Romanian property prices increase by 40%

Spanish re-sales to foreign buyers fall 18%

REIT pouring €64m into Bulgarian business compound

House prices in Germany fell by 0.7%

Sales prices rapidly decreasing in the U.S

Government land unsold in Mumbai’s auction

Auctions indicate Sydney’s worsening property crisis

Sales of new build apartments fell to a 15-year low in Tokyo

REIT pouring €64m into Bulgarian business compound

Local real estate investment trust (REIT) Prime Property BG will pour €64m in the development of a business compound in Plovdiv’s Trakiya district, according to investor.bg.

The future centre will spread on a 48 682 plot, comprising four- to five-storey buildings with office and retail outlets, underground parking, restaurants and supermarkets. The gross actual area of the complex is estimated at 110 000sqm.

The development is scheduled to open for business in 2011 and the REIT expected yields to be around 30%. The fund’s executive manager Borislav Stoyanov, quoted by investor.bg, said that Prime Property BG targeted building similar developments in other cities across the country.

House prices in Germany fell by 0.7%

House prices in Germany fell 0.7% overall in February, marking the first month-on-month decline in four months, according to a recent index compiled by financial services group Hypoport.

The cost of new homes also fell 0.7% on the month and existing home prices were down 1%, Hypoport said, and prices of apartments dropped by 0.4%.

In addition, on the year, house prices were down 4%, after a decline of 3.2% in January.

Only new homes were worth more in February than they were a year ago by 0.3%.

Assessing the impact of likely monetary policy for mortgages, Hypoport said uncertainty on markets would cause the interest rate yield curve to incline more sharply soon.

Hypoport’s index is based on data compiled from residential sales accounting for around 10% of the German market.

Spanish re-sales to foreign buyers fall 18%

The latest Spanish Ministry of Housing (MVIV) figures have revealed that the number of property re-sale transactions to foreign buyers fell by almost 18% from Q2 2006 to Q2 2007, from 21,628 to 17,815.  

More specifically a significant drop in figures was recorded in the Spanish capital, Madrid, where re-sales to foreigners declined from 3,496 in 2006 to 1,562 in 2007, a drop of 55%. A similar story was reported from the Castilla La Mancha province, also in central Spain, where a drop of 44% occurred during the same period, from 692 in Q2 2006 to 388 in Q2 2007. 

In contrast, however, this period saw a huge increase in re-sales to foreign buyers in the Canary Islands, from 1,012 re-sale properties sold in the 2006 period to 1,746 properties sold in the 2007 period, resulting in an increase in sales of resold properties of 73%. 

The Andalucia region also saw an increase in the number of resale properties sold to foreigners. Figures were up 24% from 2,317 to 2,861. Within Andalucia, the province of Granada showed the greatest growth in foreign re-sales, increasing by 84% between Q2 2006 and Q2 2007, which is a reflection of changing buyer demands.

Martin Dell, MD of Spanish property company Kyero.com, said: “Even though these figures from the MVIV are now almost 9 months old and have their limitations, it’s the first time that this data has been made available to the public. It confirms the scope of the downturn in the number of property purchases by foreigners in Spain. What’s surprising is how well the region of Andalucia performed and, in particular, the strong performance of the Canary Islands.”

Romanian property prices increase by 40%

Property prices in Romania have seen substantial increases in recent months, with local buyers bolstering demand and pushing up prices, according to Anglo-Romanian Development.

The company says that the average property price has increased by 40% during 2007. These increases have been driven by a rise in wages among the domestic population since accession to the European Union on 1 st January 2007. The Romanian finance minister recently announced GDP per capita in the country had increased from €2,600 (£2,000) in 2004 to €5,400 (£4,240) in 2007.

The latest figures from market analysts Mercer also forecast the trend will continue - with wages in Romania expected to rise by 11.5% in 2008, the highest rise in Europe and fourth in the world. The Romanian Government also forecasts a staggering 75% salary increase by 2013. This trend has allowed a strong property market to develop, with local buyers fuelling demand as opposed to second and holiday home owners.

