Property Alert

Market On The Move?

Whisper it quietly, but the top house builders have all reported profit growth of 33 per cent or more in the most recent year and, what’s more, they are now actively seeking new development land according to industry reports. (That, no doubt, will see another wave of landbanking scams coming soon – watch this space).

Looking at a recent Savills’ report on this subject, we note, ‘There are clear signs of more positive industry sentiment and activity. Latest government house building statistics reveal that private starts in England, at 22,200, were 7 per cent higher in the first quarter of this year than in the final three months of 2012.’

‘House builders, having rebuilt their balance sheets, are looking to secure a pipeline in an improving market. However the market is highly localised and values remain very suppressed beyond the pockets where land is trading, but real opportunities exist in many urban markets for developers able to take a long view.’ More to come.

Rents – What’s Happening?

We’ve signed up to The Rent Check to keep you up-to-date on current and future trends. The Rent Check report monitors rents agreed by more than 1,500 private landlords in England and Wales and who are all members of the National Landlords Association. ‘The Rent Check report will track movements in the private rented market every six months analysing changes in actual rental rates by property type and region.’

‘The data shows 87 per cent of landlords achieve their listed asking rent or higher, 61 per cent are confident in the prospects for their own letting business and 41 per cent have agreed higher rents over the past 12 months compared to 7 per cent who had agreed lower rents. The average tenancy lasts two and half years.’

‘Excluding London, the average monthly rent for a two bedroom flat ranges from £480 in the North East to £695 in the South East. Rent for a three-bedroom property, terraced and semi-detached houses, ranges from £500 in the North East to £935 in the South East. In London, average monthly rents for a two-bed flat are £1,515 in zones one and two, £1,060 in zones three to six, £1,815 for a three-bed property in zones one and two and £1,435 further out in zones three to six.’

‘Open House’ Viewings

We’ve had a huge response to the London property sourcing service and, fingers crossed, we should start matching members and properties soon. I would stress that, although we welcome everyone, this one is really for people who are ready and able to start investing rather than the ‘I want 50 per cent off and no money down’ members.

Catching up on London reading, we note that search consultant Erica Evans makes some interesting comments on ‘open house’ events. ‘In the more sought-after parts of London, such as the South West, West and North West postcodes, we have seen consistently brisk activity levels. We believe that many estate agents are still struggling to understand just how strong demand level is, evidenced by the large number of ‘open house’ viewings that are tending to be arranged. These are little more than on-site auctions where the agent is largely guessing at true demand and price levels.’ Food for thought.

Muslim Tourism

I just read a US report that says ‘Muslim tourism’ is a huge niche market. The market is currently worth $126 Million in the States and is growing much faster than the market as a whole. My hunch is that the same thing is happening here in the UK.

So here’s the question. How can you cash in on this information? Perhaps airlines, hotels and tourist destinations need to gear up for this growing market and someone who takes the time to find out exactly what special needs and requirements the market has, could help them to do it. Perhaps you could become a consultant to travel and service providers on how to attract their share of this market, or maybe you could organise holidays and trips aimed exclusively at the Muslim market. I’ll leave you to think on it.

Property Alert

Turkey – Coastal Resorts

Oceanwide Properties, agents for property in Turkey, offer an overview of the property market this week. ‘Back in 2005, quality resale property in Turkey was in short supply. The spurt of low-cost, new-builds coupled with eased zoning rules, which allowed for more land to be developed and sold to overseas buyers, meant we entered at a time of a sellers’ market.’

‘The global credit crunch saw new-build construction slow and the tables turn to a buyers’ market. However, having seen through their own financial crash in 2001, Turkey was already on a firm policy route to safeguard growth. This has helped keep markets moving to today and, for many European buyers, for example, we have been able to present a long-standing sunnier option for hard-earned cash and a promising escape from failing banks and pensions – something which more traditionally favoured Euro-spots like Spain and Portugal have not.’

