Standard & Poor Predicts Further Price Drops in Gulf Region

A gloomy report from Standard & Poor predicts that property prices and rents in the Gulf region will continue to fall for the rest of the year. The agency thinks that developers will continue to postpone projects in favour of renting out and managing current stock, and it went on to say that it expects to see a shift away from luxury property towards more affordable housing, and that this will be particularly pronounced in Saudi Arabia.

According to a credit analyst for the ratings agency, prices and rents will continue to decline for the rest of the year, even though some of the properties in Qatar, Bahrain and the UAE have lost up to 60% of their value.

Apparently part of the problem is that the legal and regulation framework in these countries needs to be reformed to help stimulate the property market. Another problem is that the markets are oversupplied, and even though some people want to buy they cannot afford these luxury properties and cannot obtain finance.

The property market in Bahrain and Egypt is expected to remain slow, at least in the short term, which is due to the protests earlier in the year, and a considerable number of projects have been delayed or even cancelled.

Construction isn't expected to restart on any major scale until the political situation has stabilised, and the proper authorities are put into place to issue permits, licenses and property titles. There is also the possibility that property firms in the Gulf region may eventually adopt a real estate investment trust status, as at the moment REITs are relatively rare in this area.

US Property Market Finally Shows Signs of Stabilising

According to the second-quarter real estate market report from Zillow, the property market in the United States may finally be showing signs of heading towards stabilisation.

Although property prices have fallen by an average of 6.2% in the majority of markets, these falls have been slowing, with the last quarter showing just a 0.4% decline, the smallest for more than four years.

Some property markets are showing price increases, and negative equity has declined slightly. However economists are predicting that the bottom of the market won't be realised until next year due to the high numbers of foreclosures and continuing uncertainty over the economy.

Overall property prices have fallen by around 28% since their peak in June 2006, and the average property costs $171,600. The rate of foreclosures is gradually declining, as in March it reached a peak of 21.4% of all sales, while in June this figure fell to 19.7%.

Although property experts acknowledge this is good news they are still cautious about the future, and feel the road to recovery will not be particularly smooth. This is due to the fact that there are still a lot of foreclosures in the pipeline, and many people still have high levels of negative equity which could put their homes at risk in the future.

Some property markets have now shown two consecutive quarters of appreciation, and these include Washington DC where property prices increased 0.2% through to the first quarter of the year, and 1.7% through the second quarter. In the Pittsburgh prices increased 0.1% through the first quarter of the year and 2.8% through the second quarter.

Nicaragua Is a Great Destination for Investors Seeking a Bargain

Nicaragua is the largest country in Central America, and much of the southern Pacific Coast is being developed with luxurious planned communities designed specifically for overseas buyers.

While these developments are absolutely gorgeous, the Northern and Central Pacific Coast offers a far more affordable alternative, and many investors are catching on fast.

A lot of the towns here are quite simple, but are undergoing gradual transformations and the percentage of holiday homes is increasing. One such village is Pochomil whose most significant claim to fame is the substantial number of excellent seafood restaurants on the beach which is wide and sandy and about 10 miles long.

The Pacific Ocean here is extremely calm and warm, and is perfect for swimming and other water sports. This village is near to a luxury resort at Montelimar, and is also close to the former presidential seaside retreat. The nearest large city is the capital of Nicaragua, Managua, and many of its residents choose to escape here for day trips.

At the moment prices here are still very low as a three-bedroom property with ocean views can be bought for as little as $150,000, and the village has attracted a real international mix. Unlike the planned communities along the south Pacific Coast, this region has retained its authentic feel.

As well as being an attractive country for second homeowners, Nicaragua is increasingly being seen as offering opportunities for foreign direct investment, and is often regarded as one of the most competitive sourcing options for the textile industry, even when compared to countries such as Vietnam, China and Bangladesh.

Nicaragua has a skilled labour force and is very pro-business offering attractive fiscal incentives, and is likely to see good economic growth over the next few years.

Property Prices in Australia Fall Unexpectedly

Property prices in Australia are continuing to fall, as new figures for June show they have now declined for three straight months. One index showed that property prices in eight major cities dropped by 0.1% during the last quarter, and they are now at their lowest level since 2009. However the price falls in some cities were much larger, as property prices fell by 1% in Perth, and by 1.6% in Darwin. They are still continuing to rise in some cities as they increased by 0.4% in Sydney, and by 1.1% in Canberra.

Australia currently has the highest interest rates in the developed world, at 4.75%, although it has just been decided to keep rates the same for another month in spite of worries over high inflation figures. Rates have been increased seven times between October 2009 and November 2010.

The number of permits to build new homes, or to renovate existing houses and apartments fell by 3.5% from May, and building approvals have fallen by 15.5% year on year to June. This was unexpected as economists had been predicting a 3% increase in approvals during June, and a 10.3% fall for the year. Some analysts are taking the view that a fall in building approvals is good for house prices and should ensure that there aren't any real significant price drops in the future.

In spite of these gloomy figures, the medium to long-term outlook looks good, as economic growth is expected to boost the housing sector. There is a strong underlying demand for new homes, as around 135,000 units are built when there is a need for 200,000 new homes annually.