If the spring market holiday homes in seaside resorts in the country still had customers willing to pay the price required by sellers against certain features of the property, today most buyers looking for a bargain and a maximum discount of their choice, property analysis shows GriynLayf investment company.
Nearly 75 percent of customers in the spring testified specific search - area characteristics of the project, even if such concrete, according to research company. 77% of buyers over the past two months are not looking for property with certain characteristics, but want to see "the most profitable offers on the market and make the best deal.
"This trend is new to the market and need time to devise a responsive mechanism for reaction," admits Mariana Daskalov, commercial director of the company. "More and more often occurs within one week to receive a request from several agencies, reductions in the price of one particular apartment. So we found and the change in the behavior of buyers - turning to agency asking for "best offers" and choose a property soon begin a study in which all agencies is the lowest price at which it can acquire, "she explains .
In the process of negotiating concessions from the original price up to 20%, but payment of 100% of the amount due on the property, according to company surveys. This is a scheme which prefer 60% of all buyers. Only 20% seek individual scheme of deferred payment, pay 30% of the first stage, the rest stop of staging schemes developed for the project.
Selling "green" continue to reduce their share this summer has dropped to 5% of all sales. The remaining 95 percent have chosen to buy the finished product.
Russian clients and were the only significant factor in the Bulgarian market of holiday properties in the summer of 2009 to change their behavior determines not only the demand and prices, but the actions of that small part of the serious entrepreneurs who are still active in this segment writes in the analysis.
Russian buyers looking for more space, additional equipment architecture. Only 35% of all buyers fall into the category of so-called. "Lowest segment and have a budget between 16 thousand and 25 thousand euro. Currently, such amount against the purchase price of the studios in sq m between 400 and 500. Most influential, however, the group of representatives of the Russian middle class who have a budget between 45 thousand and 60 thousand euro. They must want a discount, look for the best offer in the category, but have serious requirements to the property. Follows a group of buyers who have a budget between 60 thousand and 150 thousand euros and now want to buy a house.
The overall decline in real estate prices motivate this new demand and expectations of the analysts have a tendency to increase during the autumn months when the property starts and exhibitions in Russia. Less than a year for allocation to those customers could buy a larger apartment in a nice complex, but the crisis now enabled them to acquire a separate villa or house. This led to a change in the proportion of houses sold - a year ago if the distribution was 10% to 90% in favor of apartments, today the proportion of houses is already 30% of all sales.
Another important feature of the market for vacation property is the complete absence of speculators, as a result of which disappeared and bundling of apartments. Russian investors were popular with this kind of purchases a year ago, but this summer their interest to such transactions disappeared. The survey shows that 87% of all buyers acquire property for private use and refuse to lease them. Combined yield of the other bike with his own vacation, and only 3% of the new owners acquire properties for resale and profit.
All payments are made in cash, not for external funding. For Russian clients now show extreme discipline and delayed payments, nor seek to postpone them, comment from the company. There are positive signals and closing transactions with the old English-speaking customers. In early summer, almost 34% of the deal can be finalized, since some of them wanted rescheduling, others wanted to give up entirely, and others looking for a reason with which to delay and postpone his last payment. Problematic transactions are now reduced to 15%.
Prices for apartments in large complexes luxury retreat and offers level, but actual reductions have sat down at the negotiating table. In the plots, especially those with a good view, the change is minor. In investment activity dropped sharply, it means a great price scissors between the demand and supply. Active buyers looking for levels of 60-70 euros per sqm, while the owners still want a double price. The company forecast winter after the interests of both parties to come, prices fall, and only then start to enter into transactions in this segment.
Friday, October 2, 2009
Unrequited vacation of the property market
The purchase of a timeshare (taymshear) is currently on the market of exotic holiday properties in the country as well as supply and as demand. Evidenced Investor.bg online poll and survey companies in the segment.
On the question "Does the investment interest in real estate with a timeshare (timeshare) in our country?" The majority (73%) out of 1340 have voted in the poll answered "No".
