Mumbai Property Market Grinds to a Halt

According to the latest Knight Frank report, the property market in Mumbai is seeing low levels of activity. There are fewer apartments and homes being put on the market as sellers wait for conditions to improve. Buyers are also being put off by increases in building costs, and some of the better neighbourhoods are seeing vacancy rates as high as 48%.

Between 2011 and 2012 just 45,000 apartments were sold in Mumbai's metropolitan region which is well below the market average of 80,000 units a year. There is a current inventory of 80,000 flats, but many buyers are choosing to wait and see believing prices will drop in the near future.

Since the peak of the market in 2007 sales have dropped by more than 60%, and by 35% from 2011. Normally this decline in sales would have brought about a price correction, but this hasn't happened as a delay in approvals has ensured the market equilibrium is maintained. The fall in the number of units launched has offset the impact of prices.

So far this year just 55,000 flats have been launched which is a decline of many 40% compared to the 92,000 units launched in 2011. Developers are choosing to actively delayed project launches, and to sell current inventory before launching any fresh product to help ease any downward pressure on prices. Many developers simply cannot afford to cut prices as the costs of land, raw materials and labour have risen substantially, eating into current operating margins of 30% to 35%.

South Korea's Housing Market Is Bouncing Back

South Korea's housing market experienced something of a revival last year with housing starts and sales figures increasing substantially. Property prices rose by 6.86% during 2011, and the number of housing construction permits increased by 42.2% to 549,594 permits. Apartment building sales rose by 41.8% to reach 285,000 units.

However last year South Korea's economic growth rate slowed to just 3.6% from 6.16% in 2010, and the Bank of Korea is forecasting GDP growth of 3.7% this year. In 2006 South Korea's housing market was at the height of a price boom, and property prices in Seoul increased by nearly 20%. This prompted the government to take action and they imposed controls on housing loans and increased capital gains tax on speculative areas. The following year saw prices slow down, increasing by just 5.4% in Seoul and nationally by 3.1%.

In 2008 property prices in Seoul rose by 5%, while prices rose by 3.1% nationally. In 2009 the property market was affected by a combination of the collapse of the Lehman Bros and government curbs, and property transactions dropped by 35.8% year-on-year to September 2010, and this slowdown caused severe problems within the construction industry. The government began its plan to revive the property market in 2009 by purchasing $1.79 billion of unsold new property, and another $2.68 billion worth of land from construction firms, enabling them to repay their debts. In the summer of 2010 the government began easing property lending restrictions, and this measure has proved to be effective. Last year mortgage loans rose by 8.27% year-on-year.

Myanmar Becoming More Attractive to the West

Until recently Mayanmar was a somewhat faded Southeast Asian country that saw very few Westerners. This former British colony was ruled for 50 years by a military junta and had a very poor human rights and democracy record which saw sanctions imposed by Western governments.

It is now ruled by President Thein Sein, a retired junta general who since coming to office 10 months ago as a civilian leader has imposed an economic and political reform, the speed of which has amazed observers. Last year saw a groundbreaking visit by US secretary of state Hillary Clinton, and William Hague visited in January.

This has raised the profile of Myanmar, especially as sanctions will soon be lifted, and businessmen are quickly seeing the potential of the country. It has a considerable number of natural resources including precious gems, gas, oil and timber, and the former capital city of Yangon is seeing something of a property boom.

High-end hotels in the city have been fully booked during recent months and there is a shortage of office space as well as the type of housing expected by Western executives. Villas which were available to rent for just a few thousand dollars a year ago are now costing up to $50,000.

International standard office blocks have seen prices increase from $25 per square metre to $50 per square metre in just 12 months, with even a small office now costing $3,000 a month to rent.

Companies are keen to rent office space in order to conduct market research before sanctions are lifted, and rents are expected to increase by another 30% during the first six months of this year. Yangon is not the only city to see price rises, as the old royal capital of Mandalay have seen huge increases during the last few years, mainly driven by an influx of Chinese money.

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

Mallorca is Beating the Mainland

Buyers are choosing to look at property on Mallorca rather than the mainland with the visitor numbers and enquiries having steadily increased over the last year.

The sales and marketing director of Taylor Wimpy de Espana, Ignacio Osle believes this is because the island has so much to offer with beautiful architecture, a wide range of sport and leisure activities and wonderful beaches. The island's capital, Palma de Mallorca was recently voted one of the five best towns for travel and tourism in 2010 by Exceltur.

