Property Prices in the Ukraine Rise Unexpectedly

Property prices in Kiev, the capital of the Ukraine rose unexpectedly during the year ending April 2012, but experts are doubtful as to whether this increase is sustainable, especially as the economy is slowing down. During the last year the average price of an apartment in Kiev increased by 28.9%, but is still 30% less than the peak of the housing boom in 2008.

In November last year property prices rose by 25.7% year-on-year which was something of a surprise as they had declined for nearly 3 years. However prices declined during the following months. The housing boom in the Ukraine took place between 2005 and 2008, and was mainly due to strong economic growth and interest from foreign buyers.

The boom was encouraged by the President, and as a result property prices increased by more than 1000% between the second quarter of 2000 and the second quarter of 2008. Between 2000 and 2007, GDP grew by an average of 8% annually.

Most of the properties bought by foreign buyers were purchased by Canadians, Kiwis, British, Emiratis and Cypriots, as well as some Americans. Properties were also brought by wealthy Ukrainians, and the average price rose to well above anything that could be afforded by the average resident. In late 2008 this foreign demand dropped off sharply due to the global crisis.

Domestic demand also decreased as Ukraine's main export is steel, and the need for this commodity collapsed. As a result GDP contracted by 15% in 2009. Since then the economy has expanded by 4.1% in 2010, and 5.2% last year. The Ukraine is quite an attractive proposition, as the economy is in relatively good shape, and the cost of buying a property is low. Ukraine also has the advantage of having good rental yields, and the laws are in favour of landlords.

Property Investors Becoming Increasingly Interested in Italy

According to a recent report, property investors are becoming increasingly interested in purchasing homes in Italy, and the current climate is especially good for British investors due to the strength of the pound against the euro.

Last year Umbria and Tuscany were especially popular amongst international buyers, and the regions saw increased activity. Most of the buyers were from the Eurozone, from Luxembourg, Belgium and the Netherlands. This year is likely to see something of a reversal due to the decline in the Euro.

During the last year or so the number of buyers looking for property in Italy has increased substantially, although prices of luxury homes in Tuscany and Umbria dropped by nearly 5% which is thought to be due to the weak global economy, and the Eurozone debt crisis.

Most international buyers are interested in luxury properties priced between €5 million and €15 million, as well as those at the lower end of the market price between €500,000 and €1.5 million. New properties coming onto the market are being priced accurately which is increasing buyer confidence, as well as helping to promote these areas as being some of the best residential property markets in Europe.

Tuscany and Umbria have traditionally always been popular amongst the British, and property in Umbria tends to be slightly cheaper than Tuscany. However Chianti is becoming increasingly popular as it is a picturesque rural area. Other areas attracting interest include Florence and Val d’Orca. Property prices in Italy are expected to remain largely stable this year, and there's no chance of a property glut as new developments are tightly regulated so demand will be higher than supply.

Hong Kong Property Market Looks As If It's Cooling

It looks as if the Hong Kong property market is cooling, as the government recently sold land for less than the estimated value, in spite of it being in one of the most exclusive areas in the city. The 42,000 ft.² of land is situated near Repulse Bay Road, and was sold for HK$1.67 billion, although estimates had expected the land to be sold for HK$1.68 billion.

It's likely low-rise apartments will be built on the site, and could cost about HK$44,000 a square foot during the next couple of years, while new units in the area currently cost between HK$35,000 and HK$40,000. Repulse Bay is one of the most exclusive areas in the city, and is home to some of the richest inhabitants. It was developed around the site of the Repulse Bay hotel which was built in the 20s and demolished in the 80s, and which featured in several famous films.

In July Leung Chun-ying is due to take over as the leader of Hong Kong, and has already pledged to increase the housing supply in a city where property is among the most expensive in the world. Since the beginning of 2009, property prices have increased by more than 78% which is due to a lack of supply and low mortgage rates.

During the first quarter of this year, prices of luxury homes fell by 2.2% due to mortgage restrictions imposed by the government on properties costing more than HK$10 million reducing demand. Property in Hong Kong is around 55% more costly than London.

Residential Property Sales Accelerating in New Zealand

The rate of residential property sales in New Zealand has been accelerating over the last four consecutive quarters, as during the second quarter of last year, sales increased by 7%. By the following quarter this had increased to 18%, and during the final quarter of last year property sales grew by 22%.

This rate of growth has continued into the first quarter of 2012, with sales growing by 29%. This last quarter’s sales growth equates to 3,969 more properties being sold during this period, compared to the same period last year, or 44 properties per day.
This rate of growth hasn’t been matched by the pace of listings, as these have grown by just 10% during the first quarter of this year. This lag in listings is quite common and is being seen all around the country, and it’s not unusual for it to take up to six months to catch up.

While sales may be increasing, so are prices, and New Zealand is one of the most expensive places in the world to buy property, when income is taken into account. The Demographia International Housing Affordability Survey found the average property in Auckland cost 6.4 times the average annual salary in the city, compared to 6.2 in New York, and 5.7 in Los Angeles.

The problem isn’t just confined to Auckland, as property prices in Christchurch are 6.3 times the average income, while in Dunedin prices are 5.2 times the average income, and are 5.1 times the average income in Wellington. This unaffordability is reflected in the fact that less than 30% of those aged 40 or under own or partially own the property in which they live.