An Insider’s Guide to Living the Good Life in Naples

Sterling at six year low and is moving towards a 20 year low but there yet.
Dollar is still the favourite for defensive investors.

Sterling lost 11 cents in the first four days of the week, touching below $1.46 on Thursday. Consolidation over the weekend allowed it to open in London this morning at $1.47, close to its lowest level for six years.

It was another week of general investor nervousness for all the same old reasons. If the mood was not of unremitting gloom then the bright spots were very few and far between. Even Beijing’s announcement of a $580 billion stimulus package fell into the bad news box for many investors; China’s economy must be in a parlous situation to require such a boost. Following the IMF’s lead a couple of weeks ago the OECD added its weight to forecasts that developed economies will remain in recession until at least the middle of next year.

The weekend’s G20 meeting in Washington attracted more advance optimism among the tabloids than it did among investors. As Britain’s Observer newspaper put it afterwards, the meeting was “…never, in a single afternoon, going to solve a crisis that has been a generation in the making.” If anything, it made investors more nervous about the banking sector’s recovery prospects: The word “stimulate” cropped up three times while “regulation” appeared 11 times.

There was no let-up in the downward pressure on Sterling. Weak financial institutions, falling interest rates, an ailing real estate market and mounting job losses all fuelled the perception that in a world of economic dogs, Britain is the undisputed pack leader. Wednesday’s quarterly Inflation Report from the Bank of England gave every indication that falling inflation would mean yet more interest rate cuts by the MPC. It was another concrete lifebelt for the sinking Pound.

Source: MoneyCorp

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Even Dubai, the seemingly invincible ‘nothing can stop me now’ emirate is feeling the effects of the credit crunch, with property prices in some of Dubai’s most prestigious developments falling by as much as 50 per cent.

Prices in the Downtown Burj Dubai area have fallen by as much as half, according to Dubai based estate agents. Because prices in the area had previously risen so high and so fast, when the slowdown happened, it affected that area, one of the most exclusive in Dubai, far more than others.

Whilst prices in the area were around £652 per square foot, they are now sitting at around £482. Downtown Burj Dubai, a mixed use urban development that includes the recently opened Dubai Mall, has some of the most expensive properties in the Emirate. The Burj Dubai Tower, due for completion next year, will put the area further onto the map.

Source:TheMoveChannel

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Due to the global credit crunch a UK based developer has launched the biggest property competition of all time. In association with Great Ormond Street Hospital, MIA Developments Ltd is giving away a block of apartment in Central London valued at $14 million.
 
It’s got to be one of the most innovative fundraising ideas ever - a luxury apartment block worth $14 million is up for grabs in the UK’s biggest ever property competition…
 
Great Ormond Street Hospital Children’s Charity has teamed up with London property developers MIA Developments Ltd to launch WinALondonPad.com - the biggest free prize draw in the UK .
 
Tickets are priced at $120 and each entrant will also receive a 4GB MP4 player worth $150. Entrants have a one in 200,000 chance of winning - and never having to work again.
 
Limited to 200,000 tickets available at WinALondonPad.com, the winner will scoop an entire development consisting of eleven luxury serviced apartments worth in excess of $14 million.

Source: TheMoveChannel

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The biggest difference between this recession and the last is the importance of natural search rankings.  Agents that rank highly for phrases that have intent to purchase have a much better chance of survival than those that do not.   Here are some tips:
Unless you have an old, established site that already ranks well, don’t try and compete with portals on 2 word phrases like “<Location Name> Property”. You’ll lose.

Use your database to create lots of pages that are very specific.  For example we just created lots of pages like this for an IFA client selling developments in Cyprus.  When this goes live they will soon rank for lots of very specific terms like “2 bed townhouse in Peyia Cyprus”.  There won’t be many of these but on aggregate there will be enough relevant traffic to generate leads.

Go niche
The internet rewards niche players. If you can become an expert on a particular location and/or genre like investment property in Poland, you will generally get more links and be seen as more trustworthy than an agent selling in 10 countries. It must be balanced against the risks of over-specialisation but it’s worth remembering.

Source: globaledge.co.uk

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For many, the US at this moment is ripe for ‘buy low, sell high,’ but buying low does not mean simply buying something ‘cheap’…

It also requires being selective about quality and location. Many developers of higher end properties have come up with ways of enticing investment in a changed yet ironically competitive investment landscape.

