Asian Property Popular with Wealthy Investors

A number of property investors with cash to spend are looking to increase their wealth by purchasing real estate in the Asian property markets.
While a number of traditional locations around the world, such as London and New York, are expected to remain popular, many buyers are "starting to spread their wings" by looking at different areas, according to BuyAssociation.

"We have certainly seen quite a bit of growth in the far-eastern and Asian markets. There seems to be buyers with cash to spend and they are looking at their overseas property markets as being a good place to invest," Paul Collins, editor at the website, said.
Indeed, recent research from Knight Frank has revealed that almost 40 per cent of global luxury residential property markets saw values climb during 2010, with six of the top ten biggest increases seen in Asia.
Overall, the property consultancy's research showed that luxury property price growth was highest in Shanghai with a 21 per cent rise. Also performing strongly were London and New York, with increases of ten per cent and 13 per cent respectively.

Buyers becoming increasingly focused on a property's 'real' value

With capital growth currently suppressed and the investor focus switching to rental yields, buyers are scrutinising their buy-in price now more than ever, according to Propell National Valuers.
However 15 per cent of buyers still pay $10,000 above the real value of a property, Residex chief executive John Edwards told The Australian newspaper last week.
While Propell National Valuers national director Kel Spencer said 15 per cent sounds a bit high and "sensationalised", he also acknowledges that buyers are now increasingly turning to independent valuers and advisers for help to secure and negotiate the real value of a property.
"To determine the real value of a property it's important to analyse the comparable sales in a nearby location and derive land values and building values from that," he said.
Spencer said mortgagee auctions and deceased estates often sell on the day so those sales can even be a little reduced in price and are often ignored in valuations because they're not in ample supply nor typical of prices around.
Valuations generally remain valid for 90 days for market accuracy purposes.
WBP Property valuations manager Brendan Smith said buyers must do their homework, particularly in changing markets.
He said buyers must first become familiar with the market.
"It's not just about turning up to a property… go look at other properties; attend some auctions in the previous weeks," said Smith.

Spain ‘will not’ follow Portugal in seeking aid

European finance ministers do not expect Spain to follow in the footsteps of Portugal in seeking a financial bailout.
Spain is the latest eurozone country to come under pressure from financial markets in the past year, with Ireland, Greece and Portugal previously having to request monetary aid from the EU.
It stems from concerns surrounding a large budget deficit and a burst housing bubble in Spain.
To this end, the country has made progress in slashing its deficit, but unemployment remains high, at close to 20 per cent.
However, French finance minister Christine Lagarde dismissed concerns about the country’s fiscal strains, with the Wall Street Journal quoting her as saying that "Spain isn’t a problem".
The news is likely to be welcomed by individuals looking to buy real estate in the country, with their currently a high level of distressed properties available.
Market concerns have eased in recent weeks with investors gradually growing more confident that Spain can clean up its beleaguered savings banks.

Overseas buyers drive Turkish demand

An increase in the number of overseas buyers active in the Turkish property market has helped the sector to exceed growth expectations.
This is according to a recent report by the Association of Real Estate Investment Companies, which found that the market is returning to strength following the recent economic troubles, Hurriyet reports
Indeed, between 2006 and 2008, property sales to foreign nationals stood at $3 billion (£1.8 billion). In 2009, the figure fell by $1.8 billion, but has now rebounded up once again to $2.5 billion.
"Real estate sales to foreign nationals rose by 40 per cent, reached $2.5 billion. Foreigners’ interest in and appetite for Turkish property continues to increase. If the reciprocity problem is solved, we think the figure may double," Is?k Gokkaya, the chairman of organisation, said.
Mr Gokkaya added that the country’s construction sector expanded by 18 per cent over the course of last year, with new developments springing up around Turkey.
Meanwhile, Nick Mar, chief executive officer at Homesgofast.com, recently claimed that Turkey is one of the best foreign property markets at present, along with Spain, Brazil and Malaysia.

Investor confidence returning

Homebuyers and investors are slowly coming back to the market, with mortgage sales during March bouncing back from the record lows of January and February, according to Australian Finance Group.
However, the company says the figures are still lower than a year ago. The $2.51 billion of home loans processed in March is up by 22 per cent on the February figure of $2.05 billion, but still 8.9 per cent lower than the $2.76 billion arranged in March 2010.
New South Wales recorded exactly the same figure for mortgage sales in March 2011 as March 2010. South Australia had a slight softening (-2.7 per cent) with greater differences recorded for Western Australia (-10.9 per cent), Victoria (-11.7 per cent) and Queensland (-15.4 per cent).
New South Wales also showed the highest level of investor activity, with 40.2 per cent of all new home loans being processed for investors – well above the national average of 34.7 per cent.
Australian Finance Group’s general manager of sales and operations Mark Hewitt says buyer confidence is slowly returning.
“The Reserve Bank of Australia holding off further rate rises has given some sense of normality and while the lender wars haven’t encouraged many people to switch, at least there’s now a feeling that lenders are trying to be competitive,” he says.
“In our view, last month’s banning of exit fees will have little, if any, positive effect on the market in the short term, and will certainly hurt non-major lenders going forward.”

