Welcome to Thursday’s email of news and views…
It’s often said that, for a market to be truly rising, it should not have ‘too many’ distressed properties, i.e. those in foreclosure, available to buyers. Quite simply, the more there are, the likelier it is that prices are kept down at or close to distressed levels. ‘Too many’ or ‘not too many’ is open to debate but some pundits say that 2 per cent is about the norm in a healthy market.
On that basis, some markets in the US, although they are often receiving good press, are not as healthy as they might be. According to Core Logic, Michigan had the largest share of distressed sales of any state in December at 34.3 per cent. Nevada at 32.2 per cent, Illinois at 27.4 per cent, Florida at 25.8 per cent and Georgia at 24.6 per cent came next.
Note though that the 2 per cent figure we gave is a percentage of the total properties currently on sale whereas these 34.3 per cent and other figures are a percentage of the total sales. It is also worth mentioning that these high percentages are falling steadily. More to come.
Meravista, a website selling properties on the Algarve, says Portugal is a buyers’ market for both investment and lifestyle purchases. The site compared prices on its 24,000 units database with 2013 bank valuations from Statistics Portugal (INE). Prices on the Algarve are now only 5 per cent higher than bank valuations on average.
Anita van Huson at Meravista says, ‘Algarve property was experiencing inflated growth in advance of the recession, so it was hit particularly hard when the markets crashed. I don’t think we’ll see valuations as low as these for a long time to come, which makes the Algarve an ideal place for property investment.’ We have more to follow.
Knight Frank’s latest Dubai Prime Residential Review suggests that market cooling measures in Dubai are having some effect; having seen prices rise, in some locations, by 20 to 30 per cent in 2013, the rate is expected to slow closer to 10 per cent in 2014.
Their Khjawar Khan says, ‘Given that prime residential prices are still almost a third below their previous peak, and the fact that there is little in the way of new apartments due to be delivered over the next 12 to 18 months, we think there is decent scope for prices to play catch-up. We anticipate that prime residential prices in Dubai could rise by 10 to 15 per cent this year.’ We have members out there to report back shortly.
All for now, as ever, feel free to email back.