Streetwise Property Alert 23rd June 2014

We are looking to overhaul ‘Property Alerts’ from September; new websites, beefed-up weekly services etc. We are also going to limit memberships for the weekly, fuller services (London, France, Spain, America, Lifestyle, Investment, Hotel Property Alerts) and will only be taking on about another 100 or so members for (each of) Spain, America and France Property Alerts in particular. Time to sign up? Read on…

Spain – The Edge Of Recovery

James Daniel, head of the IMF’s Spain mission, has authored a new report on Spain suggesting is it on the brink of recovery. ‘After six consecutive years of house price declines, especially intense in certain periods, everything points towards the end of this scenario drawing to a close, giving way, at the least, to price stability.’

‘Prices show signs of improvement after years of accelerating declines. Average national house prices rose 0.84 per cent quarter on quarter and are down just 1.7 per cent over 12 months. This is a big improvement on the double digit annualised declines last year. This is the first time in eight years that sales and prices have improved together. The market hasn’t seen this since the first quarter of 2006.’

‘However, the lack of new housing starts in recent years means the only new homes are those built during the boom and still for sale. A large share of them are in the hands of the financial institutions, being sold actively with price reductions. As this stock reduces, the relative weight of new home sales will decline to ever smaller quotas.’ At SPA, we have some buying checklists coming plus inspection trip visits to Marbella and Murcia and some more BMV deals.

US- Slowing Growth Update

According to the latest report from real estate data provider Clear Capital, we are seeing ‘slowing growth’ in the property market. In a clear reminder of our oft-repeated statement, ‘beware averages’, the report indicates that the annual price rise across the 50 major metro markets is 22.3 per cent but ‘there is some considerable variation depending on location…varied from a fall of 37 per cent to growth of 45 per cent.’ You need to look at micro-markets. In Cleveland, the best-performing zip code area is up 42.4 per cent, the worst is down 23.3 per cent.

More generally, ‘It’s no surprise that the spring buying season isn’t moving the needle this year. The rising price floor in the low tier sector of the market has squeezed investor returns, thereby removing a key demand segment. We don’t expect to see a large pop in prices through the summer buying season. It’s likely we’ll keep chugging along at our current pace, somewhere around one per cent quarterly gains for the rest of the year.’

‘Considering the number of key housing fundamentals that remain stressed, like millions of borrowers still underwater, high levels of student debt, potential borrowers with less than perfect credit, and a job market that is still recovering, we don’t expect a market with waning investor demand to withstand any eye-popping rates of growth. Although it’s not a quick fix to the larger housing problem, home price moderation is really a healthy move for the market overall.’

‘While some might be discouraged by a weak spring buying season, we are encouraged that price trends are finally calibrating back to pre-bubble norms. Despite other headwinds, moderating home prices will serve as the foundation to a more balanced market moving forward. Remember, we’re still in recovery mode which means deals exist. Market participants just need to look deeper. As softer gains continue to unfold, broad stroke investment approaches will prove less and less fruitful. As such, market participants who pinpoint investments will be better positioned for success.’ Interested in America? We may be testing a separate Florida service shortly. Let us know if this
interests you.

France – Prime Market Update

Knight Frank reports that buyers returning to the prime property sector in France. ‘Against the backdrop of the global recession, the Eurozone debt crisis and President Hollande’s austerity measures, France’s prime property market has faced considerable challenges in recent years. Nonetheless, a villa on the Côte d’Azur or a ski chalet in the Alps remain amongst the most popular investments for international second home buyers.’

‘With deflationary risks increasing in Europe, the European Central Bank is considering following the lead of the UK and the US by injecting a round of quantitative easing (QE) into the European economy. This will have the effect of driving down the euro and increasing the appetite for French property from non-Euro buyers.’

‘Where property is priced accurately interest is generated, viewings are arranged and sales are agreed. However, there are still far too many properties that are unrealistically priced and languish on the market due to a lack of realism on the part of some vendors and a lack of transparency in the marketplace. We are cautiously optimistic about the market.’ We have a visit to Paris coming up this weekend – feedback next week – and are about to introduce a new ‘Centre Parcs’ type deal near Paris. All at FPA!

All for now, other than to say email back telling us which services interest you and we will sign you up for free. See you again tomorrow.

admin@streetwisenews.com

Leave a Reply

Your email address will not be published. Required fields are marked *