NEW MARRAKECH HOLIDAY HOMES

Most Riads Redeveloped

Entering La Villa des Orangers was like being told a secret. Here a visitor can discover the type of tranquility usually only found in churches, temples and places of exquisite natural beauty. 

Walk through a quiet, high ceilinged corridor lit by lanterns and into an inner courtyard where, in the middle surrounded by four orange trees, an ornate stone fountain burbled gently. The sweet smell of incense wafted across from an alcove where lantern light illuminated the blue and white mosaic ties decorating floors and walls. Above, galleries overlooked the courtyard on four sides. 

Through another corridor into a second, bigger inner courtyard which had a shaded seating area at one end and swimming pool at the other, with exotic, flowering plants, including more orange trees, occupying most of the rest of the space. This lantern-lit courtyard was also overlooked by first floor galleries, and everything, water, leaves and air was still. It could have been a Moroccan-style setting for a performance of Midsummers Night Dream.

La Villa des Orangers is a boutique hotel, but the type of building it occupies is known as a riad, a traditional Moroccan-style house, the must-have abode for adventurous Europeans in north Africa during the early noughties when many of these largely unmodernised properties were on the market at remarkably low prices, only GBP40,000 in some cases. Set around one or two inner courtyards these two storey houses are unusual in that they are largely windowless on the outside, providing occupants with a high level of privacy and protection from noise. 

The largest Marrakech riads are palatial and rarely come onto the market these days. Developers have been restoring them, converting some into hotels and restaurants, and selling others as upmarket homes. With most Marrakech riads now restored and occupied, many developers are turning their attention to building villas on the outskirts of the city where a very different lifestyle is offered to residents.

Modern Suburban Villas Popular

New suburban villas include Dar Tourtelle, a three bedroom home situated in the Ourika Valley to the south of Marrakech at the foot of the snow-covered Atlas Mountains which can be seen from the property, as can the surprisingly green surrounding countryside which is filled with trees – palm, olive, cypress and eucalyptus. 

On offer for GBP650,000, this home is in the Bab Adrar development where Moroccan architect, Karim el Achak, has designed eight villas, each with a different floorplate to the others. The architecture blends traditional Marrakech style, such as building with red clay, with European comfort, including 3.5 meter-high ceilings which are for good air circulation, a concept French colonials introduced to Morocco during the early twentieth century. 

With daytime temperatures ranging from between 20 degrees centigrade in winter to 45 degrees centigrade in summer, the villa has plenty of shaded, outdoor spaces, including a roof terrace and garden terrace. 

The development has a communal tennis court and hamman. Its developer is British entrepreneur, Tim Buxton, who started out restoring riads at the start of the last decade before moving into building villas.

“The riad market ended in 2005, following a tripling or even quadrupling of prices,” says Buxton, “Now it is all about villa construction and the development of resort communities outside Marrakech.”

He says suburban villas appeal to homebuyers who want to escape the hustle and bustle of the medina. Outdoor pursuits, such as walking and skiing in the Atlas Mountains, can be pursued more easily from villas on the south side of the city too.

Many villa buyers are former holiday-makers who rent a property one or two times and then decide they want a house of their own says Alicia Pasley-Tyler, international lettings negotiator at Aylesford estate agents which is marketing homes at the Bab Adrar development.

Aylesfords is marketing homes for sale at Assoufid, one of the large resort communities under construction on the outskirts of Marrakech and which also has views of the Atlas Mountains. Project developer, Assoufid Properties Development, is planning to build 80 villas at this 222 hectare golfing community. Initially, 14 villas are being offered for sale, six of which have found buyers. 

The project was first launched in 2006, but construction work was put on hold in 2010 following the credit crunch. Work restarted in 2012 after Kuwaiti investors agreed to help bankroll the scheme. However, timing of the final completion date will depend on how quickly villas are sold. Construction of the resort's hotel will start later this year the developer says. The 18-hole golf course and four villas have been completed so far.

