Surge in interest to buy French property

Turkish election won with record majority

Romanian workers using legal loophole to work in the UK

€500m to be invested in Bulgarian infrastructure

China studying ban on off-plan buying

Dubai bypass road given go-ahead

Singapore-listed property stocks falling

Government in Delhi reduces stamp duty tax

Romanian workers using legal loophole to work in the UK

Workers from EU newcomers Romania and Bulgaria are using a legal loophole to come and work in UK, according to The People newspaper. UK laws currently restrict access of unskilled workers from those countries, but they are helpless to stop those who claim to enter the country to set up a business.

Workers (with the help of job agencies in Romania and Bulgaria) simply present themselves as self-employed contractors in order to travel to the UK where they usually work as hotel staff, or in other unskilled positions.

UK ’s former home secretary John Reid, who imposed the restriction of Bulgarian and Romanian workers’ entry to the UK in 2006, said that “the terms of the Accession Treaty do not allow us to place restrictions on EU nationals’ rights to come here to set up a business.”

€500m to be invested in Bulgarian infrastructure

Around €500m will be invested in repairing and resurfacing Bulgaria’s roads next year, according to the Regional Development and Public Works Minister Assen Gagaouzov. The sum is double the amount that has been allocated for infrastructure reconstruction this year, he told Bulgarian National Radio (BNR).

Turkish election won with record majority

The result of this week’s general election in Turkey saw the return of AKP – the Justice and Development Party – to Government, with a record majority in the history of Turkish politics.

Turkish shares hit a record high and the business community was in high spirits after the pro-business AKP Party won a landslide victory in the general elections. The euphoria reflected investor hope that another five-year term for the AKP would ensure the continuation of the economic stability that the AKP has presided over since coming to power in November 2002.

Under the AKP government, inflation in Turkey dropped from 29.7% in 2002 to 9.65% in 2006, growth averaged 7.0% between 2003 and 2006, and the budget deficit was reduced to 0.7% last year.

Surge in interest to buy French property

Rightmove Overseas has reported that it received 251,824 French property searches last month alone with popular provinces including Brittany, Normandy and Languedoc-Roussillon. In addition, the south of France is emerging as the most popular region with investors and holidaymakers seeking a traditionally French way of life and hot temperatures.

The increase in demand is a result of French president Nicolas Sarkozy’s recent announcement that he plans to re-introduce tax relief on mortgage interest payments. After initial uncertainty, Nicolas Sarkozy has confirmed that five years tax relief will be available for all French mortgages on French principal residences, even those already in payment. Interest paid will be tax-deductible from the date the law is voted. Anyone resident in France (and declaring income) will be eligible to claim mortgage interest relief.

Also, some French banks have relaxed the one-third rule. The one-third rule limited the amount of your income that could be devoted to French mortgages repayments. The French banks are now permitting the ratio of debt payments by non-residents to creep nearer to 40% than 33%.

“Sarkozy's plans will not take effect until later in 2008, giving investors time to purchase French properties before the boom and watch the price of their properties quickly appreciate”, Rightmove Overseas head Justin Figgins said.

Meanwhile, according to Cluttons France spokesperson Olivier Morvan, many British residents are choosing to spend their retirement in the French Riviera. While the Spanish Costas have been the destination choice for many retirees, “the French Riviera has a certain prestige”, he said.

Singapore-listed property stocks falling

Singapore-listed property stocks have started to fall after the government increased the development charge rate in a surprise move last week. Analysts are advising caution when investing in developers that are focused on residential or overseas properties.

Although the Urban Redevelopment Authority was quoted as saying that the move was not aimed at cooling the property market, there are concerns that some measures may be around the corner.

Singapore-listed property firms have reported strong gains this year, with CityDev and CapitaLand both going up by around 18% since January.

Leslie Phang, Head of Investments (Asia), Commonwealth Private Bank, said: “Valuations are looking stretched, especially for the property plays that are focused primarily on the residential market.....But going forward to the next one to two years, the earnings are actually going to be sustainable and the effect of the development charge will only kick in, at the earliest in July next year.”

Government in Delhi reduces stamp duty tax

In what would translate into big savings for property buyers, the Delhi government on Friday decided to reduce stamp duty on property registration by 2%.

The government had to reduce the rate for accessing funds under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) as the programme requires states to have an average stamp duty of 5%. The new duty structure is now being sent to the Union government for its concurrence.

For properties registered in the name of men, the stamp duty will now be 6%, and for those in the name of women, it will be 4%.

However, the cut in stamp duty is not expected to dent overall revenue collection. That’s because the government has also just issued the notification for circle rates (minimum property rates) in the city — after a two-year gestation period and exactly a month after the Delhi cabinet gave its approval to the proposal.

The circle rates, says the government, will encourage people to reduce the ‘black’ component in property deals and register their properties at a higher amount. The government is actually looking at doubling its collections from stamp duty this year. Last year, it collected £72.6m.

Dubai bypass road given go-ahead

The Dubai Roads and Transport Authority (RTA) has awarded a £38.4m contract for Phase III of the Dubai bypass road. The project has strategic significance in linking the Northern Emirates with Abu Dhabi without passing through Dubai Downtown.

The project starts from the outskirts of Sharjah and extends up to the road linking with outskirts of Abu Dhabi. It will also provide a link with Jebel Ali Airport (Dubai World Central) and Dubai Industrial City.

The road is one of the most strategically important sectors within the structural road network plan carried out by the RTA. The project provides alternative roads to both Emirates Rd & Sheikh Zayed Rd and offers motorists coming from the northern emirates heading towards the emirate of Abu Dhabi (and vice versa) an outer road without having to pass through downtown areas.

The third phase of the project starts from Jebel Ali-Al Hibab Rd and extends 25km up to the outskirts of the emirate of Abu Dhabi. The contract of this sector includes constructing a dual carriage highway of six lanes in each direction to accommodate the anticipated traffic flow. It also includes constructing three camel cross points that could be used as U-turn exits.

Meanwhile, project staff that helped complete a floating bridge in Dubai in just 300 days were honoured recently by the (RTA).

The floating bridge consists of three lanes on each direction and has a capacity of 3,000 vehicles in each direction in the morning and evening peak hours. The floating bridge, which is 360 metres in length, extends from the intersection beside the city centre and the Dubai Golf Club in Deira, and ends at the intersection at Al Riyadh Street, between Dubai Courts and Creek Park.

China studying ban on off-plan buying

China is considering a ban on residential property pre-selling in a bid to force out speculators and hold down price growth, the South China Morning Post reported, citing recommendations made by a study group within the state planning agency, the National Development and Reform Commission.

The report said developers and property consultants are warning against such a ban as it would reduce supply.

“Disallowing pre-sale of unfinished flats will cut flat supply in the market, and that will only result in prices going up because demand remains strong”, Alan Chiang, the head of DTZ's residential department in the mainland, reportedly said.

While the measure still remains just a proposal, the central government is sending a clear signal to the market by outlining its plans. At the moment, key cities such as Beijing, Shanghai and Shenzhen allow developers to sell off-plan once the building is over eight floors high or is more than 60% complete, the report said.

Developers use pre-selling to mitigate their risks in high-rise construction, gaining access to funds that will help ensure that the building is completed.