Global Property Guide - News and Discussions
New Zealand government gets tough on foreign property buyers who evade taxes
Property buyers now need a New Zealand bank account and an Inland Revenue Department (IRD) number to buy residential properties in New Zealand. The change, which came into effect on October 1, impacts both foreigners and native New Zealanders. Both will have to provide their IRD number and other details when buying or selling properties, except in the case of main homes bought by residents.. However the primary aim of the changes is to make it easier for the government to collect data on property purchases being made by foreign buyers. Many overseas speculators are reported to have cashed in on house sales without paying taxes. The changes are contained in the recently-passed Taxation (Land Information and Offshore Persons Information) Bill, which enables Land Information agency to collect information when property is bought and sold, and pass this information to the Inland Revenue Department (IRD). 'Most people do the right thing and pay their taxes, but there has been some concern that compliance with taxes on certain property transactions, particularly by non-residents, may be relatively low,' Land Information Minister Louise Upston told Parliament. The commentary attached to the bill proposal noted: ' An important feature of the proposal to provide IRD numbers is that all parties to a land transaction will be expected to have an IRD number, even if they are non-resident. A person who is not an "offshore person" as defined and who is purchasing a property with the intention of that property becoming their main home, or selling a property that was their main home, will be exempt from the requirement to supply this information. 'Second, an "offshore person" (as defined) will be required to provide evidence of a New Zealand bank account as a prerequisite to obtaining an IRD number. This is to ensure that an offshore person looking to obtain an IRD number has first been subjected to New Zealand's anti money-laundering and Countering Financing of Terrorism rules.' Upston told Parliament that the data would help the government better understand the residential property market. It will also assist the government in forming its housing policy, the minister said. While the government says the information will help it clamp down on speculators, many believe the measures are not good enough. New Zealand First MP Fletcher Tabuteau termed it waste of time saying the bill would do nothing to cool overheated housing markets. Legislation to introduce a capital gains tax on residential properties bought and sold within two years is still going through Parliament.
Housing starts and permits reach record levels in US
Groundbreaking and permits to new build new homes have surged steeply in the US, reaching the highest level in the past eight years, according to the U.S. Commerce Department. This is the strongest recovery in housing starts since 2007-08 financial crisis. Groundbreakings on new homes surged 26.6%, and permits to build new homes went up 30% year-on-year in June. Economists say an increase in both starts and permits could help ease the demand for housing, in the face of limited supply. There were 1.174 million housing starts (seasonally adjusted, annual rate) in June, up from June 2014andprime;s rate of 927,000. Permits for June reached an annual rate of 1.343 million (seasonally adjusted, the highest level since July 2007, when housing permits stood at 1.361 million. "This month's reading is in line with recent data showing stronger sales in both the new and existing home markets as well as continued job growth... However, builders still face a number of challenges, including shortages of lots and labor.," the National Association of Home Builders' chief economist David Crowe said. Housing starts for multi unit buildings have witnessed a particularly large boost. Starts on buildings with five or more units shot up by 28.6% in June, to an annual rate of 476,000 (seasonally adjusted). Experts believe that the main reason behind increase in starts is that people who were forced to sell their homes in 2007-08 financial crisis are back in the market, looking to be homeowners again. This has boosted the demand for comparatively cheaper housing. Builders are trying to meet this demand through multifamily housing projects. The home ownership rate in the USA is currently 63.7%, the lowest in the past 20 years.
Rate cut by Canada's central bank fuels housing bubble fears
Canada's central bank has reduced its overnight lending rate to 0.5%, from 0.75%, to counterbalance slumping oil prices. In response, several Canadian banks have cut their prime rates.
Toronto-Dominion Bank has cut its prime lending rate by 10 basis points to 2.75%. Royal Bank of Canada, TD Bank, Bank of Montreal, Bank of Nova Scotia and Canadian Imperial Bank of Commerce have cut also their prime lending rates by 15 basis points.
The rate cut has come at a time when real estate markets in Canada are already overheating. The cut will lead to increased borrowing, which will result in faster property price growth.
This is the second lending rate cut by the Bank of Canada this year. The central bank surprised economists in January when it reduced the rate to 0.75%.
These interest rate cuts were followed by the highest number of monthly sales for several years in May and June, according to the Canadian Real Estate Association (CREA). there were 56,839 transactions by CREA members in June, up 11% from the same month last year.
