Mortgage market impact

40-article law

Source: AME Info

New York, sung about by Frank Sinatra, chronicled by Carrie Bradshaw and trampled by King Kong, is not the only city capable of captivating the un- encumbered and adventurous. The world is dappled with electric and stor- ied cities, and real estate is staggeringly affordable in many of them.

“There is so much value in a lot of foreign countries,” said Nigel Leck, an international property expert on the BBC-TV program “Uncharted Territo- ry.” “The capital growth will be very, very good.”

Entrepreneurial types should seize the moment in Eastern Europe, where cities like Budapest, Prague and Krakow, Poland, are in need of basic services and programs to propel them into the future. Those who want to be certain of a transparent market and the protection of property rights - but want more bang for their buck - should consider Toronto, Montreal and Quebec.

Sun-seekers looking to live and in- vest in a more tropical climate may want to migrate to one of the many flourishing cities in Latin America.

Young executives who want to posi- tion themselves for the next decade can get deals in Shanghai, even though the market there has been somewhat vola- tile of late, while romantics can em- brace a piece of Paris for less than they may have thought.

Information about ownership laws in 24 countries can be found on World- Properties.com. Click on “Country Info,” then “Business Practices.” Select a country from the drop-down menu. Where it reads “Select Business Prac- tice,” choose “Foreign Ownership.” Any restrictions should be listed.

In Mexico, for example, Article 27 of the Mexican Constitution of 1917 pro- hibits foreigners from owning residen- tial real estate within 48 kilometers, or 30 miles, of any coastline or 96 kilome- ters of the borders.

“As a rule of thumb, countries that were former British colonies have few, if any, restrictions, whereas many other countries restrict and require you to get a special permit to buy,” David Michon- ski, chief executive of Coldwell Banker Hunt Kennedy and an international real estate specialist, wrote in an e-mail message. “But in resort markets, the countries often make exceptions.”

Renting is a more informal process. “It is always easier to rent in a foreign country than to buy and I know of no restrictions on renting anywhere,” Michonski wrote.

Latin American cities are among the most exciting and affordable, especially Buenos Aires, the sultry, party-until- the-wee-hours city known as the Paris of South America. In 2002, the Argen- tine peso was devalued by the govern- ment, resulting in a currency crash. But four years later the city is recovering.

“This is a city that is getting more ex- pensive because the economy is on the recovery, but it’s still at a fraction of the cost” of property in New York, said Jeff Hornberger, manager of international market development for the National Association of Realtors.

The enclave of the moment is San Telmo, a “young, hip urban scene with a thriving arts community and a strong ex-pat community,” as Hornberger put it. The neighborhood is dotted with res- taurants, bars, boutiques and colonial houses. Property costs $56 to $93 a square foot, Reynolds said. Renting also is affordable. There are furnished studi- os with weekly maid service for $450 a month at www.buenosaireshous- ing.com.ar.

Real estate is more costly, though still reasonable, in Recoleta, an elegant downtown tourist magnet. Prices are about $180 to $300 a square foot, Reyn- olds said.

Lief Simon, the editor of Global Real Estate Investor, a newsletter published by International Living, likes Panama City with its high-rise buildings, restau- rants and some 80 banks. “It’s a first- world city,” he said, and yet two-bed- room apartments can be had for $60,000 to $80,000.

Mexico City is recommended by some property experts, but its crowded streets and polluted air makes others cringe. Hornberger suggested living in Condesa, a chic area that has been likened to New York’s East Village. There are two- and three-bedroom apartments in the neighborhood for about $1,200 to $1,500 a month. Some one-bedrooms in downtown Mexico City are less than $700 a month.

Those who are partial to cooler tem- peratures could head to Canada. “‘It’s a great opportunity for kids today,” Michonski said.

Toronto is the financial headquarters of the country and three of its trendiest neighborhoods - The Beaches, West Queen West and King West Village - are among the most affordable. “It’s a mini-Manhattan, but we’re decades and decades behind in terms of where you are with your price points,” said Mi- chael Kalles, president of Harvey Kalles Real Estate (harveykalles.com) in Toronto.

