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Is the US property market going backwards?

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Much has been made about the US property recovery in recent months, but new data suggests conditions may not be as positive as initially believed. Fitch Ratings claim high interest rates on home loans could dampen demand and dent bottom lines for US banks with strong mortgage originations.

Interest rates on fixed 30-year mortgages rose to an average 4.68 per cent in the first week of the month - the ninth consecutive increase and the highest in almost two years. This is having an impact on the number of people taking out mortgages and Fitch believe volumes will continue to fall. The agency explained that borrowers have either already refinanced their homes or are unable to do so because of depressed housing values. While this is partially offset by rising home prices, there are severe implications for the mortgage market.

Some US banks gain as much as 20 per cent of non-interest income from mortgage banking, not to mention nearly eight-to-ten per cent of net revenue. Should higher interest rates and refinancing burnout cause a mortgage decline of 50 per cent, regional banks would suffer a four per cent drop in revenue.

"Bank earnings from large mortgage players such as JP Morgan Chase, Wells Fargo and U.S. Bancorp have been boosted over the last several quarters by strong mortgage banking income due largely to the high volume of refinancings amid generationally low mortgage rates," Fitch said in a statement. The agency added that it did not "expect this level of mortgage banking to persist". As refinances decline and mortgage rates grow, "Fitch believes bank earnings could be impacted over the next few quarters".

Figures from the Mortgage Bankers Association also recorded a drop in new home purchase loans throughout June. The Builder Application Survey showed a 15 per cent month-on-month decline in mortgage applications. This doesn't include a seasonal adjustment. Throughout the month, 67.3 per cent of loan applications were for conventional loans. FHA loans accounted for 17.4 per cent.
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Residential mortgages increasing Australian bank risk

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The Australian banking system could be at risk due to its high concentration of residential mortgages. Moody's Analytics manager director Tony Hughes explained that the sector is vulnerable to possible house price correction, the Global Property Guide reported. Australian property has long been highlighted as some of the most highly valued in the world and if prices remain too high, banks could be facing a major concentration risk.

While many local analysts don't foresee a market collapse, thanks to pleasing economic conditions in the country, Mr Hughes claims the US subprime mortgage crisis is proof that Australia isn't bullet proof. With banks in the US crippled by the housing collapse, it is important for the sector to ensure properties aren't excessively overvalued. According to Mr Hughes, only economists in a ten-year coma could be fool enough to believe an Australian housing collapse is impossible.

It is undeniable that property prices in Australia are rising dramatically. A new report from RP Data identified a number of areas where house prices are predicted to double over the next decade, based upon latest industry trends. Should house values increase at the predicted rate, property investors will have an opportunity to experience significant returns in Australia if they invest now. The RP Data Investors Report shows that Melbourne has the greatest number of suburbs with a likelihood of delivering a 100 per cent return within ten years, reports Yahoo.

A number of Sydney suburbs are also set for price rises, including Eastern Creek, Campbelltown and Belmore. Interestingly, more than half (55.7 per cent) of the areas with fast-rising property prices are located away from the main cities, including mining towns such as Hunter Pilbara, Mackay and Fitzroy.

However, soaring prices spell bad news for future would-be-buyers, who could become locked out of the market. A recent report by Auspol showed many Australians are becoming frustrated at the lack of affordable housing, with 84 per cent ranking house prices as more important than any other issue.
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Portugal remains in the 'doldrums'

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Despite the release of relatively positive data for Q2, Portuguese property is still in a slump. The Global Property Guide reported that major factors remain weak, with the average property price in Portugal falling by 2.4 per cent year-on-year in June 2013. Figures from Statistics Portugal showed despite prices in the country rising by 0.2 per cent quarter-on-quarter in Q2, when adjusted for inflation, prices fell 3.4 per cent since June 2012.

The average property in Portugal now costs €948 (£816.11) per square metre. Flats are performing the best, falling just 2.2 per cent year-on-year in real terms in June to around €1,051 per square metre. When it comes to location, the news provider explained that prices dropped  across the country, but the Algarve had the sharpest decline, with a 5.8 per cent drop year-on-year.

