spread out across the rest of the country, region by region, moving north and west, until finally everyone agrees “there's nowt like bricks and mortar as a good investment”. We are at an early point in the process with price rises rippling out of the British capital into parts of south-east England. One or two markets further afield are also looking busy.

London leads the way

So, here's a snapshot of where we are at now. Property prices in the most desirable parts of London, like Kensington and Chelsea, are 10 per cent above what they were in early 2008, at the height of the previous housing market cycle prior to its collapse later that year, figures from website zoopla show. Property prices for most of the rest of London are close to parity with 2008 levels.

Across Britain as a whole however, prices remain 8 per cent below peak levels even when the London price surge is added, which goes to show how depressed most of the rest of the country's housing market remains. In northern English cities like Bradford, home prices are 15 per cent below where they were five years ago.

But, in south east England, housing markets in prosperous towns and cities have been recording small property price rises for one or two years. Slightly further afield, in some West Country and East Anglia locations, property transactions and prices are increasing, positive evidence that the ripple affect is strengthening. It has been felt most strongly in the West Country city of Bath where prices have jumped 7 per cent over the past 12 months.

Ironically, the cause of the ripple affect are those high property values in the capital. When Londoners find they can no longer afford to buy or rent a home in their city, they look further afield, and they are doing so in ever greater numbers. Estate agency, Knight Frank, says most demand for homes in cities like Bath, Oxford and Guildford comes from priced-out Londoners.

Overseas buyers impact

Overseas buyers, the biggest group of purchasers of multi-million pound homes in central London, have been making their presence felt in the capital's hinterland over the past year, especially in the exclusive, private housing estates of Surrey and Berkshire where they can get more for their money than in Mayfair or Knightsbridge.

Individual British homeowners are knocking down their own homes to build “palaces” for Russians, Kazaks and Arabs. At Weybridge, Surrey, a former Rolls Royce executive has replaced his 100-year old home with Newnham, a house two-and-a-half times the size, complete with swimming pool, massage room and the large entertaining spaces sought by Russian oligarchs. He wants GBP14 million for it.

Better economy, better colleges, better transport help

Some businesses are escaping London's high office costs for outlying locations and this gives added momentum to the ripple affect, because employers and staff relocate with them. Brighton has 1,000 digital and technology businesses operating there, some of them former London operations, and this is contributing to its population and property values growing faster than the national average.

Improving transport links is giving a boost to some housing markets. Property prices have been rising in Bristol and Cardiff since plans were announced last autumn to electrify rail links between these two cities and London. The improvements will reduce train journey times between Bristol and the British capital by 20 minutes. Knight Frank estimates electrification will add up to 10 per cent to the value of homes in parts of Bristol.

The expansion of world class education facilities, including universities, independent schools, language colleges, teaching hospitals and further education colleges in cities like Oxford and Cambridge, and their ever closer links to private enterprise, is generating increased demand for homes from burgeoning numbers of students, teachers, lecturers, businessmen and scientists.

The development of research facilities at Cambridge University has made “Silicon Fen”, the science parks outside Cambridge, an international hub for software developers, biotechnologists and electronics specialists.

Oxford University's biggest construction project for more than a century, the 10-acre Radcliffe Observatory Quarter, will add 7 per cent to the value of homes surrounding it Knight Frank forecasts. Nearly completed, it consists of libraries, teaching premises, student accommodation and medical facilities.

A farming revival in some locations is having a positive impact on housing markets in smaller market towns, including Marlborough in Wiltshire. Businessmen have bought up tracts of countryside surrounding the town, increased farm productivity and launched new enterprises, like brewing. These activities combined with an expansion of the town's world-famous independent school, Marlborough College, have created jobs, drawn visitors and increased trade between businesses, underpinning demand for homes there.

Southern construction boom

Construction levels may be depressed nationally, but in London and much of southern England they are rising as house-builders compete to accommodate incomers. Bath is experiencing its greatest level of building activity since post-war reconstruction in the late 1940s. New schemes include Somerset Place, where Regency houses lining one of the city's five famous crescent-shaped roads are being restored by developer, SIAHAF. Used by a university since World War Two, the yellow Bath-stone buildings are being turned back into homes - nine houses and 20 apartments, with prices starting at GBP1.65 million. Six new houses are being constructed behind the crescent.

To the north, Edinburgh homes are rising in value, even though most of the rest of Scotland remains mired in slump. As Britain's second largest financial centre, Edinburgh's economic fortunes can more closely mirror that of London than of other Scottish cities, and this is reflected in its housing market trends.

Locations to watch in the English north and Midlands include Wilmslow in Cheshire, famous for all its millionaire footballer residents, and Stratford-upon-Avon, Shakespeare's birthplace in Warwickshire, which is attracting overseas buyers. Upmarket estate agency, Sotheby's International Realty, has expanded its operations in both locations to cater for increased buyer demand.

A housing market needs a strong economy to underpin it. With a double dip recession avoided, GDP growth forecast to accelerate over the next two years, and employment levels rising, Britons are starting to think it is safe to buy a home again. This ought to ensure price rises ripple out further from London.

Help to buy

The ripple affect will be given extra momentum by the Government's Help-to-Buy scheme announced in March which targets homes valued under GBP600,000. It will provide buyers with equity and loan guarantees equal to up to 40 per cent of the value of a property, thereby alleviating the difficulty many have with raising the large deposits demanded by banks. Mortgage lenders have been getting busier since the scheme was announced. Nationwide Building Society says mortgage demand from first time buyers has increased 70 per cent year-on-year.

The extent to which this embryonic housing boom is sustainable will depend on the balance between sound economic and demographic fundamentals on the one hand and government intervention on the other. Where Help-to-Buy is a dominant driving force, price rises will not be sustainable in the longer term, because they rely on buyers taking on large debts, but where improved transport links, economic recovery and growing population underpin demand, they ought to be. The towns and cities mentioned in this article fall into the latter category.

(This is a version of my article which appeared in Identity magazine, UAE)

NEW MARRAKECH HOLIDAY HOMES

2013-07-01T07:43:00.001-07:00

Most Riads Redeveloped

Entering La Villa des Orangers was like being told a secret. Here a visitor can discover the type of tranquility usually only found in churches, temples and places of exquisite natural beauty.

Walk through a quiet, high ceilinged corridor lit by lanterns and into an inner courtyard where, in the middle surrounded by four orange trees, an ornate stone fountain burbled gently. The sweet smell of incense wafted across from an alcove where lantern light illuminated the blue and white mosaic ties decorating floors and walls. Above, galleries overlooked the courtyard on four sides.

Through another corridor into a second, bigger inner courtyard which had a shaded seating area at one end and swimming pool at the other, with exotic, flowering plants, including more orange trees, occupying most of the rest of the space. This lantern-lit courtyard was also overlooked by first floor galleries, and everything, water, leaves and air was still. It could have been a Moroccan-style setting for a performance of Midsummers Night Dream.

La Villa des Orangers is a boutique hotel, but the type of building it occupies is known as a riad, a traditional Moroccan-style house, the must-have abode for adventurous Europeans in north Africa during the early noughties when many of these largely unmodernised properties were on the market at remarkably low prices, only GBP40,000 in some cases. Set around one or two inner courtyards these two storey houses are unusual in that they are largely windowless on the outside, providing occupants with a high level of privacy and protection from noise.

