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www.opp.org.uk | JULY & AUGUST 2012 www.opp.org.uk | XXXX 2012 What do you think?


Tell us what you think about the latest news and what you would like discussed by joining our LinkedIn group, tweeting us @oppnews, emailing john.howell@richmondgreengroup.com or writing us a good old-fashioned letter...


Murcia is pulling away from the ‘doom and gloom’ in Spain Dear Editor,


private sectors. The Paramount Theme Park, an over-€1 billion project, is set to create 22,600 jobs and an additional 3.6 million tourists for this emerging coastal region of Spain. Over the past few years there has been much negative speculation – but despite


this the land for the theme park has been purchased for more than €10 million, site infrastructure works are underway and the offi cial inauguration ceremony was held on May 31. Besides the Paramount Park, a new €1 billion airport in Corvera will be


Investors looking to benefi t from fi re sale property prices in Spain are closely watching the potential unravelling of the Euro. A question on many people’s minds is: what will be the real term eff ects of a Euro fall out on Spanish property? The fi rst thing to understand is that, although there may be a down-turn in a


country’s property market, within it there will be areas that retain value, areas that present opportunity and, most importantly, micro-markets of growth. Property is an end-user product and the market is governed by the simple supply and demand rule: the more people looking to stay work and live in an area, the higher the demand for property and the higher the value. Despite all the doom and gloom in Spain one particular region is defying all


odds and has recently been subject to wide spread media coverage. Earlier this year, along with only two other European destinations, Murcia was rated one of ‘The World’s Best Real Estate Markets of 2012’. The attractiveness of Murcia property comes from the value for money,


incredible fi nancing options and the capital growth potential it has to off er. At present, investors can buy a two bedroom apartment on a luxury golf resort from as little as €62,000 with up to 110% fi nance. The same apartments were selling off - plan for over €125,000 not so long ago. Murcia is enjoying a great deal of inward investment both from the public and


Best of the Blogs More foreign buyers investing in American real estate – foresight or folly? By Meg Handley at U.S. News & World Report


A Russian billionaire buys an $88 million New York City condo for his daughter. Realtors report working with more Brazilian clients in Miami. A Vietnamese investor scoops up an entire town in Wyoming.


As property values have fallen precipitously over the past several years


thanks to a catastrophic housing bust, foreign buyers are increasingly eyeing US real estate and snapping up properties in the nation’s hottest markets. While that might seem like fi nancial suicide to most Americans who have


lived through one of the nation’s worst housing crises, the picture looks a whole lot diff erent to international buyers, many of whom hail from rising economic powerhouses abroad. As their home countries have fl ourished, so too has the affl uence among some residents. “The world is getting a lot richer,” says Jed Smith, managing director of


quantitative research at the National Association of Realtors. “The market has picked up in the last couple of years and that’s being driven by the relative affl uence of a number of countries who are doing pretty well.” With the extra competition now coming from abroad, will domestic buyers be pushed out or priced out by foreign buyers? At this point it’s not likely, says Luis Vergara, director at fi nancial services fi rm


operational by the end of this year and a €3 billion AVE high-speed rail link is set for completion in the year 2014. There are no returns without risk but with the combination of current pricing, available fi nancing terms and more than €6 billion of inward investment, Murcia is a sensible option. Now, going back to the original question: what eff ect would a Euro fall out have on a Spanish property investment made today? If this does happen, Spain is most likely to go back to their pre-Euro currency, the Peseta. Spain has been preparing for this for months now, so a signifi cant devaluation of the currency is unlikely. However, let’s look at the possibility of Spain experiencing a slump in the value of its new currency. There would be no immediate eff ect on house prices due to the ‘time lag’: i.e. the delay between the economic action and its consequence. As foreign currencies would now be worth more in Spain to, the demand for


Spanish properties, goods, holidays and so on would most likely increase. This would cause an upward movement in price in the long run. As a highly leveraged investor with minimal to nil capital outlay you wouldn’t be


exposed to the short-term currency fl uctuations as your sterling or dollar savings would still be safe in your bank account – while perhaps you would benefi t from increased demand for rental lets of your property. The window to the future is the mirror of history and the current situation we are in is nothing new. Property cycles have been experienced since the inception of private property ownership. With a little bit of vision you can play the current economic climate to your


advantage, acquiring strategic property with strong growth potential with minimal risk. Zeeshan Shah, Chief Executive, Prestige Brokers


Mission Capital Advisors. Although he’s seen an uptick in sales to foreign buyers in his home market of New York City, overall international buyers still make up a relatively small percentage of total sales. Foreign nationals spent about $82.5 billion in the 12-month period ending


in March 2012 – up about 24% from the $66 billion they spent the year before – but only 9% of all residential real estate sales come from international buyers, according to a recent report from the National Association.


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