Property Market News Today

Mumbai property prices predictions 2012

noreply@blogger.com (property market news) — Fri, 27 Jan 2012 17:10:00 +0000

property market news today - Mumbai property prices predictions 2012 : more predictions about residential property prices in Mumbai — the most expensive property market in the country — coming down in 2012.

This time, it’s from Bank of America Merill Lynch (BofAML), which forecasts that residential property prices in the city could fall by 15-25 percent over the next six months.

The brokerage says Mumbai’s residential property prices jumped 14.6 percent (compounded annual growth rate) over the past decade, higher than the estimated 9-10 percent growth seen in earlier decades. “This growth appears unsustainable and prices should undergo mean revision over the next 1-2 years,” it predicts in a report.

To support that view, its analysts also visited some building sites in Mumbai and discovered that developers were offering 5-8 percent discount to buyers depending on the project.

BofAML predicted that given the financial difficulties being faced by developers (high debt loads, high funding costs and limited access to funds), they would offer higher discounts to push sales in 2012.

BofAML is not the only one that believes a price correction is around the corner.

Jones Lang Lasalle, a real estate consultancy, also noted in a recent press release that there is already a price correction of sorts happening “below the radar”. “While official prices have remained firm in ready-to-move-in projects, prices have fallen by at least 10-20 percent in under-construction projects which are less than 30 percent complete,” it said.

The consultancy also expects moderately revised rates to be made official in several suburban residential projects in the next few months, which, it said, should spur a slow but steady recovery in demand.

To be sure, record home prices and higher interest rates have hit demand badly: Mumbai’s residential home sales dropped to a three-year low in the quarter ended December, according to a Bloomberg report.

According to data provided by Liases Foras Real Estate Rating and Research, sales fell 17 percent from the previous quarter to 7.59 million square feet, the report added.

Unsold inventory, or the number of months needed to clear stock at the existing absorption rate, also climbed to 44 months.

The figures elicited a rather predictable response from the founder of Liases Foras, Pankaj Kapoor: “The likely scenario looks like we will see a dip in prices seeing the dismal sales and as liquidity remains tight,” he told Bloomberg.

Unfortunately, we believe there is no guarantee that property prices will fall, no matter what the experts say.

When home prices soar and demand from buyers falls, developers tend to cut back on new launches to save on costs, but don’t slash prices on their existing/ongoing projects. Sometimes, they might even start a new project offering limited amenities or smaller units to attract buyers, but continue to sell their existing/ongoing larger projects at current prices.

Sometimes, a buyer could get lucky and get a minor discount. It’s rare, however, for developers to cut home prices sharply in response to dwindling demand.

There are three good reasons for that.

One, as Firstpost has already pointed out, the real estate market is driven mainly by investors and not end-users or consumers. These investors demand good returns on their investments. That means that even if a developer can’t find buyers for his flats at a certain price, he can’t reduce prices because that would lower the returns for these investors, who might then not invest in another project of the developer again.

Two, a falling rupee has stoked demand from non-resident Indians, according to some experts, who are also buying real estate primarily as an investment. Since there is a fair bit of demand right now from this segment, there’s really no compulsion for developers to lower prices for real home buyers.

And three, interest rates are expected to start coming down this year, which should get at least some home buyers back on the market as loan repayments become easier.

So, why on earth should developers bring prices down?

Residential property prices predictons 2012

noreply@blogger.com (property market news) — Mon, 23 Jan 2012 17:50:00 +0000

property market news today- Residential property prices predictons 2012 : Residential property prices are likely to continue to drift sideways this year, impacted by poor economic growth, according to bond originator, ooba.

But ooba chief executive Saul Geffen said with interest rates remaining at historically low levels, which may drop further in 2012, home buyers and home owners would continue to benefit.

Geffen said that 2011's third quarter economic growth figures had confirmed that SA had once again had little real economic growth, which should mean further pressure on the fragile labour market and negative real disposable income growth.

“All of this will lead to limited purchasing power. Whilst interest rate easing is possible, rates are not likely to make a major difference to residential property demand in 2012.

“However, the reduction in interest rates of 650 basis points since 2008 has improved affordability and reduced the cost of servicing a bond significantly. The record low interest rates, coupled with subdued property price inflation, increased bank approval rates and lower deposit requirements, will continue to positively influence the property market.”

Geffen said the current economic climate was the biggest challenge facing the property market. However, there has been consistent improvement in the bank lending criteria in 2011. “The ability to obtain financing is one of the biggest drivers in the property market, so the consistent improvements are a positive indicator for the property market going forward”.

“In addition, ooba has recorded significant growth in the number of applications and approved loans in 2011 and this growth is expected to continue. The rise in applications and approvals are attributed to the continued relaxation in lending criteria by the major lenders as well as ooba's market share growth.”

The company's statistics reveal that the number of bond applications during November 2011 increased by 36% from November 2010.

The statistics also revealed that November was a record month for the value of approved home loans, which increased by 33% in comparison to November 2010. The value of approved loans in November is the highest recorded since May 2008, over three years ago.

Rental property prices in the UK falling, latest index shows

noreply@blogger.com (property market news) — Mon, 23 Jan 2012 17:46:00 +0000

property market news today ; Rental property prices in the UK falling, latest index shows : More rental properties are coming onto the market in the UK and as a result prices are falling, according to the latest rental index from FindaProperty.