Slow growth predicted for Australian housing market

House prices in Australia are forecast to grow by just 0.6 per cent over the course of this year, a survey by National Australia Bank has said.
According to the research, access to credit was the "biggest impediment" stopping people from buying homes and pushing prices up.
Most respondents to the survey expected the strongest growth in values to occur in Western Australia (up 1.1 per cent) and New South Wales and the ACT (up 0.9 per cent). The weakest area is expected to be South Australia and the Northern Territory, with respondents expecting a 0.2 per cent decline in home prices over the next year.
However, while prices are expected to remain fairly stable, investors and agents are more optimistic about the rental market.
They noted that the year will see higher rents, with survey respondents predicting an average 3.5 per cent increase in residential rents.
Western Australia, New South Wales and the ACT were again expected to see the biggest rent rises of 4.6 and 4.3 per cent respectively, while Queensland rents are only tipped to rise 2.5 per cent.

Brazil is a ‘hot market’ at present

Interest in Brazilian property could be set to rise following the comments of one expert.
Nick Marr, chief executive officer at Homesgofast.com, has heaped praise on the South American market noting that it should be considered an "exciting prospect" by investors.
Mr Marr said that there are a number of "great exit opportunities" currently available in Brazil as a result of the amount of potential local and international buyers active in the market.
The expert also suggested that Turkey, the Canary Islands and Malaysia are also top property investment destinations at present.
"Prices [in Brazil] are still low compared to Europe and with all the exciting things happening to the country – from Obama’s visit, oil finds, the World Cup and the Olympics – it’s proving irresistible," Mr Marr added.
According to the latest Global House Price Index by Knight Frank, residential property values across South America climbed by 3.8 per cent in 2010, ahead of the global performance of 2.8 per cent.

Portugal property prices set for a 20% fall

Economic turmoil in Portugal could lead to property prices in the country falling a further 20 per cent by the end of 2012.
This is according to foreign exchange bureau Caxton FX, which noted that after the country failed to pass a strict austerity package, an EU and IMF bailout looks all but certain.
As a direct result of this, the firm suggested that property in Portugal was likely to fall in value.
Caxton FX explained that there has been a steady increase in the number of Brits buying property in the European country in the past year, adding that recent economic events mean that buyers will be able to negotiate more on asking prices.
Rupert Lee-Browne, the firm’s chief executive officer, said: "Eurozone interest rates are likely to rise, increasing the expense of homeowner loans. As loan defaults increase, and the number of repossessions rises, I expect the price of Portuguese property to fall significantly."

Average UK property values fall, Land Registry claims

The latest figures have revealed that average house prices in the UK fell during February, although there are a number of regional differences.
According to statistics released by the Land Registry, the value of a residential property in England and Wales has dropped by 1.7 per cent.
However, house prices in London were up 3.2 per cent in the year and in the east of England values went up by one per cent.
The biggest fall in prices over the year was seen in the north-east of England, at 7.1 per cent. The region also had the biggest month-on-month decline, dropping by four per cent in February.
London had the biggest annual rise in prices, although properties in the capital did drop in value by 0.5 per cent in February month-on-month.
The IPD UK Residential Index recently claimed that property in England offered investors double-digit annual returns last year.
Standing at 10.4 per cent, the index shows that individuals with real estate in the UK enjoyed capital growth of 7.4 per cent and income growth of 2.8 per cent in 2010.

Malaysian property prices to rise in 2011

Residential values in parts of Malaysia are expected to rise in 2011, albeit at a slower pace than in previous years.
This is according to real estate services company CH Williams Tahir & Wong, which noted that prices in the Klang Valley, Penang and Johor will remain on their upward trend.
The company’s managing director Foo Gee Jen said this year’s growth in the prime areas is projected to be between ten and 15 per cent, an article by Property Report revealed.
With prices expected to rise in the coming years, property in Malaysia offers some excellent opportunities for foreign buyers and investors.
Investor speculation in the Malaysian market has been triggered by fears of property bubble forming as a result of the government’s decision to introduce a maximum lending limit of 70 per cent for third house financing.
"The government announcement to lower the cap on the loan-to-value ratio for third house financing gave a bit of psychological effect on people," Mr Jen said.