Authors Posts by admin

admin

1113 POSTS 0 COMMENTS
Les Calvert is the owner of overseaspropertymall.com and many other property and travel related websites. Les writes news and articles on the overseas property market for leading websites, trade magazines and newspapers.

0 3428
taxes

The French are seeking to protect their domestic property rental market against overseas buyers.  Foreign buyers tend to push house prices up, so it becomes more and more difficult for young people to get on the property ladder.  In Europe and America especially, wages are stagnant and their real values are actually falling as costs of living increase.  House prices rising pushes up rents and makes governments unpopular, and since the actual causes of the financial crisis seem beyond the power of elected officials to control, it falls to government to attempt to control the symptoms; Hong Kong announced recently that it would bar foreigners from buying certain types of home, and now France has followed suit.

The difference is that Hong Kong remains an aspirational island, the world’s freest economy, and the complaints that the system there is unfair are the voice of those who want the rules changed, not those who want to play a different game.  The US has a history of voting for rightist demagogues or do-nothings like Hoover in times of financial crisis, but the French have responded by electing the Socialist party.  And now the opponents of the Socialist party are accusing M. Hollande and his comrades of driving wealth creators out of the country.

Bernard-Arnault
Bernard Arnault

Bernard Arnault is the world’s fourth-richest man, with an estimated personal worth of over $41bn.  He is a personal friend of ex-President of France Nicolas Sarkozy, and spent the years of Francois Mitterand’s Socialist government in the United States.  Now he hopes to take his fortune, and his position as CEO of LVMH, the luxury goods group behind brands like Louis Vuitton, and move to Belgium.  The news came on the same day as M. Hollande vowed to follow through on his electoral pledge to introduce a 75% €˜wealth tax’ on all incomes over €1m.

Predictably, the response to both pieces of news has been polarized.  Business leaders and rightist politicians have roundly attacked M. Hollande’s policy.  Britain’s free market-happy leader David Cameron, who subscribes to the theory that it is entrepreneurs who enrich society, offered to ‘roll out the red carpet’ to people fleeing the new French tax.  And Francois Fillon, M. Sarkozy’s old Prime Minister and a candidate for leadership of the UMP party, called M. Arnault’s actions the ‘troubling results’ of M. Hollande’s ‘tupid decisions.’  One Socialist Party MEP pointed up a different angle on M. Arnault’s actions, however, saying, ‘when you leave France, you don’t leave it in difficult times.’  M. Arnault put out a statement saying he ‘is and will remain’ a French citizen, including for tax purposes.

Yet while M. Hollande attacks the wealth of the wealthy in approved Socialist style (and reaps the rewards of increased left-wing support at the ballot) his government is also working on ways to make the French housing market more attractive for investors.  Just like in the US and Hong Kong, rents are soaring.  Just like in the UK, housing is in short supply.  So M. Hollande’s government has scrapped the ‘Scellier’ initiative, and set out to get the French property market into more manageable shape.  This is to be achieved through a mixture of carrot and stick.

The stick is to be an increased tax on empty property, intended to alter the maths of being a landlord so that it’s in rentiers’ interest to rent, rather than to use empty properties as bargaining chips to drive up prices and rents.  The French Housing Minister Cecile Duflot told journalists last week that getting 10% to 15% of France’s empty housing stock back into circulation could produce the needed change.  But there’s a carrot too, also in the form of taxation.  Investors who put in to property developments intended for rent were to be given tax breaks under the ‘Scellier’ scheme, but this has now had to be abandoned in the context of the clamped-down 2012 budget.  Sarkozy is attempting to enact social justice by way of the public purse, but as in other European countries, the IMF hold one set of purse strings, and the ECB the other.  France’s left-wing government must make their Socialism on the cheap and perhaps without their entrepreneurs, for good or ill.

Photo Credits: Tax Credits & Wikipedia

0 3895

Almost alone in Europe, Germany is economically in good shape and solvent.  Almost alone in Europe, Berlin’s property market is on the up, with the result – probably also unique in Europe – that the number of squatters in the city is actually decreasing.

