India : Real Estate Sees Slow Recovery, Prices Pick Up - 12th May 09
With sales gradually picking up in the real estate sector, developers are swiftly increasing prices. Tata Housing has emerged as the lead developer to have hiked property prices in the recent days. The company has increased prices of residential units at Eden Court, its first housing project in West Bengal, for the second time in the last one week, to Rs 2,900per square feet from the staring price of Rs 2,750 per square feet. “The rise in prices is in tandem with the demand, as almost 70 per cent of the residential units in the project have been sold out,” said sources at the authorised marketing agents for Tata Housing.

Tata Housing’s first real estate project in the state is not a low-cost housing project, like the one it recently launched in Mumbai. Widely applauded as a “Nano” in the housing sector,a 283 square feet flat in “Shubh Griha”, the company’s low cost housing projects in Mumbai, comes at about Rs 3.9 lakh. Whereas, at Eden Court, about a 1,000 square feet flat will not come at less than Rs 30 lakh. A spokesperson from Tata Housing, while confirming the price hike, said, “The housing project in West Bengal has been well-received.” When asked whether the company would launch a low-cost housing project in West Bengal, the spokesperson said, “Our managing director has indicated that we will have a pan-India presence. We are also considering Kolkata for the housing project. The project commencement will depend upon the availability of land in the state.”

Spread over 50 acres in Rajarhat, in Action Area II of New Town, the Tata Housing project would be a combination of residential, commercial and retail, and the first phase comprises the residential project. The company bought the land from the West Bengal Infrastructure Development Corporation (Hidco), the nodal agency for allotting land in New Town Rajarhat. The complex would be spread over five acres and would have three towers with two-bedroom and three-bedroom apartments. Two of the towers would have G+18 floors. The entire township project is expected to be completed in 2.5 years. However, not just Tata Housing, it appears that the real estate sector was showing signs of recovery.Kolkata-based P S Group, is also developing a housing project at Rajarhat, and selling flats at Rs 1,899 per square feet.

Pradeep Chopra of the P S Group said, his firm had increased prices by Rs 200 per square feet recently. “Even by selling at Rs 1,899 per square feet, our margin is close to Rs 300,” said Chopra. According to experts, the spurt in prices could be in view of the lack of supply, mainly because for more than last six months hardly any new project has been launched by developers in Rajarhat. With few ready-to-occupy flats available in the area, big real estate developers might have been leveraging from the imbalance in supply and demand, apart from the brandname, opined experts.

UK : Home values 'down 28% from peak' - 12th May 09
UK property prices will fall by 28% from their peaks before the market downturn ends, an economists' group says.
CARRIBEAN : Current real estate position in Carribean - 03rd May 09
The global economic downturn has seriously affected the world's property markets. Many countries are reporting a sluggish turnover of property and decreased value on previously purchased real estate.

However, keen investors are finding that there are still some areas which are riding the storm and flourishing. Caribbean Land and Property have been monitoring the markets in the 26 Caribbean countries they serve and are now sharing what they feel are the top locations for purchasing property in 2009.

International Property advisor for Caribbean Land and Property, Wini Dean, states that "It is simply not true that everything is in decline, in fact I am as busy as ever with clients seeking property in the Caribbean region. Of course some areas are doing better than others and we feel obligated to let people know where they will get most value for their investments."

One of the countries remaining popular with buyers is Belize. As it is the only English speaking country in Central America, there is an increased ease of conducting both personal and business affairs for expats and investors. Real estate is readily available as Belize is the least populated country in Central America and has one of the lowest population densities in the world. Belize is popular with those who enjoy pristine environments with rainforests and exotic wildlife. In addition the coastline of Belize is lined with tropical beaches which offer snorkeling and diving into the 2nd biggest coral reef in the world.

