USA: Latest property news

GM Motors expand in Detroit

General Motors Co has shown their belief in the recovery in Detroit, by purchasing a mixed-use commercial property across the street from it's world headquarters.

Cleveland-based real estate company Forest City Enterprises Inc. announced Thursday that it sold the Millender Center's hotel, parking facility, retail and office space to GM subsidiary Riverfront Holdings Inc. for $37.8 million.

Forest City and associates retain ownership and management of Millender Center Apartments.

The sold assets had been leased to Riverfront Holdings with an option to buy since 1998.

GM spokesman Tom Wilkinson says the automaker has not occupied the center's commercial property but has used space in the parking deck.

GM bought its previously leased Renaissance Center headquarters in 2008 for $626 million. It moved into the riverfront complex in 1996.


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Improving Economy Helps Vacancies Rebound

The National Association of Realtors claims that U.S. commercial property vacancies may have peaked, caused by the improving economy.

"The basic fundamental of rising commercial leasing demand, resulting from a steadily improving economy, means overall vacancy rates have already peaked or will soon top out," Lawrence Yun, chief economist of the real estate group, said in a statement today. "Multifamily housing is the one commercial sector that has held on relatively well in the past year, and can expect the best performance in 2011."

U.S. gross domestic product grew by 2.5% in the third quarter, beating the 2% estimate, according to the Commerce Department. As the economy improves commercial real estate occupancies increase as businesses expand and employers add jobs.

"Property fundamentals are improving, investment capital is slowly flowing back into the sector, commercial mortgage originations are increasing, and demand for CMBS issuance is gaining traction," Standard & Poor's said in the report today.

As commercial property grows, investors are also looking to residential property to decide where the peak is, or whether it has already passed.

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Steady US Real Estate Recovery Predicted

A steady recovery is predicted for the US residential real estate market, despite some ongoing challenges, according to the National Association of Realtors.

NAR chief economist Lawrence Yun said to the 2010 Realtors Conference and Expo that he expects a continuing improvement of underlying fundamentals of the current market in the coming years.

'A slow recovery is taking place as we head toward our goal of a stable, solid housing market. However, the pace of job growth will determine the strength of the housing market recovery," he explained.

Overall real estate experts are cautious but optimistic about the current and future state of the industry. Panelist Margaret Kelly, chief executive officer of RE/MAX, said today"s market shouldn"t be called the new normal because the old market was abnormal. 'The spike up and down in the housing market wasn"t normal so we shouldn"t be measuring ourselves against it," she said.

Kelly added that despite some challenges there are plenty of opportunities in the housing market with low mortgage interest rates, abundant inventory and stable prices attracting buyers to the market.

'To be successful in the current housing market, real estate professionals need to educate themselves about buying and selling distressed properties and working with investor buyers, who are a significant part of the market. Real estate professionals should be learning how to handle short sales, how to market themselves and find buyers and to really understand market conditions," she explained.

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Commercial Property Boosts US Market

Commercial property is one sector which is currently booming in the US, providing stability to the property market as a whole, according to a recent report. In fact, almost one-third of global capital available for commercial real estate investment is expected to target the US market in 2011.

Both Europe and Asia are also expected to see double-digit increases in capital commercial real estate investment, and worldwide investment in commercial real estate is expected to rise substantially in 2011.

A new study by DTZ Research finds that global investors are prepared to plow some US$97 billion into the U.S. commercial real estate market in 2011. That represents a 54% increase over DTZ's previous estimate in December 2009.

On a global basis, DTZ estimates that $281 billion of capital will be available to invest in global real estate in 2011, a 22% increase over its previous estimate. The firm's latest The Great Wall of Money report analyzed the capital being raised by an extensive range of investor groups. The greatest increase in available capital is forecast to be focused on the U.S. ($97 billion), which is in line with the "DTZ Fair Value Index" score of 89. That score indicates that most markets in the U.S. now offer an attractive opportunity to investors.

