Rising Interest Rates are Unlikely to Affect Brazilian Home Sales

Brazil's third largest homebuilder says Brazil property sales are unlikely to be affected by increased borrowing costs so long as the interest rate is kept below 14%.

Duilio Calciolari is the new chief executive officer of Gafisa SA. which is Brazil's third largest homebuilder, and doesn't feel there should be any significant impact if rates go up to 14% to control inflation.

The bank has already raised interest rates to 12%, but employment is extremely strong and banks are becoming ever more willing to finance mortgages. An estimated 9.1 million Brazilians intend to buy property this year, all of which bodes extremely well for Gafisa.

The unemployment rate in Brazil hit a record low in December at just 5.7%, and was 6.5% in March which is the lowest ever recorded rate for that month. The Brazilian president, Dilma Rousseff recently said that the economy is near full employment.

However as the economy continues to expand, the rate of inflation is also accelerating and is now running at 6.51% which is the highest rate since 2005 and above the target range set by the government. A recent central bank survey of 100 economists revealed that most expect the interest rates to end the year at 12.5%.

Mortgage lending grew by 51% in 2010, compared with a 2.6% decline in the US and a 12% increase in Mexico. Property prices have risen significantly since 2008, with prices increasing by 113% in Rio de Janeiro and 91% in São Paulo. In spite of these hefty increases Calciolari doesn't think the housing market is at any risk of a bubble and the prices are just a structural correction due to the increasing mortgage market.

Singapore Safe as Houses for Investors

Sales of residential homes in Singapore have reached a five-month high as they increased 29% last month due to many foreign buyers seeing the country as a safe place in which to invest. This is because of the recent earthquake in Japan and the continuing political unrest in the Middle East regions.

Sales of new homes rose from 1,386 in March to 1,788 in April which is the highest level since 1,915 homes were bought in November. However this figure has dropped since a previous high of 2,208 recorded a year earlier.

According to Donald Han, managing director at Cushman and Wakefield, this shows that consumer confidence is still high both locally and internationally, and that Singapore is still seen as a highly desirable investment destination.

The economy in the country grew at an annual rate of 23.5% during the first quarter and homes are now at record prices in spite of the government's attempts to curb speculative buyers. The government has extended the period for sales tax liability on home sales from 3 to 4 years and has also raised the down payment necessary for second mortgages.

This hasn't stopped investors as most intend to hold onto their properties for longer term and are not buying them just to flip them. It remains to be seen if the government will introduce any more measures, and much depends on property price figures for the second quarter.

There is growing discontent amongst Singaporeans who are unable to afford property in the city and this led to the People's Action Party losing votes and seats during general elections held earlier in May.

http://www.bloomberg.com/news/2011-05-16/singapore-april-private-home-sales-rise-to-five-month-high-on-haven-status.html

Property Sales in Phoenix Rise to Record Highs

The number of sales in Phoenix has risen to a record high during the first quarter of 2011, largely due to cash buyers and investors purchasing distressed property. Foreclosure sales and short sales are still accounting for a huge portion of the market and the median sale price is still dropping.

Sales figures for March showed that 10,352 new and resale properties were bought which is up a staggering 44.3% from the previous month, and 7.5% from March 2010 according to DataQuick who track property trends nationally through public property records.

It's normal to see a sharp rise in sales between February and March as the property buying season gets underway in earnest, but this year's increase is larger than normal. The average increase would be about 30% according to records kept by DataQuick since 1994. The March sales figures were the highest for that particular month since March 2007 and are just 1% short of the average number of sales for this month.

In spite of this, sales of new properties are at their lowest levels for 14 years as builders are unable to compete with bargain priced foreclosure properties.

A huge 41.2% of all property transactions in March were for homes costing less than $100,000 which is up from 40% in February and 30.6% in March last year. Property investors bought 47.1% of homes sold in Phoenix, and this is the highest level for any time during the last decade.

The median price of property in Phoenix was $119,000 which is down 11.9% from March 2010. Foreclosure sales accounted for 53.1% of property purchases in March, down from 66.2% in March 2009.

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House Prices Increased in Colombia in 2010

The housing market in Colombia was especially strong in 2010 which is partly due to the burgeoning economy and partly because of the peaceful transition to a new president. It's expected that house prices will continue to increase this year and Colombia's investment rating was upgraded in March to investment-grade.

The average house price rose by 9.25% in 2010 with the average price of a new apartment increasing by 9.57%, and the price of new homes increased by 5.69%. Three cities in particular showed strong price increases last year, which were Bucaramanga with increases of 15.2% year-on-year, Bogota with increases of 10.5% and Barranquilla with increases of up to 8.6%.

Colombia has a housing deficit of around 2.4 million homes with 185,000 new homes being needed annually. There are signs that this demand is partially being met as housing approvals reached 153,903 last year, with this high level being partly accounted for by the reduction in construction costs.

The Colombian economy grew by 4.3% last year up from 1.5% in 2009. The growth during the last quarter of 2010 was especially strong, and as a result of this there was a 3.2% increase in the consumer price index during the first quarter of this year, but this is still within the central banks 2% to 4% target.

The country gained a new president in August 2010, Juan Manuel Santos, who succeeded Alvaro Uribe. Santos was formerly the Minister of defence and his main priorities include improving relations with Ecuador and Venezuela and reducing the high levels of unemployment.

Recent Foreign Ownership Laws Helping Property Market in Cambodia

Recent laws allowing foreigners to own apartments and condominiums were introduced last year and have already had a positive effect on the property market.

However it still remains a little sluggish, even though the number of property transactions tripled since the foreign ownership law was approved by King Norodom Sihamoni in May 2010. The tax revenue from property transactions increased by 60% to US$19.5 million up from US$12.2 million in 2009.

Un Mouy, of Two Town Company, who is the developer of Bal Resort said that 80% of the project has already been sold with 60% of it being sold to overseas buyers. He credits the new law for these good sales figures. It's the same story for the Camko City megaproject who has sold increasing numbers of condos to foreigners since the new law was passed.

It's estimated that as much as 70% of luxury property in Cambodia is reliant on overseas investors. The law had been amended as far back as 2005 to allow foreign investment in buildings, but was never put into practice due to Cambodia experiencing a property boom.

During the property boom the price of residential property rose by about 25% to 40% annually between 2004 and 2007. At first this property boom was confined to popular regions such as Phnom Penh and Siem Reap, but it soon spread right across the country.

The construction boom in Phnom Penh was largely fuelled by overseas investment with the government favouring wealthy developers. However it remains against the constitution for foreigners to own land even though it can be held on long leases and through majority-owned local companies incorporated in Cambodia.