Direct investment in commercial property in Europe down by -42%

Developers try to lure buyers back

UNESCO issues Bulgarian authorities an ultimatum

Canadian residential property sales rise again

Residential property prices in China are increasing

RERA suspends licences of unregistered property brokers

Direct investment in commercial property in Europe down by -42%

According to Jones Lang LaSalle, direct investment in commercial real estate in Europe stood at €24bn in the first half of 2009.

Levels in the second quarter were similar to volumes seen in the first quarter of the year. The €24bn transacted in direct commercial real estate investment in the first half of this year was down -42% on the second half of 2008 (€41.5bn).

Tony Horrell, head of European capital markets at Jones Lang LaSalle, said: “We believe that the European market has now reached a floor in transaction volumes and based upon investor interest we would expect an increase in turnover in the second half of this year. Prime office yields were largely stable in Q2 for the first time since mid 2007. Volumes have remained low because the bid offer spread remains wide in some markets due to price expectations and needs of owners. At the same time falls in capital values have made pricing attractive for those investors with equity or buyers who are not highly leveraged and who have good banking relationships.

“It is the high net worth individuals and equity players who are making the market at the moment, as the debt markets remain largely restricted; new lending remains tightly constrained and expensive and most large deals have vendor financing or stapled debt.  There is no shortage of equity for income secure opportunities. We are seeing deep investor interest in London, with multiple bidding from international investors, some of whom continue to benefit from currency advantage.”

Developers try to lure buyers back

According to CB Richard Ellis (CBRE), a number of price cuts have been made in new homes schemes in Ireland in recent weeks as developers attempt to secure sales in advance of the traditional summer lull.

It also said that a number of real estate agents around the country are tentatively reporting signs of increased activity in recent weeks although not unsurprisingly the market continues to be very price sensitive.

But obtaining loans is still a major hindrance to a property market recovery. The report said: ‘Anecdotally, potential purchasers claim that finance is still proving very difficult to obtain in the current climate despite the fact that financial institutions claim to have funding available for potential homeowners.’

Approximately 10,000 new housing units were completed in Ireland during the first four months of 2009 and the report predicts that there will around 23,000 housing completions nationally in 2009 with approximately 15,000 new houses likely to be built in Ireland next year. But this is a far cry from the 93,000 housing units built in 2007.

The report hits out at the recent decision by the Irish Government to introduce new taxes on holiday homes and investment properties. It said: ‘While the rationale for introducing legislation to tax holiday homes and investment properties is understandable in the context of broadening the national tax base, it is difficult to understand why the Irish Government are introducing this new tax now until such time as the Commission for Taxation have made their recommendations regarding property taxation.’

UNESCO issues Bulgarian authorities an ultimatum

UNESCO’s World Heritage Committee has warned the authorities in Bulgaria to stop ski resort developments in the Pirin National Park.

It has issue an ultimatum giving the Government one last chance to comply with its own national laws which ban construction in the area until 2013 and European legislation to protect the area. The EC is currently looking at numerous complaints by environmental groups about such developments.

Bulgaria has asked for Bansko, Dobrinishte and Razlog to be taken out of the park but UNESCO has consistently refused and said the construction of ski resorts must stop or the park would be put on the organisation’s endangered list.

An environmental coalition group, For the Nature, has been campaigning for the area to be protected further since major development began eight years ago in Bansko. It is outraged that construction has continued and now there are plans for further developments in Dobrinishte and Razlog despite the fact that the Act for the Protected Areas and the Plan for Management of the National Park Pirin bans construction until 2013.

Bansko is accused by environmental groups of building on 150 hectares of National Park without an Environmental Impact Assessment and of cutting down trees to create ski runs without the proper authoristations. The authorities deny this.

Environmentalists point out that the park is remarkable and renowned for its flora and fauna including centuries old forests of beech, spruce, fir, hornbeam, and durmast. More than half the flora of Bulgaria has been identified within the park and of these, 10 species and two subspecies are endemic, which means they are found nowhere else in the world.

It also has more than 130 higher plants and animal species which are included in the Bulgarian and the World Red Book of Endangered Species. These include extremely rare Edelweiss.

It is also home to most of Europe’s largest mammal species including the brown bear, wolf, boar, chamois, deer and others. They claim that further development will result in more deforestation and animal displacement.

Canadian residential property sales rise again

Canadian sales of existing homes rose for a fifth month in June, according to the Canadian Real Estate Association, adding to evidence that record low borrowing costs are fuelling housing demand.

Sales rose 8.7% to 41,304 homes from the previous month on a seasonally adjusted basis. Average home prices rose +3.6% from a year earlier and the inventory of unsold homes fell to its lowest since August 2007.

Recent data on Canada’s housing market suggest the Bank of Canada’s efforts to stimulate spending with interest rate cuts are helping fuel demand for homes and may be reversing a slump in home construction. The Bank of Canada, which forecast that housing will shed -1.1% from growth in 2009, has cut its benchmark lending rate to a record 0.25%.

New home sales jumped by 32% during the second quarter to 114,173 units, according to the Canadian Real Estate Association. In addition, the number of months needed to sell current inventories fell to 4.2 in June, the lowest level in more than two years.

Residential property prices in China are increasing

Residential property prices in urban areas in China rose for the first time in six months in June, according to data released by the National Development and Reform Commission and the National Bureau of Statistics.

The prices in 70 major cities increased by +0.2% year-on-year, following a -0.6% fall in prices in May but echoes unofficial figures which have indicated for a number of months that prices are on the rise amid signs that the real estate market in China is well on the way to recovery.

Analysts also point out that it is a sign that the Government’s stimulus plans are working. In some areas there is even concern that prices could be rising too quickly. Since October the Chinese Government has taken a series of measures, including tax breaks and preferential rates for first time buyers, to shore up the real estate industry which accounts for more than 20% of urban fixed investments.

The property market started to stabilise in March, when prices rose +0.1% month-on-month. Along with favourable government policies, inflation expectations due to a surge in new bank loans this year is also driving the sector's rebound, according to analysts.

RERA suspends licences of unregistered property brokers

The Real Estate Regulatory Agency (RERA) in Dubai has started to suspend the licences of property brokers who fail to register, after warning several weeks ago that it would take action against those who did not conform to the new rules and now it is again warning that it will not hesitate to act against those who fail to do so.

RERA took action after is found that property broker Sulehri Real Estate was advertising in newspapers for leasing units in Discovery Gardens and International City but although being registered with the Dubai Department of Economic Development, it was not registered with RERA.

RERA is also reminding buyers and sellers that they should only use the services of RERA-registered brokers. They can check the broker’s RERA accreditation at the agency’s website before dealing with them.

As of 7th July 2009, the number of brokerage companies registered was 2,087 but the number of brokers is estimated at 7,761, according to RERA.