The largest Marrakech riads are palatial and rarely come onto the market these days. Developers have been restoring them, converting some into hotels and restaurants, and selling others as upmarket homes. With most Marrakech riads now restored and occupied, many developers are turning their attention to building villas on the outskirts of the city where a very different lifestyle is offered to residents.

Modern Suburban Villas Popular

New suburban villas include Dar Tourtelle, a three bedroom home situated in the Ourika Valley to the south of Marrakech at the foot of the snow-covered Atlas Mountains which can be seen from the property, as can the surprisingly green surrounding countryside which is filled with trees – palm, olive, cypress and eucalyptus.

On offer for GBP650,000, this home is in the Bab Adrar development where Moroccan architect, Karim el Achak, has designed eight villas, each with a different floorplate to the others. The architecture blends traditional Marrakech style, such as building with red clay, with European comfort, including 3.5 meter-high ceilings which are for good air circulation, a concept French colonials introduced to Morocco during the early twentieth century.

With daytime temperatures ranging from between 20 degrees centigrade in winter to 45 degrees centigrade in summer, the villa has plenty of shaded, outdoor spaces, including a roof terrace and garden terrace.

The development has a communal tennis court and hamman. Its developer is British entrepreneur, Tim Buxton, who started out restoring riads at the start of the last decade before moving into building villas.

“The riad market ended in 2005, following a tripling or even quadrupling of prices,” says Buxton, “Now it is all about villa construction and the development of resort communities outside Marrakech.”

He says suburban villas appeal to homebuyers who want to escape the hustle and bustle of the medina. Outdoor pursuits, such as walking and skiing in the Atlas Mountains, can be pursued more easily from villas on the south side of the city too.

Many villa buyers are former holiday-makers who rent a property one or two times and then decide they want a house of their own says Alicia Pasley-Tyler, international lettings negotiator at Aylesford estate agents which is marketing homes at the Bab Adrar development.

Aylesfords is marketing homes for sale at Assoufid, one of the large resort communities under construction on the outskirts of Marrakech and which also has views of the Atlas Mountains. Project developer, Assoufid Properties Development, is planning to build 80 villas at this 222 hectare golfing community. Initially, 14 villas are being offered for sale, six of which have found buyers.

The project was first launched in 2006, but construction work was put on hold in 2010 following the credit crunch. Work restarted in 2012 after Kuwaiti investors agreed to help bankroll the scheme. However, timing of the final completion date will depend on how quickly villas are sold. Construction of the resort's hotel will start later this year the developer says. The 18-hole golf course and four villas have been completed so far.

Villas at Assoufid are huge. The Art Deco-inspired show house has 500 square meters of indoor space and 500 square metres of covered terraces, including a massive, shaded roof terrace with 360 degree views. Each house has a garden, swimming pool, pool house, garages and staff accommodation set in one hectare of its own grounds. Prices start from euro1.95 million for a three bedroom villa with an internal area of 552 square metres to euro2.95 million for the show house which has four bedrooms and an additional two bedroom guest pavilion.

Marrakech Property Prices Crashed

The second homes market in Marrakech has struggled since it peaked in 2006, because of the global economic downturn and fears over the extent to which Arab Spring-related violence might afflict Morocco. Prices have fallen for all types of Marrakech property over the past six years, down 20 per cent for villas, 40-50 per cent for apartments and 30 per cent for riads, says Buxton. Some developments appear to have been shelved. A resort community scheduled for completion in 2012 by Monaco's state-owned SBM corporation remains on the planning board. The company has not responded to our questions about its future.

Although Morocco has been rocked by occasional bomb attacks made by Western Sahara separatists and witnessed some street protests against corruption, unemployment and other issues, the country has remained stable since the Arab Spring began in 2011, and Buxton believes the Marrakech housing market is starting to recover, partly helped by French buyers wanting to escape the eurozone crisis and tax rises imposed by President Hollande.

“We will have low price growth in 2013 and this will accelerate in 2014, because the French are coming back,” says Buxton, “The French like Morocco, because don't need a passport to get in, only an ID card, and because of the language.”

Growing Expat Community

The British are arriving. At the Bab Adrar project, five villas have been bought by Britons and one by a French family since sales began. Rich Moroccans from Casablanca, the country's main commercial centre, are buying weekend retreats around Marrakech. Swiss second home buyers are arriving, their language skills ensuring they are able and willing to negotiate deals in Francophone Morocco.

Many overseas home buyers are looking to retire in Morocco, attracted by its low taxes, including an absence of inheritance tax on property, says Buxton.

Most villas on the market in Marrakech mix traditional with modern in their design, such as a suburban, four bedroom villa in the Agdal district of the city on offer through Savills for euro2 million. Christies International Real Estate is marketing a three bedroom villa located within the Palmeraie, a district of dry palm groves. The Modernist-style, euro3 million home has gardens, a swimming pool, jacuzzi with views of surrounding palm groves, and terraces with views of the Atlas mountains.

Re-sale properties available at resort communities include a three bedroom villa at the Four Seasons resort, 1.5 kilometres from the medina, on offer through Knight Frank at euro1.25 million.

(This is a version of my article which appeared in Identity magazine, UAE)

PROPERTY HOTSPOTTER - DECEMBER

2012-12-19T02:49:00.002-08:00

Follow the agents who follow the money

Who opened or expanded branches in November/October/December

Central London – CBRE has acquired London estate agency, E.A. Shaw

UK - Countrywide has acquired 23 lettings offices in past 18 months

Ealing (London) - Benham & Reeves Residential Lettings

West Hampstead (London) - Kinleigh Folkard & Hayward has opened a lettings branch
London - Hamptons International has opened a lettings department in Hong Kong for owners of London property.

London - Chesterton Humberts has launched a home-finding service

Liguria (Italian Riviera) - Chesterton Humberts

PROPERTY HOTSPOTTER is updated monthly (except in summer). It lists which estate agents opened or expanded branches, or formed new affiliations, in the previous month.

Estate agents open or expand operations in an area when their research shows demand is rising, so this can indicate a future property hotspot.

See my Financial Times article on where and why agents expand by clicking on this link http://www.ft.com/cms/s/2/28b251d0-428d-11e1-93ea-00144feab49a.html#axzz1rARj2Xfz

If you want to add any branch openings/expansions to this list please add them to the comments section or tweet me @richardgwarren or email me at richard.warren@rocketmail.com

FUTURE CITIES: WHAT WILL THEY REALLY BE LIKE?

2012-12-05T08:00:00.000-08:00

Taller, greener, smarter and home-based

Artists' impressions of tomorrow's urban utopias usually depict cities of giant towers, some bulbous or twisting, others connected by walkways in the sky and buzzed by flying cars. The reality could be more practical, liveable and equally imaginative.

Significantly, we, the people, may have a bigger say in how our cities evolve. The BMW Guggenheim Lab, a collaboration between the car-maker and art museum, is an ideas forum for urban design which is holding a rolling programme of talks in cities around the world. Discussions held at its first stop, New York, suggest future cities will be shaped increasingly at grass-roots level by ordinary citizens says Thomas Girst, BMW Group spokesman. “Small urban experiments initiated from a culture of participation, crowd sourcing, community cohesiveness... will inspire larger, city and region-wide efforts aimed at urban improvement,” says Girst.