Construction is also very weak. Statistics Portugal's index of production showed a 16.3 per cent year-on-year fall in activity for the quarter ending in June 2013. However, this is up by 2.9 per cent from May. Employment and wages and salaries indexes registered year-on-year falls of 15.3 per cent and 15.1 per cent respectively. 

However, Portuguese property is anything but down and out. The country still remains popular among second-home owners and investors in the holiday let market. In fact the Organisation for Economic Co-operation and Development named Portugal as one of the most favourable countries in the world to own property in May 2013. This is because real estate is undervalued and the price-to-rent ratio is appealing for investors. Homes are now seven per cent cheaper than their historical average and rents are 13 per cent more favourable for landlords.

Yet the mortgage market's instability could deter some from buying property in Portugal. Although interest rates are falling, dropping to 3.24 per cent in May 2013 from 3.99 per cent the year previous, there is extreme sensitivity to interest rate changes. The Global Property Guide explained this is because 98 per cent of all loans approved in Portugal have variable interest rates or initial rate fixation of less than one year.
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Higher US mortgage interest rates slow market

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The US property market is being slowed by high mortgage interest rates, according to new figures from the National Association of Realtors (NAR). The Pending Homes Sales Index showed a drop in transactions in July, based on contract signing data. During the month, pending sales declined 1.3 per cent to 109.5. This is down from 110.9 per cent in July but still 6.7 per cent above July 2012.

July's figures represent the 27th consecutive month pending sales have stayed above levels recorded for the year previous. However, there are still questionable market fundamentals and an uneven growth pattern across the country. Lawrence Yun, NAR chief economist, said: "The modest decline in sales is not yet concerning, and contract activity remains elevated, with the south and midwest showing no measurable slowdown. However, higher mortgage interest rates and rising home prices are impacting monthly contract activity in the high-cost regions of the northeast and the west."

A lack of supply is adding to price pressure in the west and if new homes aren't built soon, Mr Yun claims the region could soon face significant affordability problems. Sales are still dropping in the region, down 4.9 per cent in July to 108.6. This is 0.4 per cent below July 2012.

In the northeast, sales also dropped 6.5 per cent to 81.5 per cent in July. However, this is still 3.3 per cent higher than a year ago. The midwest saw one of the smallest drops, down one per cent to 113.2. This is 14.5 per cent above July 2012. In the south, sales actually increased 2.6 per cent to 121.5, 7.7 per cent above last year.

However, overall NAR expects a positive year for US property, with existing home sales rising ten per cent during 2013 to around 5.1 million. By next year, it is expected there will be 5.2 million sales. But a supply imbalance will cause prices to surge higher, with the median existing home price growing by 11 per cent in 2013 and between five and six per cent in 2014.
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Nar applauds US second mortgage reform discussion

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The National Association of Realtors (Nar) has applauded officials for encouraging discussion on reform to the second mortgage market for US property. In a statement, Nar president Gary Thomas welcomed Senate Banking Committee chairman Tim Johnson's and ranking member Mike Crapo's move to begin a series of hearings about the future of second mortgages and sustainable finance reform.

"As the thoughtful policy discussions move ahead, Realtors (Nar) continue to advocate for a system that ensures creditworthy buyers always have access to safe, reliable mortgages such as 30-and 15-year fixed-rate loans, even in tough economic times when private lenders cannot, or will not, enter the market," Mr Thomas said.

He added that the goal of Nar - America's second largest trade association - is to simply help congress and the industry create a second mortgage market model capable of furthering US interests today and beyond. However, critics will be wary of creating a culture of high debt once again, leaving real estate and lenders vulnerable to a crash.

Currently, high mortgage interest rates are keeping a cap on lending in the US. This is also helping to slow down sales, with Nar's Pending Homes Sales Index showing a drop in transactions in July. Pending sales fell by 1.3 per cent over the month to 109.5, down from 110.9 in June. However, sales remain 6.7 per cent above July 2012 - the 27th consecutive month transactions have stayed above levels recorded in the previous year.

