The last ten months have seen rising prices in the sales market. Hamptons International have reported an increase of between 10-15% uplift. In fact, in some cases, they achieved prices beyond the peak of the market in 2007. This is in despite of a lack of properties for sale and the overall stock levels down 27% year on year. This pattern is set to continue during the early part of 2010 with a steady climb until the general election. As always with political elections, the danger of rising interest rates and potential increase in taxation mean that the market will be nervous around this time; however once the election is over it will recuperate quickly.
Another round of losses in the third quarter shows continuing weakness in the world’s real estate markets. Although property investment in Singapore ticked up slightly in the third quarter, more bad news from major developers and property investment vehicles show continuing declines in prices, sales volumes and profitability. US luxury home builder Toll Brothers posted a Q3 loss of $472.3 million, and GPT group in Sydney, Australia posted a US$995 million loss for the first half of the year.
More on Investing in property – the big boys are starting to hurt badly
For those who managed to avoid losing their shirt in the Spanish property market, or investing in Dubai’s real estate bubble, another possibility seems to be floating on the horizon – maybe. Cambodian Prime Minister Hun Sen on Friday urged the Ministry of Land Management, Urban Planning and Construction to expedite the drafting of new rules that would permit foreign ownership of property in Cambodia.
More on Cambodia consider new laws for foreign property investors
As per usual, the best one can say about the “news” as to whether now is a good time to invest in real estate is at best confusing, at worst deliberately so. But there are some indicators giving an idea as to when and at what price is a good time to consider re-investing in property. Ignoring the obviously “spun” headlines from the government press release farms such as The Times, these are a few recent, factual articles that might be of interest as it would appear that the commercial real estate bubble is now starting to burst – and as predicted will have an impact on the credit availability in the residential sector.
The Knight Frank Global House Price Index shows pretty much what everyone in the industry expected. Dubai and Singapore show the largest drops in value, with more stable housing markets performing better than those affected by the recent credit boom and subsequent housing bubble, and the decline looking to continue for the foreseeable future. Key points of the report are from Knight Frank’s press release:
London townhouse sold for huge discount; the UK, Hong Kong, Dubai and Calgary markets have bottomed out; Luxury resort in the Bahamas goes broke; Irish property prices have fallen 52 percent and a British Member of Parliament forgets he paid his mortgage off.
Volatility still rules the property markets – although when the term “volatility,” started to mean “dropping prices,” remains a mystery. A few interesting reports from the property investing world make disturbing reading for some markets – particularly some of the emerging markets.
We are constantly being approached by agents and developers with property for sale, or developments that need an infusion of capital. Some of them are potential investment opportunities, but some of them………. Well, no one in their right mind would consider some of them. Many of these come from “developing” countries, and are barely intelligible.
More on Investment Property For Sale – Worst Investments Ever or Biggest Missed Opportunities ?
