Investment in French commercial property increases
Investment in French commercial property rose by almost +90% to €1.7bn in the second quarter of 2009, compared to just €0.9bn in the first quarter of the year, according to a new report by real estate advisor BNP Paribas.
The increase in transaction volumes is the first in over a year of investment decline, and could be interpreted as the first sign of market recovery. However, BNP Paribas pointed out that transactional activity in the first quarter is generally lower than the rest of the year, and suggested caution in interpreting the figure too positively.
The advisor expects a progressive but moderate increase in investment volumes in the second half of the year, with a forecast investment volume of €6-7bn for the whole of 2009. This compares to the estimated €13bn and €28bn of transactional activity reported in France in 2008 and 2007 respectively.
The growth in the second quarter of 2009 was mostly attributable to the return of larger transactions. The retail sector accounted for the lion’s share of commercial property investment, reaching a third of the total investment volumes. Although prime shopping centres have been more resilient, secondary assets such as retail parks have shown a substantial slowdown, according to the advisor.
Are Irish residential property prices bottoming out?
The property slump in Ireland may be turning with Brian Lenihan, Ireland’s finance minister, claiming that residential property prices are bottoming out.
When Lenihan was quizzed by a parliamentary committee in Dublin, he said: ‘We are very near it on the basis of the figures that we now have about the yield from property. The yield is at an all-time high relative to the assets which is a clear, objective economic indicator that we are approaching the trough.’
However, a report by Morgan Kelly, University College Dublin’s economist, suggest that property values may only recover to less than half of their peak values and remain there for a decade or longer. Kelly had predicted in 2007 that property prices were set to fall by up to -20% and had been criticised for having such pessimistic views but the slump proved him correct.
New mortgage site in the Czech Republic
The creators of broker-free property website Bezrealitky.cz recently have launched a new mortgage site, Honzovahypoteka.cz, which claims to be the first in the Czech Republic to provide a ‘truly objective comparison of mortgage loans’.
The new service is a product of Bezrealitky.cz creator Jakub Havrlant and Jiří Paták, formerly with local mortgage provider Green & Beck. Paták said: “Our vision is to make the Czech mortgage loan market more transparent, professionalize services of brokers and create a unique solution for financing of housing.” The creators want to create a mortgage market using the same concept as Bezrealitky.cz, while focusing on independence and transparency, Havlant said.
Honzovahypoteka.cz cooperates with all the banks and with major financial companies on the Czech market that provide mortgages and savings bank mortgage products. Brokers do not receive clients’ contact details and other personal data, Paták said. The service also offers mortgage refinancing and it is free of charge as the company generates profit from brokers who sign contracts with clients.
The lenders are represented by more than 130 mortgage brokers and their number is expected to increase to 500, Paták said.
Worldwide News
Two reports, two different outcomes
According to the official data, Kuwaiti real estate sales plunged -47% in Q2 2009 compared to the year earlier, with the blame being put down to the global financial crisis.
Property sales fell to 280.8m dinars from 529.1m dinars in Q2 2008. In the residential sector which represents the biggest proportion of property transactions, sales fell -28.1% in the quarter to 142.8m dinars. Property sales, especially for residential units, have been falling since state-restricted private firms were barred by the Government from residential real estate deals last year.
Investment property sales fell -55.6% to 101.19m dinars, while commercial property (apartment buildings for leasing) sales were down -64.1% in the second quarter of 2009, compared to the same period a year earlier.
However, a separate report from Kuwait based Emaar Company for Real Estate Services said that property prices in Kuwait increased +15% in July. The return of Kuwait Finance House and other Islamic financial institutions to the property lending market have contributed to the increase, the report claims.
Indeed, according to the real estate registration department at Kuwait’s ministry of justice, sales in the private residential sector increased by +55% in July.
‘Residential house prices have turned a corner’
The Absa House Price Indices (up to August 2009) ‘indicates that year-on-year house price deflation in the middle segment of the South African housing market has turned the corner and is slowing down’.
Jacques du Toit, senior property analyst for Absa Home Loan, said in a report: ‘ Year-on-year price deflation in the South African housing market appears to have turned the corner and is slowing down, according to Absa’s calculations. On a month-on-month basis, house price deflation slowed down from April to June this year, with price inflation recorded in July and August. These month-on-month trends contributed to year-on-year price deflation tapering off in the past two months.’
Middle-segment house prices were down by -3.4% year-on-year (y/y) in August 2009. On a month-on-month basis, prices were up by a nominal +0.2% in August, after a marginal increase of +0.03% was recorded in July. In real terms, prices were down by -9.7% y/y in July this year, after declining by -10% y/y in June.
The South African economy is in recession after contracting for three consecutive quarters up to the second quarter of 2009. However, there are indications that the global economy may be on the path to recovery, with the economy expected to start to recover late this year.
Property investment in Northern Cyprus continues to be marred
Property investment opportunities in Northern Cyprus continue to be marred by political uncertainty over developments in the island as on a visit to Northern Cyprus, Ahmet Davutoglu, Turkish foreign minister, said that they shall not allow the continuation of the status quo which meant Turkish Cypriot people’s being unable to enjoy basic rights.
In a message to the Cyprus Turkish people, the Turkish Foreign Minister reminded that the people of Northern Cyprus had demonstrated its will towards a settlement and changed the international community’s perception towards the Cyprus Problem.
He emphasised that the Cyprus Turkish people continue to suffer under international embargoes, which had an obvious impact on property investment, despite having voted in favour of the UN-sponsored plan in 2004. He said that the Cyprus Problem continued to pose a major obstacle for a large number of issues and projects within the EU, and the continuation of the international isolation of the TRNC people was inexcusable.