Retiring to Belize is made more appealing through government incentives for qualified retirees. These include tax-free income status and duty free concessions to import all household items, a car and even boat or a light aircraft. They have also recently reduced the stamp duty tax on real estate title transfers. The new rate is 0% up to US$10,000 in purchase price and 5% for any amount above US$10,000.

Another country in the region that continues to flourish is the Dominican Republic. As one of the most stable countries in the Caribbean and Latin America, the Dominican Republic has been able to attract overseas business with a favourable Foreign Investment policy. Property prices within the Dominican Republic remain very competitive when compared with other Caribbean locations and offer very good value for money, especially when coupled with the low cost of living.

The ease of travel to and from the Dominican Republic makes it ideal for anyone doing business or needing to stay in touch with family. There are 10 International airports in the country and many direct and regular flights to and from destinations in Europe and North, Central and South America. Santo Domingo is accessible by air from New York (3 hours), Miami (less than 2 hours) and San Juan (45 minutes). The Dominican Republic continues to be the Caribbean's most popular tourism destinations and Caribbean Land and Property currently has over 100 properties including hotels, resorts and residential properties that are ideal for personal use or as a vacation rental.

Costa Rica is also on the list of recommendations of where to buy property in 2009. This country is well known for its ecotourism and peaceful environment. With many direct and quick flights from USA, it is an ideal location for US residents who wish to experience a piece of Caribbean paradise whilst retaining their connections to home. Costa Rica boasts of the longest standing democracy and highest literacy rate in Latin America. The country's banking system is stable and the country is often referred to as the 'Switzerland of Latin America'. A wide range of properties for residential or business ownership are available through Caribbean Land and Property who predict that this location will remain popular throughout 2009 and beyond.

The small island of Dominica is also recommended as an investment arena in 2009. The property market remains healthy and it is an alternative option for those seeking to live a more sustainable and simple lifestyle. Property advisor in Dominica, Lisette Stevens, explains that "Dominica is more rugged than many of the other Caribbean islands and appeals to those with either a sense of adventure or a desire for a quiet life."

Whilst all of these Caribbean countries are popular with retirees, Wini Dean adds a word of caution to prospective buyers of working age. "It is important to realize that there are few job opportunities within these countries and anyone who wants to live there should be prepared to create their own avenues for employment. Setting up new business which brings new jobs for locals is also a way of giving back to a country that has embraced you."

CARRIBEAN : Carribean countries make it easier for non residents to buy property - 03rd May 09
Courtesy : Wall Street Journal

Like many developers of resort Caribbean real estate, David Johnson is facing the daunting challenge these days of selling ultraluxury Caribbean property at a time when the economy is tanking and buyers are in retreat.

But he is getting some help from a powerful ally: the government of the British Virgin Islands, which has agreed to ease some restrictions on foreign real-estate buyers.

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The Oil Nut Bay development will benefit from eased restrictions.
Oil Nut Bay

The Oil Nut Bay development will benefit from eased restrictions.
The Oil Nut Bay development will benefit from eased restrictions.
The Oil Nut Bay development will benefit from eased restrictions.

Qualified buyers willing to pay $2 million to $25 million for a lot in Mr. Johnson's Oil Nut Bay, an 88-home, low-density development under construction in Virgin Gorda, will benefit from a new 90-day automatic approval for a landholder license. The government also is expanding the local airport and is providing better cellular service and high-speed wireless access for smart-phone use.

"The government realized, given the current economic climate and given that we live by tourism, that we want to have these investors come in," says Clyde Lettsome, permanent secretary for the Ministry of Natural Resources and Labor.

As property markets fall world-wide, one of the few consolations for real-estate investors is that some governments have become more open to nonresident property owners. A growing number of them are considering loosening or temporarily suspending foreign property-ownership restrictions in a bid to stimulate their real-estate markets. In January, for example, Beijing issued a one-year suspension of a one-year residency requirement for foreign nationals buying a house.

The Cayman Islands and Australia have also recently loosened their rules. Meanwhile, the issue is being discussed in numerous other countries, including the Philippines.

