Economic turmoil – where now?

By Camilla Kaas Stock

Since the beginning of the credit crunch, you haven't been able to open a newspaper without the headlines "recession", "global downturn" screaming at you. The worries about job security and negative equity, has resulted in people putting a padlock on their purse-string and in turn this fear has exacerbated the recession, sucking the whole world economy into a maelstrom.

But remember that what goes up must come down and vice versa. And this is the light at the end of the tunnel. Because at some point people will start buying, banks will start lending again, and all those property speculators who been sitting at the side line waiting to pounce at the best bargains are probably already sharpening their claws. Here are some media clippings: 

 

 

Sunday, 12. April 2009

Following the worsening of the international economic crisis, housing demand significantly dropped in Italy, but Italians continue to see property as a good medium-term investment, according to a new report.

The Italian property market is now suffering the consequences of the global economic crisis, but Italians still perceive housing as a reasonably safe investment and the sector is expected to recover in 2010, the report from economic intelligence company Nomisma indicates.

Analysts found that residential property sale volumes decreased by 15.1% in 2008. However, the drop was particularly marked in the last quarter of the year, after the deepening of the financial crisis eroded consumers' confidence, it says.

 

Wednesday, 4 March 2009

Property overseas: Outside the Eurozone

There are still bargains abroad to be found, explains Laura Latham

House prices may be dropping across Europe, but the strength of the euro has put British buyers off destinations such as Spain and France. However, there are countries where you can still find good-value property.
"You get more for your money in Turkey, when compared to Spain or popular Greek resorts," says Janet Schofield of the Turkish specialists Nicholas Homes. "Prices haven't gone up lately, and there are definitely good deals, such as two-bedroom apartments from around £40,000 and villas with pools for around £140,000."
Schofield says there's also increasing demand for rental property as holidaymakers shun the Eurozone for cheaper destinations, which benefits owners who want to let their homes

 

Property prices fall across Europe

By Daniel Thomas, Property Correspondent

Published: March 6 2009 02:00 | Last updated: March 6 2009 02:00

Homeowners across Europe saw the value of their properties slide last year as demand for new homes plummeted because of the impact of the credit crisis on mortgage supply in the major economies.

House prices were falling in every European market by the end of 2008 when adjusted for inflation, according to the Royal Institution of Chartered Surveyors, although a few such as Greece and the Netherlands were still slightly positive for the year as a whole after initial growth.

Core markets are set to suffer "marked downturns" in 2009, according to he report, written by Professor Michael Ball, who blames significant falls in mortgage lending, coupled with the economic downtur.

 

As It Falters, Eastern Europe Raises Risks
By NELSON D. SCHWARTZ
Published: February 23, 2009

PARIS - Since the fall of the Berlin Wall, the countries of Eastern Europe have emerged as critical allies of the United States in the region, embracing American-style capitalism and borrowing heavily from Western European banks to finance their rise.
Now the bill is coming due.
The development boom that turned Poland, Hungary and other former Soviet satellites into some of Europe's hottest markets is on the verge of going bust, raising worrisome new risks for the global financial system that may ricochet back to the United States.

 

 

 

UK commercial property market expected to provide 'golden opportunity' for investors
Thursday, 28 May 2009

UK commercial market provides good opportunity
The commercial property market in the UK will begin to recover later this year but it is the prime sector that is likely to flourish before the secondary market, according to a new report.
There could be a 'golden opportunity' for excellent risk-adjusted returns for property investors in selective areas, says the report by Cordea Savills, the international property fund manager.
It predicts that by the end of 2009 UK capital values will have fallen around 50% from their 2007 peak but this short term distress is creating a window of opportunity for investors to purchase high-quality commercial property, with secure income, at attractive prices.
For property investors with Euros or US dollars entering the market during this decline could offer even greater opportunities with a 20% retreat for Sterling giving a 70% peak to trough fall in capital values according to market indices.
It also points out that a two-tier market for commercial property is emerging in the UK. This is reflected by an increasing demand for prime property and continued malaise in the secondary market.
Some of the best investments are likely to be prime assets leased to high quality tenants such as government department or supermarkets for over 10 years until first break. These could realise around 7.5% per annum and are deemed low risk.
The report rejects the argument that the UK economy is set to experience a protracted period of turmoil, akin to Japan's lost decade and suggests that the timely introduction of substantial fiscal stimulus packages early in the crisis will be reflected in a swifter economic recovery than other European markets, which have been slower and less decisive in their response.
'The UK is one of Europe's core property markets, accounting for 29% of its investible market size. As well as its scale, it is highly transparent and offers an unparalleled quality of lease structure and income stream,' said George Tindley, Director of Investment at Cordea Savills.
'Recent short term changes in pricing can only help to increase the relative attractions of investing in this market over the medium to long term, particularly considering the deteriorating prospects of the Eurozone,' he added.
'There has been a noticeable change in sentiment towards property in recent weeks which has been caused by a number of factors, not least diminishing fears of systemic risk to the UK economy; the prospect of a return to GDP growth in early 2010; improved (although still limited) debt availability, and value having been arrived at for the prime end of the market.
This is a golden opportunity for investors to exploit the power of their equity by cherry-picking assets demonstrating strong covenants, established locations and long lease length at a discount to historic market levels,' he concluded.

 

 

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