Berlin isn’t a success story within Germany, on paper at least.  Unemployment in Berlin runs at twice the national average of 6.8%, and there are relatively few employers.  The city has nevertheless spent the last three and a half years building itself up into the go-to destination for Europeans.  Wealthy Germans used to go to Greece, Spain and Italy; now wealthy Greeks, Spaniards and Italians are coming to Germany.

They’re fleeing the economic woes of their own countries, and they’re contributing to a spike so sharp – 17% in a year that George Soros is worried about a bubble.  There’s a particularly high demand for luxury apartments in Berlin.  New builds are more likely to feature modernist architecture and designer interiors than to be family homes or affordable housing.  Those Greeks, Spaniards and Italians have helped push up prices and rents to the point that Berliners are protesting in the streets, to the chant of ‘nicht Ihre Prozent auf unsere Miete!’ – ‘don’t make your percent off our rent!’

Berlin’s population, much like that of any capital city, comes largely from outside.  The city’s been swelled in recent years by professionals, young creative types and entrepreneurs with an eye to emerging technologies, and prices and rents reflect this mix.  Rent on a Berlin apartment typically runs at 5% annualized return, and prices for residential property have risen by 31% in the last five years, according to property broker ImmobilienScout 24.  US corporations are moving their property investment money to Berlin, to capitalize on a market that’s low but shows strong promise.

In the process, the culture and atmosphere of Berlin is changing.  Berlin has a long history of being the place for arty Europeans to go, especially Germans, and has caught all those who might have gone to Paris if they could afford it.  Now they can’t afford Berlin either.  Berlin has no concentration of industries or banks, as London or Paris does.  As a result, claims Steffen Sebastian, head of the Real Estate Institute at the University of Regensburg, Berlin apartments are overvalued already.

A sign of the end of an era, as much as the renovation of any Dockland warehouse, is what’s happening to Tacheles.  Tacheles is German for ‘Straight Talk.’  It’s Berliner for a building in the now-fashionable Mitte area of the city which used to hose a department store.  For more than twenty years now, it’s housed a collective of artists who squatted there to work and live.  They were evicted a fortnight ago.

‘This part of Berlin doesn’t interest us anymore,’ said one of the squatters, Reiter, as bailiffs supervised the eviction of the collective to make way for developers.  But it’s also true that Reiter and those like him no longer interest Mitte.  It’s gone from a post war bombsite – old Red Berlin, with extra bullet holes and rubble – to an upmarket German analogue of London’s East End.  Gentrification, identified as ‘capitalist coup’ by Reiter and characterised by him by ’boutiques and restaurants,’ has set in.  George Soros, speaking in Berlin on September 10, seemed to agree, albeit in a different language.  He warned his audience of a bubble and said the Berlin market had a lot to do with the flight of capital and negative real interest rates.

Photo Credits: Piano Light

0 3487

neville's-eco-mansion

Manchester United’s longest-serving player gets go-ahead for his flower-shaped eco-mansion. Gary Neville is that rare thing in modern football, a one-club player.  But fans may be forgiven for thinking that he’s transferred his loyalty from Old Trafford to the Tubbytronic Superdrome.

Neville has been working for over a year to get planning approval for his eco-mansion, which even fans must admit bears more than a passing comparison to the home of the Teletubbies.  After several attempts and a radical overhaul of the plans, he finally has the go-ahead.

Neville’s original plan was for a build on a Bradshaw hillside, near Bolton, powered by a wind turbine and scoring a perfect code 6 (out of 6) on the government’s chart for eco-friendliness.  But the first set of plans ‘generated over 100 objections from local residents,’ as Mike Ralph, from RED property services and Neville’s representative, reported.  Neville has been forced to alter his plans.  The result has been likened by less Teletubby-minded commentators to a Neolithic settlement, being largely underground.

In the original plans much of the power was to be provided by a wind turbine.  Excess energy from the turbine was to be sold back to the National Grid, ensuring the building’s carbon neutrality.  In March last year, a revised version of the original plan was given the official go-ahead.  However, the turbine was the source of many of the complaints made by local residents, who felt that it would disfigure the landscape.