Despite the Lab's initial findings, planning professionals dominate thinking for now, and 'Place-making' is one of their favourite buzzwords. Instead of dividing a city into distinct residential, retail, office and industrial zones, the idea is for districts to become a mix of these elements, so it is alive all hours of the day, and enables people to live close to their work places, shops and leisure facilities, saving them time and money on travel. Early examples include the City of London which, in addition to being Europe's key financial district, is now a prime residential area, because it has changed from being a place where hardly anybody lived to become home to 9,000 people, many of them residing in new, luxury apartment blocks, such as The Heron.

The future city will be high tech. Companies like Siemans, Philips and Cisco Systems promote 'smart cities' where technological innovations like wireless sensor networks will be installed by authorities to manage resources better, such as dimming and brightening street lighting depending on when it is needed most. Jeroen Beekmans, partner at Golfstromen, a creative agency based in Amsterdam, works with Phillips to explore how intelligent technologies, such as Internet accessing smart-phones, can shape cities. He believes citizens may manage public functions like street lighting in future. “Now we all have a smartphone, but in ten years we might wear innovative glasses that turn the city into an operating system,” he says.

Another technological development to watch is 3-D printing. Using blueprints stored on the Internet, 3-D printers can print out objects like chairs and door knobs using plastic or metal powder as 'ink'. Scientists are looking to bring down costs so we can have 3-D printers at home to print out smaller objects, and machines in high street premises to produce larger pieces. If realised, this technology will speed up the demise of traditional retailing which has been battered by on-line shopping, leading to fewer shops on our high streets. We may also see buildings constructed with 3-D printers. Loughborough University has developed a machine to print out wall sections with cavities for cabling. If the machine becomes commercially viable, then construction of buildings will become faster, because developers can install 3-D printed sections, rather than fabricate walls on site.

The Internet is enabling more people to work from home, so companies will need fewer offices in future, which means fewer and smaller office districts. In place of offices we have work hubs appearing in suburban and central city districts to accommodate home workers who want to work outside of the house part of the week, mainly so they can enjoy human company. Operating like gyms, these hubs have desks, phones, printers and even cafes and libraries for users who pay monthly membership charges. More people working from home means fewer people commuting, so the relentless expansion of roads and commuter railways could ease up in many cities, possibly stop and even go into reverse, assisting another trend, pedestrianisation.

On New York's Manhattan Island, a three kilometre long stretch of overhead railway has been closed and turned into The High Line Park pedestrian walkway. In central London, Braham Street, a previously busy four lane road, has become Braham Park, a quiet, green oasis. London is following the example of the Netherlands by turning some roads, like Exhibition Road in Kensington, into shared spaces that cars and pedestrians both use. It slows down traffic and is safe, but irritates drivers, because they have to negotiate pedestrians in their path, leading some of them to leave the car at home.

Reducing traffic in cities is part of a wider drive to make them Greener, so too are low carbon building projects which are appearing in greater numbers. In Helsinki, British engineers and designers, Arup, leads an international team master-planning a Dhs272million low carbon housing, office and retail complex called Low2No on behalf of Finnish development partners Sitra, SRV and VVO. Intended to be a role model for other low CO2 schemes, the 22,000 square meter project will have energy efficient buildings made from sustainable materials like wood and an off-site wind farm to offset carbon emissions.

Some new eco-districts are being named after the company that builds them, so we may expect some future urban landscapes to become branded products just like groceries. For example, Masdar City in the UAE is named after Masdar, a renewable energy subsidiary of the Abu Dhabi government-owned Mubadala Development Company. When fully complete in 2025 the city will be home to 40,000 people and a showcase for renewable energy and clean industries developed by the company's recently built Masdar Institute of Science and Technology.

London studio, Foster + Partners, is designing Masdar City to be energy efficient. Buildings are being constructed close to each other to create wind canyons and to ensure the sun only shines for one hour a day in these narrow pedestrian corridors, a passive cooling system for buildings and pedestrians that reduces the need for active cooling systems like air conditioning. This design follows the pattern of traditional Arab cities which maximised shady areas. This means future cities may provide opportunities for design ideas from the past to make a come back.

However, not all schemes come to fruition. In China, developer SIIC had plans to build Dongtan, an eco-city near Shanghai. The first phase was scheduled for completion in 2010, but it remains un-built and so does the remainder of the city which was intended to become home for 500,000 people. Arup master-planned this city, but implementation has been postponed indefinitely by the developer with no explanation given.

Unrealised dreams like Dongtan have led some architects like Austin Williams, director of the Future Cities Project, to argue that the current emphasis on sustainability and low impact architecture has resulted in poor quality design and urban planning.

Usually, we think of cities getting bigger, but some could shrink. Some already are. In the US city of Detroit, 12,000 homes have been abandoned by people escaping economic decline for better times elsewhere. Those houses that don't fall down are knocked down. Civic authorities are attempting to consolidate who and what is left behind into a smaller, manageable unit, so homes are no longer separated by acres of “urban prairie” as exists in some parts of the city now.

Of course, the Detroit authorities might want to consider taking advantage of this enforced ruralisation to adopt the Roman principle of rus in urbe, of deliberately bringing the countryside into the city to make it a greener, healthier place. This principle exists in the British city of Bath where sheep graze in parks within the city centre, and in the London suburb of Richmond which has a dairy farm open to the public. Cowboys in Detroit? It may happen.

PROPERTY HOTSPOTTER - OCTOBER

2012-10-08T03:21:00.000-07:00

Follow the agents who follow the money

Who opened or expanded branches during September

The World – A&K International Estates was launched. This new estate agency arm of travel group, Abercrombie & Kent, will market GBP1m+ homes using its worldwide network of 50 offices and database of 250,000 HNWI clients.

Clapham (London) - John D Wood & Co

Marylebone (London) - Thamesview (purchased Harris Latner)

Mayfair (London) - Winkworth opened Chinese-speaking desk.

Cascais (Portugal) - Fine & Country

PROPERTY HOTSPOTTER is updated monthly (except in summer). It lists which estate agents opened or expanded branches, or formed new affiliations, in the previous month.

Estate agents open or expand operations in an area when their research shows demand is rising, so this can indicate a future property hotspot.

See my Financial Times article on where and why agents expand by clicking on this link http://www.ft.com/cms/s/2/28b251d0-428d-11e1-93ea-00144feab49a.html#axzz1rARj2Xfz

If you want to add any branch openings/expansions to this list please add them to the comments section or tweet me @richardgwarren or email me at richard.warren@rocketmail.com

PROPERTY HOTSPOTTER - SEPTEMBER

2012-09-18T04:17:00.000-07:00

　
Follow the agents who follow the money

Who opened or expanded branches during the summer

Henley-on-Thames – Sotheby's International Realty

South Kensington (French-speaking branch) - Douglas & Gordon

Central Kensington - Chesterton Humberts

Stockwell, Tooting and Mitcham (South London) - Century 21 franchise (formerly Abbey Estate Agents)

Maldives - Christies International Real Estate (affiliation with Dutch Docklands)

PROPERTY HOTSPOTTER is updated monthly (except in summer). It lists which estate agents opened or expanded branches, or formed new affiliations, in the previous month.

