Oversupply in Poland may worsen as public housing plans announced
The Ministry of Infrastructure is preparing a bill that will allow State Treasury land to be transferred to municipalities and used for housing investments.
To be allocated land in this way, the municipalities must first prepare local plans or a housing development plan. Such a plan should specify the area the municipality wants to develop, its density as well as how it will be provided with essential infrastructure. After preparing the document the municipality will then sign an urbanisation contract with the owner of the land (for example, the Agricultural Property Agency or the State Treasury), allowing the municipality to assume rights to the land. Then, according to the Ministry’s own proposals, the land will be assigned to a company on a 99-year lease, which will then allow them to build flats for rent in line with the requirements stipulated by the municipality.
The number of units that will be built as a result of the new bill is yet to be estimated. Meanwhile, a total of 11,700 flats were completed for use in February 2008, which translates into an increase of 33.7% in relation to the corresponding period of 2007, the Polish Central Statistical Office reported.
Brits that sold property in Spain paid 20% too much CGT
Thousands of British residents that sold property in Spain between March 2004 and December 2006 could be owed a 20% tax rebate as a result of the Spanish Government overcharging them for Capital Gains Tax (CGT).
British non residents who sold their Spanish properties during this period paid a Spanish Non Residents’ Income Tax rate of 35% on any capital gains, compared to a rate of 15% paid by Spanish nationals. This 20% overpayment not only totals a profit somewhere in the region of £37m, but also contravenes European Community Treaty rules on discrimination and therefore was unduly charged by the Spanish Government.
Placing an actual figure on the amount of people affected by this is very difficult, as the Spanish Government is said to be reluctant to disclose this information. However, UK currency firm HiFX, believes a conservative estimate of those that may have paid is in the region of 4,500 British people, plus thousands more residents in other European countries. The company estimates that an average CGT bill during the three year period would have been £14,000, which would equate to an overpayment of £8,000.
People who sold property previous to January 2004 have already missed out, as claims can only be made dating back over a four year period. HiFX, together with some Spanish lawyers are calling for British people to come forward and register their details to be part of what could be the biggest class action against the Spanish tax authorities for many years.
Commenting on the issue, Spanish lawyer Emilio Alvarez said: “Anyone who has sold a Spanish property between March 2004 and December 2006 will have been victim to this inflated capital gains tax rate, which saw non residents scammed into paying inflated CGT bills by as much as 20%.
“A change in the law at the start of 2007, which saw the standard Capital Gains Tax for non residents being brought in line – a reduction from 35% to 15% , passed by largely unnoticed. As a result, thousands of people who had previously sold property in Spain are entitled to a 20% rebate.”
Turkey to compete with Spain and Portugal for fair weather golfers
The Turkish Golf Federation plans to add 100 new golf courses to Turkey’s current low total of less than 20. Golf tourism is already experiencing strong growth in Turkey and revenues should hit €500m by 2010.
In Spain, there are over 350 federated golf courses with around 60 of these concentrated along the Costa del Sol generating the Málaga province alone an estimated €900m back in 2006. It’s clear that Turkey has some catching up to do but the country is 50% bigger than Spain, has a similar climate thanks to sharing the same latitude, and one of the fastest growing tourist industries on the planet (up 29% in 2007 to 23.8m foreign tourists) so the country’s potential is obvious.
Adam Godwin, marketing director for Dream Homes Worldwide says: “T the Bodrum area will become a serious destination for UK and Ireland-based golfers who will pay considerably less than the average £65 for a round on the Costas. Those who get in early in prime projects will enjoy significant price rises over the next five to ten years; we’re already experiencing capital appreciation of around 15% per annum largely thanks to recent infrastructural improvements.”
Up until now Turkey’s golf has been concentrated in two clear regions – Istanbul has three and Belek on the south coast has around a dozen – but now the southwest province of Mugla, which is reported to attract around 70% of all tourist arrivals and has over 1,100km of coastline, has 18 golf courses in the pipeline, with most planned to be built in either Bodrum or Milas over the next six years at a cost of $1.5bn.
New direct flights to boost Montenegro’s property market
Montenegro Airlines is to lead the way in providing the first direct scheduled flights to Montenegro from London Stanstead, commencing on the 4th of May 2008. This move will mean that those traveling from the UK will no longer have to fly via Dubrovnik, in Croatia or charter direct flights from the UK when visiting the eastern-European country.
The implications of this exciting move for the tourist industry is clear – ease of travel to Tivat, the fastest growing airport in the region where passenger figures in 2006 reached a record 451,000, will almost certainly increase the number of visitors to the region. Return flights will operate on Wednesdays and Sundays, from May to the end of October and cost €200 excluding taxes.