The poll is pretty indicative of the current level of demand by Bulgarian consumers, currently has no great interest in the rest of the type taymshear, told Investor.bg Karavidov Aristide, Governor of Arica Taymshear Club, which operates in the segment. According to him, this may be due both to the economic crisis and the relatively poor knowledge of the product. To develop the market and increased demand, it is necessary to explain to users what is actually a taymshear and to establish the necessary legal basis to defend their interests, he said.
What is taymshear?
Taymshear types of contracts are in the field of tourism and hospitality, through which gives entitlement to a holiday home or hotel room for a certain period of time. The existence of such contractual relations requires the creation of legislation that regulates them. Since the contracts of the type taymshear are new to Bulgaria, they still are not governed by Bulgarian law. Thus the relationship between seller and buyer taymshear can be settled only in a contract between two parties. To ensure the interests of the parties shall take legislative measures in this direction, said Karavidov.
Late last year the European Parliament has adopted rules that aim to create greater certainty for buyers taymshear. According to the amendments consumer has the right to information and taymshear seller is obliged to issue informational materials which describe in detail the conditions in the proposed holiday complex. Should actual conditions do not meet the specified, the client has the right to claim.
The client is given and the law of reflection. Within two weeks after signing the contract the client can waive that during this period does not make payments under the contract. Regulated and how that may change the annual fee for maintenance of the property or the annual membership fee taymshear club.
Buyers admitted to be held mainly because of lack of knowledge. Board of Karavidov is before signing any contracts was to consult with a lawyer, and to personally ensure the quality of proposed conditions in a residential complex.
Despite the lack of interest among the larger group of consumers, however, over one fifth (21%) of participants in the survey of Investor.bg said they would invest in taymshear.
Opportunities for this in Bulgaria was rather limited.
Only a few companies are offering or taymshear taymshear-like products in Bulgaria, explained Karavidov. We can not be purchased taymshear in the region of Varna and Nessebar. Expected demand in the near future to increase significantly, especially in mountain and Black Sea resorts. Among the reasons shows that there are many unsold holiday properties in those areas in which they taymshear is possible to find the outlet.
With the popularization of the product is expected to increase interest not only from the Bulgarian clients but also by foreign tourists, such as German, which traditionally visit Bulgaria.
Despite the low share of taymshear Market of tourist products in Bulgaria, the potential for development is very high, says Karavidov. According to data from PricewaterhouseCoopers in 2007 taymshear sales in the United States amounted to 6,7 billion dollars. In Europe, the market amounted to around EUR 10 billion annually and employs 40 thousand people. The world today has more than 6.7 million owners of taymshear of which more than 1,5 million live in Europe, according to European Organization segment Resort Development Organisation.
Who buys taymshear?
Buyers of taymshear are mostly people who traditionally visit the same tourist destination. Have built a sense of second homes and are ready to ensure your vacation for years to come.
Another type of buyers are those who benefit from the current conjuncture situation. They buy taymshear at a time of weak demand and depressed prices of the tourist market, then sell it, profit is earned.
"I expect the supply of taymshear gradually be increased and this could lead to more investment in advertising and promotion of the product. Offering holidays taymshear type may be out of this crisis for the market of holiday properties in the country, predicted Karavidov.
On the question "Does the investment interest in real estate with a timeshare (timeshare) in our country?" The majority (73%) out of 1340 have voted in the poll answered "No".
The poll is pretty indicative of the current level of demand by Bulgarian consumers, currently has no great interest in the rest of the type taymshear, told Investor.bg Karavidov Aristide, Governor of Arica Taymshear Club, which operates in the segment. According to him, this may be due both to the economic crisis and the relatively poor knowledge of the product. To develop the market and increased demand, it is necessary to explain to users what is actually a taymshear and to establish the necessary legal basis to defend their interests, he said.
What is taymshear?
