Global Property Guide - News and Discussions


    Spain saw 19% jump in property sales in 2014
    Over 364,000 property sales were reported in Spain in 2014, a jump of 19% year-on-year, according to Spanish notaries data - yet more evidence of a recovering Spanish property market. Nearly 80% of the residential properties sold were apartments and flats. An interesting trend is that fewer people are buying new builds. Almost 40% of the flats sold in 2007 and 2008 were newly built. This dropped to only 10.8% in 2014, with a very negative impact on the construction industry. Experts, however, hope that with growing interest of foreign buyers, things will take a turn for the better in the near future. One reason why old units are more attractive is that they are comparatively cheaper. While the average price per square meter for a new flat in 2014 was around ? 1,624 (US$ 1,837), the price for an old unit averaged just ? 1,347 (US$ 1,526) for second hand apartments, according to the notaries. The notaries' data is considered 'real time' as they record property transactions the moment a sale takes place. Registration data, in contrast, lags the market. The registration data suggests that in 2014, sales rose only 2.2% on 2013. But thousands of sales that took place at the end of 2013, were only registered in the first few months of 2014. This lag is built into the registration data. Foreign buyers are believed to have contributed towards recovery of housing markets in Spain, with government initiatives like the Golden Visa scheme boosting the market. To promote inward foreign investment, Spain started issuing residency permits to non-EU nationals in February, in return for real estate investments of ? 500,000 ($ 670,000) or more.

    Foreigners pushed Portugal's luxury home prices sharply up in 2014

    One in five homes sold in Portugal last year were bought by an overseas buyer. Houses in the coastal resort town of Cascais near Lisbon, and seaside villas in the south were the biggest attractions for foreign buyers. Portugal's warm climate, low property prices and tax breaks for European retirees are key factors attracting French and British buyers.

    UK buyers bought the largest number of homes in Portugal in 2014 at nearly 23,000, followed by Chinese and French buyers, according to the Portuguese Real Estate Agents Association.

    There was a negative impact from the arrest of immigration officials on suspicion of the corrupt sale of visas to wealthy foreigners, and the news of the resignation of interior minister Miguel Macedo, after being linked to a company identified in the probe. The police also arrested the head of Portugal's immigration and border service, Manuel Palos, and detained 10 other people.

    The number of Chinese buyers dropped in November last year when it emerged the majority of buyers bribing immigration officials were from China.

    'The property market grew by between 9% and 15% in 2014,' said Portuguese Real Estate Agents Association's head Luis Lima. 'If it hadn't been for the Banco Espirito Santo debacle and the golden visas scandal it would have been 25%'.

    Portugal is one of several European countries to have introduced a golden visa scheme with residency permits granted to foreign real estate investors, in return for property purchases. Spain, Greece, Hungry, and Cyprus have similar schemes.

    A total of 2,022 golden visas have been issued under the scheme, which was launched in August, 2012, mostly to Chinese nationals, earning 1.2 billion Euros (US$1.37 billion) in revenue.

    Luxury home values increased 54% to around 4,266 euros ($US 5,887) per square metre in 2013 compared with 2012, according to a survey by the Confidencial Imobiliario (CI) and the Royal Institution of Chartered Surveyors.



    Chinese overseas property investment to total $20 billion in 2015

    Chinese investors are likely to buy $20 billion worth of properties overseas in 2015, up 21% year-on-year, forecasts Jones Lang LaSalle.

    Chinese overseas investment in real estate was nearly $16.5 billion in 2014, a 46% increase compared to the previous year. Apart from the domestic real estate buyers, property developers and insurers are behind this overseas buying spree, experts say.

    In 2012, the China Insurance Regulatory Commission allowed insurance companies to invest in real estate outside of mainland China and Hong Kong, which has prompted them to move their assets overseas.

    'The easing of restrictions over the last a few years by the Chinese government has (made it) ... much easier for institutions as well as individuals to move money overseas,' said David Green-Morgan, the Singapore-based head of global research for International Capital Group at JLL.