The airport at Palma de Mallorca is the third busiest in Spain and handles more than 21 million passengers, and the airlines have been quick to respond to this increased demand with new flights beginning this year.

Ryanair will begin operating flights from Birmingham while EasyJet will be flying from Manchester. Jet2.com is due to start flying from Glasgow and Eastern Airways will be flying weekly from London Oxford airport from this June.

Mallorca is also becoming more popular with cruise ships and received over 500 last year while a 28 million Euro designated birth is currently under construction and will be able to accommodate up to 5 larger ships.

The Balearics as a whole have seen 145% increases in property sales last year when compared to 2009. Average asking prices in Mallorca are the second highest Spain at €428,300, although overall, asking prices have dropped over the last two years as the market has realigned itself.

Taylor Wimpey has two new developments on the island, one of which is to the north of the island eight few minutes from a Pollensa beach while the other is to the south-west of the island at Las Altos del Golf in Andratx.

View Spanish property for sale

Cyprus Property Sales Increasing in 2010; Let’s Try not to Cry

The latest property sale figures from the Land Registry show a 30% increase in property sales in February this year compared to last year, and a 27% increase in January and February this year compared to the same period last year. Respectively the numbers were 558 and 1274 contracts of sale registered.

While this is most definitely positive news, analysts have been quick to point out that sales are still 60% down on 2008 levels. They have been quick to point out also that this is general data, and there is no indication of what proportion of sales are attributable to foreign buyers -- the Cyprus property market has become incredibly reliant on foreign buyers in recent years. Figures on sales to foreign buyers are expected to come out in the next few days.

The most surprising response however came from Solomon Kourouklides, president of the Cyprus Real Estate Agents’ Association, he has been quoted as saying:

“The latest increase is attributable to the opportunities in the market. Many Cypriot individuals and investors have bought properties from non-Cypriots or Cypriots who cannot pay off their loans. But these opportunities will run out

"If the economic parameters remain the same, we believe that the market will remain at the same level as in 2009, while there is a possibility of a slight deterioration."

Talk about looking a gift-horse in the mouth (yes, I know that saying doesn't exactly fit, but until I think of a better one...).

No one seems to have touched on the fact that this is now 2 straight months of increasing sales in Cyprus. In January sales to foreigners were also found to have increased. This would seem to indicate that the mix of government legislation and advice from Cypriot legal officials has cooled some of the negative effect the title deeds issue caused.

Nor has anyone mentioned the potential positive effect the slew of new golf courses scheduled to be built in Cyprus starting from this year could have. I am not saying go out and buy champagne to celebrate the massive increase in Cyprus property prices in advance, but I am saying, let's not be too negative either. 2010 is likely to be a strong year for overseas property sales, and with the deeds issue semi-resolved and the new courses, Cyprus may well get some of that action.

View Cyprus property for sale

Bulgaria Property Finally Making the News for the Right Reasons

The Bulgaria property market has been getting a lot of attention lately, most recently because the government has stopped allowing people to pay in cash when buying property, and because a major new developer is currently assessing buyer demand with the launch of a new development that has been in the pipeline since 2007.

The announcement from the government is undoubtedly an attempt to reduce corruption and money laundering in the property market, which will no doubt be reassuring for foreign buyers in the long run.

The developer, Immorent has launched a new 200 unit apartment development in the high end Simeonovo district of Sophia. Immorent will only be starting construction on the development if sufficient demand emerges from the domestic and international markets. They are not aking deposits or anything like that, just allowing people to register their interest at this stage.

Managing director of the firm Milen Petrov told Overseas Property Professional magazine that despite Bulgaria's dramatic price falls, there was still a lack of good quality product on the market. But the company wanted to assess demand before starting construction.
"We don't need the money from sales to start building," he said. "We purchased the land in 2007 and the project has been in the design stage since. But the big question now is whether to start or to wait."
The company are planning to target the upper-middle end of the market both in Bulgaria and abroad, Petrov added. "We would prefer local buyers who want to live in the properties but we are also marketing to Russian buyers, as well as UK and Scandinavian investors and even nearby Macedonians."

The commercial and retail sector of the Sophia property market have also been making the news recently, including the opening of the European Trade Centre, a five building office complex and shopping mall, now scheduled for Spring 2010. Those sectors ultimately stimulate demand in the residential sector, and my gut tells me that the Immorent development will go ahead.

View Bulgaria property for sale