Lawrence Yun, Nar chief economist, isn't concerned about the drop-off in activity. He claims the contract level "remains elevated", but high mortgage interest rates and rising prices are affecting the market in expensive regions. At a time when many post-recession economies are fearful of overheating in the future, this may not be a bad thing. Controlling growth will be essential for places like the US and UK if the recovery is to be a sustainable one over the long-term.
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Mortgage middlemen cashing in on UAE property market

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As the UAE property market strengthens, mortgage middlemen are cashing in. With homeowners no longer unconcerned about the small print on their loans, many are going in search of better deals and middlemen are stepping into the breach, The National reported. In fact, banks are recording an increase in the number of mortgage brokers and consultants they do business with.

Jean-Luc Desbois, managing director of Home Matters , told the news provider: "Consumers now are looking for better value for money. Not just lower interest rates, but terms and conditions and exit fees." Intermediaries can often offer this to buyers and in the UAE investors are starting to realise their potential.

For brokers and consultants, now is boom time. Mortgage consultant company Independent Finance is just one firm that tripled in size last year and Sam Wani, the company's general manager, told The National it is likely to double again this year. He claims the company has a 95 per cent preapproval rate for customers and clients are thoroughly vetted. However, he admits excessive leveraging can be problem.

As property prices rise in the UAE - particularly Dubai - the need for mortgage financing is increasing. Mr Wani claims this is partly the result of the domestic market looking to lower costs by buying, rather than renting. Remortgaging is also driving demand for middlemen, with those who purchased their home when interest rates were high now looking for a payoff.

Now is certainly time to investigate finance options in the UAE, as growth becomes more sustainable. Standard Chartered Bank explained to Trade Arabia that sales are currently driven by organic demand and improved economic fundamentals, opposed to speculators. This has led to a 38 per cent price rise of apartments over the last year, while villas have seen values jump by 24 per cent.
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Spain gains ground in property popularity stakes

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Spanish property is gaining ground in the popularity stakes, attracting more and more overseas buyers as house prices fall. According to Conti , Spain is the second most popular destination for investors, accounting for 36 per cent of all mortgage enquiries. France tops this list with 43 per cent, but the gap between the two nations is narrowing.

Enquiries about mortgages on Spanish properties increased by three per cent year-on-year in August, while France fell two per cent during the same period. In fact, during the months of May, June and July, Spain accounted for more enquiries than France. This is likely down to the market swaying in favour of buyers. There are a large number of homes available in the country and prices are yet to reach the bottom, meaning there is plenty of scope for negotiating values. In terms of lending, there are also plenty of opportunities to be had as long as investors have a healthy deposit. Add in to the mix the fact that the country is easily accessible and Spain looks like a very attractive prospect indeed.

However, it isn't just France and Spain that are attracting the eyes of buyers. In fact, more and more people are looking for overseas property across the globe. During August Conti saw a 62 per cent increase in the number of mortgage enquiries, making it the busiest month so far this year.

Clare Nessling, director at Conti, said: "Traditionally, our enquiry levels tend rise around now, as people return home from trips abroad with dreams of owning their own place in the sun. But the uplift is even higher this year, perhaps the result of the UK’s hottest, driest and sunniest summer in the UK since 2006 inspiring even more people to invest in an overseas bolthole which they can escape to during the cold winter months."

However, Ms Nessling added that buyers still want to play it safe and opt for traditional locations for overseas homes. This may be the result of uncertainty in certain parts of the globe following the Arab spring, not to mention the consistent tourism activity in popular spots like the Costa del Sol, meaning holiday-let opportunities are available.
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US house sales hit six-and-a-half year peak

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House sales in the United States hit a six-and-a-half year peak in August, according to figures from the National Association of Realtors (NAR). 

The organisation’s report also indicated that median home prices have risen for nine straight months of year-on-year increases, with every one of these rises reaching double digits.

It was also found that total existing property sales - including single family homes, townhouses, condominiums and co-ops - rose by 1.7 per cent to an annual rate of 5.84 million in August from 5.39 million in July. Year-on-year, this figure stands at 13.2 per cent higher than the 4.84 million sales that took place in August 2012. 

Analysis of this data showed that sales are now at their highest rate since February 2007, at which point they achieved 5.79 million. Furthermore, the past 26 months have seen year-on-year increases in house sales. 