The number of available rental properties rose to its highest point since August 2009, triggering a 3.3% decrease in asking prices which fell from an average £890 per month to £861, ending a year of otherwise dramatic rental price inflation.

Prices could fall further in 2012 if stock levels continue to rise, experts said. On a regional level, London remains the most expensive location with rental prices increasing 0.5% in a month to an average asking price of £2,086. It is cheapest to rent in Yorkshire and the Humber, where the average rent is just £558 a month.

Outside London, Wales and the West Midlands are the only regions to show an increase in rental prices in the last quarter of 2011, up 1.8% and 0.9% respectively on the quarter, with all other areas showing rent falls compared to the third quarter of 2011. The corresponding rental asking prices for these regions were £639 and £674 per month.

The North West and South East recorded the most dramatic fall in rent asking prices, dropping 7.5% and 7.1% respectively. The corresponding rental asking prices for these regions were £593 and £1,080 per month.

‘Up until the fourth quarter of 2011 both rental stock and asking prices were steadily increasing. Now, not only has the average rent fallen to £861, but rental stocks are at their highest since August 2009. This should give more power to renters, which will ultimately result in more freedom, greater choice and a better deal,’ said Samantha Baden, property analyst at FindaProperty.

The index also shows that while asking prices decreased by 0.4% , £902, last month to £217,483, they are still 1.1%, £2,294, higher than a year ago.

The North West and Wales were the only regions to experience price inflation last month, with asking prices rising 0.1% . This brought the average price of a North West home to £163,603 and a Welsh home to £169,660. In Scotland asking prices fell 1% from £149,596 to £148,121.

Asking prices for first time buyer properties fell by 0.2% in December and are now £152,633, the seventh consecutive monthly decline. Affordability for first time buyers also improved slightly as a result of a lower income multiple offered by mortgage lenders and the average first time buyer in December had to find a deposit of £49,135 on average, some £357 less than in November.

Asking prices for houses fell by 0.5% to £238,546, a decrease of £1,232 while prices for flats decreased slightly slower, by 0.1% or £219, to £174,043. On an annual basis, prices for houses are 1% higher than December 2010, while flats are 1.3% higher.

For the second month in a row, asking prices for larger family homes fell faster than any other property type, with five plus bedroom houses dropping by 0.9% or £4,684 to £536,273.

The average asking price for one and three flats fell by 0.2% and 0.4% respectively, with a one bed flat now costing £127,186 and a three bed costing £312,530. However, the average asking price for studio flats grew by 0.4% to £154,853. Two bedroom flats saw no change in price in December and still cost £176,062.

Analysts Dubai property market predition 2012

noreply@blogger.com (property market news) — Sun, 15 Jan 2012 14:35:00 +0000

property market news today - Dubai property market predition 2012 : Sections of Dubai's battered property market could show some signs of recovery in 2012 but the release of new supply coupled with wider global economic woes will seen an overall decline in prices, an Arabian Business poll found.

Well-established communities in Dubai such as Emirates Living and Downtown Burj are expected to see house prices rise by 5-10 percent, a survey of real estate analysts found. But property prices in less desirable locations such as International City and Dubailand could decline 3-10 percent, leading to a marked two-tier property market in the emirate,the poll found.

“Prime developments or locations have in the last year enjoyed some moderate price and rental appreciations and we expect this trend to continue through 2012,” one analyst said.

For the secondary developments we expect prices and rental rates to soften further as more supply comes onto the market in 2012.”

Analysts polled said average prices in neighbouring Abu Dhabi could fall up to 10 percent amid increased supply. Analysts expect an average of 19,716 units to come on to the UAE capital's market this year.

“Prices will fall in Abu Dhabi this year in the region of 5-10 percent. The emirate is going through the same problems as Dubai did in the past,” said one analyst.

Property prices in Dubai soared after the city opened its real estate sector to foreign investors in 2002, granting them freehold ownership rights at many developments.

From start-2007 to mid-2008, prices rallied almost 80 percent, Morgan Stanley estimates showed, with billions of dollars worth of new projects launched by local developers.

But home prices in Dubai, the Gulf property market that had the biggest reversal because of the financial crisis, have declined 60 percent in the wake of the global economic downturn.

While prices in Abu Dhabi fared better during the crisis, analysts remained concerned about the significant supply of high-end homes scheduled to enter the market.

Several Dubai-based developers have turned their sites to midmarket housing in a bid to fill the gap left by the collapse of the emirate’s housing bubble. The year ahead will see an increasing number of developers look to develop affordable housing projects but these could be hindered by the rising cost of land and declining house prices in the GCC, analysts said.

Analysts’ opinions remained split regarding what they considered the biggest challenge ahead for the UAE’s property sector. Excessive supply and the impact of Europe’s economic woes were cited as he biggest concerns, alongside a lack of clarity in Dubai’s regulatory environment

UK. housing market predictions 2012,2013,2014,2015,2016

noreply@blogger.com (property market news) — Sun, 15 Jan 2012 13:43:00 +0000

property market news today - UK. housing market predictions 2012,2013,2014,2015,2016 : According to a recent forecast from the Office for Budget Responsibility (OBR), it’s predicted that there will be a 20% rise in transaction activity within the housing market in 2013. However, house prices are also predicted to rise by 4.5% in 2015-2016 which could have a knock on effect.

