The total spend on Irish property is expected to hit its second highest level ever this year, according to Savills Hamilton Osborne King. The property consultants’ winter property outlook predicts that €45bn will be spent in the sector in 2007.
Savills Hamilton Osborne King says that while that represents a 17% reduction on last year’s record high, it is still a relatively strong performance. The slowdown in the industry is quite noticeable in the new homes area, which seems set to fall from €29bn in 2006 to €23bn this year.
However, it is anticipated that it will be a record year for the office sector, with take-up likely to exceed 250,000sqm. The uncertainty in the Irish market has led to an increase in overseas investment, with 22% of this year’s total spend going abroad, compared to 15% of last year’s total.
Despite the slowdown in growth, Angus Potterton, managing director of Hamilton Osborne King, remains upbeat about the sector’s prospects: “While there have been plenty of predictions regarding the demise of the property market, the reality is that it's not all doom and gloom. We look forward to a busy 2008 and forecast a steady year ahead for most sectors.”
Hosting Euro 2012 to cost Poland €27bn
The rating agency Fitch estimates that hosting the Euro 2012 football championships will set Poland back €27bn. The agency’s calculations take into account both the construction of new stadiums for matches as well as investments in transport infrastructure.
Representatives of the previous government argue that the agency’s estimates are too high, even though no official cost estimate for the tournament is in place. According to the government, such an estimate should be ready by the end of 2007.
Fitch has stated (as highlighted in previous issues of PIN) that the biggest challenge facing the organisers is bringing old and incomplete road infrastructure up to scratch. In the agency’s opinion, the country’s transport infrastructure needs may require total expenditure of as much as €100bn.
Airport in southern Crete to accept commercial flights
Sitia airport on the northeast coast of Crete is about to be upgraded allowing commercial flights from all over Europe. According to the Greek Prime Minister the airport offers great potential for tourists and investors and will be operational by 2009. Already the foundations are in for the three new terminals which will make the airport capable of receiving up to seven planes at the same time.
Richard Brady, director at Olive Tree International said: “If buyers are looking to invest in a country where all the signs are positive, then Crete should be seriously considered. The island, which is the largest of the Greek islands, is steeped in history, has an excellent sunshine record, low cost of living, most locals speak some English and its infrastructure is that of modern European standards.”
This is just part of major plans recently laid out for the promotion of Crete by the Greek Prime Minister as he spoke on prime time television and promised investment of €2bn over the next few years.
Part of the plans are to open up the eastern coastal regions of Crete, which is expected to see the most substantial growth in quality tourist areas with signature golf courses, 5-star hotels with conference facilities, and spas.
Croatian ruling party wins general election
The ruling conservative Croatian Democratic Union (HDZ) won 66 of the 153-seat parliament, allowing it to remain the largest party in Croatia, the State Election Commission said on 28 November.
According to provisional election results from all 12 electoral units, the main opposition Social Democratic Party (SDP) was second with 56 seats.
The coalition of the Croatian Peasant Party and the Social Liberal Party won eight seats, the People's Party seven, the regional Istrian Democratic Party and HDSSB party three each, while the Party of Rights and the Pensioners’ Party each won one seat.
The new parliament will also include eight representatives of ethnic minorities.
About 4m voters were eligible to vote in Croatia’s parliamentary elections on 25 November, the sixth multi-party elections since 1990. The turnout of the elections was around 64%.
Final results will be announced after repeated voting at three polling stations on 9 December and the expiry of a 48-hour deadline for complaints, but those results will not affect the present distribution of seats.
Worldwide News
Gulf construction projects hit $2.4trn
The number of real estate projects in the Middle East that are underway total 2,837, and are worth $2.4tn, according to research by Proleads, which monitors regional construction projects across all industry sectors.
King Abdullah Economic City in Saudi Arabia is the biggest construction project currently underway in the region, valued at $120bn, followed by Dubailand in the UAE, valued at $110bn, and the $86bn Silk City Project in Kuwait.
New laws to stabilize Vietnam’s soaring property prices
Since the beginning of 2007, property prices in Vietnam have increased by up to 50%, which has prompted the government to issue a preliminary draft of new laws to curb bulk buying and create a sustainable property market.
The draft proposals include an annual tax on owners who have acquired more than one property, however, the law would not come into effect until 2010. At present only transfer taxes are payable on the sale of a property, but most sales are paid in cash making it difficult for the government to gage volumes and collect on capital gains tax.
Property agents remarked that the government’s plans to allow both Vietnamese living overseas and foreign investors to own freehold property in the near future has accelerated the rush to purchase real estate for future resale and thus affected prices.
Currently, hundreds of property investors are reported to be queuing overnight in an effort to secure off-plan properties.
Nguyen Xuan Dao, chief executive of property developer Vietnam Property Inc. commented: “In some areas in Hanoi and Ho Chi Min City (HCMC), especially in the luxury condominium sector, prices have tripled in the past year alone.”
Dao added that many local real estate companies have sold-out their developments prior to completion in Hanoi and HCMC and that one company, PT Ciputra Development Tbk, is now selling apartments for $240,000, as opposed to $80,000 in 2006.
US mortgage applications fall 4.3%
The number of mortgage applications in the US dropped last week, led by the biggest decline in refinancing this year.
The Mortgage Bankers Association’s index of applications to buy a home or refinance an existing loan decreased 4.3% compared to the week prior. The group’s refinancing gauge slumped 15%, the most since December 2006, while purchases rose.
Less available credit and falling home prices are making it more difficult to refinance or buy property and is expected to extend the housing recession into a third year, economists predict.
However, the mortgage bankers report counts all applications, even those that are rejected, and some borrowers have submitted multiple applications as credit standards have tightened.
Other reports have reflected a fast deteriorating housing market. Home prices in the US fell 4.5% in the third quarter, compared to Q3 2006, the largest annual fall for at least two decades, according to a report from S&P/Case-Shiller.
Homebuilding permits in October fell to their lowest level since 1993, while starts of single-family homes slumped to their lowest in 16 years, the government said last week.
Confidence returns to Australia’s new-build apartment market
A new survey complied by the Commonwealth Bank and Housing Industry Association (HIA), has showed that apartment sales in Australia increased by 25.3% in October, completely reversing the fall in September. Apartment sales had slipped 10% during the three months prior to October.
Among regions, detached house sales in Victoria jumped 28% in October. Sales in Western Australia rose 2.7% in October, while sales in New South Wales increased 2.1%. However, sales fell 5.5% in South Australia, and slumped 8.7% in Queensland.
HIA’s new home sales survey was complied from a sample of the largest 100 residential builders in Australia and is considered the first leading indicator on new housing activity to be released on a monthly basis.