Lawrence Yun, chief economist at the NAR, commented that the US real estate market appears to have hit a peak - although this is unlikely to be a permanent position. He explained that rising mortgage interest rates have pushed more buyers to close deals, however monthly sales are likely to be “uneven” over the next few months as several market frictions continue to rear their heads.

“Tight inventory is limiting choices in many areas, higher mortgage interest rates mean affordability isn’t as favourable as it was, and restrictive mortgage lending standards are keeping some otherwise qualified buyers from completing a purchase,” he added.

A survey if total housing inventory at the end of August increased 0.4 per cent to 2.25 million existing homes which are now available to be sold. If sales continues at its current pace, this represents a 4.9 month supply, which is a drop from July’s five month supply. 
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Australian building recovers, but lending slips

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The Australian property sector is witnessing a return of new builds, but unfortunately this has coincided with a drop off in lending. Figures from the Australian Bureau of Statistics showed the total number of private sector house approvals increased 0.6 per cent in August, contributing to the overall 0.1 per cent rise in the total dwelling units approved. This marks something of a recovery and is the ninth consecutive month approval numbers have grown.

The Australian Capital Territory saw the greatest jump in new projects being approved, with a 2.3 per cent increase. This was followed by the Northern Territory, which posted a 1.3 per cent rise, and New South Wales, with 1.1 per cent growth. South Australia, Tasmania and Queensland also saw approval numbers rise by 0.9 per cent, 0.7 per cent and 0.1 per cent respectively. However, Victoria saw a 1.7 per cent drop.

While growth in approvals across most of the country is good news for Australia, which is struggling with a lack of supply, this isn't being matched by improved lending conditions. House finance data has showed that new home lending slipped back during August. In fact, the number of loans advanced for purchase and construction of property dropped to 8.347 on a seasonally adjusted basis. House Industry Association (HIA) senior economist, Shane Garrett, said: "This represents a slight decline on the previous month’s result and is a timely warning against complacency towards Australia’s housing market."

While lending activity has risen significantly when compared to a year ago, growth has stalled over the last six months and remains low by historical standards. In the three months to August, the number of loans to owner occupiers for the construction and purchase of new homes increased by just 0.3 per cent - a 13.3 per cent rise year-on-year.

According to the HIA, more needs to be done to encourage lending. "The patchiness we are continuing to see in areas of the home loans market means that another interest rate cut from the RBA before the end of 2013 is important in order to ensure that the market recovery fires on all cylinders," Mr Garrett explained.
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Spain catching up to France in popularity stakes

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UK buyers have always favoured France when investing in international property, but Spain is swiftly closing the gap. According to mortgage specialist Conti , 36 per cent of all enquiries received so far this year have been for Spain, growing by three per cent on the same time last year. Conversely, while French property made up 43 per cent of enquiries, numbers actually declined by two per cent.

In fact, Spain accounted for more enquiries than France during May, June and July, demonstrating that the market remains a popular one and confidence is rising. Things are certainly starting to look up for the country's real estate sector and prices have started to bottom out in certain parts if the country. Seemingly, Spain is now on the slow climb to recovery and savvy buyers know that now is the time to snap up property while it remains in low value territory.

Indeed, Conti notes that investors are in a strong position when it comes to Spanish property due to the number of homes available and the chance of negotiating even lower prices with motivated vendors. There's also cheap and easy access to the country from the UK and rental opportunities are good.

Of course there are still some barriers in the market - namely a lack of finance. Mortgage availability is weak in Spain, but for those with a healthy deposit to put down, there are still plenty of banks willing to do business. While cash is still king at the moment, it is possible to borrow up to 65 per cent of the value of a property and rates start from just 3.23 per cent.

Commenting on the findings, Clare Nessling, director at Conti , said: "Prospective buyers are still playing it safe when it comes to location, with France and Spain still out on their own in terms of popularity. And there may actually never be a better time to buy as bargain property prices, historically low mortgage rates, good rental yields and a stronger pound are all making it more affordable for British buyers right now."
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UAE sets mortgage limit to prevent property crash

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The United Arab Emirates (UAE) has set a limit on mortgage loans in a bid to cool its property market and prevent another crash. Fear that a bubble is emerging has been mounting for some time, and while short boom-and-bust cycles are often common in an emerging economy, they are undesirable. Between 2008 and 2010, UAE property prices fell more than 50 per cent. Speculation has been the main bugbear of the market, but lending is also a major issue.

