Tired of the doom and gloom of the world share markets and property? Don’t want to know that as of yesterday Australia’s share market was worth exactly 50% of what it was last year? Well I have a word for you: timeshares. The timeshare operators are in the market and are buying up big!

Accor Vacation Club is a major timeshare operator in Australia and has bought a swag of apartments in a prime Gold Coast building. AVC operates well-known brands such as Grand Mecure and Novotel.

According to The Australian newspaper:

it is buying 44 units in one line at what is believed to be a significantly discounted price.

AVC chief executive John Osborne declined to reveal the price paid for the Freshwater Point apartments but local agents said one-bedroom apartments in the Broadbeach complex had been selling for about $400,000 and two-bedroom units for between $500,000 and $700,000.

AVC bought 22 of each. Sources put the value of the deal at about $20 million.

This is not just any old apartment building in need of a refurbishment though. The developer Matthew Property Group had finished the building a year ago and the apartments are a mixture of one and two star apartments all rated 4.5 star. The property is prime real-estate located in the heart of Broadbeach and accross the highway from Jupiter’s Casino, the iconic destination for the Gold Coast.

It seems that times are good for timeshares - the Australian Timeshare and Holiday Ownership Council research shows that timeshare occupancy is running at over 94%. It may well continue to be strong to - especially in Australian’s decide to holiday at home on the back on the much weaker US$ which has dropped from US98c to US67c in less than 4 months.

The Gold Coast is a perennially popular family destination with that magic combination of theme parks, good beaches and cheap food - and Broadbeach is a a prime area of the Gold Coast.

AVC reports that all their properties have occupancy rates of better than 90% including properties Melbourne CBD, Snowy Mountains, Sydney CBD, resorts and Coffs Harbour and Cairns and Sunshine Coast.

It looks like the big player bargain hunter are entering the market: I guess anyone with cash who can afford to buy a significant percentage of a building would be in a great bargaining position with a cash-strapped developer. It works for the timeshare company to, as they normally like to own a fairly large percentage of the building so that they can cost-effectively manage it and control the day-to-day running of the property.

Conrad Jupiters Casino

Spain head in sand not helping

For those with a property to sell in Spain, a recent report brings more doom and gloom to the Spanish markets. With the countryside littered with part-finished developments, and the Spanish government having been snubbed by most world governments recently regarding the recent summits to discuss the “financial crisis,”  the news keeps getting worse and worse. What many do not seem to realize or accept is that the Spanish property crisis is almost entirely home grown. Massive over-building combined with extremely lax regulations on developers, estate agents and mortgage brokers caused this crisis, not the world credit crunch. With what appears to be half the local government officials in Spain either already in jail or on the way, it’s about time Spain woke up and smelled the horse manure. Sticking one’s head in the sand and blaming it all on the “credit crunch,” is not going to resolve anything.

Spanish property prices need to fall by 23% to bring housing affordability back to its long term average, and return the market to normality, argues a new report out today from property consultants Aguirre Newman.

The report asks how much average Spanish property prices have to fall to bring the cost of housing in line with the long term average of 30% of household income.

Assuming mortgage financing of 70% for 30 years with a rate of Euribor (4.5%) plus 0.5%, for a property of 75m2 and a disposable annual household income of 21,259 Euros, the report concludes that prices must fall by 23%.

The report focuses on primary housing, so the conclusions do not necessarily apply to prices for second homes, especial in coastal areas. Second homes are a luxury that tend to suffer more than primary housing in economic downturns.

Whilst identifying over pricing as the main problem, the report also points out that the market is under added pressure from the credit crunch and falling consumer confidence as unemployment rises.

With the property market paralysed by high prices, Aguirre Newman expect a trend towards renting over buying, should property prices not fall.

To date renting has been an unpopular option in Spain, with less than 8% of households renting, compared to 35% in other European countries. Aguirre Newman recommends legal and fiscal changes to stimulate the rental market.

The report forecasts that rents will increase just above inflation, making rental property investments worthwhile with the right legal and fiscal changes.

In the midst of doom and gloom on the share market and some property markets a leading Australian economic forecaster is predicting the slump in land sales will soon end in Perth, Sydney and Melbourne.

In their latest capital report on the outlook for residential land sales, BIS Shrapnel tipped that next financial year would be the turning point for land sales in several capital cities. For Perth BIS Sharpnel predicts:

After a decline of 22% in the 2 years 2007-08 residential lot production in Perth would ramp up from 10,300 blocks in 2008-09 to a peak of 13,200 in 2011-12.

