UK PROPERTY PRICES FORECAST 2010

Well, the surge in British home prices in late 2009 caught most property analysts by surprise. Whoever coined the maxim “never trust an expert” knew what they were talking about which, rather awkwardly, makes them a bit of expert. Anyway, collectively, economists are at sixes and sevens about what might happen in 2010.

Credit where credit is due, property company, Assetz, correctly forecast a rise in prices in late 2009, and confidently forecasts a 5 per cent rise in 2010.

Among the most bearish, Savills forecasts a fall of -6.6 per cent this year (2010). Others like Cluttons are hedging their bets – at best, prices will rise 2 per cent it says, at worst, fall -5 per cent.

What everyone agrees upon is that “haves” will do better than “have nots” - bankers bonuses and foreign investment will buoy the top end of the market in prime central London and the Home Counties, while low wages, unemployment and indebtedness will depress prices lower down elsewhere.

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SWISS HOUSE PRICES RISING

Switzerland's housing market is one of the few in the world to have benefited from the economic turmoil of the past two years. While property prices in many countries have crashed, in Switzerland they have moved steadily upwards.

Andrew Hawkins, head of international at estate agency Chesterton Humberts, said an influx of rich foreign buyers, lured by the country's low taxes and stable governance, had supported Swiss property prices. Many Swiss had also repatriated their overseas wealth to buy Swiss property, he added.

"Switzerland is one of the few countries where property prices have risen in the past year, with an average increase of 4 per cent, according to the Swiss National Bank," Hawkins said. "With recent economic difficulties and proposed fiscal legislation change in many countries, Switzerland once more is seen as a real port in a storm."

Income tax rates vary between Switzerland's 26 cantons, but are usually below 30 per cent, according to website Switzerland.isyours.com. Most people don't have to pay capital gains tax and few cantons levy inheritance tax.

Multimillion-Swiss franc homes are most in demand. According to a survey by Wealth Bulletin, Via Suvretta, in the Swiss ski resort of St Moritz, was the only street on its list of The Top Ten Most Expensive Streets of the World where prices rose in the 12 months to July this year. They increased by 18 per cent to an average of US$45,000 per square metre. Via Suvretta is sixth on the list.

Many foreign buyers were former London-based finance workers, said Sergio Martinez, general manager of estate agency Aylesford International's Geneva office. Britain's £30,000 levy on non-domiciled foreigners and increased taxes for high earners were driving them to Switzerland.

"We have had 1,500 people move from the UK to Switzerland over the past year, including Greeks, Canadians and other nationalities as well as Britons," he said.

Most foreigners were taking up residence in or around Zurich, which is Switzerland's financial centre, Geneva and Montreux, Martinez said.

At some developments most buyers are foreign. Seven out of nine apartment owners at Schooren, a scheme built by Swiss developer Peach on the shores of Lake Zurich, are non-Swiss.

Hedge funds are moving into Zurich and its environs from Britain, Germany and other locations, because of Switzerland's low taxes.

According to Jeremy Rollason, managing director of estate agency Savills Alpine Homes, one-fifth of Switzerland's 7.59 million population are non-Swiss nationals taking advantage of its low personal taxes or working in associated businesses such as banking and hedge fund management.

Finance sector expansion is helping Switzerland's economy. Economists at UBS bank forecast Switzerland will emerge from recession during the fourth quarter and that its economy will grow by 1.7 per cent next year.

Thomas Wolfensberger, partner at Peach, said prospects for the Swiss housing market were rosy.

"The general market is a lot more stable," he said, "We don't have the problems of Spain, the US or the UK. We had no bubble. We assume that it [property prices] will continue with a slight increase each year."

Hawkins said new measures next year to allow each canton to set its own property ownership laws, instead of the federal government, would speed up the home-buying process, making Switzerland more attractive to foreign buyers.

The government is keeping a lid on the number of homes foreigners can buy in some tourist areas so that they don't become ghost towns for parts of the year. "In Verbier, they stopped foreigners from buying there because too many holiday homes were left empty for so much of the year. They would use them for two weeks and then leave," Martinez said.

At Villeneuve, 10 kilometres from Montreux, Aylesford is marketing a four-bedroom house that can be bought by foreigners for 2.75 million Swiss francs. The house is 200 square metres in size, with a 1,000-square-metre garden, swimming pool and garage.

On the shores of Lake Zurich, Peach is building Peninsula Beach House, which has 15 apartments in a four-storey block at prices starting from 2.35 million Swiss francs for a one-bedroom home. Residents have access to a communal spa, swimming pool, squash court and a 3,000-square-metre lakeside garden.

In the ski resort of Nendaz, Savills Alpine Homes is marketing 40 leaseback holiday homes at the Pracondu II community, with prices starting at 237,000 Swiss francs. Three leaseback packages are offered by property management company Alpvision, including a "skier" option that provides the owner with a 4.1 per cent gross return guaranteed for 15 years and six weeks use of the property each year.


SWITZERLAND HOME BUYERS GUIDE

Restrictions on second-home ownership in Switzerland are tight. In some of the 26 cantons, foreigners cannot buy or invest in holiday homes. In others, they can buy only certain types of property.

In Geneva, where restrictions are tightest, foreigners can only buy a home if they work in the city.

Non-resident, non-Swiss people could buy property most easily in tourist zones that had their own special rules on home ownership, said Sergio Martinez, general manager of Aylesford International's Geneva office.

Even so, restrictions still apply in these tourist zones, which are largely mountain ski resorts or lakeside destinations such as Montreux. A foreigner cannot own a property of more than 200 square metres on a plot bigger than 1,000 square metres.

Normally, foreigners must live in a property for at least six months, sometimes a year, before they could let it out to tenants, Martinez added.

Properties with the least restrictions are leaseback. These are usually chalets and apartments in ski resorts that a purchaser buys from a developer and leases to a property management company in return for a guaranteed rate of return over a set number of years.

The owner is allowed to stay at a leaseback property for an agreed number of weeks each year. The property management company lets it out for the remainder of the 12 months. Net rates of return for investors at new leaseback schemes are less than 3 per cent usually.

The federal government sets a quota each year for the number of wealthy, non-working foreigners allowed to buy homes in Switzerland and who will make it their primary residence.

European Union nationals can get a permit relatively easily, but it is more difficult for non-EU nationals.

BRITISH COUNTRY HOUSE PRICES RECOVER

Country house prices rose for the first time in two years in the third quarter of 2009 analysts reveal. According to Knight Frank, prices increased by 1 per cent nationally for country homes valued at GBP500,000 or more, between July and September. Buying activity was strongest in the Home Counties as London's mini-boom rippled out into the countryside.

Andrew Shirley, head of rural research at estate agency, Knight Frank, said prices have risen 3 per cent in the Home Counties since March 2008. This compares with a modest 0.3 per cent rise in the Midlands and falls of 0.1 per cent in the south west and 5.3 per cent in the north and Scotland over the same period.

City of London finance workers and overseas investors have been venturing out of the British capital's property market into the countryside since last spring.

“You can see the affects of the increases in London filtering out to the Home Counties and then spreading out more generally to the rest of the country,” Shirley said, “More overseas buyers are buying in the posh enclaves of Hampshire and Surrey.”

Prices were rising most strongly for multi-million pound homes, including manor houses, he said. Buyers of these properties paid mostly in cash, so were less troubled by the lack of mortgages which continued to pull the lower end of the property market down, he added.

Many buyers stayed away during the 2008 downturn, but now this pent-up demand was being unleashed on the market he said.

“People who have waited a year, but now have to move for family reasons or other reasons, see now is a good time to get back into the market, because mortgage rates are low, prices are a bit lower,” he said, “that bounce in demand is pushing prices up.”

Jonathan Bramwell, head of country at buyer agency, Prime Purchase, said British expatriates relocating from Hong Kong were buying homes for retirement or close to schools for their children. A country house in the Home Counties had been sold to a Chinese buyer, a sign that the much expected influx of mainland investors had started, he said.

Mr Bramwell said prospects for the country house market were uncertain.

“There is a general election coming up, so the market will go into limbo,” he said, “A Conservative government will be elected and some say this can only be good news for us.”

He advised buyers to hire a British-based solicitor, because they would run a money laundering check on them, which would improve their credibility with sellers. He also recommended buyers get expert advice when choosing a property, so they would know its true value.

Country houses on the market through Knight Frank include Malverleys, a GBP12 million home in Hampshire which comes with parkland, walled garden, swimming pool and tennis courts. The company is also marketing Ashenden, a Grade II listed Georgian house in Kent with 95 acres of land, on offer for GBP4.35 million.