"The current attractiveness of the US is in stark contrast to the situation a year ago," says Nigel Almond, Associate Director of Forecasting & Strategy at DTZ and author of the report. "Most U.S. markets were cold, offering expected returns below risk adjusted required returns. This opportunity remains largely unexploited to date, since transaction volumes in the U.S. have not yet seen the levels witnessed in Europe and Asia Pacific."

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New Research Shows Detroit as Investment Hotspot

Residential property prices in the US rose slightly last month, according to government figures, but foreclosures are still rising, increasing opportunity for overseas buyers looking for a bargain in the US.

A 0.4% increase in property prices in September almost reversed the 0.7% fall in August according to the latest report from the Federal Housing Finance Agency. However, its monthly House Price Index also shows that overall prices fell 2.4% in August from the year before and remain 13.6% below the peak of the market in April 2007. Reports also show that foreclosure filings, which include notices of default, pending cases, notices of foreclosure sale and repossessions, increased from last year in 65% of metropolitan statistical areas tracked in the third quarter of the year.

Figures from RealtyTrac shows that the Seattle area had the highest increase with filings rising 71% from the third quarter of 2009. Chicago was second with a 35% increase followed by Houston, Texas at 26%.

California, Florida, Nevada and Arizona accounted for 19 of the top 20 foreclosure rates in the country. The only exception was Boise City, Idaho, which was 14th.

Las Vegas saw the highest rate in the third quarter, where one in every 25 housing units received a filing, more than five times the national average. But the 32,288 filings is down 20% from last year.

Cape Coral-Fort Meyers, Florida, was second with a one in 35 foreclosure rate. Filings there reached 10,352, down 22%. While one in 36 houses in Modesto, California, received a filing in the third quarter for the third highest rate, but it was an 18% drop from a year ago.

Miami, Florida, experienced the highest total number of foreclosures in the third quarter, at more than 58,600 filings, an increase of 9% from last year and up 25% from the previous quarter.

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New Research Shows Detroit as Investment Hotspot

The Michigan city is fast becoming a top choice for foreign real estate buyers, as US president Barack Obama declares he loves the place and the US government pours millions into its car industry.

According to a market commentator, it is displaying classic signs of being ripe for investment for buy to let investors in particular.

'The US housing market, in general, remains ideal for investment opportunities. House prices are still low due to foreclosures and rental demand is high. Now, as Detroit enjoys an economic recovery, investors can benefit from Government subsidised rents, capital growth over time and re-selling back into the local market," it was explained.

Interest doesn"t just come from the more traditional investors in Canada and the UK, investors from Saudi Arabia and Singapore are also making enquiries and looking to buy.

Analysts believe there are two potential investment strategies for Detroit, the first involving robust cash flow for purchase at a low cost, refurbish and rent and then a strategy for capital growth over time.

'Detroit was in a terrible state when we first looked at investment opportunities there. However, this worked in our favour because we approached the City and offered to assist with the housing and economic regeneration by bringing in international investment. This led to the City endorsing our product and also offering a significant reduction in taxes for investors," said one commentator.

Analysis shows that employment and the local economy are picking up in Detroit. Auto companies such as Ford and General Motors (GM) are reporting second quarter profits in the $billions. GM"s electric car, the Chevy Volt, is about to go into production for worldwide sales. Chrysler"s Fiat 500 electric car is also planned for 2012.

Although approximately 230,000 workers were laid off when the motor industry crashed in Detroit a few years ago, the industry has already taken on around 15,000 new employees so far this year. Reports indicate 10,000 new auto workers will be required, per year, from 2011 to 2013. US Mortgage collective, Quicken Loans, is creating 4,000 new jobs in Detroit. Plus Marathon Oil Corporation is expanding its refinery and creating 2,000 new positions in the area.

Detroit is also becoming a major player in the film industry. Tax incentives mean that in 2009 parts of 470 movies were filmed in Detroit and a number of 2011 release films are being shot there this year including Scream 4, LOL: laughing Out Loud with Demi Moore, Real Steel with Hugh Jackman and The Mechanic with Donald Sutherland.

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Detroit Property Shows Signs of Recovery

Signs that the Detroit region is starting to recover have appeared in home foreclosure rates and jobless figures. August figures showed that the foreclosure rate slowed for the first time in the year, while the state jobless rate was steady for the second month at 13.1%.

