30 November 2005

Investing in real estate

For an increasing number of consumers, property investment is widely regarded as being an integral part of their pension portfolio.

Property behaves differently to both equities and bonds and provides the classic diversifier - helping to create a balanced spread of investments. In addition, after the disastrous performance of many mainstream pension funds in recent years, many investors feel more confident investing in property - an asset they actually feel they understand.

But - and it is a big but - for most investors the problem is that individual properties are generally far too expensive. For somebody looking for a small level of exposure to the property sector, direct investment doesn't always suit their needs.

A potential solution to this problem has been discovered in the shape of the proposed UK Real Estate Investment Trust (REIT). Put simply, a REIT is a collective investment through which investors are able to purchase a stake in a large property portfolio without actually owning the bricks and mortar outright. Whilst this structure is new to the UK, it already exists in many parts of the world, most noticeably in the US and Australia.

Over 65 property market

New research from Brewin Dolphin Wealth Management reveals there are now some 280,000 people over the age of 65 who each have assets of £500,000 or more.

Collectively, these half-millionaires are worth a staggering £239.7bn. And they own around 9.34% of the UK personal net wealth.

Younger people may be saddled with crippling university and credit card debts, struggling to get on the first rung of the housing ladder, and swimming against the tide when it comes to keeping their head above the financial water.

But for many parents and grandparents, who have not only reaped the benefits of Britain's economic boom since the end of the Second World War, but been a part of the welfare state with its free health care and old-age pensions, life in retirement is proving their just reward for years of toil.

As independent financial adviser Kim Addavide of AYP Financial Limited, says, 'This is the generation of savers who didn't change jobs and had good company pension schemes from which they are getting their full service, and who have seen the value of their property rise dramatically.

More here.

22 November 2005

Confidence in property

Confidence in the housing market has picked up so far in November, with sellers raising asking prices by 0.8%, figures showed today.

According to property website Rightmove, the average asking price of a property in England and Wales rose by £1,507 to £197,855. The rising confidence among sellers meant they hoped to attract 4% more for their property than at the same time last year. In contrast, the year-on-year increase in prices in October was just 1.5%. In greater London, asking prices rose by 3.5% during the four weeks to mi-November, reaching £291,927. This is almost double the average asking price in the north of England which, following a 0.9% increase in November, stood at £150,052.

Despite price rises in November and October, Rightmove said asking prices were at the same level as in April this year.
It said sellers had responded to the slowdown seen earlier this year when sales reached their lowest level since 1996 and adjusted their expectations accordingly.

"The property market's key foundation has returned," said Miles Shipside, Rightmove's commercial director. "Confidence is back leaving pessimists out in the cold.
"The combination of sustainable prices and a fall in interest rates has raised buyers' and sellers' confidence to strike a deal".

More here.

Hong Kong property investment

Macquarie Goodman Group plans to launch a Hong Kong real estate investment vehicle in 2006, chairman David Clarke told the industrial property group's annual meeting.

Clarke said the Macquarie Bank managed group's growing Asian business will help it deliver distributions of 0.275 aud per security in the June 2006 fiscal year up from last year's 0.2396 aud distribution.

'Over the past year we have increased our profile in Asia and made acquisitions that will deliver continued earnings growth for our security holders,' he said.

He said the group will continue to pursue third party funds management opportunities and to develop its business in Asia.

During fiscal 2005 Clarke said Macquarie Goodman Group invested 973 mln aud in acquisitions, about a quarter of which represented it first exposure in Hong Kong. The group now owns Hong Kong properties worth more than 585 mln aud.

Forbes reports.

18 November 2005

Property lures buyers

Charming Tuscan villas lure with views of lush olive groves and ancient hill towns. Beachfront retreats in the Caribbean call like modern sirens. While travelling abroad, who among us hasn't been tempted to splurge on an exotic vacation home?

But international real estate is more than an impulse buy – or, it should be if you're smart.

Along with the appeal of owning a second (or third, or fourth) home, there are pragmatic reasons for buying abroad. It can be a way to diversify an investment portfolio or provide rental income. Buy in Dubai, and you automatically receive a visa that permits you to do business there. Some international purchases made a decade ago would be considered very wise today.

More here.