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BRITISH BUYERS BOOST LONDON PROPERTY PRICES

A strong recovery in the prime central London housing market over the past seven months has taken even the most optimistic observers by the surprise. Today, prices are 8 per cent higher in the British capital's most des res areas than in March 2009, figures from estate agency Knight Frank shows.

This rise has been helped by a 2.1 per cent increase in October the company's latest research reveals.

Following six months of strong overseas demand, British buyers came back in large numbers in October.

Liam Bailey, head of residential research at Knight Frank, said values had risen most strongly in the prime central London districts of Kensington, Chelsea and Notting Hill - up 10 per cent since March.

Prices rises have rippled out to other parts of London, including prime areas of Richmond and Islington.

“Prices have done much better than people expected, because there isn't much stock in the market and buyers have come back, because they've felt confident, thinking that London's economy is beginning to turn round,” Mr Bailey said, “The weak pound has encouraged overseas buyers to come back into the market place and the feeling that prices were over-discounted at March this year.”

Mr Bailey said two-thirds of buyers of GBP5 million-plus homes were British, in October, up from two-fifths in the preceding three months. British demand was driven up by the return of City of London buyers to the market he said. City bonuses are being paid again and the stock market has risen in value by 50 per cent since March 2009.

Wealthy foreigners have flocked to London since the spring when prices were 50 per cent below their late 2007 peak in US dollar terms. Buyers include the first mainland Chinese to invest in London's property market.

“European, Middle East and even American buyers are very prominent,” Bailey said, “Hong Kong buyers tend to be more noticeable among investment purchasers, and we've seen, for the first time, mainland Chinese purchases in London.”

He said Chinese buyers wanted property either as an investment or as a place for their children to stay while studying in Britain.

He said a continued lack of supply coupled with strong overseas interest would support prices over the next twelve months. After a quiet period in the market during the autumn, he said prices may edge up 5 per cent in 2010.

“The lack of properties available to buy in the market means it is going to feel quite subdued overt next few months,” he said, “we will have to wait for (next) spring when we are hoping to get more properties back into the market.”

After forecasting a recovery in the prime central London market last spring, Camilla Dell, managing director of buyer agency, Black Brick, is uncertain it can be sustained. Much of the increase in buying activity during the spring and summer was fuelled by the release of pent-up demand from cash-rich Britons living in rented accommodation who wanted a home of their own, she said.

“We are slightly surprised that the numbers are what they are, that we have had such big price growth” she said, “We are hesitant to say this signals a recovery. If we see a lot more supply coming onto the market then we won't see this level of growth continue.”

She considered the national property market may suffer over the next year or so if the economy worsened, but that prime central London's housing sector may be less affected.

“In second quarter of 2010, unemployment is expected to peak at 3 million, so we could see price falls,” she said, “But London is a different animal to the rest of the UK. It will always attract international investors and buyers.”

Ms Dell advised buyers not to delay making a purchase in the expectation that prices might fall again.

“If you can find the right property at a good price then it is worth doing,” she said, “Buyers become too obsessed with price. Buying property in London ought to be seen as a long term thing, because it has a proven track record of attracting international investment.

London's biggest private landlord, Bruce Ritchie, chief executive of Residential Land, which owns 1000 homes in the British capital, is confident London's best addresses will ride out any economic turbulence. He expected investment returns to rise over the next year or two, especially for the best quality homes.

"For a yielding asset the path is only upwards from its current lows,” he said.

Big houses on sale include, 23 Cadogan Place, a GBP26 million city mansion marketed by Savills. This Knightsbridge property has five bedrooms, cinema room, swimming pool, staff accommodation and four terraces.

Islington's emerging prime market was lifted by the official opening of Highbury Square on September 24th. The site, the former Highbury stadium of Arsenal Football Club, was redesigned as 650 apartments and penthouses, and will be completed later this year. Eighty flats remain unsold with prices for a two bedroom penthouse starting at GBP995,000. Sales agents, Savills.

In Paultons Square, Chelsea, a four bedroom, two bathroom period townhouse with several reception rooms, home cinema and garden is on the market through Knight Frank for GBP7.25 million.

At the Barbican in the City of London, former commercial premises have been converted into Frobisher Crescent, a set of 69 apartments, with a three bed home costing GBP1.875 million.

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HOPE FOR MOROCCAN PROPERTY PRICES

Estate agents are excited by Moroccan government plans to increase public investment in the country's economy and infrastructure by 20 per cent in 2010. They hope this will help reverse a 25 per cent drop in property prices since 2008 which wiped out most of the 40 per cent gains made in the five years before the downturn.

Foreign buyers are prevalent in parts of the country like the medina in Marrakech where half of purchasers come from overseas, mainly Britain and France. Renovated medina riads cost from £300,000.

Big overseas hoteliers and developers developing leisure communities in the country attract overseas buyers. Jumeirah Group is the latest. It will manage the Jumeirah Marrakech Golf and Polo Resort, seven kilometres south of the city. Scheduled for completion in 2013, the resort will include 18-hole golf course, three five star hotels, two polo fields, souk, spa, shops, bars, restaurants and 50 villas.

CYPRUS PROPERTY PRICES FALL

In the Greek dominated, independent part of Cyprus, the southern half, house prices have fallen by 10 per cent over the past year, as the property market slump has spread from tourist areas into the wider property market, Cypriot developers say.

Resorts continue to bear the brunt of the downturn most, with prices for holiday homes down by as much as 40 per cent in towns like Limmasol, Paphos and Famagusta.

However, the bottom of the market has almost been reached developers say, which must be good news for estate agency, Knight Frank – it is marketing Akamas Bay Villas, 40 three and four bedroom homes close to the sea at Akamas Peninsula, a UNESCO World Heritage Site and national park.

Each of the Akamas project's modernist-style homes has its own swimming pool. Due for completion in 2012, the site is 25 miles from Paphos airport. The Prices start from CYP1.6 million.

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LONDON'S PROPERTY MARKET BOOM

A north-south divide has emerged in Britain's housing market. London's multi-million pound homes market is surging to new heights with prices above 2007 peak levels in Chelsea. Estate agency, Chesterton Humberts, received 18 bids on a house in that district recently.

London prices are being driven up by strong overseas demand. The weakness of Sterling means British property remains 40 per cent below peak levels for buyers coming from US dollar and euro-linked countries. Most foreigners prefer to buy in London compared to other places in Britain, because that is the city most familiar to them.

North of the Home Counties life is grim for home-owners, however. Many northerners, unable to re-mortgage, are desperate to sell.

Property Portfolio Rescue, a company that specialises in buying homes from distressed sellers, is receiving record numbers of enquiries from the England's North and Midlands regions, up 60 per cent from this time last year.

Nationally, the number of mortgage payers in arrears is 30 per cent higher than twelve months ago, so repossessions will rise, especially in the hard-pressed North, the company says.

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SPANISH PROPERTY PRICES "HIT BOTTOM"

What would you like first? A gloomy prediction? Or a vision of impending apocalypse?

OK, gloomy prediction: estate agency, Knight Frank, says Spanish house prices have hit bottom, but will stay there for another two years. What's more, only home-owners selling properties in the most des res areas of Spain's biggest cities can hope to make a sale. In the countryside, small towns and coastal resorts the market will be “stalled for years” the agency says.

Now for that vision of apocalypse, but first, take note, Spanish property prices are already 35 per cent below their 2007 peak. Consultancy, Capital Economics, forecasts prices will crash another 30 per cent, because the house-price-to- earnings-ratio is way out from its historical average.

Making things worse, earnings look set to fall and developers must sell at “rock bottom prices” to shift newly built stock over the next couple of years. Ay caramba!

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IRELAND'S NEGATIVE EQUITY PROBLEM GROWS

One in four Irish households will be in negative equity by the end of 2010 if property prices continue to slide. Irish homes have lost 30 per cent of their value over the past two years and some commentators speculate this could become minus 50 per cent in twelve months time.

Today, stockbroker, Goodbody, estimates the average household has debts Euro43,000 greater than the value of their home.

Unfazed by Ireland's debt burden, some investors believe profits can be made, because falling prices have improved yields. British property company, Assetz, says “Ireland is now in a prime position for a carefully selected property investment.”

It is marketing Knocktopher Abbey which has been converted into holiday apartments. There are also cottages for sale in its 17 acre grounds. Here, investors are promised rental returns of 6 per cent net for the next ten years by its operator, Seasons. They can use their property for four weeks each year. Prices from euro209,000.

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RECORD SALES PRICE IN HONG KONG

It's a chain reaction. In Hong Kong, a gentleman from mainland China has paid a world record breaking price for a duplex flat of HKD439 million (GBP34.2 million). Estate agents are delighted, but Hong Kong residents blame incoming billionaires for inflating property prices beyond their reach.