Loosening foreign-investment restrictions isn't new. Governments have been attempting to stimulate foreign investment for years in response to swelling interest from international investors. In 2005, India began letting foreigners invest directly in Indian residential and commercial real-estate development. And in late 2006, the government lifted a required 10-year lock-in period on repatriating property sale proceeds, although it's limited to $1 million a year.

Slumping property sales has given the issue renewed urgency, as countries strive to find ways to stimulate local economies. Last month, the historically foreign-investment-friendly government of the Cayman Islands temporarily lowered rates on their real-estate transfer "stamp duty" taxes, including a reduction to 5% from 7.5% on waterfront property. At the same time, the country's real-estate brokers group, Cayman Islands Real Estate Brokers Association, announced a 20% rebate on commissions. The discounts last through Sept. 30.

Restrictions on foreign ownership exist mainly in emerging property markets. Most Western European countries, including the U.K., France and Italy, don't restrict foreign nationals from owning real estate. (Notable exceptions are Switzerland and Austria, which have established some foreign-buyer quotas to keep prices down in some ski towns.) The U.S. doesn't restrict foreigners from buying property.

Ways to restrict foreign investment aside from outright bans include high transfer taxes and limits on when and how much money investors can repatriate. Rules can differ depending whether the purchase is a residence or an investment.

To be sure, not all countries are choosing to loosen regulations. Some may crack down on foreign investment, blaming it for driving prices to unsustainable levels, says Danny Bance, managing partner of U.K.-based International Property Investment Network, a research and investment services provider for investors.

But many governments believe that foreign investment spurs infrastructure development, which spurs economic opportunity, says Mr. Johnson, 59 years old, of Detroit, who got his start developing luxury property in Michigan, including a large Lake Michigan resort. He says he helped convince the British Virgin Islands government to loosen curbs on foreign investment partly through his willingness to hire local residents for senior management positions.

Oil Nut Bay is Mr. Johnson's biggest solo project and his first in the Caribbean. He bought the undeveloped 300-acre peninsula in 2006 for an undisclosed price and has spent millions on infrastructure, roads, electricity, the arrival dock, the beach club and other structures.

Yet sales are slow. After about four months of marketing, he says he has sold about eight lots of the roughly 45 for sale at "founders" prices, ranging from $1.9 million for a "ridge villa" one-acre lot to $25 million for 10 acres with 360-degree views. Nevertheless, he says he isn't strapped for funds.

Oil Nut Bay's beach club is slated for completion in December and construction costs are expected to total $500 million for the full project, including what buyers will pay to build their houses and the cost of shipping in 5,000 metric tons of sand to create a sandy beach.

There is still a market for unique, luxury development, Mr. Johnson says, despite the recession. He admits, however, that there are fewer buyers than there used to be. He notes: "If we had 1,000 units [to sell], I would be scared to death."

SOUTH AFRICA : Large houses in Cape Town bringing big rentals - 03rd May 09
LARGE, expensive Cape homes bought before 2004 are now bringing in impressive rental returns, says Mike Greeff, chief executive of Greeff Properties.

"A surprising number of our clients are opting to rent out their homes rather than sell and the reasons for this are not difficult to understand," he says.

"Anyone who bought a home before 2003/4 would have seen at least a 125 percent appreciation in value to date and as the rents are by and large calculated on current values, it is now possible for a landlord who has owned his home for five years or more actually to cover or almost cover his monthly bond repayments."

Quoting a typical example, Greeff says a home owner who bought a Constantia property for about R2 million in 2003 had his home appreciate in value to R4.5m by the end of last year. The increases this year, says Greeff, have been far slower than before.

"Originally, the owner was paying 12.5 percent interest on a 95 percent bond (these were readily available in 2003) and now is paying 13 percent, and his repayments are about R22 000 a month. This is about R3 000 more than the original payments but in the meantime the rental has risen from R12 000 a month to R23 000 a month - a welcome increase for owners who are trying to cover as much of their bond as possible.

