Foreigners Snap Up $2bn in London Property in Christmas Week

Foreign investment in the London property market has been growing for 18 months, but never so fast as in the week before Christmas. In one week alone buyers from Asia, Africa and Europe bought £1.3 billion worth of skyscrapers, upmarket clothes shops and sprawling City office developments.

The surge of demand shows that London still retains its safe haven status even as the EU crisis worsens and there was talk of British isolation.

“Buyers are aware that now is a good time to come into the London market as many sellers are distressed or concerned about the impact of the eurozone crisis on future valuations,” said James Beckham, director of capital markets at Jones Lang LaSalle, the property services group.

The purchase of Tower 42 Nathan Kirsh, the South African property tycoon, from BlackRock and Hermes Real Estate, was the biggest and most noteworthy sale of the week. The tallest occupied skyscraper in the City and former headquarters of NatWest bank went for £282.5m.

The Malaysian government's investment arm Permodalan Nasional Bhd also made the noteworthy shortlist with its £350m office complex purchase. In its UK debut PNB snapped up the 460,000 square foot Silk Street Building just down the road from Tower 42.

It is not just prime office stock that has attracted overseas interest, however. A property investment vehicle backed by Ernesto Bertarelli, the Swiss-Italian pharmaceuticals billionaire, on Wednesday announced its first investment, acquiring a 186,000 sq ft mixed-used building in Mayfair in a deal rumoured to be worth more than £100m.

US Foreclosures Fall 14% in November as Lenders Freeze Evictions for Holidays

Just as the Germans and Brits played football on the battlefields across Europe on Christmas day, the US' banks are calling ceasefire on litigious battles as they suspend evictions and foreclosure proceedings for the holiday period.

According to real estate data collection agency RealtyTrac the widespread move brought a 14% decline in the number of foreclosures last month, with 224,394 properties receiving default notices last month. The number of foreclosures also declined on a monthly basis, with 1 in 579 households receiving foreclosure notices in November, compared to 1 in 563 in October.

The firm's chief executive James Saccacio said that the eviction moratorium is partially behind the numbers:

Despite the fall in filings the number of scheduled foreclosure auctions hit a nine-month high. Saccacio explained: "[The] first quarter typically is a better buying season, so you’ll see more of this inventory try to come to market.

"I expect 2012 to look similar to 2011 in volume if nothing changes with government intervention regulations."

With 1 in 175 homes receiving foreclosure notices in November, Nevada remains the worst affected state for the 59th consecutive month. California (one in 211) came second, while Arizona was third (one in 256).

Saccacio's prediction that 2012 volumes will be largely the same as 2011 has to be looked upon as disappointing and pessimistic. For America 2012 will be almost the 7th year of housing market collapse and still we are not to see any improvement? Optimists would say that the rapid rush of auctions in Q1 combined with the foreclosure moratorium will make a big space to clear a large chunk of foreclosure inventory in Q1, setting the way for the rest of the year. Time will tell who is right.

Russian Buyers Becoming Prolific in Overseas Property

During the boom Russians became prolific in the world of overseas property, particularly in Bulgaria, Ukraine and other coastal hotspots in the region, but also in Spain and the Med. They, like buyers from almost all nationalities became rare during the financial crisis, but according to many reports they are now becoming as prolific as ever.

According to aiGroup, who surveyed Russian investors at their three property shows between September and November, 71% of Russian investors are planning to complete a purchase in the next 3-6 months.

More than two thirds of Russian overseas property exhibition visitors are looking to complete a purchase in the next three to six months. Kim Waddoup, chief executive of the group said that exhibitors at his Moscow and St Petersburg property shows reported "stronger than ever interest in their properties".

The reports are confirmed by official data, which shows a surge in capital flight out of Russia into foreign assets and investments. According to central bank chairman Sergei Ignatyev has estimated $49.3 billion has left the country in the first nine months of the year, already outstripping 2010’s figure of £35.3 billion. $13 billion of capital left Russia in September alone…70% of the third-quarter total.

Turkey is a firm favourite among the new breed of investors according to other reports. International Residence surveyed 499 Russian investors at the Moscow International Investment Show in March this year, and found Turkey to be the third most popular country among those looking to buy. Spain and Bulgaria were first and second.

Worries over China's Property Market Overshadow Economic Prospects

Worries about a slowdown in China's property market are threatening to overshadow the country's economic prospects, according to the Organisation for Economic Cooperation and Development.

The report from the OECD stated that while the failure of small developers wouldn't pose a significant problem, this wouldn't be the case with larger developers who could put bank lending at risk. It identified a key risk as being an "overly quick liquidation of unsold property."

China is expected to see growth of 8.5% next year, even though exports will be affected by weakened demand and a decline in the nation's overall competitiveness.

According to the OECD the economy could be helped through government housing projects which would support the construction and moderate the effects of inflation, possibly allowing the government to cut interest rates from the middle of next year.

The vice premier of China, Li Keqiang has already announced the property market is entering a critical stage but feels restrictions on transactions should be maintained even though sales are declining. Latest figures show October sales fell by 25% compared to September and prices fell in 33 out of the 70 cities monitored.

The government has placed restrictions on mortgages and home purchases in around 40 cities and is also aiming to build 10 million affordable homes to boost supply. Some analysts are already predicting that falling property prices in cities such as Shanghai and Beijing could force the government to relinquish some of its hold on the property market. UBS is forecasting property prices will drop by between 10% and 15% in first tier cities in 2012 and by 5% to 10% in other cities.