Taymshear types of contracts are in the field of tourism and hospitality, through which gives entitlement to a holiday home or hotel room for a certain period of time. The existence of such contractual relations requires the creation of legislation that regulates them. Since the contracts of the type taymshear are new to Bulgaria, they still are not governed by Bulgarian law. Thus the relationship between seller and buyer taymshear can be settled only in a contract between two parties. To ensure the interests of the parties shall take legislative measures in this direction, said Karavidov.
Late last year the European Parliament has adopted rules that aim to create greater certainty for buyers taymshear. According to the amendments consumer has the right to information and taymshear seller is obliged to issue informational materials which describe in detail the conditions in the proposed holiday complex. Should actual conditions do not meet the specified, the client has the right to claim.
The client is given and the law of reflection. Within two weeks after signing the contract the client can waive that during this period does not make payments under the contract. Regulated and how that may change the annual fee for maintenance of the property or the annual membership fee taymshear club.
Buyers admitted to be held mainly because of lack of knowledge. Board of Karavidov is before signing any contracts was to consult with a lawyer, and to personally ensure the quality of proposed conditions in a residential complex.
Despite the lack of interest among the larger group of consumers, however, over one fifth (21%) of participants in the survey of Investor.bg said they would invest in taymshear.
Opportunities for this in Bulgaria was rather limited.
Only a few companies are offering or taymshear taymshear-like products in Bulgaria, explained Karavidov. We can not be purchased taymshear in the region of Varna and Nessebar. Expected demand in the near future to increase significantly, especially in mountain and Black Sea resorts. Among the reasons shows that there are many unsold holiday properties in those areas in which they taymshear is possible to find the outlet.
With the popularization of the product is expected to increase interest not only from the Bulgarian clients but also by foreign tourists, such as German, which traditionally visit Bulgaria.
Despite the low share of taymshear Market of tourist products in Bulgaria, the potential for development is very high, says Karavidov. According to data from PricewaterhouseCoopers in 2007 taymshear sales in the United States amounted to 6,7 billion dollars. In Europe, the market amounted to around EUR 10 billion annually and employs 40 thousand people. The world today has more than 6.7 million owners of taymshear of which more than 1,5 million live in Europe, according to European Organization segment Resort Development Organisation.
Who buys taymshear?
Buyers of taymshear are mostly people who traditionally visit the same tourist destination. Have built a sense of second homes and are ready to ensure your vacation for years to come.
Another type of buyers are those who benefit from the current conjuncture situation. They buy taymshear at a time of weak demand and depressed prices of the tourist market, then sell it, profit is earned.
"I expect the supply of taymshear gradually be increased and this could lead to more investment in advertising and promotion of the product. Offering holidays taymshear type may be out of this crisis for the market of holiday properties in the country, predicted Karavidov.
Brokers of luxury real estate boom waiting in the segment in 2010
By the end of the year is expected to slightly increase the number of successful sales of luxury properties in Bulgaria, as well as price stability, predict in their analysis of Luxury Property Agency, which specializes in the segment. While maintaining peace and in the coming months is even possible to observe in the spring of 2010, small increases to 10% in the prices of the most elite and unique real estate, wrote in the analysis.
The company expected the segment of the elite property to recover the former because of their high qualities. First it would make the market in Sofia, followed by that in Varna and other cities. Transactions will resume more sensitive to the early summer of 2010
The segment of luxury properties follow the general trend for the entire market to dramatically reduce the number of transactions. At the same time, elite real estate prices remain relatively stable, but decreases reaching a maximum of 20% compared to 30-40% decline in the prices of mass properties, says the analysis. In the segment of luxury holiday properties are observed slightly larger reductions in the bids.
In the so-called "unique properties" that are positioned at the very top of the market, there was no reduction in prices, but realized and no transactions. Truly unique properties, however, are not so much at us, ie no serious competition, which appears to be another reason for their relatively stable prices.
Most wanted luxury properties
Demand for luxury property this year will be focused mainly on urban real estate in Sofia (houses and apartments). Traditional favorites are the southern districts of the capital and the supply of such properties is concentrated mainly in the elite quarters there. Buyers interested in properties in the closed complex, fully finished, with certain amenities.