    Ping An Insurance Group's acquisitions recently included the Tower Place office block in London for 327 million and Lloyds of London. Anbang Insurance Group has entered is buying New York City's Waldorf Astoria hotel for $1.95 billion. Real estate accounted for 20% of total investment made by insurance companies overseas.

    Europe was the number 1 choice for Chinese investors, with total property investments of $5.5 billion in 2014. London is the favourite city for Chinese buyers, but they are also investing heavily in properties in Portugal and Spain. Chinese buyers have also become the largest source of foreign cash in the U.S. residential real estate market. Australia is another favourite property buying destination.

    In China, new home prices fell in 69 of 70 cities in the first nine months of 2014, compared to the same period in 2013, with an average price decline of 5.1% based on data from the National Bureau of Statistics (NBS).



    No ban on foreign ownership of South African residential property, says SA government

    Following plans to introduce a bill banning foreign ownership of land in South Africa, made public last year, the South African government has clarified for the first time that the ban will not apply to residential properties, but only to agricultural land.

    Under the Regulations of Land Holdings Bill, foreigners will be allowed to lease agricultural land for 30 years, but not to buy it, the government said recently.

    Earlier, the assumption that the government was planning to impose a ban on foreign ownership of all types of land triggered panic. In his state of the nation address last week, President Jacob Zuma fuelled these fears by saying that foreigners would be barred from owning land and South African citizens will not be able to own more than 12,000 hectares, or the equivalent of two farms.

    Presidential spokesman Mac Maharaj clarified recently that the ban on foreigners will apply only to agricultural land, and not residential property.

    'The land that the president is referring to is productive land not residential property,' Gugile Nkwinti, minister for Rural Development and Land Reform, was quoted as saying.

    South Africa has been attracting overseas buyers for a long time. Nearly 7% of land is owned by foreigners, and foreigners own more than 130,000 residential properties.

    The ruling African National Congress party has faced flak for not introducing land reforms. These restrictions on foreign ownership are being touted as part of the reforms.

    The proposed bill would be a fair way of ensuring that the property market stays favourable to the purchasing power of local buyers, minister Nkwinti had said.

    The government also clarified that existing foreign land owners don't need to worry. "Applying the law retrospectively would be unconstitutional. We cannot act in an arbitrary manner," according to Nkwinti.

    President Jacob Zuma's government will try to make the bill a law by the end of his term of office in 2019.



    Did Hong Kong's amazingly punitive stamp duties work?
    The Hong Kong government racked up in the excess of HK$37.7 billion (US$4.86 billion) revenue from stamp duties in 2014. Stamp duties imposed on foreign property buyers, purchasers of a second home and short-term speculators have been a major contributor. The revenue from stamp duties is likely to go up to a whopping HK$70 billion (US$9.02 billion) this year, prompting real estate industry professionals to demand relaxations. Hong Kong has become one of the most expensive real estate markets for foreign buyers as they have to pay much higher property taxes and stamp duties compared to other cities in the world. In October, 2012, the government reacted to widespread concerns over runaway property prices by imposing a 15% tax on home purchases made by foreigners. The government also raised transaction taxes to up to 20% on properties sold within three years of their purchase. In 2013, the government made it mandatory for second-home buyers to pay a double stamp duty if they failed to sell their old units within six months of buying the new one. Despite these measures, residential property prices continued to surge. They rose by 13% year-on-year in 2014, according to government data. Government data show home prices have risen nearly 35% since 2012, since the cooling measures were introduced. Singapore and Hong Kong have imposed the heaviest tax burden on foreign property buyers amongst Asia Pacific markets, according to the latest Knight Frank report. "In terms of tax burdens on foreign investors, our analysis indicates that the more mature and open markets of Hong Kong and Singapore have some of the highest, while Cambodia, South Korea, Thailand and Malaysia have more benign tax regimes," the report said. "Some of these taxes have had a significant influence on the ways markets respond and perform. The imposition of a 15% additional stamp duty for foreign buyers in Hong Kong and Singapore, along with seller's stamp duties, is the most obvious example of how fiscal measures, together with other macro-prudential measures, have engineered a market slowdown," said Oliver Holt, head of Asia Pacific research at Knight Frank.

