JUNE 2010 |
www.opp.org.uk
Developer profi le
INDUSTRY Market news | 05 Discounts fi re up a Mexican revival By STEPHEN HARRIS
PARTS of Mexico are reporting their fi rst increase in sales in over a year as distressed sellers help prices to reach market bottom. Some agents have seen as much as a
100% increase in sales compared to this time last year, although admittedly from a low base. But recovery is in its earliest stages
and even the most optimistic agents don’t expect to see 2010 prices improve. “We’ve sold 49 units this year, but
people are holding on to their money tighter and sales are still very slow across the board,” said Heidi Wosak (pictured), CEO of Century 21 Sun & Sand in Puerto Penasco, northwest Mexico. Large amounts of available stock have hampered recovery and developers have started taking product off the market.
Heidi Wosak says Mexican agents saw sales increase 100% year-on-year in Q1.
But sellers have also begun to lower their expectations, said Wosak. “Discounts as much as 50% have been
the big driving factor. Premium condos on the beach have gone from $400,000 to less than $200,000 because the owners need the money.”
Big price cuts haven’t drawn many
pure investors as they have in other markets. “You can get as much as a 50% discount but it has a different dynamic from somewhere like Florida,” said Stephen Drechsler, executive VP at consultancy Panorama.
Wealthy buyers back in Portugal
FOREIGN buyers are returning to Portugal as an infl ux of wealthy clients starts to replace last year’s distressed bargain hunters. Agents and developers have seen
customer budgets shift upwards as enquiries and in some cases sales rise on the back of economic recovery. One agent, Infi nito Real, has seen
the average agreed sale price increase by almost 50% from €185,000 this time last year to €276,000.
Confi dent clients “What we’ve seen is a much more confi dent and educated client who has realised the potential for investment is ripe now,” said managing director, Stephen Anderson (pictured).
“And that achieving what was
perhaps a little out of reach before has now become quite easily achievable. A popular product this year has been a fi ve-star resort on the beach in the Western Algarve – this would have been out of reach until this year for
many.” And although buyers still want to secure a discounted deal, they have also begun to think more about their own enjoyment and rental income, he added. Portuguese developers have generally been very reluctant to lower prices through the downturn and investors have often been frustrated with the lack of distressed property. Helen Smith, Portugal coordinator
for agent Compass Amazing Resorts, said: “People have now begun to realise Portugal doesn’t have the same discounts as Spain and they need to spend more to get what they want.” Portuguese house prices for the fi rst
Prices up 50% says Stephen Anderson MUMBAI MARKET OVERHEATS
RESIDENTIAL development markets in India are overheating as buyers refuse to pay infl ated amounts, according to Knight Frank. Mumbai in particular has been aff ected and sales have dropped as much as 50% after six months of aggressive pricing. Land enquiries are up but residential demand is down says Knight Frank.
quarter were up 0.91% year-on-year, according to Global Property Guide.
CHINA LUXURY TAX
CHINA is considering a new or higher tax on luxury residential real estate developments in a bid to calm down rapidly escalating prices. Press reports in China say that the new tax will probably be aimed at those buying multiple properties and/ or luxury real estate in selected cities where price growth is deemed to be out of hand.
“The speculative part of the market
has disappeared and people are really only buying for use. You do see some investors in the big cities but not in the vacation and resort markets.” Those areas that have seen improvements have tried to attract a wider client base: Canadians and Mexicans as well as Americans, and different types of lifestyle buyers. “Puerto Vallarta where we sell is
unique in Mexico in that it’s not just a resort but a planned community and we get lots of different kinds of vacation goers,” said Marilyn Newman at Prudential California Realty. “We’re seeing more younger buyers as well as retirees and it’s good for families.” But the big problem remains fi nancial insecurity for American buyers and prices generally aren’t expected to rise until at least 2011.
Italy’s up
UK BUYERS are continuing their return to portal Rightmove, with Italian hotspots seeing the biggest jump in searches. Overseas enquiries on the website
were up 73% year-on-year in April 2010 and approaching 2008 levels. Almost 60% of locations saw more interest from property buyers. Italy has benefi ted most, seeing its
market share jump 20% as it became the 4th most popular country on the site – pushing Portugal and Australia down as it climbed from sixth place last month. Sicily saw the biggest jump within
Rightmove’s Italian locations, recording a 115% increase in searches in April. Sardinia, Lazio and Campania also saw rises of up to 30%.
OZ HOUSING CRISIS
AUSTRALIA’S housing shortage is getting worse, with the gap between supply and demand up nearly 100% in the past year. The country needs to grow its current rate of house-building by more than 30% over the next 20 years just to keep pace with demand, according to a report from the National Housing Supply Council.
INDUSTRY
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