The transaction surge is good news for the property market, as it has seen extremely low sales levels during the recent economic turmoil. Figures from HM Revenue & Customs revealed that sales for 2011 were down 5% compared with 2010.

The official statistics from OBR suggest that the number of people buying property in 2011-2012 would fall by 3%, but then surge by 20.7% in 2013-14. In terms of cost, house prices will be 0.9% cheaper in 2011-2012, but then rise by 2.7% in 2013-2014. Meaning advice is to buy in 2012, if you can afford to do so.

BNP Parabis Real Estate revealed statistics suggesting that between 2000 and 2016, house prices in London will have risen by more than 40% in total. “London & South East growth in house prices are so dominant that by 2016 they will pull the UK average growth per annum up to 2.4 per cent despite most other regions only forecast to grow by 1 per cent.”

The lack of first time buyers is worryingly low, as those stepping onto the property ladder are forced to rent, as mortgages and deposits are at an all-time high. In the South East and East Anglia, demand is for family homes with good transport links rather than apartments in town centres which are being constantly developed.

The property market remains in a worrying state. Many Londoners are being forced to look outside of capital for homes, as mortgages are simply too high.

The only saving grace within the property market is that working environments offer affordable options. Serviced offices provide tenants with cheap and flexible options, such as shared office space and virtual office space.

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iceland house price index overview 2011

noreply@blogger.com (property market news) — Sun, 15 Jan 2012 13:35:00 +0000

property market news today - iceland house price index overview 2011 ; Iceland’s house price index rose 6.28% (1% inflation-adjusted) over the year to October 2011, according to Statistics Iceland. This was the ninth consecutive month of annual house price rises since prices started to fall three years ago. House prices are now just 7.6% below the levels seen in Q1 2008.

Iceland’s house prices started falling in October 2008, when the Central Bank raised its key policy rate by 500 basis points to 18%. The hike was implemented to stabilize the Krona, and was one of the International Monetary Fund’s conditions for granting a US$2.1-billion loan, sought when Iceland’s three major banks all collapsed in the span of one week. Iceland’s house prices had previously risen by 16% between Q3 2006 and Q1 2008.

From January to October 2011, the number of sales transactions in the country’s major metropolitan areas increased by 60.3% from the same period last year. In addition, the total value of real estate transactions almost doubled to ISK108.83 billion (US$903 million) from ISK66.13 billion (US$548.5 million) over the same period.

The collapse of the banking industry in 2008 threw the economy into recession, with GDP shrinking by 6.9% in 2009 and by another 3.5% in 2010.

However, the Icelandic economy is now recovering, thanks to increased exports, consumer spending and fixed investments. In the third quarter of 2011, annual real GDP growth was 4.8%, according to Statistics Iceland. Iceland’s economy is projected to expand by 2.6% in 2011 and 2.4% in 2012.

Standard & Poor’s has recently raised its outlook on the country from negative to stable.

Iceland’s central bank, Sedlabanki, announced in early-December 2011 that it will hold the key rate unchanged at 4.75%, as the economy is recovering and inflation is above target. The key rate was raised by 25 basis points in November 2011, the second rate hike since August 2011, as the government tried to shield the krona from shocks fueled by the ongoing Eurozone debt crisis.

Consumer prices rose by 5.2% y-o-y to November 2011, more than twice the central bank’s target. Iceland’s inflation rate was 5.4% in 2010, from an average of 12.2% from 2008 to 2009 and 4.7% from 2000 to 2007. Iceland’s economic and housing market recovery is expected to continue, though the euro debt crisis will likely slow growth.

Property Market Predictions for 2012-2013

noreply@blogger.com (property market news) — Sat, 17 Dec 2011 17:00:00 +0000

property market news today - Property Market Predictions for 2012 : According to a recent forecast from the Office for Budget Responsibility (OBR), it’s predicted that there will be a 20% rise in transaction activity within the housing market in 2013. However, house prices are also predicted to rise by 4.5% in 2015-2016 which could have a knock on effect.

The official statistics from OBR suggest that the number of people buying property in 2011-2012 would fall by 3%, but then surge by 20.7% in 2013-14. In terms of cost, house prices will be 0.9% cheaper in 2011-2012, but then rise by 2.7% in 2013-2014. Meaning advice is to buy in 2012, if you can afford to do so.

BNP Parabis Real Estate revealed statistics suggesting that between 2000 and 2016, house prices in London will have risen by more than 40% in total. “London & South East growth in house prices are so dominant that by 2016 they will pull the UK average growth per annum up to 2.4 per cent despite most other regions only forecast to grow by 1 per cent.”

The property market remains in a worrying state. Many Londoners are being forced to look outside of capital for homes, as mortgages are simply too high.

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What will 2012 mean for the housing market

noreply@blogger.com (property market news) — Sat, 17 Dec 2011 16:54:00 +0000

property market news today - What will 2012 mean for the housing market : Property prices can be a depressing subject for both home owners and those looking to get a foot on the property ladder. In fact, while estate agents Knight Frank have estimated that the average house prices in the UK will have actually risen by 1.3pc by the end of 2011, with inflation currently at 5pc, property values are falling in real terms.

