Almost 700,000 flats under construction in Poland and more to come

Slovakian properties rise 20% in first nine months of 2007

Ban on foreign buyers lifted in the Valais, Switzerland

Foreign observers claim Russian election was ‘not fair’

Property price growth slowing worldwide says Knight Frank

UK overseas property ownership set to double by 2012

New York most expensive location to rent retail units

Ban on foreign buyers lifted in the Valais, Switzerland

The federal government in Switzerland has just increased the annual quota of properties which may be sold to foreigners in the Valais, Switzerland. This ban was lifted on the 23rd of November 2007 and in 2008 it will again be possible for foreigners to buy in the Valais but there will still be a limited number of permits available.

There are so many foreigners who want to buy in this part of Switzerland which includes ski resorts such as Verbier, Saas Fee, and Zermatt that next year there will still not be enough foreigner purchase permits to satisfy demand.

At the beginning of this year the state council of Valais imposed a moratorium for one year prohibiting sales to foreigners in certain resorts as there were queues of 2 years or more to obtain a permit. Many foreigners had signed purchase contracts and were occupying their new chalet or apartment but were still waiting for the permit to be registered as the owner in the land register. So the state council stepped in and imposed a ban on new sales to allow this old queue to be dealt with.

Of the 330 new permits to be allocated to Valais in 2008 they will allocate 50% (165) to ‘touristic’ projects where the buyer has an obligation to rent their property out through a tour operator. Of the remaining 165 permits 40% (66) will be allocated to those buyers who are in the queue (having signed a notary’s purchase deed in the last 2 or 3 years but still not having received a purchase permit and therefore not yet registered in the land register). The remaining 99 permits will be allocated to new buyers in Canton Valais in 2008 for second homes (no obligation to rent).

Simon Malster, managing director at Investors in Property also expects to see increased demand for property in other Swiss Cantons which have more foreigner permits available and fewer restrictions. He said: “We have always had strong demand for property in Villars as it is an attractive dual season resort less than an hour and a half from Geneva airport. As Villars is in Canton Vaud, where foreigners can buy freely today and sell tomorrow, we expect demand and prices to continue to rise.”

Malster added that most clients are looking for resorts which satisfy three important requirements - to be within an hour or so of an international airport, to have access to high altitude skiing, and to have good infrastructure and dual season use. His latest find is Engelberg, which is 90 minutes by car from Zurich and accessible also by train, has glacier skiing, and is an attractive resort with plenty of facilities including a golf course. He says a foreigner can get a purchase permit for Engelberg in just 2 or 3 months.   

Investors in Property are selling apartments in the Residence Angelmontana which is about 400m from the main ski lift and a 10 minutes stroll to the centre of Engelberg. One bedroom apartments are priced from £160,000 and three bedrooms are from £300,000 and completion is expected in December 2008.

Foreign observers claim Russian election was ‘not fair’

A joint statement from the observer team consisting of the Organisation of Security and Co-operation in Europe (OSCE) and the Council of Europe, have said that Russia’s parliamentary election won by President Vladimir Putin’s party was ‘not fair.’

With nearly 98% of ballots counted, Putin’s ‘United Russia’ party had 64.1% of the vote, which took place on 2 nd December. However, opposition claims of fraud were rejected by the electoral commission.

The election ‘was not fair and failed to meet many OSCE and Council of Europe commitments and standards for democratic elections’, the observers said at a news conference in Moscow.

The statement said the polls ‘took place in an atmosphere which seriously limited political competition’ and that ‘there was not a level political playing field’.

The OSCE had abandoned its plans to send a big team of observers, accusing Moscow of imposing curbs and delaying visas. Russia denied the claims.

Only a much smaller group of MPs from the OSCE’s parliamentary assembly had attended the election, leaving some 330 foreign monitors covering nearly 100,000 polling stations.

Slovakian properties rise 20% in first nine months of 2007

According to the National Bank of Slovakia (NBS), property prices in the first nine months of 2007 have increased by 20.8%. The figures include old and new properties, and flats as well as houses.

The most expensive properties are in the capital Bratislava and the Bratislava region, with an average price of €1,450sqm, which represents an increase of 18.4% compared to the same period last year.

Even communist built flats are reportedly selling at €1,430sqm in the capital, and local demand for housing is said to be out-weighing supply.

Prices for new flats vary hugely based on area and standards, reportedly starting at €1,200sqm (inc. VAT) on the outskirts and other less popular locations, averaging €1,650sqm for most projects in average areas, and up to €3,000sqm in the most desirable neighbourhoods. The most expensive projects in the capital on the market at the moment are priced at €4,500sqm.