    Russian billionaires to buy London's most luxurious student housing
    Is London property past its peak? Now the Americans are selling, while the Russians are buying. Three Russian billionaires are negotiating to buy some of London's most luxurious student housing blocks for nearly 535 million. The accommodation, owned by the US-based venture capital firm The Carlyle Group, has 418 "state of the art" student rooms in West London, offering "exceptional space and beautiful interior design" for rents of up to 22,360 per academic year. The Carlyle Group is believed to be selling its Pure Student Living business to three tycoons from Russia: Mikhail Fridman, German Khan and Alexei Kuzmichev. Fridman is Russia's second wealthiest man with a net worth of 9.3 billion. The personal fortunes of Khan and Kuzmichev is believed to be 6 billion and 4.5 respectively. The properties in the block are rented by the children of wealthy individuals from all over the world, while they study in the UK. All the units feature en-suite bathrooms and modern kitchenette areas. The Carlyle Group's Pure Student Living arm owns at least five large group student housing blocks in London that, as per the company website, offer 24-hour security, dedicated housekeeping and maintenance teams, free Wi-Fi, free contents insurance, outdoor courtyards and other such facilities. The deal has raised eyebrows. Fridman was chief executive of controversial joint venture TNK-BP involved in oil production. In 2008, BP's chief executive Bob Dudley, who headed the venture, fled Russia and sold BP's interest in March, 2013. These billionaires' interest in the properties appears to have been triggered by the collapse in the rouble, falling oil prices and the West-imposed restrictions following Russia's takeover of Crimea. The Carlyle Group's exit from the UK student accommodation market five years after its first project comes amid widespread evidence that London's property market is cooling rapidly. London real estate agents report falling interest, and the Royal Institution of Chartered Surveyors (RICS) reported during January that "London market conditions continued to deteriorate, with prices, buyer inquiries and sales falling. The latest data shows 49% more respondents saw prices in the capital decline and the short-term confidence outlook is negative, despite the longer-terms sales outlook being more upbeat." Only 2% of surveyors and estate agents surveyed by RICS expected London prices to increase rather than decrease over the next three months.

    UK government to give BoE powers to prevent housing bubble
    "The Bank of England will have further powers to safeguard the stability of Britain's financial system from any future risks posed by our housing market or banks," said Chancellor George Osborne recently. Powers to limit loan-to-value ratios were requested in October by the BoE's Financial Policy Committee (FPC), in addition to power to limit loans extended to borrowers with high debt to income levels. The government has agreed to provide BoE with these powers. "Curbing Britain's age-old vulnerability to banking and housing booms is one of the goals I recently set for the next two decades of Britain's economic policy, and this announcement of new powers for the Bank of England shows our determination to achieve this," the chancellor said. The BoE can already recommend how much banks should allow homebuyers to borrow, based on income and property value, but has no legal powers to enforce these recommendations. Chancellor George Osborne offered the BoE new powers in June last year to stop the housing market over-heating; however the Bank didn't consider them at that time because of their "political sensitivity". But the BoE's FPC later set out details of the new regulatory powers it wants. The BoE took into account steeply rising housing prices while making the request for new powers, and these new "powers of direction" would empower it to act quickly in the face of what is beginning to seem like a crisis of overvaluation in parts of the UK housing market. However, according to the latest survey by the Royal Institution of Chartered Surveyors (RICS), home prices in the UK climbed in January at their slowest annual pace since May 2013 and fell for a fifth month in London. The fall in London prices is considered to be the result of banks putting borrowers under closer scrutiny. The BoE had last year asked banks to consider the consequences for the borrower of an increase in interest rates in the future when approving mortgages.

    Asian and American real estate investors are on a buying spree in Japan

    Japan saw a surge of 181% in inbound investment in 2014, the highest since 2009, according to finance ministry. And property investment has been a major contributor.

    The sharp drop in the value of yen has contributed to a large increase in demand for properties in Japan. Buyers from Asia and America are particularly showing interest. Companies from Singapore and the U.S. have opened branches in Japan for acquisition of properties and other assets over the past couple of years. Some experts predict that this interest will continue till at least the 2020 Olympics. The total inbound investment was valued at 1 trillion yen ($8.4 billion) in 2014.