The UAE is hoping that by introducing restrictions, growth can become more stable. The changes are also not as stringent as originally proposed, after the banking industry lobbied against the plans. Mortgages for first-time buyers of homes worth up to five million dirhams (£872,000) will have a cap of 80 per cent of the property value for UAE citizens and 75 per cent for overseas buyers. Second-time and subsequent homes will have a 65 per cent mortgage cap for locals and 60 per cent for foreigners. Other restrictions will also be introduced, including a caveat that loans should not exceed 25 years and should be cleared by locals by the of 70 and foreigners by the age of 65.

There is yet to be a date set for when the rules will take effect, but they are likely to meet a relatively warm reception. The head of retail banking at one bank in the UAE told Reuters : "The (new mortgage) rules are a good thing for the industry and I don't think they will have a negative effect on prices. It's a good, balanced document which takes everyone's needs into consideration."

There are certainly signs the UAE property market is becoming more sustainable. A study from Standard Chartered Bank recently revealed that in Dubai, demand is now organic and not the result of speculators. Trade Arabia reported that regulation and pleasing economic fundamentals are attracting people to the emirate, with logistics, hospitality and retail supporting growth. Between 2011 and 2021, tourism is also expected to grow at an average rate of 6.5 per cent per annum, creating jobs, supporting the economy and cultivating opportunities for investors.
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Investors marginalising Australian first-time buyers

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First-time buyers of Australian property are being marginalised by investor demand and upgraders. According to figures from the Australian Bureau of Statistics (ABS) that go back 22 years, those trying to get on the housing ladder now make up the smallest proportion of the market on record. ABC News reported that the number of first-time buyers dipped to 12.5 per cent of all activity in September - the smallest amount noted since figures started being collected in 1991. In fact, the other low was experienced in March 2004, when 12.8 per cent market share was seen.

Conversely, investment lending jumped 5.2 per cent in September, while the number of loans to owner-occupiers increased 4.4 per cent across the board, the news portal revealed. UBS Australia's chief economist Scott Haslem believes this is down to issues of affordability. It seems that while investors and upgraders can easily meet asking prices, those trying to get on the property ladder are struggling to compete.

"Housing in Australia still remains pretty expensive, but it has become cheaper than it has been for the last ten years given the fall in interest rates and, up until recently, pretty low prices," Mr Haslem told ABC. "In contrast though, first home owners aren't seeing relative affordability, they're seeing absolute unaffordability, so I think for first home owners housing in Australia still looks pretty expensive."

Sydney is one of the most costly locations for buyers, with prices in the city rising 3.6 per cent in September 2013. Melbourne, Brisbane, Perth, Hobart and Darwin also saw increases of 1.9 per cent, 1.2 per cent, 0.2 per cent, 1.4 per cent and 0.4 per cent respectively. Conversely, Canberra and Adelaide witnessed price drops of 1.2 per cent and 0.6 per cent. However, the weighted average for the eight capital cities grew by 1.9 per cent during the third quarter of the year. This means that to the end of September, prices increased 7.9 per cent on average in Australia's capital cities since the beginning of 2013.
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US growth to slow over the next five years

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The next five years is expected to see US property growth slow considerably, according to new research. The latest Zillow Home Price Expectations Survey revealed that while prices have been increasing rapidly this year, finishing 2013 6.7 per cent higher than 2012, this pace of appreciation is unsustainable and will begin to decelerate significantly as soon as next year.

It is expected 2014 will see value growth drop off to around 4.3 per cent. The survey of 108 economists, real estate experts and investment and market strategists also revealed this will fall further to 3.4 per cent by 2018. This puts the housing market on a firm footing but could dissuade some investors. However, the tempering of growth is important to ensure property prices don't encroach on bubble territory.