A skewed solution to Hong Kong's home ownership problem is found in London. British developers are offering London projects to Hong Kong buyers before marketing them in Britain, even though there is a housing shortage in the British capital.

London property prices have partly recovered from their 2008 lows, but the weakness of Sterling makes them cheap by international standards, so Hong Kong and Singapore investors are keen to buy.

But what about Londoners struggling to find a home of their own? The last time developers put Londoners last in the queue, earlier this decade, they bought as far afield as Normandy. Eurostar passenger numbers are likely to rise shortly.

(All The World's a Home : Global Property News)

USEFUL WEBSITES FOR BRITISH HOME BUYERS

Once upon a time you had to make endless phone calls and wait several days for bulky brochures to arrive by post when searching for homes in Britain. Now, you can find most information, including what the street looks like, what the house next door sold for and what mortgages are available with just a click of a mouse.

Websites providing extensive property listings include FindaProperty.com, Rightmove.com and Propertyfinder.com. Some of these and other property search sites give information on mortgages, insurance, Home Information Packs (HIPs) and other homebuying services.

Property search sites like Globrix.com and zoopla.co.uk give data on prices trends. And another search site, upmystreet.com , offers advice on how to improve a property and deal with nuisance neighbours.To find out which properties have had their prices reduced go to propertysnake.co.uk

The Land Registry, landregistry.gov.uk gives official statistics on house prices although it is a couple of months delayed. If you want more recent house price data look at market monitors hometrack.co.uk, hbosplc.com and http://www.nationwide.co.uk/.

The BBC provides a mortgage calculator on its website which shows how much you can expect to pay at different rates of interest,
bbc.co.uk/homes/property/mortgagecalculator.shtm.

Google has added several features in the last couple of years which are useful to property buyers: by typing in a property's address, Google Street View and Google Earth give street level and bird's eye views of it and the surrounding area respectively. Meanwhile, Google Maps shows where the property is located.

Information about a neighbourhood's facilities is available from nestoria.com and ukvillages.co.uk, although both can be several months out of date.

To ask residents and local property experts questions about an area go to godirect.co.uk.

Both the National Association of Landlords, landlords.org.uk. ,and Association of Residential Letting Agents, arla.co.uk., provide advice to investors. The ARLA site also lists letting agents.
For buyers seeking help from a buying agent, The Association of Property Finders and Buyers Agents (APFBA) has 50 members listed on its website, apfba.org.

The Royal Institution of Chartered Surveyors (RICS) provides advice, including how to buy at auction on its website rics.org, plus market comment and a list of members for buyers who want a property surveyed.

Thousands of repossessed homes for sale can be found at repossessedhousesforsale.co.uk and property auction news is available at propertyauctions.com

For more information about HIPs, property information that a home seller must give a buyer, go to homeinformationpacks.gov.uk.

(All The World's a Home : Global Property News)

SPAIN'S MARKET HOTS UP

Spain offers home buyers the best value for money for ten years says British property company, Assetz. With property prices down by as much as 40 per cent in key tourist hotspots, like the Costa del Sol, overseas buyers were trawling the market for holiday homes at “rock bottom prices” the company reports. It has received a 150 per cent increase in enquiries in the past three months.

Today, a three-bedroom villa with pool on the Costas can be bought for around Euro400,000, compared to Euro650,000 at the peak of the market the company says.

Buying agents, like The Property Finders, consider the bottom of the cycle may have been reached for upmarket homes on the Costas.

However, buyers are advised to avoid homes valued at less than Euro150,000 which are in huge oversupply. Spain has one million empty homes, many of them unwanted holiday apartments.

(All The World's a Home : Global Property News)

NEW YORK'S PROPERTY MARKET GETS BUSY AGAIN

New York's property market is beginning to resemble the hustle and bustle of Fifth Avenue again. Some big deals are being made. Seventy per cent of apartments at District, an Art Deco conversion in Manhattan's Financial District, have been sold. Prices for the 163 apartments start at $500,000 for a studio.

“Real estate is a very psychological animal. Now that we’ve seen the worst of the storm, deal activity has increased dramatically,” says Stephen McArdle, principal of Urban Marketing, the project's promoter, “Pricing has become more realistic and true to today’s market.”

Meanwhile, sensing an upturn in the market for big property purchases, the Maharishi Mahesh Yogi's spiritual movement is attempting to sell a Wall Street centre for transcendental meditation, for $45 million, eight times more than followers of this non-proft organisation paid for it in 2004. The five storey, neo-classical building has been “completely renovated” its broker says.

(All The World's a Home : global property news)

INDIA'S PROPERTY MARKET RECOVERY MAY STALL

A recovery in India's property market might stall analysts warn. Prices dropped like a stone after the credit crunch, by 50 per cent. Developers of high end schemes were hardest hit as the nouveau riche became the nouveau not-so-rich. Speculators who hoped to “flip” new build apartments were caught out too.

Now, prices are 20 per cent up from their lows of last year, but some commentators say this recovery has over-reached itself and that values in smaller cities could drop again. Big cities like Mumbai, New Delhi and Bangalore are where it's at they say, because their populations just keep getting bigger, pushing up the demand for housing. Investors are buying land ear-marked for high end schemes from cash-strapped funds, to build mass market housing for which there is firm demand.

However, other investors consider India yesterday's success story and are heading to Europe and the United States where returns are higher.

(All The World's a Home : Global Property News)

LONDON'S SMALL FLATS LETTINGS REVIVAL

While the recovery in London's residential sales market has centred on strong demand for large houses, small flats are the star performers in the lettings sector. Overall, rents have stopped falling in prime central London, letting agents say.

According to estate agency Savills, rents have risen 10 per cent for one-bedroom flats let to corporate tenants in east London's Docklands and Wapping districts over the past 12 months.

This meant they had recovered from last year's lettings slump, said Jane Ingram, national head of lettings at Savills.

"At the bottom of the market, typically they [one-bedroom flats in Docklands and Wapping] were letting at £320 per week, but now they are letting at £370 per week," she said.

"In some cases, they are nearly the same price as a corporate two-bedroom flat. We believe these one-bedroom flats are back to 2007 prices."

Rents are rising for small flats let for between £450 and £550 per week in Islington, she added.

Rents have risen for small flats because cuts in corporate accommodation budgets mean staff are looking for one-bedroom or two-bedroom homes instead of the larger properties they sought before the credit crunch.

In addition, many potential first-time buyers have opted to rent during the sales slump, pushing up demand for rental accommodation further, Ingram said.

Strong demand for small rental properties in areas close to the City of London and Canary Wharf financial districts means rents have stopped falling in prime central London overall.

However, the lettings slump continues for large homes in prime central London areas such as Mayfair, Knightsbridge and Kensington. Ingram said rents for family homes in these areas were 15 per cent below market peak levels of 2007 and were continuing to fall, though more slowly.

A four-bedroom town house in Chelsea, a typical type of rental house in that part of London, now lets for £2,000 to £4,000 per week, she said.

Savills forecasts that prime central London rents will fall 3 per cent to 4 per cent overall next year because of ongoing economic uncertainties, with the market for smaller homes continuing to do better than that for larger properties.

While a small number of British landlords are selling homes during the sales market upturn, particularly those who had let out their own homes reluctantly during the slump, Hong Kong landlords are holding on to their properties, Ingram said.

(All The World's a Home : Global Property News)

DESIGN ADDS VALUE TO LONDON HOMES

In London, intense competition between landlords for tenants has driven rent levels down for most properties. However, if a property is refurbished to a high standard, a landlord can increase its rental value by as much as 50 per cent. Resale values can be lifted by a similar amount.

"Based on examples of works that we have undertaken to completely refurbish properties, the rents achieved can increase anywhere from 25 per cent to 50 per cent depending on the level of specification," said Jane Ingram, national head of lettings at estate agency Savills.

Alan Waxman, managing director of developer Landmass London, advised landlords to create a smart, modern look.

"For rental properties, the trick is to furnish it as if it's a hotel," he said. "It's best to keep the decor neutral to attract tenants. With resale properties, you also need to offer a bit of a wow factor, so you make the property stand out from others and encourage a transition from a practical purchase to an emotional one. This can be done by introducing some colour, but don't go over the top - a signature wall is a safer bet than painting a room one colour, as you may otherwise run the risk of putting buyers off."

Deciding on the target market for resale is important. To attract bachelors, the property ought to include ultra-modern furniture and some black in the colour scheme. But Waxman warned that this combination would put off families.

