Retail takes larger share of investment activity

Amount of new-builds in Bulgaria increased in Q2 2009

Spanish residential planning approvals decrease significantly

Residential prices are beginning to bottom out globally

Value of Jordanian property deals decrease by -38%

Residential prices in China are on the up!

Retail takes larger share of investment activity

According to CB Richard Ellis (CBRE), retail transactions accounted for 35% of total European real estate investment activity in the first half of 2009, compared to the last five-year average of 26%.

Amount of new-builds in Bulgaria increased in Q2 2009

The amount of newly constructed real estate apartment blocks across Bulgaria increased by +24.1% in the second quarter of 2009, according to the National Statistics Institute (NSI) data.

The statistics show that, on an annual basis the growth of buildings completed accounts for 6.9%, while the increase of new apartments has grown by +30.2%. For the period May to July 2009, 679 properties were erected with 5,888 flats in total. For that period alone, there is a +51.1% increase in new apartments nationwide.

Varna led the way with 157 new buildings constructed, with a total of 1,204 new units, followed by Bourgas who had 134 buildings recently constructed making a total of 1,665 new units and Sofia with 35 new buildings recently constructed as well as 549 new apartments. The report indicated that there was no new construction in the towns of Razgrad, Montana and Haskovo in the same period.

The figures indicate that the total new marketable area consists of more than 411,000sqm of apartment space, or a +15.9% increase compared to the corresponding period for 2008. However, according to the report, on average, flats are becoming smaller. In the first quarter of 2009, the average living area in new construction amounted to 75.5sqm, which in the second quarter decreased to 69.9sqm.

Spanish residential planning approvals decrease significantly

Residential planning approvals in Spain (excluding social housing) decreased by -70% to 19,844 in Q2 2009 compared to the same time last year, according to Spain’s College of Architects.

Over 12 months to the end of June, planning approvals were down by -70% to 108,120 compared to the previous 12-month period. Planning approvals are the pipeline for the residential building industry, so these figures are disastrous for the sector and the Spanish economy. Now banks have turned off the tap, which helps to explain why planning approvals have collapsed.

Gonzalo Bernardos, a housing market expert at the University of Barcelona, told the Spanish press: “This has been the year of refinancing for developers, but banks are not offering funding to start new developments, just to finish those already being built.”

Residential prices are beginning to bottom out globally

According to Knight Frank’s latest Global House Price Index, there are the first tentative signs of recovery in 33 key locations across the globe.

Liam Bailey, head of residential research at Knight Frank, said: “It now appears that house prices are starting to stabilise across the world. The latest results from our Global House Price Index show values increased in almost half of the locations reporting price changes for the second quarter of the year.

“Significantly, quarterly price falls accelerated in only 22% of the locations and did not exceed by 10% in any country. This compares with double-digit falls in a number of locations during the first quarter.”

Israel was the top performer on an annual basis with prices rising +12.5% while Dubai was worst with prices falling -47%, but slowing in the second quarter of the year to a more manageable -7.5%. A number of other countries also saw strong quarterly gains with prices in Norway increasing by +5.3%, Sweden up +3.6% and Finland up +3.9%. According to Bailey, Northern Scandinavia is also recovering well.

He said: “This is probably because prices didn’t increase to the same extent as other areas during the property boom. There has also been a sharp slow down in the number of houses under construction. In Sweden, construction started on 45% fewer houses in the first half of 2009 compared with the same period last year. In Norway, new starts have fallen to their lowest levels since 2000.”

Even the US, where the sub-prime mortgage crisis started, is starting to see a recovery as prices increased by +1.3% in the second quarter following falls of -7% in each of the previous two quarters, the report also showed. Even in Dubai the recovery looks underway.

Bailey said: “Prices are still falling in Dubai, but the decline has slowed sharply.

The second-quarter drop in Dubai was only -7.5% compared with a massive -41% slide during the previous three months. While the market still remains over supplied, transaction volumes have started to increase on the back of reduced asking prices, the increased availability of credit and more certainty from developers regarding the completion dates of projects.”

The report concludes that overall, it seems that prices are starting to bottom out around the world.

Value of Jordanian property deals decrease by -38%

The total value of property deals in Jordan decreased by -38% to 2.78 billion dinars in the first eight months of 2009 compared to the same period a year earlier, according to the latest figures from Department of Land and Survey.

The figures also show that turnover stood at 4.46 billion dinars in the first eight months of 2008 before the impact of a global downturn began to slow economies across the Gulf region, hurting business and dampening domestic consumption. Foreign purchases of apartments, commercial units and real estate assets rose by +22% to 169.1 million dinars in the same period in 2009, against the first eight months of 2008.

Iraqis bought a total 79.7 million dinars worth of property, top among the list of non-Jordanian investors followed by holders of US passports - mostly Jordanian expatriates living abroad - who bought 17 million dinars worth of property.

The Government’s revenues from property sales also fell by -38% to 174.2 million dinars in the first eight months of the year, according to the department.

Residential prices in China are on the up!

The figures from the National Bureau of Statistics in China showed that residential property prices in 70 big and mid-size cities in China rose +2% last month from a year earlier, and +0.9% from July.

Year-on-year growth in real estate investment also gained pace, increasing +14.7% from January to August. Shenzhen and Jinhua, the main cities in the eastern coastal provinces, led the gains.

Most analysts believe the recovery is due to the series of measures introduced by the Chinese Government since last October, including tax breaks, to support the real estate sector, which accounts for more than 20% of urban fixed investments and is a key driver of China’s economic recovery. However, analysts have warned that property prices could face a major correction if the Government has to make aggressive moves to prevent asset bubble build-ups.