For new apartments / complexes offering a good quality and really elite property stand out from the already massive offering. Prices vary according to the specific characteristics of properties that are much more diverse than those of the properties of the lower class. If you need to determine the average price for tendered luxury properties, they are in the range between 1000 and 1600 euros per sq. m, the deals are concluded mainly at levels between 1000 and 1300 euro per sq m, according to the company.
Top center is also one of the top location in Sofia and a place with a concentrations of luxuriously finished property. The majority of the dwellings, however, are in old buildings in need of major repairs, a characteristic defining them as "elite" is their location. In their bids in the range of about 2000 euro / sq. m, but the deals are concluded at around 1300 euros / sq. m
Other destinations, which attracts buyers of luxury properties, is Varna. There demand is significantly less than in Sofia, but there is a well-marked segment of the elite and high-quality properties.
Rental market in the segment
Clear tendency to shift towards renting in the presence of strong demand for rental property elite. This is another reason for maintaining stability in rental prices and failing "flooding" the market with a large number of offers for sale. Customers have to buy peace, but still need to live in quality properties. Therefore, the trend of shifting to rent even lead to a slight increase in rental prices of luxury properties, since the supply is not as great as in the properties of the lower class.
The company expected the segment of the elite property to recover the former because of their high qualities. First it would make the market in Sofia, followed by that in Varna and other cities. Transactions will resume more sensitive to the early summer of 2010
The segment of luxury properties follow the general trend for the entire market to dramatically reduce the number of transactions. At the same time, elite real estate prices remain relatively stable, but decreases reaching a maximum of 20% compared to 30-40% decline in the prices of mass properties, says the analysis. In the segment of luxury holiday properties are observed slightly larger reductions in the bids.
In the so-called "unique properties" that are positioned at the very top of the market, there was no reduction in prices, but realized and no transactions. Truly unique properties, however, are not so much at us, ie no serious competition, which appears to be another reason for their relatively stable prices.
Most wanted luxury properties
Demand for luxury property this year will be focused mainly on urban real estate in Sofia (houses and apartments). Traditional favorites are the southern districts of the capital and the supply of such properties is concentrated mainly in the elite quarters there. Buyers interested in properties in the closed complex, fully finished, with certain amenities.
For new apartments / complexes offering a good quality and really elite property stand out from the already massive offering. Prices vary according to the specific characteristics of properties that are much more diverse than those of the properties of the lower class. If you need to determine the average price for tendered luxury properties, they are in the range between 1000 and 1600 euros per sq. m, the deals are concluded mainly at levels between 1000 and 1300 euro per sq m, according to the company.
Top center is also one of the top location in Sofia and a place with a concentrations of luxuriously finished property. The majority of the dwellings, however, are in old buildings in need of major repairs, a characteristic defining them as "elite" is their location. In their bids in the range of about 2000 euro / sq. m, but the deals are concluded at around 1300 euros / sq. m
Other destinations, which attracts buyers of luxury properties, is Varna. There demand is significantly less than in Sofia, but there is a well-marked segment of the elite and high-quality properties.
Rental market in the segment
Clear tendency to shift towards renting in the presence of strong demand for rental property elite. This is another reason for maintaining stability in rental prices and failing "flooding" the market with a large number of offers for sale. Customers have to buy peace, but still need to live in quality properties. Therefore, the trend of shifting to rent even lead to a slight increase in rental prices of luxury properties, since the supply is not as great as in the properties of the lower class.
In search of profits by saturation with unsold apartments
Investor from Miami Rodrigo Nino does not care if people describe his investment group which heavily reduced buying luxury apartments in Miami and New York as a "vulture fund". "Let us say as you want. We buy cheap and sell cheap, this is our business plan, he cut down.
Nino, executive director of the company for sale Prodigy International, created the fund in July, initially paid $ 100 million purchase of groups of unsold apartments in new projects. His plans provide for the sale of the apartments within 90 days of purchase, using a network of brokers to advertise Prodigy units, which are mostly in Italy and Spain.
