Property Solutions

Property prices in Munich set to rise because it becomes well-liked by overseas buyers

Posted on June 30, 2013 at 7:58 pm

Image The residential property market in Munich, an extended standing location of choice for wealthy Germans, is commencing to attract more international buyers, in line with a brand new analysis report from Knight Frank.

Prime property prices in Munich increased by 9.3% in 2012, outperforming most other key European cities and now affluent buyers from Russia, the center East and the united kingdom are targeting the areas of Altstadt-Lehel, Glockenbach, Schwabing and Maxvorstadt within the city centre.

According to Kate Everett-Allen, of Knight Frank’s International Residential Research team, Munich’s excellent medical facilities are particularly drawing interest from Middle Eastern buyers.

Mainstream residential prices in Munich stand at around €4,200 per square meter while luxury prices are toward €15,000 per square meter. And the report says that although economic indicators can be weakening in Germany with GDP forecast to rise by only 0.5% in 2013, the outlook for property prices is more upbeat.

The report says that since its housing market downturn within the late 1990s, Germany’s residential sector has outperformed most of its European neighbours. The conservative lending policy of German banks, combined with the truth that only 45% of German households own their home, helped lessen the impact of the worldwide credit crunch when it hit in 2008.

As a result, post-Lehman mainstream property prices have risen by 7.4% in Germany, but fallen by 8% around the wider Eurozone. At €4,200 per square meter, mainstream prices in Munich are one of the most costly in Germany in comparison to €3,100 per square meter in Frankfurt and €2,200 per square meter in Berlin. However, property prices still compare favourably with other European cities.

The city has a population of one.4 million but attracts 5.7 million tourists annually. ‘Munich remains well-liked by many wealthy Germans and a growing number of international buyers. Latest estimates suggest around 5% of buyers purchasing homes in Munich above €2 million are from abroad with Russian and Middle Eastern buyers most prominent,’ said Everett-Allen.

‘Munich’s excellent hospital and medical facilities, on a par with London’s Harley Street, are helping to draw interest from Kuwaiti, Saudi Arabian and Qatari buyers amongst others. Estimates suggest 700 Arab patients were travelling to town once a year for treatment some 10 years ago, and this figure has risen substantially since,’ she explained.

Most of Munich’s prime buyers need a home within a 30 minute walk of town centre and here prices can reach €15,000 per square meters, in line with the report. An apartment within the heart of the town in prime areas which includes Altstadt-Lehel, Glockenbach, Schwabing and Maxvorstadt rank highly on most luxury buyer wish lists.

Munich’s up and coming areas including Nymphenburg have undergone significant regeneration lately and values in neighbouring Neuhausen are moving upwards, but older houses and villas in Pasing remain popular too.

The luxury residential market in Munich recorded price growth of 9.3% in 2012 outperforming many other European cities including London and Paris. Unlike much of Europe, residential sales activity has increased in Munich with total sales volumes rising from €9.3 billion in 2011 to €9.9 billion in 2012.

‘Quality properties are sometimes being sold within two weeks of coming to the market. We predict prime prices within the city to rise by yet another 5 to ten% in 2013 as supply tightens and insist increases as a result of Munich’s growing international appeal,’ concluded Everett-Allen.

The report also points out that once buying in Germany different levels of property tax apply reckoning on location. In Germany, real estate transfer tax (RETT) or Grunderwerbsteuer is levied at the transfer of real estate. Previous to 2007 all German federal states applied a rate of three.5% but since this date states can set their rates independently.

In Munich, and its wider state of Bavaria, transfer tax currently stands at 3.5%, but in Berlin and Hamburg it’s now 4.5% and in Stuttgart and Dusseldorf it’s 5%.

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Balearic prices rival London

Posted on June 30, 2013 at 7:36 pm

Most property investors have a picture of Spain and the Balearic Isles as recession-wrecked countries, where bargains are plentiful. However, this certainly is not the case in Mallorca and Ibiza, in accordance with Sotheby’s International Realty . The typical price per square metre for real estate sold by the corporate in both isles is €9,000 (£7,600) – within the same price bracket as certain parts of highly priced London.

This paints an exceptionally different picture of Balearic property and shows that during some areas real estate can still give other nation’s a run for his or her money. Basically, Sotheby’s claim that the location in London – where demand from overseas markets has helped to push prices upwards – is equal to in Mallorca and Ibiza. He even goes as far as to assert that the consequences of the financial crisis aren’t any longer being felt within these markets.

