Spain is attracting commercial investors

French property prices hold steady

Lack of demand for offices

Dubai’s rate of decline is slowing

Price growth in 2010 of +9.8% in Auckland

Number of foreclosures in the US continues to rise

Spain is attracting commercial investors

French property prices hold steady

According to French property firm Athena Mortgages, the French residential property market is stabilising as on average prices rose by +3.9% during Q2 2009, resulting in an annual return to July 2009 of -2.5%.

The company believes that much of the market’s resilience is due to the prudent lending criteria that have been in effect for many years. In France, lenders do not allow borrowers’ total outgoings on finance payments to exceed one third of their total gross monthly income. This way the bank can be sure that any change in circumstances does not precipitate immediate financial problems and that the borrower will continue to be able to make the monthly repayments.

This has allowed for a continuing availability of mortgage finance in France. While mortgage finance in the UK remains difficult to secure at higher LTVs, the French banks continue to lend to borrowers with smaller deposits, even up to 100% LTV.

The buy to let sector in France is attracting particular interest from investors at present, as price falls have boosted gross yields. The average annual gross yield in France is currently 5.6%, which compares to 5.1% in the UK as a whole and 3.79% in London, according to Athena Mortgages.

Lack of demand for offices

The number of unoccupied offices in Sofia, Bulgaria, is growing because of a lack of demand, according to Bulgarian-language mass-circulation daily Trud, as at the end of June 2009 about 15% of offices in Bulgaria’s capital city were vacant.
 
Trud also said that Irish people were selling their real estate in Bulgaria at prices reduced by 20-50%, while another newspaper reported that a foreign financial institution was buying up flats in Sofia.
 
It was also recently reported that the number of real estate transactions in Sofia had fallen by -58% since the beginning of 2009, while the number of mortgages had decreased by two-thirds. Raiffeisen Real Estate said that property deals have shed an average of -42% nationwide and by -58% in Sofia in the first half of 2009.

Dubai’s rate of decline is slowing

According to Jones Lang LaSalle, residential asking prices for property in Dubai has plummeted -49% since the third quarter of last year, with rents falling -35% in the same period.

However, the report does show that the rate of decline is slowing, giving hope that a recovery could be underway by the beginning of 2010. Overall, values fell -24% in Q2 2009 but the gap between asking and achieved prices is narrowing.

Rents also fell less sharply in Q2 2009 as the average rent for a two-bed apartment fell by -15% in this quarter compared to -22% in the first three months of the year. In addition, the level of transactions has stabilised with volumes between the first and second quarters of this year levelling off compared with a -58% fall between the second quarter of 2008 and the same period in 2009.

Around 22,400 residential units are expected to be handed over in 2009, despite over $24bn worth of residential projects being put on hold or cancelled, according to the report.

Price growth in 2010 of +9.8% in Auckland

A study by forecaster Infometrics predicts an annual residential price growth of +9.8% next year in Auckland, New Zealand, followed by annual increases of +9.2% until 2012 in Auckland due to a severe shortage of supply.

Researchers pointed out that the country’s largest city is facing a rising population and a limited supply of new housing. The report said: ‘ Auckland house price growth is forecast to be the fastest in the country at +9.2% per annum.’

The report is also bullish about property prices in general as it said that nationally residential prices could rise by up to +24% over the next three years as cheap mortgages and lack of new housing continues.

Figures from Statistics NZ back up the claim that fewer new properties are being built. New housing consents plummeted from 30,000 a year to just 13,000 last year. In addition, estate agents are reporting an increase in activity and that the time it takes to sell a property has reduced from 58 days in July 2008 to 41 days in June 2009.

Number of foreclosures in the US continues to rise

Figures from RealtyTrac’s July Foreclosure Report show that the number of foreclosures in the US is continuing to rise with one in every 355 households facing default notices, scheduled auctions and bank repossessions.

The figures showed that notices delivered to property owners increased by nearly +7% from June to July, and are now up +32% from July 2008. This is the third time in the last five months that a new record figure has been recorded.

Nevada continues to lead the nation as the state with the greatest number of foreclosures filings for the 31 st consecutive month, with one in every 56 households receiving a foreclosure filing in July. However, a state law enacted on 1 st July that requires lenders to offer mediation before beginning the foreclosure process reduced initial default notices by -18% in July, according to RealtyTrac, although scheduled auctions and bank repossessions increased more than +20% during the same period.

California and Arizona were second and third, respectively, on the list of top foreclosure activity states, with one in 123 Californian households and one in 135 Arizona homes receiving a notice during the month. Rounding up the top ten states with the highest foreclosure activity in the US are Florida, Utah, Idaho, Georgia, Illinois, Colorado and Oregon.