Neville’s new plan leaves out the wind turbine.  It also promises to have a considerably smaller ‘footprint’ – though slightly larger, the new plan takes up less floor space, and neighbours expressed gratitude that Neville had ‘seen sense,’ because, as one unnamed resident pointed out, ‘a structure like that would have been an eyesore.’

Neville’s plan is to build his home carbon-neutral, which is how it rates its code six(PDF).  Following the initial round of planning rejections, Neville went back to the drawing board with Make to look for solutions.  But after being forced to abandon the wind turbine altogether, Neville also abandoned Make and in August of this year brought in a German firm to work out alternatives.

The new design will use a ground source heat pump, taking advantage of temperature differentials deeper underground, as well as photovoltaic cells for converting sunlight into electricity.  As tempting as it is to point out that the Bolton area can rely more on wind than on sunshine, Neville has the weather covered: the house will have sustainable rainwater harvesting too. Additional neighbour-pleasing is provided by offsite production – the house will be fabricated elsewhere and assembled on-site.  Partly as a result of this the construction of the new plans will take only 4 to 5 months rather than the 18 to 20 previously projected.

Artists’ impressions of the plans show a central kitchen surrounded by petal-like lobes sunk into the ground, with a waist-high traditional-looking drystone wall outlining each lobe.  This low visual profile and semi-traditional appearance – as if marking field boundaries for psychedelic farmers – is vital to the success of Neville’s plans, for the home he hopes to build is on green belt land.

While central government wrangles over letting 2% of all green belt land go for housing to ease the shortage, Neville’s local council has been more conservation-minded.  But he got the green light in both senses after proving that his would be the first carbon-neutral home in its Bradshaw purview. Councillor Andy Morgan said he felt ‘the exceptional circumstances [requirements] had been met because of code six and it is still an attractive and modern building.’

After persuading his neighbours to feel the same way, it looks as if Gary Neville, now a pundit for Sky Sports, will get to say ‘Eh-Oh!’ to his new home at last.

riyad-city-landscape

Saudi Arabia has announced that it plans to construct a women-only industrial city in the country’s Eastern province city of Hofuf. According to Saudi business paper Al Eqtisadiah, the city has been proposed by a group of Saudi businesswomen, represented by Hussa al-Aun, who told the paper, ‘The new industrial city should have a specialized training centre to help women develop their talents.’

The city is a proposed solution to an impasse in Saudi national life: women want more independence, and the economy needs their labour, but Saudi society is strictly segregated. The country is governed according to Sharia law, and one result is that women’s lives are highly controlled, to a greater degree than almost anywhere else in the world. Saudi women are, notoriously, forbidden to drive, but are also not legally permitted to travel alone with a man who is not their husband, or to pray at mosques without special female prayer sections. Women will vote in Saudi local elections for the first time in 2015, and the 2012 London Olympics were the first to feature female Saudi athletes.

Women are segregated at work, too: of the 15% of Saudi women who work, most work in female-only companies. Saudi Arabia regularly comes in for a drubbing from human rights groups for its repressive attitude toward women. However, the reason for the creation of the female employment enclave is likely to have relatively little to do with foreign pressure.

Hussa al-Aun continued her statement by saying that the special training centre should ‘train [women] to work in factories. This is essential to cut our graduate unemployment rate.’ The city in Hofuf is expected to create 5, 000 textiles, pharmaceuticals and food processing jobs – in other words, it will focus on secondary production and high added value manual work. In the process the development is expected to add 500 million riyals – about $133.3m – to the Saudi economy.women-in-suadi-arabia

The building of the female-only city has come after government pressure to increase the female workforce, and the Deputy Director General of the Saudi Industrial Property Authority, Saleh al-Rasheed, told UPI that he was ‘sure that women can demonstrate their efficiency in many aspects and clarify the industries that best suit their interests, nature and ability.’ Saudi Arabia’s female workforce employment rate languishes around the 15% mark, and a recent Gallup poll found that an increasing number of businesses were insisting that women be unmarried to qualify for employment.