    A state-owned investment fund company from Singapore is believed to have invested $1.7 billion for a property located adjacent to Tokyo Station. The deal was finalized in October last year.

    A premier global investment and advisory firm is acquiring the residential-property business of a Japanese company for $1.6 billion.

    Many other companies are reported to have invested in Japanese real estate markets.

    The increase in inward foreign direct investment reflects recent Japanese government policies aimed at doubling foreign direct investment by 2020. Among many steps, the Japanese government plans to lower income tax rate on corporate income by 3.29% over the next two fiscal years. Economists calculate that a 1% corporate tax cut increases inbound investment by around 3.5%.



    Bank of Canada's benchmark rate cut fuels mortgage price war
    Following the Bank of Canada's recent surprise benchmark rate cut, Canadian banks have gotten into a mortgage rate price war. Some have already dropped their rates, while many other banks are expected to follow. Experts fear the rate cuts may further boost Canada's already overhearing property markets. The central bank dropped its benchmark rate to 0.75% last month, as a response to plunging oil prices. The cut surprised many, as the Bank of Canada had kept its benchmark interest rate at 1% for more than four years - and many believed that the housing markets were overheating. The first bank to drop its mortgage rate was Royal Bank of Canada. It has lowered its five-year fixed rate to 2.84%, and its 10-year fixed rate to 3.84%. "The bank continues review the impact of the Bank of Canada's rate decision... the company's individual product lines continue to make pricing adjustments in the regular course of business to ensure we provide competitive rates in the marketplace," Royal Bank of Canada spokesman Wojtek Dabrowski said recently. Bank of Montreal is also planning to drop the mortgage rates in the spring. The bank's chief executive recently said in an industry conference that the bank is planning to "have a fresh offer that is appealing to customers" in the spring. The bank had in 2013 dropped its five-year fixed mortgage rate to 2.99%. Brokers predict that banks will soon have to cut their prime rates also, which govern variable-rate mortgages.

    Indians want capital gains tax exemptions, when they buy overseas properties!
    Many Indians buying properties overseas are faced with a dilemma. The government has increased the amount of money that Indians can remit overseas, prompting them to buy properties overseas in the past few months. But at the same time, the government has scraped text exemption on capital gains reinvested in overseas properties. Under the Liberalised Remittance Scheme (LRS) introduced last year, the Reserve Bank of India allowed all resident individuals to remit $250,000 overseas every financial year for purchase of property or shares, overseas education, travel, medical treatment, apart from maintenance of relatives living abroad, gifting and donations. Earlier, this remittance limit had been $125,000. Due to the increase remittance ceiling, many Indian buyers are finding it easier to invest money in properties overseas, particularly in countries like the USA and Dubai. The new limit has brought some types of properties, for example a one-bedroom apartment in Dubai, within the reach of more buyers. However the government has scrapped the capital gain tax exemption, if the gains earned from selling a property in India are reinvested in an overseas property. Sections 54 and 54F of the Income Tax Act earlier provided that, where capital gains arose from the transfer of a residential house held for three years or more, and the tax payer reinvested the capital gains in a new residential house within a certain period, the capital gains to the extent re-invested would be exempt. The act did not stipulate that the new property should not be abroad. However the Income Tax Act was amended in the 2014 Finance Act, effective from April 1, 2014, and removed the capital gains tax exemption, where the gains are reinvested in overseas property. 'With the RBI now doubling the remittance figure, and overseas property proving to be attractive, investors are hoping for a tax break. The forthcoming Budget should consider this issue and re-introduce tax breaks on reinvestment in a house property overseas,' said Naushad Panjwani, senior executive director, Knight Frank India.