In Montreal, the “place to be and to be seen” is Plateau Mont-Royal, said Bertin Jacques, a spokesman for Tour- isme Montreal. Property in this area, which is popular with young Canadians because of its cafes, restaurants and nightclubs, is about $220 to $240 a square foot and rentals are about $650 to $1,470 a month, he said.

If Buenos Aires is the Paris of South America, Quebec City is the Paris of North America. It is divided into Haute- Ville, the more expensive upper town, and Basse-Ville, lower town.

Warehouses converted into 750- to 2,000-square-foot apartments are about $170,000 to $390,000, said Richard Seguin, a spokesman for Quebec City Tourism.

Speaking of Paris, the city of Renoir and haute couture is far less expensive than New York and San Francisco, a fact that has escaped many.

“There’s a lot that is still way under- priced because it needs renovation and gentrification,” said Adrian Leeds, who moved from Los Angeles to Paris in 1994 and is the editor of www.parlerpar- is.com, a newsletter about Paris, as well as other Web sites about France, includ- ing French Property Insider (www.frenchpropertyinsider.com).

Those looking for a deal should con- sider arrondissements where the city’s bohemians and “bobos” (bourgeois bo- hemians) flock: the 10th, 18th and 19th.

In the 10th, the areas along the tree- lined Canal St.-Martin are beautiful, but those near the Gare du Nord “can be horrible,” said Yolanda Robins, a prop- erty manager for French Property In- sider who moved from Philadelphia to Paris two years ago. The average price per square foot in the arrondissement is about $530 to $670, she said.

Long-term furnished rentals in those arrondissements are about $320 to $430 a month, according to Leeds. “It doesn’t even come close to London,” she said.

As Hornberger put it: “London is out of reach unless you’ve got a really good trust fund.” Yet some Anglophiles and English majors remain undeterred.

Ryan Benson, director of Dream Properties London, suggested renting in St. John’s Wood. But even there, a 270- square-foot studio on the famous Abbey Road is on the market for about $1,470 a month (at www.foxtons.co.uk). Other areas to search are Maida Vale, West Hampstead and Little Venice, though the pickings are slim. Suburbs like Stanwall and Radlett are less expensive but what is saved in rent is paid for in gasoline or commuting time.

Those doing business in China (Michonski calls it “the land of the fu- ture”) may want to work and buy in Shanghai. Adrienne Farrelly, general manager of Shanghai Properties (shanghaiprops.com), suggested look- ing in People’s Square, nestled among two of the city’s major commercial and retail streets. Nearby is Top of the City, an apartment complex where property is about $350 a square foot and rentals start at around $700 for a 689-square- foot one-bedroom, Farrelly wrote in an e-mail message. “It’s probably the best value in town given that it’s at People’s Square,” she wrote.

Property experts agree, however, that the best values are really in Eastern Europe. There are “huge swaths of land” available for “knockdown prices,” said Leck of “Uncharted Territory.”

“That’s where the opportunities lie,” Simon said, “and that’s where the young person who’s entrepreneurial could make some money.” It costs about a $110 a square foot to buy in Bucharest, he said.

“I think the biggie there in Eastern Europe is Bulgaria,” said Michonski, adding that it has magnificent beaches as well as mountains for skiing and that “you can live like a king on $10,000 a year.”

Source: International Herald Tribune (IHT)

Dubai based property company, Bonyan International Investment Group, has announced plans to invest $15 billion to build a tourist village within the area of Jebel Al Shiekh in Syria. Commenting on the project, Engineer Abdullah Attatreh, Chairman of Bonyan International Investment Group, said that the project will be called Syria Bonyan City and is a step towards achieving the company’s aim to build a city within every Arab city.

The new development will be the second after Jordan Bonyan City. The Syrian Higher Council for Investments has given initial approval for the establishment of this project, which will open new horizons for real estate investment in Syria. Final approval will be granted to the project as soon as feasibility studies and final designs are completed and submitted. “We are happy to have signed this important agreement with Bonyan International Investment Group. Syria Bonyan City is a mega project that will include tourist, commercial, residential and entertainment facilities including a Ski area, specialised hospitals and many other services” said .