"In the Detroit area, the worst part of the recession is over," said Patrick Anderson, an economist and principal of Anderson Economic Group in East Lansing.

Anderson cited a two-percentage-point drop in the Metro Detroit area's jobless rate to 14.1 compared with a year ago, and improving median sales prices of homes and condominiums.

Comerica Inc. Chief Economist Dana Johnson said it "all adds up to fairly convincing evidence that a moderate recovery is under way." He contends the housing market may be poised for a healthy rebound next year.

"Once people in Michigan become more convinced that their jobs are secure and that house prices have stabilized, demand will begin to build and homebuilding will start contributing to a more broadly based recovery," Johnson said in a recent report.

The state's jobless rate remained unchanged in August at 13.1 percent compared with July and was down 1.2 percentage points compared with the August 2009 rate of 14.3 percent, the Michigan Department of Energy, Labor & Economic Growth reported Wednesday.

"Michigan job levels have stabilized somewhat since August 2009," said Rick Waclawek, director of DELEG's Bureau of Labor Market Information and Strategic Initiatives.

Another positive sign is that Metro Detroit foreclosure activity, while on a record pace for the year, fell 7.8 percent in August compared with a year ago, according to RealtyTrac, a California-based foreclosure tracking firm.

Foreclosure activity from initial notices of default to sheriff's auctions of seized properties fell to 9,849 from 10,683 a year ago in Macomb, Oakland and Wayne counties. For the six-county area -- which also includes Lapeer, Livingston and St. Clair counties -- foreclosures dropped 8.8 percent last month compared with the same period a year ago.

An increase in foreclosures usually leads to lower home sales prices, but prices have been recovering in Metro Detroit because of a drop-off in foreclosure sales.

One explanation is the slowing loss of jobs and growing confidence among homeowners, Johnson said. "Houses are worth whatever people are willing to pay for them," he said. "I think you are seeing more people feeling secure in their jobs and feeling (home) prices have fallen enough."

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Foreclosures reach record high

A record number of homes in September and the third quarter fell into foreclosure as lenders continue to work through the shadow inventory of distressed properties, according to RealtyTrac, which monitors the filings across the country.

For the month of September, foreclosures increased 3% from August to 347,420 properties. Banks repossessed 102,134 properties in September, the first time REO reached triple digits for a single month.

Foreclosures were filed on 930,437 properties in the third quarter, a 1% dip from last year but a 4% increase from the previous quarter. In the third quarter, one in 139 homes received a foreclosure filing, which includes default notices, scheduled auctions and bank repossessions (REO).

REO for the third quarter reached a new record as lenders took back 288,345 properties, a 7% increase from the previous quarter and up 22% from last year.

But as lenders work through the supply of serious delinquent loans, fewer are defaulting. RealtyTrac reported 269,647 default notices in the third quarter, down 22% from the peak in the third quarter of 2009.

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Freeze on Foreclosures Restricts Supply

The largest mortgage firms in the US have put a halt on home foreclosures, to attempt to process legal issues. This sudden tightening of supply, with distressed properties accounting for almost a quarter of transactions, is likely to lead to soaring prices on foreclosed property, and a rush by investors to purchase what is left over.

Bank of America Corp, the largest US lender, extended a freeze on foreclosures to all 50 states on October the 8th 2010. JPMorgan Chase & Co. and Ally Financial Inc"s GMAC Mortgage unit stopped repossession cases in 23 states where courts supervise home seizures.

According to one data company, foreclosure sales accounted for 24% of all home sales as of September 2010. They made up an even larger share in states which suffered strongly in the downturn. In Nevada it was 56%, in Arizona 47%, and 43% in California. Florida, Massachusetts, Michigan and Rhode Island the share of home sales was about a third.

Some indicators show the U.S. real estate market had turned a corner in August. The number of contracts to purchase previously owned homes increased 4.3 percent, the second monthly gain, according to an Oct. 4 report from the National Association of Realtors. Sales of previously owned homes rose to an annual pace 4.13 million, up 7.6 percent from July"s record low, the Chicago-based group said last month.