Home prices in Toronto and Vancouver continue to surge. The average cost of purchasing a condo, townhouse or low-rise property in Toronto has jumped 38% during the five years to June, according to the Canadian Real Estate Association.
Credit agency Fitch Rating, however, says that the decision by the central bank to reduce its overnight lending rate by 25 basis points will not have much impact on borrowing.
"Given the current rate environment, which has been at near-record lows for several years, Fitch does not expect the rate cut to have much impact on market mortgage rates, or on affordability for current borrowers," the company said in a release.
Despite this, Fitch says it believes the Canadian housing market is still 20% overvalued, with what it described as "modest variation" across provinces.
"However, a number of positive market factors are expected to moderate any negative price pressure. Most importantly, the Canadian mortgage market does not have significant exposure to riskier mortgage products that would be at high risk of default," said Fitch.
"Expect a soft landing nationally, where the price growth that has characterized the country's housing markets for more than a decade will abate, with modest declines to follow," the company said.
British PM to crack down on "dirty money" in UK real estate
Britain will crack down on investors using shell companies to invest ill-gotten wealth in UK real estate, British Prime Minister David Cameron has promised. Cameron's warning comes in the wake of the National Crime Agency's call for curbs on foreign criminals, who the agency believes are investing laundered money in London real estate, using shell companies to circumvent scrutiny by law enforcement and intelligence agencies. The agency has accused these foreign investors of driving up property prices. The agency's economic crime director Donald Toon recently warned that these investments are 'skewing' the market. 'Prices of high end property are being artificially driven up by the desire of overseas criminals to sequester their assets here in the UK. What they are doing is distorting the market,' said Toon. Campaign group Transparency International recently claimed that companies registered in offshore secrecy jurisdictions own one in 10 properties in the City of Westminster, central London. No less than £120bn (US$187.65) worth of properties in England and Wales are owned by offshore companies. The government will likely introduce in the autumn a central public land registry of foreign companies. The registry will make public which land is owned by offshore companies. Currently, a small fee has to be paid to obtain the records about ownership titles on a property deed from the registry. The new registry will make the process easier and more transparent. Besides, the information provided by the registry will be more detailed. The government also plans to have the registry 'out' the true owners of UK companies, so that it would cover overseas-registered firms with a government contract.
Indonesia to allow foreigners to buy luxury apartments
The Indonesian government is planning to give foreigners the right to own and trade apartments in Indonesia, under a new law likely to be introduced by year-end, Land Affairs and Spatial Planning Minister Ferry Mursyidan Baldan said recently. Foreigners are currently barred from directly obtaining properties in Indonesia. Under the new law, foreign investments in apartments that cost at least Rp 5 billion (US$186,000) will be legitimate under the "right-to-use" category, though not under the 'right-to-own' category, which is reserved to Indonesians. The government also aims to pocket luxury tax by legitimating these investments. There are reports that foreigners are buying properties through proxies in large numbers, avoiding paying taxes. 'The state will allow foreign nationals to have apartments in Indonesia for their lifetime, and the apartments may be bequeathed to their descendants or resold...However, the status of these apartments will fall under the right-of-use category, not the right-of-ownership category,' Ferry said. Under the right of use category definition, a lease holder's possession of the property expires in 25 years that can be extended 20 years or lifetime for the land's legally defined use. However, the land law also provides for the right of ownership - known in Indonesian as hak milik - that has no time limit but is applicable only to Indonesian citizens. While the regulation will allow foreigners to invest in apartments, they will still not be able to buy landed houses. Foreigners will be able to own the apartments for their lifetime and pass on to descendants as inheritance if they decide not to sell it. 'We will issue a government decree on foreign possession of property before the end of the year,' Ferry said. Ferry said the government had no intention to restrict the location of apartments available for foreigners to possess in Indonesia. 'Foreigners normally prefer living in South Jakarta areas like Kemang or in the Sudirman Central Business District so it's useless to restrict their purchase locations,' he said. Experts say that the regulation will stimulate demand in the country's luxury market. Some experts have warned the government to increase the threshold of the property's minimum value from Rp 5 billion because the shopping spree by foreigners may create a bubble situation in coming years.