Villas at Assoufid are huge. The Art Deco-inspired show house has 500 square meters of indoor space and 500 square metres of covered terraces, including a massive, shaded roof terrace with 360 degree views. Each house has a garden, swimming pool, pool house, garages and staff accommodation set in one hectare of its own grounds. Prices start from euro1.95 million for a three bedroom villa with an internal area of 552 square metres to euro2.95 million for the show house which has four bedrooms and an additional two bedroom guest pavilion.

Marrakech Property Prices Crashed

The second homes market in Marrakech has struggled since it peaked in 2006, because of the global economic downturn and fears over the extent to which Arab Spring-related violence might afflict Morocco. Prices have fallen for all types of Marrakech property over the past six years, down 20 per cent for villas, 40-50 per cent for apartments and 30 per cent for riads, says Buxton. Some developments appear to have been shelved. A resort community scheduled for completion in 2012 by Monaco's state-owned SBM corporation remains on the planning board. The company has not responded to our questions about its future.

Although Morocco has been rocked by occasional bomb attacks made by Western Sahara separatists and witnessed some street protests against corruption, unemployment and other issues, the country has remained stable since the Arab Spring began in 2011, and Buxton believes the Marrakech housing market is starting to recover, partly helped by French buyers wanting to escape the eurozone crisis and tax rises imposed by President Hollande.

“We will have low price growth in 2013 and this will accelerate in 2014, because the French are coming back,” says Buxton, “The French like Morocco, because don't need a passport to get in, only an ID card, and because of the language.”

Growing Expat Community

The British are arriving. At the Bab Adrar project, five villas have been bought by Britons and one by a French family since sales began. Rich Moroccans from Casablanca, the country's main commercial centre, are buying weekend retreats around Marrakech. Swiss second home buyers are arriving, their language skills ensuring they are able and willing to negotiate deals in Francophone Morocco.

Many overseas home buyers are looking to retire in Morocco, attracted by its low taxes, including an absence of inheritance tax on property, says Buxton.

Most villas on the market in Marrakech mix traditional with modern in their design, such as a suburban, four bedroom villa in the Agdal district of the city on offer through Savills for euro2 million. Christies International Real Estate is marketing a three bedroom villa located within the Palmeraie, a district of dry palm groves. The Modernist-style, euro3 million home has gardens, a swimming pool, jacuzzi with views of surrounding palm groves, and terraces with views of the Atlas mountains. 

Re-sale properties available at resort communities include a three bedroom villa at the Four Seasons resort, 1.5 kilometres from the medina, on offer through Knight Frank at euro1.25 million. 

(This is a version of my article which appeared in Identity magazine, UAE)

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.

http://globalpropertynews.blogspot.com

PIRATES DRIVE UP NAIROBI HOME PRICES

In London, first-time buyers complain about bonus-spending bankers and free-spending foreigners pushing up the value of homes. In Hong Kong, the middle classes blame an influx of mainland Chinese buyers for pricing them out of the market. In Nairobi, Kenyans say Somali pirates are inflating the city's house prices.

Kidnapping and holding for ransom yachtsmen and merchant shipping crews is good business for Somalia's seafaring criminals who have made more than USD100 million from these activities in the last two years, London-based think tank Chatham House reports. And their income is rising sharply. Ransom payments doubled over the twelve months to January 2010, from an average of USD1 million per vessel to USD2million, the think tank says.

Kenya shares a long border with Somalia and has a large Somali community, so smuggling money into the country for laundering through its property market is relatively easy. Result, property prices have trebled in Nairobi over the past five years.

http://globalprpertynews.blogspot.com

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.

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)

PRICES SOFTEN IN MAURITIUS

Mauritius, one of the most popular countries for setting up second homes, will probably see a fall in prices this year, according to estate agents.

Holiday home projects have sprung up on the coastline since the Indian Ocean island opened its doors to overseas property buyers in 2005. These developments are mostly gated communities with leisure facilities including golf courses, spas and restaurants. There are two types of communities - Integrated Resort Schemes (IRS), launched four years ago, in which villas are mostly available, and smaller, less expensive Real Estate Schemes (RES), started 18 months ago, which are apartments and houses.