Estate agents open or expand operations in an area when their research shows demand is rising, so this can indicate a future property hotspot.

See my Financial Times article on where and why agents expand by clicking on this link http://www.ft.com/cms/s/2/28b251d0-428d-11e1-93ea-00144feab49a.html#axzz1rARj2Xfz

If you want to add any branch openings/expansions to this list please add them to the comments section or tweet me @richardgwarren or email me at richard.warren@rocketmail.com

BIG ESTATE AGENTS OPEN ON FRENCH RIVIERA

2012-08-17T03:16:00.001-07:00

Glamour versus austerity

Four international estate agencies opened offices, formed affiliations or acquired local estate agencies on the French Riviera between March and June this year – Savills, Knight Frank, Chesterton Humberts and Christies International Real Estate. The agents say the French Riviera's luxury housing market is benefiting from a domino effect with a growing number of increasingly wealthy international HNWIs buying a home in London and then wanting a place on the Cote d'Azur.

But with the French economy stalled, President Hollande raising taxes and the eurozone in crisis, how well timed is this move to the Med? Some estate agents and buyers agents who have been operating on the Riviera for a while say they would be busier sitting on the beach this summer, because so few buyers are around. But other agents say business is good, so it is not clear which way the market is headed in the short term.

The longer term must surely be bright. Times may be rocky now, but they were worse during World War Two, and the Riviera recovered from that, so why not this time? The Cote d'Azur is and will remain one of the most glamorous places in the world. When the eurozone crisis is finally resolved, estate agents, letting agents and buyers agents will be far too busy to even contemplate spending summer on the beach.

The leaves unanswered the big question of “how long must we wait for the good times?”. Nobody knows. It could be months, but more likely years, and it brings to mind Warren Buffett's advice to stock buyers which must hold true for the housing market - “Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years.” Hopefully, it won't be that bad.

BRITAIN'S RACIST AND RIP-OFF LANDLORDS

2012-07-06T02:04:00.000-07:00

The Rachman era returns

Forget the market-rigging bankers, the phone-hacking journalists and the bribe-taking police. What about the rip-off landlords who bring shame on Britain? Yesterday, two shocking bits of news came to light.

First, the London borough of Brent announced its crackdown on “Beds in Sheds”. In the past three years the council has issued 84 planning enforcement notices against home-owners who rented out their garden sheds to desperate tenants, so now it wants to put a stop to this exploitation once and for all.

Second, it turns out many landlords are racists – a BBC investigation of London and Birmingham landlords has found some choose tenants on the basis of race. For example, their adverts say tenants “Must be Bangladeshi, Pakistani, Indian” or “Filipino only” or “Sri Lankan professional couples”. The BBC and Letting Agent Today ask whether these landlords are breaking the law? Well, if they aren't, then they darn well ought to be. Weren't the days of “No dogs, no blacks, no Irish” supposed to be long gone?

Britain's landlords are developing a shocking reputation. Increasingly the worst among them make headlines for the wrong reasons – intimidating tenants, operating dangerous boilers in rental properties, evicting tenants to replace them with higher paying Olympics visitors are some examples of their outrageous behaviour. No wonder the London Borough of Newham and the Welsh government want landlords licensed. That way the Rachmanesque among them can be weeded out.

Yes, many landlords are decent human beings who provide decent accommodation at a decent price. But the private lettings market is becoming so tainted by criminality, incompetence and greed, that it is time for decent landlords to stand up and take action against their corrupt peers. The National Landlords Association's Code of Practice whilst laudable is not enough. The body should support landlord licensing or, at least, a landlords register to professionalise the sector fully. Scotland has a landlords register and limited licensing system. Time to extend that across the rest of the United Kingdom.

POLLUTION WILL AFFECT HOUSING MARKETS

2012-06-20T08:21:00.002-07:00

What price clean air?

In Rio the politicians are discussing how to save the planet. In Hong Kong a friend has posted a facebook status update which shows in graphic detail how our survival on this planet is threatened. It gives a link to a University of Hong Kong website http://hedleyindex.sph.hku.hk/home.php which shows smog in Hong Kong today (June 20^th) at levels the World Health Organisation considers “Very Dangerous” owing to northerly winds blowing China's industrial air pollutants southward. Four Hong Kong people will die today because of this pollution the university's School of Public Health forecasts. Air pollution in Hong Kong has exceeded safe levels for 139 out of 171 days so far this year.

What has all this got to do with property you may ask? Well, one of the reasons why I moved away from Hong Kong in the 1990s was because of its worsening air pollution. My departure has barely made a nano-dent in the territory's demography, because vast numbers of Chinse have moved into Hong Kong since I left, pushing up its population by about a million, so this means pollution has not stopped Hong Kong from continuing to expand and this has provided knock-on benefits for its economy and the value of its clearly much sought-after homes. However, many more individuals may leave Hong Kong in future and this could have an impact on its housing market.

As Hong Kong University's research shows, the cost of treating pollution-related diseases and the loss of productivity has drained HKD18 billion (GBP1.5 billion) from the Hong Kong economy so far this year. And the problem is worsening. As the costs to people's health and businesses mount up, so a tipping point will be reached where more non-Chinese leave Hong Kong for a place where they can breathe, and reduced numbers will want to move there. That will have a negative affect on the territory's economy and that, plus the direct affects of reduced housing demand, will have a negative affect on its property market, especially at the upper end which overseas corporates favour for accommodating expatriate staff.

Admittedly, we could be talking decades, certainly years, but if current trends continue then this will surely happen eventually. Another caveat, Chinese immigration, which forms the vast bulk of people moving into Hong Kong, is unlikely to be affected, because they come from a place that is no less polluted. And yes, Chinesification could fill the gap left by departing expatriates, but Hong Kong is a trading city that depends on its oversess links. What's more, many of those Chinese and Hong Kong residents who can afford to leave will do so.

What may happen in Hong Kong could be replicated in other locations across the world, wherever air pollution, rising water levels, extreme weather and other environmental disasters become overwhelming. And while those locations suffer population loss and economic decline, the safe havens where people move to will see increased pressure on housing stock. If not enough homes are built to keep up with the demand from incomers in these locations, then sales prices and rents will rise. Of course, if the world's environmental problems are sorted out then none of this may happen.....

PROPERTY HOTSPOTTER - JUNE

2012-06-15T06:53:00.000-07:00

Follow the agents who follow the money

Who opened or expanded branches in May

St Johns Wood (London) – Chesterton Humberts

Central London - Christies Private Property (new buyers agency)

Henley and Cobham - Sotheby's International Realty

Bristol - Hamptons International

Hong Kong - Landscope Christies International Real Estate

Asia - Sotheby's International Realty (expands management team)

Malta - Chesterton Humberts

PROPERTY HOTSPOTTER is updated monthly. It lists which estate agents opened or expanded branches, or formed new affiliations, in the previous month.
Estate agents open or expand operations in an area when their research shows demand is rising, so this can indicate a future property hotspot.