Bargain hunters looking for properties on Greek islands may be disappointed
The Greek stock market may have hit rock bottom, but prominent Greek real estate brokers report a surge in enquiries for homes on the Greek islands. The agents say that most enquiries are from Europe and Middle East Asia. Many foreign buyers are eyeing vacation villas on the world famous islands of Mykonos and Santorini, as well as Port Heli, in hopes that their prices will plummet.
Property prices in Greece have fallen 40% since 2007, according to Bank of Greece. Property prices on the island of Mykonos went down 30% before stabilizing last year. The island saw a brief spell of recovery in prices in 2014.
However though enquiries have increased, there haven't been many sales
Home owners on these islands seem unwilling to sell. They are watching developments and not lowering their asking price, real estate professionals report. They are opting to rent their properties, instead of selling at throwaway prices.
European Leaders are still hoping to rescue Greece from its financial crisis. Greece needs to agree on the details of a new aid program before August 20, when the country is scheduled to make a payment of 3.2 billion euros on bonds held by the European Central Bank.
Landlord tax-relief slashed to discourage Britain's buy-to-let frenzy
A radical change is ahead for UK landlords. Tax reliefs favouring UK landlords have led to a steep increase in investment in buy-to-let properties in the UK, and have contributed to inflating property prices and rents, making housing increasingly unaffordable. Landlords are currently able to claim tax reliefs worth 40% or 45% of interest payments on buy-to-let mortgages. However under new rules, from April 2017, they will be able to claim maximum tax relief of only 20% of the interest payment. The change will be unfolded over the next four years. The landlords will also not be able to claim 10% of the rent against wear-and-tear costs. From April 2016, landlords will only be able to deduct costs they actually incur. Britain's two million buy-to-let landlords will be affected by these tax regulations. 'Buy-to-let landlords have a huge advantage in the market as they can offset their mortgage interest payments against their income, whereas homebuyers cannot,' Chancellor George Osborne said recently. Osborne added that how popular buy-to-let mortgages have become in Britain can be gauged from the fact that they now accounted for more than 15% of new mortgages, causing the Bank of England to sound warnings about the market. "So we will act. But we will act in a proportionate and gradual way, because I know that many hardworking people who've saved and invested in property depend on the rental income they get," he said. The government also announced a major tax relief to home owners who let a room in their own home to a lodger. Homeowners will be able to make tax-free income in rent up to £7,500 (US$11,548) from lodgers. Earlier, the tax-free limit was £4,250 (US$6,544). The change comes into effect from April next year. Advocates of affordable housing welcomed the announcement. They said that buy-to-let landlords were being given unfair advantage over regular home buyers. They hoped that the government would take more such measures to give home-buyers a level playing field.
Australian banks restrict lending amid housing bubble fears
Australia's major banks have tightened underwriting rules for property investors amid growing fears of a housing bubble, after the Australian Prudential Regulatory Authority warned that Sydney's housing bubble could destabilise the financial system.
Paying heed to the warning, Australia's four major banks - Commonwealth Bank of Australia, Westpac Banking Corp, ANZ Banking Group and National Australia Bank - have raised the minimum down payment to 20% of the purchase price, having previously required only 5% money down. Stricter mortgage approval criteria have been introduced, and the banks are either not providing interest rate discounts on mortgages to property investors, or discouraging discounts.
Australia's regulators still want the banks to take more steps to check the country's runaway property price rises, particularly in Sydney, asking them to set aside more capital against mortgages. Sydney's house prices have risen 40% over the past three years.
Treasury secretary John Fraser warned last month that Sydney is 'unequivocally' in a housing bubble, due to interest rates at historically low levels. 'When you look at the housing price bubble evidence, it's unequivocally the case in Sydney. Unequivocally,' he said.
Dubai-based developer to promote 37,000 properties to Chinese buyers
Dubai-based prominent real estate developer Damac Properties has inked a deal with a Chinese property broker to promote its 37,000 properties in Dubai to Chinese investors.
Beijing-based property broker 5i5j employs nearly 30,000 real estate sales professionals and boasts of "selling a unit every four minutes".
The deal underlines how Chinese investor interest in Dubai real estate is growing.
In fact, there have been many signs of this phenomenon. Dubai has seen a surge in the number of Chinese visitors in the recent past, many of them exploring real estate investment opportunities, experts believe.