    Wary of Brazil's stagnant economy and corruption, Brazilians are buying abroad
    Real estate professionals have reported a surge in enquiries from Brazilians seeking to buy homes at some American locations including Miami, Orlando, New York and Boston. The increase in the number of people planning to move abroad has occured since Dilma Rousseff was re-elected as President in October. Many of these people are frustrated with increasing crime, corruption, the political atmosphere and the stagnant economy, prompting them to leave the country, according to real estate professionals. Three million Brazilians now live abroad, according to the Brazilian Foreign Ministry, and nearly 35% of those live in America. Brazilians have a strong affection for Miami, in southeastern Florida, and accounted for 51% of all tourists visiting Miami in 2013. Brazilians have been big buyers in Miami for years. However, they are now seeking long-term roots in the city, which real estate professionals say is a new trend. Alongside enquiries for homes, agents are receiving requests for advice on establishing American residency or citizenship. Most prospective buyers are rich Brazilians based in Rio de Janeiro and Sandatilde;o Paulo who want to move capital out of the country because of concerns about Brazil's current political situation, according to real estate professionals. President Rousseff's popularity has been going downhill since her re-election. In a recent poll by Datafolha, only 23% respondents rated her good or very good, the lowest level since she took office in 2011 and the worst for any Brazilian leader since Fernando Henrique Cardoso in 1999. Her rating has tumbled from 42% in December.

    European property markets will continue to rebound in 2015
    Europe's peripheral residential property markets have been going downhill since financial debacle seven years ago, but they will likely improve in 2015, according to a Fitch Ratings report. The outlook for the German, Dutch, Danish, Irish, and Spanish markets is particularly positive. In fact, most of these markets witnessed increase in property transactions and mortgages issued to home buyers in 2014. All of them are at various stages in recovering from pronounced house price corrections. Economic growth, low interest rates, and improved affordability are among the supporting factors for mortgage and housing markets in these eurozone peripheral markets, according to the report. The strongest outlooks are for Denmark and Germany. In both the countries, arrears are likely to be low and stable in 2015-2016, as they will in France and Belgium. However, the latter two markets will continue to experience falling house prices, due to overstretched affordability (France) and tax changes (Belgium), while Germany and Denmark will see prices rise by 3%-4%, the report says. Markets in Spain where property prices have declined by 40% in the past seven years will stabilize as further drop in prices is unlikely. Besides, the number of non-performing loans will also come down after 2015. However, high unemployment rate and persisting deflation are some of the factors which may negatively affect the recovery in Spain. Ireland witnessed a rise in property prices in 2014, but the house price growth is likely to slow down this year because of declining affordability levels. "Lending, and with that house price growth, will depend on whether and how the central bank implements proposed loan-to-value and loan-to-income caps... which we think would reduce long-term mortgage credit risk," the report says. While, the recovery of property markets in Greece will suffer as new mortgage lending has hit a new low, a persistently weak labour market and return to recession could see arrears rise modestly this year and house prices continue to fall in Italy. The UK and the Netherlands are already among Europe's largest mortgage markets and both could see increases in new mortgage lending of around 10% due to improving housing market liquidity, the report says. UK house prices will rise again, reflecting continuing demand, low rates, and the economic recovery. But deteriorating mortgage affordability means the overall rate of increase will slow sharply, to around 2%. The slowdown will be notable in the South East, while prices in the North could catch-up, narrowing the past regional discrepancy. Rate rises should be modest and gradual, limiting the impact on prime performance and continuing the trend towards fixed rate borrowing, according to the report.

    Sharp correction ahead for Dubai
    "Property prices in the emirates could slide by between 10% and 20% this year, depending on location and investor sentiment," say SandP regional property analysts Franck Delage and Gregg Lemos-Stein. They are one of a growing group of professionals sounding the alarm as Dubai responds to falling oil prices. International property investment agency JLL also recently predicted that prices and rents in Dubai would drop this year by an average of 10%. The value of Dubai property transactions fell 7.6% to Dh218 billion (nearly US$59.35 billion) year-on-year in 2014, according to Dubai Land Department data. Cooling measures introduced by the government have added to the pressure. The government doubled the property transaction tax and asked the United Arab Emirates central bank to restrict mortgages after Dubai's property prices soared 56% in just two years. Dubai home sales declined 3.2% by value in 2014 due to the cooling measures. Home sales by value fell to dh60 billion (US$16.3 billion) in 2014, from 62 billion dirhams (US$16.88 billion) in 2013, according to Dubai's Land Department. However few believe that the market will crash like it did in 2008 when property fell more than 50% in value. The real estate market is showing a "trend towards maturity," said Sultan Butti bin Mejrin, director general of the Dubai Land Department, adding that any drop in prices will help attract investment.

