Repossessed Property Investment Hotting Up in America

The market for repossessed properties in America is really hotting up at the moment, and little wonder. According to RealtyTrac -- the leading tracker of the American repossession situation -- 2009 was a record year for repossessions with 2.8million homes being repossessed, but experts are warning that 2010 could be even worse.

These fears were heightened when a new monthly record was set in March, when RealtyTrac says some 378,000 homes were repossessed, higher than in any month since they began tracking repossessions in 2005.

While investors from the US and around the world are capitalising on repossessed and distressed properties in all corners of the states to make strong yields, certain areas stack up better than others and as such as seeing demand intensifying at a faster rate, and even slight increases in price.

One such area is Fort Myers in Florida. As we know Florida has been one of the worst affected regions in terms of repossessions, but within that Fort Myers has taken a real battering, and was one of the fastest areas into the repossession crisis in terms of repossession volumes.

However, the fundamentals for economic growth are strong in Fort Myers with many businesses noting recovery and the labour market seeing increased stability in recent months. The biggest pull to Fort Myers property for those buying up repossessed and distressed properties though is the price and the value for money.

Perhaps more than anywhere else, in Fort Myers there are plentiful opportunities to buy new and nearly new properties that have been repossessed or face repossession and are therefore at rock-bottom prices. These present the opportunity to rent out the properties almost immediately after they have been purchased, and yields are around 8%-10% net.

One such repossessed property investment package in Fort Myers is currently being offered by Azure Overseas, with a typical deal being a 3 bedroom property in a good area for £50k, which will rent out for £552 per month, with £367 being left after expenses such as management and maintenance (net).

Demand for repossessed property in Fort Myers and America as a whole is predicted to remain strong in at least the short-medium term, because investors feel confident buying property in an established economy market for such low prices. Another factor is the strong dollar which increases rental yields for British investors.

EU Construction Output Increase Bodes Well for German Property Investment

EU construction output grew 6.8% in March compared to February. This is the largest growth seen in the EU construction sector since the crisis hit. In fact, all the other rises have been lower than or a little over the 1% mark.

According to the data, from Eurostat, construction output rose on a monthly basis in thirteen of the fourteen states that provided data. The largest increases were recorded in Germany (+26.7%), Hungary (+5.5%) and the Czech Republic (+4.7%). Sweden was the only country to register a monthly contraction of -0.4%.

In the annual data it is a different story. Construction output for the entire EU was down 5.2% in March compared to last year, and the only countries to register an annual growth were the United Kingdom (+9.2%) and Germany (+2.6%). The largest decreases were registered in Romania (-23.1%), Bulgaria (-20.9%), Slovenia (-19.7%) and the Czech Republic (-19.1%).

This is the latest positive data on the EU economy, god knows it needs it after the debts of Greece blew up in everyone's face. According to recent reports, European property markets are starting to improve, and this is likely a major factor in the construction growth.

The growth in Germany is particularly interesting, because it confirms recent reports of major demand for retail and commercial spaces in the country. This will obviously fuel the residential markets in areas where the new construction is taking place. It is also good news for the German economy, which -- more than most places -- is a big factor in the shape of the property market.

In Germany only a little over 40% of the population owns their own home, and some 48% live in rented accommodation at full price. For this reason the property market is heavily restricted, with landlords only able to raise rents if wages are increasing. Thus, German property investments are most profitable when the economy is doing well.

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Italy Leading in Overseas Property Revival Says Rightmove

The overseas division of the UK’s largest property portal Rightmove has revealed a 73% year on year increase in searches for Overseas property in April.

According to the portal the biggest benefactor of the increase was Italy, which saw its market share increase by 20% as it became the fourth most popular country on the site, up from 6th in March.

The portal said that Sicily had seen searches increase by 115%, which Sardinia, Lazio and Campania saw searches of between 20 and 30 percent higher than March. Agents in Calabria have also been reporting significant increases in foreign activity, though, they say sales are still low, enquiries are definitely increasing.

According to Rightmove’s head of overseas Robin Wilson, the increase in activity is representative of increasing confidence among buyers, as those who postponed their purchasing plans last year, deciding that now is a good time to buy.

“There’s no doubt absolute traffic volumes are down on the bubble peaks of 2007/2008, but there’s a ground swell of consumer confidence and resolve amongst serious lifestyle buyers to put into practice the purchase plans they put on hold last year,” he said.

This is the latest in a series of positive reports about overseas property this year, particularly European property in established markets.

These included a 150% year on year sales increase in Marbella, and an 18.7%sales increase in wider Spain. These early signs of hope can only be built upon now that the Eurozone debt problems are leading to Sterling having a run against the Euro.

1 pound Sterling is currently worth 1.17 Euros, having smashed the 1.15 ceiling of the past two months, which followed the breaking of the previous 1.10 ceiling that brought us out of 2009.

Because the Euro has come to near parity with the Pound, the difference this makes can easily be quantified: property in the Eurozone, including Italy and Spain is currently 12% cheaper to British buyers than when the pound was worth 1.05 euros in the second half of last year.

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Rugby Giant Falls for Altinkum and the Apollon Holiday Village

Rugby giant Jordan Crane has invested in a property in the Apollon Holiday Village development in Altinkum Turkey through Azure Overseas. Entirely happy with the service he received, Jordan sent in the following as a testimonial to the quality of our services:

"I would like to thank you for all the support and help you offered me during the process of purchasing my apartment at the Apollon Holiday Village in Altinkum Turkey. I did not make the trip over to Turkey to view the complex but Jess and Belinda were very well looked after while they were there, and the staff there went above and beyond to make sure there trip was a good one. Personally I would recommend Frank and Azure Overseas to anyone who is thinking of buying a property abroad."