In 2014, a total of 344,329 Chinese visited Dubai, an increase of 25% over 2013, according to data released by the Dubai Corporation for Tourism and Commerce Marketing (DTCM). Dubai is home to about 200,000 Chinese expatriates.
Wealthy Chinese visitors nominated Dubai as their third most preferred luxury travel destination in the world follow Australia and France in 2014, according to a luxury travel report.
Bilateral trade is also flourishing between the two countries. China has become Dubai's biggest Asian trading partner, overtaking India. The Dubai government is also trying to increase acceptance of China's currency - the renminbi - within the emirate.
Damac is targeting Chinese for both its hotels and real estate projects, said Ziad El Chaar, Damac's managing director. The company is focusing on buyers from Beijing, Shanghai and Guangzhou, as well as the northern city of Urumqi, home to China's largest Muslim population.
"[The Chinese Muslims] on their way to Makkah, pass through Dubai, so they're a growing, important part of the tourism in Dubai," El Chaar said.
He added that the tourism industry required far more flights between the UAE and China in order to grow it further.
"One of the main things that has to happen so we can get more Chinese tourists to Dubai is we need more flights from China because the demand for hospitality is always related to the number of seats you have on planes coming from that country," he said.
Spain relaxes residency permit norms for non-EU property investors
Encouraged by the recent surge in foreign investment in real estate, Spain has relaxed norms for issuing residency permits to non-EU nationals. Now a foreigner investing more than ?500,000 ($560,855) will automatically qualify for permanent residency. Moreover, residency permits will be granted not only to the investor, but also to his or her parents and children, adults as well as minors. Until now, only the spouse and minor children could qualify for residency permits. Over 350 residency permits were issued to non-EU investors during the year since the scheme was launched in February last year. The residency permits are also open to those investing in public debt, and businesses in Spain. Spain is one of the several European countries to have introduced schemes by which residency permits are granted to wealthy foreign real estate investors, in return for buying prime properties. Other countries are Portugal, Greece, Hungry, and Cyprus. The investor has to retain the property in order to continue enjoying residency benefits. In Greece and Hungary, the minimum value of the property has to be ?250,000 ($280,481). In Spain and Portugal, the minimum investment is ?500,000 ($560,855), while it is ?300,000 ($336,577) in Cyprus. Investors, mainly from China, Russia, Brazil, Angola, South Africa, and India, are applying for Golden Visas in Spain, with Chinese topping the chart by a big margin.
UK home prices to rise 25% over next five years: RICS
Reeling under the problem of acute shortage of homes, the UK's home prices will rise 25% over the next five years, according to the Royal Institution of Chartered Surveyors (RICS). New buyers are entering the market at the fastest pace in a year. Yet the supply of homes has gone down alarmingly, causing property prices to go up faster in May compared to April. The supply of homes for sales has dropped by 12% since the start of this year, said RICS. Their data is based on the average number of homes for sale on chartered surveyor estate agents' books. RICS said that the average stock of houses per surveyor has now fallen to 52, the lowest level since records began in January, 1978. Earlier it was believed that the supply of homes would rise after the general election. "There had been some hope that the removal of political uncertainty would encourage more properties on to the market, but the initial indications are that this is not proving to be the case. As a result, it is hardly surprising that prices across much of the country are continuing to be squeezed higher, with property set to become ever more unaffordable," said Simon Rubinsohn, chief economist at RICS. Rubinsohn added that the feedback RICS was receiving from its members "points to prices at a headline level rising by another 25% over the next five years". He added that there was no real confidence among members that effective measures to provide a major boost to new supply would be delivered by the government any time soon. The North West and London saw the sharpest drop in new homes coming onto the market compared with April, RICS said. "More ominously, U.K.-wide listings have now failed to see any meaningful growth since the middle of 2013," he said.
Berlin implements rent control legislation, more cities likely to follow
Landlords have been barred from increasing rents by more than 10% above the average for a locality in Berlin as legislation enacted in Germany three months ago, has come into force.
Berlin is first city to implement the rent control legislation, a move considered by many a necessity to rein in rent growth. The rate of rent rise in many areas of Berlin is the fastest in Europe.
There is already a 10% increase cap existing tenancy contracts, but new contracts will also now come under this legislation's ambit.
"The rent cap already applied to existing tenants, meaning the difference between what was charged for existing contacts and new contracts was high. The other problem is that we have 40,000 more inhabitants per year," said Reiner Wild, the managing director of the Berlin Tenants' Association.'