See my Financial Times article on where and why agents expand by clicking on this link http://www.ft.com/cms/s/2/28b251d0-428d-11e1-93ea-00144feab49a.html#axzz1rARj2Xfz

If you want to add any branch openings/expansions to this list please add them to the comments section or tweet me @richardgwarren or email me at richard.warren@rocketmail.com

IMPACT OF POLITICS ON PROPERTY MARKETS

2012-06-07T08:26:00.001-07:00

...it grows bigger every day...

Not since the fall of the Berlin Wall have politicians had such a big impact on property markets. The end of state Socialism in eastern Europe in the late 1980s and early 90s allowed for the return of private property ownership there and in China, while in Britain and the United States this transformation coincided with conservative politicians striving to create "property owning democracies" in which tenants could become home-owners.

Today, politicians who reform housing markets do so more through pragmatism than idealism. By raising property taxes the Chinese government has ruthlessly engineered a downturn in its property market to squeeze out inefficient property companies. The Hong Kong, Taiwan and Singapore authorities have introduced taxes and buyer restrictions to cool overheated housing markets too.

In Europe, the Portuguese government will administer the economic equivalent of CPR to its recession-blighted construction sector this month (June) by allowing landlords to raise rents for the first time in 30 years, so they can fund building improvements. Politicians had been putting off this reform for 25 years, because they didn't want to be confronted by angry tenants.

Politicians are impacting on property markets in unintended ways too, sometimes far from home. Property prices in prime central London are higher now than they were during the previous market peak in 2007, because of a house price boom fuelled by an influx of Greeks escaping political meltdown in Athens, French avoiding newly elected President Hollande's planned tax rises, Russians fleeing arbitrary rule under re-elected President Putin, Chinese escaping corruption and autocracy in Beijing and Arabs leaving behind political turmoil in the Middle East.

This politically-driven flow of wealth across the world can have political repercussions in the safe havens where it is directed - in Switzerland, citizens have voted to limit foreign home ownership to 20% in tourist areas, because they are fed up with first-time buyers being priced out of the housing market by wealthy incomers.

The grand projects of politicians may even touch on London's safe-have reputation in two years' time. At the behest of the Scottish National Party, Scotland will have a referendum in 2014 on whether to become independent - although according to opinion polls only 40% of the country is currently in favour of full devolution. If the Scots do vote "yes", then there will be wrangles between Scotland and the remainder of the United Kingdom over who owns which North Sea oil fields and is responsible for the debts of Edinburgh registered banks like Lloyds and Royal Bank of Scotland. The arguments will create uncertainty, which housing markets don't like. Resolution of the arguments could see one or both newly separated countries less well-off or better-off than before, which will have a knock-on effect on their housing markets.

An understanding of economics has long been recognised as useful when analysing the world of property - all those GDP numbers, interest rate stats, construction data and other facts and figures have a bearing on which way a housing market may move. Now, with politicians having an increasingly big impact on property markets, intentional or otherwise, it pays to have an understanding of politics too.

I wrote this blog piece for property consultancy, Knight Frank's Global Briefing, published today.

http://globalbriefing.knightfrank.com/post/2012/06/07/The-growing-influence-of-politics-on-global-property-markets.aspx

GREECE: IMPACT OF POLITICAL CRISIS ON ITS PROPERTY MARKET

2012-05-15T08:39:00.001-07:00

The German and Italian experiences give clues

A company with a vested interest in boosting holiday home sales claims property prices in Greece will become 50 per cent cheaper for those buying in pounds, dollars and other currencies if the country leaves the eurozone. Those people with an eye for a Greek island hideaway may say "lovely jubbly". But wait, life is not that simple, especially when it comes to the eurozone crisis.

Yes, Greek property may become considerably cheaper if the country exits the euro and a greatly devalued drachma is re-adopted, but that could be the next link in a chain of events that sees it become next to worthless.

In political science there is a theory called Polarised Pluralism. It is not a theory you would want applied to your country. Unfortunately, Greece is becoming a text book example of it. It goes like this - a political system becomes dysfunctional when voters leave the centre ground to support parties at the extreme left and right - there will be little room for compromise, only lots of argument. Such a scenario is destabilising for the economy, financial markets and property market. Following Greece's elections in May, only 40 per cent of voters supported Socialists, liberals and conservatives who occupy that middle ground and accept austerity measures as the price to pay for Greece remaining in the euro. The other 60 per cent mostly supported a collection of extremist left wing and right wing parties, including neo-Nazi Golden Dawn, who reject austerity measures.

Following the failure of talks over the past nine days to form a governing coalition another election will be held in June. Opinion polls suggest more Greeks will go to polar extremes at that election, with far left Syriza, already the second biggest party, topping the poll. What will happen then?

To answer that question, let's look at the two great historical examples of Polarised Pluralism: the Weimar Republic and post-war Italy. The Weimar Republic collapsed when the National Socialist German Workers Party was voted into power in 1933 and created a dictatorship under its leader Adolf Hitler. The rest, as they say, is history. Like Weimar, Greece is experiencing economic catastrophe, a full-blown depression – its economy has contracted by 20 per cent since 2008 and half of its young people are jobless. Weimar had hyper-inflation and mass unemployment. Germans papered their walls with banknotes, they were that worthless. In both cases, democrats could not navigate turbulent economic waters, and were unable to stop extremists entering the political process and dividing the nation.

Syriza is not looking to form a dictatorship, but if it is not willing to accept the terms of the EU and IMF bailout, then Greece will most likely be booted out of the eurozone and bailout funding will cease. This means the government will run out of money to pay public sector employees and Greeks with mortgages and other debts in euros will find them much harder to service in devalued drachmas. These and other economic strains caused by Greece's exit from the euro will lead to greater political instability. An outgoing Greek minister has warned of civil war. Another possibility is the return to military dictatorship - the military ran Greece until 1974. That's the worst case scenario. The Italian experience offers some hope.

Italy had elections almost every year for decades, invariably resulting in shaky coalition governments, sometimes consisting of five different parties or more. Following a series of corruption scandals involving leading established parties, two new blocs of left and right were formed in 2007, and this has created stability, though of a highly idiosyncratic, Italian kind – for example, the right-wing bloc, The People of Freedom, led by Silvio Berlusconi, consists of neo-fascists, Christian democrats, liberals and conservatives. Until 2011 it governed in alliance with Lombard separatists and, some say, the mafia. A UK equivalent would be an alliance of the BNP, SNP, Conservatives, Liberal Democrats, East End gangsters and Church of England. Berlusconi's failure to manage anything seriously except for his hair dye meant Italy went into deep recession and is now run by a government of technocrats. Nevertheless, it is stable.

Modern day Italy and Greece also benefit from something the Weimar Republic did not have: friends. The EU, IMF and European Central Bank, the troika, is attempting to prop up both countries. Greeks say the troika's medicine is killing the patient. However, not even Syriza wants to leave the eurozone, and with anti-austerity politicians sweeping to power in France and parts of Germany, it may be possible for a compromise to be made, to have the austerity pill sweetened for Greeks by adding debt-free EU structural funds and European Investment Bank support to the bailout package. That's the best case scenario.

