regions

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Spain’s markets are in a fix, and there seems to be no creditable solution in sight. In fact, there is no credit. Lending activity in the country has slowed down dramatically, having experienced its greatest fall this year (a record 2.64% decline till September). The property markets gone bust, and looks to have taken all the air out of Europe’s fourth largest economy. Borrowers keep defaulting, and homes foreclosing. The only thing that’s left soaring here is the national unemployment rate (22.6% at present vs. 7.9% in summer 2009).

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The UAE seems well perched on the formidable wings of its soaring aviation industry. Markets are swiftly jetting towards the promise land of both recovery and progress. The region is close to realising its long held ambition of piloting growth independently off its naturally occurring oil reserves (UAE is the 4th largest exporter of oil in the world), and is strategically building upon its tourism industry to provide the necessary traction.

Emirates Boeing 777 Airpot Landing

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We always talk about the special partnership between the UK and US, and we all know that it will scarcely ever be as “special” as it was between Bush and Blair, at least not until sufficient time to have past for us all to have forgotten the lies Blair told during the time that he was being operated from behind by Bush, but that is another article. But one special relationship that we have no such choice in is the special relationship between our economies and housing markets.

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No one was hit harder by the violent crash of the UK housing market than buy to let investors. Landlords went from having no difficulty getting credit to having no chance of getting credit in a very short space of time. The market was just too risky. But now they are having the last laugh, lenders are practically falling over themselves to keep buy to let investors in credit as the UK rental market booms.

There have been near constant reports of rising rental demand and rising rents since the second half of 2010. According to the reports rents rose across the entire UK in 2010, but the most notable rises were, and continue to be in London and the South West. According to Cluttons, rents in Central London rose by a record 19.1% in 2010.

And it hasn’t stopped this year. In RICS second quarter report in the buy to let market, a balance of 35% of surveyors reported rents rising rather than falling, and the also reported rents rising as well with a forecast for 8-10 percent rises in Central London this year.

The growth is hardly surprising. The UK house price correction was nowhere near as expected, or as it would have needed to be to make UK housing affordable — especially in London. And at the same time the crash in the banking system was exactly as bad as expected, or maybe even worse. The banks are barely lending, and even the few first time buyers with good enough credit to get a loan need at least a 10% deposit, which most just can’t raise in the current climate. So, would-be first time buyers are renting and getting used to it.

This is now fuelling record growth in rents according to the latest data from LSL Property Services. In the latest release of its buy to let index the firm reported a 1.2% month on month increase in August. This is the fastest rise recorded by the index in a year, and took the average rent in England and Wales to the record high of £713 per month.

So, the investors who can afford it are building their portfolios at record low interest rates, and with prices still subdued in most of the country (except London and the south). House-builder Barratt have just reported a 25% rise in sales to investors in the first six months of this year compared to last year. This growth is confirmed by the growing number of buy to let mortgage products being released by lenders to meet the growing demand.

Some mixed news for Emaar properties, one of Dubai’s — state owned — master developers. That is, mixed news, not in a share of good and bad news, but rather in the fact that the bad news was tinged with goodness.

The company posted a 69 per cent decline in net profits for the second quarter of this year, which is obviously not good news. However, the decline was largely put down to the equity-hit the company took for writing off its 30 per cent stake in Dubai Bank, which was taken over by the government earlier in the year. This is being reported as good for the company, because it removes a “corporate distraction” and absolves the firm of any further calls for equity injection. In short: allowing the developer to concentrate on development.

Chicago is without doubt one of the greatest cities in the US and the world. In some ways like the UK’s Brighton, Chicago is unique, with its own systems, unwritten codes, and ways of doing things. Like almost every city, street, town, suburb and person in America, Chicago has lost some of its sheen to the financial crisis and cuts in public spending. But International Property Developers Inc plan on restoring a huge chunk of central Chicago to its former glory. They have just (July 21) filed plans for a new $3.5 billion development, which will include the tallest tower in the US.

Florida’s real estate market is about to get messy! That sounds like something the voiceover for a move trailer would say but it is actually happening in real life. We all know that Florida has one of the biggest foreclosure levels in America — which means in the world as well –, but few would have expected the problem to still be getting worse almost 5 years into the crisis.

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There is a question at the moment, like some sort of mystical force may be at play; over why the UK buy to let scene is currently thriving beyond belief. It is simple economics:

Hardly anyone is buying a home right now, for reasons to be explained below. And home builders are hardly building, primarily because no one is buying, but also because they (the builders) are still licking their metaphorical wounds from the financial strike they suffered, and remain fearful of the economic outlook that lies ahead.