In June, the country unsuccessfully attempted to persuade fellow OPEC members to allow a higher production ceiling. With a growth in oil revenue out of its government’s control, maybe Saudi Arabia is hoping to diversify its economy into industries suited to women’s abilities and natures, such as pharma and clothing production. It certainly looks that way; even before a brick of the new city has been laid, four more similar cities have been proposed.

In addition to providing an economic boost to Saudi Arabia – if each of the five such projects meet the target income proposed for the Hofuf development, the initiative will be worth $666m to the Saudi economy – the plan might provide a safety valve for a major social pressure in Saudi society. YouGov and Bayt.com carried out a poll in July 2012 which found that 65% of Saudi women who worked wanted to increase their financial independence through their careers. In a society that restricts women’s opportunities so drastically, employment of any sort is likely to ease the frustration of Saudi women – at least in the short term.

However, increasing education – leading to that pool of unemployed graduates that worries Ms. Al-Aun – together with internet access have contributed to Saudi women’s willingness to assert themselves that the Centre for Democracy and Human Rights calls ‘a game-changer.’ Without liberalization of Saudi society in other ways, the halfway house of women-only employment zones may turn out to be too small to accommodate the aspirations of the best-educated generation of Saudi women ever.

Photo Credits: IMP1 & Wasapninworld via Flickr

0 7039

Brazil’s real estate market showed signs of slowing to match the relative underperformance of the rest of the Brazilian economy on Monday.

The Brazilian market in real estate has been expanding rapidly in recent years and by international standards the growth rate in the industry has been extremely healthy, with real estate lending expanding at approximately 50% per annum in a boom that has lasted since 2006.  However, the rate of expansion has slowed considerably in the last quarter.

While the Brazilian real estate market is still expected to show 20% growth over 2012, this is less than the 30% expected by Octavio de Lazari Jnr., President of the Brazilian Association of Home Loans and Savings Banks.  ‘Now we are revising [our estimate] to an expansion of 20% amid the overall slowdown of economic activity in Brazil,’ Mr. Lazari explained.

Brazil is the largest economy in South America, and experts predicted a respectable 4.5% growth rate for the economy as a whole at the start of the year.  However, this estimate has been revised down to a more modest 1.8% for the same period due to the poor performance of European and North American economies.  This downturn comes at a bad time for Brazilian real estate companies, many of which have already been hit by lower-than-expected demand.

Although mortgage lending has risen this year, ‘real estate companies have reduced the volume of new launches,’ said Mr. Lazari.
Companies that raised Brazilian reais in the billions through capital markets to finance new building schemes have seen their properties stand empty, costing money instead of making it. Now Brazil looks set to be pulled into the general economic contraction triggered by the collapse of the American financial sector in 2008.

The news comes as Brazil’s second biggest homebuilder, PDG Realty, saw a 4% share price drop caused by construction delays and cost overruns. In the same week homebuilder Gafisa announced that it expected arbitration to buy its Alphaville development out, allowing the company to struggle back into profit.

Brazil as a whole has been described as suffering from ‘reform fatigue,’ following a series of government initiatives intended to stave off economic stagnation by stimulating business.  However, criticism of these initiatives has pointed out the lack of basic structural reforms.  The comparison is with Mexico, whose economy is being driven by industry as companies like VW move production there.  Mexico is expected by some analysts to overtake Brazil economically by 2028-29:  ‘If Brazil doesn’t pass any structural reforms and Mexico does, then the scenario ‘Mexico high – Brazil low growth’ seems the most likely,’ economist Benito Berber said.

One factor that has fuelled the Brazilian property boom has been the psychological impetus imparted by expectations of the FIFA 2014 World Cup, for which Brazil is constructing stadiums, and the 2016 Summer Olympics in Rio de Janeiro.  This psychological impetus is not expected to outlast the Games, leading experts to expect a drop in Brazilian economic performance after 2017.

Maracana-stadium-upgraded-for-the-world-cup

Maracana Stadium is being upgraded for FIFA World Cup 2014 and Summer Olympics 2016

In the present situation, some see an up-side to the deceleration. ‘It was simply not possible to sustain the previous level of annual growth in lending,’ said Jorge Hereda, president of the government-run Caixa Economic Federal mortgage bank.  ‘Now, with a more moderate pace of expansion, we’re going to see more balanced development.’  Caixa owns approximately 70% of Brazil’s mortgage lending.

