Surplus of Spanish housing thanks to a fall in sales
Spanish property sales fell by -28.6% in 2008, according to the Spanish National Institute for Statistics (INE), which has led to the sector adopting more aggressive sales policies and slashing prices in order to reignite demand.
However, despite this fall, latest statistics registered by the INE showed an improvement with respect to mid-2008 and analysts hope that the fall in real estate sales has eventually stabilised at approximately -30% over the last few months after reaching -36% in August 2008.
According to INE the fall in sales has been more acute in second-hand properties with falls of up to -39.3% (273,936 sales) compared to sales for new properties which only fell by -14.1% (284,493 sales). The figures by INE for 2008 show that transactions for private properties fell by -28.9% while transactions for subsidised housing fell by -25.5%.
The fall in sales has provoked an accumulation of surplus housing in Spain which is estimated to vary between 600,000 and 900,000 unsold new properties. The fall in sales of new properties throughout 2008 is just 3.2% according to the Ministry of Housing or 10% according to the property evaluators Tinsa. In fact Tinsa predicts that this percentage will go up to a round 20% by the end of 2009 with 1.5 million unsold properties on the market.
This year brings new rules to Bulgaria’s housing market
Address Real Estate recently presented a report that examined Bulgaria’s market development in 2008 and found that the beginning of 2009 brought new rules to the housing market.
National statistics showed that every fifth home in Bulgaria had been put up for sale, which signified that supply greatly outnumbered demand, but sellers have not been ready to stampede for a deal at any cost. During January 2009, about 115,000 homes were listed for sale in Sofia alone. However, Address’s analysis indicated that fewer deals were being finalised for two main reasons - either banks were refusing to grant the requested loan at the last minute, or buyers were deciding to look for a better offer.
According to Address’s report, the Bulgarian property market was beginning to free itself from the flow of speculative capital. About 20% of the total homes offered for sale came from owners who had invested in real estate, hoping to reap a comfortable profit and then move on. Foreign investors and Bulgarian investments coming from abroad were becoming scarce, the report said, adding that such was part of a worldwide tendency of postponed or carefully weighed investment possibilities.
The report said that in 2008, property prices nationwide had jumped by 22%. But buyers at present were reluctant to buy off-plan and finalising a deal could take up to 20 weeks. Address said that, thanks to the stricter loan requirements introduced by Bulgarian banks in the middle of 2008, the local property market had been saved, perhaps, from entering a gruesome stage with an avalanche-like effect of an increasing number of defaulted loans.
According to the report, with banks’ support, the property market was gradually passing to its next logical state, that of fewer buyers, a real estate frenzy reined in and a correction of prices. Address said: ‘This tendency urges many analysts to conclude that the market is dead. The truth is that changing one’s home as something that is often dictated by personal factors in life. Therefore, people will always buy property. All we are parting with now is the hysteria.’
More routes to Malta from the UK
Airlines, including budget airlines Ryanair and Easyjet, are increasing the number of routes to Malta as the country’s tourism grows and investment comes both from relocating businesses and from those wishing to own a home in the country.
Easyjet has increased its routes from April by including direct flights from Newcastle twice a week. Ryanair has also announced two new twice weekly routes to Malta from Edinburgh and Bristol. Flights from Edinburgh start on 31 st March and run every Tuesday and Saturday. Flights from Bristol will operate on Wednesdays and Sundays and will start on 5 th July.
Scandinavian Airlines (SAS) is also launching a non-stop route from Stockholm-Arlanda airport to Malta starting in April 2009.
James Vassallo, senior sales manager of mixed-use development, Tigne Point, said: “The increased air traffic is certainly good for the island especially in these trying times. Malta is strategically placed between the West and East and the growing importance of North Africa. It appeals to businesses looking to relocate to the Med and, over the years, business travel has constantly grown”.
Malta is becoming a focus for business people and those looking to locate in a region that has such easy access to Europe and the Middle East. The island has attracted significant investment in the financial sector which, taken with the related and support services, accounts for some 12% of GDP. This is predicted to grow substantially over the coming decade. Malta gives international firms an excellent services and communications infrastructure and offers the benefits of an exemplary regulatory environment plus a network of double taxation agreements.
Worldwide News
Obama unveils plans to help homeowners
President Barack Obama recently unveiled plans to help up to nine million homeowners restructure or refinance their mortgages to avoid foreclosure.
The plan will enable as many as five million homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac to refinance their mortgages through those institutions. Under current rules, refinancing is not an option for most homeowners who owe more than 80% of the value of their homes.
An additional three to four million homeowners will be able to avoid foreclosure through a new £76bn mortgage modification program. The Homeowner Stability Initiative will be available to homeowners who are at imminent risk of default, even if they are now current on their payments.
Lenders will be responsible for reducing interest rates on these loans so the monthly payment will be no more than 38% of the homeowner’s income. Government funds would match further reductions in interest rates to bring the payment down to 31% of income.
The US Treasury Department will create an insurance fund of up to $10bn to compensate mortgage holders if home prices decline. This is designed to discourage lenders from foreclosing on mortgages out of fear that housing values will decline later.
The Treasury Department also will develop uniform guidelines for mortgage modifications. Any lenders that receive financial assistance from the government will be required to follow these guidelines, as will Fannie Mae and Freddie Mac. The administration will work with federal and state agencies to implement the guidelines across the entire mortgage market.
The president also endorsed legislation that would allow bankruptcy judges to reduce the principal on homeowners’ mortgages.
Retail sales in SA have their best performance since the summer
South African retail sales fell 0.1% in December, according to Statistics South Africa, which was their best performance in eight months and lessens expectations for an emergency meeting to cut interest rates.
This fall compares to a 4.4%% decline in November, according to the agency. December’s sales marked the strongest performance since 0.2% growth in April 2008. Sales for the year were poor, contracting 2.2% for the first annual decrease in nine years.
The data may temper speculation that the central bank will call an emergency meeting before the scheduled April sitting to cut interest rates, although fourth quarter gross domestic product (GDP) figures due in the end of February are the main focus.
Government unveils $33bn infrastructure plan
The Harper Government in Canada will unveil within weeks the details of its $33bn plan to upgrade aging infrastructure, according to Lawrence Cannon, the federal minister responsible for transport, infrastructure and communities.
Cannon said the plan, representing the biggest public investment in infrastructure since WW2 would finally provide stable and predictable funding for much-needed projects. Nearly half of the money would come from a $2bn-a-year transfer of gas tax revenues, a measure introduced by the previous Liberal government and extended by the Conservatives until at least 2014.
But Cannon noted his plan, outlined in last spring’s budget, would also include new money for large-scale projects, including highways, drinking and waste water installations, public transit and green energy.
Cannon added that the Government will also proceed with plans to create a $1.25bn public-private partnerships (P3) fund. The fund, which would be managed by a new P3 agency, would count on contributions from cities and provinces. Cannon said the new plan would help cities and industry plan for their future economic development.