Over the past months have witnessed a flood of ads new investment funds as the Nino, which hopes to buy residential properties drastically reduced prices from desperate sellers in places like London, Dubai, Bulgaria, the United States and Ireland, writes New York Times.
Funds seeking opportunities in markets in which prices have fallen by between 20 and 50 percent over the past two years, although some delay purchases in anticipation that prices be lower still.
Although the general fund share a focus on property owners with financial difficulties or withdrawn by banks, different strategies vary. In February, for example, started Appreciating Assets Fund for the purchase of apartments in resorts in Bulgaria, mainly of British and Irish investors who want to quickly exit the market.
In July, the British entrepreneur Finchatton, specializing in luxury projects announced plans to raise 250 million pounds, or about 405 million dollars from private lenders and investors for the purchase of distressed properties in central London.
Such funds vultures are common in business properties, but are a relatively new phenomenon in the market of holiday properties and luxury homes. Even in good economic conditions luxury homes are considered risky investments requiring much capital and with little likelihood of short-term returns.
Falling prices, forced withdrawals and empty properties in new projects, however, made housing more attractive to some investors.
Often these funds are negotiated directly with banks or entrepreneurs who need cash. "Search is not the price of a security sale," explains Stuart Law, CEO Assetz, property investment company based in the UK.
Assetz recently announced the creation of a fund for 25 million pounds with a focus on distressed properties in the UK and plans to lease property, while selling prices improved.
Considering that the rental income are key to its business plan, Lowe says Assetz avoid markets such as Bulgaria and Spain, although prices in these countries are more reduced than the island.
"We just have too big supply and no demand for rent. Can not do this if there is demand for rentals, "said Lowe.
In some cases, funds are backed vultures of entrepreneurs who hope thus to reduce their risk in a weak market. In June, Dubai Deyaar Development announced that it has attracted 250 million dirhams (about 68 million dollars) from local and foreign investors to buy distressed properties - mainly from the portfolio itself Deyaar.
Many analysts remain skeptical about short-term prospects of the vulture funds. According to them, in many markets may take years before they return to higher levels than before.
Despite the influx of new ads a few large transactions in the sector, experts explain.
"Talk to the creation of many new funds. The issue is that they do not buy, "said Andrew Pratt, managing director of the British housing market of the investment company Grainger.
In recent months, Grainger reported increasing investor interest to Britain from Switzerland, Italy and other EU countries because of the renewed strength of the euro, said Pratt.
However, many of the proposals for luxury homes in bulk failed to materialize. In some cases, lenders prefer to keep the property rather than accept lower offers. However many investors remain cautious, they are of the opinion that prices in many cities have not reached bottom.
"We still are not convinced that it is time to enter the market. We believe that possible new significant reductions in prices, "says Anton de Liu, head of South African investment company YDL. Earlier this year YDL set up a fund for 100 million rand, about 13.6 million dollars for the purchase of distressed properties in Ireland. However, the Fund has not made a deal.
In Miami, however, the situation is different. The so-called "bulk buyers" were paid a total of about 195 million dollars for 766 units in Miami last year, according to Condo Vultures Realty, a three-year consulting company for investors who buy apartments in bulk.
Nino's Fund, recently bought 10 units in a project in Miami, having paid about 156 dollars per square foot, or 1150 euros per square meter. Market price would be between 215 and 225 dollars per square feet for such apartments, says Peter Zalevski of Condo Vultures.
Vulture funds often go bad name, and should not, says Zalevski. "Look at the fund as a lifeguard at the beach. The ship sank and we are going to save.
Nino, executive director of the company for sale Prodigy International, created the fund in July, initially paid $ 100 million purchase of groups of unsold apartments in new projects. His plans provide for the sale of the apartments within 90 days of purchase, using a network of brokers to advertise Prodigy units, which are mostly in Italy and Spain.
Over the past months have witnessed a flood of ads new investment funds as the Nino, which hopes to buy residential properties drastically reduced prices from desperate sellers in places like London, Dubai, Bulgaria, the United States and Ireland, writes New York Times.