Daniel Chavarria Waschke, managing director of Balearics Sotheby’s International Realty, said: “On account of ease of access from most northern European cities, greater than 80 per cent of our buyers aren’t Spanish. Watching the year so far, 1/2 all our enquiries are from Brits and Germans, 34 per cent and 21 per cent respectively for Mallorca and 40 per cent and ten per cent for Ibiza, and they’re placing high value on location alongside quality of construction, a considered layout and an outstanding level of decor.”

Buyers are at the hunt for luxury property and Mr Waschke claims budgets often appear limitless. However, supply remains low within the Balearics and property values are being inflated accordingly. The placement looks set to just intensify once new Golden Visa legislation takes effect, drawing in buyers from China, Hong Kong and Russia. Nonetheless, Sotheby’s has observed demand is essentially focused on homes under construction. All properties sold by the firm in 2013 fit this description or where recently completed or freshly refurbished. It sort of feels homes that also need work are sticking for sale much longer.

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Increased transparency boosting real estate markets in south east Asia, says report

Posted on June 28, 2013 at 7:41 pm

Image Strong growth in Southeast Asian real estate markets is associated with increasing transparency inside the region’s property markets and consequently rising investment interest, that is claimed.

Global real estate advisory firm Jones Lang LaSalle says there are various real estate trends and opportunities in emerging markets across Southeast Asia.

In a brand new report it points out that the economies within the region continue to outpace the remainder of the sector by a big margin. While Singapore remains the industrial and fiscal hub, emerging markets are making headway across Southeast Asia.

The report says that despite a slight slowdown through the first quarter of 2013 in some Southeast Asia markets akin to Indonesia and Thailand, economies around the region anticipate growth for the rest of the year. Because the continued global economic recovery and growth within the region increase liquidity and decrease debt, growth prospects in real estate assets around the region will attract global investors, it believes.

Supported by strong investor demand and consumer spending, Indonesia’s economy is forecasted to grow 6.1% in 2013, the Philippines is predicted to grow 5.7% this year and economies in Thailand, Malaysia and Vietnam are expected to grow between 4.5 and 5.5% driven by strong domestic demand.

‘This growth translates to robust domestic investment into commercial property, driving demand for office and logistics space. Increased consumer spending will boost demand for expanded retail formats, which in turn will support the developments of retail malls and the following accompanying infrastructure in emerging markets,’ said Chris Fossick, managing director, Singapore and Southeast Asia at Jones Lang LaSalle.

‘We at the moment are beginning to see increased transparency within the real estate markets of those economies that allows you to ultimately spur regional growth encouraging investment. For this reason, the genuine estate industry is in a special position to steer and be inquisitive about many key aspects of development inside the Southeast Asia region, both economic and social,’ he explained.

‘There is a job for the industry in areas resembling infrastructure, housing, education, healthcare, tourism and industry and trade that are all inextricably linked. That’s both a chance and a challenge for our industry and we have to work closely with both private and public enterprise to make sure real estate adds full value,’ he added.

The office markets within the region are set to profit from changes being made to house growing workforces and modernised office spaces in new, emerging markets. While existing companies seek space to deal with expansion and new businesses and industries demand a share within the markets, demand for offices will spike and vacancy levels are forecasted to succeed in historic lows by 2014, the report says.

An example is Jakarta where office demand has increased by nearly 150% in four years, growing 7.4% inside the last quarter alone. The Philippines, often overlooked by investors, witnessed record levels renowned for office space, sparking new developments in previously unexplored submarkets and a three% rise in rents from an identical period 2012.

The report also says that using increased domestic demand, office market rents and capital values in Thailand’s real estate market have demonstrated recovery for the reason that end of 2012, rising 15.2% year over year inside the first quarter of 2013. Meanwhile increases of one to 4% in office rents were seen in another emerging markets, resembling Kuala Lumpur and Bangkok.

It says that currently Jakarta leads the regional field within the retail market, supported by a enormous domestic population. As rising disposable income and changing demographics are driving consumer confidence and end result of the retail rents have accelerated by 4.9% year on year within the first quarter of 2013.
 
In Thailand, the local retail market also enjoyed renewed interest from international retail brands trying to capitalise on resilient domestic demand and overall rising affluence in Asia. Leasing activity was strong, largely driven by newcomers and expansions by international brands with retail rents in Bangkok growing 4.1% year on year and capital values rising by 3.4% year on year inside the first three months of 2013.

By incorporating sustainability in real estate development, markets within the region can capitalize on and maintain growth, enhance corporate productivity and efficiency, and improve transparency for prospective investors, consistent with the firm.
The Jones Lang LaSalle’s 2012 Global Real Estate Transparency Index revealed that transparency in real estate markets is usually improving as investors and company occupiers extend deeper into these geographies.
 
