Florida Property Market Sees Surge in Activity from Foreign Buyers

It doesn’t take a genius to predict that Florida would be one of the biggest benefactors of increasing activity from British property buyers overseas.

Florida has long been one of the most popular tourism destinations, for those that could afford it anyway, and as a result property in the state was also very popular with British buyers.

Unfortunately, prices became too big for many buyers, especially given that the flights to Florida are more expensive, causing many potential Florida property buyers to re-examine their options in Europe.

It is one of life’s great coincidences (not) that the sunshine state has been one of the worst affected by repossessions (foreign speculators in a speculation too far in cinemas Friday). Property prices in Florida are currently anywhere between 20 and 60% lower than they were in 2006, and this is a bargain too good to miss for many British buyers.

The recent rise in activity has come about because it has became apparent that the worst of the downturn is now either behind us, or can certainly be seen. The biggest problem for some people (mainly those with substantial savings and equity) was worry over just how bad the downturn could get. Now the full extent of it can be seen, confidence has rightly increased.

There are very few mortgages available for foreigners in Florida at the moment, even though the Brits who are currently buying overseas property are those that have sufficient money behind them that they no longer worry about a monthly pay cheque. This has led to one developer setting up a mortgage company with $100million of his own cash.

This rise in demand is great news for the Florida property market, but one must hope that the buyers are being more responsible than the repossessed homes’ former owners. It is true that the crunch has caused most overseas property buyers to conduct their own research at great length before making a purchase, but in the case of Florida it is easy to get swept up by the grab-a-bargain mentality.

On the upside, Florida property is a buy-to-let investor’s dream at current price levels. It is likely that many such investors, those that can raise sufficient cash to buy multiple units, will do very nicely from it in the short, medium and especially in the long term.

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A Laid Back Look at the Overseas Property Revival

The positive stories of increased activity from foreign buyers in property markets around the world continue to multiply by the day. But there could still be trouble ahead if central banks are not careful.

All around the world property prices are either growing or the decline is slowing, and private investors and funds from all corners of the globe are currently buying distressed houses and office space by the hand or the bucket load.

Last week an apartment in Hong Kong sold for $55.6 million, prices in Singapore have grown 19% this year, and a report in Overseas Property Mall tells of property prices in Lebanon having grown throughout the international downturn.

The stimulus efforts all around the world literally flooded the markets with cash. In the likes of the UK and US this was wholly necessary, because of the massive recession we were falling into. But in the likes of Asia, where growth in most countries was only set to slow, and not fall into negative territory the injection of cash brought liquidity to the markets that now threaten to form another asset bubble. It seems they have learned nothing from the crash at all.

Meanwhile property prices in Dubai and Spain are still looking likely to see some misery yet, as developers were increasing output massively, completely oblivious to the impending crash, and now have massive oversupply problems to deal with. And the likes of Romania and Bulgaria are fighting for the very survival of their once rapidly emerging economies.

Yes, there are clear signs of recovery around the world, but if the withdrawal of the stimulus is not carefully managed by the world’s central banks there could be some misery ahead. The country’s that do not have so much to worry about in this respect, because they have been very clever about measures to stave off the crunch are Turkey, and France and probably a few more, which can be left in the comments section.

Greece would have been on that list as well, but the new government has decided to inject 2 billion Euros into the economy as it pledged during the election campaign. I have heard of shutting the stable door once the horse has bolted, but this is Opening the stable door once the horse has been put back in.

Spanish Property Market Falling off Cliff it Walked into with Eyes – Open?

Spain’s oversupply problems are to continue growing according to the G14 grouping of the country’s largest property developers.

If you are wondering why such companies would be so honest about the shape of the market, it is because they are currently applying pressure on the government to step in with measures aimed at stimulating the housing market.

They say that the glut of unsold properties could hit 800,000 next year, equivalent to 3 years (compared to 1 years oversupply in the US). This will have a devastating effect on the whole country they say, because it is stopping building starts, which will cause continually rising unemployment from the building industry, and damage any recovery prospects in the economy.

In my opinion, Spain (and Dubai) are prime examples of why house building should be more heavily regulated. It is such an easy task: people already have to apply for permission to build, but this is currently looked at based on a safety and infrastructure perspective, not on a supply and demand basis.

Obviously, no one can predict demand to an exact science, but anyone could see that new home starts in Spain being more than three of Europe’s largest nations (Germany, Britain and Italy I think but don’t quote me, know it was definitely 3) was a recipe for disaster. The fact that the starts were predominantly aimed at demand from foreigners only added to the precariousness of the Spanish market, which is now falling off the cliff that it walked off with its eyes obviously open, but apparently closed.