    International property markets see fewer Russian buyers
    Russians have been one of the top luxury residential property buyers in many countries, but the dwindling value of ruble has slashed their purchasing power. The ruble's value has declined by over 50% compared to the US dollar since June last year, wiping out a major chunk of Russian buyers from the international real estate markets. Real estate professionals in many countries including the UK, Spain, Dubai and France say that the number of Russian buyers has come down substantially in a matter of just few months. The West-imposed restrictions following Russia's takeover of Crimea is a major reason, keeping many wealthy Russians from buying properties overseas. Russians have been a major force in the central London's luxury property market. In 2013 they bought 5.2% of all central London homes sold, but their market share dropped to 3.5% in 2014, according to Knight Frank. Experts believe it will likely go down further if rubble's value doesn't improve in the near future. "The wealthiest Russian buyers have all but disappeared from some areas in the south of France. Their absence has left quite a void," Mark Harvey, France's residential expert for Knight Frank. In St.-Tropez, Russian demand for luxury villa rentals came down 20% year-on-year in 2014, he said. However, ultrahigh-net worth Russians are still buying. "There are two clear Russian buyer markets in London, the uber-wealthy and the mainstream buyer... The wealthiest Russians still have the ability and desire to buy, and have their infrastructure in place in London to keep purchasing," Harvey was quoted as saying. Developers in Spain, where the Russians are the third largest international buyers, also report a drop in sales to Russian buyers.



    Scotland's new property transaction taxes help the poor, milk the rich
    Scotland's government has decided to exempt 50% of property sales from transactions tax altogether. However, high-end home buyers will pay more. The decision to revise property tax rates has apparently been prompted by the UK Government's Stamp Duty reforms unveiled in Chancellor George Osborne's Autumn Statement in December. It comes only three months after Scotland proposed a new band-based tax on land and building transactions. Under the earlier announced rates, no Land and Buildings Transaction Tax (LBTT) was applicable on land and building transactions valued up to 135,000 (nearly $204,761). LBTT replaces Stamp Duty Land Tax (SDLT) in Scotland with effect from 1 April 2015. The LBTT-free threshold has now been increased to 145,000 ($219,928). As a result, half of the land and building transactions will be exempted from the LBTT altogether, while 40,000 buyers will have to pay less, according to Scotland's Finance Secretary John Swinney. For properties worth between 145,001 (about $219929) and 250,000 ($379121.25), 2% LBTT will be applicable. The new rates also attempt to provide relief to people buying larger homes as a new band for properties worth between 250,001 to 325,000 ($492,944) has been proposed in which buyers will have to pay 5% LBTT. Between 325,001 and 750,000 ($1,137,450), the marginal rate will be 10%. The top rate of 12% will now affect all transactions above 750,000, rather than the 1 million initially planned. Earlier, the buyers were supposed to pay 10% LBTT on all purchases worth between 250,000 and 1 million. 'The measures I am proposing send a very clear message...This government has put fairness, equity and the ability to pay at the very heart of the decisions that we have taken," said Swinney. However, Swinney was accused of taking "the fastest U-turn in history". 'Having announced his intentions at the tail end of last year to make this a fair and progressive tax, it took John Swinney just 100 days to change his mind," said Labour's Jackie Baillie. For the rest of the UK, Chancellor George Osborne announced in December a rate of 5% for properties costing 250,000 to 905,000. It was feared that the new UK tax bands would discourage property purchases in Scotland, prompting the changes to the earlier proposed LBTT rates.

