Annual property price inflation in Spain fell from 12% in the first quarter of 2006 to 10.8% during the second quarter of this year, according to the Spanish Ministry of Housing.
Annual Spanish property inflation rates have fallen every quarter since the end of December 2004, when the rate of property inflation was 17.2%.
Antonia Trujillo, Spain’s Minister for Housing, said: “The government is on the right path, as it is now clear that a soft landing for the property market is under way.”
Nick Freeston, International Manager at Chesterton International, comments: “It is interesting to note that according to the government’s figures in 2005, some of the highest growth regions in Spain were Aragon, Andalucia and Galicia. and in 2006 Mallorca is proving to be our hottest market with growth levels anticipated to be in double figures."
Riga leads the way - Knight Frank
The residential property market in Riga, Latvia is appreciating faster then anywhere else in the world, according to Knight Frank's Global House Price Index.
The index reveals that average property prices in the Latvian capital appreciated by 45% during the second quarter of 2006. Bulgaria, came in second place (up 20%), while Denmark (up 15.4%) was in third.
Liam Bailey, Knight Frank's Head of Residential Research, comments: "A levelling up situation is affecting all markets in the former Eastern Bloc - especially those which have joined the EU in recent years.
"Wage inflation, growing prosperity and access to less constrained mortgage finance have all contributed to rapidly rising prices.
"The same process has been seen in Bulgaria - with a classic combination of catch-up, speculation, second home interest and slow but sustained economic growth underpinning prices."
It is reported that much of the money piling into the Latvian and Bulgarian property markets is coming from British and Irish investors.
€26bn approved for Polish infrastructure
A budget of around €26bn has been reserved for transport and environmental investments in Poland. At the beginning of August the government gave the go-ahead for the “Infrastructure and Environment” programme, the largest of the regional development programmes to be supported by the European Union for the 2007-2013 period.
The budget prepared by the Ministry of Regional Development breaks down as follows: €21.2bn from the EU, €3.7bn from the Polish public sector and approx. €1bn (in the form of private contributions) from Polish companies.
According to Poland’s minister for regional development, Grazyna Gesicka, €15.1bn will be spent on modernising the country’s transport network (mainly road links between Poland’s urban centres and Warsaw, the country’s main east-west railway line as well as railway links on the Gdansk-Katowice-Wroclaw lines).
In addition, the sum of €4.8bn has been earmarked for environmental projects, among others, water-sewage management and waste utilisation, anti-flooding protection and assistance for firms in implementing environmental norms.
The “Infrastructure and Environment” programme will be one of a number of regional development programmes to be carried out at the national level after 2007. The other projects in the pipeline include the following: Innovative Economy (with approx. €7bn in financial aid from the EU), Human Capital (€8.1bn), a relief programme for Eastern Poland (€2.2bn), the European territorial co-operation programme (€576m) and technical aid for administrative units responsible for the deployment of EU aid for Poland (€217m).
Apart from national-level programmes, a further 16 regional programmes will also obtain funding from the EU budget – totalling €16bn.
Highway construction in Bulgaria to begin in October
The construction of Liulin Highway in Bulgaria should begin in October, according to the director of the national roads agency Vesselin Georgiev. By the end of September, the European Commission will select a consultant for the project and Georgiev has already signed a contract for the construction of the highway with the Turkish consortium Mapa Cengiz. The European Commission selected the company from a choice of five applicants.
The project budget totals €148m and more than €137m have been allocated for the construction works. The project would be executed in three years, during which time a 20km road section will need to be completed.
Liulin Highway is part of the European transport corridor 4, connecting Vidin to Koulata through Sofia. The construction of Liulin Highway is the first project Mapa Cengiz would carry out in Bulgaria. In Turkey, the company has completed more than 20 road projects worth around €620m.
Funding agreed to alleviate traffic in Belgrade
Rehabilitation of the Gazela Bridge, which is the main bridge into the city of Belgrade, Serbia, should commence early next year. The €290m investment will also pay for the construction of the remaining sections of the Belgrade bypass, which is required to alleviate traffic congestion in the city, and to rehabilitate the approach roads to the bridge.
Pending final a final review in December 2006, Serbian Roads, a separate company responsible for the construction, maintenance and management of roads in the Republic of Serbia, will contribute €112m, the European Bank of Redevelopment (EBRD) will loan €80m, as will the European Investment Bank (EIB). Technical co-operation funds and financing from the City of Belgrade will provide the balance.
Cypriot property prices continue to rise
Average residential property prices rose by 0.3% in July 2006 and 6.8% since the beginning of 2006, according to the latest BuySell Home Price Index. The average Cypriot home price now stands at CYP 91,677 (£107,922).
Worldwide News
Rate increase won't have a big impact on South African property market
The South African Reserve Bank's recent decision to raise interest rates by 0.5% to 11.5% is expected to have a minimal effect on the country's property market.
Tony Ketcher, managing director of Seeff Properties Randburg says: “Given increases in producer price inflation and the oil price, the hike in interest rates is not unexpected, and in itself is not a bad thing.”
Ketcher further comments that the rate increase is 'not enough to frighten buyers off.'
Samuel Seeff, CEO of the Seeff Group, said: “The issue here is confidence and sentiment in the market, which hinges on the direction that Governor Mboweni gives. Can we expect further rate increases or is this, ideally, the most we are facing? Perceptions of the answer to this will impact on where we see the market going and related activity. In summary, I think that perceptions will be that buyers will expect sellers to come down in price and will wait, or will offer lower prices. However, sellers who can manage the increase in payments will hang on to their properties without dropping their prices. In other words, we are not actually going to see the decrease in prices that many might be expecting to happen. If this trend does eventually start to happen, it will take a while to filter through.”
Israel to promote vacate-and-build projects as conflict takes its toll
The Israeli Ministry of Housing and Construction estimates that at least 10,000 homes, effecting 40,000 residents, have been damaged as a result of the military conflict in the north of Israel.
The Ministry of Finance now wants the government companies Amidar Ltd., Amigur Ltd., and Shikmona - Government and Municipal Company for Housing Rehabilitation to renovate the damaged homes in Haifa.
The vacate-and-build projects will reportedly take place in severely damaged areas in Nazareth, Kiryat Shmona, Maalot-Tarshiha and other towns.
Indian property market to rocket over next decade
Merrill Lynch forecasts that the Indian property sector will appreciate from $12bn in 2005 to $90bn by 2015. “ India is the most exciting real estate market in Asia,” says Michael Smith, head of Asian property investment banking at Goldman Sachs. “It’s one of the last major countries in Asia with an improving market.
“ India is one of the last few countries where there is primary demand for real estate rather than individuals trading up”, says Rajiv Sahney of New Vernon Advisory.
Rate hike affects respective property markets
The recent interest rate rise in Australia has had an instant impact on the country's housing market.
Reports suggest that sales slumped in Melbourne and Sydney, by 25% and 33% respectively, during the first two weeks of August.
Richard Movsessian of Century 21 Coastline Properties, located in Sydney said: "The number of people coming through has halved. There's absolutely nothing happening out there.
"They're (applicants) making offers, the client's accepting the offers, and then they're pulling out because they think prices are going to drop."
Only 49.6% of properties auctioned in Melbourne last weekend were sold, according to Australian Property Monitors.
In Sydney, the auction clearance rate was 44.7%, a fall of 6.6% on the success rate achieved the weekend prior.
