Turkey reports record levels of foreign investment in 2007
Turkey attracted a record $22bn of foreign direct investment (FDI) last year, well above the 2006 figure, according to the country’s Prime Minister, Tayyip Erdogan.
“This is an all-time record for Turkey”, Erdogan said in a speech to his Justice and Development Party’s (AKP) parliamentary group.
The figure represents a 9.5% rise from the $20bn of FDI received in 2006.
The Turkish government predicted in January that it expects $18.5bn of FDI in 2008, $19.1bn in 2009 and $21bn in 2010.
Swedish property returns defy global credit crunch
Swedish property investment returns fell slightly in 2007 but stayed in double-digits for a third year running, defying a global credit crunch, according to Investment Property Databank (IPD).
In contrast to other European commercial property markets - notably Britain’s, which turned negative last year - Swedish real estate posted a 14.9% total return in 2007 after 16.2% in 2006.
The strong performance was in sharp contrast to falls in Swedish equity and bond markets and was primarily driven by a sharp appreciation in the capital value of Swedish commercial property, notably retail, IPD said.
Rental growth also maintained a healthy pace towards the end of last year thanks to solid tenant demand for space.
Separate data from Jones Lang Lasalle (JLL) has also confirmed that the buying and selling of Swedish property by investors was largely unaffected by the credit crunch last year, holding steady at €12.5bn, just 2% less than in 2006.
Transactions in the second half of 2007 were also slightly up on the previous six months, JLL said.
High-speed train from Madrid to Barcelona completes first journey
The first Madrid-Barcelona AVE Velaro high-speed train has completed its first journey across Spain, reaching speeds of 300km/hour.
The trains will run every hour on the 630km route, cutting journey time between the Spanish cities from six hours to two hours and 38 minutes.
The Velaro, designed and built by Siemens Mobility, has a speed of 404km/hour and set the world record for a series-produced train on Spanish tracks in September 2006.
Spain is currently working to expand its high-speed rail network to become the biggest in Europe by 2010.
Mixed reports regarding Irish property market
CB Richard Ellis (CBRE) has said that there has been a recovery in the new homes market in Ireland since Christmas, most notably in Dublin.
Developer’s efforts to attract buyers are paying off with agents reporting high viewing numbers this year, and people eager to take advantage of reduced prices. And this is expected to continue if there are the predicted interest rate cuts by the ECB later the year.
CBRE acknowledge some difficulty in the market, with the cost of borrowing cited as a big issue but it also predicts that house completion levels will fall even lower this year to around 50,000 units, with 20% of these in Dublin.
However, the tsb/ESRI house price index has just reported that house prices in Ireland fell for the eleventh month in a row in January, taking the total decline, compared to January 2007, to 8.1%.
But the speed at which prices are falling is slowing and the average price of a house fell 0.7% in January, compared with a drop of 1.5% the previous month.
The average price paid for a house in January was €285,880, down from €287,887 in December 2007.
House prices which more than quadrupled in the decade after the Irish economy began to boom in the late 1990s, started falling in March 2007 for the first time in five years.
Worldwide News
Canada grows in popularity as holiday letting investment
Canada is steaming ahead in popularity as a destination for investors to buy a holiday home with the intention of letting the property on a short-term basis to holiday makers, according to new data from holidaylettings.co.uk.
The company has seen a surge of late in the number of landlords registering their Canadian properties on its website, up over 50% since November 2007, followed by Thailand and Greece, which have both seen increases of 30-40% during the same period.
Holidaylettings.co.uk believes the figures represent a trend towards property investors searching further a field for cash-flow positive rental yields.
Despite average house prices in Canada reaching £288,740, the company says that the letting season is longer than average with an expected 22 weeks occupancy each year, which should push rental yields to around 10%, compared to yields of 3-5% for similar properties in the European Alps.
Ross Elder, managing director at holidaylettings.co.uk says: “ Canada seems to have it all in terms of attractions and amenities….however it probably needs to see lower transatlantic flight costs before it attracts Britons and Europeans more regularly.”
Brits spent £24bn on overseas property last year
British investors spent nearly £24bn buying international property in 2007 according to the Association of International Property Professionals’ (AIPP) annual market report, now in its second year.
Despite talk of market jitters caused by the global credit crunch, British buyers completed more than 240,000 purchases of overseas property in 2007, an increase of 21% on the previous year.
“Some may be surprised to hear that Spain is still at number one as the primary destination for Britons buying property abroad as there has been some negative media coverage over the Spanish property market”, Paul Owen, CEO of AIPP said. “However, our figures show it is still the favourite destination for the British buyer; even a six per cent decrease in purchases did not manage to knock it from top spot.”
The figures reveal the enduring appeal of established destinations with 25% of British property purchases abroad in 2007 in Spain followed for the second year by France slightly down at 17%. Moving up one place from last year, the USA came in at third place at 10% bumping Bulgaria down one place to fourth.
“Bulgaria has held the position as an ‘emerging market’ for two to three years and it is interesting to see that in 2007 it held up pretty well in the face of many new entrants in the ‘emerging market’ category”, Owen said.
The remainder of the top 10 destinations for British buyers in 2007 is a combination of established and emerging markets. Morocco (5%) came in at fifth place slightly ahead of Dubai in sixth. Tenth place was taken by another emerging market, Turkey, with 2% of buyers.
Two-thirds of purchases in 2007 were in established markets. Wedged in between the newcomers in seventh, eighth and ninth places were Italy, Portugal and Cyprus, all with 3-4% of total sales.
Prices flat in South Africa due to rising interest rates
Property prices in South African remained static for the third straight month in February as the high cost of debt kept the market subdued, according to a report by Standard Bank.
The bank stated that the short-term outlook for residential property remained bleak because interest rates increased by 4% between June 2006 and December 2007, which has drastically slowed consumer spending.
Economic growth is expected to slowdown to 4% this year after averaging 5.1% over the past four years, according to the South African Finance Minister Trevor Manuel.
Standard Bank said the continued deterioration of the outlook for inflation reduced the odds of lower interest rates in the short term which would have provided relief to the consumer, and therefore to residential property.
“We anticipate that growth in residential property could be noticeably lower in 2008 than the 8.3% annual growth recorded last year”, it said.
China invests heavily in rail infrastructure
China is undergoing radical change in the development of its railway network and plans to spend four times more in 2008 than in recent years. So far, railway construction has not met the requirements of such a fast-growing economy.
Beijing alone has budgeted ¥1.5trn (£107bn) for its rail network over the next four years, the most in its history. The capital city’s authorities are building 11 new rail lines, two of which will be operational in time for the Olympic Games in August.
Officials at the Beijing Municipal Development and Reform Commission have reportedly stated that the construction of the subway and over ground rail lines will add 270km to the municipal rail track, almost doubling its size.
The two over ground rail lines will connect the airport with Beijing’s transport hub of Dongzhimen, increasing the Beijing Metro’s track length by about 200km.
The running distance of the rail network will total 561km by 2015, making Beijing’s subways the largest in the world, according to Chinese officials.
Overall, more than 7,000km of passenger-dedicated lines (PDL) are now in the pipeline to be constructed including a 350km/hour bullet train between Beijing and Shanghai, construction of which commenced in January this year.
Meanwhile, Work on a new high-speed inter-city passenger rail link between the Chinese cities of Nanjing and Shanghai is set to begin soon also. The project, estimated to cost close to £3bn, has been approved by the National Development and Reform Commission.
The Ministry of Railways is set to provide the majority of the investment for the 3,000km railway, which will take four years to build and will accommodate trains traveling at speeds up to 250km/hour.