Unfortunately, even the best case scenario is unlikely to solve Greece's problems. Only a complete write-off of its debts, including bailout fund repayments, coupled with the structural reforms needed to make it competitive in the world would make it a good place for investment. There is too much opposition from Germany, the banks and others to having Greek debts written-off. While that remains the case, investment in Greece would be an investment in chaos, incompetence and much worse. In other words, avoid, avoid, avoid.

FRENCH ELECTION: IMPACT ON PARIS HOUSING MARKET

2012-05-08T03:35:00.002-07:00

Not much. Arab Spring and eurozone crisis more important

Contrary to conventional wisdom, the Socialist victory in France's presidential election last weekend will make little difference to the Parisian luxury housing market. This is reflected in the reaction of markets to that victory – as expected when a Socialist wins an election, financial markets fell the very next morning. But, within hours they rose again as brokers and investors accepted his policies would be little different to those promoted by the defeated presidential incumbent, the conservative, Nicolas Sarkosy. Although much has been made that president elect, Francois Hollande, wants to levy 75 per cent income tax on those earning euro1 million or more, the reality is that even if Sarkosy had won taxes would have been raised.

Nevertheless, the threat of higher taxes has already driven some wealthy French to buy homes in London where taxation is lower. Many of the 3000 French citizens who will be affected by the 75 per cent tax rate may leave. However, their departure will have less affect on the Paris luxury housing market than it might have done in the past, because domestic demand is less important than it used to be. According to Christies International Real Estate, two-thirds of luxury home buyers in Paris come from overseas.

What's more, whether French and overseas buyers continue to buy homes in Paris will have less to do with Socialist tax policy than powerful forces at work on the international stage. Principally these are the spiralling eurozone crisis and the political turmoil beyond Europe. These two currents, one pushing property prices up and the other, down, have been swirling round the city's housing market since early 2011.

First, fears that Greece will default on its debts and that this will spread like a highly infectious disease across the rest of the eurozone, with Spain, Portugal, Ireland, Italy and possibly Belgium defaulting too, have caused many people to think twice before buying a home in Paris, because French banks, who have lent heavily to these countries, could go bust and will need rescuing at huge cost to the French taxpayer (and those elsewhere). This has acted as a depressant on Paris property values.

Second, countering the eurozone debacle, has been a huge inflow of money from outside of France into the Paris property market, most of it coming from trouble spots. Overseas buyers include wealthy Middle Eastern individuals looking to escape violent excesses of the Arab Spring, rich Russians wanting to avoid excessive taxes and state bullying under President Putin, and Chinese wanting to leave behind corruption and autocratic government in Beijing. These international buyers have done much to drive up demand for large lateral apartments and trophy houses in the 6^th, 7^th, 8^th and 16^th arrondissments over the past 18 months.

Wealthy foreigners could be hit by higher taxes like the French. This may deter some of them from buying in Paris, but others will continue to do so, viewing higher taxes as a small price to pay for having their money protected in a safe haven. Many of these buyers fear they could lose all or most of their assets located in their home countries. In any case, higher taxes have been on the cards for some time, so overseas buyers have started to factor this into their calculations.

Also, although London and Monaco have lower taxes than Paris, the dirham, rouble and yuan stretch further in the French capital's housing market – prices are 50 per cent lower in the French capital than in its British rival. This is important to anyone wanting a spacious home, such as large Middle Eastern families. The highest prices in Paris touch euro3500 per square foot, compared to euro6500 per sq ft in London.

One other factor that will support prices within the iconic, nineteenth century city centre built by Baron Georges-Eugene Haussmann are strict planning controls – these allow few new developments to be built. In the long term, having the supply of property largely restricted to what is already there will help underpin values no matter what misfortune befalls the eurozone, what taxes are increased and what events take place elsewhere in the world.

PROPERTY HOTSPOTTER - MAY

2012-05-03T02:37:00.001-07:00

Follow the agents who follow the money

Who opened or expanded branches in April

Cote d'Azur (multiple locations) – Knight Frank (PS: Christies International Real Estate extended its affiliate network there in March)

St Jean Cap Ferrat (Cote d'Azur) - Michael Zingraf

Villefranche sur mer (Cote d' Azur) - Nice Properties

Manhattan, Brooklyn, the Hamptons and Palm Beach, Florida – Hamptons International (marketing agreement with New York-based Corcoran)

Wandsworth and Battersea (London) - Hamptons International

Earls Court (London) – Marsh & Parsons

PROPERTY HOTSPOTTER is updated monthly. It lists which estate agents opened or expanded branches, or formed new affiliations, in the previous month.

Estate agents open or expand operations in an area when their research shows demand is rising, so this can indicate a future property hotspot.

See my Financial Times article on where and why agents expand by clicking on this link http://www.ft.com/cms/s/2/28b251d0-428d-11e1-93ea-00144feab49a.html#axzz1rARj2Xfz

If you want to add any branch openings/expansions to this list please add them to the comments section or tweet me @richardgwarren or email me at richard.warren@rocketmail.com

Thanks to buyers agent, Rebecca Russell, for some of the Cote d'Azur information. Her website: http://www.frenchentree.com/nice-property-finder/

HOW TO END LONDON'S HOUSING CRISIS

2012-04-26T05:27:00.000-07:00

Make somewhere else the capital

First, some simple maths to show how current thinking is failing to solve London's housing shortage. There are 350,000 people on social housing waiting lists in London. London Mayoral candidates promise to build hundreds-of-thousands of new homes, but experience shows us they are unlikely to do this and certainly not fast enough – over the past eight years, in Ken Livingstone's and Boris Johnson's respective tenures at City Hall, barely 110,000 affordable homes were built. At that sluggish rate of construction it would take 25 years to house those on today's waiting lists, and that does not take into account anyone else joining those lists over that period.

Now here's a statistic that represents part of the solution. There are 122,000 civil servants working in London, 27 per cent of the national total. If we move most or all of them out of the city, then their homes and offices become available for occupation to the rest of us. This is not as mad as it sounds. The BBC is moving most of its activities to Manchester, and many government agencies and departments have moved out in the past, such as Companies House to Cardiff and tax offices to Bradford.

Moving the remainder of government out of London, including MPs and peers, will provide much needed space for the city's burgeoning population and hard-pressed private sector, both of which are being priced-out by spiralling rents, sales prices and occupancy costs. Whitehall could become a new business district, or, if the buildings are not suitable for modern office use, transformed into a highly desirable residential area. This makes more sense than moving the city's vulnerable to social housing estates in Stoke-on-Trent which is what Newham council wants to do.

An added benefit – it would give an economic boost to whichever city became the new capital of the United Kingdom. All those politicians, lobbyists and civil servants spending money in shops and restaurants – what city wouldn't want that? Moving the capital out of London to a new geographical location could have political benefits too. I would suggest Liverpool – it is in the middle of the island of Britain, closer to Scotland, around the corner from Wales, across the water from Northern Ireland and immediately in touch with struggling industrial towns in the English North and Midlands.

During this Age of Austerity it makes financial sense for government to move north. It can sell or lease-out government-owned property for high prices in expensive London, while buying and leasing its new premises beyond the city for a fraction of that cost. Civil servants will be amazed by how much further their salaries will stretch outside London, even with London-weighting taken off – another saving to the taxpayer.