Property outlook index falls in China

China's property outlook index fell for the third month in a row in October, government data showed Thursday, as the impact of policy measures to rein in the strong growth of the sector was felt.

The outlook index, which covers property prices and investment trends, fell to 101.10 points in October, down 0.47 points from September, the National Bureau of Statistics said in a statement on its Web site.

That would appear to be the lowest level in about four years. A government official had previously said that the June index of 101.65 was the lowest since the second half of 2001. The statistics office declined to comment on the data Thursday.

The index has trended lower for most of the year. It fell 3.84 points from the same month last year, the bureau said.

The government, worried that surging property prices nationwide could lead to a bubble, has taken a raft of measures in recent months to cool the sector, including taxing the sale of houses sold shortly after purchase and raising mortgage rates.

More here.

15 November 2005

Property As Pension

People should only consider investing their pension in property if they have a fund worth at least £600,000, a pension consultant is warning.

New rules come into force on April 6 next year which will enable individuals to invest their pension in residential property for the first time.

Some commentators have predicted the change will lead to a boom in the buy-to-let market.

Others think people will try to take advantage of the rule by putting a holiday home or even their main house into their pension fund.

More on SIPP's here.

Cashing in on property

Intense media coverage of the opportunities to be had in residential property post A-Day, creating fears of potential mis-selling. Residential property seems to be the single most exciting opportunity encompassed in the forthcoming A-day changes, if you believe the press coverage.
Much has been written over recent months about the many opportunities for those with buy-to-let properties or holiday homes to shelter these investments in their retirement plans.
The only problem with this type of coverage is that it is making residential property in Sipps seem like an easy prospect and the bears in this market already fear the potential mis-selling that could arise.
The bulls for residential property in Sipps believe it offers interesting opportunities, shelters some property from CGT and that it will attract a lot more interest to pension planning full stop.
The bears proclaim that only a tiny minority of people will ever be able to take advantage of such flexible investment rules and believe investors should be wary of such schemes.

14 November 2005

Overseas property investment

A static housing market has done nothing to dent the nation’s love of property investment; it has just turned its attention to opportunities available in overseas markets. Because, according to Barclays Bank, the number of people who own an overseas property is set to double to 4.4m, virtually 10 per cent of the adult population.

Barclays estimated that 2.2m currently own overseas properties and another 2.2m say they definitely going to buy an overseas property in the future. A staggering 37 per cent of respondents to its survey (which equates to an almost unbelievable additional 16m people) said that they were considering a purchase abroad.

More here.

Bulgaria as Property Investment Hotspot

Fourteen leading Bulgarian construction entrepreneurs have established the Bulgaria Est8s Club, aiming to promote Bulgaria as attractive property investment destination.

The Bulgaria Est8s Club program includes presenting information on the condition of Bulgaria's real estate market, participation of Bulgarian companies at major property exhibitions, maintaining good relations with the Bulgarian embassies abroad, establishing adequate communication with foreign investors, agents, promoters.

More here.

Other posts about Bulgaria:

10 November 2005

Middle East Worldwide Property Show

International Property Exhibition Company, DSL Exhibitions, is set to bring the world to your their with their 28th Middle East Worldwide Property Show in Abu Dhabi (November 14th -15th 2005) and Dubai (November 18th -20th 2005), where the possibilities for choosing the home of your dreams are endless and the chance of winning an amazing prize is a reality.

Visitors to both the Abu Dhabi and Dubai Middle East Worldwide Property Shows will have the opportunity to be entered into draws for a number of 'trip of a lifetime' prizes, from a luxurious 7 day trip from From the Our Home Abroad to one of their stunning Spanish Villas, to a 7 night stay at the sumptuous Zimbali Lodge in South Africa courtesy of IFA Hotels & Resorts, or a week in Thailand at one of The Lersuang Group's first class hotels. There is also the chance to win a plot of land worth Dhs130,000 in the UK from Sinclair Deville and the opportunity to pick up a free copy of My Virtual Home software, which is worth over Dhs 900, from Peregian Springs in Australia.

The exhibition includes such projects as Le Raffine's lavish apartments in Bangkok, Thailand, which feature a terrace pool in every apartment to the Kadomo Island resort in Fiji where Fiji Island Investment give you your own piece of paradise as they showcase the 78 Bures (villas) which are being built in harmony with the local beauty.