IRS project Villas Valriche, on the southwest coast, will comprise 52 homes in phase two, seven of which have been sold since marketing started last November. Its developers, South Africa-based Second Lifestyle and Mauritian landowner Hector Espitalier-Noel, said completion of the second and third phases might be delayed if sales remained slow. This is because they cannot build the homes until buyers decide what style of villa they want. Twenty four styles are on offer.

"Phase two was launched at the end of 2008 and, although interest has been very high, the global market conditions have slowed buyers' willingness to put down deposits," said Robert Green, director of Cluttons, the sales agents for Villas Valriche. Prices start at US$950,000 for the estate's freehold villas.

Harry Lewis, international residential director at estate agency Savills, said sales were traditionally weak at this time of year which exacerbated the downturn.

"We've seen a mirror situation to all high-end resort developments worldwide," he said. "There has been a substantial reduction in inquiries, prices are softening but not as quickly as many would hope, and everyone forgets that January and February is traditionally our slowest selling period of the year."

The slowdown follows strong sales at initial IRS projects until last year. Anahita and the Tamarina Golf Estate and Beach Club are both sold out. At Villas Valriche, 123 of 132 plots in phase one were sold following its launch in May 2007.

Mr Green said resale prices for Tamarina properties were double their initial sales prices because of that growth. Prices rose 20 per cent at Villas Valriche last year, he added.

The nationality of buyers has altered since the IRS initiative was launched.

"The profile of buyers has changed as a result of the global financial crisis," Mr Green said. "The South African and British markets, previously regarded as the two biggest, have retracted largely due to weakening exchange rates and, as a result, other markets, particularly in the euro zone, have increased interest."

Some buyers are western expatriates based in the Middle East.

Projects had not been marketed in East Asia, so few buyers had come from there, Mr Green said. With demand drying up elsewhere, developers considered these markets potentially important now, so exhibitions might be held in Hong Kong soon, he added.

Several developments are scheduled for completion over the next couple of years.

South African estate agency Pam Golding Properties, which is affiliated to British agency Savills, is marketing two schemes that will be completed next year, including The River Club where half of its 250 homes have been sold. Prices start from US$825,000. It is also marketing Corniche Bay on the southwest coast which is centred on an 18-hole Gary Player-designed golf course. Ten of its 120 wavy-roofed villas, designed by Norman Foster, have been reserved. Prices start at US$3 million.

RES schemes include Cape Bay Beach Resort Mauritius where 22 of the 41 apartments have been sold. Prices for the remaining units start at US$355,000. Prices at RES project Le Residence start at US$352,000 for a two-bedroom, two-bathroom first floor apartment with roof terrace.

Jonathan Tagg, managing director of Pam Golding Properties, said even though the launch of the RES sector coincided with the start of the credit crunch, it had withstood the property market downturn because few properties were on the market.

"The shortage of resales of RES units has kept prices high and the crisis has not affected prices substantially," he said.

Mr Tagg forecast lower-priced RES and IRS properties coming on the market this year.

"We will see more IRS developments priced at about US$1 million as opposed to the conventional pricing of around US$2 million," he said. " RES developments are likely to be priced from US$300,000 to take advantage of a lower price bracket of buyers."

He said prices in Mauritius were, until recently, expensive but that there were some nice apartment blocks and small housing developments coming onto the market at prices ranging from US$250,000 to US$500,000.



MAURITIUS HOME BUYER'S GUIDE

Overseas buyers of Mauritian homes, sold for US$500,000 or more, will gain permanent residency on the island. Investors can only buy these properties at Integrated Resort Schemes (IRS) which are holiday home communities dotted round the island's coastline.

