JUNE 2011 |
www.opp.org.uk
BUSINESS
FUNDING ANALYSIS | 33
Romania over recent years has managed to continue to develop its infrastructure despite the global economic downturn and offers good potential for medium term property investors. After accession to the EU in 2007, the real estate market in Romania has been supported strongly by EU funding which has enabled it to develop more roads, hospitals and schools. These funds have also helped to create more jobs which in turn have brought more property buyers and renters to Romania. In the past few years property prices have risen by 25%. However, Romanian property is still at levels 20% to 30% lower than other Eastern European countries. Mortgages for foreign property buyers in Romania only returned to the market place at the beginning of this year and are currently only available on limited terms. Interest rates start from 5.75% (variable) and mortgage lending is available from 25,000 Euros up to a maximum of 75% of the property’s value or purchase price. Turkey, like Romania, also has a
positive outlook as it continues to go from strength to strength with one of the most stable economies in Europe. Last year
GDP grew by 8.6% and property sales to foreigners grew by 40% according to a report released by GYODER. Data provided by the Central Bank of Turkey last month also supports these positive growth signals by revealing that the Turkish mortgage market is currently growing at a rate of 20% per annum. Mortgages are currently available to foreign investors in Turkey up to 75% of the property’s purchase price with interest rates starting from 4.30% variable and
“Mortgages are currently available to foreign investors in Turkey at up to 75% of purchase price”
7.2% fi xed. Mortgage lending starts from 23,000 Euros and is currently available for investment and holiday home purchases, like for like remortgages and equity release.
David Kerns, Private Client Dealing
Manager at currency specialist Moneycorp, commented:
The British pound continues to trade on the weak side against most currencies with the exception being the US dollar which fi nds itself with
Top 10 Countries By Highest Loan To Value (LTV) Country & Position
1 Poland - Portugal 2 France 3 Spain - India - Italy
4 Romania - USA
- Turkey - Ireland
LTV Available
100% 100% 85% 80% 80% 80% 75% 75% 75% 75%
Monthly chart change
- -
1 1 1 1 1 1 1 3
3.89% 2.30% 4.30% 3.29% 2.09% 3.87% 4.55%
very few friends. And whilst most developed nations are now looking to raise their interest rates to help fi ght against rising infl ation, driven in part by surging commodity prices, the USA continues to favour an accommodative policy for the time being at least, until their economy shows clear signs of continual strength confi rmed by falling unemployment numbers. The UK’s Monetary Policy Committee also maintains a very similar stance, with
interest rates still at their historical low level of just 0.5% although infl ationary pressures run at a full 2% above the level targeted by the Bank of England. The fragile state of the UK’s economy continues to remain the driving concern of the MPC’s members, with no change in policy in sight until the latter part of 2011. The pound continues to suffer as global investors look for the most favourable yield advantages.
Sailing | into faster waters as Turkish mortgage lending surges by 20% per annum
Leading Mortgage Rates By Most Popular Countries
9.50% 5.96% 3.77%
Source: OMF
USA SPAIN
TURKEY ITALY
FRANCE
PORTUGAL IRELAND
SOUTH AFRICA CARIBBEAN POLAND
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