Prices fall for fifth month in a row in Krakow

Montenegro and EU sign key agreement

Romania and Bulgaria to discuss joint bid for Euro 2020

Dramatic leap in number of new flats built in Poland

US building permits falls to 14-year low

Strong pound fuelling investment in the UAE

Commercial investors target strong returns in Vietnam

$1bn US property fund signifies change in attitude

Romania and Bulgaria to discuss joint bid for Euro 2020

Bulgaria and Romania are considering a joint bid to host the 2020 European Football Championship, according to a report in the Sofia Echo.

Bulgarian Football Union President Borislav Mihailov is quoted as saying that “this is not a mirage, it’s completely possible.”

To meet the requirements as Euro 2020 hosts, Bulgaria would have to build four new stadiums.

“We can do it over the next 12 years”, added Mihailov.

Dramatic leap in number of new flats built in Poland

A total of 13,378 flats were completed in September 2007, which is a jump of 63.8% in relation to the same month in 2006. The number of flats completed for sale or rent in September soared by 128.4% year-on-year to amount to 6,537, the Polish Central Statistical Office (GUS) reported.

Individual investors completed 5,590 flats, up 34.5% on a year ago. The number of flats built by co-operatives was also up – 830 in September, which represents year-on-year growth of 36.7%.

Prices fall for fifth month in a row in Krakow

Prices for new-build flats in Krakow slipped 1.28% in October to an average of €2,060sqm (Zloty 7,500), according to redNet. The fall represented the fifth month in a row that prices have fallen in the Polish city.

However, developers stress that the decline in property values is due to the appearance on the housing market of flats in less attractive locations, which thus means they are cheaper. In their opinion, this does not translate into to a real reduction in prices of flats currently under construction.

Since the beginning of this year, prices in Krakow have only increased by 6% compared to 21% for the same period last year.

Montenegro and EU sign key agreement

Montenegro has signed a Stabilization and Association Agreement (SAA) with the EU, marking an important step on its path to eventual membership of the Union. Portuguese Foreign Minister Louis Amado, whose country currently holds the EU Presidency, said that this agreement was the “best possible framework for future endeavours”.

He added: “The signing of this agreement is a significant milestone on Montenegro’s road towards the European Union. The agreement will establish a comprehensive and contractual framework for further development of our relations.”

The European Enlargement Commissioner, Olli Rehn, underlined that this agreement should serve as an inspiration to all western Balkans countries: “Proper implementation of this agreement is also a gateway to EU candidate status, one day”, Rehn said.

Montenegro’s Prime Minister Zeljko Sturanovic said that his government was aware of the hard work ahead but expressed his readiness to implement all necessary reforms needed for European integration.

Montenegro is the fourth country in the western Balkans to sign an SAA with the EU, following in the footsteps of Croatia, Macedonia and Albania.

Commercial investors target strong returns in Vietnam

Vietnam is currently enjoying a commercial property boom, with grade-A office rents now at $40-45sqm (excluding service charge) in Ho Chi Minh City, which is approximately three times more expensive than office rentals in Bangkok. The severe lack of quality office space has forced rental prices to soar.

However, the amount of office space in Ho Chi Minh City, formerly known as Saigon, should increase from 320,000sqm to 800,000sqm in the next three to five years.

On 1 st January 2009, Vietnam will open up its retail markets to international retailers in compliance with its commitment to the World Trade Organisation and several big names are reported to be preparing to enter the Vietnamese market in early-2009.

$1bn US property fund signifies change in attitude

The tide appears to be turning with regards to investing in US property. Private German bank Metzler has just announced that it is launching a $1bn fund to take advantage of price corrections caused by the US sub-prime crisis and of the weak dollar by investing in US commercial property.

In a statement, Metzler said its ‘MUSREF II’ real estate fund will look to raise equity of around $300m from German institutional investors and use the proceeds plus additional debt funding to snap up 15 to 20 property assets worth between $30m and $80m each.

The 333-year-old bank said yields had stabilised on prime US properties and moved up on riskier US real estate assets in secondary locations because debt-dependent investors had been forced out of the market by a credit crisis.

“These facts combined with a record-low dollar and strong underlying property fundamentals make for an opportune time to invest in the US real estate market”, Jim Neal, head of Metzler’s North America business, said.

US building permits falls to 14-year low

The number of US building permits issued in October fell 6.6% from the previous month to a level not seen since July 1993. Economists were expecting the 12-month pace of new building permits to be around 1.2m, but it is currently running at 1.178m.

However, home construction starts were up 3% in October, the biggest monthly gain in eight months. The Commerce Department said housing starts set at an annual pace of 1.229m units in October from a 1.193m unit pace in September.

It was the biggest monthly increase since February this year and came after starts tumbled 11.4% the prior month. Economists were expecting to see a slight decrease in starts to a 1.17m unit pace from the initially reported 1.191m pace.

Strong pound fuelling investment in the UAE     

The exceptional current rate of exchange between Sterling and the Dirham is fuelling property investment in the UAE. In fact, the Pound Sterling is at its strongest level for at least 26 years against the UAE Dirham, with 1 GBP worth 7.4 AED (AED has been pegged to the US Dollar since 1980).

This has consequently made property appear cheaper in Dubai, convincing some British investors that now is the ideal time to invest in the emirate.