Streetwise Property Alert 23rd July 2013

New Hotspots?

New figures from Eurostat, the statistical office of the European Union, reveal where property prices are rising most within the EU. Estonia, at 7.7 per cent over the past year, and Latvia, at 7.2 per cent, lead the way. At the other end of the range, Spain (down 12.8 per cent), Hungary (-9.3 per cent), Portugal (-7.3 per cent) and the Netherlands (-7.2 per cent) saw the biggest falls.

Inevitably, these two emerging markets – Estonia and Latvia – are being pitched as hotspots…’Latvia…the 18th country to join and use the euro…financial stability improves’ etc. Are they good investments? I’d be wary if I were you.

The problem with these relatively small new countries is that much of the market is focused on the capital. That is driven often by foreign investors. It’s a smaller market within a small market and the ‘luxury sector’ (which is what most foreign investors buy into) is an ever smaller market within that. Much of that property is beyond the reach of the local population. Who will rent or buy? Where’s the exit strategy?

Turkey – What’s Hot?

Julian Walker, director at property specialists Spot Blue, has been saying, as mentioned last week, that land in Turkey is worth a look. He gives us a nudge as to what and where to look. ‘We’re seeing a consistent demand for land in 2013. Currently, we have a client in the process of buying an 800-square-metre plot in Belek for around €110,000 (£94,128 approximately), giving the option of building a desirable private villa or sitting on the plot and waiting to see if its value rises. Many Middle Eastern buyers have long-term investment interests in Turkey. They are seeking property in rapidly developing suburbs of Istanbul.’ Some of you – 15 to 20 – have expressed interest in buying land here and we are at work on a checklist for you; ready this weekend.

Quick Global Overview

Just been re-reading the latest Global Property Guide for the year ending Q1 2013. Let’s pick up some price risers that are worth a look, in our view anyway.

The US. The S&P/Case-Shiller index rose 8.31 per cent over the year; that’s the biggest year-on-year increase since Q1 2006. From what we can see, the various measures, construction levels, foreclosure rates etc, are all going the right way. Well done to those of you who bought in last year. Those who buy this year won’t do as well, but there is still plenty in the system for more cautious, ‘wait and see’ investors. Next year, we think, will be too late for the ‘wait and wait and wait’ investors.

Dubai. Have to say that property prices here are reported to have risen 28.02 per cent over the year to Q1 2013. Speculative investors keep telling me this is the place to be. Maybe – at least in places – but I don’t think it is for widows or orphans. There is still a lot of mass market supply out there and in the system. I think you need whatnots of steel.

We’re taking a closer look at different markets at present as we are re-packaging some of the services from the autumn. Do let us know where you are looking please. It helps us help you.

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