"With fewer people buying large Constantia, Bishopscourt and Upper Kenilworth homes," says Greeff, "rental properties valued at above R3m are in demand. A R4m plus home is being rented at between R22 000 to R25 000 a month."

Surprisingly, says Greeff, there are still certain investors buying expensive Constantia and Bishopscourt homes to rent out, even though the rental may well cover only 40 percent of their bond repayments.

"They believe the capital appreciation will be substantial in the next five years. This arrangement can make especially good sense if the owner is earning a large income or has other rental properties which are showing a profit. In such a case the income can be offset against the interest paid on the newer investment."

AUSTRALIA : Oz govt urged not to end grant for first time buyers - 03rd May 09
The property industry in Australia is warning that there will be a severe backlash if the popular grant for first time buyers is not extended in the budget.

Prime Minister Kevin Rudd has hinted that the $21,000 first-home buyer's grant which is credited with giving a boost to the real estate market might not be continued beyond its current deadline of June 30.

'We should all underline the fact that all good things at some stage come to an end. We've been clear in our announcements about how long this programme would last,' he said.

The Government raised the grant in October from $7000 to $21,000 for new homes and to $14,000 for existing homes, to help insulate the industry from job losses caused by the global financial crisis.

The boost, which was part of the $10.4 billion stimulus package, sparked strong demand from first-home buyers, with nearly 30,000 people accessing the scheme between the middle of October and the end of January.

The property industry urged the Government to continue the boost for new homes, or at least phase it out in stages.

Housing Industry Association chief economist Harley Dale said the boost had been propping up housing construction activity. 'It's quite clear in recent months it has had a very real, positive impact on the level of building activity and therefore the level of demand for employment and building materials,' he said.

Dale said building approvals had been creeping up and HIA surveys showed new home sales had surged in early 2009. But without the boost, an important stimulus for the sector would be removed.

'We really need domestic demand to pick up strongly. Housing and construction is a very important part of Australia's domestic economy,' said Rod Cornish, head or property research at Macquarie Bank.

Cornish explained that a doubling of the grant to $14,000 for new homes and lower interest rates caused a jump in housing construction in 2001. Housing commencements leapt 50% in the year to March 2002, helping Australia to avoid the recessions Asia and the US experienced at the time.

But the grant was reduced to $10,000, then $7000, in middle of 2002. This contributed to construction declining in early 2003.

Opposition housing spokesman Scott Morrison urged the Government to give home buyers certainty. 'This is placing young home buyers under terrible pressure while they are trying to make one of the most important financial decisions of their lives,' he said.

USA : Measure to modify delinquent loans in bankruptcy court fails in Senate. Obama administration loses big stick to prod loan servicers to aid troubled borrowers. - 03rd May 09

NEW YORK -- The Obama administration lost a bid to add a powerful weapon in its fight against foreclosure Thursday, after the Senate voted down a proposal to allow bankruptcy judges to modify mortgages.

The defeat left many housing advocates questioning the effectiveness of the president's loan modification plan. The so-called cramdown provision, which would allow judges to reduce mortgage principal, would have put pressure on servicers to modify loans before borrowers file for bankruptcy.

The financial industry lobbied hard against the bill, arguing that letting judges change mortgage contracts would add instability to the market and raise interest rates. Senate Republicans and some moderate Democrats were concerned about the bill's impact and about the growing resentment among homeowners in good standing.

The bill was defeated by a 51-45 vote. The House had passed similar legislation last month.
0:00 /02:50The $75 billion housing fix

The vote comes on the day that a new report showed foreclosure starts spiking to a record high in March. Servicers initiated foreclosure proceedings against 290,000 borrowers, according to Hope Now, a coalition of lenders, servicers, investors and housing counselors. That's the highest monthly total since the group began tracking data in mid-2007.