"Creating atmospheric rooms can help to encourage an emotional purchase, but the decor must reflect the intended use of the room." he said. "You can create cosy rooms with darker colours and relevant lighting, whilst you can make the more practical rooms light and airy, using light colours and mirrors."

Homes for sale ought to be furnished even if being sold unfurnished, he advised. Furniture packages can be bought or hired from companies such as Landlord Furniture, which sell packs from £499.

"Artwork is really important, as otherwise the empty walls will make a property feel unfinished and stark," he said. "The same applies to curtains."

Prints and other artwork can be bought from £5 from http://www.art.co.uk/.

Interior designer Katharine Pooley said walls in rental properties ought to be painted with emulsion paint, which was easy to clean, and that a property needed to be maintained carefully, with cleaning materials used that would not damage surfaces. Furniture ought to be made from hard wood which is longer-wearing.

Whether refurbishing for sale or rent, investors should also consider structural issues, she said.

"There are so many elements to designing," she said. "You have to look at layout, putting sockets in the right place, lighting, the kitchen. It is not just a matter of `let's get that sofa and put it in the corner'. It may not fit through the front door."

In London's most desired locations, Pooley said it was important to focus on detail so that the landlord could offer a tenant a lifestyle.

"Landlords in Mayfair and Knightsbridge want to put in nicer finishings because they want to get better returns," she said.

This meant plug sockets made from chrome, not white plastic, even though they were more expensive, and completely kitting out the home with high-quality accessories, from cushions to bed sheets, she said.

Pooley advised investors to hire an interior designer. "Interior designers know where to get the right things, we know what goes with what, we know where it fits," she said.

Even though it could cost between £250,000 and £500,000 to have an interior designer refurbish a home in prime central London to a high standard, the investor would recoup these costs and make money on the resale, Pooley said.

For example, a three-bedroom Knightsbridge flat refurbished by her company is now worth 30 per cent more than two years ago, even though the market had dropped 30 per cent over that period. "We ripped out every bathroom and put in beautiful floor-to-ceiling marble tiles, a brand-new kitchen, an antique parquet floor and a brand-new terrace, and we've opened up walls so that there is one big living room rather than two little areas. We have also made the bedrooms en suite," Pooley said.

"We've brought it up to a different spec for the rental market. The quality of the furniture is second to none. It's clean and neat, so someone will just walk in and say `this is somewhere I want to rent'."

To decorate and furnish a two-bedroom flat in central London to a high standard, but without structural changes, new bathrooms or kitchen, would cost between £100,000 and £200,000, she said.

(All The World's a Home : Global Property News)

NEW AMENITIES A MIXED BLESSING IN BRITAIN

When a new shopping centre, major art gallery or new train station opens, estate agents chatter excitedly about how these new amenities will boost local property prices. In Wales and Scotland, expectations are mounting over how new sports facilities may add value to local homes.

In Aberdeenshire, northeast Scotland, Donald Trump received planning permission on September 1 to create two championship golf courses overlooking the sea. The Trump International Golf Links is scheduled for completion next spring.

Buying agency The County Homesearch Company expects the new golf courses to raise local property values because they will act as a magnet for golfers from around the world, some of whom will want to buy and rent homes nearby.

In Camarthenshire, west Wales, the Ffos Las Racecourse near Trimsaran opened late last month. As the first National Hunt course to be built in Britain for 80 years, this would attract new visitors to the area and boost the local economy, thereby driving up property prices, The County Homesearch Company forecast.

Property prices in Newham, east London, rose 5 per cent above the national average from 2005, when it was announced the 2012 Olympic Games would be held in the borough, to 2007, the height of the property market, said Carol Peett, director of The County Homesearch Company.

Sports facilities are not always good news for property prices, however. Many stadiums can depress values, research by estate agency Savills shows. Houses in streets surrounding Lords cricket ground in north London are worth 62 per cent less than houses further away in the same district.

The value of flats and houses close to Stamford Bridge, the home of Chelsea Football Club, are down by 14 per cent and 12 per cent respectively because of the disruption caused by thousands of fans passing through the streets, according to Savills.

Only one of the four London soccer grounds surveyed by Savills had a positive impact on local property prices - Arsenal's Emirates Stadium in north London, which added a premium of 1 per cent.

The sports stadium that helps property prices most is the All England Lawn Tennis and Croquet Club in Wimbledon, which adds a whopping 150 per cent premium to houses, according to Savills. Some residents let their houses to tennis players during the two-week tournament in June.

Lucian Cook, research director at Savills, said: "Only properties around Wimbledon show any substantial premium because disruption is confined to two weeks of the year when there may be the opportunity to let out larger properties for a tidy sum. Otherwise, on average, prices [close to a stadium] are 9 per cent to 12 per cent below those in the local area - although clearly there are exceptions. For example, a flat with a roof terrace and view over the Oval cricket ground can easily have a 10 per cent premium."

A big boost to property prices can be given by new and improved transport connections.

In London, estate agency Knight Frank said prices for newbuild homes around Kings Cross had doubled over the past five years because of expansion in the area's transport links and other facilities. Prices for new homes in the area had risen from £400 per sqft in 2005 to £800 now, Knight Frank revealed.

A new Eurostar terminus for trains running from London to Paris and Brussels was opened at the redeveloped St Pancras station, next to King's Cross station, in 2007. Trains from revamped Thameslink station nearby run to Gatwick and Luton airports.

Simon Barry, partner at Knight Frank, said these transport improvements were a catalyst for redevelopment of the area and the arrival of new employers and cultural attractions, all of which had lifted property values.

Developer Argent is redeveloping 28 hectares of surrounding redundant railway and industrial land into new shops, offices and 1,800 homes. The British Library and the Observer and Guardian newspapers have moved into the area.

"The main things which make a difference [to prices] are new transport links ... new amenities, such as the opening of a shopping centre like Westfield [in west London], and cultural attributes such as the Tate Modern on the South Bank," Barry said.

Howard Elston, director of estate agency Aylesford International, said close proximity to shops, bars and restaurants could make a property less saleable. "Many residents near the King's Road in Chelsea have easy access to its shops and facilities," he said. "But at night they have to put up with impossible parking as the area floods with people going out to dinner."

(All The World's a Home : Global Property News)

BRITISH PROPERTY PRICES HIGHER THAN YEAR AGO

British property values are higher than they were a year ago following six consecutive months of price rises website FindaProperty.com reports. Today, the value of the average home is £218,134 compared to £217,622, twelve months ago, an increase of GBP512.

The small rise in values is due to a surge in demand for large houses.

Prices are rising for larger properties targeted by "home-movers", but falling for smaller homes sought by first-time buyers FindaProperty.com reveals. Prices have risen 6.6 per cent over the past twelve months for homes with three bedrooms or more, but dropped 4.6 per cent for small flats, terraced houses and other properties with two bedrooms or less, the website's research shows.

Rising unemployment and difficulties in raising mortgage finance are keeping first time buyers from the market which is dragging prices down for entry level housing FindaProperty.com says. Home-movers are able to buy homes more easily, because mortgage lenders are more likely to lend to them, so this is keeping the market for larger properties active the website adds.

"Movement into positive annual property price growth is the news homeowners have been waiting for and suggests the housing market is making a sustained recovery," says Michael O'Flynn, director or FindaProperty.com, "There is no doubt that lending criteria still continue to be an issue, but most existing homeowners are still able to access the mortgage market using the equity they have built up over the years."

The British property market has experienced a sharp turnaround in recent months and many forecasters are upgrading their forecasts for this year. The RICS forecasts prices will be slightly higher by the end of this year than at the start, after previously forecasting a big fall.

The market has been particularly strong in prime central London districts like Mayfair where City money and foreign money have driven up prices since the Spring. City buyers are benefitting from the return of bonuses and a surging stock market, and foreign buyers are benefitting from the weak Pound, although it has strengthened marginally in recent weeks.

Many commentators remain sceptical about the recovery in prices. PriceWaterhouseCoopers says prices will fall over the next 18 months and may not recover to 2008 levels for another decade, saying the lack of mortgage finance and a shaky economy will drag the housing market down.

(All The World's a Home : Global Property News)

REPOSSESSIONS RISE IN BRITAIN

The Council of Mortgage Lenders forecasts 65,000 homes will be repossessed in Britain in 2009, a two-thirds increase on 2008 when 40,000 were taken over. These repossessions could provide a rich harvest for investors, because they can be bought relatively cheaply, sometimes at 40 per cent below market value.

A bank or building society will repossess a property if the borrower fails to make mortgage re-payments to them. A home can also be repossessed if its owner fails to repay credit card and other non-mortgage loans secured on the property. Once repossessed, the lender sells the home either through an estate agent or at auction to recoup the money they lent.