"We don't want a situation like in London or Paris," he added. "The reality in Paris or London is that people with low income have to live in the further-out districts of the city."
Rent control may be introduced in more German cities in the near future.
Berlin has witnessed gentrification at a very fast pace over the past one decade. Migration into the city increased, so did rents and property prices.
Rents have risen more than 30% in the past three years, according to a Jones Lang LaSalle report.
Rent control legislation was enacted in Germany in March. "We're creating a fair balance between the interests of landlords and tenants," German Justice Minister Heiko Maas said in a statement. "We want to foster and maintain the high appetite for investment in the residential market."
Foreigners buying properties in Australia illegally face jail term and fines
Stepping up pressure on foreigners suspected to have bought properties illegally, the Australian government has told buyers to come forward and disclose their unlawful transactions by November, or face three year jail terms plus whopping fines.
Under the new rules, foreigners who have bought properties illegally in Australia face fines of A$127,500 (US$100,050) and up to three years jail for individuals, and fines of more than A$637,500 (US$499,000) for companies.
Third parties such as real estate agents who knowingly assist a foreigner to breach the rules will be fined up to $42,500 (US$33,254) for individuals and $212,500 ($US166,230) for companies.
Abbott said foreigners were illegally buying into the existing residential property market and driving up prices.
"We want to ensure that locals are getting a fair go, that the playing field is at least level and, if possible, slightly tilted towards the locals," he told reporters in Sydney recently.
Foreigners need to seek permission from Australia's Foreign Investment Review Board (FIRB) before buying. They are not allowed to buy an established (previously occupied) house. They may buy an unoccupied new dwelling, but only if the FIRB feels that the purchase will not add to the shortage of properties available to native Australians. However, many foreigners are believed to have flouted these restrictions. Abbott said foreigners were illegally buying into the existing residential property market and driving up prices.
Treasurer Joe Hockey said the government was already investigating some 100 cases of illegal purchases. The Australian government has asked 55-year-old Hong Kong property developer Hui Ka Yan - the 15th wealthiest person in China - to sell a Point Piper mansion in Sydney within 90 days or face having it repossessed by the Commonwealth Department of Public Prosecutions.
Singapore's rents fall, as property prices stabilize
Singapore tops the chart of the world's most expensive cities, with high living and education costs and strict foreign labour policies. However, renters are heaving a sigh of relief as the country's rental housing markets cool. Rents have fallen to their lowest level since 2011, due to stabilizing property prices and increasing inventory. The first three months of this year saw a steep drop in rentals, causing them to plummet to the lowest level since the first quarter of 2011. Rents have been continuously falling since February, 2014, according to Singapore Real Estate Exchange (SRX) Property Index. SRX index showed that private condominium and apartment rents fell for the 11th month in a row in December last year. They dropped 0.8% in December compared to the previous month. Rents in prime central areas saw the steepest drop - 1.2% - while those in the city fringe fell by 0.6% and those in the suburban areas dipped 0.3%. Savills Research and Consultancy research suggests that average monthly rents of high-end condominiums tracked fell 5.8% year on year to S$4.57 ($3) per square foot in the fourth quarter of 2014. The luxury housing segment has witnessed the steepest drop in rents. Property prices have stabilized due to a slew of cooling measure undertaken by the government over the past few years, but the rental housing market is also cooling. These 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. Another reason behind dropping rents is the increasing vacancy in the luxury property segment. The country's housing stock is also increasing, providing people with more choices and bargaining power in the rental market. The Singaporean government has already imposed several restrictions on home buyers. 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.
Global real estate boom spreading to Africa
African real estate markets are increasingly attracting overseas property investors, but the focus of buyers is shifting from South Africa to real estate markets in the continent's other countries. The result is that continent is set for a property boom, argues a recent Knight Frank report.
A fast-growing population is the key reason why international investors are eyeing residential properties in Africa. The continent is expected to be home to four billion people by 2021, nearly 40% of the world's total population.
Until recently, Africa has been a hot destination for Chinese property developers, but the continent is now attracting property investment from other Asian countries, and also from Middle East.
Nigeria's Lagos, Tanzania's Dar Es Salaam and Angola's Luanda are among the fastest developing cities in the world, with strong prospects of a property boom, according to the Knight Frank research. The report notes that apart from the demographic growth, strong economic growth is another reason why buyers are taking notice of African real estate markets.