Funds seeking opportunities in markets in which prices have fallen by between 20 and 50 percent over the past two years, although some delay purchases in anticipation that prices be lower still.
Although the general fund share a focus on property owners with financial difficulties or withdrawn by banks, different strategies vary. In February, for example, started Appreciating Assets Fund for the purchase of apartments in resorts in Bulgaria, mainly of British and Irish investors who want to quickly exit the market.
In July, the British entrepreneur Finchatton, specializing in luxury projects announced plans to raise 250 million pounds, or about 405 million dollars from private lenders and investors for the purchase of distressed properties in central London.
Such funds vultures are common in business properties, but are a relatively new phenomenon in the market of holiday properties and luxury homes. Even in good economic conditions luxury homes are considered risky investments requiring much capital and with little likelihood of short-term returns.
Falling prices, forced withdrawals and empty properties in new projects, however, made housing more attractive to some investors.
Often these funds are negotiated directly with banks or entrepreneurs who need cash. "Search is not the price of a security sale," explains Stuart Law, CEO Assetz, property investment company based in the UK.
Assetz recently announced the creation of a fund for 25 million pounds with a focus on distressed properties in the UK and plans to lease property, while selling prices improved.
Considering that the rental income are key to its business plan, Lowe says Assetz avoid markets such as Bulgaria and Spain, although prices in these countries are more reduced than the island.
"We just have too big supply and no demand for rent. Can not do this if there is demand for rentals, "said Lowe.
In some cases, funds are backed vultures of entrepreneurs who hope thus to reduce their risk in a weak market. In June, Dubai Deyaar Development announced that it has attracted 250 million dirhams (about 68 million dollars) from local and foreign investors to buy distressed properties - mainly from the portfolio itself Deyaar.
Many analysts remain skeptical about short-term prospects of the vulture funds. According to them, in many markets may take years before they return to higher levels than before.
Despite the influx of new ads a few large transactions in the sector, experts explain.
"Talk to the creation of many new funds. The issue is that they do not buy, "said Andrew Pratt, managing director of the British housing market of the investment company Grainger.
In recent months, Grainger reported increasing investor interest to Britain from Switzerland, Italy and other EU countries because of the renewed strength of the euro, said Pratt.
However, many of the proposals for luxury homes in bulk failed to materialize. In some cases, lenders prefer to keep the property rather than accept lower offers. However many investors remain cautious, they are of the opinion that prices in many cities have not reached bottom.
"We still are not convinced that it is time to enter the market. We believe that possible new significant reductions in prices, "says Anton de Liu, head of South African investment company YDL. Earlier this year YDL set up a fund for 100 million rand, about 13.6 million dollars for the purchase of distressed properties in Ireland. However, the Fund has not made a deal.
In Miami, however, the situation is different. The so-called "bulk buyers" were paid a total of about 195 million dollars for 766 units in Miami last year, according to Condo Vultures Realty, a three-year consulting company for investors who buy apartments in bulk.
Nino's Fund, recently bought 10 units in a project in Miami, having paid about 156 dollars per square foot, or 1150 euros per square meter. Market price would be between 215 and 225 dollars per square feet for such apartments, says Peter Zalevski of Condo Vultures.
Vulture funds often go bad name, and should not, says Zalevski. "Look at the fund as a lifeguard at the beach. The ship sank and we are going to save.
Rise and fall - nothing new in real estate
Recessions are an inevitable part of the so-called "economic cycle" - repeated periods of growth and decline, which can be traced in history. They affect all markets, including this property. Successful investor in real estate can be defined as one who buys at the bottom of the cycle, summarizes Property Wire.
However, how to recognize this crucial time that determines the success or failure of the investor's estate?
Most economists agree that the economic cycle consists of five different stages, each of which blends into the next. Broadly they can be defined as a peak, contraction, recession, recovery and prosperity. During the peak of the shares and property are considered overvalued, and credit institutions were heavily burdened with debt.
