Bulgaria’s draft budget for next year said that state budget funded wages would be increased by up to 10% from 1 July 2008, while the country would introduce a 10% flat tax rate on personal incomes.
The draft Budget 2008 was discussed by representatives of the Government, trade unions and employers, within the so-called National Council for Tripartite Co-operation. The council agreed that the minimum monthly wage in Bulgaria should be raised by more than 22% to 240 leva from the current 180 leva.
In addition, pensions in Bulgaria would see an increase of 9.5% from 1 July 2008, thus reaching an average level of 196.40 leva for the country. The minimum pension would also be upped from the current 102.85 leva to 112.62 leva, or by 9.5%. The maximum size of the pension, paid by the National Social Security Institute would remain at 490 leva, or 35% of the minimum secured income for the previous year.
A flat rate of 10% would be introduced next year on all personal incomes, regardless of their size, and the currently existing threshold for non-levied incomes would be scrapped.
20% of Malta’s property is empty all year round
According to Malta Today, one in every five dwellings in Malta, and more than one in every three in Gozo, are empty all year round. It reports that empty homes have shot up by 17,403 since 1995, while in the last seven years MEPA (Malta Environment and Planning Authority) has issued permits for 47,821 new dwellings.
The amount of vacant properties exceeded most other EU states, except Portugal and Greece. Even with a landmass almost eight times as large as Malta’s and 100,000 more residents, Luxembourg has only 4,000 empty dwellings and 20,0000 fewer properties. Ireland’s total stock of 1.4m dwellings only has around 7,000 vacant properties.
Over the last decade, empty properties have increased from 35,723 to 53,126. Excluding the 10,028 holiday homes which are occupied for some time of the year, 43,108 properties are completely vacant all year round. Most of this potential housing stock can be used without any major restoration cost, with 43% of vacant properties in a good state and 21% of vacant property stock only need minor repairs.
Investment in European retail remains high
Investment volumes in European retail real estate remained high in the first half of 2007 reaching €21.6bn, which is down compared to the €27bn achieved over the same period in 2006, according to AXA European Real Estate’s latest commentary on retail investment.
But volumes are expected to be pushed higher in the second half of this year as there are reportedly a number of significant deals under offer.
Highlights of the report are that the outlook for the Euro Zone economy remains robust despite financial market uncertainties and of all the sectors, retail in Europe is likely to remain the most robust due to its limited volatility and tighter planning regulations.
However European retail property markets are set to see lower core returns going forward. AXA say that Prague has the most attractive performance aspects on a risk-adjusted basis in the technical retail scoring matrix, and in contrast Milan, Rome and Vienna have the least. In addition, core investors should target prime high street locations in top European cities and shopping centres in secondary cities. Value-added investors should target well-located shopping centres, hypermarkets/supermarkets and unit shops with active management and redevelopment potential in order to capture future reversions.
London moves into top E-REGI position
According to Jones Lang LaSalle’s European Regional Growth Index, London has moved into the number one position ahead of Paris which is now in second place.
London is expected to see improved levels of GDP and employment growth over the next five years accompanied by increased wealth. Dublin retained third place and continues to be one of Western Europe’s dynamic city economies, while Helsinki and Munich have been replaced in the top five by Madrid and Stockholm.
Nigel Roberts, chairman of European research at Jones Lang LaSalle, said: “With Europe’s real estate investment markets achieving ever higher capital values, it is increasingly important for investors to be able to assess the relative strength of the underlying occupier markets across the region. Whilst there are clear signs of improving occupier fundamentals across Europe, occupier demand conditions vary significantly. E-REGI provides a unique reference tool to provide insights into the property markets across Europe bringing to light those cities which demonstrate strong demand prospects for the future.”
Worldwide News
China needs more housing at lower prices
China’s central Government has renewed its emphasis to rein in property inflation. China’s Premier Wen Jiabao said the country should continue to control the fast increase in fixed assets investment, bank loans and land use for new projects, especially the ones that are energy consuming and highly polluting.
Li Xiaochao, spokesman for the National Bureau of Statistics, said the current housing supply should be better structured as demand from urban residents is expected to increase even faster in coming years.
He said: “More efforts should be made to improve housing supply at medium and low prices, which are most popular with urban residents.”
Analysts and industry experts said the excessive increase in property investment poses long term economic and financial risks. According to figures released by the National Bureau of Statistics, the aggregate fixed-assets investment rose 25.7% in the first nine months from the previous year. In the first three quarters of 2007, aggregate investment in the country's property development reached 1.6 trillion yuan, up 30.3% from the previous year.
Kenny Ho, research head of Jones Lang LaSalle, said the much stricter macro-control policy on property by the Government could accelerate the decline in bank loans for property projects in the fourth quarter, following a downward trend in the third quarter.
New constitutional amendment will cut property taxes in Florida
In a response to increasing coastal property values and taxes, Florida lawmakers have passed a proposed constitutional amendment that backers say would cut local property taxes by $12.5bn over the next five years.
House and Senate members have agreed to double the state’s $25,000 homestead exemption and allow homeowners to take tax cap benefits when they move. It has also been agreed to expand a popular tax cap by limiting tax increases on commercial property, vacation homes and investment properties to 10%pa. Since a 1992 referendum dubbed Save Our Homes, homeowners now enjoy a 3% cap on annual local tax increases.
South Africa’s property prices increased by 351% in the last decade
South Africa’s property prices have increased by 351% over the last 10 years, according to Pin High Property.
Lloyd Cornwall, director of Pin High Property, says: “ South Africa is coming of age. The last 10 years have played a major part in shaping its future, and now South Africa is in a strong position to become a major player in the international arena. With huge natural resources, an ever growing economy and stock markets performing well, it is becoming more attractive to investors each day. The property market has been one of the biggest performers and despite these huge growths over the last decade, South Africa is still vastly under priced, therefore over the next decade we expect to see these prices come into line with the European markets, which means healthy profits for all who have invested into the property market.”
Home building approvals in Australia increased by seven-fold
Australia’s home building approvals rose almost seven times as much as forecast in September 2007 as a housing shortage and rising rents have encouraged investors to buy property.
The number of approvals to build or renovate houses and apartments increased by 6.8% in August (to 12,710), according to Australia’s Bureau of Statistics. Australia’s lowest jobless rate in 33 years and rising wages are driving an economy that is expanding at the fastest annual pace in three years. Rents in Australia’s largest cities have climbed after a construction slowdown last year cut the supply of housing, just as rising immigration spurred demand.