We asked industry experts for their predictions for what 2012 would mean for the housing market.

Howard Archer, IHS Global Insight

I think house prices will fall by 5pc over the first half of the year and then flat line over the second half. I believe there is a significant risk that house prices could fall more than this given the current weakness of the economy and worrying outlook.

Furthermore, we believe there are serious downside risks to this forecast and that house prices could well fall by more than 5pc given the current deteriorating economic situation and outlook.

We suspect that squeezed household purchasing power, a markedly weakening labour market and major concerns over the economic outlook will limit potential buyers and weigh down on house prices. And there is significant concern that banks' future ability to lend to homebuyers could be hit by difficult wholesale funding conditions. These factors are seen outweighing the support to house prices coming from extended very low interest rates.

The squeeze on consumers' purchasing power should ease as 2012 progresses as inflation falls back markedly, and this may help house prices to stabilise in the second half of 2012 along with ongoing very low interest rates. However, unemployment is likely to rise appreciably further and wage growth looks set to remain muted so the overall environment will still be very tough for households.

Ray Boulger, mortgage brokers John Charcol

The number of housing transactions is currently about half the pre-credit crunch level and next year's outlook is massively influenced by how the Eurozone debt crisis plays out. The major mortgage lenders rely for some of their funding, and in particular for their marginal funding, on the wholesale money markets. As, over the last few months, the markets have become increasingly concerned about how this crisis will be resolved the cost of borrowing new funds has shot up.

If the euro collapses the consequences on our banking sector will be severe because of the global nature of banking and the huge write-offs, which will be necessary on loans made to Eurozone banks which will become insolvent.

The result of this will be that mortgage lenders will have no choice other than to reduce lending which will have a negative impact on the level of activity in the housing market and on property prices.

I expect demand from buyers next year to be lower, primarily as a result of more difficult mortgage conditions, but also because the economic outlook will sap consumer confidence further, with unemployment, or the fear of it, a particular worry for many.

I expect to see the number of property transactions in 2012 fall a little further. I also expect a small fall in house prices, in the region of 4pc, although as this year there will be significant variations throughout the UK and depending on property type.

David Hollingworth, London & Country Mortgages

I'd expect that next year would look broadly similar to this year. Mortgage availability has played a key role in the reduced level of housing transactions and there is very little expectation that next year's mortgage market will be any bigger and could even be a little down on this year.

Overall, it looks like a flat market at best and a reasonable possibility of slight falls, balanced by the lack of property coming to market.

There is likely to be big regional differences in house price movement and so local movement is likely to be of more interest to home owners than overall national trends.

Jon Hall, Saffron Building Society

We see little sign of any increase in base rate, and the lack of confidence in the economy means that house prices are unlikely to do anything spectacular. That said, we are seeing increased signs of activity at the top end of the market, with contract races for premium properties in the South East in particular.

We're also seeing people choosing to invest in refurbishing older properties to achieve greater returns on their capital.

Lee Watts, Kinleigh Folkard & Hayward

I anticipate 2012 to deliver a similar total of property transactions to 2011. I believe the first half of 2012 will be considerably stronger than the second, with early price gains eroded as the year goes on.

We will see further demand in the sales market with an increased supply of stock for lettings due to high rental yields and increasing levels of buy-to-let funding made available by lenders. This will lead to growth and activity within the new homes market with developers confident in developing the land banks they have been building up over the past few years.

I predict the lettings market will experience a healthy volume of business throughout 2012 with an increase in longer-term renting due to property values and mortgage availability making home ownership difficult for first-time buyers to achieve.

Robin King, Move with Us

Next year will be a tale of the haves and have-nots. Those that are able to, will continue to de-leverage using lower interest rates to increase the rate of pay down on their mortgages. Those who find themselves in arrears will continue in arrears as they see the value of their asset eroding while struggling with higher living costs. We do not expect to see lenders pressing for foreclosure until they see an end to this housing market recession. Currently, 5pc of mortgages are showing significant arrears in the UK.

Generally, the housing market will remain flat with low levels of supply on the market as families choose to reduce their mortgages rather than move. Most of the demand for housing will be in the private-rented sector due to the lack of higher loan to value mortgages and the threat of unemployment.

However, it won't be all doom and gloom, there will be hot spots around the country where economic activity has remained strong and where new infrastructure improvements open an area up to commuters in strong economic zones. In areas of low economic activity, we expect to see house prices slide backwards gradually.

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property market in Cyprus forecast 2012

noreply@blogger.com (property market news) — Thu, 24 Nov 2011 16:48:00 +0000

property market news today - property market in Cyprus forecast 2012 : Cyprus bank executives see a further deterioration in the Island’s economic conditions next year that they consider will further reduce liquidity, increase the cost of borrowing, and put further downward pressure of property prices.

SPEAKING at a forum for finance managers held in Nicosia yesterday, senior managers from three of the Island’s banks outlined a gloomy future for the economy and called on government to take bolder steps to reverse the downward course.

Christos Stylianides, deputy CEO of the Marfin Laiki Bank said that “The Cyprus banking system dealt with the shocks of the global credit crisis. However, the government’s failure to take measures in time led to its consecutive downgrades by the rating firms and its inability to borrow from the foreign markets”.

