Friday, 22 April 2011

Chinese banks increase reserve requirements

Chinese banks have increased their reserve requirements in order to restrict the flow of cash and cool inflation, and the central bank governor Zhou Xiaochuan has said that monetary tightening will continue for some time.

The reserve ratios are due to rise half a point pushing the requirement to 20.5% for the biggest lenders and this latest move comes just two weeks after interest rate increases. It's hoped these measures will prevent banks from lending aggressively in the next month.

It also seems likely that another interest rate increase may come as soon as next month after figures showed inflation accelerating at its fastest pace since 2008.

The policymakers in China may also consider allowing the Yuan to appreciate more quickly in order to reduce the cost of imported products including oil.

The US in particular thinks the Chinese currency is undervalued and there are expectations that it will rise about 2.3% during the next 12 months. The US Treasury secretary Timothy F.

Geithner has said that a stronger currency would help to counter inflation within China and would also help to reduce economic imbalances that have contributed to the global financial crisis. The Yuan has increased in value by 4.5% against the dollar since last June, which was when the Chinese scrapped their policy of keeping the currency unchanged against the dollar.

The Yuan is close to becoming included in the International Monetary Fund's Special Drawing Rights basket, and this should help China overcome inflation. However some officials feel that the SDR basket should be broadened to not only include China but also the currencies of Russia, India, South Africa and Brazil.

Sunday, 17 April 2011

Thailand's Property Market Finally Slowing Down

According to estate agent Brett Gordon, founder of Panna Capital in Hong Kong, the property market in Thailand is slowing down after a year of spectacular growth.

The Bank of Thailand's Economic Conditions Report released in January showed sales in Bangkok reached 178,128 in 2010, up from 161,240 in 2009. However on January 1 2011 the central bank raised the loan to value ratio.

The loan to value ratio for condominiums costing less than 10 million baht is now 90%, while the ratio for low rise properties will be 95%, applicable to purchase contracts dated on or after January 1, 2012.

Brett Gordon sees this as a sensible move although there are concerns being raised in a report from CB Richard Ellis that limitations on foreign ownership in Thailand could do long-term damage to the market.

This effect is already showing quite clearly in the Bangkok property market as it didn't gain any real income or have any significant property deals during the last quarter of 2010.

The report from CBRE went on to say that although there are concerns about the influx of foreign capital into Thailand the restrictions mean that the property investment market remains largely the domain of domestic buyers.

However the threat of a property bubble in the condominium market has subsided due to decreased demand and a reduction in supply.

For his part Brett Gordon sees the retail sector in Thailand as being the most interesting, in particular the small listed retails. He feels that the dominance of large listed retails in the country has reached its maximum.

Saturday, 16 April 2011

The increasing popularity of Uruguay

Uruguay only used to appeal to Argentinians, Chileans and Brazilians who all knew about the pristine beaches, pleasant cities and vibrant nightlife.

However when the local currency crashed a few years ago Uruguay suddenly became a lot more appealing to foreigners, and there is a lot to recommend this small South American country.

Uruguay has an open, free market economy with no foreign currency limitations. Some 80% of bank deposits in the country are held in euros or US dollars and Uruguay has a strong financial privacy law. It's easy to obtain residency as much depends on having an annual income of more than $6000.

The economy grew by an impressive 8.5% last year which is more than the much talked about Brazil. Punta del Este, Colonia del Sacramento and Montevideo have attracted the tourists for a long time and visitor numbers to these areas for January this year were up 40% on January 2010.

A large percentage of tourists come from Argentina and other areas within Uruguay, with locals especially anxious to spend their new-found wealth from owning agricultural exports.

Punta Del Este is an appealing seaside town that is a mixture of sophisticated high-rises and the brick built houses. During the height of the season it attracts the famous and wealthy, but for much of the time it's sleepy and laid-back.

La Barra is just a short distance away from Punta Del Este but is already being redeveloped with luxury apartments being built near the beautiful beaches. Property around here is selling well and was relatively untouched by the recession with prices per metre averaging $3000 for prime ocean and beach view condos.

Sunday, 10 April 2011

Confidence Returning in UK Property

According to the latest Zoopla.co.uk Housing Market Sentiment Survey, there is a returning of confidence to the property market as about two-thirds of homeowners stated that they anticipate property prices to increase over the next six months. Last year about 50 percent believed that the property prices would increase.

In comparison with a third of people in December who thought that prices would fall, only a quarter expect prices to fall now. More optimism abounds now concerning the amount that prices will increase. Out of 7,984 people surveyed, people predicted that prices in their area will increase by 2.8 percent within the next six months, which is a 1.9 increase from three months ago.

