31 January 2006

Property in Croatia

British investors have lagged behind other Europeans, such as the Germans and the Italians, in recognising the potential of Croatia, once part of Yugoslavia. Some areas such as Dubrovnik and Hvar Island have already experienced strong capital growth and this is expected to spread along the largely unexploited Dalmatian coastline, stretching from Slovenia in the north down to Montenegro, which includes more than a thousand islands.

Croatia property prices are rising fast, having more than doubled in the past three years. But, they are lower than the South of France and if you buy now in the right location, any profit you make will be tax-free after three years. When competitive mortgage deals become available after EU admission in 2008/9, property values are likely to rocket.

After decades in the doldrums, the property market in Zagreb, the beautiful and often forgotten Croatian capital, is moving up after the arrival of Oracle, Siemens, Te-Com and Coca-Cola. Demand exceeds supply for accommodation in the centre and prices are rising, although they are still lower than in Prague or Budapest. About E120,000 to E130,000 buys a new two to three-bedroom flat in Maksimir, a leafy residential area in the north east of the city with a large park, a short tram ride from the centre. Rental yield would be around 7-7.5%.

Now the big European tour operators are moving along the coast. With a shortage of tourist accommodation in many areas, buy-to-let investors from Britain are snapping up low-cost holiday homes along one of the most dramatic shorelines in Europe, often before a brick has been laid. Prices in Dubrovnik – a medieval gem with its sun-baked city walls, lapped by an azure blue sea – have gained up to 20% in the past year. A new one-bedroom flat overlooking the city’s yacht marina will to set you back from E174,000 (£120,000) for two bedrooms.

This growth rate looks set to continue, as demand for tourist beds is forecast to increase by an average of 6-9% a year. Access is a key factor, with more new flights to Croatia’s airports at Zagreb, Split, Dubrovnik, Pula, Zadar and Brac from a growing number of European destinations. A new coastal motorway from Zagreb to Split will reach Dubrovnik by 2008.

There are no plans to introduce budget airlines routes into Croatia. But Ryanair flies to Trieste, a 45-minute drive from Istria in the north of Croatia, close to the border with Italy and Slovenia. The region – dubbed the new Tuscany – has an undulating green hinterland and an unspoiled coastline, ripe for development, which is being explored by a growing band of foreign property buyers.

The Istrian Peninsula, jutting out into the Adriatic, enjoys an Italian influence with Venetian ports, including Rivinj and Porec, and a Roman amphitheatre in Pula. But prices are much lower than on the Italian Riviera. You can pick up a new three-bedroom det-ached house, with its own pool and garden, on a small private estate, a short distance inland from the sea, for 220,000 Euros. Air-conditioned flats on the coast start at E65,000 Euros.

27 January 2006

Property hotspots in Mallorca

This year’s property hotspots in Mallorca will be business premises and middle-priced holiday homes.

The shortage of business premises in Palma and other large cities means the price of these properties is set to rocket. Meanwhile in the domestic market, the luxurious end of the market will stay stable whilst the mid-range, more-affordable property market will be buoyant.

There is no sign of the foreign investors drying up as industry insiders claim that currently 700,000 Europeans are thinking about buying a second home somewhere in the south Mediterranean region.

Mallorca is set to stay as one of the most sought-after destinations for holiday homes due to its safety, culture and cheap airline connections. However, a different type of investor is heading this way.

Instead of large holiday homes on a golf course, purchasers are seeking smaller boltholes near airports for that long weekend away from base.

The mid-range property priced around 400,000 euros is set to become the most sought after type of second home in the sun.

24 January 2006

Property development in the French Alps

It is not every ski resort that has a large, colourful Picasso sculpture of a woman's head in the middle of its village, with other modernist pieces by the likes of Bury, Vasarely and Dubuffet scattered around. Nor can other resorts claim to be the architectural vision of one of the Bauhaus movement's most famous sons, Marcel Breuer, designer of the Unesco building in Paris and the Wassily chair.

But Flaine considers itself to be a bit different. This perspective is likely to be put to the test in the next few years as the Grand Massif resort sets out on an expansion programme to get back on the map after years in the doldrums.

Leading this initiative is Canadian developer Intrawest, which has announced that Flaine will be the site of its second project in Europe, following the success of its village of Arc 1950 at Les Arcs, which is virtually sold out and nearing completion.

Intrawest has shaken up the standard of holiday property development in the French Alps. Its cosy four-star apartments with spacious floorplans, colourful soft furnishings and high-specification interiors contrast with the cramped, spartan accommodation skiers must too often accept as the norm. At Arc 1950 they have been snapped up mainly by UK buyers. Now, it is planning to repeat the formula at Flaine, a resort that has a style of its own, but has fallen out of fashion in the past 15 years.

More here.

23 January 2006

Australia holiday home property

The holiday home property wave has broken but, for the time being at least, living on millionaires' row means there won't be a wipeout.

While other beach house sales flounder, luxury home markets in locations such as the Gold Coast, Portsea and Margaret River have powered into 2006.

In those markets, multi-million-dollar houses and apartments are selling strongly while other agents complain of their worst lead up to Christmas in a decade.