‘A higher transparency ranking in these markets will support economic integration by leading developers to explore opportunities for real estate growth which, in turn, encourages other investors who will recognise the growing development cycle,’ the report explains.

‘Across the Southeast Asia emerging markets, increased corporate real estate activity is enhancing the pace of transparency improvements in Indonesia, the Philippines, Vietnam and Thailand. These countries have experienced probably the most progress in transparency among Asia Pacific countries, and rank a number of the top 10 improvers globally in overall transparency scores because of greater availability of market data and incremental changes within the regulatory and transaction processes,’ it adds.

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Could you make the most of Panama’s economic growth?

Posted on June 28, 2013 at 1:16 pm

Panama’s economy is expanding and appears set to continue on an upwards trajectory over the approaching years. Because the country experiences growth, investors ought to be asking themselves how they are able to capitalise at the nation’s good fortunes. The Panama property market is definitely a good selection for buyers at the hunt for assets, particularly if investment is centred across the holiday-let sector.

The rustic is decided to extend its tourism capacity and because 1997, the variety of hotel rooms in Panama City alone has increased from 1,400 to greater than 15,000, consistent with STR Global . The rustic currently receives around 2.1 million tourists every year and initial projections for 2013 suggest the there’ll be ten per cent growth.

In keeping with the worldwide Property Guide, the common cost of an apartment in Panama stands at $2,015 (£1,249 approximately) per square foot. With rents at $1,692, yields are high at 8.4 per cent. Demand levels also are prone to improve as economic growth becomes more stable. Government figures show Panama’s economy expanded by 7.6 per cent inside the second quarter of the year, led by activity in transport and communications, Reuters reported. Increased activity within the construction and mining sectors is likewise helping drive growth.

While growth in Q2 2013 is below that experienced in 2012 when the economy expanded by 10.8 per cent, the worldwide financial crisis and the delay of the outlet of the Panama Canal expansion have been largely responsible. Once that is rotated sooner or later, growth is probably going ramp up.

Needless to say there are still risks inside the economy that investors must be aware about, Reuters explained. Panama have been suffering from the dispute between its trading partners Columbia and Venezuela. This has disrupted the Colon Free Trade Zone, that’s the most important duty-free area after Hong Kong.

However, Frank De Lima, finance minister for Panama, isn’t too worried about future prospects: “In comparison to global and regional growth, Panama have been growing almost thrice as much. We see a soft landing expected inside the near future, but still higher than average growth within the next couple of years.”

Posted in Property Solutions

Strong European office markets offering the very best rental discounts

Posted on June 26, 2013 at 7:28 pm

Image Office property markets in Europe which are perceived as being stronger are offering the very best rental discounts to tenants, new research shows.

London City, Paris CBD and Paris La Defense currently offer a few of the highest available discounts, around 20% of the whole months over lease term, says the report from property firm Savills.

‘Over the past five years landlords in a number of Europe’s prime office markets have lengthened rent free periods to support headline rents. Which means markets comparable to London and Paris, where landlords can be feeling more confident, have surprisingly large incentives on offer,’ said Julia Maurer, European research analyst at Savills.

The report shows that on average rent free concessions for high CBD space have increased by 21% across Europe in 2013 compared with 2008 and currently account for a standard 12% of the complete rental period inside the markets examined.
 
The highest percentage of rent free months offered within the markets surveyed is in Milan at 25%, followed by Paris CBD and La Defense both at 21% each, and London City and Dublin both at 20%.

But weaker markets are usually not offering much of an incentive for absorb. As an illustration in Athens, where prime headline rents have fallen significantly by 30% during the last five years, there’s only offers of two% of months rent free.
 
Take up levels rose in approximately half the locations surveyed and the firm means that going forward this improved soak up may lead to a discount of incentives offered by landlords in these markets, and therefore have a good impact on real rental growth.
 
The outlook is especially positive for London, Vienna, Brussels and Warsaw which all recorded year on year absorb increases of roughly 20%.

‘We are seeing a moderately positive trend across European office markets because the average amount of rent free periods offered is in certain cases decreasing. German cities primarily reflect this trend, with rent free periods either stable or taking place and just a small difference between headline and effective rents,’ explained Eri Mitsostergiou, Savills European research director.

Overall the report shows that incentives appear determined by the mixing of various market indicators, consisting of availability and insist, and the person local characteristics. It concludes that incentives are therefore an awesome indicator of the final market sentiment.

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