US new home purchases at record low

Homebuyers in the US are shunning new homes as purchases are now at record low levels with the figures for April showing that the property market remains a weak link in the US recovery.

The number of new homes sold in April was 300,000 which is the same as March, but it seems as if buyers are choosing to purchase previously owned homes which is having a serious effect on homebuilders.

The figures for this months new-home sales are not expected to show any significant improvement. The high levels of foreclosures will continue to have a negative effect on property prices. Unemployment levels are now at 9% and wages are remaining static.

When this is combined with tighter credit regulations it seems likely that a recovery in the housing market will take years. Steve Blitz, a senior economist for ITG Investment Research Inc in New York feels that new-home sales will remain depressed due to the considerable housing inventory.

The chief financial officer of D.R. Horton, Bill Wheat feels that demand will remain weak into 2012. D.R. Horton is the second largest homebuilder in the US.

Housing starts fell by 11% in April to 523,000, as builders have already begun to cut backoreLogic Inc estimated in March that there were 1.8 million homes that were more than three months delinquent, already in foreclosure or bank owned, and there are already 3.87 million pre-owned homes on the market which will continue to affect sales of new houses.

At the peak of the market, new-home sales accounted for 16% in July 2005, while in March they accounted for just 5.6% of the market.

French Tax Laws Set to Sting Second Homeowners

The French government has just announced that second homeowners in France could be subjected to a new tax if they don't live in the country and don't pay French taxes. It's likely to apply to people who don't rent out their properties as owners who collect a rental income are likely to be unaffected by the new tax.

It looks as if the tax would be equivalent to 20% of the cadastral rental value and it is expected that this tax will bring in an extra €176 million to government coffers every year. As yet there isn't a firm date for this new law to be implemented, but it's expected it could be as early as January 2012 and that the new law will be passed in Parliament this summer.

The French budget Minister, François Baroin has defended this new bill on the basis that anyone owning a second home doesn't contribute towards national services and infrastructure even though they benefit while in the country.

It's widely thought that there will be a six-year period of grace for people who had previously been French tax residents before moving abroad. It is also likely that anyone who paid taxes in France for three years during the last decade for leaving the country could benefit.

This change could affect 360,000 second home owners who are mainly British and Dutch citizens.

There are questions being raised about the legality of the new law under EU laws even though it has clearly been written to apply to French citizens as well as overseas buyers. The European commission has already announced its going to take a look at this draft law but the reality is that member states are free to set their own tax laws.

Aftermath of the Earthquake leads to building boom in Japan

The aftermath of the earthquake is likely to lead to the biggest housing boom in Japan for at least 15 years. Japan's second-largest house builder, Sekisui House Ltd is set to focus its attention on building new homes locally after concentrating much of its efforts into overseas housing markets such as Australia and China over the last three years.

The company had decided to target countries that are dealing with increasing population, good economic growth and rich resources as the housing market in Japan was damaged by falling wages and increasing unemployment.

New housing starts in Japan fell to less than 1 million units in 2009 and 2010 which is the lowest level for four decades, but now demand is expected to exceed that of 1996 when 1.6 million new homes were built after the Great Hanshin Earthquake.

The Japanese Prime Minister is proposing a ¥4 trillion budget to help rebuild homes destroyed and damaged by the earthquake and subsequent tsunami. There is also a proposal that the government should raise taxes to pay for this extra spending, but experts feel this would hurt the economy and could jeopardise the revival plan.

After the last earthquake in 1996 housing starts increased for 10 months, but the area damaged in March is much larger and the need is much greater. There are about 30.3 million homes in Japan, and 90% have not yet been assessed for quake resistance. An estimated 0.4% of the 29,692 homes built by Sekisui in the area of the Hanshin earthquake were destroyed and 9.3% were just slightly damaged.

The chief executive officer of Sekisui, Isami Wada announced the company's intention to continue building more earthquake resistant homes that help give people peace of mind and security.

Stylish living in Sweden

Although it's just a two-hour flight away from the UK, very few Brits buy property in Sweden, and yet the country has much to offer as it has stunning scenery and great skiing. While the north of the country is sparsely populated, the southernmost part of Sweden is on the same latitude as Edinburgh and the cities of Gothenburg and Stockholm have lots of cultural entertainment and restaurants but yet remain relatively uncrowded.

Temperatures here can reach 30°C in the summer and the area attracts large numbers of Dutch, Germans and Norwegians who buy summer houses as holiday homes.

Prices in Sweden fell by around 10% to 15% in the aftermath of the global financial crisis, but as the government lowered the interest rates, prices have gradually climbed back to where they were at their peak.

Property prices are much lower outside the cities and towns and a lot of Swedes own a second home, or summer house which is little more than a log cabin.

These can cost as little as £25,000. Prices in Stockholm can vary as it is made up of separate villages which each have their own character. In the city centre most people live in apartments, and not surprisingly this is the most expensive area at around £6250 per square metre.

A family house close to the city centre will cost about £773,000, but you can halve this figure by moving slightly outside of the city. Swedes enjoy a very high standard of living, and there are good job opportunities here for people with good qualifications, but taxes are high.

Confidence remains high in Hong Kong property

The first land auction since last November has just taken place in Hong Kong and raised amounts close to the highest estimates of analysts. This indicates that developers are still confident that the market can withstand any attempts by the government to control property prices.

A plot of land in the Hung Hom district which is near to the site of the former airport was bought by Nan Fung Development Ltd and Wing Tai Properties Ltd for HK$1.525 billion. Five surveyors and analysts had estimated this site would raise anything from HK$1.07 billion to HK$1.53 billion.

The site will be jointly developed and it's estimated the whole project will cost between HK$500 million and HK$600 million to build over 100 three and four-bedroom luxury apartments. The price paid for the site equates to HK$9934 a square foot while the estimated selling price will be HK$12,934 per square foot.

Property prices in Hong Kong have risen by 65% in the past two years, and the government has been trying to control this rapid rise since last year and hopes that boosting land supply will lead to more affordable housing, since many of the public have complained that housing costs are now unaffordable. Property prices rose 0.6% to the week ending April 17 after a 1.6% decline in mid-March after mortgage terms increased.

Prices of homes have increased by around 10% since last November. The government is selling a total of nine sites in the second quarter of this year which will enable 2650 apartments to be built. It could auction 52 sites this year which would mean 16,000 homes could be built. This would be an increase of nearly 80% on the number of homes built on government sold land last year.