Streetwise Property Alert 30th May 2014

Welcome to today’s email alert…

France & Europe – What’s Next?

Ambrose Evans-Pritchard, The Telegraph’s International Business Editor in London, offers an outlook. ‘Be careful if you are planning to buy a house in France. The EU stress test for banks just released expects French property to fall 1.6 per cent this year and another 1 per cent in 2015 even if things go well.’

‘An adverse scenario is a cumulative drop of 31 per cent by the end of 2016. This reflects the worries of French regulators who fed the data to the European Banking Authority. Romania competes for horror. Italians deem their country less volatile. Spain falls 4.3 per cent this year, then starts to recover. The worst case is a 10.4 per cent drop over the next two years with rebound by 2016 even in a crisis. The Spanish regulators are delightfully optimistic as usual, seemingly living in a parallel universe.’

Student Landlord? Heads Up!, AFS, cautions landlords that the student exam season is almost over and will be swiftly followed by a mass exodus of students from their rented accommodation as they return home for the summer. ‘Organising a professional company to produce an inventory at the beginning of the tenancy and a pre-checkout meeting with students a couple of weeks in advance of them moving out could be the answer to avoiding a dispute altogether. It helps landlords maintain a positive reputation and gives students, who are often renting a home for the first time, a better chance to receive their deposit back.’

‘It’s an opportunity for landlords to resolve any problems in advance, or at minimum, ensure that an independent third party explains what the potential issues are so that the students are clear about grievances that may arise. In particular, if items are damaged or missing, it gives students a chance to source and replace them, as well as carry out any necessary works (cleaning, fixing etc), instead of it being deducted from the deposit or attempting to resolve discrepancies on leaving day.’

‘Student landlords should expect scuffs and scrapes, but not burns in the carpet or holes in the walls. The term is not explained in law and is very much a case of considering the merits of each incident – this is very much where a reputable, independent third party can be of enormous benefit. A pre-check out meeting also gives students time to discuss house matters with their house-mates, sharing any potential costs and responsibility before they head home for the summer, hundreds of miles away from each other.’ Food for thought.

Spain – A Quick Update

Growing interest in Spain amongst members so we have been looking at the new findings from the General Council of Spanish Notaries. Have to say, it’s more positive than it has been in some time. Key findings? Q1 2014 sales are up 45 per cent compared to Q1 2013. Mortgage loans are up 48.3 per cent over the same period. Note, of course, that we are
starting from low bases here. Interestingly, for those who focus on price per square metre, the average price over the year to the end of March 2014 is down 4.8 per cent to €1,248.

As mentioned previously, Chris Mercer of Mercers in Murcia suggests ‘mortgages’ are the issue that are restraining a real recovery. ‘If the Spanish government really wants to give its economy a shot in the arm, the banks should relax their lending criteria. The maximum loan-to-value for non-residents in Spain today is around 60 per cent. However, the purchaser also needs to pay up to 15 per cent of the purchase price in taxes and fees so, unless you’re buying a bank repossession where they may lend up to 100 per cent or more, you really need easy access to around half the money to buy a Spanish property. This debars a large number of people who require larger loans.’ Meantime, there are big opportunities here for those with cash.

All for now, see you soon.


Streetwise Property Alert 29th May 2014

Welcome to today’s email. If you have missed Pure FX’s weekly or monthly currencies reviews, they are here for you. Email back. Meantime…

Turkey – ‘New’ Airport

It’s common knowledge – I hope – that a new airport coming in, or well-publicised, significant improvements to an existing one, help property prices in the area. How far do you want to drive once you’ve landed on holiday? 30 minutes? 45? That’s the area of impact.

We note this week that there are plans to upgrade Gazipasa Airport which is located 30 minutes east of Alanya in Turkey – improved infrastructure, more flights etc. As such, there may – may – be some knock-on effects. This is just a heads-up, we are taking a closer look not only at Alanya but also at the nearby resorts of Side and Belek. We welcome feedback if you are active here.

London – Still Upwards

I spent a pleasant afternoon in London this week with five investors who are looking to buy there; we visited hotspots and one or two projects. There is still upside here in the short-term. According to estate agents Haart, the average London property price has now reached £501,056.

‘London home owners will be forgiven for being astonished that they have seen an average £100,000 increase in equity over the last 12 months. In spite of London property prices breaking new records of over £500,000, up 9.4 per cent annually, buyers are still coming to the market in numbers greater than last year.’

‘The way to put the brakes on price growth is to increase supply, but in London we have only seen new property instructions rise 0.2 per cent annually and new properties for sale across the UK as a whole are down 1.7 per cent. Home owners can help break this cycle by putting their property for sale before finding somewhere themselves thus freeing up supply.’ We have another get-together in London next month; that’s already full (we only take six at a time) but we can offer feedback to members and there will be another in July and then September (I am in the US for August).

Singapore – Malaysia Trigger?

Our friends at OPP Connect report that a new HSR rail link from Singapore to Malaysia will ‘boost property values near the route of the line.’ The High-Speed Rail (HSR) line is due to complete in 2020 and cut the journey time from Singapore to Kuala Lumpur from six hours to 90 minutes.

Having done some due diligence on this, it’s fair to state that it – or at least the exact route – is not yet finalised so it is something of a ‘one to watch’ right now. We are keeping an eye on developments. Do let us know if you are interested in these markets; we have a relatively strong set of contacts there.

All for today, see you on Friday.

The Gentleman Peeler

If you want to study the art of effortless old-fashioned salesmanship, you could do a lot worse than study the video of  Joe Ades, which I’ve linked below. Joe died in 2009, but spent the previous 15 years selling just one product – a potato peeler – on the streets of New York. Although the peelers only cost $5 each, Ades ended up living in a Fifth Avenue apartment and enjoying east side café society. When asked about his success, Ades said “Never underestimate a small amount of money gathered by hand for 60 years.”  Enjoy the video.