And the immediate future, at least, is expected to confound pessimism: Mr. Lazari hopes to see a ‘greater expansion in real estate lending’ in 2013 than in 2012, while most economists are predicting a growth rate for Brazil as a whole of 3% in 2013, with some forecasters expecting a return to 4.5% growth rates.

Photo Credits: twiga_swala & over_kind_man via Flickr

0 1906

Eurozone-crisis

Can The Economists Who Failed To Foresee The Crisis See A Way Out For The Eurozone?

August 9 marked what many considered the fifth anniversary of the credit crunch. It’s five years almost to the day that anxious depositors began to form queues outside branches of Northern Rock, like Bailey Savings and Loan customers – without a George Bailey.

Beginning in the same way, marked by several of the same guideposts and running at roughly the same level of economic growth as during the 1930s – about 0.2% – the current financial crisis has been referred to as a second Great Depression. Writing for the Christian Science Monitor, financial journalist Pan Pylas remarked on August 9 that ‘the last five years have proved to be one of the most dramatic and volatile periods for financial markets since the stock market crash of 1929.’ Focussing on the UK, James Meadway, senior economist at the New Economic Foundation, observes that ‘the economy is recovering more slowly than it did from the Great Depression of the 1930s.

Some experts consider the failure of government action to stave off the crisis to be the result of misdiagnosis, pointing to Keynsian policies characterised by a single set of answers: ‘inject money into the economy and hike government spending,’ as market analyst Alasdair McCleod has it. Others observe that governments accepting responsibilities for the debts of their national banks, as Ireland and Spain have done on an even greater scale than Britain, has left nations burdened by sovereign debt and unable to spend their way out of the crisis, even if they wanted to: the future of Greece’s involvement in the Eurozone hinges on the Greek government’s ability to enforce an austerity package on a population that wants relief instead.

In the UK, readers of the Guardian newspaper answered a survey asking how the five years of financial freefall had affected them, and the overwhelming themes are of compulsory early retirement and of investments in stocks and shares at the behest of financial advisers which have ‘made next to nothing back,’ as one respondent, ‘Robert,’ has it.

The respondents also highlight the effect of unemployment so widespread it extends into high-ranking professionals who gone from being two-salary households where neither partner has ever been unemployed to living on state benefits in only a handful of years, highlighting the fragility of prosperity at the personal level.

Meanwhile massive cash injections by Eurozone states into their domestic financial sectors, and by the Eurozone Central Bank, have failed to increase financial liquidity or offer a way out of the debt crisis.

Analysis of the market’s performance clearly shows ‘safe-haven’ investments outperforming all others; in a comparison of investment strategies over the 2007-2012 period, which considered five investment options, the FTSE, S&P and DAX indexes all lost money, at an average annualized return of -1.6%. Meanwhile money invested in gold returned 28% and in silver 22%. This is used by some analysts as proof that ‘printing money’ in an ineffective strategy for coping with the crisis. Rather, argues McCloed, this is a policy ‘common to all failed states,’ and he offers the example of Germany as a country which has avoided the debt trap engulfing the rest of Europe.

one-euro-coin

However, the majority of the new investment and borrowing has been pumped directly into the financial sector. In some nations crippled by sovereign debt, financial trade continues according to the same rules as before and new building projects in the Frankfurt financial district are the nearest modern equivalent of the WPA. James Meadway, of the NEF, argues that until cash injections are focussed on restarting productive economic activity, additional aid will indeed be futile.

Meanwhile, the worst drought for more than fifty years has hit the American Midwest region. USA Today reported Jeff Schussler, a drought researcher at DuPont Pioneer, saying that ‘we would not expect to see any devastating soil effects’ on August 26. Chuck Raasch, the article’s author, remarks that expected 2012 average yields would have been records in 1991. However, there is additional pressure on farmland due to biofuel demand. This will be exacerbated by oil price rises which saw crude hit $124 a barrel earlier this year, and by OPEC’s decision to leave in place its production ceilings and to attempt to use slower increases to govern demand.