Brits Staying at Home for their Holidays now will Cause Surge in Tourism as UK Recovers

The Office for National Statistics revealed its figures on the UK tourism industry for October. It showed that UK visits abroad were down 3% on the previous quarter, and 17% on last year. We also spent 4% less. So now is not a good time to own a holiday home abroad if you are relying on British holidaymakers it is likely that you will have a much smaller market to target, and the competition intensified.

However, Britain’s staying at home for their holidays is not a matter of choice, and many of them will not be happy about it; will miss their holidays abroad. When the UK economy recovers, and there are some real signs that that is currently well underway, there will likely be a surge in overseas travel, as Brits make up for lost time in their favourite destinations.

These favourite destinations just so happen to be some of the places where property has fallen in value by the largest margins, because of the lack of British buyers. When tourism returns they will certainly have some lucrative years, with some solid property price growth.

Thus, it could be argued that taking advantage of the currently low prices to buy a property in one of those destinations is a fairly sound investment choice– especially if you make it part lifestyle choice.

Among the best places to make such buys is Spain, but you must be careful to avoid the over-developed areas and a trip is essential if you are buying a distressed sale. Personally I would go for the Canaries, rental property owners are currently struggling, but there will be a boom here when the UK recovers.

Why India Property Prices Continue to Grow

The International Monetary Fund has just released data from a major study into global house prices. Though the report was pessimistic and largely critical of over-inflated prices in most countries, it did show that house prices in India were 17% higher in Q2 this year than last year.

Pessimists could say that this is merely the formation of another bubble, but I do not believe this is true.

Property price growth in India is fuelled by the fact that the number of people who can afford to buy a house is growing far faster than the number of houses available for them to buy.

This is because Indian property developers have spent many years, during the boom building luxury property — all the while demand for affordable housing was growing.

Each year literally thousands of Indian’s are coming out of University each year and taking up gainful employment, not to mention all the start-up business that are doing well out of the continued growth in services outsourcing. Because of this the Indian middle class grows by the thousand every year, and so the number of people looking for affordable housing grows too.

Now there is the additional dynamic of the growing number of wealthy Indian’s who can afford to buy luxury property, and whether or not the demand for affordable housing will once again be neglected by developers, who can make more money from luxury development.

Dubai and UAE Great Long Term Real Estate Investment Potential if Industry Changes its Mindset

Jones Lang La Salle has just issued a new research report into the Middle East and North Africa, in which they backed up what I have been saying about Dubai.

The report said that Dubai’s real estate market has among the best long-term potential in the region, but that the industry has to change its mindset from targeting investors and those seeking short term capital gains, to target those who want to live and work in the country as the economy begins to grow once again. It read:

“A few years ago, the market was driven by short-term speculation but that bubble has now burst. That demand was from investors not from those who wanted to occupy the properties,” said JLL’s head of research for MENA, Craig Plumb.

“But now this is over, demand will come from those who want to work and live there, as more international companies use the UAE as a regional base for the Middle East, North Africa and central Asia,” he said.

I worded it a different way, I said that if Dubai property was ever to see any growth again they needed to stop marketing based on short term capital growth, see the article here: http://overseaspropertyworld.wordpress.com/2009/06/23/will-the-dubai-property-market-ever-be-the-same-again/.

I have also written an article that suggested those marketing properties in Dubai should do so based on rental yields, which you can read here http://www.write-about-property.com/articles/dubai-property-should-be-marketed-on-rental-yields-to-recover-355.php.

The report said:

Jones Lang la Salle has assessed that Abu Dhabi, Dubai, Cairo and Casablanca are best positioned to attract more long term regional and global investment into their real estate markets in the next 2-3 years.

While some of these Tier I markets may see a continued decline in their short term performance, they are considered to offer the right conmbination of investment competitiveness, real estate market conditions and asset specific ingredients to attract long term investors.

A Jones Lang la Salle report earlier this year said that the Dubai property market would recover in 2011. In that report they suggested that developers would turn to affordable housing developments rather than the iconic developments we have seen in the past.

Philippines Real estate Market Proves Resilient to Downturn

The Philippines property market has barely been affected by the downturn, and like most places demand began to pick up again in the second quarter, according to a market report from Colliers International. The company expects residential property prices to fall just 1% in the next 12 months.