Montenegro Airlines’ move is not only set to improve the lives of those that already frequently travel to Montenegro, it should also encourage a boom in the local property market. “These direct flights into Montenegro are an excellent sign that the country is making progress with their tourist development plans, which will definitely be a boost to the already hot property market and a great help to visitors”, said Caroline Hollingworth, managing director of overseas property consultancy, Hollingworth & Associates.
Worldwide News
UAE considers Olympic bid
Sheikh Mohammed bin Rashid Al Maktoum, vice president of the UAE, recently announced his intentions to begin studying an Olympic bid. He recently visited China and expressed his initiative during a conference to journalists on a flight from Beijing to Shanghai.
The Olympic bid will be welcomed by avid investors who have already purchased property in Dubai’s Sports City, which is to become the largest sports complex in the UAE and probably the world once it is completed. The custom-built complex, which will feature a 25,000-seater cricket stadium, a 60,000-seater outdoor arena that could hold track and field events, and a 10,000-seater multi-purpose indoor arena, is most likely to hold a key role in the UAE’s Olympic bid.
Dubai already hosts many major sporting events, including the Dubai World Championship, a golfing event with a grand prize of $10m, the Barclays Dubai Tennis Championship, the biannual cricket internationals, and the Dubai World Cup horse race. The UAE’s capital, Abu Dhabi, will also host its first ever Formula 1 Grand Prix next year.
Regarding the Olympic bid, Sheikh Mohammed refused to give any further details or pinpoint a target year to host the event.
British investors showing strong interest in Florida property
Primelocation’s latest international search data has revealed that the USA recently broke into the top three most popular search destinations for the first time, amongst British property investors, accumulating 11.4% of all searches, nearly four times the 4.3% experienced in November 2006.
Florida in particular has attracted significant interest from UK buyers looking for a bargain investment. The foreign exchange company Moneycorp also back up Primelocation’s findings by stating that there has been a recent surge in the number of dollar enquiries.
Steve Parnell, author of ‘Buying and Selling Property in Florida’ was quoted as saying: “News of America’s nose-diving real estate industry and some troubles in the Florida market in particular might have some potential buyers frightened off. However, a closer look at the market and the facts shows that now is the ideal time to consider this subtropical paradise. In fact, based on figures from only a few years ago, British buyers can almost enjoy two homes for the price of one.”
David Giles, director at real estate agent Property Deals Florida, reportedly agreed saying: “Brits have certainly been enjoying their ‘two for the price of one’ dollar to the pound. As the American economy falters, overseas investors are now in the driving seat and able to negotiate substantial discounts.”
World Bank urges Vietnam to slowdown its property market
Vietnam should cool down its overheated economy, especially the hot property sector, by using more market mechanisms and keeping better track of capital flows, in order to maintain economic stability, the World Bank announced recently.
The Southeast Asian country’s emerging market economy is now a popular foreign investment destination, but it has been hit by double-digit inflation for five consecutive months and a tripling of its trade deficit. The Communist-run government was forced to shave its 2008 growth target by 1 percentage point to 7.5% amid the global slowdown.
“We do not anticipate a financial crisis in Vietnam or anything like that”, said Martin Rama, the bank’s head economist in Hanoi. “ Vietnam should have a well-prepared protocol in the event of a crisis on what to do, who can take capital out and in what circumstances”, he added.
World Bank economists have suggested that Vietnam announce a proposed property tax to help halt land speculation by developers. The proposed law on property tax would come into effect in 2010 and a capital gains tax in 2009, government officials have said.
Prices for city luxury apartments tripled in 2007 and office rents in Ho Chi Minh City rose 40%, resembling prices of a developed economy, not Vietnam, which has an annual per capita income of just $830. The mortgage market grew by 50%, fueling prices, imports and the real estate bubble.
The currency is pegged to the US dollar and the World Bank said that had Vietnam chosen a trade basket of currencies for exchange rate policy in December 2006, the inflation rate would have been 8% in 2007 instead of the 12% recorded.
Arabtec wins $817m contract to build 2,300 houses in Dubai
Dubai-based construction firm Arabtec Holding has just won an $817m contract to build almost 2,300 houses in Dubai, pushing the company’s stock to a record-high. The stock, in which foreigners can own up to 49%, surged 7.38% on the announcement.
“If you look at the Dubai market, if you want exposure to the construction sector there is nothing but Arabtec”, said Amr Diab, head of sales at EFG-Hermes in Dubai. He added: “The only thing holding Arabtec back is that it has reached its foreign ownership limit.”
Construction of the villas will be completed in phases over the next 40 months, taking the number of houses under construction by the company to 5,000. In 2007, the company is reported to have won $2.3bn worth of contracts in the UAE.
The units will be built for the Mohammed bin Rashid Housing Establishment in the Al-Barsha, Al-Warqaa and Oud al-Muteena areas of Dubai.