On the Gold Coast, PRDnationwide agent Doug Green sold three luxury homes for more than $13 million in less than three weeks in the lead up to Christmas.

More here.

17 January 2006

Free holiday homes in France

Second home-seekers who desire an overseas property in France can effectively get a holiday home for free following the introduction of a new type of mortgage.
The emergence of interest-only leaseback mortgages is expected to help the French property market compete with Bulgaria and Turkey where overseas property investors have been turning of late.

It means the borrower of an interest-only leaseback mortgage can purchase a leaseback property in France, cover the cost of their mortgage and still use the property for a few weeks a year themselves as a holiday home, according to property investment firm Assetz.

The French leaseback scheme was introduced by the French government 20 years ago to increase tourism in areas such as the Cote D'Azur, the Alps and Paris by increasing the amount of quality holiday accommodation.

Under the scheme, investors purchase a freehold property and lease it back to a pre-selected property management company earning guaranteed rental income for at least nine years.

Investors are typically allowed to use their property for a set number of weeks each year for a holiday – although that depends on the development.

They also benefit from a 16.4 per cent discount on the property price with the French government providing a VAT cash back upon completion.

Until recently mortgage lenders in France would only offer interest-only mortgages on non-leaseback properties but this has now changed.

Investors can now purchase a property with a projected rental yield of five per cent on an interest-only mortgage of about three per cent of the property price. After mortgage costs, an investor would therefore receive two per cent of the property price per annum.

More here.

13 January 2006

Record prices for property in Noosa, Australia

A one bedroom apartment at Noosa’s premium Netanya beachfront resort has been sold to a Melbourne business man for $2.3 million, the highest price ever paid for a one bedroom apartment in Noosa. The same property sold in 1996 for $520,000.

A Roma businessman and property owner bought a similar, 75 square metre beachfront apartment on the top floor of the Hastings Street resort last year for $1.79 million, setting the value of the property at more than $23,866 per square metre.

The new price represents a per square metre value of $31,500.

Real estate agent Klaus Tschech from Noosa Richardson and Wrench, said Noosa beachfront property has grown on average by 20% year on year for the past 15 years.

"Noosa only has 650 metres of beachfront property so real estate in this premium location will always be a good performer," he said.

Netanya Noosa's tariff for a one bedroom penthouse terrace apartment for the 2006 high season is $4,375 per week.

The Netanya Noosa beachfront resort complex was purchased by private owners eleven years ago. Each apartment was converted to strata title and sold off to individual owners for personal use and holiday letting.

Don Farrow, CEO and Chairman of Netanya Management Group in Noosa, was a partner in the original purchase of the property and has spent the last decade developing the property and building a management team to market the property to high end holiday makers.

The result is a property which has maintained an elite appeal for owners and guests which have included Jana Wendt and Michael Gudinski.

Mr Farrow credits the success of the resort to his core staff of 16, which swells to 32 in peak periods.

“Fifty per cent of our core staff have been with us for more than a decade and together we have created a culture in which the guest and owner experience is paramount,” he said.

The onsite management of the resort enables the apartments to function like a hotel for owners and holiday makers, with daily servicing, room service, mini bar, PABX facilities and extended check in hours.

“Some time ago a few of our apartment owners opted for off site management by external real estate agents in Noosa,” Mr Farrow said.
“That was short lived when those guests were unable to access after hours check-in, daily room servicing, room service or access to the PABX offered through Netanya’s management service.”

All 48 apartments in the Netanya Noosa hotel resort have now been managed for many years through the Netanya Group. The Netanya Management Group owns many of the common areas in the complex such as the reception area, open plan offices, conference facilities (50 theatre style), laundry, PABX system, lunch room and court yard.

Holiday property management used to be the domain of husband and wife operators seeking a seachange to escape from the city.

Sick of urban life and seeking a lifestyle in a tourist destination, thousands of couples and families have traditionally signed up to manage holiday properties over the years, to fund a new life in a more appealing environment.

But the business of management rights has changed dramatically since its fledgling start in Queensland in the 1950s, with many predicting the end of ‘mum and dad’ style management.

Don Farrow says many husband and wife teams seeking an escape from traditional employment quickly become disillusioned with managing holiday properties.

More here.

09 January 2006

Romania property investment

People wanting to make maximum returns on a property investment abroad should head to Romania, it has been claimed.

House prices in the country are expected to soar four-fold over the next 10 years as Romania's economy benefits from its entry into the European Union in 2007, according to Channel 4 programme A Place In The Sun.

It has put Romania at the top of its list of the 20 best places in Europe to make money on property in the coming decade.

It said house prices in the country currently average just £17,000, but predicts £100,000 invested now could be worth £514,000 in 10 years time due to the impact EU membership is expected to have on the property market.

Anybody who bought property before the country joined the EU was likely to be in a very strong position as hoards of investors were expected from 2007, it added.

Poland, not the most obvious destination to buy a second property abroad, was named second on the list.

But the programme expects £100,000 invested there now to be worth £493,000 in 10 years time as the current transformation Poland is undergoing continues, with increased levels of investment from foreign firms creating more jobs and stoking the property market.

More here.