‘As a long-standing agency, we have seen coastal Turkish property in the Mediterranean region work its way through the ups and downs of global and local market cycles. Turkey’s economy is adding an emergent home market of affluent Turkish property buyers to the mix. These buyers are fast capitalising on mortgages that have seen interest rates cut hugely. This has accelerated local sales volumes. Overseas buyers that bought wisely in the early days and who now wish to sell on or move up the Turkish property ladder are currently finding they can do so quickly. Demand is pushing us back to a sellers’ market.’ We are currently looking at properties in Fethiye; let us know if this interests you.

Foreign Investors – A Universal Truth?

We’re currently looking at a ‘down under’ service and, as part of that, have been reading a wide range of materials. A recent article by Mark Armstrong offers some key points of universal interest. It starts, ‘Local buyers should beware the hype caused by foreign investment in the Australian property market.’

It goes on, ‘There is no doubt that a heap of overseas investors buying new property in Australia is great for our economy. International investors are largely uneducated to the ways and value of the Australian property market. They rely heavily on the advice from sales people who use slick marketing techniques to sell their wares. Overseas buyers can and often do pay too much for property because they do not fully understand the market they are entering.’ Too true – do your due diligence. More to come on this – it’s worthy of a report.

Spain – A Price Riser?

According to Fernando Jimenez, Secretary of State for Economic & Business Support in Spain, the price point for Spain’s new ‘Golden Visa’ scheme is about to be announced. Members will recall that, late last year, the government proposed that buyers who bought property at a certain price point upwards would qualify for a visa giving them automatic residency for the duration of their ownership.

Many pundits suggested this would be of specific interest to buyers from China and Russia and would cause some upward price movement at the appropriate price point. It’s said that the price point will only be revealed as and when the bill is fully approved. Members who read us regularly will recall a recent piece from Spanish property expert, lawyer Peter Esders, which states a price point.

The Cookie Factory Attraction

The Golden Gate Fortune Cookie Factory is based in Chinatown in San Fransisco. It produces 20,000 cookies a day but earns an extra income as a tourist attraction. Every day, tourists pay a fee to see how the cookies are made and no doubt leave with a bag full of the product too.

What is commonplace to one person can be fascinating to others. You may be bored stiff by your place of work, but might others be interested in seeing how you do what you do? If so, there may be a readymade extra stream of income for you just waiting to be exploited.

Property Alert

US Price Rises

New figures from the US National Association of Realtors (NAR), suggests prices are up by an average of 11 per cent over the year to the end of April 2013. Volumes are up as well but are limited by a lack of supply and a lack of finance.

Lawrence Yun, NAR’s Chief Economist, summarises, ‘The robust housing market recovery is occurring in spite of tight access to credit and limited inventory.  Without these frictions, existing-home sales easily would be well above the five-million unit pace.’

‘Buyer traffic is 31 per cent stronger than a year ago but sales are running only about 10 per cent higher. It’s become quite clear that the only way to tame price growth to a manageable, healthy pace is higher levels of new home construction.’ More to come.  

Look At Italy?

Property EU’s recent briefing on the Italian property market in London was interesting; asked how they would each spend a theoretical €500 million in the Italian real estate market, experts came up with various suggestions.

Gabriele Pompei at K2Real said, ‘Southern Italy is not just good for shopping centres but for resorts too. Here, returns on investments can be quite high. This would not necessarily be luxury accommodation. Instead, I see potential for student accommodation or care homes with good standards and good facilities.’

Francesco Sanna at K&L Gates’ Milan office said, ‘I would invest in luxury resorts and the public asset development sector. You need to find a very good operator but these sectors are on the rise.’ More on Italy soon.

Portugal – No, Not Yet!

The latest RICS/Ci Portuguese Housing Market Survey (PHMS) is being spun, ever so gently, into a sales pitch in some quarters. I’ve seen one headline that reads, ‘Sales expectations and new instructions both turned positive for the first time since autumn 2010.’

Dig a little deeper and we see that, of those interviewed, 45 per cent more respondents experienced price falls than rises and 39 per cent more respondents believe prices will fall further than rise soon.