Zillow chief economist Dr Stan Humphries said: "The housing market has seen a period of unsustainable, breakneck appreciation, and some cooling off is both welcome and expected. Rising mortgage rates, diminished investor demand and slowly rising inventory will all contribute to the slowdown of appreciation."

Participants in Zillow's research were also asked about their opinions on whether the federal government should reform the mortgage finance system and how. Of those questioned, 58.4 per cent said involvement should be "somewhat significant", "significant" or "very significant". Just eight per cent believed the federal government should have a "non-existent" role in the market. When asked to define appropriate levels of government backing for mortgage loans, most agreed 35 per cent was the optimum figure. This is roughly what was seen in 2006 at the height of the housing bubble.

"Policy discussions centred on reforming the nation’s housing finance system have only just begun, and it will be very interesting to see what comes out of these debates and how the market will react to new proposals," Mr Humphries said, adding that the amount mortgages will end up costing average buyers is one of the most critical issues for the market.
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Cyprus govt to launch mortgage rescue scheme

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The Cypriot government is looking to launch a rescue scheme that will help homeowners who are unable to maintain their mortgage repayments. A Ministry of Finance official told the House Human Rights Committee that those who are unable to repay their mortgages to commercial banks could receive support under a plan currently being drafted, Cyprus Property News reported.

The changes could see homeowners receiving up to €200,000 (£167,201) relief if they default on their first residence. The government will purchase their home and they will have the ability to become tenants paying a nominal rent, the news portal revealed. Homeowners unable to make their mortgage repayments will also be able to pay their loan off under favourable terms under a long period.

With the Cypriot economy still floundering, property owners will be grateful of any assistance to keep hold of their home. Conditions could get worse if deflation occurs too. Falling incomes and value of property could leave those in debt in real trouble. Indeed, attempts to bring about deflation could prove a threat to the entire EU. François Heisbourg, head of the Geneva International Institute for Strategic Studies, said: "Britain, the US, Japan, all have a strategy of monetary stimulus, but in the EU we have nothing but hard money. The currency doesn’t belong to bankers, and it doesn’t belong to Germany, it belongs to all members of the eurozone. We must face the reality that the EU itself is now threatened by the euro," he said.

However, writing in the Cyprus Mail, Paul Rowland, founding member of a European consultancy for asset protection and debt management, explained that one of the only ways to strengthen the position of Cyprus is to look to quantitative easing, fiscal stimulus and the devaluation of the euro. This would attract more tourists to the country and ease the debt burden, he claims. Tourism is one of Cyprus' main draws and the market attracts property investors year-after-year and creates jobs. Revitalising the sector will be crucial in any recovery, it can be argued.
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Self-build lending on the up in Australia

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Those looking for Australian property are increasingly deciding to construct their own homes, new figures suggest. Data from the Australian Bureau of Statistics (ABS) showed that the number of loans advanced for owner occupiers to construct new properties is at the highest level since March 2010. This is a symptom of improved lending conditions for home building in the country.

ABS reported a one per cent increase in the total number of owner occupier housing loans, while loans for construction also jumped by one per cent. Loans for the purchase of new dwellings rose 3.6 per cent, while loans for established dwellings grew two per cent. These figures are welcome news for the Australian property market and with construction finance slightly easier to come by, the country will be able to address its lack of housing supply and the upwards pressure this is having on prices.

"The upward momentum in lending for new investment property is continuing," Harley Dale, Housing Industry Association (HIA) chief economist, commented. "The dual growth evident for lending for construction across both owner occupiers and investors is a good sign for new home building activity in early 2014."

What's more, six out of the eight Australian states and territories contributed to the growth in construction lending for owner-occupiers, showing the trend is relatively widespread. "This is an important tick in the box for the residential construction outlook as the first round new home building recovery in 2012/13 was narrowly driven with only two states – New South Wales and Western Australia – accounting for the bulk of the growth,” Mr Dale said.

