Spanish property prices to finish year 4% up says government
Spanish property price will close the year 4% up on last year according to Rafael Pacheco, head of the government’s architecture and housing policy unit. Annual Spanish property inflation at the end of September was 5.3%, so to fall to 4% by year end the government is assuming that price growth will continue to slow during the last quarter of the year.
Speaking at a conference organised by the Instituto de Empresa business school in Madrid, Pacheco ruled out a serious crisis or a “drastic fall in property prices that threatens the national economy”, and pointed out that Euribor has started to decline, which will ease the downward pressure on property prices.
Pacheco also forecast that 550,000 new homes and 100,000 council houses will be built this year, ruling out any “paralysis” in the construction sector. Regarding property transactions, he forecasts 900,000 this year, down from 1m in 2006. “This is not a crisis, just a necessary adjustment for the sector,” he said.
However, a new report from Deutsche Bank has predicted that Spanish real estate prices will fall by between 2% and 8% in 2008, then stabilise in 2009.
But BBVA – one of Spain’s largest banks – forecasts that Spanish property prices will rise by 1.5% this year, 1.4% in 2008, and then fall by 1.9% in 2009. As a consequence BBVA does not expect the downturn in the Spanish property market to do much damage to the Spanish economy.
Highway finally completed between Bratislava and Vienna
The highway between Bratislava and Vienna has now re-opened, after the missing miles on the Austrian side were finally completed. The highway cuts the commuting time between the two capitals down to just over 30 minutes and is particularly important to the Central European business community.
Property investors are also likely to further benefit from this increased proximity of the two cities and other connections between Bratislava and Vienna include the train as well as a high-speed catamaran service on the Danube River, which was initiated in 2006.
Sweden abolishes wealth and property taxes
The Swedish parliament voted on 17 December in favour of abolishing the country’s wealth and property taxes in 2008 after proposals presented by the centre-right government earlier this year.
The federal property tax, which will be eliminated as of 1 st January 2008, will be replaced by a municipal tax that will have a ceiling of Kronor 6,000 (£450) per household. Property tax had been yielding the government an average of £1.24bn each year.
The abolition of the wealth tax, in place since 1947, was meanwhile aimed at attracting risk capital investments to help companies grow and increase employment. Job creation has been the centre-right government’s primary objective since coming to power in October 2006.
Announcing the government’s plans in March, Swedish Prime Minister Fredrik Reinfeldt pointed out that only five of the 30 member states of the OECD - France, Norway, Spain, Sweden and Switzerland - still had wealth tax.
However, some of Sweden’s richest entrepreneurs, including fashion retailer H&M, had threatened to leave the country and take their companies with them if forced to continue paying the wealth tax.
Polish mortgage debt to grow by over 20% in 2008
The total mortgage debt in Poland will reach Zloty 140bn (€38.9bn) by the end of 2007, and is expected to rise by around Zloty 30bn (€8.33bn) in 2008, according to Polish financial website ‘Serwisy Finansowe’, representing growth next year of around 21%.
However, based on these estimates, Polish banks will have lent a total of Zloty 50bn (€13.9bn) in mortgages in 2007, equating to growth of around 56% this year, so the mortgage market growth is expected to slow considerably in 2008.
The report also showed that interest in taking out loans in Swiss francs, the total cost of which continues to drop, shows no signs of flagging despite the government imposing restrictions on granting loans in Swiss francs in July 2007.
Analysts predict that the total cost of servicing a loan in francs will not rise in 2008. The average value of a mortgage taken out in the third quarter of 2007 was €55-70,000 and the company estimated in its report that this figure is likely to rise to €70-83,000 in 2008 in response to further rises in flat prices.
Worldwide News
Plans finalised for $3bn financial harbour in Tunisia
Gulf Finance House (GFH) has announced its plans for setting up the Tunis Financial Harbour (TFH) at Tunis Bay. With an estimated development value of approximately $3bn, TFH will be located in the north of Tunis and will be just 25 minutes from the Tunis Carthage airport.
Tunisia was ranked as the most competitive country in North Africa by the World Economic Forum in the 2007 edition of its Global Competitiveness Report. It is also the first country on the southern coast of the Mediterranean to have concluded a partnership and cooperation agreement with the European Union, the main component of which is the establishment of a free-trade zone. Since 1987, it has recorded an average GDP growth rate of 5% per annum.
Esam Janahi, chairman at Gulf Finance House, said: “The Tunisian economy has been constantly outperforming the African average, with the country’s per capita GDP being amongst the highest in Africa, driven by foreign direct investment.
“The country could benefit from developing its offshore financial services industry and creating a world-class International Financial Centre for North Africa. (TFH) has been created by some of the world’s leading financial services strategists.”
TFH will comprise four key clusters including, a Corporate Centre, an Investment Banking and Advisory Centre, an Insurance Centre and an Exchange. To be spread over a total site area of 450 hectares, TFH will consist of a marina and a commercial cum residential complex of luxurious villas, commercial/ business developments, a golf course and a stadium. The project will also contain a world-class business school. It is estimated that TFH will create thousands of jobs and bring in billions of dollars to the overall Tunisian economy.
Property prices up 10.5% in 70 major Chinese cities
Property prices in 70 major Chinese cities rose by 10.5% year-on-year in November 2007, an official of the country’s top economic planning agency said. Cao Changqing, director of the price department at the National Development and Reform Commission, said the State Council will increase land supply and low-rent housing in an effort to lower property prices.
Another tactic that might be introduced by the Chinese authorities is to implement a property tax, which may commence in early-2008.
Government measures are being introduced to encourage people to buy houses for their own use and not for speculating. A property tax could curb speculative investment activities by reducing the number of empty properties and big houses, according to the chairman.
China has picked 10 provinces and cities, including Beijing and Shenzhen, to institute property taxes on a trial basis in 2008, according to sources with the Office of the Central Leading Group on Financial and Economic Affairs, media reports said.
21 new apartment towers being built in Jakarta, Indonesia
Indonesia ’s state-owned housing developer Perum Perumnas has announced that it will build 21 low cost apartment towers in Jakarta.
Construction in the Indonesian capital has already started, with six towers in Pulogadung, 10 towers in Cengkareng and five towers in Kemayoran, according to Himawan Arief, Perumnas President.
“Perumnas will handle the construction of three towers and construction of the remaining 18 towers will be handled in partnership with other developers. In Pulogadung, construction (of one tower) is now in progress with two of the 15 floors already completed”, he added.
He said the apartment complex will include a school, a sports center and other public facilities. The apartments will be sold at prices below Rupiahs 200m (£10,630) each, and are designed for middle income residents.
New plan for $3bn Dubai Pearl
Pearl Dubai, a consortium of investors led by the Al Fahim Group, has announced that it has bought and repositioned the $3bn Dubai Pearl development. The project, which is located in the Dubai Media and Technology Free Zone and overlooks the Palm Jumeirah, will be built over more than 15m sq ft and feature climate conditioned pedestrian walkways to create a street cafe ambience.
The residential component of the project will include sky palaces with private pools and gardens, sky penthouses, luxury branded apartments and condominiums. Dubai Pearl will contain 6 freehold residential towers with 2,000 one, two, three and four bedroom apartments. The first apartments are expected to be completed in 2009.