“On the other hand banks are under constant pressures to increase their capital due to the haircut on Greek bonds, so we were forced to stop lending”, he added.

Mr Stylianides said that the liquidity problem in Cyprus is due to the policy pursued by the Cyprus government and especially the policy of the former Finance Minister, who tried to finance the deficits through domestic borrowing, which exacerbated the banks’ liquidity problem.

A further reason is the downgrading of the banks by the ratings agencies, which affects the inflow of deposits.

Marios Savvides, General Manager of the Piraeus Bank stressed there is cash but there is no liquidity in the market and although balance sheets show that cash is available, it is not available for lending.

He also agreed with Mr Stylianides that lending by the banks will be very restricted next year.

Mr Savvides also believes that property prices will continue to fall over the next six months.

Comment

Various reports indicate that the average Cypriot’s take home pay is around €20,000/annum, while the latest RICS Cyprus Property Price Index shows that the average price of a 3-bedroom, semi-detached house is €419,880; that is nearly 21 times the average Cypriot’s salary!

Compare this to the UK, where the average house price is around 6 times the average salary.

This would indicate that the property market in Cyprus has been manufactured as the average Cypriot cannot afford to buy a house without borrowing many times more than their annual salary.

In the past, banks were giving credit based on their expectations that the value of the underlying collateral (property) would continue to increase and this helped to fuel the boom in house sales.

But now that property prices have fallen, the underlying collateral is worth less – and in some cases it has fallen below the amount of money advanced under a mortgage. As the banks have been tightening their criteria for lending, this puts further downward pressure on property prices because their value depends on the willingness of the banks to lend.

How much further will property prices fall? Only time will tell.

average house price in Northern Ireland november 2011

noreply@blogger.com (property market news) — Thu, 24 Nov 2011 16:38:00 +0000

property market news - average house price in Northern Ireland november 2011 : today THE average house price in Lisburn now stands at £154,629 - £15,000 more than the Northern Ireland average of £139,691.

The price in Lisburn - the third highest in Northern Ireland - fell by 3% over the quarter but rose by 8% over the year highlighting the volatility of the current market according to the most recent survey conducted by the University of Ulster.

The average house price in South Belfast is £196,182, and North Down is £174,000. Other areas include East Belfast £148,358, West Belfast £119,148; East Antrim £125,491, Antrim/Ballymena £120,933 and Craigavon/Armagh £108,725.

The variable nature of the market is highlighted by the performance of semi-detached houses (£I51,640) whose average sale price rose 4.6% over the quarter but fell 5.2% over the year.

Demonstrating how volatile the market still is, the average sale price of detached houses in Lisburn (£202,708) fell by 10.3% over the quarter but rose by 12.6% over the year, which the authors of the report say indicates the problem of arriving at a market value.

Semi-detached houses in the city sold for an average of £I51,640 - up 4.6% over the quarter but down 5.2% over the year.

The latest University of Ulster Quarterly House Price Index, produced in partnership with Bank of Ireland and the Housing Executive, showed the number of transactions in the third quarter of this year – July, August and September – was 1,133 compared to 1,062 in the previous quarter.

The overall average price of a house in Northern Ireland was £139,691 which meant the weighted rate of annual decline slowed to 7.5% from 15.3% recorded in the second quarter of this year.

According to the authors of the report - Professor Alastair Adair, Professor Stanley McGreal and Dr David McIlhatton - while activity levels have improved the market is still in a state of correction from what was arguably the deepest downturn ever experienced in Northern Ireland.

“There has been renewed activity in the third quarter of the year and slightly improved average prices for a number of sectors within the market. We see a return to more normal conditions being a slow process over a period of time rather than any major short-term change in market sentiment,” they said.

Alan Bridle, UK Economist at the Bank of Ireland UK, said: “This survey presents a slightly more positive picture although behind the headlines a number of market dynamics are at play including some contrast in performance between parts of Greater Belfast and our provincial and rural areas and a continuing element of stock clearing, particularly of lower value properties.

“The winter months will inevitably see some seasonal influences on activity levels and it is likely 2011 will mark the fourth consecutive year of house price decline. The region is learning, at some cost, that housing market cycles are typically extended and pronounced.”

The Housing Executive’s Head of Research, Joe Frey, welcomed the report as further evidence of ‘a more robust housing market’ and noted that “although first time buyers are still facing difficulties in terms of accessing mortgage finance and continuing uncertainty in the labour market, house price to income ratios clearly show that in comparison to a few years ago Northern Ireland’s housing market is now much more affordable”.

House prices in Luxembour continue to rise

noreply@blogger.com (property market news) — Wed, 02 Nov 2011 15:59:00 +0000

property market news today - House prices in Luxembour continue to rise : House prices in Luxembourg have been rising since the second half of 2009, after almost two years of house price falls, with lower interest rates boosting demand.

The average apartment price rose 2.12% during the second quarter, and is 6.73% up on the same quarter last year, at €3,896 per square metre (sq. m.)., according to Observatoire de L’ Habitat. Year-on-year, prices are higher both for existing flats (6.73%) and for apartments under construction (5.27%).

House sale prices rose 4.24% (0.68% inflation-adjusted) during the year to end-Q2 2011, according to the Ministere du Logement.

Most mortgage loans in Luxembourg are variable rate, making the housing market sensitive to interest rate changes. As of September 2011, the harmonized long-term interest rate stood at 2.27%, down from 2.59% the previous month, according to the European Central Bank ( ECB).

In Q2 2011, the volume of real estate sales rose by almost €7 million, 8.5% up on the previous quarter. Demand for apartments remains strong, thanks to continued economic recovery. The economy is expected to expand by 4% in 2011.

tips to successfully invest in profitable rental real estate

noreply@blogger.com (property market news) — Wed, 02 Nov 2011 15:53:00 +0000

property market news today - tips to successfully invest in profitable rental real estate : Despite the high demand for rental property, there are still many factors which will influence whether certain real-estate will make a wise investment. From single bed apartments to large family homes, see our guide to on how to invest in profitable rental real-estate.

Choosing the right location

The key to successfully renting property is location. Unfortunately, many developers quickly invest in real-estate without considering what market their property will appeal too. Homes that yield the best return are located in well-populated areas. You may have discovered a huge farm house with beautiful views, but, unless it is in an area that people need to live, you will struggle to find any tenants.

Financial advice

In tandem with choosing the right location, seek out professional financial advice. You will need to realistically look at your finances to understand what you can and cannot afford. If you require a loan then speak to multiple lenders as interest rates will vary. If you have a sizable deposit or can raise finance by selling a property you should have few problems obtaining a mortgage.

Your tenant’s needs

Understanding your tenants needs is vital when investing in real-estate. If your tenant is a city worker then look for properties within easy access to transport links. Families will seek out areas with local schools and parks. In areas where schools have achieved high ratings of excellence, rental prices have also increased. Single-family homes tend to be more appealing to longer-term renters such as families or couples. As a landlord, these often make the ideal tenant as they are more likely to be financially stable and pay their rent on time and regularly.

If your property is based near a university then it is fair to say students will make up your main pool of potential tenants. It is worth considering with students they are often only interested in short leases and will leave the property vacant through holiday periods.

Research rental rates

What you think your rental investment is worth and what your rental investment will actually rent for are two different things. Research what similar properties in that area are letting for. Take the time to contact these properties and understand what is included in the rental price. Ask how long the properties have been unoccupied for, as this will give you a true understanding of market expectations.

Future developments

Contact your local borough councils to find out if there are any new developments planned. Restaurants, malls and business parks are all good developments to watch out for. Areas that are up and coming will quickly see a high demand for rental properties.

Property taxes

Unfortunately taxes are a legal requirements and anyone looking to doge them can expect to pay a hefty fine or even face jail time. Speak to a property accountant if you need guidance on what tax you are eligible to pay.

Necessary upgrades

No one wants to live in a home that is falling apart. Inspect the property you are interested in to estimate all costs for any necessary upgrades and repairs. We strongly advice you hire a surveyor to determine if the property is in sound condition. You should factor any costs you initially invest in upgrades and repairs when planning future rental prices.

Conclusion

If you’re looking to start or grow your buy to let portfolio hopefully these tips will help make it a profitable one! Just remember do your research and take your time. Good luck!

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US Housing Market down september 2011

noreply@blogger.com (property market news) — Wed, 02 Nov 2011 15:32:00 +0000

property market news today - US Housing Market down september 2011 : The Pending Home Sales Index, which is used by experts as a forecaster for home sales, dropped 4.6% in September. The numbers are an improvement on September 2010, but home sales continue to struggle due to a lack of consumer confidence and strict lending limitations. Experts with the National Association of Realtors believe the direction of current U.S. policy in the housing market is stifling potential growth by capping loan amounts and so forcing people with good credit to accept higher interest rates on jumbo loans. For more on this continue reading the following article from Property Wire.

Pending residential property sales in the United States declined in September, although activity remains above a year ago, according to the latest report from the National Association of Realtors.

Its Pending Home Sales Index, a forward looking indicator based on contract signings, fell 4.6% to 84.5 in September from 88.6 in August but is 6.4% higher than September 2010 when it stood at 79.4.

It means that the housing market is being excessively constrained, according to Lawrence Yun, NAR chief economist.

‘A combination of weak consumer confidence and continuing tight lending criteria held back home buyers, even though the private sector added nearly two million net new jobs in the past 12 months,’ he said.

The PHSI in the Northeast declined 4.7% to 60.6 in September but is 4% above a year ago. In the Midwest the index dropped 6.2% to 71.5 in September but remains 12.3% higher than September 2010.

Pending home sales in the South fell 5.5% in September to an index of 91.6 but are 5% above a year ago. In the West the index declined 2.1% to 105.8 in September but is 5.6% higher than September 2010.

‘America’s monetary policy is contradictory and confusing, where some consumers with the best financial capacity and top-notch credit scores pay higher mortgage interest rates. The Federal Reserve evidently has been attempting to lower mortgage rates, yet more consumers are faced with taking out jumbo loans that carry higher interest rates,’ Yun explained.

Yun emphasized the need to reinstate higher loan limits in 42 states. ‘Just leaving excessive cash to sit in banks and not work into the economy is a drag on the overall recovery. We need a comprehensive approach to address housing issues, not additional impediments,’ he added.

Canadian Housing prices rose in August 2011

noreply@blogger.com (property market news) — Wed, 26 Oct 2011 16:53:00 +0000

property market news today - Canadian Housing prices rose in August 2011 ; Housing prices rose in August for the ninth month in a row, according to the Teranet-National Bank national composite house price index, released Wednesday.

The 0.9 per cent gain in August – the fifth time in those nine months that the increase was 0.9 per cent or above – took the index to a new high of 149.46 (the baseline being 100 in June of 2005).

Toronto, where home prices rose 1.6 per cent, led the gains in the index, which would have risen by just 0.6 per cent if Canada’s biggest city was excluded. It was one of four metropolitan areas monitored in the index where housing price increases in August exceeded the national average; the others were Winnipeg (1.3 per cent), Hamilton (one per cent) and Ottawa-Gatineau (0.9 per cent).

Calgary saw a 0.7-per-cent gain month-over-month, while Vancouver and Edmonton both posted a 0.6-per-cent increase and Montreal prices rose 0.3 per cent. Prices were flat in Victoria and Quebec and down 0.2 per cent in Halifax.

“Vancouver’s August increase extended its string of consecutive gains to 11, the longest run of monthly rises among the markets covered,” said Marc Pinsonneault, senior economist with the National Bank. “The Halifax decline was the second in a row.”

Year-over-year, the national increase was 5.4 per cent in August, a level exceeded by five of the index’s 11 metropolitan areas – Vancouver (9.9 per cent), Winnipeg (7.6), Quebec (6.7), Toronto (5.6 per cent). Prices increased over the previous year’s levels by 3.9 per cent in Ottawa-Gatineau, 2.9 per cent in Halifax, 2.4 per cent in Hamilton and 0.8 per cent in Calgary.

“The Calgary appreciation broke a nine-month run of 12-month deflation,” Pinsonneault said. “Prices remained down from a year earlier for a 10th consecutive month in Edmonton (-2.1 per cent) and for a ninth consecutive month in Victoria (-1.2 per cent).

Dubai eyes property revamp with $1bn joint fund

noreply@blogger.com (property market news) — Wed, 26 Oct 2011 16:50:00 +0000

property market news today - Dubai eyes property revamp with $1bn joint fund : Dubai, whose 2009 property collapse led to a debt crisis, launched a real estate investment fund worth up to $1 billion with Canada's Brookfield Asset Management in a bid to revive the battered sector and restore investor confidence.

The emirate's main investment vehicle, Investment Corporation of Dubai (ICD), and Brookfield will each deploy $100 million in the joint fund, UAE state news agency WAM said on Wednesday.

Dubai's once-booming property market hit a wall in 2008 and the decline worsened after the global financial crisis, ending a massive building spree. Prices are down 60 percent from their 2008 peak.

State-owned developer Nakheel, builder of islands in the shape of palms, was at the center of the collapse. Nakheel, and its parent Dubai World, have restructured some $41 billion in debt in the past year.

The market can expect more pain with oversupply likely to delay a price recovery in the Gulf emirate until 2016, ratings agency Moody's said.

"It's clearly a step in the right direction to bring back some confidence in the real estate market. $1 billion is not a small size and they (Dubai) can build on the success of that," V.Shankar, Standard Chartered's global chief executive for non-US operations said at a conference in Dubai.

Wide class

The fund, with a maximum cap size of $1 billion, will focus on a wide class of assets in both freehold and non-freehold areas. It will also seek additional funds from a select group of local, regional and international investors, the WAM statement said.

The size of the fund will be capped at $1 billion and it will have a life of eight to 10 years, the statement said.

"We see this agreement as another big step in our next phase of growth. It once more affirms Dubai's attractiveness as a premier investment destination in this region," Sheikh Ahmed bin Saeed Al-Maktoum, the chairman of Dubai's Supreme Fiscal Committee and the uncle of Dubai's ruler, said.

Market impact of the latest move, however, remained muted with the property-heavy Dubai stock index trading flat. Top Dubai developer Emaar Properties rose 0.4 percent amid low volumes.

"People will be slow to react and assess the impact. They will also be suspicious of what it means until they read the details," said Mohammed Yasin, chief investment officer of CAPM Investments in Abu Dhabi.

In June, UAE extended visas for real estate investors to three years from six months in a move to boost foreign investment.

Brookfield, a property, power and infrastructure investor, has about $150 billion in assets under management.

ICD holds about $70 billion in assets and its portfolio includes airline Emirates and stakes in Dubai's largest bank, Emirates NBD, developer Emaar Properties and Borse Dubai.

house prices forecast in UK 2012

noreply@blogger.com (property market news) — Wed, 26 Oct 2011 16:45:00 +0000

property market news today - house prices forecast in UK 2012 ; It’s that time of the year again. For those of you already depressed at what the value of your home is doing at the moment, turn away now, as the outlook for the next few years doesn’t get any better.

Knight Frank, the upmarket estate agent, this week kicked off the start of the latest round of residential market forecasts. I’m afraid it did not have an upbeat story to tell.

It estimates that average house prices in the UK will rise by 1.3 per cent this year - but with inflation currently at 5.2 per cent this means that values are already falling in real terms.