The lowest price increase in the nine months of this year has been seen in Trnava, in spite of its strong economy and massive automotive investments creating thousands of new jobs. Prices have increased by 9.6% year-on-year.

The Zilina region experienced the highest growth in the first nine months of 2007, with average prices rising from by 35.9% to €610sqm. While the low prices are mainly due to the majority of communist estate housing present in Zilina, the fast growing numbers of new projects are already said to be reaching the limits of the local purchasing power, with most developments being offered at €1,200sqm (inc. VAT) - a bargain for Bratislava but not cheap for Zilina or any other Slovak towns.

Almost 700,000 flats under construction in Poland and more to come

The number of housing construction permits issued Poland from January-October 2007 soared by 50.1% in relation to the previous year, according to data from the Polish Central Statistical Office (GUS). A total of 206,600 such permits were granted in the first 10 months of 2007.

Housing co-operatives noted the highest growth in this respect – 68.4%. Meanwhile, the number of permits issued for flats assigned for sale or rent surged 59.4% and in the case of individual house construction by 45.5%.

GUS also reported that construction work commenced on 158,600 flats during the same period, which is 36.8% higher than 12 months previously. There were a total of 683,900 flats under construction at the end of October, which translates into growth of 8.2% in comparison with the end of October 2006.

In January-October 2007 a total of 101,228 flats were completed for use, up 15.3% on the same period last year.

UK overseas property ownership set to double by 2012

A study carried out by Datamonitor has found that British and Irish citizens now own 3.81m properties overseas (excluding time share and fractional ownership), with 1.21m of these properties being owned by permanent UK and Irish citizens and residents.

The study valued the overseas property market in 2006 as being worth £44.4bn, with UK and Irish based estate agents forecasting the market to continue to grow at an annual rate of over 13% between now and 2012 – almost doubling the total value of the market.

Spain , France and the USA remain the most popular destinations of choice, but younger buyers are looking further a field to markets including Brazil, Egypt and Croatia. Demand for overseas homes is increasingly being driven by buyers at the younger end of the age spectrum looking for a combination of investment and personal use. However, over 70% of property owners claimed that their purchase was driven by a desire to improve their lifestyle.

Datamonitor claimed that the study, which was carried out between June and September this year, is the largest of its kind ever undertaken in the UK and Ireland on the overseas property market.

New York most expensive location to rent retail units

New York’s Fifth Avenue remains the world’s premier retail destination with rental values reaching €11,400/sqm/year, over 40% higher than Moscow, which ranks in second place. Also making the top five in the rankings are London, Paris and Tokyo, with Hong Kong in sixth position. The CBRE Global Retail Destinations Report ranks 85 of the leading global retail markets across EMEA, Asia Pacific and The Americas in terms of rental values for stores in prime retail destinations.

It is, however, European markets that dominate the overall ranking, accounting for 16 of the top 20 most expensive destinations across the globe (and 37 of the top 50). Peter Gold, Head of the CBRE EMEA Cross Border Retail business, explains, “It is not just local retailers who are driving up rents. We are seeing premium global retailers, particularly in the fashion sector, aggressively expanding their footprint across Europe. With prime locations in short supply, rents are under significant upward pressure as retailers compete to secure the best of them.”

After seeing prime retail rents rise by over 25% over the last 18 months, Moscow is now the most expensive retail location in Europe. Demand for prime space in Moscow has been rising rapidly as retailers look to take advantage of rising consumer spending, particularly on luxury goods.

In Western Europe some of the strongest rental growth was seen in Barcelona and Madrid, with increases of 36% and 32%, respectively, over the past 18 months. Dublin, currently seventh on the global ranking, has also seen prime rents rise by 18% over the same period. “The strength of many of the European economies and rising consumer spending in the UK, Spain and Ireland, has generated rapid rises in retail rents across many European cities,” comments Rebecca Canty, EMEA Retail Analyst at CBRE.

In the Central and Eastern European (CEE) markets, consumer spending is growing at 4% to 6%, well above the EU-15 average. This ongoing growth, coupled with the desire of premier retailers to secure market share and establish their brand in CEE, continues to encourage retailers into the market.

Rents have been rising sharply in CEE, with tenants competing to secure the best space in the newly-developed shopping centres across the region, of which there are more set to arrive. In a separate CBRE survey of 225 cross-border global retailers, 62% of those surveyed now have a presence in CEE. Poland is identified as one of the most successful markets, having secured almost one third of the retailer respondents.

“While rents in CEE may look high, they need to be viewed in the context of other factors such as significantly lower staffing costs”, continues Gold. “The growth potential across the CEE region is phenomenal for both new entrants and those that have already established a beachhead in one market to expand their footprint into other countries.”