However, it's not good news across the board and the original value of loans for larger alterations and additions aren't performing as strongly. Indeed, they declined by 5.1 per cent over the three months to October 2013. They now stand just 1.8 per cent higher than in the same period in 2012. Renovations investment is also at a ten year low and Mr Dale said there needs to be substantial improvements ahead.
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Portuguese Golden Visa scheme paying dividends

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Portuguese property is receiving a boost from the country's Golden Visa and Golden Residence Permit Scheme. The initiatives to attract more foreign investment to the country are beginning to pay dividends and figures from the Foreign Ministry have shown immigration issued 318 Golden Visas last year alone.

Most visas advanced have gone to Chinese nationals, with people from the country accounting for 248. The Russian Federation saw fifteen visas going to its investors, while Angola and Brazil accounted for the rest. So strong has been demand that Portugal expects to issue around 400 Golden Visas per annum going forward. With the particulars of the scheme demanding that applicants invest at least €500,000 (£418,933) in property, this is certainly giving the market a boost and offering some stability to prices.

In November, foreign ministry spokeswoman Francisca Seabra told Bloomberg that €198 million of property investment has already been received this year from non-EU nationals. Charles Roberts, managing partner of Fine & Country Cascais, explained to A Place in the Sun: "There is a feeling in Portugal that the worst of the country's economic crisis is over and that real estate prices have finally bottomed out."

Yet there continues to be no liquidity in the banking system, Mr Roberts noted, which causes problems for buyers. Financial institutions in Portugal are still trying to restructure themselves and offload distressed assets. Mortgage repayments are an issue for the country too and there are many resale properties in popular locations with owners unable to meet repayment charges or maintenance costs.

Yet Mr Roberts is confident about the coming years: "As long as the Golden Residency Permit continues and providing that other countries do not produce more attractive schemes, we look to the future with confidence. The Non Habitual Resident Tax Scheme is also bring us a number of high value sales and we are now dealing with markets that previously had no interest in Portugal. By way of example President Hollande's tax regime in France is benefitting Portugal tremendously."
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Property owners protesting overvaluation in Malaysia

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All isn't well in the Kuala Lumpur property market , with residents and homeowners now protesting overvaluation. People are up in arms about the adjustment, which will increase property taxes, even if assessment rates are unchanged, the Malay Mail Online reported. However, the Umno minister has labelled people of the city "confused" - something DAP's Teresa Kok has condemned.

Speaking to the news provider, the Seputeh MP accused the Federal Territories minister Datuk Seri Tengku Adnan of himself being confused. She claims he has misunderstood the rationale behind objections to overvaluation. "The huge increase in the new annual value will bring about [a] big hike in their property assessment rates if the current percentage rates imposed remain unchanged," Ms Kok said. "Irrespective of whether there will be changes in the percentage rates, objections can be made if there are grounds that the properties have been overvalued."

The price adjustment could also have negative effects on foreign investors, discouraging buyers from ploughing money into the city. New rules to limit speculation will also come into effect in January, which will make it more difficult for people from overseas to buy property. The Global Property Guide explained that from next month international investors will only be able to purchase property priced at RM1 million (£189,312) or above. Higher property gains tax has also been imposed by the government.  This will abolish the tiered rate system and introduce a flat rate of 30 per cent if a property is sold in the first five years after purchase.

The Global Property Guide claims this will have an effect on overseas buyers looking for quick gains or a holiday home. What's more, the measures may not be able to cool property prices, rendering the changes seemingly misguided. Datuk Michael Yam, president of the Real Estate and Housing Developers Association, claims the reforms could encourage people to hold onto their homes for longer, causing supply to decline and prices to travel upwards further.
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Spanish Property Sector Struggling Despite Foreign Sales

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The Spanish property market is still struggling to recover from a period of almost half a decade spent in the doldrums, according to latest figures. It comes just a few weeks after it was claimed that the number of property investors purchasing in Spain having made the move from overseas was helping to prop up the sector in one of the nations that was hurt worst by the financial downturn across the eurozone from 2008.

The latest figures released by the National Statistics Institute have revealed that the number of homes sold in the nation during November 2013 was a full 16 per cent lower than it was a year ago. This poor month, during which just 22,000 homes were bought across the whole country, marked the second largest year-on-year dip seen in the nation since 2008.