    Hong Kong, Vancouver and Sydney - the least affordable housing markets
    A study of 378 metropolitan areas in nine countries has found that Hong Kong, Vancouver and Sydney are the most unaffordable housing markets in the countries studied. Housing affordability in Hong Kong has reached record heights. Its median home price was 17 times the median pre-tax household income in 2014, the least affordable ever recorded in the 11 years of the Demographia International Housing Affordability Survey, up from 12.6 times a year earlier. In Vancouver, median home prices were 10.6 times household incomes. In Sydney they were 9.8 times times household incomes. Markets where homes cost more than 3.1 times incomes were classified unaffordable by the study, and those where the multiple is 5.1 or higher as "severely unaffordable' by Demographia Other 'severely unaffordable' cities included San Francisco and San Jose (each 9.2), Melbourne (8.7) and Greater London (8.5). Three other markets had median multiples of 8.0 of above, including San Diego (8.3), Auckland (8.2) and Los Angeles (8.0). The study included metropolitan areas in 9 countries: Australia, Canada, China, Ireland, Japan, New Zealand, Singapore, United Kingdom and United States. Housing prices rose by 1.6% during the year to Q3 2014 in Hong Kong, suggesting that measures imposed by the government to cool the property markets are working. Shortage of supply, steep increase in demand from both local and global property investors and regular buyers are considered responsible for continuous price rise in Sydney. "These markets have severe land use restrictions that have been associated with higher land prices and, in consequence, higher house prices..." according to the study. The U.S housing markets were comparatively affordable. All the 10 most affordable markets including Detroit and Rochester and Buffalo in New York were in the U.S. However, some other metropolitan areas like San Francisco, San Jose, San Diego and Los Angeles, all in California, were among the least affordable. Housing affordability in the U.K. worsened slightly. Homes were 5 times incomes, up from 4.9 a year earlier. New Zealand, however, reported improvement in housing affordability, with prices 5.2 times incomes. The ratio was 5.5 times a year earlier. Singapore's housing affordability also improved slightly, to five times incomes from 5.1 last year. The study has the advantage of looking at more individual towns than comparable work by The Economist, or the Global Property Guide, but it covers many fewer countries. It uses the measure of 'median multiple' (median house price divided by gross annual median household income) to assess housing affordability, a figure recommended by the World Bank and the United Nations. The median (= the middle income) is a superior measure compared to the mean (= total income of everyone divided by number of people). Demographia, which conducted the study, describes itself as a 'consultancy' but it is one with a strong ideological angle, and might be described as free-markets pressure group. It campaigns for the removal of all 'artificial' controls on housing construction, i.e., it calls for total freedom for developers to make cities as ugly as they please, regardless of the wishes of their inhabitants.

    Investors pricing out home buyers in Australia
    Investors are taking half of all mortgages issued to home buyers in Australia and are pricing middle class and young families out of the property markets, credit ratings agency Fitch concludes. As a result, the number of first-time buyers entering the market hit record lows in 2014. "The growth of the housing investor market has largely been at the expense of the first-time buyer. There is little doubt that first-home buyers are being priced out of the market," according to the report. Australia's homeownership rate has been continuously falling, from 70.7% in 2000 to 67.5% in 2012, the report says. "The same trend is being observed around the globe. Tight credit availability and stretched affordability should continue to lead to falling home ownership levels in many countries," the report said. "Fitch expects investor demand to remain high in Sydney and Melbourne, so long as interest rates remain at the current low level and so long as the tax incentives to invest in property remain." However in 2015, Fitch predicts housing investment to cool slightly. Rising home prices in cities like Sydney and Melbourne will dampen investment because of pressure on rental yields, slowing price growth. Fitch expects Australian home price growth to come down to 4% in 2015, from 7% in 2014. "Housing investor sentiment is fickle and if alternative asset classes offer better returns we would expect investor interest in housing to fall with some follow-through impact on demand and property prices," the report said. "After 15% growth in the past 18 months, we believe Australian house prices are near an affordability ceiling and growth is expected to moderate in 2015-16," the report said.