As Germany, China and the United States have shown a country's political and commercial centres do not need to be in the same city.

As analysis consistently shows, such as The Wealth Report by Citi and Knight Frank, London is the world's top city, but it needs room to expand, to provide more homes and work places. Redeveloping the Docklands into a new financial services sector, with space for new, affordable and suitable offices, has helped London beat off commercial competition from Frankfurt and New York since the late 1980s, but now it needs to adapt again. Yes, building more homes and filling empty properties will partly solve London's housing problems. But more must be done. If London is to remain capital of the world, then it may need to stop being capital of the United Kingdom. As the increasingly cosmopolitan make-up of London's populations shows, it has outgrown that role.

BUILD MORE TSUNAMI-SAFER HOMES

2012-04-11T09:13:00.001-07:00

....they save lives

Today's Tsunami warning in the Indian Ocean is a reminder that we need more flood resistant homes. The Japanese Tsunami in 2011 and the Boxing Day Tsunami of 2004 that swept across the Indian Ocean from Indonesia to Africa destroyed tens of thousands of homes and killed thousands of people. That most of the world's population lives on or near coastlines makes the problem more acute.

Fortunately, architects and engineers are designing homes that can resist powerful tsunami waves. The Prajnopaya Foundation charity is building 1000 tsunami-safe(r) houses in Sri Lanka to replace homes destroyed by the tsunami in 2004. Designed by scientists at the Massachusetts Institute of Technology and architects at Harvard Design School, they are intended to survive a ten meter-high tsunami like that which hit Japan last year.

Fixed to firm foundations, the tsunami-safe(r) house stands on stilts and its doors and windows are arranged in a line, so water can run straight through, under and over the building. The doors and windows get blown away, but the house remains. True, it would need to be redecorated and re-furnished after being hit by a wave, but that is easier than complete reconstruction. Moreover, survivors can continue to have a roof over their heads in the aftermath of a tsunami when flood waters have subsided.

In addition to protecting against tsunami we need to design homes to cope with storm floods and rising sea levels. Architects are coming up with many designs to protect against these dangers, including several already mentioned in this blog – see BUILD MORE FLOATING HOMES (14^th March 2012). Others include Flood House, a two storey land-based home designed by British architect, Pippa Nissen.

Flood House allows water to enter the ground floor while residents can continue to live on the upper floor. The kitchen, bathroom, living room and spare bedding would be on the upper floor where self-contained utilities, including electricity generator and water storage, would continue to function. The ground floor's one meter-high concrete dado wall makes it easier to clean after a flood. Flood waters would have to rise beyond two meters before the upper floor is inundated.

So, even if floods do become a growing problem across the world, an increasing number of flood and tsunami-resilient homes are being designed that would allow people to enjoy living by water, but without actually ending up in it. All that's needed is for planners, politicians and developers to help make these designs a reality. Many lives will be saved by doing this.

PROPERTY HOTSPOTTER - APRIL

2012-04-05T07:26:00.002-07:00

Follow the agents who follow the money....

Who opened branches in March

Cote d'Azur - Christies International Real Estate

Marrakech - Christies International Real Estate

Dublin - Owen Reilly

Teddington (London) - Hamptons International

London Bridge (London) - Foxtons

Crouch End (London) – Foxtons

The PROPERTY HOTSPOTTER, previously known as the Housing Hotspots Tracker, is updated monthly. It lists which estate agents opened or expanded branches, or formed new affiliations, in the previous month.

Estate agents open or expand operations in an area when their research shows demand and prices are rising, so this can indicate a future property hotspot.

See my Financial Times article on where and why agents expand branches by clicking on this link http://www.ft.com/cms/s/2/28b251d0-428d-11e1-93ea-00144feab49a.html#axzz1rARj2Xfz

If you want to add any branch openings/expansions to this list please add them to the comments section below or tweet me @richardgwarren or email me at richard.warren@rocketmail.com

THE WEALTH REPORT - IMPLICATIONS

2012-03-29T01:41:00.000-07:00

How safe are safe havens?

The rich are getting richer and the poor poorer, and the rich are retreating to the citadels leaving the wasteland to the poor - this could be a particularly dark interpretation of the findings revealed in The Wealth Report published by banker, Citi, and property consultancy, Knight Frank, yesterday, but in my opinion, summarises where the world is headed.

There are more centa-millionaires, HNWIs with more USD100 million or more in assets, living in Asia than in the West now, and the world's centre of economic gravity has shifted from the mid-Atlantic to somewhere over Turkey and Russia, and will be firmly in India and China by 2050, the report tells us. But it also reminds us that these Asian centa-millionaires, along with HNWIs from across the developing world are using much of their money to buy homes in London, New York and Paris, because they feel safer there - these cities are politically stable and enjoy the rule of law.

Economic growth in the developing world is not solving all of its problems, rather it is masking many of them, like poor governance and corruption, and worsening others, notably environmental degradation. The rich know that. That is why 60 per cent of Chinese millionaires (calculated in British Pounds) are either leaving China or considering doing so. Who feels safe living in a country where you can be arrested, tried and executed within three days?

As The Wealth Report shows, South American HNWIs are heading to Miami, the Chinese to Hong Kong and everyone to London. That's great news for estate agents and vendors in these and other recipient locations, including Monaco, Cote d'Azur, the French and Swiss Alps, Sydney and Auckland. The trouble is that with so many HNWIs arriving the natives are getting restless. Britain has increased stamp duty to 7 per cent for multi-million pound homes, which are mostly bought by foreigners, and the Swiss have voted in a referendum to limit the number of holiday homes in tourist areas to 20 per cent of housing stock, because locals are fed up with being priced-out of the housing market – great news by the way for owners of existing Swiss holiday homes, because their assets have suddenly attained rarity value.

These tax increases and construction caps are mild however, and in themselves little to worry about, except that they could be the start of something more ominous – growing resentment of wealthy foreigners. As any politics lecturer will tell us, when you have one line of division (nationality) compounded by another, (contrasts in wealth), then the potential for conflict becomes exponentially worse. The Occupy Movement has focused on banks, but it would not take a great leap of the imagination to see its supporters outside under-used and over-furnished, luxury flats at One Hyde Park. Squatting has been on the rise across the world for several years, another sign that we need to close the gap between rich and poor. Inward investment should always be welcomed, but it must benefit the locals. That is the only way to ensure real, lasting security for wealthy outsiders moving into “safe havens”.

HOW TAXES AFFECT HOUSING MARKETS

2012-03-21T07:38:00.001-07:00

Small is beautiful if it's a tax rise

Tax cuts and tax rises - they are good indicators of where a property market is at, but can they influence where it is headed? Invariably, finance ministers, like Britain's Chancellor of the Exchequer, raise property taxes (like he has today) when housing markets are strong and cut them when weak.

The British property market maybe weak overall, but its luxury end, the sector for GBP2 million+ homes, on which Chancellor George Osborne will levy stamp duty at 7 per cent from today, has reached record highs in London. This sector will also be affected by his decision to close tax loopholes that allow wealthy foreigners to pay stamp duty at 0.5 per cent when purchasing property via a tax haven.