Northern Ireland saw the greatest improvement, in which 57 percent of homeowners anticipated property prices to increase. This is a 42 percent increase from three months ago. Scotland also saw respondents anticipate high gains at 63 percent.

With the last nine months experiencing steady declining prices, Nicolas Leeming from Zoopla.co.uk states that this may be a good sign that the property market is on the upward swing.

There is a low inventory of homes currently and homeowners are continuing to anticipate prices to increase in their areas. The confidence levels are not the same as they were in early 2010, but the improvement is being received well and increasing optimism.

Many real estate experts anticipate about a 2 percent decrease in property prices in 2011 as a whole and many are quite optimistic that the property market will have a favorable year.

Saturday, 9 April 2011

Australian Property Investment to Increase

According the Alan Oster, NAB chief economist, the number of people that plan to invest in Australia’s property market this year is surprisingly high. Figures show that numbers of interest have risen from 24% in December to 33% in March.

The increase is largely due to improvement in rental yields and changes that allow self-managed super funds to purchase residential property developments. This is good news for the property market, but the National Australia Bank survey shows that credit access continues to be a problem for developers.

Property price growth is expected to grow this year at about 0.6 percent and rental prices are anticipated to rise. Some in Australia are in favor of a “buyers strike” until the prices strengthen, but in exchange for the wait, they will have to pay higher rents.

Experts predict that rents will increase about 3.5 percent within the next year, and 5.2 percent by March 2013. WA is expected to see the biggest gain (4.6%) and SA/NT (2.9%) and Queensland (2.5%) are expected to experience the weakest gain.

Western Australia is expected to lead the way regarding house prices, with a 1.1 percent rise over the next year. New South Wales and the Australian Capital Territory are expected to see increases as well at 0.9 percent.

A recent survey has found that access to credit is now beginning to be more of a hindrance to purchasing properties over the interest rates. Regardless, Australia’s property experts agree that the property market will slowly see improvement this year.

Australians Finding Value in US Property Market

Australians are viewing the US as a good property investment opportunity, but real estate experts are cautioning investors to do their research before making an investment.

Australia has a strong dollar and the US property market has an abundance of foreclosures on the market. With median prices being much lower in the US, Australians are tempted to make overseas investments to enrich their portfolios.

The median house price in Perth, Australia is $465,000 and in the US is $210,000. With the falling rate of home ownership in the US, the market is peaking the interest of international investors.

According to Leigh Gavin, head of property research at Frontier Investment Consulting, for every 1 percent that home ownership rate falls, it equals about 1.1 million households.

In the last year, about $600 million dollars have come in from Australian investors into the US property market. Some are even paying for investments that they have never seen. This may not be wise though, if the area that the properties are being purchased are not in attractive areas. The potential for loss in the future is greater if the area is run down or in a high crime area.

Some experts are advising that investors look into multi-family housing and some companies are available to assist overseas investors find and purchase such housing for as little as $10,000. Multi-family housing is booming in the US due to Generation Y’s reluctance to purchase their own homes with the economy the way it is.

In Australia, yields on apartments are about 2-3 percent, but in the US yields are about 5-6 percent. The US property market is expected to continue to see slow recovery this year, as more and more people begin to show interest in purchasing homes once again.

Saturday, 2 April 2011

Spanish Property Benefits from Construction Decrease

Spain's property market is benefitting from a decrease in new home construction in 2010. A decrease of 33 percent has been reported from 2009 to 2010, according to the latest statistics from the Government.

A 60 percent decrease in Spain property construction completions have occurred from 641,419 new homes in 2007 to 257,443 new homes in 2010. This is largely due to a decrease in demand for residential properties.

Planning approvals have also declined according to research, as they hit an all-time low of 91,662 last year. This is an indication that less and less homes will be coming onto the market for the short to medium future.

Spain has been experiencing a great oversupply of homes across many regions of the country, so a slowing down in property construction was necessary to balance things out. Since Spain’s property market peaked in late 2006, property prices have decreased by up to 60 percent.

There are around one million unsold homes on the market in Spain currently. Despite the large number of homes, some house builders, such as Polaris World, are still planning on building new homes this year. Property experts do not believe that this is a good idea, as the market is best when supply vs. demand is more balanced.

With the large number of unsold properties at affordable prices, the amount of overseas investors has increased. Investors are very interested in capitalizing on the oversupply to fatten their investment portfolios in the hopes of high returns on their investments in the years to come.