With manufacturing contracting across the Eurozone, farming hit in the US and international finances in freefall worldwide to the extent that Mr. Mcleod thinks it ‘threatens to bring down the entire global banking system,’ perhaps it’s time to buy gold?

Photo Credits: EurocrisisExplained & Alles-schlumpf via Flickr

0 3446

Palm Jumeirah Island Dubai UAE

Over the 16 weeks leading up to August 26, Dubai saw a bullish market driven by property. On Sunday August 12, Nakheel announced that demand was expected to remain high for properties on the island. The Dubai developer made the statement as it announced the sale of a 305,704sqft plot for Dh1,302 ($520) per square foot to an unidentified local investor.

Nakheel went on to state that the value of residential plots on the Palm – particularly on Frond N had increased by 30 per cent in the past year. ‘We have seen a very healthy demand in the first half of 2012, and this looks set to continue for the year,’ Nakheel said, quoting a spokesman.

To date, Nakheel has sold over 80 of the 105 plots on the Palm, which have a total sales value of over Dh657 million. Earlier this year, a single 5,574sqm plot was sold by Nakheel for Dh87 million.

In the same statement, Nakheel’s spokesman explained that the company believed that ‘land and properties on Palm Jumeirah are in big demand thanks to its unique design, location and ever-increasing range of amenities.’

Figures releases by the Dubai government showed that Indian citizens were the main buyers of luxury apartments and commercial space in the Burj Khalifa during the first half of 2012, spending $222 million, while Iranians came in second, spending $128 million.

Dubai has recovered from the collapse of a property bubble in 2008 that cut home prices by more than 60% from their peak. However, Dubai now functions as a safe haven for regional investors as London does in Europe, according to Graham Stock, strategist at frontier fund manager Insparo in London, who added that ‘we see Dubai real estate performing well over the medium term,’ and that ‘safe-haven’ investment was drinving up real estate prices. In turn, this is buoying up Dubai’s stock market.

Farouk Soussa, Middle East economist at Citgroup in Dubai, commented on August 9 that ‘perceptions are that the real estate market has bottomed out. If you are looking for a more long-term investment, the market in Dubai seems reasonable. A lot of people in the Middle East and Russia, Pakistan, the Asian sub-continent are looking for a safe haven.’

This ‘safe haven effect’ could be driving Dubai’s current property expansion in 201, real estate contributed approximately 13% of Dubai’s GDP, almost as high a contribution as manufacturing.

In July of this year, Nakheel announced its half-year financial results, declaring a net profit of Dh767 million, an increase of 36.5% over the Dh562 million it made in the same period last year. The company has also recently completed a restructuring exercise.

During Sunday, August 26, however, Dubai’s index slipped 0.9%, which Amer Khan, fund manager at Shuaa Asset Management, ascribed to Eid interfering with normal trading patterns. ‘We’re not back to post-Eid trading levels yet,’ Mr. Khan told Reuters. ‘Some of the names in Dubai were stretched from a technical point of view and were looking to correct it’s better that names like Emaar correct on low volumes rather than when people are back.’

The negative 14-day divergence at the recent high suggests that the market may flag temporarily, but will resume its upswing shortly, according to analysts.

In the real estate letting and purchase market at the apartment level, there has been a rally of over 5% in the second quarter compared with 6 months ago, according to Frank Knight estate agents.

Photo credits: Maja via Flickr

At first glance Malaysia looks like it should be the natural investment choice in South-East Asia.  The archipelago nation is one of the richest countries in Asia the result is a burgeoning middle class combined with a tourist trade that brought in over 22m tourists in 2009.

kuala lumpur city skyline

But Malaysia offers more to its potential investors.  For one thing, Malaysia is a prime target for investors from China, Singapore, Japan and South Korea, according to South-East Asian property website property-report.com.  That’s partially explained by cultural similarities and physical proximity: it’s always going to be tempting to invest in a place that’s easier to reach.