Buyers are expected to retun to the market with house and land packages increasingly more affordable. Not that the price of new homes are expected to come down any time soon, more the expected interest rate cuts will make borrowing more affordable.

This forecast for recovery of the Perth property market within the next year has been made by a number of local property experts. Industry insiders expect that the record population growth enjoyed by Western Australian has got, eventually to flow through to the property market. The Real Estate Institute of WA has predicted that house prices will begin to increase again at a rate of about 5% a year form the end of 2009. \

The current financial crises in the US adds a new dimension though: with smaller mining and exploration companies, in particular, finding it difficult to raise share market funds while investors remain jittery. I wouldn’t be investing in holiday homes or other luxury real estate any time soon: but it does seem reasonable that that the average family home or rental is probably a good investment in states such as WA and Queensland which are enjoying strong population growth and excellent employment rates.  First home buyers could be looking at their best opportunity to buy in major Australian cities  that they have had for some years.

Photo Credit: moving overseas

There is no question that the real estate market has slowed, particularly in the U.S. But does that seem to be spreading around the world. The answer, of course, is yes and no. So, who is saying what? What new developments are on the horizon? Will the doom and gloom continue, and does this just mean more opportunities for those with the cash to spend?

Douglas Heddings at the True Gotham blog suggests that overpricing your property is the kiss of death.

If you’re a real seller, this is NOT the market to grossly overprice your property. Surprisingly though, I would have to say that as many as 50% of the marketing presentations I have done in the past couple of months have been with sellers who are terribly unrealistic with their asking prices. And for those who stubbornly suggest pricing above what I believe the market will bear, I say ‘best of luck to you.” I also walk out the door wishing I could say, “I look forward to hearing from you in 5 or 6 months when you become more realistic,” but I tastefully refrain. Grossly Overpriced Property… The Kiss of Death.

Kevin Brass at The International Herald Tribune blog, “Raising the Roof,” reports on a new ‘Signal Tower,” that will reshape Paris’ skyline.

In one of those competitions that turn architecture into a sort of gladiator contest, Jean Nouvel last week vanquished some of the elite designers in the world to earn the right to build a landmark 71-story tower in Paris’ La Défense district. New Paris Tower.

Overseas Property Mall reports on the dismal state of the Vietnamese housing market.

Due to the current global property gloom, many domestic Vietnamese property markets are now facing falling property values. By far the biggest losses in investments have been seen at the high end market with drops of up to 50%. Vietnam Housing Market - Another one bites the dust?

The Inman Blog feels (rightly I believe) that foreign buyers will eventually bail out the U.S. housing market.

Also, the weak dollar means the cumulative price declines for condos in markets like condominiums in Florida or Las Vegas is equal to at least 50 percent to an overseas buyer, “So even without legislation to encourage them, foreigners are likely to provide some of the solution to the housing overhang.” Barney Franks’ FHA bailout.

As if to back up this one, the Wall Street Journal reports that a Beijing real estate company has signed an agreement to move into “Freedom Tower.”

A Beijing real estate company has signed a tentative agreement to move into the Freedom Tower, which would make it the first corporate tenant in the signature skyscraper planned at the World Trade Center site, the site’s owner said Monday. Beijing Vantone Real Estate Co. agreed to preliminary terms to open a Chinese business center on five floors of the 1,776-foot tower, the Port Authority of New York and New Jersey announced. Chinese real estate company to lease Freedom Tower.

crain’s new york business reports that yet another fatal accident on a construction site in New York is causing developers to lose thousands of dollars a day. (No comment)

Developers at five construction sites in the city are losing thousands of dollars each day they are not allowed to use large Kodiak cranes like the one that collapsed on the Upper East Side last week. Developers lose money in crane crackdown.

The Rat and Mouse, a London-based property blog report that the London property market has all but come to a standstill.

New Land Registry figures reveal the extent of the property market inaction… transactions down by a third in the November-to-February period, compared to the same period a year ago. In the £150,000 to £200,000 bracket, sales were down 40%. No-one’s buying, no-one’s selling.

The Guardian reports on the state of the Spanish property market and asks if the dream is becoming a nightmare for many.

It’s the most audacious private property development Spain has ever seen. In the semi-desert scrubland of Murcia, a series of gigantic gated communities set around Jack Nicklaus golf courses accommodating tens of thousands of people - predominantly British expats - are nearing completion. The fairways are immaculate. Pine trees tower over perfectly manicured lawns. As new towns go, it’s more Poundbury-by-the-sea than Harlow-in-the-sun. But are investors, who snapped up properties, now facing meltdown in the heat of Spain’s worst market slump for decades? Dream or Nightmare?