With the spring season already in full swing, we thought that we’d share a couple of overseas property exhibitions for 2008 that you can pencil into your dairies. It might be just the right time to find some bargains or establish some key relationships. Please drop us comments on any exhibitions we might have left out as the list open & bound to grow.

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Where to Look

Kuala Lumpur is in a class apart as the country’s business capital and definitely the focus of most activity in residential, retail and office real estate. The city’s central business district is currently undergoing rapid change. However, KL’s long term prospects are not guaranteed despite all the activity. Singapore (pop. 4.5m) is only as far away as London is from Paris and this proximity means that Kuala Lumpur only has Malaysia (pop. 27m) as its hinterland. Given that KL and the KL ‘metropolitan region’ have populations of 1.8m and 6.9m respectively, it seems unlikely that the city can surprise by growing into a different league, either in terms of wealth or size. However, genuine friendliness and cooperation between the two countries could herald impressive new opportunities. WTW’s (CH Williams, Tahar & Wong) series of annual property reviews provides a good breakdown of developments around the country.

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There is no doubt that Edmonton, Canada has seen some spectacular increases in property value over the last ten years. 200%+ in fact. But will this continue and what is Edmonton’s future prospect as a property investment? As usual, the analysts and estate agents disagree.

What caused the real estate boom?

Oil. Oil was discovered in Alberta in 1947, much of it concentrated in central and northern Alberta, making Edmonton the base for much of the oil industry. Edmonton did see a drop in values during the 80’s, but made a full recovery very quickly thereafter. Nevertheless, Edmonton’s continuing growth is based heavily on oil extraction and processing. the Conference Board of Canada’s “Autumn 2007 Metropolitan Outlook,” forecast that Edmonton’s GDP for 2007 will be $44.1 billion (2007 dollars), a 3.6% increase over 2006. Read the rest of this entry »

Dear Overseas Property Mall,

I am a little confused about the state of the Spanish property market. I read conflicting reports and projections about Spain all the time and the newspapers are filled with doom and gloom alongside glowing projections. Should I invest in Spain or not ?

Yours sincerely,

Confused in Coventry

Dear confused in Coventry,

Your confusion is understandable. Several small and medium sized Spanish property developers have recently run into financial difficulties, some of the smaller ones taking deposits from customers with them.

The most recent casualty, Colonial, saw it’s shares plummet 40% in 2 days, seemingly for no reason other than worries that the Spanish property boom is over. The president and largest shareholder, Luis Portillo quit after this drop.

This follows on from two other medium sized casualties. Astroc saw their shares drop 85% in July last year causing the founder, Enrique Banuelos to quit and Llanera, a developer based in Valencia, filed for credit protection a few months later.

The Financial Times has a more in-depth look at these casualties here.

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We reported recently on the likely boost in French property in Paris and Lille due to the introduction of a new Eurostar train service. But Eurostar connects to more than just Paris. There is a direct service to Brussels in Belgium with connections on to Brugge, Namur, Antwerp and Ghent.

Brussels in now less than 2 hours from St Pancras station and is already seeing an increase in interest from British buyers keen to snap up a bargain before everyone jumps on the band wagon – or should that be railway carriage?

According to the Telegraph, Restored studio flats a few yards from the Grand Place can be picked up for as little as €70,000 (£50,000), and vast, contemporary loft-style duplexes in former industrial buildings go for €500,000 (£360,000).

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The Association of International Property Professionals has recently completed it’s 2007 consumer survey and, perhaps not surprisingly, the biggest fear of British overseas property buyers is the fact they feel a high chance of being mislead, either by an agent or a developer.

According to the AIPP’s survey, 69% of consumers are worried about being given unreliable or misleading information and 44% said that being unable to independently check information is a concern. Only 17% are worried about being pressured using hard sell techniques and only 34% were worried about overpaying for property.

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As more and more well-developed overseas property markets reach saturation point, British property investors are starting to look further and further afield in the search for likely investment opportunities. South America, despite some political and social issues still to deal with, offers those opportunities. South America, like many other emerging markets sees the benefits of foreign investment and the governments are taking steps towards creating a more hospitable investment environment.

Despite the strength of the upper echelons of the property markets, concerns about the spreading effects of the US sub-prime mortgage crisis are having effects further and further afield.

Asian bond spreads widened in Hong Kong this week, with the popular iTRAXX Asia ex-Japan high-yield index widened by 20 basis points, in turn raising the costs of protecting investors against defaults or restructuring.

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British property investors are taking a long, hard look at the New York property market. With the dollar at a 20-year-low, for British investors with pounds in their pocket, the Big Apple just got a whole lot cheaper. According to the Financial Times, Steven Toumbas, an equities investor from London, has always wanted to own a second home in the US. “America is the engine for the world,” he says. “Everyone wants to have a holiday home in Florida, or an asset in New York. It’s the place to be.”

Mr Toumbas began looking at potential properties in New York City in mid-June 2006, but felt the timing was not quite right. The pound at that point was trading at about $1.84. “I held back because I thought there would be further dollar weakness,” he said.

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London once again defied the skeptics and remained on target for a 17% increase in value in 2007 despite falling prices in much of the rest of the country.

The Royal Institute of Chartered Surveyors reported that “house price growth remained negative for the second month in succession,” and “new instructions declined for the fourth consecutive month at the fastest pace since June.”

Having said that, London was the only region in their monthly survey to experience a rise in instructions, and according to the Financial Times House Price Index, “prices in London rose 1.1 per cent in August compared with July and the annual rate of growth accelerated to 17.6 per cent, from 17 per cent in July. This was almost double the pace of growth of the south-east, the area with the second-highest increases, where prices were up by 9.4 per cent over the year. The cost of the average home in the capital is £363,364, compared with the national average of £225,826.”

The FT index suggests that overseas demand, rising immigration and City bonuses are fueling the London price increases.

Some areas around the country were less fortunate with price drops reported in the North, East Midlands and Yorkshire & Humberside and stagnant prices in the North West, South West and East Anglia.

Whether or not London can maintain this continued growth in the face of credit squeezes, reduced mortgage lending and dropping prices in much of the rest of the country remains to be seen and many analysts are predicting a slow down or reversal before the end of the year. For the moment though, it looks as though London is shoring up the whole market.

Links:

The Financial Times

The Royal Institute of Chartered Surveyors

The Halifax House Price Index

The Land Registry House Price Index