The number of homes getting repossessed is rising, because millions of home-owners are struggling to repay their debts. The recession means they are either losing their jobs or having their wages slashed.

Landlords are struggling too, because although they are benefiting from low interest rates, some are struggling to find tenants. According to the Council of Mortgage Lenders (CML) 1,400 buy-to-let homes were repossessed in the second quarter of 2009, about the same as in the previous quarter.

Nick Hopkinson, director of Property Portfolio Rescue, a company which specialises in buying assets from landlords and developers, said the number of homes being repossessed this year would grow.

“We are likely to see a big rush of repossessions later in the year,” he said, “People are losing their jobs, insolvencies are peaking and there is no sign that banks are lending more freely.

Many different types of property get repossessed. Knight Frank is marketing two repossessed country mansions, including GBP.2.75 million Clifton Hall (pictured above) on the outskirts of Nottingham. This Grade I listed mansion boasts 17 bedrooms, eight reception rooms and one hectare of gardens.

Most repossessions are found at the other end of the property spectrum. The bulk are inner city flats or terrace houses offered at low prices. In Bradford, a three bedroom terrace house in need of modernisation is being offered by auctioneer Manning Stainton with a guide price of GBP40,000 to GBP50,000.

Some homes are former investment properties. In London, estate agency and auctioneer, Barnard Marcus, is offering a repossessed terraced house in Fulham which has been divided into four flats. It was unsold at the company's last auction despite receiving an offer of GBP1.35 million. It's guide price is GBP1.5 million.

The company is also offering a flat in Hampstead at a guide price of GBP200,000 at its next auction in September.

In addition to approaching estate agents and auctioneers for repossessions, buyers can find websites dedicated to these types of property. Three thousand repossessed British homes are advertised on http://www.repossessedhousesforsale.co.uk/.

An auction can be the cheapest place to buy a repossession. According to Steve Forshaw, managing director of website www.repossessedhousesforsale.co.uk, properties can be bought for 40 per cent below their market value at auction.

“The vendor wants a quick sale and a quick sale equates to lower price,” he said, “It is not politically correct to say a property is repossessed, but the fact that the property is being sold by a bank is enough to tell you it is.”

However, auction buyers sometimes bid too high Robert Hadfield, managing director of London investment property management company, Pineflat, said.

“Auction rooms can encourage irrational exuberance, so, while there are some bargains to be had, this is not automatically the case,” he warned.

Repossessed properties can be problematic he added.

“It's quite a long time since we've bought a repo, but the last one needed half the kitchen cupboards replacing and also lots of messing about with heating controls, keys and missing bits of pieces,” he said, “And of course sometimes repo properties are trashed deliberately.”

Repossessed homes are sometimes blighted by planning disputes or are in areas with high crime rates or widespread mortgage fraud he warned.

“Check for liabilities like unpaid service charges, title irregularities and the sales history of neighbouring properties,” he advised, “If there are several repossessions in the local area there is probably something amiss.”

Mr Forshaw said investors ought to base their purchases on a property's potential yield. “We are looking to buy property in this office,” he said, “We are interested in nothing less than 10 per cent returns.”

Tim Hyatt, head of lettings at estate agency, Knight Frank, said buyers in London ought to choose properties that were close to transport links to major financial centres, like Canary Wharf. Properties in poor condition needed improving he added.

“The standard of rental accommodation is now really quite high, much higher than three years ago,” he said, “it needs neutral décor and style, and to be high spec.”

Mr Hopkinson advised overseas investors against buying blind.

“You either need to work with a specialist advisor or see the property yourself,” he said, “You need to do spreadsheets, not just look at pretty pictures. You need to go on the Internet and check the prices and rents in the area.”

(All The World's a Home : Global Property News)

BRITAIN'S RENTS UP

British rents have risen 1.2 per cent over the past three months latest figures show, because the demand for houses is strong. The market for flats remains weak however.

According to The FindaProperty.com Rental Index, August 2009, average monthly rents have risen by GBP10 across Britain since April to GBP829, following three consecutive months of increases. This means the year-on-year decline has eased to minus 4.8 per cent, the lowest decline since January 2009.

Rents for houses rose for the fourth month running in August, but the oversupplied flats sector is “languishing” FindaProperty.com reports. Many developers dumped inner city flats they could not sell onto the rental market over the past 18 months, pushing up supply.

Rents for houses rose 2.5 per cent between April and August to GBP868 per month, while asking rents for flats have sunk minus 2.6 per cent since February to GBP749 per month, the website says.

According to Michael O'Flynn, director of FindaProperty.com, demand for houses was boosted by many families opting to rent, because they could not get a mortgage to buy a home.

In prime central London districts like Mayfair, Belgravia and Kensington, the lettings market continues to struggle. According to estate agency, Knight Frank, average rents are down 19.3 per cent on June 2008 after having fallen for five consecutive quarters.

However, Juliet Hill, Lettings partner at Knight Frank's Knightsbridge office, said the downturn had eased in prime central London during August.

“I wouldn't say there was a recovery, but rents are more stable,” she said,” the volume of stock coming onto the market is down 35 per cent compared to this time last year, and at one or two offices we have had competitive bidding.”

Properties most in demand are family houses in the GBP2000 to GBP3500 per week range, because tenants wanted to be ready for the autumn school term which starts in September, and good quality two bedroom flats priced at GBP800 to GBP1500 per week, she said.

She was uncertain how the market would perform over the next twelve months.

“I remain cautious,” she said, “landlords need to be competitive. If they ask ambitious rents then there will be long void periods. Our market is very dependent on the City (financial services sector). There are some reports saying the City firms are recruiting again, and others say they are not. Until we know which where they are going we can't know how rentals will be.”

According to FindaProperty.com, rental yields are 4.75 per cent nationally. In prime central London they are between 3.5 – 4 per cent Knight Frank reports.

(All The World's a Home : Global Property News)

TRADING PLACES WITH CHINA

Foreigners have been gobbling up Chinese bricks and mortar this year. For example, 12,000 Hong Kong buyers purchased property there in the first half of 2009, up 23 per cent on the same time last year analysts say.

We may expect China's rich to return the favour when their government gives them the go-ahead to buy property abroad. The Middle Kingdom has 825,000 individuals with 10 million yuan to their name, enough to make each a Sterling millionaire in Britain. The Hurun Wealth Report reveals they spend half of their money on housing.

The Chinese like buying property, because they consider it a safe, long term investment. When the Chinese are given the green light to invest overseas, analysts say the HNWI's will focus on luxury homes in big cities like London, New York and Paris, university towns where their children study, and investment hotspots, including the Middle East.

(All The World's a Home : Global Property News)

BETTING ON MACAU

Analysts are betting the slow recovery in Macau's housing market will gather pace soon. Property prices are rising, but at a much slower rate than in Hong Kong or mainland China, and remain 33 per cent below their late 2007 peak.

Macau, a small, semi-autonomous region of China on the opposite side of the Pearl River delta from Hong Kong, relies on gaming for two-thirds of its income. Before the economic downturn this former Portuguese colony attracted many overseas property investors, especially ethnic Chinese.

With new casinos opening, visa restrictions relaxed, taxes and foreign exchange controls changed, and equity markets booming, analysts consider Macau ripe for investment again. Jones Lang LaSalle forecasts prices will rise between 10-20 per cent in the second half of this year.

A further boost to its economy will come if a planned bridge connecting Macau to Hong Kong and the neighbouring Chinese city of Zhuhai goes ahead, because it will speed up travelling time to the enclave. At the moment, travel between Macau and Hong Kong is by ferry, jetfoil or helicopter.

(All The World's a Home : Global Property News)

THE NEW TUNISIA

Tunisia wants overseas investors to buy property at Berge du Lac, a brand new, 150 hectare waterfront district, on the edge of the country's capital, Tunis, which will be fully completed by 2015.

A growing number of international firms opening offices in this government-backed development zone, include KPMG, Cap Gemini and British Airways. The British, Americans, Canadians and Malaysians have moved their embassies there.

Although, the district's western-style homes are very different to traditional Tunisian dwellings, with car parking spaces for example, they are attracting some younger, middle class residents. Prices for flats start at about GBP120,000.

Foreigners who buy properties as second homes can spend as much time as they want in the country. Tunisia is negotiating an open skies agreement to improve its air connections to other parts of the world.

(All The World's a Home : Global Property News)

BOURGEOIS FRANCE

The French property market is emerging from the global economic downturn as one of the world's strongest. House prices fell in 2008 and 2009, but they did not collapse, the country is out of recession and the euro is strong against other currencies, so the value of French property relative to the rest of the world has risen.