The Italian government has raised property taxes too. Its retrospective 0.76 per cent annual levy on the market value of homes owned by Italians overseas is effectively a tax on the London housing market, because that is where many Italians buy second homes. Neither the Italian nor the British tax measures are likely to impact significantly on the prime central London housing market. Most overseas buyers will continue to buy London property, because they are doing so for political or extreme wealth preservation reasons - wealthy Middle East businessmen concerned about the Arab Spring, wealthy Greeks and Italians wanting to have assets outside of the crisis-ridden eurozone, Africans looking for a safe haven for their money, Chinese looking to escape autocracy and corruption back home, and Russians looking to avoid punitive taxes which they expect newly elected President Putin to introduce.

If Putin does over-tax his country's rich – and he must be tempted because Moscow's property market is surging, then more of them will move capital abroad – bad news for Moscow vendors and estate agents, but good news for those in London, Paris and other locations favoured by wealthy Russians.

Here's another example of tax increases in one country bolstering property markets in another – newly introduced higher capital gains taxes in France has led to an increase in enquiries for low-taxed Monaco homes. And another example - Chinese money is finding its way overseas via Chinese businesses - the only legitimate way for Chinese to export capital abroad, following property tax rises in China and subsequent price falls – values are forecast to collapse 30 per cent in 2012, more than Beijing would like, so now it is looking to cut taxes again to stabilise the market. Hopefully, it won't be too late, because tax cuts don't always work when other factors like sentiment are overwhelmingly negative - just look at Spain.

Spain's Socialist government cut VAT on new homes from 8 per cent to 4 per cent for six months in 2011, and some developers subsidised the remaining 4 per cent, so that effectively it became 0 per cent for buyers. Madrid's new conservative government has extended the VAT holiday until the end of 2012. The affect on the housing market? Negligible, though some developers around Marbella, where the market is starting revive, say every little helps. In Cyprus, where the market has been troubled since 2007, VAT cuts made in October 2011 have had no tangible affect, though it is still early days of course. These two countries' economic problems are just too great for these tax cuts to make much impact.

So, can tax cuts and rises affect a housing market? Only if they are so large they become more significant than other issues. Increasing stamp duty from 5 per cent to 7 per cent for multi-million pound homes in Britain is not a large tax increase. Still not convinced? The increase in stamp duty from 4 per cent to 5 per cent for GBP1million+ homes, implemented 11 months ago, is now completely forgotten.

BUILD MORE FLOATING HOMES

2012-03-14T05:18:00.001-07:00

....they are getting prettier

We love living by water, but not on it. If we can overcome our primeval desire to live on dry land, then we could partly solve two big problems – the housing shortage in cities and the affects of flooding.

Most cities are built by bays or rivers – these are a rich, mostly untapped source of residential “land”, ample space for floating homes. Unfortunately, few people are attracted to the idea of living like“sea gypsies”. The image of a floating home is bad – depending on what part of the world you come from, it might be a narrow boat too small to pirouette in, a trailer-trash home on a metal tray, a converted fishing boat or another piece of cramped, cough-and-cold-inducing residential flotsam or jetsam.

But times are changing– architects are designing warm, dry, spacious and exciting homes that float. Architects in the Netherlands are leading the way. Studios, like Aquatecture, have designed attractive floating homes, pictured here, for Dutch canal dwellers. And outside the country's ring of dikes, 46 floating homes were created at Maasbommel by the DuraVermeer Group in 2005 – securely attached to moorings they go up and down with rising and receding flood waters – they survived a nationwide flood in 2011.

British studio, Baca Architects, has designed Britain's first amphibious home next to the river Thames, which will be built by the end of 2012, and the country's first floating community at a Glasgow marina, scheduled for completion in 2020.

Over the coming decades, floods will become more frequent, because of rising sea levels and fiercer storms resulting from climate change. Meanwhile, housing will become increasingly sought-after and expensive in cities, because the production of new homes can't keep up with the reproduction of humans, and there is a finite amount of land available. Yes, we can keep building upwards, build on green fields or reclaim more land from the sea, but creating floating homes is quicker, less expensive and less environmentally damaging. They can also be fun to live in.

HOUSING HOTSPOTS TRACKER

2012-03-08T08:16:00.001-08:00

Follow the agents who follow the money

A few weeks ago I wrote a piece for the Financial Times about how the world's top end estate agencies are expanding their international networks to service the growing demand for luxury homes from HNWIs. These agencies spend a lot of time and money tracking capital flows around the world - Knight Frank has 20 researchers in London doing it assisted by overseas staff. The agents follow the money that fuels the markets. This got me thinking - wouldn't it be a good idea to start a regular Housing Hotspots Tracker that shows which agents are opening or expanding branches and where.

So, here it is - if you are thinking of buying a home and want to know where the agents believe the market is hotting up, then check out the Housing Hotspots Tracker. The Tracker will be updated monthly.

HOUSING HOTSPOTS TRACKER

Estate agency branch openings since January 2012 -

Savills - Gibraltar

Strutt & Parker - Westbourne Grove (London)

Haus Properties - Fulham (London) Expanding. Opened in November 2011.
Winkworth - Canterbury (Kent), Cheam (London), Worcester Park (London) and Grantham (Lincolnshire).

Sotheby's International Realty - Canford Cliffs (Dorset), Chelsea (London), Stratford upon Avon (Warwickshire)

If you know of any agency openings/expansions that could be added to this list, then please tweet me @richardgwarren or add them to the comments section below.

Thanks to Loubie Vaughan, Emma Ward-Hunt and James Trimble for being helpful eyes and ears.

If you want to read my piece on expanding estate agencies in the FT then copy and paste this link to the address bar, and click - http://www.ft.com/cms/s/2/28b251d0-428d-11e1-93ea 00144feab49a.html#axzz1oRm1k1sC

ADZUNA HOMEBUYERS' FACEBOOK MAP

2012-02-29T10:36:00.001-08:00

Get stalking....

Now here's something a bit bonkers. Adzuna, a social search engine for British property listings, was launched yesterday by the founders of Gumtree and Zoopla. It features a Friends Map which shows the places where your Facebook friends have "checked in" - this means that if you are thinking of buying or renting a home in the surrounding area, you could ask them questions about it, because obviously they have local knowledge, right? That's the theory.

The reality is much more hit and miss - I tried the map - yes, it did show my friends visiting Zizzi or whatever in the area where they live, but mostly it showed them visiting bars, nightclubs and restaurants in the West End (I never knew some of them led such glamorous lives) or the Westfield shopping centre or, better still, Luton Airport. This makes the map an invaluable snooping tool. However, just because my friends or I go to the Odeon, Leicester Square, occasionally does not make us an expert on what it is like to live there. We just know that we hate the crowds, tourist trap "restaurants" and general tat. Thinking about it, as I write this, I wonder if I am wrong - maybe we could offer useful advice - for anyone thinking of living around Leicester Square - don't do it, it is truly horrible. Yes, get this Adzuna app - it is indepensible, even if only to help you stalk friends as they go about their daily lives - fantastic! If one of them can help you select a good area to live-in as well, doubly fantastic!

http://property.adzuna.co.uk/