But there are other reasons too, especially for Singaporeans.  Eric Chan, who’s Deputy Manager of property developer Eastern & Oriental Berhad, explains that the MM2H’ ‘ Malaysia My Second Home ‘ program offers foreign visitors a 10-year multiple entry visa referred to as a Social Visit Pass, and this has made Malaysia particularly attractive to investors who can now be physically present at their property far more easily.  Of course, for Singaporeans this holds true doubly: Singapore City is only 196 miles from Kuala Lumpur, but the biggest buyers are from the state of Nusajaya, Johor, just across the border.

Added to this mix,’ Mr Chan continued to explain, ‘is Malaysia’s friendly lending terms’ ‘ these are extended to foreigners to and can offer finance of up to 90% ‘if certain conditions are met.’

The Singaporean Dollar has been rising consistently against the Malaysian Ringgit ‘ 3% since January alone – and now exchanges for about 2.5 Ringgit, leaving Singaporeans in an advantageous position when it comes to buying their neighbours’ houses.  Add to this the price of Malaysian property, which is about a sixth the price of equivalent Singaporean properties, and there is a significant inducement to Singaporeans to chance their arm over the border.

The mixture of generous lending terms, government incentives and physical proximity may have made some Singaporean investors overconfident, however.  The Malaysian real estate market also comes with a lack of transparency that surprises foreigners, including those from neighbouring countries.  According to the Global Transparency Index, a proprietary index compiled by Jones Lang LaSalle, Malaysia ranks 23rd ‘ ten spots below Singapore.

This can mean that developers who default on payments can be difficult to track down, and more than one investor has been left with a second Malaysian home that they can’t pay for or sell.

Additionally, the Malaysian government is considering altering the minimum price of foreign investors’ properties.  It currently stands at RM500, 000, but is set to double to RM1m.  The move will be a bid for popularity by the Malaysian government which will receive approval from young middle-class couples currently fighting richer Singaporeans for a place on the property ladder.  However it may take less wary investors by surprise.

In fact, the same rules apply as anywhere else.  ‘Most of us fail to do any sort of research prior to investing into the properties,’ points out Michael Tan, an investment coach.  Eric Chan agrees: ‘Research is essential in buying a property,’ he says.  ‘A reputable developer and good location is the mantra in property investment and it is no different in Malaysia.’

Mr Chan explains that location with Malaysia is a major factor, with investors in the Kuala Lumpur area expecting to make up to a 30% capital appreciation on completion of their investment projects.

But in other areas of Malaysia the maths works out differently and investors who fail to consider location.  Big towns on the island of Johor, like Penang and Iskandar as well as, of course, Kuala Lumpur, offer great possibilities for investment.  Unfortunately, the very market dynamics that make it relatively easy for Singaporeans to invest in Malaysian property can also make it impossible to get a return on their investment.

David Neubronner, Head of Residential Project Sales, of Jones Lang LaSalle, explains that Malacca, for instance, is a more historic town appealing more to locals ‘ who frequently can’t afford to give a Singaporean investor a good return on his investment.

Like may other analysts, Neubronner goes on to remark that a key feature of unwise investments in Malaysia is a false sense of security and buying interest ‘based on sentiment than investment.’

0 3492

Dylan Cullen, the Irish property dealer who operates appreciatingassets.ie, is hoping to buy the overseas investments and second homes of Brits who have been hit by the recession. Cullen hopes to be one of the few involved in the Irish property market who emerges better off after the country’s disastrous property crash.  In addition, he hopes to lure other Irish people back into their own property market. His plan is to sell Brits’ second homes or buy-to-lets in Bulgaria to newly minted Russian millionaires and leave the sellers in a position to reenter Ireland’s now rock-bottom property market with the proceeds.

0 3201

East London City Start-ups

 

 

 

 

 

 

Europe’s tech industry seems to have found base in East London, or at least that’s how the UK government plans on selling London’s newly expanded Tech City district. The Silicon Roundabout has been stretched out to accommodate a growing number of start-ups and other tech firms, with the government pledging even more support to help attract new talent and add to the areas twitter-happy conversation. While some welcome the attention, others dread overexposure.

As industry bigwigs such as Google and Groupon move-in, locals worry that restrictive property prices might soon follow. Either way, Tech City is buzzing, and these are the ten most rambunctious techies on the block.