Permanent residency brings several advantages including tax. Income tax is levied at a flat rate of 15 per cent on their worldwide income. Expenses, losses and debts can be offset against this. Depending on the taxpayer's circumstances a certain amount of income is tax-free. There is no capital gains tax or inheritance tax.

On the downside, IRS homebuyers must pay a US$70,000 purchase tax.

Alternatively, overseas investors can buy less expensive homes at Real Estate Schemes (RES) where prices start at about US$300,000. However, they will not gain permanent residency by investing in these projects. Investors in new RES units must pay US$25,000 registration duty. Buyers of resale RES homes pay this charge plus a 5 per cent land transfer tax.

In a separate government initiative, retired foreigners can live in Mauritius provided they deposit a minimum of US$40,000 into a local bank account each year. These retirees can buy IRS and RES properties.

The Permanent Residence Scheme (PRS) awards permanent residence to foreigners who invest US$500,000 or more to start a business. These overseas businessmen are allowed to buy a home on the island. Foreigners with sought-after professional skills can gain permanent residency under another scheme and buy property.

Robert Green, director of Cluttons estate agent, said the IRS and RES rental markets were untested, so rental returns were impossible to calculate. The developers of Villas Valriche estimate 8 per cent yields are possible at their IRS project. According to the Global Property Guide, rental yields are 6.17 per cent in the general housing market.

IRS and RES home owners, who let their properties through the development's management company, must pay it a letting fee of about 20 per cent of the rent. Rental income is taxable.

More than 60 per cent of Mauritians are of Indian origin, 25 per cent Creole, 3 per cent Chinese (mainly Hakka) and 2 per cent Europeans. English is the official language.

STRUGGLING SEYCHELLES

Nowhere is immune from the global economic crisis, not even paradise. Sales of luxury holiday homes in the Seychelles have slowed to a trickle, because of belt tightening by the world's wealthy.

Although the Seychelles gave the go-ahead to building resort communities for overseas buyers four years ago, tight planning controls mean only four schemes have homes for sale. Prior to the collapse of several banks like Lehman Brothers, last autumn, sales had been good.

On the west coast of Mahe, the Seychelles' principal island, 18 of 28 villas at the highly exclusive Four Seasons Private Residences were sold within a couple of months of coming onto the market in May 2008, most in pre-sales. The least expensive home, a three bed residence, is USD7million. Two buyers come from Singapore, most of the rest from Europe and the Middle East. Over the last six months no villas have been sold at this project.

Only one villa from 13 on offer at the Banyan Tree Seychelles resort on Mahe island has been sold. Prices start from USD1.5million for a one bedroom villa. Eden Island, the first, largest and least expensive of the resort communities was mostly sold before credit began to be crunched. Two-thirds of its 450 villas, duplexes and apartments are sold with South Africans and Britons the biggest groups of buyers. Prices start at USD375,000.

Sales were strongest over the past six months at Zil Pasyon on Felicite Island where prices start at USD3million for a three bed home. Nine of its 28 villas have been sold to buyers from across the world, including a Hong Kong-based western expatriate. However, some buyers were having financial difficulties project developer, Per Aquum Residences, revealed.

“Some buyers have asked for extensions on payment schemes,” said Jenni Beggs, managing director of Per Aquum Residences, “Two UK buyers from Monaco put down deposits and have withdrawn. We've found that the UK market has been hardest hit.”

James Davies, director at London-based Hamptons International, sales agents for Four Seasons Private Residences, said the global economic slump had dampened sales of homes, but buyer enquiries had grown since December.

“Inevitably, like everything, there were buyers, but then their circumstances have changed, both at the high end and entry level,” he said, “Since the end of last year we have had more interest from individuals looking to relocate, some for tax reasons. Also we have entrepreneurs looking for somewhere to chill out.”

He anticipated sales would start to pick up at Four Seasons following the opening of its hotel on 5th February, because visiting holidaymakers would be able to view nine villas completed in January.