A regular with both the Leicester Tigers and England Rugby Union squads, Crane purchased a 3 bedroom unit in the development for the incredible price of just £32,000.

And that is the exact reason why Turkey property is set to be one of the biggest sellers for at least the next 3 years, the incredible value for money.

The Apollon Holiday Village is a development of supreme luxury, with the resort and apartments all built to the highest standards by a reputed British developer. According to the other testimonials on the Azure site, those who have seen the resort are surprised at just how big the apartments are, and one couple even comment that the pool is bigger than they thought it would be.

Altinkum is an upcoming tourist town on Turkey’s Aegean coast, and property prices are unlikely to stay at their current levels for long.

Currently prime property is selling better than the lower classes, but this is set to change as confidence grows in the recovery around the world. Thus there is a gathering storm behind property in Altinkum and Turkey, to suggest increasing sales, increasing prices, and increasing rental yields.

Greek Tax Changes to Have Big Effect on the Market

As some of you will know there have been some pretty sweeping changes to the Greek taxation system in relation to property purchases and sale. Usually when a government does things like this it is easy to pick out their motive, but this time it is unclear whether they are trying to revive foreign sales, increase tax payable for commercial transactions, both or something else entirely.

Firstly and perhaps most importantly for the market, the annual levy on properties held by foreign companies and funds was increased from 3% to 15%. This will almost certainly be reduce investment in Greek property by international real estate investment trusts (REITs) and other commercial funds.

On the flip side, the 1% property transaction duty and capital gains tax on property were both zeroed, and transfer tax reduced from 11% to 10%. This should be good news for many foreign buyers.

Not all buyers will benefit however, because VAT on new build homes was increased by up to 2%, which will cancel out some of the benefits to new build buyers.

The changes won’t drastically reduce demand from foreigners buying privately, if correct advice is given, says Peter Mihalos, president of Southeast Real Estate Group.

“A ‘normal’ foreign buyer will actually see a small discount in the transactional tax due,” he told Overseas Property Professional.

“Furthermore European Union citizens are also eligible for various tax breaks, especially if they are residents here.”

The changes could bring about a 20% reduction in Greek property prices as investors give the country a wide birth, says RICS Hellas spokesman George Litsas.

“I believe that this will turn off foreign investors buying any kind of real estate in Greece, local demand for property will slump and eventually, from the second semester of 2010 the property prices will decrease,” he said.

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EU Property Investment Up 15% in the First Quarter

13.4 billion euros worth of property investment deals took place in the EU in the first quarter of this year. This represents a 15 per cent increase over the first three months of 2009, according to research from PropertyEU released yesterday.

This shows unequivocally that faith is returning in the international property arena. Sure, this report is on commercial real estate, but growth in the residential sector will almost certainly follow in the areas where these purchases and expansions are taking place.

Malls need staff, malls need shops, new ventures open up and they need staff, not to mention staff to manage the malls. It is a fact that many of these staff will already be in place, but I do not know one mall investor who will not want to have some sort of presence in the higher levels of their new investment’s staff.

Also, the malls and offices wouldn’t be worth investing in if growth and expansion were unlikely in the market. This means expansion of stores and business, which cannot happen without more staff.

Speaking of which, according to the report, the retail sector was by far the best performing, over the office and industrial sectors.

The retail sector, which saw a 5.2 billion euro growth, was boosted, by the 1.3 billion euro purchase of a portfolio of operational shopping centres and shopping centre developments by Dutch investment trust Corio,  from developer-owner Multi Corporation.

Both companies agreed that Corio would acquire four active retail centres in Germany, Spain and Portugal and another retail centre under construction, again, in Germany.

The second most lucrative deal in the first quarter, was the purchase of  Simon Ivanhoe's portfolio of shopping centres in France and Poland, worth about 715 million euro, in February, by Unibail-Rodamco.

According to the website of PropertyEU, the site was established in 2006 to provide insight on financing and investment in the latest important deals in Europe, investors from North America, the UK and elsewhere.

The research follows investment deals exceeding 20 million euro in value, for which the financial details are known.

Italian Property Market on the Turnaround

The Italian property market looks to have turned the same corner that many established markets did in the second half of last year, the corner onto the road leading to recovery.

Un the final quarter of 2009, property transactions declined by just 0.4% year on year, according to the latest housing market review from the Agenzia del Toro (Italian Land Registry). This is compared to a year on year drop of 18.6% in the first quarter. In the second half of 2009, Italian property prices were just 0.2% lower than in the first half, and just 0.7% lower than the second half of 2008.

This is hardly surprising. The trend in 2009 was buyers going for safety and stability. This made property markets where prices had held up well against the downturn much more popular than those that hadn’t.

Italian property prices fell by among the smallest amount in Europe throughout the entire course of the crisis. In fact, in Knight Frank’s index in Q2 of last year, Italy was the 10th best performing market in Europe (16th in the world), with prices down just 3.5% on Q2 of 2008. The same index in Q3 showed prices were still down only 3.5% year on year, by which time the market was clearly already on the turn.

Italy is a strange one though. The other markets that have seen prices holding have tended to fit certain criteria:

In economies that have not endured a severe recession, and, in some of these places, an economic stimulus has been far more than was needed, creating a liquidity surge.

Italy has endured a severe recession, and its stimulus has tended to be very measured. For this reason, when Italian property prices do start to grow now, going forward there will be no need for anyone to fear that a bubble is forming.

In terms of foreign demand, Italy may well suffer in the short term, as buyers look for bargains in the markets where prices have been slashed. Whether it does or not, Italy has now proven that the management of its property market is capable of preventing speculative bubbles, and this makes it a stable long-term growth market. This will do it more good than harm over the long term.

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