Now for 2012 and beyond.

Knight Frank is predicting that average house prices across the UK will fall by 5 per cent in 2012 and won’t start growing until 2014 - albeit with small rises of 1 per cent in 2014 and 2 per cent in 2015.

Some parts of the UK will fare worse than others. Average prices in Wales are expected to drop by 6.7 per cent next year, while both the North East and Scotland will see falls of 5.9 per cent.

London, South East, East Anglia and the East Midland are forecasted to do better than average UK values but will still see falls of between 3.7 per cent to 4.1 per cent.

But that’s not the only bad news. Knight Frank has estimated that with the 5 per cent fall in prices next year, mainstream property values will be nearly 15 per cent below their 2007 peak. To emphasise the fact that house prices will see little growth over the next years, the firm notes that average prices won’t hit 2007 levels again until 2018.

On top of this - when you factor in inflation, “the picture is even more subdued”, says Gráinne Gilmore of Knight Frank.

House prices, adjusted for CPI inflation, have fallen by 21 per cent since the peak of the market and will continue to decline until 2015, at which point prices will have dropped by 29 per cent of their value. “On this measure, prices will not reach their previous highs until 2028,” warns Gilmore.

Not such a pretty picture.

Forecasts for prime central London are slightly more upbeat, however.

Knight Frank believes average values of upmarket homes in the capital will rise by 5 per cent next year - but will be flat in 2013, followed by a 4 per cent and 6 per cent rise in 2014 and 2015. This shows that the huge growth seen by this market over recent years - rising by 37 per cent between March 2009 and September 2011 - isn’t expected to continue but should see some growth in real terms from 2014 onwards.

Prime homes across the UK will not fare well either. Knight Frank predicts falls of 5 per cent in 2012, followed by small rises in 2014 and 2015.

Middle Eastern property market outlook 2011 - 2012

noreply@blogger.com (property market news) — Thu, 06 Oct 2011 14:31:00 +0000

property market news today - Middle Eastern property market outlook 2011 - 2012 : Confidence in Dubai’s real estate market is waning and Middle Eastern property investors are looking for new markets, particularly in Egypt and Saudi Arabia. A survey from Colliers International property consultants reveals that 70% of potential buyers are looking to increase their real estate holdings, driven largely by news of shortfall in affordable housing in the region that has developers eager to enter the market. A majority of investors predict the real estate market will show significant gains in the future, and have tempered concerns about political strife with hopes that tourism and increased investment will help foster stability.

Property transactions are increasing again in the Nordic countries of Denmark, Finland, Norway and Sweden but lack of lending is still holding the real estate market back, according to analysts.

The region has been widely affected by the economic downturn, but the economies are fundamentally quite healthy with a sound financial situation, a new report from Colliers International shows.

In 2009 all four countries experienced negative growth, most significantly in Finland. In 2010 the growth had returned to a positive level although for Norway it was only 0.4%. Finland and Sweden have both experienced a significant turn around from 2009 to 2010, while the growth in Denmark in 2010 was more moderate.

Denmark, Finland and Sweden are among the European Union countries with the smallest budget deficit. The deficit number for Denmark in 2010 was 2.7% and for Finland 2.5% while Sweden was in balance. The, the EU average was 6.4%.

‘We see that the number of property transactions has gone down in all markets during the crisis. Now the number of transactions is increasing again, but still the markets are influenced by the funding difficulties,’ said Torben Nielsen, sales director for the Nordics from Colliers International.

‘The stressed bank sector implies that it is very difficult to obtain funding for property investments, unless the properties have very low risks. The bank sector in Norway is less affected than in the other countries, even though LTV is less than it used to be in 2005 to 2008,’ he added.

Traditionally, the foreign investors are most interested in Sweden, which have the largest and most professional property market among the four countries. The Swedish property market is dominated by a number of strong property companies with a high level of funding, meaning that it is also the most liquid market.

The Norwegian property market is more on its own, the report says. The surplus of domestic money stemming from the oil wells has entailed that Norway and the Norwegian property market have not been severely affected during the crisis.

The property market in Finland is dominated by local investors and has been hit quite a lot. Also because the dominant firm Nokia has had a turbulent period, giving challenges to the Finnish economy.

The Danish property market has been hit hard during the crisis. The Danish bank sector has almost stopped giving funding to property investments or projects unless the property has a very low risk,’ it adds. source Property Wire.

Property definitions

noreply@blogger.com (property market news) — Wed, 14 Sep 2011 06:02:00 +0000

Property is any physical or intangible entity that is owned by a person or jointly by a group of people. Depending on the nature of the property, an owner of property has the right to consume, sell, rent, mortgage, transfer, exchange or destroy it, or to exclude others from doing these things.

Important widely recognized types of property include real property (the combination of land and any improvements to or on the land), personal property (physical possessions belonging to a person), private property (property owned by legal persons or business entities), public property (state owned or publicly owned and available possessions) and intellectual property (exclusive rights over artistic creations, inventions, etc.), although the latter is not always as widely recognized or enforced.

A title, or a right of ownership, establishes the relation between the property and other persons, assuring the owner the right to dispose of the property as the owner sees fit. Some philosophers assert that property rights arise from social convention. Others find origins for them in morality or natural law.