“We are very confident that we will have sold out by end of 2009, because it will all be built, the hotel is open and it is one of the best resorts in the world,” he said.
With only a few luxury homes being built in the Seychelles, estate agents and developers are confident they can ride out the downturn, especially since these properties are rent-able to holidaymakers.

“The key is that it is a very limited market,” said Mr. Davies, “The Seychelles has very high environmental standards, so getting planning permission takes years and years and years. Also, it has the highest average hotel room rates in the world and consistently higher occupancy levels.”

Each resort scheme is highly distinctive. Situated on steep hillsides overlooking a quiet bay, the Four Seasons villas are built on stilts from stone and wood in the creole-style with steep metal roofs to shoot heavy rain. Residents can use Four Seasons hotel facilities.

The strikingly minimalist Zil Pasyon villas designed by British architectural practice, Richard Hywel Evans, have James Bond baddie-levels of over-the-top glamour. Each villa has a glass bottomed swimming pool outside the first floor master bedroom which forms part of the ceiling of the lounge below.

Each Banyan Tree villa has a surround sound home theatre system, steam room, jet pool, sun deck, private swimming pool and access to the beach, although the sea is rough here, so not ideal for swimming. Residents can use the resort's spa.

Eden Island is a marina complex built on reclaimed land off the coast Mahe, close to the airport. Mr. Davies said there was a growing trend for overseas investors to buy land on the Seychelles's 115 islands, so they could build their own home. Hamptons was helping six foreigners, including a Hong Kong-based British expatriate, to buy land.

“They are looking for sites that range from one to 20 acres,” he said, “You can pay GBP5 million for a few acres of beach-front, or get something significantly better for GBP2million, because owners are picking valuations out of the air. It is a brand new market, so it is very difficult to get good valuations. “As soon as you step back from the beach prices fall right back. You can get a couple of acres of property with ocean views for a GBP300,000.”



SEYCHELLES HOME BUYER'S GUIDE

The Seychelles is a tax haven which gives permanent residency to overseas second home buyers. As residents, they benefit from paying no tax on income, inheritance and capital gains.
A minimum of SCR1 million (one million Seychelles rupees) must be spent on a property to gain residency.

Property taxes can be high or low depending on where you buy. Stamp duty is higher for properties bought outside of holiday home estates. The tax ranges from 2 per cent at resort community, Eden Island, to 30 per cent in the general housing market.

Placing your home in an estate's rental pool may reduce your stamp duty liability – at resort community, Zil Pasyon, home-buyers pay 6.5 per cent stamp duty if they allow the estate's management to rent out their home, but 10 per cent if they don't.

Buying properties on holiday home estates can incur some huge service charges. At Four Seasons Private Residences, they levy USD65,000 to USD85,000 per year service charges and at Zil Pasyon, USD100 per square meter per year. Since Zil Pasyon's villas range from 612 square meters to 1400 sq m in area, that means owners could pay a whopping USD140,000 in management charges each year.

Developers say high service charges are needed to pay for expensive construction and maintenance costs. At Four Seasons Private Residences, hotel facilities were enlarged to accommodate villa owners and basic infrastructure like water desalienation and power generation had to be built. Providing security guards and golf buggies for residents raised costs further.

Properties at Four Seasons and the Banyan Tree Seychelles resort can be bought freehold, so too individual homes and undeveloped plots. At Zil Pasyon and Eden Island homes are leasehold.
Rental income is classed as business revenue, so it is taxed at a progressive rate from 25 per cent to 40 per cent. Tax deductible expenses can be claimed.

James Davies, director at estate agency, Hamptons International, said the second home sales and rentals market on the islands was too “immature” to estimate potential rental yields accurately. Rental returns could be given at the Four Seasons project in six months time when its rental programme was up and running and it was known how much rent holidaymakers were willing to pay, he said.

However, Banyan Tree guarantees villa buyers gross returns of 6 per cent per year for six years and use of the villa for a maximum of 60 days each year. Owners can use some of this time at the operator's other resorts.

Independent estate agents offer completed homes and undeveloped plots for sale, including the occasional private island.