Streetwise Property Alert 17th September 2013

We’ve had a good response to the German armchair  investment. I cannot say too much about it in public but I can confirm that we think it’s a great deal and you should ask for details so you can do your due diligence, use your own lawyer and see for yourself.

Euro Prices – At Last!

The latest global index from Knight Frank shows that European property prices are, all in all, up for the first time since 2010. Prices in Europe rose 0.7 per cent over the past 12 months. As you’d expect, there are wide variations. Remember my mantra to A Level students? If A goes up 10 per cent and B goes down 10 per cent, the average is not
representative of either.

The Knight Frank figures showcase this perfectly. Turkey was the strongest market performer, up by 12.2 per cent over the year. Greece was the weakest market performer, down by 11.5 per cent over the year. Bottom fishing? Prices in Greece, Spain and Italy are now 31 per cent, 29 per cent and 15 per cent off their market peaks. Tell us where you
are looking to buy in Europe; we’ll tell you what’s happening beyond the average.

London? Heads Up

We have a paid-for service at London Property Alerts and are looking to offer a free trial period for serious investors who will be buying in the next quarter. We run a paid-for service because, to be blunt, there are a lot of members who like a freebie and get into the system when they have no intention of buying. It can cause issues. If you are
serious and would like a free trial, send us your detailed requirements in the first instance.

We have, for paid-for members, sent up extensive links with developers to ensure that they can get the best, pre-market deals. That’s especially important these days as we note, from new Chesterton Humberts research, that overseas property buyers take some 70 per cent of new-build homes in prime London.

With demand for prime new-build properties set to remain robust and new supply struggling to keep up, we expect investment volumes will be higher this year than last. The relative weakness of sterling means that many overseas buyers can achieve effective discounts on purchase
price whilst acquiring an asset that will almost certainly appreciate considerably over time and which they will have little difficulty in selling when the time comes.’

More On Mexico

Remember the news from Mexico? In short, buyers from overseas are expected to be able to buy coastal properties for the first time? At present, we are told, foreigners have to partner with a local bank in an agreement called a fideicomiso to buy in these restricted zones but it is complicated and time-consuming which puts many people off,’

That’s set to change and, as a result of the news, it’s being reported that ‘searches for luxury coastal property in Mexico by overseas buyers have increased by 27 per cent…Cancun and Playa del Carmen are set to benefit most with 57 per cent of all property searches by UK residents centered on the state of Quintana Roo in which they are located.’

Without wishing to get too ahead of ourselves – I am the man, after all, who once wrote a report on The Effects On Property Of The 2012, er, Paris Olympics (to be offered in the national media on the day after the announcement) – we can do a report on request. Let us know?

Have you read the international property newsletter for September?

Please feel free to send it on to anyone who may be interested in overseas property.


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.’