In offering the bill, Sen. Richard Durbin, R-Ill., cited Moody's statistics showing that 8.1 million borrowers are facing foreclosure. The bankruptcy provision could prevent up to 1.7 million of them, he said.
What now?

Bankruptcy reform was a key part of Obama's foreclosure prevention plan, which was introduced in mid-February. It aims to encourage servicers to be more aggressive in modifying loans through a mix of carrots, in the form of incentive payments, and the stick of cramdowns. Servicers have come under fire for not helping enough homeowners through voluntary initiatives.

Now, it remains to be seen how many people will get relief, experts said.

"It won't render the loan modification program useless, but it removed an important ingredient that would have helped realign everybody's interests," Barry Zigas, director of housing policy for the Consumer Federation of America, said of the measure's defeat.

Servicers covering 75% of the nation's mortgages are now participating in the modification program, which calls for banks to lower troubled borrowers' monthly payments to 31% of their pre-tax income. Many major servicers said they have beefed up their loan workout departments to handle more calls.

However, most just started accepting applications, so experts say they won't be able to judge the program until the fall at the earliest. By then, hundreds of thousands of borrowers could lose their homes.

"If it's not working, it's kind of too late then," said Adam Levitin, an associate law professor at Georgetown University. Cramdown was designed as "a backstop to protect homeowners if modifications didn't work. It's supposed to be a safety net to catch homeowners."

The cramdown measure also addressed a major hole in the Obama plan -- helping homeowners who owe far more than their homes are worth. Bankruptcy judges could address this problem by reducing the principal balance on the home, said Bruce Dorpalen, director of housing counseling for Acorn Housing.

USA : Obama expands foreclosure fix - 03rd May 09
The Obama administration said Tuesday it is expanding its foreclosure prevention program to cover second mortgages and to direct more troubled borrowers to the Hope for Homeowners program.
INDIA : DLF’s Next 2 Quarter Sales Critical- Experts - 03rd May 09
Realty analysts in the country say it is critical for DLF Ltd, India’s top real estate firm by market value, to revive sales and cash flows in the next two quarters failing which, they say, the firm may be forced to start selling chunks of its land holdings and sharply reduce home prices. The developer’s plans to make good receivables from DLF Assets Ltd (DAL), a firm owned by the realty firm’s promoter family, will weigh heavily on its shares, they added. DLF, late on Thursday, announced financial results for the fourth quarter (Q4) and full year of fiscal 2009. Net profit at the firm declined 41% to Rs4,629 crore for the fiscal year gone by, from Rs7,812 crore in fiscal 2008, and revenue declined by 28% to Rs10,541 crore. The results were released at 10pm. DLF’s performance in Q4 to 31 March was worse. In that quarter, it posted a 93% decline in net profit at Rs159 crore, from Rs2,177 crore in the year-ago quarter. Revenue in the quarter declined by 69% to Rs1,351 crore.

One analyst projected a vicious circle ahead for DLF. “If the status quo continues, DLF will not be able to generate cash in which situation they may miss deadlines on project completion…and to generate cash flows, they will have to start selling land or refund their buyers if projects get delayed,” this analyst, working at a domestic brokerage firm, said on condition of anonymity. “Sales need to happen for DLF to generate cash and if it does not happen at current price levels, they will have to bring down prices further.” In an emailed statement, DLF said that around 450 flats in its so-called affordable housing segment have been booked across India at the end of Q4. “DLF has already reduced prices at some of its projects—the only company to do so—and we might see some more price reduction at its other projects during the next few quarters,” another analyst with a domestic brokerage firm, who too requested anonymity, said. “The company might also sell some of its land and other assets, but that would be mainly to bring down its debt position.

UK : Decline in house prices resumes - 03rd May 09
House prices in the UK fell by 0.4% in April reversing some of the rise seen in March, according to the Nationwide.

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