Even when compared to October, the sales figures made for bad reading, with the fall in the space of just a month amounting to 4.1 per cent. This latest wave of bad news comes as it has been reported that property prices fell by nearly eight per cent in 2013. Since 2007, when prices peaked, they have now fallen by as much as 39 per cent to return to levels last seen in 2002.

However, the good news for foreign investors is that they can now get on the market at a lower price level, knowing that the probability of capital gains when the economy improves will be reasonably high. One of the largest negative factors currently seen in Spain is the fact that most can't get access to finance to buy homes. “Credit is still being choked and potential buyers don’t have access to property at its current prices,” said Fernando Encinar, head of studies at property website Idealista. However, this would be something that would change when finances in Spain get stronger, helping push demand, sales and prices higher in tandem.


Article by +https://plus.google.com/117987778295738303451?rel=author on behalf of Propertyshowrooms.com

Australian Mortgage Lending Continued To Grow In Late 2013

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The mortgage lending market in Australia continued to grow throughout the final months of 2013, according to the latest figures released last week (January 15th), showing yet more strength in the ever recovering market. The Australian Bureau of Statistics said that although there was more of a steadying than a rapid growth witnessed in November, the month still helped to consolidate the strong levels of increase throughout the year as a whole.

In November, the number of loans to home purchasers increased by 0.9 per cent over the month before, and while this was slower than in other months, it still represents a growing in the market. The total volume was made up of a 2.3 per cent increase in loans for the building of new property, a surprising decline of 4.3 per cent in mortgages for buying brand new homes and a rise of 1.2 per cent in financing of the acquisition of existing stock.

" Lending for new homes is up substantially on a year ago and the strong state of the market is also captured by the 1.2 per cent rise in loans for existing home purchase during November ," said Housing Industry Association (HIA) senior economist Shane Garrett. The HIA said that although the figures were flatter than might have been expected, it showed that there is still momentum going into 2014, especially in the construction of new homes to meet the ever growing demand.

" There are few sectors of the economy more labour intense than dwelling construction. The strong expansion of the sector brings the potential for greater jobs market support at this time of economic transition, " Mr Garrett continued. Recently, the HIA also reported that the number of new homes being built across the nation in November had represented a 5.7 per cent annual growth.

Another positive from the report from the Australian Bureau of Statistics is the fact that demand is still growing in the majority of the nation. It said that subsequent buyers were still helping to prop up the market and keep it growing even at times when the sector often faces some levels of uncertainty.


Article by +https://plus.google.com/117987778295738303451?rel=author on behalf of Propertyshowrooms.com

Brazilian Property Market to Hold Strong in 2014

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Brazilian property is not expected to see any great fall in price over the course of this year, despite the fact that political unrest remains a problem throughout the nation. It will be a bonus for investors in the nation, given that prices have been seeing falls ever since 2011. According to Fitch Ratings, the imbalance in supply and demand that is still inherent in Brazil will mean that the cooling off comes to an end this year, and prices are predicted to remain at a solid level throughout the year.

Other positives expected to keep the market relatively stronger than it has been recently throughout 2014 will be the fact that mortgage rates in Brazil still remain low, which has helped to take away the issue whereby many people are unable to afford homes. For many, property was only previously accessible through the long term options of 35 year funding, but lower rates should help to make it the case that more can afford to get onto the ladder.

It is a reality set to extend throughout this year, with Fitch Ratings reporting that interest rates should remain low. At the moment, they are at a historically-low level of just nine per cent, and it is expected that this will be the case for at least the next 11 months. Some 70 per cent of mortgages are funded by the government owned CEF, and Fitch said it does not expect the government will allow CEF to increase rates this year, mainly for political reasons.

" A precondition for the surge of mortgage lending since 2007 from extremely low levels was sufficient availability of savings deposits. However, year on year growth of outstanding mortgages was much faster, with an average of 41 per cent since 2009, against 16 per cent for savings deposits, " the report added. " If mortgage lending continued to grow at recent rates of around 30%, new and probably more expensive funding sources would become necessary in the near future. Savings deposit growth was relatively strong in 2013, but could start to decrease soon, with economic growth sluggish and salary increases expected to become smaller. "


Article by +https://plus.google.com/109065039197462640663?rel=author on behalf of Propertyshowrooms.com
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