Shaher Taqi, a Syrian investor and partner in Syria Bonyan City. “Real estate investment in Syria is growing at a rapid rate especially following recent reforms by the Syrian Government to attract foreign investment,” added Taqi. The Syrian Government recently made a number of economic and political reforms and will re-draft investment laws to reach a final version for approval and implementation. Syria is considered one of the most promising markets in the Middle East that is expected to attract foreign investments.

Source: Champress

The UAE’s RAK Properties is planning to invest Dh1.4 billion ($381.2 million) this year in new luxury developments in the emirate of Ras Al Khaimah and is looking for joint ventures in Dubai and Abu Dhabi.

Mohammed Sultan Al Qadi, the company’s chief executive, also said he thought the firm’s shares, traded on the Abu Dhabi stock exchange, had fallen too low.

‘It should be better…It has been as high at Dh4.8 (dirhams)…with a company like ours with over 70 million square feet (6.503 million square metres) given free by the government we have large assets,’ Al Qadi said.

In November, Ras Al Khaimah, one of the seven emirates in the UAE, issued a decree allowing foreigners to own real estate in RAK Properties projects, following Dubai which kicked off a property boom by allowing limited foreign ownership in 2002.

Al Qadi said he did not expect profits to surge as a result of the law as RAK Properties was facing competition from four other real estate firms in Ras Al Khaimah, although he expected the overall property market to grow 20 to 30 per cent this year.

‘The supply and competition is high and we don’t think the margins will be very high but they will be reasonable.’

Al Qadi said the company was planning to invest Dh1.4 billion in new luxury developments in Ras Al Khaimah this year.

The firm has already started work on a project worth over Dh20 billion in Ras Al Khaimah which will include 10 five-star hotels and almost 4,000 residential units set to be completed by the end of 2008.

Other projects include a residential complex centred around a golf course, two residential towers, and a Dh5-billion residential and commercial development modelled on Dubai Marina, a complex of luxury residential towers outside downtown Dubai.

Al Qadi said he was setting up a financing company with a capital of around Dh1 billion to fund projects for RAK Properties, which he says has capital of Dh2 billion.

‘We have sufficient funds at our disposal for the next few years,’ he said.

Al Qadi said RAK Properties was looking to form a joint venture with one or two firms in Dubai or Abu Dhabi and would seek to enter the medium to lower end of the market.

‘We’ve been talking but it hasn’t taken (on) seriousness yet,’ Al Qadi said. ‘It will likely be with one or two companies… If a good opportunity comes I may move tomorrow.’

Al Qadi said he saw strong demand continuing in the next five to 10 years in the Dubai property market but much of the growth would come in the medium-to-low cost sectors because of an oversupply of luxury projects.

‘In Ras Al Khaimah, we want to show something unique, but if we go somewhere else they may not need deluxe or super-deluxe, they may need middle or lower, and we’ll need to meet that demand,’ he said.

Source: Trade Arabia

A huge demand for homes in the sun has seen Britons’ spending on properties overseas increase by 45 per cent in four years. The number of them owning second homes abroad now exceeds a quarter of a million people, at 257,000.

The official Social Trends report today says British families have invested more than £23 billion in overseas property, with most of that invested in Spain and France although increasing numbers are turning to Canada, the Caribbean and New Zealand.

The Office for National Statistics says more than a million British families own a second home, the vast majority of which (72 per cent) are in England, with five per cent in Wales and Scotland, and the remainder overseas.

“In recent years the increasing affordability and accessibility of foreign property markets has contributed to a rise in the number of UK households that own second homes abroad,” the report says.

“Between 1999-2000 and 2003-4 the number increased by 45 per cent.”

Spain accounted for 27 per cent of all second homes abroad, followed by France at 20 per cent.

But in 2003-4 over a third of all homes owned abroad were outside Europe, with property ownership by Britons increasingly common in places such as the United States, Australia, Canada, the Caribbean, India, New Zealand, Pakistan, South Africa and Sri Lanka.

Alex Wright, director of the currency specialist HIFX, which assists Britons buying property abroad, said there was strong demand in more adventurous locations.