    Foreclosure filings drop to low level in US
    In yet another sign that US housing markets are recovering after a long spell of slowdown, the number of properties going through foreclosure process dropped 18% year-on-year in 2014 to its lowest level since 2006, according to California-based real estate data firm RealtyTrac. Nearly 1.12 million foreclosure filings were reported last year, down 61% from the peak of the housing collapse's aftermath in 2010, when 2.87 million properties were in the process of being foreclosed upon. "This means that the housing market can move forward on much more stable footing. One pillar of the housing crisis is gone...That will allow a lot of stakeholders involved in housing to move forward with confidence that there's no shadow inventory of foreclosures that's going to rear up and disrupt the housing recovery-at least on a national level," said RealtyTrac's vice president Daren Blomquist. The foreclosure filing rate also dropped to 0.85% meaning that one in 118 housing units filed for foreclosure. It was for the first time that it dropped below 1% since 2006. Florida reported highest foreclosure filing rate in the country, at 2.3%, followed by New Jersey (1.87%), Maryland (1.69%), Illinois (1.38%), and Nevada (1.32%). "For New Jersey, Maryland, Illinois, they were not some of the hardest-hit markets initially. They're rising now because of the delayed or dysfunctional foreclosure process in those states," Blomquist said. Among the largest 20 metro areas in the country, only four increased foreclosure activity in 2014 compared to the prior year: New York (up 31%), Philadelphia (up 15%), Washington, D.C. (up 4%), and Houston (up 2%). Nearly 5.5 million homes have been lost to foreclosure since the beginning of the financial crisis in 2008, according to CoreLogic. As of November 2014, about 567,000 homes across the country were in some stage of foreclosure, compared to 880,000 in November 2013, a year-over-year drop of 35.5%, according to CoreLogic.

    Singapore home sales fall alarmingly
    The Singaporean government's cooling measures have had a major impact: sales of new private homes dropped in 2014 to their lowest level for six years, according to Urban Redevelopment Authority data. Prices have also fallen. Developers sold only 7,557 units in 2014, just above half the units sold a year earlier. Nearly 22,000 units were sold in 2012 which dropped to about 15,000 units in 2013. Only 230 units were sold in December, the lowest monthly figure since January, 2009 when developers sold only 108 units. Experts believe that restrictions on borrowing and measures taken to curb speculation are to be blamed. Housing prices fell by 6% in 2015; however, experts rule out the possibility of further drop in home sales. As the first quarter of 2015 is likely to remain sluggish, the developers may be forced to price their units competitively. The government has introduced several restrictive measures on local as well as foreign property buyers to curb speculation in Singapore since 2009. Debt is capped at 60% of a borrower's income. Real estate taxes have also been increased. The government recently raised the minimum cash down payment for individuals applying for a second housing loan to 25%, from the previous 10%. The government increased the additional buyer's stamp duty (ABSD) on private and public housing for foreign real estate investors from 10% to 15% in January, 2013. Foreign buyers pay ABSD, introduced for the first time in December, 2011, in addition to the standard stamp duty rates. These rules are also applicable foreigners on long-term passes (called 'permanent residents'), but they pay at a lower rate of 5%. Singapore residents have also been brought under ABSD's ambit, having to pay 7% ABSD when buying their second home. The government also introduced a Seller's Stamp Duty on industrial properties for the first time, to discourage speculative activity in the industrial market.

    Hong Kong housing shortage: Leung Chun-ying plans to increase land supply
    Hong Kong will increase its land supply to deal with the housing shortage, promised Chief Executive Leung Chun-ying in his recent policy address. His government will relax out-dated restrictions and streamline procedures to facilitate building new homes. Pointing to land shortage as root cause of many social and economic problems, Leung expressed worry over young and middle class families being priced out of the housing market, deterring them from forming a family or starting a business. He stressed the need for long-term land supply planning to curb runaway property prices and rents for residential homes. There is no lack of land in Hong Kong; the problem is shortage of land that is developable. 'The process of planning takes timeandhellip;We have to take into consideration more and more factors such as the impact on traffic, environment, conservation and even air ventilation in the planning processandhellip; Planning must reflect the overall interests of Hong Kong and heed the priorities of society's need. 'Not only the well-being of individual areas in planning and development, but also the overall housing supply and demand of Hong Kong as a whole should be considered,' he said. Land shortage has caused the failure of several government schemes for affordable housing. During Tung Chee-hwa's administration, the government launched a scheme to build 85,000 new flats each year, but failed to meet the target. In 2014, Chief Executive Leung Chun-ying also failed to meet his target of 47,000 new units.