The firm estimates that Nigeria is likely to be one of the continent's strongest property markets, stronger even than South Africa as it will be home to a quarter of the total African population. Nigeria's economy has also rebounded and grew to nearly US$892 billion in 2014.
As affordability levels in South Africa have deteriorated in the recent years, developers from South Africa are eyeing real estate markets in neighbouring countries. Xenophobic attacks in Durban recently may also deter foreign investment in South Africa's property markets in the short term, if not the long term, experts believe.
"We have seen rising interest in Africa from an increasingly diverse range of international investors, developers and occupiers in recent years,' said Tony Galetti, Joint CEO and Co-Founder of Galetti Knight Frank.
'The inflow of investment from China into Africa has been well publicized, but there is also growing activity involving investors from elsewhere, including the rest of Asia and the Middle East. Meanwhile, an increasingly significant flow of capital has emerged from South Africa into other African markets."
Vietnam to relax foreign property ownership rules, boosting overseas investment
A change in policy is set to boost overseas investment in Vietnamese real estate. The new policy, effective from July 1, will allow foreigners with a valid residential visa, plus foreign companies and international organizations, to buy residential real estate in Vietnam. Currently only foreigners married to Vietnamese are allowed to buy houses. Special permission to buy property is also granted to those considered to be making significant contributions to the nation's development. Vietnam's property markets are already booming. Causes include low interest rates, speedy urbanization and the government's focus on improving infrastructure. Besides, Vietnam's economy grew at 5.8% last year. During this year's first quarter there were over 8,000 property transactions, triple the number in the same period last year, according to the Ministry of Construction. The new rules will pave the way for a fresh wave of foreign investment in Vietnamese property markets, experts believe. Foreigners will be permitted to own 30% of all dwellings in an apartment building and 250 independent houses in a ward - an administrative area that can contain thousands of properties - with a 50-year lease. The relaxation of the rules is in accordance with similar laws in other countries in the region. In Thailand, for example, where foreigners are limited to 49% ownership of condos. Ho Chi Minh City and Dan Nang in particular will see a spurt in foreign investment due to availability of high-end apartments and luxury houses, experts say. Nearly 80,000 foreigners now live in Vietnam, but just 800 of them own residential properties, according to the Ministry of Natural Resources and Environment.
Foreign investment tumbles in Cyprus amid booming real estate markets
Most Cyprus districts saw exponential growth in the sale of residential as well as commercial properties this year. The demand for properties in Cyprus has, however, been driven by domestic buyers. Overseas investment has tumbled drastically, due to a number of factors. Land Registry offices in Cyprus received 452 contracts for the sale of commercial and residential properties and plots of land in March, up 31% compared to the same month last year. Of the 452 properties, 91% were purchased by Cyprus residents (a jump of 71% compared to the same month last year), while foreigners bought the remaining 9% (60% down). Nicosia is the only district in Cyprus where foreign investment in properties went up in March, with a 71% increase. The number of properties being purchased by overseas buyers dropped in all other districts. Only one property was sold to a foreigner in March this year in Famagusta, one of the popular districts among overseas buyers, compared to14 properties in March last year. The drop appears to be highly related to negative publicity, rather than economic factors, though the weak rouble is also a factor. Up until 2013, Chinese buyers were everywhere in Cyprus, but their number dwindled recently because allegedly they were duped by brokers and sold properties at exorbitant rates. Dubious real-estate brokers also duped Lebanese nationals into purchasing property in Cyprus on the promise that they would get them residency permits, even when they didn't fulfill the various criteria. Like some EU countries including Portugal and Spain, Cyprus also offers residency permits to foreign property investors. An overseas buyer has to spend at least ?300,000 (US$388,000) to get the residency permit.