Romania also has a low unemployment figure, estimated at around 4.3% during 2007.

Auctions indicate Sydney’s worsening property crisis

Only half the homes put up for auction have sold which could be another indication of Sydney’s worsening property crisis, according to RP Data.

New research has shown that many young people can afford to buy their own home only if they get help from their families. Property experts have warned that rising interest rates mean the pain of rising mortgages and dropping values in many parts of Sydney will continue for some time.

Tim Lawless, RP Data’s research director, said: “Auction clearance rates in Sydney last weekend were down to 52%. More people are putting their property on the market than this time last year because people are getting the jitters - they see the market is peaking. People are under pressure with interest rate rises and they are thinking now is a better time to sell than in a couple of months.”

Growth in the value of Sydney property has slowed to 7.8%, a long way behind Adelaide where prices are rising by 26% a year and Melbourne and Brisbane where prices are jumping by 22% a year.

Tough market conditions have also led to some mortgage brokers bending the rules to get people mortgages they cannot afford. The Mortgage & Finance Association of Australia this weekend announced that it had expelled its 14th member for misconduct. Phil Naylor, association CEO said Queensland member Stephen Cleary was expelled after telling a customer that it was all right to make up supporting documentation for a loan.

Sales of new build apartments fell to a 15-year low in Tokyo

Sales of new apartments in Tokyo fell to a 15-year low in February, according to Real Estate Economic Institute, underscoring a deep market slump triggered by rising costs and sending real estate stocks sliding.

Sellers of apartments in Japan’s major metropolitan areas have been hiking prices to offset the higher cost of land and construction materials, but with wages stagnant and the economy shaky, demand has tailed off.

The industry is likely to suffer another blow when the impact of stricter building laws implemented in June last year starts to emerge in the coming months. The new standards have delayed construction and depressed housing starts.

The research firm’s data showed that the number of new apartments put up for sale in the Tokyo metropolitan area came to 3,460 units in February, down 28% from a year earlier and the sixth straight monthly decline.

It was also the lowest level for that month since 1993, after Japan’s economic bubble popped. The survey covers apartments with more than 30 square metres (323 sq ft) of space and that are in buildings at least three storeys tall.

Government land unsold in Mumbai’s auction

For the first time in 13 years, Mumbai’s metropolitan authorities failed to sell Government land in an auction in India’s financial capital.

Up for sale were five plots in the Bandra Kurla Complex - a prime commercial real estate district whose existing tenants include the country’s largest stock exchange, the securities market regulator and Citigroup’s India headquarters. But the Government was only able to sell three plots raising Rs13.2bn ($326m) rather than the Rs19bn originally targeted, according to Bloomberg.

Just a few months ago, the Government was holding land sales in the same area which were touted by the domestic press as the most lucrative in the city’s history.

Sales prices rapidly decreasing in the U.S

Homes sales of previously owned homes in the U.S rose for the first time in seven months in February while sales prices fell by their most in 40 years, according to the National Association of Realtors (NAR).

Home sales rose by 2.9% in February 2008 to 5.03m units, which is still 23.8% less than a year ago. The rise comes after sales fell in January to a level of 4.89m units, which is the lowest since records began in 1999. Economists said that the rise was a positive indication for housing and the financial markets but that it was not clear evidence that residential real estate was about to improve.

In addition, house prices fell 8.2% in February 2008, the biggest one-month drop since NAR’s records began in 1968, to a median price of $195,900.

In another data release, the Chicago Federal Reserve Bank’s National Activity Index sent a signal that a recession had probably begun in the US. The three-month average score for the index fell below the -0.7 ‘threshold’ to -0.87 for February. The bank said: “Such an occurrence following a period of economic expansion indicates an increasing likelihood that a recession has begun.”