The luxury end of France's housing market is doing particularly well with Paris and the Cote d'Azur benefiting from their long established reputations for being safe havens for the fabulously rich and great places to live.

The Top Ten Most Expensive Streets in the World survey carried out by Wealth Bulletin features two French addresses – the only country to get a double mention on the list. Avenue Montaigne in Paris, where the Elysee Palace is located, has sales prices averaging USD54,000 per square metre. That was fifth on the list. Incredibly, prices are twice that much on Chemin de Saint-Hospice, Cap Ferrat, where they average a staggering USD100,000 per square metre. This street takes second place on the list, behind Avenue Princesse Grace, 30 miles down the road in Monaco. There, prices average USD120,000 per square metre.

(All The World's a Home : Global Property News)

US SLUMP ENDS

The US housing market is recovering from its worst slump since the Great Depression of the 1930s. Consultancy, Herrmann Forecasting, says "We're seeing multiple signs of a bottom in the housing market”.

Here's the evidence: Prices rose 1.4 per cent in the second quarter 2009, the first rise since they started falling three years ago. The number of new homes being built is rising, sales of existing homes is rising and the value of house-builders' shares is rising.

Why the upturn? The 32 per cent fall in prices from 2006 to the first quarter of 2009 is finally bringing buyers back into the market.

Some clouds remain on the horizon: unemployment is growing and a massive USD3.4 trillion worth of homes remain at risk of repossession, because their owner's mortgage debt exceeds the value of the property.

What's more, masses of new homes remain empty and a third of existing homes sold are repossessions. This prompts Capital Economics to caution “the housing market has turned the corner, but the recovery will be slow and long.”

(All The World's a Home : Global Property News)

A TALE OF TWO SALES

Time for some home truths. Attempting to sell my flat and helping my mother sell her house has revealed some worrying aspects about the British property market.

Number one: My own sale. It took six weeks for my Home Information Pack (HIP) to be delivered, when it is supposed to take two weeks.

It has been illegal to put a home up for sale without a completed HIP since April, so theoretically my flat could not be marketed during that long wait. As it was, my estate agent was not too fussy and started marketing my flat without a HIP. Needless to say, not a single viewer asked to see a pack during those six weeks.

Such lax attitudes might be enough to worry some people, but there is a bigger issue which ought to concern everyone. HIPs were intended to speed up the sales process, but if it takes six weeks for a pack to be prepared, then the system is failing and actually slowing the process down.

This raises another question: If HIP providers are failing to produce reports on time now, when there are so few sellers in the market, how will they cope when the market gets busy again? Will this added bureaucracy make the housing market even more inert?

Number two: My mother's sale. Two buyers made offers on my mother's home and both asked surveyors to value the house for them. Only 17 days separated publication of these surveyors' reports and yet their valuations differed by 25 per cent. There were no sudden shocks to the market in the days between these valuations and no secrets about the house revealed that might affect its price. So what could explain such wide variation in these valuations?

The lower of the two valuations could be explained by good, old-fashioned backside protecting. Some surveyors have been criticised for giving low valuations in recent months so they can avoid being sued by mortgage lenders if prices fall further.

In both cases, the prospective buyers paid these surveyors in excess of £1000 for these reports. Was that money well spent? Did these highly qualified, independent professionals know their job? Are they really better than anyone else when it comes to property valuation? Bluntly, are they useless?

The wide variation in those valuations reveals an unwelcome home truth. It shows that pricing a property is a guessing game. Yes, investors will use yields as a scientific way to determine a home's value, but for a great many owner-occupiers, emotional factors dominate: “Will that home make me happy” they ask themselves, which is absolutely the right question.

Estate agents valuations which, we all know, vary widely and surveyors valuations which do too, apparently, are merely rough guides, and are useless when it comes to putting a value on individual domestic happiness.

Put another way, the value of a home depends entirely on what it is worth to the person buying it and to the person selling it, it is entirely an individual matter. That is why my mother will pay over the odds, in many peoples' opinion, for her new home, a mansion block flat, because its location, lightness, airiness, spaciousness and working fireplace are worth so much more to her than others it seems.

We won't bother to have a surveyor value it. She doesn't need a mortgage and the money will be better spent on putting right small things and making it look nice. We haven't seen a HIP for it either. Chances are, it's not published yet. In any case, sometimes, intuition can be more useful than thousands of pounds worth of professional advice and a vendor's half-truthful answers on a HIP's Property Information Questionnaire (PIQ), and it's free. It's less of a bureaucratic mouthful too.

(All The World's a Home : Global Property News)

MADEIRA, THE "NEW ALGARVE"

In Madeira, developers have completed the island's first set of purpose-built holiday homes, and two more projects are on the way.

Making these schemes possible has been huge investment in the Portuguese island's air, road and sea connections over the past decade which have made visiting the island a good deal easier and raised its profile in the world.

Located in the Atlantic 350 miles off the west coast of Morocco, Madeira is a tourist island that has traditionally appealed to older holidaymakers from northern Europe, particularly Britain, because of its warm climate and easy pace of life. Famous visitors have included Sir Winston Churchill and Baroness Thatcher.

Tourism was given a boost earlier this decade when TAP, the Portuguese national airline, lost its monopoly on flights to the island. With the arrival of easyJet, British Airways and other operators, the number of destinations served by the airport has grown to 50. The airport has been rebuilt to cater for this increased traffic, and new motorways, bridges and tunnels created to make getting about this mountainous island a good deal easier.

Yachts sailing between Europe and the Caribbean have been restocking at a marina built at the Quinto do Lorde estate in 2002, and rumours are circulating that a new liner terminal will be created, so the harbour at Madeira's capital, Funchal, can accommodate super-yachts.

In addition to Madeira's two existing golf courses, two more will be created on the main island and a third on the smaller, outlying island of Porto Santo.

Tight planning laws aimed at avoiding overcrowding mean the maximum height of new buildings in Funchal's historic city centre is seven floors, although this is stretched to twelve in exceptional cases. In the countryside it is three floors.

New hotels must have at least four stars. Among those opening are Madeira's first designer hotels, The Vine Hotel and the Choupana Hills Resort and Spa.

These moves have encouraged developers to construct purpose-built holiday homes. At newly completed Palheiro Village, high in the hills above Funchal, are 48 villas and 37 apartments painted in warm reds, pinks, yellows and oranges.

Half of Palheiro Village's homes have been sold, 70 per cent to British and Irish buyers, most of the rest to other Europeans. Prices for freehold homes range from euro325,000 to euro1.8 million, and fractional ownership options start at euro120,000 for a quarter share of a one bed-apartment. Most properties have terraces and some have pools. Village facilities include a communal swimming pool.

The village is located on the lower slopes of the Palheiro Estate where residents have access to a modern spa at hotel, Casa Velha do Palheiro, and an 18-hole golf course.

Two more upmarket, holiday home developments are on the way. Sixty contemporary-looking villas and 112 apartments are scheduled for completion at Azulara, west of Funchal, in late 2012. Prices for apartments start at Euro281,000. Early buyers have come from as far afield as Barbados and the Middle East. At Quinta do Lorde, 127 traditional-style dwellings are under construction.

The completion of the Palheiro Village is significant for Madeira's tourism industry and property market, Anne Marchington, sales manager at Palheiro Village, believes.
　
"Madeira can be seen as "a late starter" for this type of resort development compared to the Algarve in mainland Portugal, and islands such as Mallorca," she says, "but with necessary conditions all now in place, the development of residential tourism on a small scale and aiming for the high-quality end of the market, is likely to become well-established."

The global economic downturn has been cruel to Madeira. No sooner had its spanking new roads, hotels and holiday homes been built, then tourist numbers were decimated by the credit crunch – the British have found Madeira, which is part of the Eurozone, a little expensive since Sterling plummeted on international currency exchanges last year. Combined with an oversupply of homes in some parts of Funchal, this has been bad news for property prices.

Tony de Nobrega, proprietor of Funchal estate agency, Nobrega Realty, said prices had dropped 30 per cent for ordinary residential property over the past 12 months and demand for holiday homes had "decreased substantially".

He considers it unlikely an upturn will happen any time soon.

"I think 12 months is too soon to forecast even if any positive improvement in the world economy takes place," he says, "it will still take time to filter into the local market."

Even so, despite these cyclical problems, Madeira's structural improvements bode well for its property market in the longer term. Now, could be exactly the right time to buy on the island.



BUYERS GUIDE

Madeira is an archipelago in the mid-Atlantic, west of Morocco and north of the Canary Islands, owned by Portugal. The main island of Madeira is 57 kilometres wide and 22km long.

