Sweden’s economy continues to expand

Residential construction continues its decline in Czech Republic

Sell a home in Spain in under a year, just!

Australian house prices increase by +3.7% in Q3

Investors owed $1.5m by Fiji resort

The Iraqi Government want foreign investors to own land

Sweden’s economy continues to expand

Sweden’s economy has continued to expand in the third quarter of 2009 by a seasonally adjusted +0.2%, however there had been expectations of it rising by +0.6% in the quarter according to Capital Economics.

The economist believes that recent gross domestic product (GDP) data confirmed that Sweden’s economic recovery is fragile and the modest growth suggested little to affirm that the commercial property occupier market downturn is nearing an end, especially as rental values are now falling across all sectors.

The report said: ‘Overall, while it is encouraging that the Swedish economy continued to grow in Q3, the strength of the recovery provides little grounds to call a recovery for its commercial property occupier markets.’

It also noted that at the end of 2008 there was a large fall in GDP which severely impacted office occupier demand and rental values, with office values falling by over -11% since their peak in 2008.

The report stated: ‘The pace at which they are falling has eased, but with a considerable pipeline of speculative office space due to complete in 2010, office rentals will remain under pressure.’

The consumer sector, however, is more positive according to the report as household spending increased for the second successive quarter. Retail sales rose by +1.5% in the year to September 2009, well above the -3% drop in the Euro-Zone as a whole. However, despite this, many occupiers have stopped plans for expansion and so rental values have fallen.

Residential construction continues its decline in Czech Republic

Data released by the Czech Statistical Office (CSU) has revealed that construction of new residential properties has continued to decline throughout Q3 2009.

The construction of new homes and apartments fell by -5.7% in comparison with Q3 2008 to 11,234 dwellings, however this is an improvement on Q2 where it dropped by -21.2% compared to Q2 2008, according to CSU.

New family houses which started construction represented 5,291 dwellings, but this was a decline of almost a fifth compared to Q3 2008. Separately, 8,720 dwellings were completed in the third quarter, a decline of -8.8%.

The planning and building control authorities granted -9.6% less building permits in Q3 2009 than in Q3 2008. With construction orders down by over a quarter, banks continue to be careful in lending money to builders for new projects, stated Václav Matyáš, president of the Czech Association of Building Entrepreneurs (SPS).

Sell a home in Spain in under a year, just!

Research by Idealista has revealed that it takes an average of 344 days to sell a property in Spain and unless the seller drops the price it could take even longer.

The situation in Barcelona and Madrid is marginally better as it takes 320 days to find a buyer in Madrid, but only 304 days in Barcelona. These two cities have the most liquid property markets in Spain.

The report pointed out that when the property market was at it peak in 2004 it would take only 86 days to sell a property in Madrid and a mere 76 days in Barcelona. Even 12 months ago, in late 2008, it only took 242 and 217 days respectively to sell a property.

Fernando Encinar, head of research at Idealista, said: “All those properties with asking prices beyond the reach of real demand were not included because they haven’t sold, and until their prices are reduced they won’t sell.”

Avila (in Castilla y Leon) is the province where it takes longest to sell a home (523 days), followed by Segovia, Castellon (Costa Azahar), Alicante (Costa Blanca), and Granada (Costa Tropical). Homes sell the quickest in Albacete (Castilla La Mancha) at just 222 days, followed by Pontevedra in Galicia (268 days) and Guipúzcoa in The Basque Country (283) days.

Australian house prices increase by +3.7% in Q3

According to figures released by Australian Property Monitors (APM), house prices in Australia increased nationally by +3.7% during the third quarter of 2009.

National house prices increased by +7.1% in the 12 months since September 2008 with Melbourne, Hobart and Darwin leading the way at +11.4%, +11.2% and +10.5% respectively, whilst Perth and Brisbane saw the lowest increases of just +1.7% and +2.1%.

Matthew Bell, APM economist, said: “The national housing market has continued to boom in the last three months, following a very strong June quarter, with quarterly house price growth at +3.7% - the highest rate in six years.

“Another quarter of improving employment results and share market increases of 20%, has meant that buyers are stepping into the oversold top end of the market to purchase properties at prices still below their highs in late 2007.”

The report stated that mortgage brokers had reported increases in enquiries from property investors, and according to the ABS, housing finance for investment purposes rose nearly +8% in August, and as a result investors are expected to return to the market in greater numbers in late 2009 and early 2010. However, investor enthusiasm may be tested if mortgage rates rise significantly as money markets have predicted, but strong rental yields and the prospect of future capital gains will entice many to enter the market.

Bell said: “While the explosive growth seen in the upper end of the market is expected to slow as prices reach and exceed their highs of 2007, moderate to strong growth is expected across the whole market for the remainder of 2009 and 2010. The question as to whether this growth can be sustained throughout 2010 depends on how quickly mortgage rates rise in the next six months.”

House price growth has been underpinned by record population growth and a significant short fall in new housing supply. Job market conditions have been improving, and renewed expectations that the unemployment rate is unlikely to exceed 7% mean that rising interest rates are now likely to be the biggest risk to house prices.

Investors owed $1.5m by Fiji resort

A Fiji Beach Resort & Spa run by Hilton has been revealed as owing $1.5m to 241 investors according to a receivership report.

The resort was developed by Neville Mahon of Greenlane in Auckland and received investment from a group of 141 New Zealanders, 52 Australians, 16 Americans, 30 people living in Fiji, one from Dubai and one from Canada. The resort continues to operate the 274 rooms, but the investors are owed a year's payments after a series of problems.

Grant Graham and Brendon Gibson of KordaMentha's (the receivers) said: "With no sums available the receivers are not in a position to make catch-up payments in relation to the pre-receivership period. The serious matter of outstanding villa-owner revenue is acknowledged and recognised,"

The report also revealed that a Fiji state authority owes the investors and two businesses in receivership $1.5 million.

Villa owners are believed to want to establish a new management structure as they are concerned that the Hilton is not trading to maximise their returns.

The Iraqi Government want foreign investors to own land

A new law has been introduced in Iraq which will allow foreigners to own land for residential property projects, with the regulation and application process also to be streamlined in an effort to encourage foreign investment.

The war-torn country is in need of millions of new housing units in the next few years but needs foreign investment in order to build them.

Previously, archaic regulations and too much bureaucracy had been putting off many potential investors, as the country’s real estate law only allowed foreign investors to lease land for a limited period of time but the Iraqi Government has now changes these laws and is now actively encouraging foreign investment.

Sami al-Araji, National Investment Commission chairman, said: ‘This is a huge achievement for everybody, the Parliament, the cabinet and the Iraqi people. This will remove many obstacles blocking the investment process in Iraq. Housing is a potentially huge growth industry.’

As well as millions of housing units for people living in the main cities in Iraq, there is also a need for housing near holy sites as they are visited by millions of pilgrims every year and where hotel accommodation is limited.

The new law must be approved by Iraq's presidential council, but it aims to speed up the process of applying for investment licenses and clarifies federal and provincial powers when dealing with investors.