The Philippines real estate market is in such good shape, because the economy is continuing to grow, albeit much slower than in previous years. A major contributor to economic growth is a 2.8% year-on-year growth in the year ending May. Worker remittances are responsible for 10% of Philippines’ GDP, so such a growth is great news for the economy.

More importantly the economic growth means that Filipinos are still spending, and this is keeping the retail sector strong. As a result, there are still plenty of foreigners in the country, staff of all the corporations who have set up operations in the low-cost environment the Philippines offers, which is keeping rents buoyant.

Another major factor in the health of the Philippines real estate market going forward is the fact that there is not much in the way of new-supply coming onto the market this year. This means, that, if the growth in sales recorded in Q2 continues, this will keep prices solid and may even bring some growth.

The Philippines property expcoming up in Abu Dhabi next week will be an excellent way to gauge international demand for Philippines property. I for one will be interested to see their sales figures.

Sales Increasing on Off Plan Property Overseas

Overseas Property Professional magazine has revealed an assertion by several major real estate agents that people’s faith in buying off plan property is rapidly returning, though people are doing more research themselves.

Earlier this year, I blogged on how off plan property had died a death, worse affected than other property classes (all of which took a hammering) because of people losing out to mass cancellations in places like Dubai. To prove this I used the offplanproperty.info portal, which has top positions for off plan property related searches in all countries, and had seen its Alexa traffic ranking plumment from the low 100 thousands to the millions.

Now, as OPP quotes several agents on the restored faith in off plan property, so offplanproperty.info’s traffic ranking is climbing again.

“The majority of our overseas clients actually purchase property in the off-plan stage,” said Denise Casey of investment agent Australian Property Solutions. Greater choice and tax incentives make off-plan purchases more attractive, she said. “As well as these reasons, Australia has a chronic housing shortage in most of its major cities, thus there is quite a supply and demand imbalance.”

The article contained details of off plan sales rising in Abu Dhabi, Morocco, the Caribbean and Greece. One of the reasons given is something that I have mentioned several times; the developments that are being marketed to international buyers are mostly off plan. You can agree with that in the likes of Morocco and Abu Dhabi, but there are plenty of resale properties in Australia.

Whatever the reason, or reasons this is excellent news for the overseas property industry. If off plan property, one of the worst affected is recovering this quickly then overall activity in overseas property sales should increase very quickly.

UK Buyers Back in the Market for Overseas Property

UK Investors are getting back into overseas property according to Overseas Property professional magazine, which became the latest publication to note increased activity in overseas property markets, especially Europe and America.

The fact that the UK recession is past the worst, coupled with the fact that Sterling is picking back up against the Euro and the Dollar, is giving UK property buyers and investors the push they need to get back into overseas property. Not to mention the recovery in parts of Europe, and in the US; people don’t want to risk missing the bottom.

“We’ve had a huge amount of interest recently,” said Martin Sadler, sales manager at property investment consultant Assetz speaking to OPP. “Everyone is looking for a deal. A normal standalone property won’t sell, though, as people want something extra from a developer.”

Assets are known for talking up the market, but there are currently so many positive reports about the overseas property markets that it is hard to ignore.

In the same OPP article, financial adviser network Olive Tree were also very positive:

“In the last three to four weeks there has been a little more interest from clients in overseas property,” said Olive Tree’s CEO, Richard Brady. “We’ve had a combination of people looking for a bargain in Spain, and other people who just think now is a good time to get into the market.”

Earlier this month SEO copywriting company Write About Property said that overseas property sales would pick up throughout the winter, and that any agents and developers left standing should up their efforts throughout the winter.

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Australia New Home Approvals Up 7.7% in July

Report after report is coming out of overseas property markets recovering, sales picking up and sentiment improving.

This week it is the turn of Australia, with the report that the number of approvals for the construction of new homes was up 7.7% in July compared to June. This was a lot more than the 3.3% analysts had forecast.

A couple of weeks ago the International Monetary Fund said that Australian property was grossly overvalued even after price falls. This may well explain the increase in new home approvals, as people can buy land and build their own homes far less expensively.

It is hoped that the construction of new homes can prop up the Australian economy in the next few months, after it performed poorly in the second quarter. This hope comes from the fact that new home approvals have been rising for the last 7 months in a row.

In terms of overseas buyers, Australia is the most popular place in the world for Brits emigrating, which is growing each year. These buyers tend to look for property that is already constructed, though some people do buy plots and build their future home over a period of years.

The latter is growing in popularity. So much so that it was covered in a recent TV documentary, which charted the top destinations to buy land and construct second homes.