MARCH 2011 |
www.opp.org.uk
DISTRESSED
an estate agent who has strong relationships with developers and, also, the banks. This will give you direct access to distressed sales i.e. a property where the original buyers have not been able to complete their purchase, thereby losing their deposit for another purchaser to take advantage of. Bank repossessions, where the bank is looking to reclaim some of their loss, are much harder to come across as this is a long and diffi cult process for the banks and there is not a huge supply of these properties in Portugal at the moment.” “There is an important choice for the investor client, however, as there
are some properties heavily discounted and offered below the market value, but are situated in less popular locations. Although they are still a good deal, the turnaround time and profi t element will be impinged on.”
“It is far more sensible to buy a reasonably priced property in a proven and highly rentable area, such as Albufeira, Lagos or Vilamoura, where the resale will be easier. Furthermore, with a popular area, the rental income should cover any running expenses during ownership. It’s even more important that these factors are taken into account when, as is the case currently, special deals are being
Grupo Banco Mare Nostrum (BMN.)
Total assets: 71,000 Total loan book: 52,500 Exposure to real estate loans: 11,554 Of which bad and risky loans: 4,635 Percentage of Spanish banking system: 2.3% Cost value of repossessed assets: 2,949 Book value of repossessed assets: 2,044 Provision for losses: 30.7%
BBK(includes Cajasur, one of two cajas taken over by Bank of Spain.)
Total assets: Not given Total loan book: Not given Exposure to real estate loans: 3,574 Of which bad and risky loans: 2,100 Percentage of Spanish banking system: 1.6% Cost value of repossessed assets: 1,152 Book value of repossessed assets: 694 Provision for losses: 39.7%
offered. No money down offers may grab the attention of the investor but, with no real exit strategy or the ability to let the property in the interim, they are not as good as may fi rst appear.” In the once-fl ourishing city of Dubai, the total value of real estate deals in Dubai plummeted by a massive 65% in 2010 as new supply squeezed an already fl ooded market. This is a city that has gone from oil boom bonanza to busted fl ush in the blink of an eye. And to make matters worse, the gap between supply and demand is expected to widen further in Dubai in 2011. Sales are slowing. The number of deals fell by more than half in the third quarter of 2010, according to the latest report from consultants Jones Lang LaSalle. Less than 600 property transactions were completed, down from more than 1,200 in the same period in 2009. The market is likely to see a
further 25,500 units come online in 2011, analysts said, with no major project cancellations expected over the next year. “Dubai’s residential market will continue to experience a situation of oversupply and prices are not expected to recover before 2012,” says JLL. And apartments will make up 79% of this unwanted stock. JLL reckons that the way forward will depend on the lenders as much as anything. Lending will remain a key
EMEA | 45
factor in Dubai’s recovery says the agency. Its new report suggests that the residential market will experience improved lending facilities in 2011 as more banks inject liquidity into the mortgage market.
And it will be governments as much as banks that lead the way, encouraging new thinking in all sorts of ways, and in all sorts of countries.
The Spanish government, for instance, is planning an international conference in London to promote “quality” distressed properties. It will then go on a roadshow tour around northern Europe.
Spanish housing secretary Beatriz Corredor recently fi red the opening salvo in a growing government campaign to reassure frightened buyers and to promise new planning laws that will end the confusion over properties deemed to have been illegally built. “Come here calmly, and trust in the system that we have and the transparency we provide,” she told the UK press. “There is a very attractive offer on the table here, with prices signifi cantly lower than two years ago, and you will certainly fi nd what you are looking for.”
Corredor is trying to make things sound calm and under control, especially in the UK. In recent years, Britons have bought one third of all Spanish properties sold to foreigners.
Banca Civica (merger of Navarra, Canarias, Burgos
and Cajasol savings banks.)
Total assets: 77,174 Total loan book: 52,000 Exposure to real estate loans: 9,187 Of which bad and risky loans: 3,368 Percentage of Spanish banking system: 2.5% Cost value of repossessed assets: 2,049 Book value of repossessed assets: 1,418 Provision for losses: 30.8%
Have a plan | and stick to it says Infi nito Real managing director Stephen Anderson
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