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One in Four US Home Sales Foreclosed Property

A massive 24% of homes sold in the United States in the second quarter of 2010 were foreclosure homes, according to new research, highlighting the amount of homes going into foreclosure as well as the demand for these homes due to their below market value cost.

The report, which examined homes for sale in Q2 2010 that were in a stage of foreclosure—either default, scheduled for auction, or bank-owned (REO)—said that more than 150,000 properties sold in April, May, and June 2010 were distressed.

The number is a rise of 3% from Q1 2010, but a decrease of 28% from Q2 2009, when the housing market crisis was at its peak. This may mean tightening supply as the recovery continues.

Despite the rise in the number of foreclosed houses sold in Q2 2010, the percentage of properties sold that were distressed dropped, due to a surge of sales of homes that were not in foreclosure.

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Michigan Bank Boosts Home Borrowing

The bank JPMorgan Chase & Co. has released new plans to help unemployed home borrowers across Michigan, by participating in a state fund which aims to pay a portion of the resident"s mortgage payment for up to a year.

This will boost the property market across Michigan, especially cities whose property markets were hard hit during the downturn, such as Detroit.

Michigan's Hardest Hit fund helps qualified borrowers by paying up to half of their mortgage payments for up to 12 months, saving them thousands of dollars. The help will be available for Chase customers who are behind on their mortgage payments as well as those who are current. Chase said it will roll out the program once the Michigan State Housing Development Authority has all the logistics in place.

For example, a borrower who has been making a $1,400 monthly payment for principal, interest, property taxes and homeowners insurance may be eligible to pay only $700 per month, with the state paying the difference.

This is likely to provide support to the housing market in Detroit, and helping with the recovery.

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Investment Accounts for 21% of US Home Sales in August

Residential property sales in the US increased in August with investors accounting for 21% of sales, up from 19% in the previous month. August saw an increase in sales of 7.6% alongside the ending of the homebuyer tax credit scheme, according to the latest index from CoreLogic.

Paul Dales, an economist at Capital Economics, said, 'Looking ahead, as the distortion from the tax credit continues to fade, home sales will rise further. But when unemployment is so high demand for housing in certain areas may remain relatively weak," he warned.

'Home values have shown stabilizing trends over the past year, even as the economy shed millions of jobs, because of the homebuyer tax credit stimulus. Now that the economy is adding some jobs, the housing market needs to steadily improve and eventually stand on its own," one analyst explained.


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Spain: Demand for Murcia increases 78%

Demand for property in Murcia has surged by 78 per cent this year, TheMoveChannel.com can reveal.

The region has long been mooted as the fastest recovering area in Spain, with the upcoming international airport and Paramount theme park boosting its potential for property investors. But interest in the region's real estate has already started to grow on the overseas portal, with enquiries between March and May this year 78 per cent higher than the three months from December to February.

The increase in interest follows official reports that property sales across Spain have risen too. Real estate transactions grew by 21.9 per cent in the first quarter of 2012 compared to the last quarter of 2011, the Spanish College of Property Registrars revealed this week. This boost in sales has been attributed to the country's "intense lowering" of house prices, as holiday homes become even more affordable for international buyers.

Spain's financial woes and historic bank bailout continue to dominate news headlines, but the country's unemployment has also driven rents up, with rates growing by 0.7 per cent in Aprilcompared to last year. Now, investors are looking to take advantage of the falling prices and higher rents, and Murcia is one their main targets. During May so far, the region's enquiries on TheMoveChannel.com are already 45.2 per cent above last month.

And a development launched this week in Murcia's most-visited golf resort is set to make them climb even higher.

Las Lomas Village, with prices below 50 per cent of the market's peak value, is a chance for investors to make the most of the high yields that come with having La Manga Club next door. Owners are guaranteed 35 per cent of the gross revenue for the village, explains the development's agent, UK Murcia Investment, while operating costs are covered by management. In addition, buyers get 30 days usage per year at no extra cost.

As well as La Manga Club's famous fairways, Las Lomas boasts its own golf facilities, plus 8 football pitches, 28 tennis courts, a hilltop spa, swimming pools and an on-site beach.

Released directly from the bank, the heavily discounted apartments (both studio and two-bedroom) are eligible for up to 100 per cent financing, meaning that a total capital outlay of only 12,000 to 15,000 euros is needed to invest.

Too good to be true? Not so, says UK Murcia Investment. Even TheMoveChannel.com's Managing Director Dan Johnson has decided to invest.

Johnson explains why the deal turned his head: "As a fan of sports, sunshine and the odd glass of sangria, these fantastic properties at La Manga tick all the important boxes for me. Dig into the deal and it just keeps getting better and better. A solid management package delivers good rental income from day one, while a really generous usage scheme lets you regularly enjoy the resort with family and friends."

"I have no hesitation in recommending this deal," Johnson adds. "I'm even buying a unit myself."

Source The Move channel

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Spain : 2 million homes on the market? The effect on property prices

I read a report on here on the possibility of 2 million homes being on the market in Spain and got to wondering the effect on already deeply reduced property prices in Spain. Two million homes sounds a lot but is it.? After a fruitless search I can not get a provable figure on what is normal in Spain.

Having lived in Spain for many years I know that the country was overdeveloped but it doesn't take a brain surgeon to know that. Having worked with all the major and some minor banks in Spain dealing with repossessions it is also very apparent that bank held property, with a "value" running into tens of billions of Euros, has a varied saleability. I would estimate 50-70% of all bank held property will never sell at a price anywhere near the book value, current value or even sell at all.

Potential buyers are now more savvy and look at value rather than price. Buyers that attained those rose tinted spectacles as soon as their plane left their country are now few and far between. So many properties were sold because they looked cheap, without the buyer having a yardstick for proper value aside from the tales told to them by their estate agent hungry to seal a deal.

There are now fears that as Bankia emerges as the next super bank in need of a bailout, following the resignation of its chief executive, that there may be a glut of property put onto the market as a result of government enforcement. Even if that does happen, do not despair. Prices will not crash further in Spain as so much of the property held by the bank is, for want of a better word, rubbish. When prices get compared there is not a decision on if to buy the bank repo that is cheap but offers no value, buyers now look for value rather than just price. Don't get me wrong, I am not saying all bank repossessions are bad, far from it. We currently are promoting a packaged deal from a bank in Hacienda Del Alamo that offers great value in the resilient market in Murcia on a golf course, near the new Paramount theme park and Corvera airport. Not a "cheap" price, just good value.

My other concern and a partial reason for the mess Spain is in, is the Euro. We can all speculate what will happen next, Greece may withdraw and go on its own which may be followed by other Southern Euro economies like Italy and Spain, but the overall answer is we do not know. Take a mortgage based in Euros for as much as you can and you can only benefit.

Over the last two years the euro has lost around 20% of its value against sterling, making property purchases 20% cheaper. Add that to declining values, low mortgage rates and good spectrum of properties to choose from, and it could be sensibly argued that the time is right now to buy in Spain. Is it the bottom of the market, no one knows. As one client once said to me, markets do not ring a bell when they hit the bottom.

Steve, MD Lydnem Property

Contact us at info@lydnemproperty.co.uk if you are looking for a good deal in Spain or its islands and we will see what we can find for you. Click on the link HERE for details on hacienda Del Alamo. For offers on property all over the world CLICK HERE

Cyprus: Limassol marina site visit.

Last Thursday, March 8 2012, we visited the site for the new marina in Limassol. Having had the brochures, we were a little sceptical given the heady prices northward of one million euros for a two bed apartment and between two and sixteen million for a villa.

Within an hour our view had radically changed. The construction of the first apartments is well under way and a show apartment has been constructed and the shell of the main building is now complete.

Spread out across 120 square metres the show apartment is on the ground floor. Elegant and contemporary, the open plan lounge leads to an American style kitchen. Buyers now get the option to change the internal layout if this does not suit. Off the living area are three good sized bedrooms complimented by an en-suite on the master and a family bathroom. The property has all the latest mod cons one would expect from high quality developments.

At €1.4 million, the price is not cheap but this apartment benefits from two garden areas (total 240sqm) and views across the marina toward the sea, the grassed area unique to only a handful of apartments. The underground garage also has a further storage area. As a security controlled area, access to the Marina is controlled and limited to pass holders only.

Having looked at many developments over the years, you find yourself comparing against other countries and developments. My immediate comparison is Puerto Banus, not so much in its looks but from an investment perspective. When comparing on this basis, prices are in line and have room to appreciate significantly, hence our change of view on the the Limassol Marina development.

The apartments, called Nereids, are set for completion later in the year and hand over of keys in November. Mortgages are upto 70% of the cost and do not attract VAT. The whole development is built on land owned by the government and so all the properties are leasehold, on a 125 year lease, with the Cypriot government benefiting from the sale of each property.

We were then taken on a bus tour of the villa's. Construction of the villas has not started yet as the infrastructure is still being tested. Completion will be in early 2014. With prices starting at €1.8m and as high as €16m (this one has just been sold) this is the playground of the rich and famous. For this price it has to be special, and it does not let us down. We pass dozens of seventy tonne blocks that are testing the strength of the reclaimed land as these properties will be built in the sea, on land that has been built to accommodate them. The views that will afford these villas are second to none, the ultimate sea view with no chance of anyone building in front and not having to build high on a mountain side. Special. There is nothing else like this in Cyprus and it is hard to compare to anywhere else in the world aside from the palms in Dubai. Again, when compared to Dubai, the prices do not look expensive. The villas have a choice of a private sandy beach or with atleast one berth for boats and yachts upto 60m. There are e-brochures and plans and CGI videos to get a better idea of the Limassol marina development but you really have to visit to get a feel for its  beauty, uniqueness and potential.

So, from an investment perspective the numbers do really add up. With the middle East high net worth market right on its doorstep, the strong demand from the wealthy Russian market there will be no difficulty is selling the development and a strong after market is predicted. Footballers, with their wealth and a need for investment is another key area that we see investing. it is not cheap, but it never will be, properties like these are rare and will always demand a premium.

Guide prices 1 bed room apartment from €428,000
                    2 bed room apartment from €809,000
                    3 bed room apartment from €930,000

                    2 bed room villas Peninsula from €1,700,000
                    3 bed room villas Peninsula from €2,812,000
                    4 bed room villas Peninsula from €2,472,000 (without berth)

                     2 bed room villas Island from €1,782,000
                     3 bed room villas Island from €2,884,000
                     4 bed room villas Island from €4,017,000

For a picture gallery on some of the construction and computer generated images of the finished development please click below
For more information including E-brochure, CGI video, plans, availibilty and price list, Please CLICK HERE to receive more information.

Spain: Opportunity not demolition job

Immediately, after the Second World War in 1945, the general consensus of opinion was that there was a huge glut of ships.

You couldn’t give them away.  Ships cost too much to maintain and there was no use for them after the conflict.

The consensus was wrong.  The war had increased the desire for international goods (like Pizza from Italy) to such an extent that international trade doubled from pre-war levels by the end of the 1950’s.  

With hindsight, there was in fact a latent shortage of ships but the market didn’t recognise it.

It sounds like a crazy question but could there be a parallel with Spanish housing market today?

There are between 800,000 and 1 million empty properties in Spain today depending on which figures you believe. Roughly 65% of them are in coastal areas.

The consensus is that most of them are badly built and in sub prime locations.

However the truth is that most of the time, these two things are not built into the price.  Developers and banks are still trying to sell at prices that do not reflect what the market is now willing to pay.

The overseas property market is driven by convenience and price. If you could buy a completed (non-fractional) apartment for £10k, would you be willing to travel an hour and half from the nearest international airport to get there?  I might, provided I could visit it first to check the quality.

Spanish tourism numbers are the one bright spot on a dark horizon.  The crisis has if anything increased the desire of tourists to visit as they expect to get a good deal.  There will always be a market for cheap holidays and holiday homes in the sun.  

Many people tell me the overseas property market will never be the same again.  Over the long term, I’m not so sure.

It’s the entrepreneurs with the vision to buy in bulk now at rock bottom prices who will be the players in tomorrow’s market.

Some of the developments may have to be bulldozed but my guess is that these will be the minority.

Everything has its price even if that price is negative and you have pay people to take developments off your hands.

Source global edge

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For spanish repossessions across the country CLICK HERE

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UK London: Student housing demand outstrips supply despite lower applications

Student housing demand is outstripping supply despite a drop in university applications.

UCAS announced yesterday that final student numbers for 2012-13 academic year fell by 7.4 per cent, as increasing tuition fees deter new UK students. Despite this drop from domestic applicants, which was expected by the organisation, the number of foreign students applying to study in Britain actually rose by 13.7 per cent, pushing housing demand up above supply levels.

"The reduction in applications means that 2012/13 applicant numbers are broadly in line with those of two years ago," Unite commented. "At this level, demand for university places still outstrips supply by approximately 32% and means that more than 156,000 students applying to study in 2012 will fail to secure a place."

Unite confidently predicts that rental yields will grow by 3.4 per cent this year as thousands of students seek accommodation.

Source: StockMarketWire.com

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Croatia: Strong sale at Dubrovnik Sun Gardens with guaranteed 4% yields

iO Adria report that it has had a successful start to the new year with six confirmed sales at its Dubrovnik Sun Gardens development in Croatia, with three more sales in the process of completion.

The developer recently launched the first phase of the development and is offering homebuyers net rental yields of 4% after HOA costs and tax in a bid to push property sales.

A one bedroom residence at Dubrovnik Sun Gardens starts at €170,000 (£143,000) for a ground floor property with garden view, up to €336,000 (£281,800) for sea view. Two bedroom residences range from €308,000 (£258,290) up to €608,000 (£509,920).

Julian Houchin, commercial director of iO Adria, says that he is positive about prospects for the Croatian property market in 2012, thanks in part to its anticipated EU accession in 2013..

He says that demand for homes in Croatia is already growing and expects that EU entry to help generate greater returns from property investments.

Houchin comments: “This [Dubrovnik Sun Gardens] is one of the few lifestyle freehold real estate resort investments available today in Europe offering a balance of personal usage and competitive net yields for owners through a sophisticated rental programme now in its third year of operation.

“[Dubrovnik] one of the most beautiful and fastest growing tourism and second home real estate destinations in Europe where early buyers can also benefit from entry level pricing and mortgage financing at Dubrovnik Sun Gardens.”

Source IEA

For more details on this development CLICK HERE

USA: Contracts to purchase US pre owned homes holds at 19 month highs

The number of Americans signing contracts to buy previously owned homes in December held near a 19-month high, showing the stabilization in the market that began in late 2011 will extend into the new year.

The index of pending home sales decreased 3.5 percent last month after jumping a combined 18 percent in October and November, figures from the National Association of Realtors showed today in Washington. It was the best back-to-back reading since a buyer tax credit boosted demand in early 2010.

“We’ve had a clear turn toward positive momentum in the housing market,” Aaron Smith, a senior economist at Moody’s Analytics Inc. inWest Chester, Pennsylvania, and the third most accurate forecaster of pending home sales. “Lower unemployment and higher confidence, coupled with record low mortgage rates, are coalescing to spur increased buying.”

The ability of the market to sustain gains in the absence of government incentives may mean housing has stopped weighing on growth. President Barack Obama yesterday proposed a plan aimed at reducing monthly mortgage payments, which would help combat a drop in home prices that Federal Reserve policy makers say is impeding the world’s largest economy.

Central bankers said today that they’ll keep their benchmark interest rate low until at least late 2014 to help stoke the economy.
Fed Statement

“While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated,” the Fed said in its statement. “Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed.”

The decrease in pending sales exceeded the median forecast of 40 economists surveyed by Bloomberg News that projected a 1 percent decline. Estimates (USPHTMOM) ranged from a drop of 8.1 percent to an increase of 7 percent.

Sales increased 4.4 percent from December 2010.

Stocks declined as forecasts at Boeing Co. and Yahoo! Inc. trailed expectations. The Standard & Poor’s 500 Index fell 0.1 percent to 1,313.4 at 11:35 a.m. in New York. The S&P Supercomposite Homebuilding Index rose 1 percent.

Elsewhere today, the U.K. economy shrank 0.2 percent in the fourth quarter as factories reduced production and services stagnated, leaving Britain on the brink of another recession, data from the Office for National Statistics showed in London.

Japan Deficit

In Asia, Japan posted its first annual trade gap since 1980 as nuclear plant shutdowns following last year’s earthquake prompted companies to import energy. A third straight monthly deficit in December capped an annual shortfall of 2.49 trillion yen ($32 billion), the finance ministry inTokyo said.

Another report today showed U.S. home prices rose 1 percent in November from the prior month, the biggest increase in six years, according to the Federal Housing Finance Agency. Nonetheless, values were down 1.8 percent over the past 12 months as foreclosures held back a recovery.

Among other recent housing figures, purchases of previously owned homes climbed 5 percent in December to a 4.61 million annual rate, the highest level since January 2011, the NAR reported last week.

Also in December, builders broke ground on 470,000 single- family houses at an annual rate, the most since April 2010, according to figures from the Commerce Department.
Economy Improving

“The economy is beginning to firm up,” Douglas Yearley Jr., chief executive officer of Toll Brothers Inc. (TOL), said in a Jan. 11 interview with Bloomberg Television. “We see more people coming out to buy. The affordability has never been better.”

Three of four regions of the U.S. showed a decrease in contract signings from a month earlier, led by an 11 percent slump in the West. Pending sales also fell in the Northeast and South.

The report showed an index level for pending home sales of 96.6 on a seasonally adjusted basis, down from 100.1 in November. It was the highest two months since March and April 2010. A reading of 100 is consistent with the average level of contract activity in 2001 and coincides with “historically healthy” home-buying traffic, according to the NAR.

At the end of 2009, the Obama administration extended a tax credit for first-time buyers through April 2010 and expanded it to include some current owners. The government incentive, worth as much as $8,000, helped bolster sales of previously owned homes before they dropped off in the middle of 2010, at one point touching the lowest level in at least a decade.
Leading Indicator

Economists consider pending home sales a leading indicator because they track contract signings. Existing homes sales are tabulated when a contract closes, usually a month or two later.

Faster job creation may help push more people into the market for homeownership. The economy added 200,000 jobs in December, and the unemployment rate declined to an almost three- year low of 8.5 percent, Labor Department figures showed earlier this month.

Homebuyers are also enjoying cheaper borrowing costs. The average rate of a 30-year fixed mortgage fell to a record-low 3.88 percent as of Jan. 19, according to data by Freddie Mac.

Lower rates combined with prices that have slumped for four out of the five past years are making homes increasingly affordable. The median price of a previously-owned home declined to $166,100 in 2011, the lowest annual average since $165,000 in 2002, NAR data show.
More Affordable

The agents group’s affordability index was at 194.5 in November, second only to the prior month’s level as the highest on record. A reading of 100 means a household earning the median income can afford a median-priced home at current lending rates.

“Housing affordability conditions are too good to pass up,” NAR chief economist Lawrence Yunsaid in a statement accompanying the release. “Our hope is lending conditions will gradually improve with sustained increases in closed existing- home sales.”

President Obama is proposing a plan to help reduce monthly mortgage payments. The program will give “every responsible homeowner the chance to save about $3,000 a year on their mortgage by refinancing at historically low interest rates,” Obama said during last night’s State of the Union address. “No more red tape. No more runaround from the banks.”
Obama Plan

Costs would be covered by a fee on financial companies with more than $50 billion in assets, according to two senior administration officials who briefed reporters on the plan. Obama said “a small fee on the largest financial institutions will ensure that it won’t add to the deficit.”

The proposal follows Federal Reserve Chairman Ben Bernanke’s call for lawmakers and the Obama administration to offer more aid for housing. The Fed, which is holding short-term borrowing costs near zero and buying government-backed mortgage bonds, said in a paper sent to Congress this month that a previous Obama administration effort to make refinancing easier had failed to go far enough.

Source Bloomberg

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