The residential property market in the Latvian capital of Riga has topped a new global house price league table published by Knight Frank.
Property prices in Riga have appreciated by 39% over the past year, well ahead of second placed Bulgaria, up 19%, while Denmark came third, with capital gains of 17.8%.
By contrast, average residential property prices in Hong Kong and Germany fell by 2.6% and 3% respectively.
Liam Bailey of Knight Frank said: " Germany has been the poor man of Europe in housing terms for well over a decade, and any change in this position is still some way off.
"Latvia has seen, and is forecast to see over the medium term, economic growth above the EU average. Wage inflation, growing prosperity and access to less constrained mortgage finance have all contributed to rapidly rising prices."
Tishman to invest €200m in Commercial Park near Sofia Airport
Tishman International has announced that it will invest €200 million in a new commercial park near to Sofia International Airport.
The Sofia Airport Centre will be the premiere mixed-use development in the country consisting of corporate offices, a logistics and distribution centre, retail outlets and a hotel.
Alan Levy, head of Tishman International, says: “Construction is expected to start in the beginning of 2007. We will construct a unique multifunctional business complex that will be 300m away from the new airport’s terminal on an area of 10 hectares. Construction work will have two phases and we will rely on Bulgarian companies and local materials.
“The first stage envisages investment of €100m and first to start operating will be the warehouses and part of the office areas. Five years from now, when the complex is completed, we will have invested €200m. The whole complex will employ about 10,000 people. In three years’ time there will be a metro that will stop nearby the centre.”
Bulgaria’s mortgage market begins to slowdown
The Association of Commercial Banks in Bulgaria has announced that the volume of mortgage loan growth in the country has decreased from 97.4% to 68.9% for the first nine months of 2006.
The report predicted that the interest rate for Euro mortgages in Bulgaria could decrease by around 1% to 5.5-6% over the next one or two years.
Bucharest metro to benefit from EIB loan
Bucharest metro is to benefit from a €60m loan from the European Investment Bank. The loan will support the capital’s ongoing extension and modernization of the metro system.
Part of the loan will be used to finance track extension linking the East/West axis of the city, whereas another portion of the loan is committed to the acquisition of 6 new metro trains and the modernization of the electrical installation. The project complements two previous loans provided to Metrorex in 1996 and 2000, worth €215m.
At the signing, EIB President Philippe Maystadt said that the Bank will continue to play a key role in the financing of the country’s transport sector. Priority will be given to the much needed support of urban transport which will ultimately benefit residents, tourism and businesses.
Mr. Liviu Soava, Metrorex’s general director, said the EIB’s third investment in Bucharest metro comes at a very opportune time: “With passenger levels averaging around 130,000 people a day, it is important to cater for their services in the best way possible, and the Bank’s loan is helping to do that.”
The EIB is one of the largest investors in Romania, having committed, since 1991, more than €4.3bn in around 47 projects, of which some €2.6bn have been directed to the transport sector. The large variety of projects include motorways, the financing of air traffic control system, port modernization, road building and improvement, acquisition of rolling stock for Bucharest metro, construction and upgrading of various railway links and modernization of the capital’s tram network.
Worldwide News
Investment in China's property market to fall
Latest figures from the People's Bank of China point to a 24.3% increase in China's investment property market to the end of September (£87bn). This figure however, is set to fall to around 20% by the end of 2006 as a result of government restrictions on foreign investment.
Australian homeowners to feel affects of latest rate rise
Homeowners in Australia will be hit hard by the Reserve Bank of Australia's decision to raise interest rates for the third time this year, according to the Real Estate Institute of Australia (REIA).
REIA highlights that:
+ An extra $113 has been added to average monthly loan repayments this year
+ More than $33,000 has been added to the interest payments a borrower will make over the life of the loan
+ Borrowing $230,000 now means paying back around $530,000
REIA President Tony Brasier said: "This third interest rate rise will hit the housing market hard with the likelihood that there will be further upward pressure on rents. That’s not good news for home buyers, renters, or for the economy."
Volkswagen to open $300m car plant in India
German car manufacturer Volkswagen has chosen Maharashtra to set up its manufacturing plant in India. The new factory will roll out an undisclosed small car model by the second half of 2009.
Volkswagen, the world's fourth largest car maker, will invest over $300m and create 2,500 jobs in the region. The factory will be set up on 500 acres of land in Chakan, an industrial belt near Pune.
Volkswagen is the third European company to choose Maharashtra for its manufacturing base in the last month, after Daimler Chrysler and Renault.
In August, American car maker General Motors also announced its decision to set up a plant in Talegaon, again near Pune.
The state is already home to Italian car maker Fiat, and Czech Auto maker Skoda, a subsidiary of Volkswagen, has its manufacturing unit in Aurangabad.
VK Jairath, the state's principal secretary of industries, said: " Maharashtra has established its position as the hub for auto and auto component manufacturing."
Analysts estimate that in three years, over half a million additional cars will roll out from these new factories in Maharashtra, both for domestic and export markets.
The additional capacity created is expected to add 10,000 direct jobs in skilled positions and at least 15,000 indirect ones in associated ancillary and service industries.
New Egyptian resort to be built
A new £1.3bn residential resort will be constructed on Egypt’s Red Sea coast. The project will be developed by Vantage Real Estate Development.
Developing economies lead way in global rent growth
Developing countries account for half of the twenty world markets with the fastest-growing occupancy costs for prime office space, according to a report by CB Richard Ellis Research.
Thirteen world markets also posted a 30% or more increase in occupancy costs over the last year, according to the semi-annual Global Market Rents survey. These markets include: New Delhi, Mumbai, Manila, Brisbane, Perth, Buenos Aires and Bogota, Manhattan, Honolulu, Sofia and Abu Dhabi.
Concern over rental shortage in Sydney
There is an alarmingly high level of rental shortages in Sydney, Australia, according to the Real Estate Institute of New South Wales.
The Institute claims that rental availability is at its lowest for over five years, with only 1.5% of rental properties available at the end of October.
Cristine Castle , president of the Institute, said: “We’d like to see some further incentives in the way of perhaps some land tax relief, particularly for residential property.”