Half of Madeira's 250,000 population live in the capital, Funchal, on Madeira island. This is where most homes for sale are found, including new build schemes on the edge of the city.

Madeira is a self-governing region of Portugal with property purchase rules slightly different to that of the mainland.

Foreigners can buy property anywhere on Madeira and its outlying islands, except for the uninhabited Desertas Islands which are nature reserves where nobody is allowed to live.

Purchase costs will add around 7 per cent on top of the sales price. These costs include IMT, a property tax, which ranges from 0 to 6 per cent of the value of the property. A legal official known as a notary charges a 2 per cent fee for arranging the public deed.

The Land Registry charges a few hundred euros for registering the sale, and a similar amount is paid if the buyer has a mortgage which they must declare. Lawyers may charge about Euro3,000, possibly less.

Properties are purchased through an escritura system, similar to that which exists in Spain and Portugal. In the presence of a notary, the buyer and seller sign the public deed, and then exchange cheque for house keys. Since these formalities are carried out in Portuguese, foreign buyers will need an interpreter. This may be their lawyer if they are bi-lingual.

Properties can be let to holidaymakers. Madeira's warm, dry climate attracts visitors throughout the year with golfers mainly coming in the winter. The tourist board hopes more golfers will visit the archipelago when its three new golf courses open. Fully furnished, three bedroom villas at Palheiro Village let for Euro1,450 per week.

Although most Madeirans are Portuguese, English is widely spoken, and some estate agents speak Spanish and Russian to cater for a large number of buyers from Venezuela, where many Madeirans emigrated to in the past, and the CIS. Many South Africans of Madeiran heritage buy second homes in the archipelago. It is popular with British buyers some of whom live there in retirement.

Madeira has a small Chinese community, mainly from Macau, most of whom work in the restaurant trade. Madeira is part of the European Union and uses the euro as its currency. Most flights between Hong Kong and Madeira involve making two stops, and none of them are direct.

Madeira is volcanic, but the last eruption is estimated to have occurred 6,500 years ago.


(All The World's a Home : Global Property News)

GERMANY'S GETTING SMALLER

While residential property values have slumped in many countries across the world over the past twelve months they have hardly budged for brand new homes in Germany. What's more, some analysts say prices for these and second-hand German homes will rise soon.

According to the most recent Hedonic House Price Index published by financial services group, Hypoport, prices for brand new homes fell fractionally, by 0.17 per cent, over the twelve months to May 2009, to an average price of euro225,396.

Prices for second-hand apartments slipped back 1.88 per cent to an average of euro130,441 over the same period. As for second-hand houses, prices for these were hardest hit, dipping 5.54 per cent, to an average of euro167,678 each.

According to Hypoport, prices for brand new homes have stayed steady, because construction costs are growing. With wages and commodities prices expected to rise further, prices for these types of property will increase the company forecasts.

“Prices for new homes will most probably rise because they are highly driven by the costs of construction,” said Professor Thomas Kretschmar, co-chief executive officer of Hypoport.

He said prices for second-hand housing would rise too, because of the growing demand for all property from Germany's aging population. Germans usually buy homes later in life, preferring to rent in their younger years, so with the population growing older, the number of buyers would increase, he forecast

Although unwilling to give exact timings, he expected the value of second-hand homes to stabilise in the short term and rise “smoothly” in the medium term especially in sought after locations.

According to Barbara Walter, proprietor of London-based buying agency, German Property Finder, Germany's residential market was relatively strong.

“I consider buying in Germany a safe long term investment,” she said.

The fortunes of Germany's housing market was influenced by its changing demographics she added. Germany has a population of 82 million people, the European Union's largest, but it has been declining since 2003. In 2007, Germany's population was estimated to have contracted by 0.12 per cent.

This depopulation has undermined Germany's housing market. Figures from consultancy, BulweinGesa, show German residential property prices fell marginally in all but one of the 15 years to the end of 2008 in real terms (after inflation is factored in).

Demographic decline started in eastern Germany during the 1990s and is spreading to western districts Deutsche Bank research shows. Most German regions will have fewer people living in them by 2020 compared to today the bank forecasts.

There will be some pockets of population growth however. The number of people living in Berlin and south-west Germany will continue to increase over the next decade the bank projects.

A trend towards an ageing population living in larger towns rather than the countryside, and an increase in single person households, would provide opportunities for investors, Ms Walter said.

“Demographics is the weak point,” she said, “but right now there is hardly enough new build to meet the demand, so prices have hardly budged in the good areas or are even rising in places like central Munich.

“Buy where demographics are good, such as south west Germany and around Berlin, although this one (Berlin) has been hyped up in the last year, so buyers can afford to be patient.”

After 15 years of falling prices, the longest sales slump in Europe, German homes have become less expensive to buy compared to many other places in the world.

According to the Global Property Guide, Berlin is 62nd on its list of Most Expensive Property Markets. The average price of a 120 square meter apartment in the city is $3,030 per square meter which is marginally more expensive than for the same sized property on the Greek island of Crete.

Munich, in south west Germany, has the country's priciest property market and is 25th on the Global Property Guide's list of 112 Most Expensive Property Markets in the world to buy a home. A 120 square meter abode in the city costs $5,255 per square meter to purchase on average.

In the posh west Berlin district of Schoeneberg, a refurbished, two bedroom apartment is on the market for £187,000 through property portal property-abroad.com. The 74 square meter abode has a balcony.

In the less salubrious central Berlin district of Kreuzberg a one bedroom studio flat with balcony can be purchased for £31,424 through property–abroad.com. The property portal's sales blurb says the rental income from the 38 square meter property is euro1560 per year, equivalent to a 4.2 per cent gross return.

In central Munich, a second floor, 130 square meter apartment with three rooms and modernised bathroom, in a high-rise block, is on offer for euro130,000 through estate agency Blue Homes.

Entire blocks of flats are sometimes traded between investors in Germany. A six storey, 100-year old block of 33 apartments in salubrious Charlottenburg, central Berlin, is on the market through estate agency, FrontlineBerlin, for euro4,150,000. Renting out all the apartments produces a gross return of 5.4 per cent the Berlin-based company says.



GERMANY HOME BUYER'S GUIDE

There are no restrictions on foreigners buying property in Germany. Following in the footsteps of large foreign reits, which purchased entire housing estates in the 1990s, individual overseas property investors, especially British and Irish, have become big buyers of German property. Berlin attracts most private investors.

Buyers have several taxes and charges to pay, including a share of the estate agent's fee which is spilt equally between seller and buyer. Purchasers must pay a Property Transfer tax at 3.5 per cent, notary fees of 0.5 to 1.5 per cent, registration fees of 0.2 to 0.5 per cent and estate agents fees of up to 3.5 per cent. For properties selling for euro1 million or more estate agents fees are negotiable.

Buying agency fees vary. German Property Finder charges a £500 registration fee and 2.5 per cent of the purchase price.

When an investor comes to sell, they must pay estate agents fees of up to 3.5 per cent. Income tax on rental income is levied at 25 per cent. Expenses like mortgage interest payments, maintenance costs and management fees can be deducted from that. A Solidarity Surcharge increases the overall income tax level to 26.4 per cent.

There is no capital gains tax to pay on sale of a property which is held for more than ten years. Profits on re-sales made within ten years have income tax and the Solidarity Surcharge deducted from them.

According to the Global Property Guide, “Germany is depressingly pro-tenant”, because tenants can get security of tenure which makes them hard to move out. Rents are freely negotiable, but rarely rise by more than 20 per cent over a three year period, because of government restrictions, the website reports.

However, the attractions of renting mean that 60 per cent of Germans are tenants, so the market is large. Nationally, gross yields are 5.12 per cent on average the Global Property Guide reports.

Above average yields are available in cities like Berlin and Nuremberg Barbara Walter, proprietor of buying agency, Germany Property Finder, revealed. Munich attracted investors looking for capital growth she added.

“I would advise to buy centrally located, old, but well maintained residential properties in major cities which are sold at less than the cost of rebuilding – in some cities under euro1000 to 2000 per square meter, and which will also offer a decent rental yield at 6 to 9 per cent gross,” she said.

German banks lend to foreigners but rarely for more than 70 per cent of a property's value she said.

She advised buyers to have a German speaker help them through the sales process.

(All The World's a Home : Global Property News)

BOOM OR BUST?

Well, it's time to take stock. Prices are rising rapidly in a number of locations – they are up 20 per cent in Shanghai and Hong Kong since the start of this year. Up by half for some homes in Seoul, South Korea. They are up by a relatively modest 4 per cent in Switzerland, where the top end of the market is doing most well. In Britain, prices have been rising for several months, also mostly for multi-million pound luxury homes.