When there is a stage of contraction, the sources of credit dry up and real estate transactions inevitably backwater. And while the stock market falls, while the overall economy does not fall into recession. Property prices and lower stock and access to credit is difficult if not impossible. Repayment begins again when it becomes available credit services.
At this point go on stage institutional investors, who quickly began to buy undervalued properties and shares. The next stage is prosperity. Prices start up again, rising wages and credit institutions are more susceptible to risk.
As an example, the tracking of this economic cycle could give Britain.
The last major correction in the property market in the UK in 1991 At that time banks and other lenders often offer mortgages for 100% of property value. Generous funding creates a strong desire for ownership, which inevitably leads to the peak of the housing "bubble."
With the economic slowdown, however, followed a total of 75 540 the process of forced removal of property, partly because the burden of high credit. This is the highest reported annual value and brings many problems for all market participants.
The market does not begin its recovery before the grave in 1994 At that time the British economy recorded 4.2 percent GDP growth, the highest level in six years. Sustained economic growth combined with rising incomes mean that people can afford bigger mortgages. Subsequently begins to grow demand for housing.
The current financial crisis has many parallels with that from its beginning in 1991 can be traced to early 2007, when the total value of high-risk mortgages is estimated at 1,3 trillion. dollars.
Soaring property prices have led lenders to take more risks. The number of lenders began to collapse under the burden of arrears, the most notable example is the case with Lehman Brothers one year ago.
The scale of the problem begins to emerge. With interbank lending to dry it reduced consumer credit and the slowing housing market. Once interest rates become sufficiently low, the credit flow again becomes a liquid. At this point, leaving the market institutional investors' confidence returned and began to rise.
Typically, the rise starting from the same spot where it came from the fall. That is why the U.S. housing market is cited as a key - you begin to recover, it will be taken as a sign for the rest of the world. By rating agency Standard & Poor, which made the index for housing prices in the U.S. Case-Schiller, believe that the market will reach bottom until October 2009
Analysts advise investors in global property to consider in countries and regions that have not been so severely affected by the current economic crisis. Central and Eastern Europe into account the economic slowdown, and Bulgaria in particular, remain unaffected by the toxic debts, says Property Wire.
However, there is always an element of uncertainty. Could someone says with certainty that the property market in London has reached its lowest point? Even with the release of a recession, the unemployment rate is expected to grow. If people are unemployed, obviously can not cover their mortgages.
Property and all other types of investment carry a high degree of risk. A thorough analysis of the economic cycle can do much to reduce risk, but can never eliminate it.
However, how to recognize this crucial time that determines the success or failure of the investor's estate?
Most economists agree that the economic cycle consists of five different stages, each of which blends into the next. Broadly they can be defined as a peak, contraction, recession, recovery and prosperity. During the peak of the shares and property are considered overvalued, and credit institutions were heavily burdened with debt.
When there is a stage of contraction, the sources of credit dry up and real estate transactions inevitably backwater. And while the stock market falls, while the overall economy does not fall into recession. Property prices and lower stock and access to credit is difficult if not impossible. Repayment begins again when it becomes available credit services.
At this point go on stage institutional investors, who quickly began to buy undervalued properties and shares. The next stage is prosperity. Prices start up again, rising wages and credit institutions are more susceptible to risk.
As an example, the tracking of this economic cycle could give Britain.
The last major correction in the property market in the UK in 1991 At that time banks and other lenders often offer mortgages for 100% of property value. Generous funding creates a strong desire for ownership, which inevitably leads to the peak of the housing "bubble."
With the economic slowdown, however, followed a total of 75 540 the process of forced removal of property, partly because the burden of high credit. This is the highest reported annual value and brings many problems for all market participants.
The market does not begin its recovery before the grave in 1994 At that time the British economy recorded 4.2 percent GDP growth, the highest level in six years. Sustained economic growth combined with rising incomes mean that people can afford bigger mortgages. Subsequently begins to grow demand for housing.
