According to CB Richard Ellis’s Accumulator, Investment Market in Poland H1 2009, the stagnation that Poland suffered in 2008 has carried on into 2009 with the commercial sector being badly affected.
In H1 2009, there was a -90% decrease in transaction volumes compared with the same period in 2008, according to the report that covers all aspects of the property investment market in Poland and its future trends.
In H1 2009, there were just eight deals worth €118m, with each transaction worth an average of €14m. The office and retail property sectors continue to dominate the investment market, although the share of retail transactions is lower. Since the beginning of the year, there were only five retail transactions totalling €40m and three office transactions in Warsaw totalling €78m. So fat in 2009 there have been no transactions registered in hotel and industrial sectors.
Open and closed-ended funds were the major buyers this year with Arak Bz WBK and Deka being the most active. The majority of the invested funds came from Germany although Polish and UK investors closed more than one deal each.
According to the report, yields have suffered and prime yields in Warsaw are now around 6.75-7%. Industrial yields are estimated at 8.75-9%.
Renewed confidence in Germany
All property markets in Germany are experiencing renewed confidence as a positive investment climate exists despite the global economic downturn, according to the latest King Sturge Real Estate Economy Index.
The office real estate sector is performing best, registering up the highest increase in confidence for a third month in a row, up by 12.6% to 43.2 points. The residential sector is also continuing to push upwards with confidence increasing beyond 100 points at 116.2. The majority of real estate agents are now describing the current situation and the outlook for the housing market as positive.
The retail sector jumped 5.4% in July, rising to 61.3 points. Overall, the poll-based Real Estate Climate rose for the eighth time in as many months, climbing by 7.5% from 58.9 up to 63.3 index points.
While the Real Estate Climate has mapped the improved environmental conditions, the development of the Real Estate Economic Situation suggests that the real estate economy still has to wait for a sustainable shift in trend. Accordingly, a majority of the survey respondents remains sceptical in regard to a swift recovery of the non-monetary economy.
Bulgarian property transactions down by over a third
Real estate transactions in Bulgaria tumbled by -35% year-on-year in the first half of 2009, according to data from the Registry Agency.
The downtrend swept across all major cities and seaside resorts, with Sofia, Varna and Samokov region, including upscale winter resort Borovets, collapsing by around -50%.
Brokers blamed lagging investment activity and the global financial downturn for this.
Recently, Raiffeisen Real Estate said in a report that property deals had decreased by an average of -42% nationwide and 58% in the capital city. The report also took off-plan transactions into account, which boomed only two years ago.
The National Association of Municipalities said that, based on contributions to municipal budgets, property deals across the country had halved. The estimates of the Registry Agency mimics figures from Sofia municipality, which said deals in the first six months of 2009 fetched only 30 million leva, compared to 59 million leva in the same period of 2008.
Mortgaged properties’ foreclosures crept up by +36.6% year-on-year, according to the agency. At the same time, new mortgages shrank almost threefold to 14000.
Worldwide News
Number of loans for building/buying residential properties increase
The number of loans granted to build or buy houses and apartments in Australia climbed +1.1% to 65,151 from May, when they gained +2.2%, according to the Australian Statistics Bureau.
Government grants to first-time buyers of as much as A$21,000 ($17,600) have triggered the longest run of gains in home loans since the figures were first published in 1975 and driven up property prices. Recently, Glenn Stevens, central bank Governor, left the benchmark interest rate at 3% for a fourth month and signaled his next move may be an increase.
First-home buyers accounted for 27.1% of dwellings that were financed in June, compared with 28.5% in May and 17.6% a year earlier, the statistics bureau said.
Demand for home loans has also been stoked by a record 4.25% of cuts to the benchmark interest rate between September and April.
Stevens said in June that he is concerned a surge in borrowing may leave the property market vulnerable to a bubble. According to Bloomberg, he said: “This ought to be the time when we can add to the dwelling stock without a major run-up in prices. If all we end up with is higher prices and not many more dwellings -- then it will be very disappointing, indeed quite disturbing.”
More than 60% of people think UAE property prices will drop by 20-30%
According to an online poll by Arabian Business, more than 60% of people think UAE property prices are going to drop by another 20-30% this year.
Arabian Business asked its readers whether they thought the real estate market had hit the bottom, with just 5% in agreement. Instead, some 63.4% of people thought there was still another 20-30% correction to come.
House prices in Dubai have decreased by 50% from their peak during the fourth quarter of last year. Problems of over-supply and population shrinkage, with thousands of jobless expatriates expected to return home now schools have broken up, will mean continued pressure on prices.
A recent Shuaa Capital survey into investor confidence was also recently released and the Dubai-based investment bank found that 19% of investors believed that the market had bottomed out. It also found the highest increase in investor confidence, rising 16.8 points to 123.8 points on the month.
However, the Arabian Business poll found that only 6.1% of people were optimistic, believing that the market was now on the road to recovery. While, 25.6% played it safe, saying nothing was going to change until the end of the year.
Singapore’s economy shrinks by 6.5%
Singapore’s economy contracted 6.5% in the first half of 2009 from a year earlier, according to Prime Minister Lee Hsien Loong.
In a televised National Day message, Loong said: “We are now in a stronger position.” The decline in the first six months was “less bad than we had feared” after an easing in the global recession and Government measures helped Singapore’s economy “bounce back” last quarter.
Singapore’s gross domestic product (GDP) will shrink between 4-6% in 2009, according to Loong, reiterating a July forecast that the contraction will be less than an earlier prediction of as much as 9%.
In Q2 2009, Singapore’s economy grew an annualised 20.4% from the previous three months, according to initial Government estimates released on 14th July.