Property price growth slowing worldwide says Knight Frank

The latest Knight Frank Global Price Index for Q3 2007 has revealed that growth in residential property prices around the world is slowing. Prices rose globally by 8.2% per annum to Q3 2007 compared to 9.6% 12 months earlier. Rising interest rates have been a major factor in slowing house price growth, together with the tightening of lending criteria seen in many European countries.

Latvia has been firmly knocked off the top spot by the recent EU newcomer – Bulgaria. Despite numerous concerns over the level of oversupply in a number of locations within Bulgaria – notably the winter ski resort of Bansko and selected coastal resort locations – Bulgaria has supplanted the previously top performing Baltic hotspot at the top of the Knight Frank league.

Latvia - the runaway success at the top of the index for the last ten quarters – has slipped considerably down the table, with price inflation over the 12 months to Q3 2007 at just over 10%. The report adds that prices in certain sectors of the market in Riga have begun to fall.

Estonia has also seen year on year price inflation fall back from the higher levels seen in previous quarters. New build properties have seen the greatest decline in asking prices, while properties in the Tallinn Old Town and in other central areas of the city have remained relatively stable in terms of price growth.

In Asia, the only market which is not experiencing relatively strong rates of growth is Japan. Even there, following on from successive years of residential property price decline, the market situation might even be improving. Or at least, prices have fallen at the slowest rate for a number of years.

The best performer in the Asia pacific region is Singapore, where price inflation has been rising steadily since the end of 2004. Prices in both New Zealand and Australia have appreciated by over 10%. In Australia, price growth has been driven by gains in Brisbane, Melbourne and Adelaide where in each case inflation over the year to Q3 2007 has been over 16%, whereas in Perth and Sydney, price inflation has been considerably more muted, with growth rates of 2.8% and 5.2% respectively.

Hong Kong also continues it’s reversal of fortunes, with prices up 10%, marginally higher than the 8.8% growth seen in the 12 months to the previous quarter.

Residential property price inflation to Q3 2007 of 14.4% put South Africa in third place. Metropolitan markets in South Africa vary considerably, with growth ranging from 9% growth in central areas of Johannesburg to almost 24% in Bloemfontein. However, the market in South Africa is expected to slow as a result of tighter mortgage lending conditions prompted by the National Credit Act which came into force in June this year.

Property price inflation in Canada has hovered around the 10% mark since 2002. To Q3 2007, prices grew by 11.7% over the year. The strongest growth has been seen in Yukon (22%) and Alberta (20%), with major cities generally seeing lower rates of growth than the national average.

In the US, the most recent data from the US OFHEO (Office of Federal Housing Enterprise Oversight) reveals that prices over the last year across the country have risen by 1.8%. Falls in Michigan (-3.7%), California (-3.6%), Nevada (-2.4%), Massachusetts (-2.3%) and Rhode Island (-2.2%) were countered by continued price growth in Utah (12.9%), Wyoming (11.8%), Montana (7.7%), New Mexico (7.4%), and Washington (7%). Over the last quarter, average prices nationally have fallen, with prices 0.4% lower than in Q2.

In Western Europe the previous boom regions have come back to earth with a bump. After seeing property price growth of 15% to Q3 2006, this year has seen the Irish market turn, with prices in Q3 this year nearly one percent lower than in 2006. Prices outside of the capital have been falling at a faster rate than in Dublin.

Spain , another location where the market has been rumoured to be in freefall, has seen year on year growth of 5.3%: a considerably more sustainable rate than that of 2003-4, which approached 20%.

The UK - also on the receiving end of much negative press – saw robust price growth of almost 11% to the 3rd quarter of 2007. Growth in the UK has been driven by that that in London and the South East, as previously strong performing markets in the north have slowed.

As usual, Germany continues to flounder at the bottom of the league table. Prices have continued to fall despite new construction permits for residential buildings in Germany being down by over 50% compared to the same period of 2006.

Other European markets remain robust, notably those in Scandinavia. Norway just pips Sweden into 7th place in the index with price inflation of 11.7%, compared to Sweden’s 10.9%, while Iceland – a new entry into the Knight Frank Global House Price Index – beats all the Scandinavians with a growth rate of almost 14%, despite the central bank raising interest rates to 13.75% by the beginning of October 2007 in an attempt to rein in inflation.

Another new entrant to the index – Croatia – showed strong growth of 12.1% in the 12 months to Q3 2007.

A number of countries included in the previous Knight Frank Global house price index have been excluded from the Q3 version as a result of a lack of current data. These include France, Lithuania, Denmark, Greece and Portugal.