The residential rental property market in Manhattan tightened in April 2006.
The vacancy rate for apartments in the borough dropped 0.08% compared to March and now stands at 0.67%, according to a new report released by brokerage Citi Habitats.
Amongst the Manhattan neighbourhoods surveyed, the West Village, at 0.25%, had the lowest vacancy rate in April. Gramercy and Chelsea had the highest vacancy rate, with each at 1.11%.
Foreign investment fuels Romanian economy
According to a new report by Bank Austria Creditanstalt (BA-CA), Romania’s real GDP will grow by 5.6% this year, with a 5.5% increase estimated in 2007. This would be an increase on 2005, when the economy grew by 4.1%, according to data published by the National Institute of Statistics.
However, the BA-CA report estimates the inflation in Romania will be 7.5% this year and 6.2% in 2007. The Romanian National Bank has set a 5% target for consumption price increases for 2006, plus or minus 1%.
Foreign direct investment is expected to reach €8bn this year, which equates to 8.5% of the country’s GDP, mainly due to the privatisation of several major companies, but also due to heavy investment in the commercial property sector in the capital.
Bucharest is scheduled to have 14 new commercial centers by 2008 and office space available in the capital is growing by 50-60% a year. However, the sector should continue to grow for several more years as Class A office space available in Bucharest is just 250,000sqm, compared to 1m sqm in Prague, 1.1m sqm in Budapest and 1.5m sqm in Warsaw.
Rate of inflation to rise in Poland
The rate of inflation in Poland is likely to return to the central bank's target range of 1.5-3.5% during the first half of 2007, and hit the 2.5% target at the end of 2007, according to the its latest inflation projection, announced 26 April. Inflation should then remain on target to the end of 2008, which is the end of the projected period.
Poland needs to increase its rate of inflation, currently less than 1%, if it intends to join the Euro in 2008. The monetary policy council said last week that inflation is expected to rise to 0.5-2.0% by the fourth quarter of 2006. Inflation rises should be driven by rising production costs, a depreciating foreign exchange rate and increasing domestic demand. It will also be influenced by rising gas prices.
The report added that in the longer term, inflation rises in Poland will be limited by the high cost of imported goods.
Half of the capitals homes sold to non-Beijing residents
Over half of Beijing's top-end residential properties were sold to people located outside of the capital, including 13% overseas buyers, according to a new report compiled by the Chinese Academy of Social Sciences.
The report also revealed that around 52% of apartments and villas, which sold for an average of 11,467 yuan (£778) per square meter or more, were purchased by people from outside the capital.
The average price per square meter for homes in Beijing is currently 6,725 yuan (£456).
"With its special status as the nation's capital, Beijing has increasingly become home to people from other provinces and municipalities, as well as from abroad," the report said.
Only 38.4% of expensive houses sold in the capital last year went to Beijing residents.
The total amount of residential space sold last year in all price brackets amounted to 40.79 million square meters.
In contrast to the luxury end of the market, local residents bought nearly 60% of the 154,000 average-priced homes sold last year. While overseas buyers purchased just 2.2% the houses priced at the lower end of the residential property market.
The report predicted prices in the Chinese capital would continue to increase this year, following a rise of nearly 20 percent year-on-year in 2005.
South African buy-to-let property market softens
The buy-to-let market in South Africa appears to be weakening, according to FNB Homeloans.
The first national bank property barometer for the first quarter of 2006 reveals that many buy-to-let investors have not been realising their required returns to make their investment viable.
According to FNB Homeloans CEO Ed Grondel, some buy-to-let investors are opting to exit the rental market, resulting in less rental stock and this could potentially drive yields up again in the future.
Grondel says there is “definitely still a rental market” but at “reasonable rentals.”
One year ago, 25% of residential property buyers were buy-to-let investors, but now they represent only 16%. “There are fewer investors now who feel they can make a quick buck. They are not achieving attractive yields,” adds Grondel.
The report also shows that residential property price growth year-on-year has slowed to 14.5% in the first quarter of this year, compared with more than 30% just over one year ago.
Grondel reports: “If you’re not getting yield and much capital growth, it makes it less attractive to get into investment property.”
Sofia Airport expansion faces further delays
The number of flaws in the construction of a new terminal at Sofia Airport has reached a threatening number, officials from the Ministry of Transport and Communications said in April. The officials had the task of doing a full evaluation of progress in Sofia Airport’s modernization and most of the flaws were cracks in walls and floors and twisted surfaces and engineering pieces that did not match up. Such pieces did not allow any further work towards installing the necessary equipment, they said. The executor of the project is the Austrian company Strabag.
In February 2006, approximately 500sqm of a suspended ceiling in the airport fell down, leaving many questions about the quality of the construction works. Although no injuries were reported, the local media added to the price and time pressures by doubting how safe the airport will be for its future passengers.
According to the Ministry, at least three more months will be needed for the installation of the equipment and for the move from the old building to the new terminal.
The project, along with the in-progress construction of a new runway, was originally meant to cost €112m and be completed in 2004. But Strabag has asked for more money on several occasions, citing such problems as faulty geological research and the rising price of steel on the world market and the cost is now €210m. In November 2005, the company asked for another extension, this time for eight months.
Polish Government cuts housing construction plans in half
The Polish Government announced on 2 May 2006, that it is planning to cut its housing construction programme in half and build 1.5m new flats over the next eight years, compared to its original promise of 3m new apartments, which was made during last years general election campaign.
The Government stated that approximately 350,000 flats should be built as part of new draft legislation assisting families to purchase flats. A further 200,000 will be constructed by investors as homes available for rent; another 150,000 will be built in the form of social housing, while the remaining 800,000 will appear under the developer system.
A spokesperson for the Government also said that severe economic penalties will be imposed on both producers and users of construction materials that are not allowed under new law because they are deemed unsafe for use.
Kazimierz Kirejczyk at Reas Konsulting says: “In 2005, 114,000 new apartments were built in Poland and this level of construction is expected to rise steadily by about 10% a year to around 220,000/year by 2014.”
This would result in around 1.3m new apartments being built in Poland over the next eight years.