RICS’ Josh Miller calls it well, ‘The April survey results point to further early signs of stabilisation in the sales market. However, at this stage we would caution against concluding the market has definitely turned a corner; prices are still falling and the broader economic backdrop remains very weak, with unemployment at 17.5 per cent. Meanwhile, activity in the lettings market appears to have run out of momentum.’

An Opportunity In Dog Sh…

There can be few more annoying things than realising you just stepped in a steaming pile of dog muck and it’s going to take you half an hour with a sharp stick to return your ridge-soled trainers to their former glory. I was therefore interested to hear of a company called Streetkleen based in Wales. The company have developed a system which I don’t really understand, for converting dog waste into biogas. I have no idea how viable this is as a business, but there’s no shortage of raw material so it could be worth investigating.

Any business that converts waste products into something useful has to be commended and will receive a sympathetic hearing from both potential investors and customers. Is this eco-friendly trend something you might be able to cash in on.

The Job Bank

Why would a bank help you find a job? Well if you think about it, it makes perfect sense.

Ohio based Fifth Third Bank found that unemployment was the cause of mortgage defaults in at least 50% of cases, and so they decided to tackle the problem head on. The bank teamed up with employment firm NextJob to offer unemployed mortgage borrowers free job search assistance, including one-on-one dedicated coaching, weekly webinars and online job search software.

A pilot scheme in 2012 for unemployed Fifth Third customers who were in serious risk of default on their mortgages, and out of work for an average of 22 months, resulted in nearly 40 percent being fully employed after just six months. Now the two companies have signed a contract to continue with an expanded version of the programme.

There’s a simple lesson here, I think. If your customers are in work and prospering, they have money in their pockets to spend with you.  Anything you can do to help your customers become more prosperous has to benefit you in the long run. Is there something you could do?

Subscription Coffee

We’ve covered coffee-by-post style services before, but this is different. Israel based Cups TelAviv gives members unlimited coffee at participating venues in return for a monthly subscription.

Around 40 coffee shops and café’s have enrolled on the scheme. Members can pay a monthly subscription and then have as many coffees as they like at any of the participating venues. Members are updated on new venues and offers via a related app.

The price structure is such that it offers great value for members. They’re effectively in front after about a dozen cups of coffee. But the venues benefit too. They get a share of the revenue, plus knock-on benefits through the sale of sandwiches and cakes to people who may not have visited them otherwise.

This is a fascinating business model and one that could form the basis of a number of profitable businesses in different locations. It seems to me you could do something like this in any town or city in the UK. And why stop at coffee? What other products might lend themselves to this subscription based approach?

Never Miss Gift

So you don’t have children, but your friends or relatives do. You have to buy them Christmas and birthday presents, but what do you buy. It’s difficult knowing what’s appropriate, and that’s where NeverMissGift comes in.

Site users register and then and answer a few questions about the child they’re buying for, including age, gender and their budget. Any number of children can be added to a user’s profile, and NeverMissGift sends an email shortly before a birthday or special occasion comes up. The company recommends its top gifts matching the child’s profile and customers who are happy with the selection don’t have to do anything – the gift is automatically sent to them or the intended recipient. The company also offer personalised wrapping for those choosing to send the gift straight to the child.

This is a US based service. Could the same service work here in the UK? I see no reason why not. Thinking more widely, could there be a gap in the market for  a service designed to solve other gift buying problems – men buying for their wives or girlfriends for example? Something to think about.

Sexcereal

Most products could benefit from a unique angle or twist. They say that sex sells, but I’ve never seen it applied to breakfast cereal before!

Sexcereal is a breakfast wholefood, purportedly designed to improve the sex lives of men and women, with specific versions for each gender. The female version contains cranberries, almonds, ginger and sunflower – designed to balance hormones – while the male version includes bee pollen, black sesame, wheat germ and Camu Camu – with the aim of restoring energy and testosterone.

I’ve no idea whether this product will have any ‘impact’ – I very much doubt it – but it’s an interesting angle which differentiates the product from the competition. Might your product or service be promoted on it’s libido-enhancing properties?