Is this the start of a sustained recovery in housing markets or just a mirage? Well, China and South Korea do seem to be enjoying something of an economic resurgence courtesy of their respective governments' financial stimulus packages. There is a danger they may overdo it and the resulting spirals of speculation, inflation and oversupply turn recently turned busts-to-booms back into busts again.

Hong Kong's economy is still in a dire state, so its property market upturn may be premature. However, when those Chinese exports start pouring through its port again, the economy may bounce back, and quickly. But first, the rest of the world must want China to make its cars, clothes and other stuff in vast quantities again.

In London, financiers are on course to make £4 million in bonuses this year. Traditionally, a large chunk of this bonus money goes into luxury houses, penthouses and manor houses. This year will be no exception. Indeed, property may be more popular than ever, because of its reputation for being a secure investment. Looming public sector cuts and tax rises after the next year's general election will suppress the mass market and may dampen the luxury market in the longer term.

Switzerland is a safe haven for the rich, so it shall continue to attract the wealthy from Britain and other countries where governments are looking for bankers, stockbrokers and others like them to pay a fairer share of tax. Possibly, Switzerland's boom is the most sustainable, because there are still plenty of rich in the world despite the economic downturn. All the Alpine state has to do is lure them in with the promise of shelter, a policy it has pursued with great success for decades. Markets may come and go, but there will always be people in the world who are rich.

You can read more about what is happening in the property markets mentioned here by reading recent entries on this blog.

(All The World's a Home : Global Property News)

BRITAIN'S REDUNDANT LANDLORDS

Well-to-do individuals losing their jobs in Britain are investing redundancy payments in property, and there could be more of them. A survey of finance professionals shows one-third of them would invest their redundancy money in property if they lose their job.

There could be more investment in the rental sector from other quarters too. The Young Index shows a growing number of existing buy-to-let investors will pour money into property over the next year, while pension funds are planning to build entire blocks of build-to-let homes to cater for Britain's growing army of tenants.

That tenants are able to pick and choose between large numbers of empty rental properties at the moment and that rental returns continue to fall does not appear to faze investors, nor a warning from tenant referencing agency, HomeLet, that the number of tenants defaulting on their rent is likely to “soar”, because of Britain's growing unemployment problem. Jobless landlords chasing jobless tenants for unpaid rent could be a new phenomenon in 2010.

(All The World's a Home : Global Property News)

SPANISH DEVELOPERS GET TOUGH

Holiday home buyers who pull out of buying a Spanish property are being pursued in the courts by the developers. Even though sales contracts allow buyers to withdraw, Spanish developers are trying to use a Spanish law to make them complete the deal.

Some Spanish builders are threatening to pursue overseas buyers in their home countries too, but British lawyers, DWF, assures buyers they cannot do this until the Spanish legal process is completed. The firm says it could be four years before the Spanish courts pass judgement, by which time many struggling Spanish developers may go bust.

Holiday home buyers may have good reason to dip out of deals. Spain's Ministry of Housing says prices are 8.2 per cent below their spring 2008 peak, and consultancy, Capital Economics, forecasts further falls of up to 30 per cent, because of the country's huge oversupply of empty homes – one million at the last count.

In the holiday homes sector, prices are falling fastest for the pile 'em, sell 'em cheap tower block flats offered at less than Euro100,000 each. There is a bit of an upturn for homes valued above Euro500,000.

(All The World's a Home : Global Property News)

BUYER'S BARGAIN

Britain's buying agents AKA property finders are becoming cheaper. Unlike estate agents which represent the interests of sellers, buying agents help buyers. Buying agents are widely established in the United States and Australia.

In Britain, buying agents have been a luxury only the rich can afford, so, to widen their appeal, a new service called The Buyers Edge has been launched by the Association of Property Finders and Buyers Agents (APFBA).

Under this scheme the usual upfront fee, which can sometimes be as much as £700, is waived and a finders fee is paid only if the agent negotiates a lower sales price on a property - this fee would be 1 per cent of the home's value and a percentage of the saving made.

More information available from the the APFBA at http://www.apfba.org/

(All The World's a Home : Global Property News)

HONG KONG'S "BUBBLE"

Property cycles in many parts of the world may be J-shaped, V-shaped or W-shaped, but in Hong Kong it defies all letter shapes. Here, the zig-zag lines that appear on an earthquake detector graph when a 6.7 is recorded are more apt, because its property market goes up and down so fast and to such extremes.

The 20 per cent rebound in property prices since the start of the year has wiped out the losses incurred in 2008. Some commentators are sanguine about this, but others fear a bubble may be forming. Mortgage brokers say demand is being fuelled by investors with unrealistic expectations of future gains and who have ignored the Hong Kong's deep recession and unemployment problems.

Its economy is forecast to contract by 9 per cent this year. Should that become 10 per cent then Hong Kong would officially be in an economic depression. Expect more zig-zagging.

(All The World's a Home : Global Property News)

KOREAN PROPERTY BOOM

Korea's bust has turned to boom. Property values in Seoul have leapt by as much 55 per cent in the first half of 2009 as Koreans rush to buy homes again, after a collapse in prices last year.

The turnaround is all thanks to a USD52 billion Government stimulus package, lower capital gains tax and new rules to encourage reconstruction of older buildings, combined with record-low interest rates.

Speculators are targeting older, low-rise blocks that may be bought by a builder for redevelopment. This follows the government's decision in November 2008, to raise the floorspace-to-land ratio to 2.5 times from 1.9 times, allowing developers to replace old, low-rise buildings with more profitable high-rise blocks.

Boosting buyer confidence is news that the economy started growing again this year, albeit by only 0.1 per cent in the first quarter, after contracting sharply by a 5.1 per cent in the last quarter of 2008.

(All The World's a Home : Global Property News)

AMERICAN LEGACY HOME

It's not all bad news in the United States. Construction projects may be on ice in many places and homes are being repossessed and sold for a pittance left, right and centre, but there are still some people around with money to burn.

In Chicago, British-based architects and project managers, Janine Stone, will build a Palladian-style mansion overlooking a golf course for a Bulgarian businessman who has made millions from the Nigerian oil trade. Costing in the teens of millions of dollars to build, the architects call this house as a “legacy home”, because it is intended to be passed down to future generations of the owner's family, a modern-day version of an ancestral home.

Sadly, other projects in Chicago have stalled. The “Chicago Spire”, which, if built, will become the world's tallest residential tower, at 610 meter high, remains a hole in the ground nearly two years after sales marketing started for its 1,193 apartments.

(All The World's a Home : Global Property News)

SWISS PROPERTY BOOM

The smart money is heading to Switzerland estate agents say. According to The Top Ten Most Expensive Streets in the World, a survey by Wealth Bulletin, Via Suvretta in the Swiss ski resort of St Moritz, was the only street on the list where prices rose for top properties over the past twelve months.

Ranked sixth on the list, a home on this street costs at least USD45,000 per square metre, which is 18 per cent more than this time last year. Prices have been pushed up by strong demand from foreign tax exiles, especially from Britain where many non-domiciled, wealthy foreigners have lost their privileged low-tax status.

Many Britons are joining these non-doms since the British government started raising taxes for all wealthy individuals say estate agency, Chesterton Humberts, and London property consultant, Charles McDowell.

In addition to St Moritz, rising demand from foreign HNWIs is pushing up prices in the posher districts of Zurich and Geneva.

“It’s no surprise that Swiss property has held its value and is in some areas rising," says McDowell, "Swiss bankers report that they aren’t seeing a large influx of Brits moving in but a number of my clients have gone forward with the purchase of a second home in Switzerland. This gives them the option of changing their residency if the tax situation in the UK or anywhere else becomes untenable."

As for the world's most expensive street, that's in Monaco the Wealth Bulletin survey reveals. Here is the survey's top ten in full:

• Avenue Princesse Grace, Monaco, $120,000 per sq/m
• Chemin de Saint-Hospice, Cap Ferrat, South of France, $100,000 per sq/m
• Fifth Avenue, New York, $72,000 per sq/m
• Kensington Palace Gardens, London, $65,000 per sq/m
• Avenue Montaigne, Paris, $54,000 per sq/m
• Via Suvretta, St Moritz, Switzerland, $45,000 per sq/m
• Via Romazzino, Porto Cervo, Sardinia,$42,000 per sq/m
• Severn Road, The Peak, Hong Kong, $40,000 per sq/m
• Ostozhenka Street, Moscow, $35,000 per sq/m
• Wolseley Road, Point Piper, Australia, $28,000 per sq/m

(All The World's a Home : Global Property News)