“Spain and France are still the most popular destinations but we have seen increased interest for investment property in Bulgaria and Dubai. Even Canada and Switzerland have seen their fortunes rise and new locations pop up all the time, including Egypt, Brazil, Poland, Hungary and the Czech Republic.”

The Association of British Travel Agents estimates that home ownership abroad will double over the next five to seven years. The Spanish Ministry of Tourism predicts that more than one million foreigners will set up home on the Spanish coast in the next six years, a figure expected to treble by 2025.

Sarah Vaughan, a property specialist and director of a public relations firm based in Spain, said: “Realistically the minimum you can spend is £145,000 for a two-bed apartment, or £210,000 if it is in Marbella.

“The Costa del Sol is not the place to buy if you are looking for a good investment. You can still buy places for a song in northern Spain and inland, but northern Spain tends to be rainy and without the bars and if you are inland you might not be near the airport, or have a phone connection, or the property might need a lot of work.”

Recent research suggested some young Britons were looking abroad to take their first step on the property ladder because house prices were too high in Britain.

A poll of more than 4,600 adults, conducted by YouGov, found that nearly half of the 18- to 29-year-olds questioned planned to buy abroad, with two thirds saying their foreign investment would be their first property purchase. More than 80 per cent of those first-time buyers said they would rent out their property.

Source: Telegraph 25/02/2006

Spain has come out as the number one destination for UK buy-to-let investors during 2005, a new study has revealed.

Figures released by the Office for National Statistics (ONS) have shown that the majority of UK people considering investing in property abroad are heading for the traditional favourite of Spain. Despite the emergence of many other vibrant property markets in recent years – in particular eastern European destinations such as Bulgaria – the figures reveal that most are keen to stick to the old favourite.

Many people recognise that Spain represents a solid investment, with property still in hot demand despite talk of a slowdown in the market and the country’s overall economy. That has failed to dampen the spirits of many property investors, who realise that the country is still hugely popular with British tourists as well as those from other countries, meaning that there will always be a market to help property prices grow.

And the number of people who have come to realise this fact has jumped considerably in recent years.

While the government’s U-turn on self-invested personal pensions (Sipps) had led some to fear that 2006 would result in a downturn in investment in foreign property, rather than the earlier anticipated increase, the ONS study suggests that the market will remain buoyant regardless of the Sipps situation.

This can be seen from the fact that 257,000 Britons now own a second home abroad, according to the ONS statistics, with spending on overseas investment jumping by 45 per cent in the last four years alone.

Over £23 billion was spent by Britons on foreign property investments last year, with Spain being the top destination.

However, the Spanish pull is not the only area interesting UK investors, with France coming second on the list.

According to the figures, while 27 per cent of foreign investments went on properties in Spain, 20 per cent of those investing in the property sector abroad chose France.

Overall, 75 per cent of all second homes owned by Britons are in England, highlighting the fact that the UK property market is still one of the strongest in Europe despite the slowdown over the last 12 months, with investors still seeing the UK market as having the potential to offer significant returns.

That view is endorsed by recent studies which have suggested that the housing market is back on track, with buy-to-let lending increasing at one of the fastest rates since the turn of the year.

A huge demand for homes in the sun has seen Britons’ spending on properties overseas increase by 45 per cent in four years.

The number of Britons owning second homes abroad now exceeds a quarter of a million people, at 257,000.

An official report today says British families have invested more than £23 billion in overseas property, with most of that invested in Spain and France although increasing numbers are turning to Canada, the Caribbean and New Zealand.

But people buying villas and apartments have been blamed for soaring house prices in areas of France, Spain and Italy.

Figures released by the Office for National Statistics show that more than a million families in England own a second home, the vast majority of which (72 per cent) are in England, with five per cent in Wales and Scotland, and the remainder overseas.

“In recent years the increasing affordability and accessibility of foreign property markets has contributed to a rise in the number of UK households that own second homes abroad,” the report, Social Trends, says.

“Between 1999-2000 and 2003-4 the number increased by 45 per cent.”

Spain accounted for 27 per cent of all second homes abroad, followed by France at 20 per cent.

But in 2003-4 over a third of all homes owned abroad were outside Europe with almost 154,000 in the United States.

