FALKLANDS ISLANDS HOT PROPERTY?

Will there be a land grab in the Falkland Islands? Geologists believe up to 60 billion barrels of oil lie underneath its coastal waters in the South Atlantic. To put that into context one of the world's largest reserves, Saudi Arabia's Ghawar oilfield, has 80 billion barrels. That dwarfs the 5 billion barrels in the North Sea's largest field, Fortis.

Already the Falkland's capital, Port Stanley, is filling up with oilmen and equipment for exploratory drilling. If the Falklands do become the islands of black gold, then its property market may surge as the demand for accommodation from oil workers rises, and others come down to sell them goods and services.

Investors might be inspired to buy property, but it's possible Argentina might try to get there first. There are property-based investment opportunities for entrepreneurs too. For those tempted by life in one of the world's remotest spots, a Falklands bed and breakfast property, Darwin House, is on the market for GBP300,000.Even if not much oil is found all the publicity might help the island's small tourism industry.

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US HOUSING MARKET DOUBLE DIP

The United States housing market will have a double-dip downturn consultancy, Capital Economics, says. Surging supply, falling demand and limited credit mean the upturn in prices during the autumn and winter will end when government tax credits are withdrawn this spring.

Ironically, past price falls and current low interest rates mean house prices are affordable once again, but demand is limited, because few households are willing to take on new mortgages, preferring to pay off debt instead.

Prices rose 8 per cent from their lows during the recent recovery, but will drop 5 per cent in the second downturn. A fading economic revival and continued high unemployment mean up to five million homes will be foreclosed over the next couple of years says the consultancy.

The good news, is that a second downturn won't trigger a financial crisis, unlike the first property market collapse, and price reductions may tempt buyers, underpinning a more sustained recovery later.

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ONLINE PROPERTY AUCTIONS GROW

It is getting easier to buy a home from the comfort of your armchair with a laptop or even a smart phone. Property auctions are growing in number and becoming more computer-friendly.

Marbella-based Direct Auctions, has launched a Portuguese auction service to supplement its Spanish auctions, in which buyers can look at properties and make bids online before the auction date.

In Britain, property valuations website, Zoopla.co.uk, has launched online auctions for homes, that run for four days at a time. The first 150 homes were auctioned in February since when auctions will be held once or twice a month.

The idea for online property auctions has blown in from the United States where auctioneer, REDC, sells about 1,000 homes this way each month.

The advantage for buyers is they can purchase from “motivated sellers” with no chance of being gazumped Zoopla says. For sellers, it can mean a speedy sale.

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EGYPTIAN HOLIDAY HOMES BOOST

In Egypt, estate agents are hoping a new airport terminal at Hurghada on the Red Sea coast, will boost visitor numbers, pushing up the demand for holiday homes. The new 92,000 square metre terminal will increase capacity from 6.7 million to 7.5 million passengers at the airport. Completion is scheduled for 2011.

“The announcement of the new terminal is encouraging for property owners who will enjoy greater access to their own homes as well as capitalising on the opportunity to generate rental income from additional visitors to the area," says Steven Worboys of property company, Experience International.

His company is offering studio apartments for sale from GBP21,000 in Hurghada. Alternatively, potential holiday home buyers can investigate El Gouna (pictured above), an upmarket new town, a 20 minute drive up the coast, which has a number of swanky holiday homes overlooking lagoons.

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INVESTING IN HOTELS

Alongside the rise in exotic forms of holiday home ownership, like fractional and leaseback, over the past decade has been growing interest in hotel room investment. Guest rooms and apartments can be purchased at apart-hotels, which are also known as condo-hotels.

A guest room or apartment owned by an investor at an apart-hotel is let out to visitors, cleaned and maintained in the same way as a guest room at a conventional hotel. The apart-hotel and investor share the proceeds of letting out these rooms, and, in some cases, rental returns are guaranteed for a period. An investor can use their guest room for part of the year, although a hotel operator may charge for this.

Conjured up in the United States, the apart-hotel concept has spread across the world. Apart-hotels are found in cities and holiday resorts.

Lucy Russell, managing director of buyer agency, Quintessentially Estates, said
apart-hotel investment was strongest in financial centres like London, Hong Kong and New York where it appealed to visiting businessmen.

“If you are in a city on a regular basis and you would normally be in a hotel room I think it works out quite well and is financially viable,” she said, “If you are looking at it as a long term investment, then I am not sure if it is the best route to take. You may be better off buying an individual unit somewhere.”

However, hotel rooms and apartments could be less expensive to buy than a one bedroom flat, so they attracted some investors she said.

“I think also people are much more transient than they used to be,” she added, “so things like hotel investments are more popular than they would have been five years ago.”

Charles Weston-Baker, director at estate agency, Savills, advised buyers to take professional advice before investing in apart-hotels.

“The model can be good,” he said, “but like all property it is dependent on location. It needs to be somewhere with high occupancy rates.”

On the popular Philippines holiday island of Borocay, marketing for the Continent Fairways apart-hotel, is underway. Fifty-six guest apartments are offered at prices starting from USD110,035. The developer, Paradisya Land, guarantees investors a 14.2 per cent rental return for at least one year.

The apart-hotel is being built in the grounds of the Fairways and Bluewater Golf and Country club where there is an 18-hole golf course which investors and hotel guests can use.

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