The current financial crisis has many parallels with that from its beginning in 1991 can be traced to early 2007, when the total value of high-risk mortgages is estimated at 1,3 trillion. dollars.
Soaring property prices have led lenders to take more risks. The number of lenders began to collapse under the burden of arrears, the most notable example is the case with Lehman Brothers one year ago.
The scale of the problem begins to emerge. With interbank lending to dry it reduced consumer credit and the slowing housing market. Once interest rates become sufficiently low, the credit flow again becomes a liquid. At this point, leaving the market institutional investors' confidence returned and began to rise.
Typically, the rise starting from the same spot where it came from the fall. That is why the U.S. housing market is cited as a key - you begin to recover, it will be taken as a sign for the rest of the world. By rating agency Standard & Poor, which made the index for housing prices in the U.S. Case-Schiller, believe that the market will reach bottom until October 2009
Analysts advise investors in global property to consider in countries and regions that have not been so severely affected by the current economic crisis. Central and Eastern Europe into account the economic slowdown, and Bulgaria in particular, remain unaffected by the toxic debts, says Property Wire.
However, there is always an element of uncertainty. Could someone says with certainty that the property market in London has reached its lowest point? Even with the release of a recession, the unemployment rate is expected to grow. If people are unemployed, obviously can not cover their mortgages.
Property and all other types of investment carry a high degree of risk. A thorough analysis of the economic cycle can do much to reduce risk, but can never eliminate it.
Plans have been approved for sale in Draka and Kovanlaka in Targovishte
Municipality of Targovishte informed that by order of the District Governor of Targovishte, published in Official Gazette br.77/28.09.09, are newly approved plans of properties for the following regions: massif 159, 166, 167, 171, 174, 176 and 181 in the locality Drakite (arrays are in the area of a motel "Freshness") and an array 201, in the "Kovanlaka" (below the dam).
Plans are at the Center for administrative services to citizens in local administration.
Complaints against the approved plans of new property may be submitted by interested parties by the regional governor of the Administrative court Targovishte - Targovishte, within 14 days of the promulgation of the order.
Plans are at the Center for administrative services to citizens in local administration.
Complaints against the approved plans of new property may be submitted by interested parties by the regional governor of the Administrative court Targovishte - Targovishte, within 14 days of the promulgation of the order.
Holiday properties in Bansko - the most profitable
Investors should avoid giving their money to nedostroeni vacation property.
Holiday properties in mountain resorts last year fell within the 20-50 percent and prices returned to levels before 4 years. It says in an analysis of agency "Bulgarian Properties".
Such properties are already available to a much broader range of buyers - not only foreigners but also Bulgarians. Another reason is the approaching winter season, which inevitably increases the interest in mountain resorts and holiday homes.
Currently Bansko can find apartments at prices from 300 euro / sq. m up to 1200 euro / sq. m. Our data suggest that most searches are properties with prices from 450 to 600 euro / sq. m in a luxury complex on prices of 700 to 900 euro / sq. m
In recent months the market for vacation properties in major mountain resorts in Bulgaria has been some movement and increased interest from buyers has been further highlighted in the analysis of the real estate agency. Greatest interest and most have made deals with residential properties in Bansko. Reasons for exercise is in the sales of our biggest ski center this summer should be sought not only to drastically reduce costs. Buyers prefer mostly ready and avoid estate investment nedostroeni housing.
For the last year prices in the three largest ski resorts in Bulgaria - Bansko, Pamporovo and Borovets, declined at different rates. Bansko is recorded the largest reduction since this is where the construction of new complexes has been the most dynamic and competition is greater.
Pamporovo and Borovets prices also declined since the beginning of the crisis but not on such a scale as in Bansko. For them the reduction is an average of 10-20% and holiday properties maintain higher prices, which in turn makes them considerably less demand.
Situation now is very suitable for investment in holiday property in the Bulgarian mountain resort, consider the "Bulgarian Properties". The main reason they remain low prices which are among the most profitable in Europe.
Subscribe to:
Posts (Atom)