U.S. interest rate hike may hurt Turkish residential property market: SandP
Residential property prices in Turkey will see a strong growth in 2015, but a possible rate hike by the U.S. Federal Reserve Bank will hurt the housing markets as it will discourage foreign capital flows, Standard and Poor's (SandP) said in a report released recently. Turkey's housing markets rely heavily on foreign investment. The U.S. Fed is all set to increase interest rates later this year. The U.S. central bank has kept overnight interest rates near zero since December 2008, but a number of officials have said recently an increase will likely be considered at its June policy-setting meeting. On the other hand, the European Central Bank recently launched eurozone "quantitative easing". The combined effect of both developments may discourage foreign capital flows to Turkey. The SandP report titled "Housing Markets in Israel, Russia, South Africa and Turkey Show Resilience to Weaker Economic Conditions," said that Turkish residential market gained more than 16% in nominal terms in 2014 in a sign of strong growth. "The market softened temporarily in the first half of 2014 amid slowing economic growth and interest rate hikes, but rebounded strongly as monetary conditions loosened and confidence returned," it said. "We expect domestic demand to rebound in 2015, supported by more accommodative monetary conditions and a boost to real incomes due to falling headline inflation on the back of lower oil prices, supporting demand for residential properties this year... 'Funding conditions are likely to remain supportive for the housing market in the near term. Overseas buyers' interest in Turkish real estate will continue to support the market, but strong structural demand from Turkey's young and growing population will remain the key driver of housing market activity," it added. So even though the expected rate hike by the U.S. Federal Reserve Bank is creating an uncertain environment for foreign capital flows to Turkey that could ultimately hurt the housing industry, domestic and overseas demand is rebounding, according to the SandP report. "Residential property prices in Turkey had risen strongly in 2014, gaining more than 16 percent in nominal terms. Real price gains exceeded 7 percent, up from 6 percent recorded last year," said the report. According to the research, the Turkish population is expected to grow by about 11 to 12 percent between 2012 and 2023, according to the Turkish Statistical Institute (TandUuml;and#304;K). Istanbul's population is projected to increase by 20 percent over this period, to 16.6 million by 2023.
As "baby doomers" follow "baby boomers", young Brits face impossible housing situation
Young Brits are ready to make all sorts of sacrifices so that they can afford a deposit for a home, a poll has revealed - to give up further study, postpone marriage, endure the stress of two jobs at a time, and even undergo paid medical trials to raise a deposit. A poll of nearly 2,300 young Brits, conducted by YouGov for the National Housing Federation (NHF) suggests that with the general elections less than two months away, the issue of housing affordability is on the mind of young voters. They believe that the government's efforts to contain runaway property prices have been unsatisfactory. Almost 4% of those polled said that they were considering undergoing paid medical trials to arrange for a deposit on a home. Nearly 12% said that they were likely to take up a second job, while 15% were ready to sacrifice their plans for getting married. Nearly 5% were thinking of cancelling further study. The poll found that the housing affordability levels have dropped alarmingly over the past few decades. Property today costs 7 times the average annual salary compared to 4.5 times in the 1990s. "In contrast to the baby boomers' good fortune, our children are set to be the 'baby doomer' generation, with opportunities for a good start in life disappearing," David Orr, NHF executive, said. "Our polling of young people underlines the stark reality of their situation and how they feel like they are shouting into a void. They are just not being listened to by government and are left feeling completely ignored, especially when it comes to housing." "We are talking about where our children and grandchildren are going to live. We simply cannot afford to ignore the concerns of younger people and just accept the fact that they will be considerably worse off than previous generations. This shouldn't be the case. 'That's why we are calling on the next government to produce a long term plan within a year of taking office detailing how they will commit to end the housing crisis within a generation," he added.
Indian real estate attracts global attention
The phenomenal growth in real estate investment in India is attracting global attention. With a whopping 140% increase in real estate investment to $5 billion in 2014, according to Cushman and Wakefield, India was among the world's top three countries for increased investment. 'Increased investment' is a slightly odd category. Countries which topped the list, had mostly previously crashed. Serbia was No 1 with a 610% increase in real estate investments in 2014, Bulgaria came second with a 186.5% rise in investments. Yet India's appearance on the list heralds not recovery after a crisis, but a real transformation. Overseas buyers in India invested $1.93 billion in properties in 2014, an increase of nearly 38%. Domestic buyers purchased properties worth $3.12 billion, a 62% growth. 'The huge growth in investment volumes in real estate markets are proof that investors are already acting out on their expectations of improvements in the ease of doing business in India backed by regulatory reforms to be implemented by the Prime Minister Narendra Modi led government,' said Sanjay Dutt, executive managing director, south Asia at Cushman and Wakefield. The residential sector received more investment than the commercial sector, with investors purchased residential properties worth nearly $2.6 billion.