More here.

07 November 2005

Surge in take-up of Sipps

Standard Life, which will present its flotation plans at a one-day roadshow in Edinburgh this week, is expected to report a continued surge in sales of self-invested personal pension (Sipp) business, up to more than £1.1bn since the launch less than a year ago.

The continued popularity of Sipps comes despite warnings about the way some are being sold, and Standard Life has called for greater regulation.

While third-quarter figures due out on Wednesday will be a boost to the life and pensions division, the health care market continues to be competitive. The acquisition of First Assist in August is unlikely to have had any effect on sales, but it will mean a rise in market share from fourth to third.

Standard Life Investments is enjoying its strongest period after recent mandate wins. It has record funds under management for both internal money and external contracts. At the interim results in August, overall group assets under management were £117bn, of which SLI is managing £107bn. This figure will have grown again due to the rise in the stock markets.

More here.

Malta property market

If you plan to invest in property in Malta and want to go for a long-term investment the new taxation system in place should suit you better. At least this is what the government claims announcing the new law.
The fast quick-buck investment return is now something from the past in Malta as it was apparently producing a bubble which could have burst dangerously, in contrast to solid returns built up over longish periods of time. Prices had started levelling off this year. So let’s hope this budget is a first small step of many that are needed to stabilise this economy and the property market particularly, wish the locals.
Who is going to tell the overseas investors though?

03 November 2005

Switzerland property laws to change

The government says it wants to liberalise Switzerland's property laws, to make it easier for foreigners to buy homes in the country.

The cabinet called on parliament on Wednesday to scrap the so-called Lex Koller legislation, designed to limit the number of foreign residents owning property in the country.

In a statement, the cabinet said the Swiss property legislation was outdated, and scrapping it would boost the economy.

The proposal is now subject to a consultation process. Interested parties and stakeholders have four months to comment on the suggested change.

More here.

02 November 2005

Property in France

A collection of articles on property investment in France:

Beware of foreign property deals

Free holiday homes in France

Property in France

Moving abroad?

The Spanish property ladder

Whilst a whole cluster of newcomers are having their first foray into the overseas property market, bagging bargains everywhere from Bulgaria to Brazil, some pioneers in the more established markets such as France and Spain are already on the second or third rung of their holiday home property ladder. Two old-hands at the Spanish property market, Dan Eustance and John Fromson, share their latest upgrades…

Dan 39, and his partner Sally, from Richmond in Surrey, have enjoyed many a holiday in their apartment in La Manga on the Costa Calida during the past six years. However, when little Mia, now 20 months old, arrived on the scene, Dan started to think about upgrading to a large villa to accommodate the growing family. Dan begins, “The only place really considered on the Costa Calida was La Manga as it is a world famous, exclusive resort with outstanding facilities. We’ve made a sound investment here and are certain that the resort will continue to shine. Other developments on the Costa Calida really didn’t hold the same appeal for us and by-and-large life outside the resort gates isn’t that vibrant, so for us comprehensive on-site facilities were a must.”

Like all discerning 21st century house hunters, Dan was scouring the internet for investment opportunities when he came across Carrington Estates, a real estate agency specializing in the sale of plots on the Costa del Sol. His original ideas began to change and it soon became clear that actually the Costa del Sol, with its extensive infrastructure, could be the perfect place for the next family home, and furthermore, he could build the villa himself and save plenty of euros as a result. A few weeks later Dan took himself to the Costa del Sol to find out more.

Read more.

Bulgaria's property sales rocket

This year is expected to be the most successful yet for real estate sales on the Bulgaria property market.
For the first nine months of 2005 208 000 real estate sales were concluded. The number was 196 000 for the entire of 2004. Most real estate agencies experience increased interest toward their offers at the end of the year. Thus, sales are expected to intensify further. If the same transaction rate is maintained, the number of concluded deals will exceed 250 000 in December.

More than 100 000 property sales were finalised for the first time in 1996. Unfortunately a period of economic crisis and hyper-inflation followed, which did not allow for a fast recovery of the market. An all-time low occurred in 1998 when the number of deals was only 65 179.

Read more

Other posts about Bulgaria: