For Northern Europeans seeking a holiday home in the sun, Greece has long been a favoured destination, offering the chance to mix beauty and solitude with a pulsating nightlife. Despite this attraction, the country has remained relatively untapped as far as Greek holiday homes are concerned, especially when compared to the traditional hotspots in Spain, Portugal and France.
Part of the reason for this is the tendency of the Greek government to deter international investors flipping homes, in an attempt to preserve pristine areas and prevent property booms and bubbles from arising. However, this policy has kept prices low and affordable, and so it is a slight mystery why Greek holiday homes number in the tens of thousands rather than the millions in the Iberian Peninsula.
The Untapped Greek Holiday Home Market
Looking deeper, one of the main factors deterring Northern Europeans from buying holiday homes is the lack of cheap flights to Greece. Many holiday home owners buy property near to airports serviced by such companies as Easyjet and Ryanair. This allows them to visit frequently, at much less than the cost of a train ticket from London to the Scottish Islands, or from the Midlands to Cornwall.
Greek airports, on the other hand, have often adopted protectionist policies, resisting the march of the budget carriers. Whilst people fully expect a little extra time and expense for flights to Greece, paying at least £150 from London to Athens is too much. In addition, the lack of regular services to regional airports, other than summer charters, adds extra expense and time onto the trip, making it unviable to enjoy a short break in the country.
Aegean Airlines - Opening the Market for Greek Holiday Homes
The Rise of the Budget Airlines
This trend is changing, especially after the financial troubles of the national carrier, Olympic Airlines, and an increasing number of flights are opening up the country. Easyjet already offers services to many Greek airports, including Corfu and Santorini, and other operators, such as Jet2, are keen to muscle in on the market and tap into the huge holiday market.
Aegean Airlines has announced an alliance with BMI, opening up the number of British provincial airports offering flights to Athens, and connection flights from Athens to the rest of Greece will increase the options. The net outcome of this is that prices should tumble and Aegean has already begun an aggressive campaign, announcing a wealth of special offers for international and domestic flights.
For those seeking to buy a Greek holiday home, this is certainly great news, unlocking the potential for short breaks. The major hotspots have steep property values, but there are many untapped regions where genuine bargains can be found. Opening up the regional airports and offering cheap flights could be the catalyst for the revival of the Greek property market, currently suffering from a period of stagnation.
Other Greek Property News
As we pointed out a couple of weeks ago, in Government, Taxes and Illegal Homes – Concerns for Greek Luxury Property Investors, the Greek government plans to readjust the tax burden concerning property taxes, moving many low and middle-income earners out of the bracket but increasing the rate for large property owners.
It is predicted that the new limit will be 600 000 Euros, lifting a large proportion of the beleaguered middle classes out of the bracket. This is also of benefit to those seeking Greek holiday homes, ensuring that they do not have to pay annual taxes for a property that remains dormant for much of the year.
Or 9% !!!!!!!!!!!!!! or 30%!!!!!!!!!!
More bad news from Dubai. According the the Financial Times, Property prices in Dubai only jumped 7 percent in one quarter as “demand revived” and “lending conditions eased.” Quite who is expected to believe this sort of nonsense is beyond me.
Especially as just last month Dubai property prices rose 30 percent!!!
Dubai Property Prices Show Signs of Revival:
Dubai property prices have risen for the first time since the market crashed last year , up 7 per cent in the second quarter as demand revived and lending conditions eased, consultancy Colliers International said.
The volume of transactions in the third quarter also jumped 64 per cent compared with the previous quarter but residential prices were still 47 per cent lower than in the same period a year ago and are equivalent to prices in the second quarter of 2007, according to the consultancy’s Dubai House Price Index.
“The Q3 results indicate a ‘bounce’ in the market but we will have to wait for the Q4 results before we can say whether an underlying growth profile exists, indicating a potential recovery,” said Ian Albert, regional director.
The rise in the index, based on mortgage transactions, came as demand increased with better expatriate job security prospects – outside the troubled real estate sector – and easing bank lending requirements and loan to value ratios eased up lending to potential buyers.
It reflects a growing sense of optimism in Dubai, which was badly hit by the credit crunch as its vast debts combined with the puncturing of the real estate bubble a year ago.
A large-scale expatriate exodus failed to materialise, while financial support from the Abu Dhabi-backed UAE central government and healthier credit markets have helped the government start paying off upcoming maturities on its $80bn debt pile, restoring confidence in the city’s solvency.
Real estate agents say the market, which dropped up to 50 per cent from its peak last year, has moved on from a speculative bubble to a more user-oriented market.
But Colliers warned that an upcoming surge in completed properties will drag down average prices next year – though not across the board.
“Well planned mature developments in good locations, supported by facilities and community infrastructure will receive relatively higher demand,” said Mr Albert.
“The dynamic between consumer demand and the banks’ risk profile for lending will be fundamental to driving the price direction of each development in the coming months.”
Apartment prices rose 6 per cent, villas were up 9 per cent and townhouses rose 7 per cent between the second and third quarters, according to the index, which was launched in January 2008.
Earlier on in the day,
Dubai property prices rebound by 9% after bottoming out !
Said Business 24/7:
Property market in Dubai is showing initial signs of a turnaround with prices rebounding by nine per cent after bottoming out in April, according to a new report.
HC Securities & Investment in its monthly report on the Mena property market said the recovery follows a 30 per cent peak to trough drop in agreed prices and a 65 per cent fall when compared to peak advertised prices.
According to the report, improving sentiment and risk appetite, a negative real interest environment and attractive rental yields are some of the indicators for recovery. 24/7
So – we now have a disappointing 7 or 9% rise after last month’s 30% rise. But with the quadruple whammy of “demand revived,” “lending conditions eased,” along with “improving sentiment and risk appetite,” this sounds like the perfect line of bullshit to me.
Ignoring the “slight” over supply problem, and rents continuing to fall through the floor, Dubai sounds like a great place to invest your life savings about now. Sarcasm in case you were wondering. the day Dubai’s property prices jump 7% in one quarter is the quarter after I get offered a 140% no money down mortgage with a free Bentley. Whatever happened to those free Bentleys and BMWs ? Last I heard – none of them materialized. Still – at least they didn’t get dumped at the airport.
It appears official – Australia’s government wants Australia to grow to a total population of around 35 million by 2049. Not exactly huge, compared to many other countries – but a little scary for some Australian’s who will tell you straight faced the country is running out of resources to support the 20 odd million people it has now. I say they need to get out more. And Australian property investors should take note.
The reality is that Australia really does need to populate or perish. Most of its population lives on the eastern sea board. Most of the north is empty – just north of which, in fact a leaky boat ride away, is Indonesia. Indonesia hasa population of 230 million spread over 1.9 million square kilometres that’s a population density of nearly 120 people/square kilometer. Australia’s average population density is 2.8 people/square kilometer – in fact in most of the north its a lot less than 1 person per a square kilometer. But there is a lack of water you say – well actually there isn’t – not in the North the tropical client is the same one which supports all those millions in Indonesia. The South East of Australia is in drought – not the north.
During the early days of World War 2, Australian military planners famously drew a line on the map roughly from Brisbane to Adelaide and declared everything to the north of it indefensible. Nothing much has changed in the following 60 years.
The Undeveloped Kimberly, Northern Australia
So what will the future of Australia look like and what will it mean to Australian property investors? Well this is where it gets harder to predict. The conventional wisdom is that most growth will occur in the big four cities: Perth, Melbourne, Sydney, Brisbane and that we need to live in higher density housing to make it practical. But Australians don’t like living in small flats – they keep on buying 4×2 “starter” homes which could house an entire tribe of Indonesians – for a couple. Australians like space, outdoor living, and sporting facilities. I don’t think the spread of suburbs is going to stop anytime soon. In addition concentrating even more people primarily in the South East will do nothing much for the defence – or even sensible use of – the majority of the country.
I’d like to see some serious development occur in the North West and North. Workers from the Argyle mine are flown from Perth – a flight so long it requires a jet – yet the local town should be a paradise featuring a year round summer, abundant natural fruit and vegetables and unlimited supplies of water. Of course there is a slight crime problem – maybe the local government would actually have to do something for the seriously disenfranchised local population? The local dysfunctional governments, including the Northern Territory’s one would have to be revamped, or replaced. It would all be quite difficult to do – but it would be a sustainable solution.
If you are an idealist invest in northern Australia property – if you are a pragmatist – then overpriced, over-large, MacMansions 30km from the CBD aren’t going out of fashion anytime soon – regardless of what the urban planners would like you to believe!
There have always been cowboy estate agents in Cyprus, parasites who will constantly lie and cheat in a attempt to deprive you of your hard-earned money. At best, some of them are simply underqualified, out of their depth and almost completely inept. At the other end of the scale are the professional sharks, who often work with lawyers and officials to make sure that you are doubly shafted.
Before blaming the Cypriots, many of these shady characters are expatriates, often from Britain. These rely upon befriending you and use the old trick of ‘helping’ you navigate through the bureaucracy. According to Nigel Howarth, of the respected Cyprus Property Magazine:
“We have warned you previously about retired Britons living in Cyprus who prey on the fears and wallets of their fellow countrymen; people like Andrew Nolan former manager at estate agents Peter Stephenson Properties and Ian Beaumont, his ‘partner in crime’”.
Needless to say, if you find yourself dealing with anybody even remotely connected to these predatory pieces of scum, go elsewhere.
The Estate Agents Registration Council and Useless European Union Bureaucrats
The Cypriot government, in 2004, enacted legislation to curb the worst excesses and strengthened the laws, in 2007. Any estate agent operating in Cyprus has to be registered with the official body, the Estate Agents Registration Council. To qualify, an estate agent must possess a university degree in estate agency or property valuation, and at least one year of experience. Alternatively, an applicant must have eight years of experience with an approved estate agent and must sit an exam about Cypriot property laws. They must also be fluent in Greek or Turkish.
Only Registered Estate Agents are Permitted to Charge Commission. There are No Exceptions
So far, so good, but you will still see many unlicensed estate agents advertising their services. Despite closing the loophole, preventing anybody from using terms such as ‘property consultant,’ ‘property advisor,’ or property investment manager, these businesses thrive. For once, the authorities are not entirely to blame and have genuinely tried their best to uphold the legislation. The problem is that the EU, unable to resist meddling, has decided that these laws discriminate against non-Cypriots. Quite reasonably, the Cypriots point out that they cannot win – people complained when foreign investors were ripped off; when the Cypriots did something about it, people still complained.
Cowboy Estate Agents in Cyprus
Finding a Reputable Estate Agent in Cyprus
Despite this setback, there is still a way that you can protect yourself from the cowboy estate agents in Cyprus. The EU cannot legislate against private organizations, and Cyprus has two bodies that will offer you a good degree of protection. The first, the Cyprus Real Estate Agents Association (CREAA), is an organization that only accepts bona-fide estate agents. To be a member, an estate agent has to meet extremely strict requirements, and have no criminal record or previous bankruptcy. They also appoint a lawyer if you have problems with one of their members, for a very small fee. The organisation is there – use them.
For added protection, find an estate agent who is also a member of the Real Estate Agent Federation (FIABCI). This body is an international organization covering all aspects of the process, including surveyors, constructors, lawyers and architects, amongst others.
If your estate agent is a member of both of these, and you have a good independent lawyer, you have minimised the chances of falling prey to one of the cowboy estate agents in Cyprus. The Cyprus property boom is over, but preventing fraud is a big step towards persuading the investors to return.
Abu Dhabi, the capital and the second largest city in United Arab Emirates, has recently witnessed a series of rapid developments. The economy, which is mainly dependant on hydrocarbons for its economic wealth, has one of the highest GDP per capitas in the world. Abu Dhabi also has the largest share of oil reserves in the UAE; 95% of oil reserves and 92% of the gas. In order to diversify its economy, the UAE government has taken large steps to encourage oil revenue investments in manufacturing, tourism, agricultural and real estate industries to limit its dependence on the finite resource of oil.
Even the Abu Dhabi Securities Exchange ended its third quarter on a positive note, increasing by 18.7% over the three months to close at 3,124.22 points compared to 2,631.32 points the previous quarter and 2,390.01 points at the end of 2008.
The investment in the Abu Dhabbi real estate market has been increasing due to changes in their rigid policy regarding the buying and selling of houses for sale making it more flexible and thus giving passage for new investors, thereby making the market more robust.
The Abu Dhabi government plans to work with its local counterparts to build stronger partnerships with the private sector, giving Abu Dhabi special priority for industrial development. The government estimates a doubling in the population of the city in coming decades as workers from all over the world head to the city lured by lucrative, tax-free salaries, and a comfortable lifestyle. So the city is experiencing great wealth generation with multicultural talent.
The positive outlook of the city thanks to the strong determination of the government has pushed Abu Dhabi’s market sky high. It is surely an ideal place for anyone who wants to invest his life for greater returns in the future. This is Abu Dhabi’s promise.
More than two-thirds (69%) of smaller, independent landlords will reduce rents to help tenants remain in their homes, according to The National Association of Independent Landlords.
Nearly one-third of these landlords (32%) say they have lowered rents over the past 18 months, according to an informal survey of association members released today.
Tracey Benson, president of The National Association of Independent Landlords, points out that in today’s tough economy, renters absolutely should approach their landlords if they need help making ends meet.
“Just like everyone else in this recession, landlords are trying hard to pay their mortgage and cover their bills. As long as renters pay on time and take good care of where they’re living, landlords will work with them,” Benson said.
Of those landlords willing to negotiate, 61% said they would drop rents up to 5%, and another 29% said they would take off up to 10%; the handful of those remaining said they would consider even steeper discounts.
Benson said renters and landlords have much to gain by working together: “Often if renters can’t pay all of their rent, they don’t pay anything at all—hoping the problem will just go away—but that strategy of avoidance just compounds their troubles, hurts their credit rating and adds to their stress level. Landlords today understand what’s going on. They don’t want an empty home any more than a renter wants to be asked to leave.”
The National Association of Independent Landlords polled members from Oct. 7 to Oct. 10, 2009. For this informal online survey, 496 landlords, almost all residential, across the country responded. About The National Association of Independent Landlords The National Association of Independent Landlords is the country’s largest provider of services for small landlords. Services include credit reports, electronic rent collection and tenant screening as well as information about property management, rental laws in all 50 states and other issues critical to property owners.
For further information, please visit www.landlordassociation.com.
There seems to be a dearth of trustworthy property investment companies at the moment. Our email inbox has been inundated with spam recently as property investment companies go belly up and sell their mailing lists to the highest bidder. This seems particularly prevalent amongst the Dubai based companies where the level of desperation is high.
If I have seen a headline stating that a recovery is under way or that prices are about to skyrocket once, I have seen it a thousand times. This is not going to happen and in the unlikely event that a bubble does start forming again, the government Inc will step on it – and hard. They have not finished paying our way out of the last one yet, and the Hong Kong government acted pretty swiftly this week to increased the deposit needed on a luxury property from 30 to 40% after a high ranking Chinese government official paid the highest price ever for an apartment in Asia, causing concern that another bubble was forming. One swallow does not a summer make, but this was pretty aggressive on the part of the authorities.
Still the issue remains of finding a trustworthy property investment company. With the banks in Spain, the USA and a number of other countries holding vast – and I do mean vast – stocks of properties, this is not going to be an issue easily overcome. We recommend taking a good hard look at the fundamentals before making any sort of investment based on a real estate agent’s advice right now.
There are too many property investment companies prepared to white wash the truth for comfort and it will probably take another year or two to weed these bad apples out.
C5 Advisors announced the closing of the first proprietary C5 Asset Recovery Company (”ARC5(TM)”) for an $800 million commercial bank client which had no options for public sector assistance. This particular bank client will realize significant benefits not available in the current market via the private or public sector and expects to close additional follow-up ARCs over the next 6 months. C5 is currently structuring ARCs for 12 other banks nationwide (ranging in size from $20-300+ million per ARC5(TM)).
According to Gary Saykaly, President, “C5 invested time, capital, resources and worked with a team of extremely creative advisors to create a unique proprietary private sector solution (ARC5(TM)) that provides banks with a structure that best addresses their current issues (capital access & “toxic” or troubled real estate loan / OREO exposure) and creates a 100% bridge between investment capital and banking requirements. The current options, public and private sector, for community and regional banks are limited and are not providing optimal long term solutions and also do not fully bridge the market bid/ask spread.
Bill Buchalter, CEO of C5, states “the ARC5(TM) is not a liquidation vehicle but instead provides a long term investment for a bank in a new real estate operating company equipped with capital, expertise, and the luxury of time, to significantly maximize the value of a bank’s troubled real estate holdings. Each Bank’s ARC5(TM) requires precision construction to structure around key factors: Accounting, Economics, Capital, Regulatory, and Management & Control.”
- The C5 ARC5(TM) provides very unique accounting, economic and execution benefits to a bank that are not currently available:
- The ARC5(TM) allows C5 to operate the assets over a much longer time horizon than a bank can, thereby maximizing the value of those assets, resulting in larger cash distributions to the bank.
- The ARC5(TM) system would enable a bank to account for the investment in the venture using an accounting methodology that is appropriate for a long term investment.
- The bank would no longer consolidate the assets/loans and thereby receive an immediate tourniquet effect for future asset impairments, providing the balance sheet stability to attract the interest of new capital.
- Immediate capital (pre-funded by the manager) for the ongoing operations and business plan execution, eliminating the need by the bank to provide any additional future capital.
- Puts the troubled assets in the hands of an interdisciplinary team of experienced real estate professionals with the required expertise and resources to maximize the value for each asset, allowing the bank to go back to the business of banking.
- Banks can contribute all or a portion of their performing/sub & non-performing loans and OREO assets for both residential (land, lots, subdivisions, vertical homes) and/or any type of commercial project or land.
According to Saykaly, “given the specific mechanics and structure of each ARC5(TM), investment capital is provided very unique benefits: attractive risk adjusted returns, flexible investment structures, 80-95% synthetic leverage, principal preservation, access to a significant amount of off-market bank owned real estate loans/assets, and proven execution expertise.
The Western Australian government is so worried about the impact of the next boom on the state’s property prices that they are running an emergency meeting including State government officials and developers to consider how the state is going to avoid a repeat of the last property price bubble in Western Australia.
Between 2004 and 2006, at the height of the last boom, the average price for a home in Perth jumped $200,000 to $460,000 – immediately making Perth one of the most expensive capital cities in Australia for home buyers.
Now on the back of China and India’s ongoing demands for Western Australia’s minerals, not to mention the enormous LNG project at Gorgon, in the state’s NorthWest, predictions are that WA will need another 38,000 workers by 2012.
To be honest I seriously doubt the state’s ability to manage this size boom any better than it did the last one. After all this is an incumbent government which can’t even legislate to allow late-night shopping never mind Sunday trading! It would indeed be logical, and indeed strategic – given the population pressures in over-crowded Indonesia just to the north, for Western Australia to actually spend some serious money and effort and develop the huge state north of the 66th parallel. At the moment it looks like again that most workers will fly-in, fly-out from Perth to dormitory resorts in the north. Perth may expand from its current population of 1.5 million to over 4 million by 2020. Meanwhile the largest town north of Perth – Geraldton is only 30,000. In the far north Broome is by the largest town – with a population of 10,000.
Thousands of miles of undeveloped coastal property, Exmouth, WA
Due to the lack of infrastructure in remote towns, it is impossible to buy a family home for less than $775,000 in Karatha. Land is relatively cheap – but to build a standard home costs around $600,000 in the Pilbara, twice the price of building the same home in Perth. Those at the bottom of the ladder – though often earning $200,000 a year – live in a caravan park – because that is all that’s available – at the price is still over $300 a week (for the site not the van – BYO!)
Yet these towns have climates which make Florida and southern Spain look down-right second rate. Set in the tropics air conditioning is essential, but the benefits include year round swimming and a only a short wet season which extends for around 3 months. Damage causing hurricanes are rare and don’t occur each year.
To get families to move there full-time, and for those who have enjoyed the high-wages from the mining industry to retire there, the government would have to take some radical decisions and make a serious effort into reducing transport costs, freeing up land for workers, developing appropriately priced single person’s quarters, and developing community and educational opportunities in the region. At least the shops in the Pilbara are allowed to open on Sundays …
The new Prime Minister of Greece, Georges Papandreou, made a powerful statement of intent when he announced that the Greek government would be seeking to push through its first green property development in Greece. Whilst visiting the Ilia prefecture, home of the site of Ancient Olympia and a region devastated by fires two years ago, the PM announced a scheme to completely redevelop the area and make it into a showpiece for sustainable development.
In one of his speeches before the election, Papandreou stated,
“PASOK’s green development strategy is based on three central policy pillars: environmental protection and urban planning, energy, and transport. In order to promote sustainable development and eco-friendly businesses, we have designed a series of policies that include: subsidies and tax breaks for companies investing in environmental technology or renewable energy, shifting the tax burden to operations and products that are harmful to the environment, introducing sustainable construction standards for all public works, and improving the energy efficiency of all public buildings.”
The Olympia Development
This plan for a green community is the first tenuous sign that there may be some substance behind the promises, a potential break from the status. The new leader of Greece showed that this scheme was more than mere bluster when he announced that he had employed, Josep Anton Acebillo, the architect responsible for the redevelopment of Barcelona for the 1992 Olympics, as a consultant.
The redevelopment of the Olympia region will include residential areas, green space and amenities. Also planned is the establishment of various sports facilities, tapping into the history and fame of this corner of Greece. Alongside residential areas, the birthplace of the Olympics will contain sports schools and various foundations to promote peace through sport. Certainly, the idea of promoting ‘sports tourism’ is intriguing and offers some potential for generating income and regrowth.
Economic Recovery and Green Property Development in Greece
This plan has been heralded as a flagship reform, aimed to show investors that Greece is serious about environmental reforms and plans to cut much of the bureaucracy and red-tape currently holding up many sustainable developments. Greece has a vast and underexploited potential for using solar and wind energy, and Greeks are already ahead of the game in installing solar water heating. Laws have already been submitted to parliament and the new Environment and Energy Minister, Dina Birbilli, is hoping for a quick resolution.
Olympia - Future Showcase for Green Property Development in Greece
The new administration hopes that this will stimulate economic growth and set Greece on the way to becoming as important as Denmark in the field of generating green energy. For green property investors with vast sums of money tied up in a tangle of Greek bureaucracy, this could be the best news for many years. For the beleaguered Greek construction industry, Green property investments in Greece could be the lifeline needed after the recent economic crisis.
As with all governmental directives, this one has yet to pass beyond the promise stage, but Green property development in Greece is certainly high on the agenda. The government hopes that this will kick-start the struggling Greek economy, although Papandreou has not yet made any indication of where the money will come from.
Most property developers will be hoping that there is substance behind these promises, because success means that the economy improves and property prices will rise. There is certainly nothing inherently wrong with the idea, only that Greek governments have a terrible tendency to mess things up. Whilst most people only voted PASOK into power through default, nobody seriously wants the government to fail and Papandreou will be given time to prove his intentions. However, he cannot afford to get this one wrong, as the electorate and media will not be merciful.