Property ownership was also increasingly common in countries such as Australia, Canada, the Caribbean, India, New Zealand, Pakistan, South Africa and Sri Lanka.

Alex Wright, director of currency specialist HIFX, which assists Britons buying property abroad, said there was strong demand in more adventurous locations.

“Spain and France are still the most popular destinations, but we have seen increased interest for investment property in Bulgaria and Dubai. Even Canada and Switzerland have seen their fortunes rise and new locations pop up all the time, including Egypt, Brazil and central Europe - Poland, Hungary and the Czech Republic.”

The Association of British Travel Agents estimates that home ownership abroad will double over the next five to seven years.

The Spanish Ministry of Tourism predicts that more than one million foreigners will set up home on the Spanish coast in the next six years, a figure expected to treble by 2025.

Sarah Vaughan, a property specialist and director of a public relations firm based in Spain, said estate agents still received inquiries from British people who thought £100,000 would buy them a four-bedroom property on the Costa del Sol.

“Realistically the minimum you can spend is £145,000 for a two-bed apartment, or £210,000 if it is in Marbella.

“The Costa del Sol is going through a bit of a wobble and is not the place to buy if you are looking for a good investment.

“You can still buy places for a song in northern Spain, and inland, but northern Spain tends to be rainy, and without the bars and restaurants, and if you are inland you might not be near the airport, or have a phone connection, or the property might need a lot of work.”

Recent research suggested some young Britons were looking abroad to take their first step on the property ladder because house prices were too high in Britain.

A poll of more than 4,600 adults, conducted by YouGov, found that nearly half of the 18- to 29-year-olds questioned planned to buy abroad, with two thirds of those stating that their foreign investment would be their first property purchase.

More than 80 per cent of those first-time buyers said they would rent out their property.

The new breed of first-time buyers, dubbed the “jet-to-let generation”, said they would spend an average of £101,000 to buy abroad - nearly £80,000 less than the average house price in Britain.

Simon Burgess, a director at Oceanico Developments, a property development company, said: “More than two in five want to live in foreign climes because it’s more affordable than the UK.”

Source: Telegraph

Overseas property purchasers are being urged not to dismiss buying a property in Spain in favour of newly emerging hotspots in eastern Europe.

Spanish property experts say that buying property in Spain can still offer good capital growth, rental returns and a stability not currently offered by eastern European countries.

There is a feeling among some overseas property investors that the property bubble in Spain, where property prices grew by 17.2 per cent in the first half of last year, is about to burst.

But Jason Windle, managing director of Spanish property firm, Platinum Properties, disagrees.

“Even though there is talk that the Spanish property market has reached its peak, it is still catching up with the English market,” he said.

“I strongly believe that it has a long way to go and we may still be only mid-way through the property boom.

“With excellent health services and an unrivalled quality of life, Spain offers a much more enjoyable investment opportunity than reading share prices every day. What’s more, as there are few barriers to living and working in Spain it has become a favourite destination for people looking to migrate or retire overseas, which acts as a great support to prices.”

Terry O’Connor, business development director of overseas property company The Superior Group, agrees that Spain is still a good option.

“Mortgages are easily obtained, there’s no worry with currency instability and there are some great deals at the moment. Some areas in the Costa de la Luz have seen inflation of 40 per cent in the last two years, and we expect at least 15 per cent in 2006.”

Earlier this year, property investment firm Assetz said property in Spain was overvalued.

Stuart Law, Assetz managing director, said: “Valuations on Spanish property have overshot the mark and investors may come down to earth with a bump in 2005 as prices fall back into line.”

But Nick Clark, managing director of the Homebuyer Show, said: “Despite emerging property markets creating a real buzz at the moment, traditional markets like Spain are still incredibly popular with visitors to our shows.

“With low cost airlines leaving for Spain throughout the day, good infrastructure and an established year round rental market, it really is an excellent investment opportunity. However, we would encourage any potential or professional investors to research the market and get advice from a professional before they commit.”

Platinum Properties and The Superior Group are among the companies specialising in overseas property that will be exhibiting at the Homebuyer Show.

Source: Aboutproperty.co.uk Tuesday, 21 Feb 2006 10:36