UK developer Anton Tardif is currently developing a luxury golf resort in the American tourist domestic hotspot Myrtle Beach, South Carolina.

“I think we have to look at creative ways to keep investment alive and in a way that benefits everyone involved and giving investors some real opportunities,” he said.

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Emerging markets are demonstrating impressive growth. Out of the top 5 countries on Knight Frank’s Global House Price Index, 4 are emerging markets and all have price growth of over 25% for the year to Q2 2008.

The International Monetary Fund forecasts that emerging market economies will grow by 7.4% in 2008, in contrast to 2.2% projected growth for advanced economies.
Analysts at Morgan Stanley are so upbeat that they expect a secular boom in emerging market property over the next 10 years.

Source: Property Secrets

Knight Frank says we are now half way through the property crash and predicts sales volumes to hit their lowest point later this year…

Forecasting the market for next year, it expects prices to fall 30 per cent from their peak, taking values back to September 2003 levels. It believes prices will continue to fall until late 2009 or early 2010.

It also believes sales volumes will pick up, but will only reach 60 per cent of their long-term average by the second half of 2009.

The firm believes that equity rich investors and speculators are already in the market, targeting distressed sellers.

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With the world bracing itself, as the global recession continues to bite with seemingly no sign of abating, Canadians it seems have been dealt a winning hand after an official think tank predicted that Canada will not follow suit. 

This forecast was delivered by the combined resources of analysts within a leading bank, a think tank in Canada and even more reassuringly, the International Monetary Fund. Obviously there will be some signs of a slow down, but it is generally business as usual and importantly, the housing market is still strong and flourishing.

The forecast for growth this year has been cut to 0.6 per cent from 0.8 per cent and in 2009 to 0.9 per cent from an earlier target of 1.7 per cent. Although disappointing that forecasts have had to drop, it is also very encouraging to see just how healthy the Canadian economy is and as such there will not be two consecutive quarters in which the economy dips into a negative, therefore there will be no recession.

This coupled with the International Monetary Fund’s prediction that Canada will have the fastest growing economy of the G7 major industrial countries next year, is all helping to keep Canada away from the murkier waters endangering so many other countries.

Canada also has the soundest financial system in the globe, according to a new Global Competitiveness Report from the World Economic Forum, which also placed Canada on the top 10 list of the world’s most competitive countries.

Source: themovechannel.com

Recovery in global property markets is likely to be slow as no one is predicting any fast movement in the bank lending systems despite unprecedented Government bailouts…

The real cost of the finance crisis is slowly emerging today as banks in Europe reveal just how much they need to avoid going bust and concern grows about the state of countries close to
Russia who are facing severe difficulties.

At least $65 billion is needed in the UK to shore up the country’s struggling banks including Royal Bank of Scotland and Lloyds TSB, it has been announced.

The French Government is making $55 billion available and in Germany a staggering $550 billion in guarantees for banks is being considered.

Japanese Finance Minister Shoichi Nakagawa, meanwhile, said his country would consider guaranteeing all bank deposits if necessary.

Australia and New Zealand have guaranteed all bank deposits and Indonesia upped its guarantee to $205,000 while India pledged more liquidity to help financial markets.
Qatar launched a $5 billion plan to purchase shares of its listed banks.

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According to figures published by Rightmove.co.uk, the US is now more popular than both Italy and Portugal among users looking for overseas property. Property searches increased 42% year on year
to take the United States third in the list, just behind Spain and France.
According to Head of Rightmove Overseas, Justin Figgins, the results partly reflect a significant increase in the number of properties listed on the portal in Florida over the past 12 months, which inflate the US figures.
However, there is evidence that the results reflect a general market trend. The five most popular overseas property locations on Primelocation.com mirror those for Rightmove.co.uk but with Italy swapping positions with the US. According to Ann Wright, International Business Development Manager of Primelocation.com, US searches are up 33% year on year.

Price is a key driver in the holiday home market and declining value of the dollar and increasing value of the Euro is the most likely explanation for the trend. Although the sterling/dollar exchange rate is roughly the same as it was 12 months ago (see graph below), this is due to a rapid rise of the dollar against the pound in the last quarter of 2006. Interestingly, the rising dollar has coincided with a sharp upturn in people searching for “property in Florida” on Google. Maybe buyers are reasoning that the dollar is not going to get any lower and now is the best time to buy?