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APRIL 2011 |www.opp.org.uk


NEWS German market is booming By Amit Katwala


GERMANY’s residential sector is on the up. The latest Price Index for Owner Occupied Housing from vdp (the Association of German Pfandbrief Banks) found that the prices of single- family condos in Germany continued to rise at the end of last year, and were up 0.6% year-on-year. Unexpected positive economic growth and the low interest rate levels fuelled this rise. New construction projects are appearing all the time, according to a new survey from BulwiendaGesa and WGF, as the country’s economy continues to recover and its unemployment rate improves. The general manager of the vdp, Jens


Tolckmitt, said “against the background of the favourable development on the labour market, we expect owner- occupied dwellings to post a further moderate rise in prices. Seen as a whole, the German housing market has been free from exaggerations for many years and will continue to develop in a stable manner. One of the reasons for this is that the real estate and mortgage markets in Germany are geared towards long-term


INDUSTRY | 09


NEWS IN BRIEF Sarkozy cuts boost France


Germany | has put past economic turmoil behind it and home values are growing


stability and a key pillar of this culture of stability is the long-term fi xed-rate mortgage, which has a term of many years and is the predominant mortgage loan form in Germany.” In the residential segment, the highest


rent increases for 2010 occurred in Berlin at 6% up year-on-years. Hamburg and Munich both saw rents rise 5% and Düsseldorf experienced a 3% increase. The investment volume of residential


portfolio sales increased from €3.3bn in 2009 to €3.8bn in 2010. Hotel properties are doing particularly well as the number of tourist and business


Quake effects to last


NEW ZEALAND’s property market was showing signs of stability in February, according to a property valuer, but the impact of the recent earthquake in Christchurch will have a lasting effect. Quotable Value’s residential house


price index fell 1.7% year-on-year in February after 1.5% decline in January. Research director Jonno Ingerson said: “Overall the property market remains subdued with lower than normal numbers of listings and sales being the main signs of buyer and seller caution. However, there are pockets of the market that remain active, particularly in the main centres.” The market is currently 5.6% below its


peak in late 2007, according to Reuters. Activity in Christchurch is expected to suffer, following the second major earthquake in fi ve months. Ingerson said: “The much more widespread damage


caused by the February quake will again cause sales activity to slow for several weeks or even months.” As many as 10,000 houses may have


been abandoned as a result of the quake, according to offi cial estimates. The fi nancial climate makes it a good


time to invest in a residential property in the country, according to some. This is because infl ation, which is currently at 4%, is expected to rise as costs for the services required for rebuilding Christchurch experience go up due to increased demand.


travellers increases. Occupancy rates are up and, in


2010, the transaction volume in the hotel industry nearly doubled from the previous year to reach €800m. The proportion of overseas investors


in the German hotel market tripled last year to 63%, up from 21% in 2009. In Frankfurt, revenue per available


room increased by 20% year-on-year in 2010. The study showed that the economy and mid-range hotels, which have better price-to-performance ratios, are benefi ting in particular from the increase in occupancy rates.


Russ-cue!


BULGARIA’s stricken real estate sector is looking to Russian holiday- home buyers to revitalise sales, according to a report in AFP. Russians with money are replacing the British property buyers who have been cutting their losses and re-selling holiday homes at half price, according to the Bulgarian section chief of the International Real Estate Federation FIABCI, Antonia Wirt. FIABCI president-elect Alex Romanenko said: “In the past three or four years, over 200,000 Russians have bought property in Bulgaria, worth over a billion dollars.” He added: “Bulgaria occupies a dominant position in the real estate market in the Balkans, which has a great potential.” There are close cultural ties between


New Zealand | quake shakes prices


Russia and Bulgaria, which was a favoured travel destination for Russians during the communist era.


FRENCH mortgage fi rm Athena Mortgages believes that tax breaks introduced by President Sarkozy are helping to boost house sales. President Sarkozy’s ‘Loi Scellier’ tax break scheme means French buyers purchasing new build can off set 25% of the value against their income tax liability, which has encouraged those in the higher tax brackets to stay in the property market despite the downturn. “Low interest rates combined with excellent tax breaks have created a buying frenzy in France which has meant that many investors from Britain had been missing out on the prime units,” says Athena director John Busby.


Quality standard for UK


THE National Approved Lettings Scheme is planning to launch a “kitemark” quality standard scheme for lettings agents in the UK. The scheme, which is yet to be named, aims to help lettings agents reassure tenants that their deposits and rents are protected should they go bust. Nick Cooper, managing director of Northwood and chair of the committee, said: “The new kitemark will ensure consumers know exactly what to look for when they approach an agent. The aim is simple: no kitemark, no Client Money Protection if the agent goes bust. The move follows a number of UK cases in which letting agencies have been alleged of mishandling client funds.


Luxury wanted in cities


AGENTS in the USA are reporting an increase in enquiries and sales for luxury homes in business cities, as stock market prices rebound and brokers feel more secure. With Wall Street stock prices now almost double their 2009 lows, property sales are picking up rapidly in New York where a total of 70 Manhattan listings above $4 million went into contract last month … the highest number since before the crash in January 2007. According to real estate data provider DataQuick Information Systems, sales of million-dollar homes rose in all 20 major metropolitan areas across the country last year, with the highest increase in San Jose, California, where sales rose 27.4%.


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