Potential of European real estate more real now

Fancy a summer home in the French Riviera? Or perhaps a lakeside cottage in a quaint little Italian town? Maybe, just maybe, a winter lodge in the mountains of Germany. The real estate possibilities in Europe are more real now than before, as property-buying and international property investment has become much easier with cross-border property agencies.

ItalyPalermoPRopertyFor investors looking to diversify, Europe could be the perfect agglomeration of yet-untapped real estate potential. Though the major cities such as Paris and London have always been the darlings of real estate investors, smaller secondary cities are coming into their own as the outlook for European real estate becomes increasingly bullish.

FrancePropertyRetailChanging work patterns, urban renewal and improved transportation infrastructure have brought out the potential of investing in real estate markets in smaller cities such as Milan, Malmo, Hamburg, Leon and in the United Kingdom, Manchester and Leeds. Not all cities present residential property potential, for some, commercial properties offer more yields. In Germany and the Netherlands for example, office spaces are more profitable, as are retail real estate in France and Poland; while in Italy, especially up north, investors are also looking into residential properties. With the global economic situation in constant flux, particularly with Asian markets heating up, perhaps a little too quickly and too much, diversifying investment portfolios might be a good move.

New residential property in Melbourne’s South Yarra

With an estimated 38,000 new homes needed per year Melbourne as the city’s size and population grow (targeted to reach 2.4 million by 2030), being one of the first to jump into the depend of the pool might give you an upper hand when demand overshadows supply.

YarraOne1

While the city centre properties in Melbourne might already cost you considerably more than it would have less than a decade ago, options of suburban properties near regional hubs or in smaller townships may cost less but still have the potential for long-term growth. And now property agencies are keen to help buyers save on property purchases as stamp concessions for off-the-plan property purchases in the state of Victoria will be removed from July 1.

Launching this weekend is the Yarra One, located near the Royal Botanic Gardens in South Yarra. Located conveniently near dining, shopping and entertainment options, with supermarkets such as Woolsworth and Coles nearby, the 26-storey Yarra One consists of 268 luxury freehold apartments. The project is heralded by Eco WorldSalcon Ya1 Pty ltd and will be designed by renowned architectural firm, Fender Katsalids Architects. This is essentially a mixed-use development as the ground floor will host a myraid of cafes, restaurants, retail and lifestyle entities. Available for sale will be 2-, 3-room units and also penthouses. The new project will also have facilities such as a rooftop garden, spa, gym, library and wine bar.

$1-billion bid for Stirling road land plot breaks record

A $1 billion bid for a piece of land at Queenstown made history as the first time a residential site under the Government Land Sales (GLS) programme scored such a high offer, almost $300 million more than the previous record.

queenspeakcondoChina-based developers Logan Property and Nanshan Group put the bid of $1.003 billion in for the 21,109 square metre plot in Stirling Road. The site had been on the GLS reserve list since 2010 and consists of a 2 adjoining land plots. It was triggered for sale only last month after a bid of at least $685.25 million was put in for the site.

But the billion-dollar bid certainly takes things to a whole new level. The previous highest ever bid was $925.7 million from MCL Land and for a pure residential site, the record stood at $682.8 million for the site where Costa Del Sol condominium now stands. At 20.6 per cent higher than the winning bid for the nearby Queens Peak condominium, the latest $1billion bid may set a new record for the Queenstown area in terms of cost per square foot. With a maximum permissible gross floor area of 954,328 sq ft, the bid will translate to $1,050 psf per plot ratio.

Commonwealth TowersThe Stirling Road site is close to Buona Vista, and placed strategically between the Central Business District and Jurong East regional business hub which makes it the prime spot for rental properties. Despite the existence of many other private properties in the area, developers do not seem intimidated, possibly as most investors of units in the area would have sold them by the time this new development is ready and will in fact be looking for new investment opportunities. There could also be a rebound of foreign investment interest following Bandar Malaysia‘s recent collapse.

Thailand’s most expensive condo opens Singapore and China offices

Foreign property investors looking for a piece of luxury in Thailand now have something new to look forward to. Thai developer Sansiri has partnered with Thailand’s mass transit operator BTS group to open international sales offices in Singapore and China, tapping on the influx of tourists in particular mainland Chinese in recent years.

Sansiri98WirelessPhoto credit: Sansiri

Their Singapore office opened at the Ocean Financial Centre 2 weeks ago and plans to open more in Shanghai and Beijing are already in the way. The venture hopes to increase sales from foreign buyers by 40 per cent. Though interest from Singapore investors have been rising, investment monies flowing into Thailand’s real estate sector from China has been limited. Sansiri currently has over 300 projects in Thailand and one in London.

BaseGardenSansiriPhoto credit: Sansiri

Their flagship condominium project, 98 Wireless, is touted as Thailand’s most expensive condominium development. 120 sq m two-bedroom apartment units are going for US$2 million. Though most Singaporean investors favour mass market condominiums in Thailand, Singapore is nevertheless a good base to indirectly steer attention from interest mainland Chinese parties temporarily residing or visiting the country to possible investment opportunities within the region. The developer says Singaporeans are more keen on rental yields and quick turnarounds. Their new partnership with the BTS group will also allow them a leverage in developing projects which build upon upcoming infrastructure.

Singapore no. 2 destination for Asian property investors

A recent study has found Singapore to be No. 2 in a list of top destinations for wealthy Asian investors. The Wealth Report compiled by Knight Frank has placed Singapore second, after only Britain, as a country high net worth Asians are favouring as a property-investment destination.

BishopsgateResidencesExcluding their primary residence, these individuals are defined by their portfolios of at least US$30 million (S$42.3 million). They are also more likely to apportion most of their assets to real estate investments. This could come as good news to developers and property marketing agencies, helping them narrow down their target audiences and structure more focused marketing strategies which are more essential now than ever as the economy languishes.

While Chinese investors are the mainstay of the real estate scene, Indian and Malaysian buyers are making an increasingly obvious presence. Property analysts are expecting the proportion of foreign home buyers in Singapore to rise to between 25 and 28 per cent this year. Their numbers currently stand at 24.7 per cent. Singapore’s slower rate of property growth allows investors to take stock of their investment and stake calculated risks without having to grapple with the rapidly increasing price growth in cities in China, Australia and Canada.

Some of the other countries which are also gaining traction in the real estate investment arena are China and Vietnam. Singapore’s stable political and business environment has however continued to make it a choice pick amongst Asian investors.

January’s private home sales plateau

After a slight rise of 0.1 per cent in December, January’s completed private home prices remained flat. There were some rise and fall in the different districts but overall, non-landed residential property prices evened out on a plateau.

CreekBukitTimahThat may not necessary be a negative as signs of stabilisation are generally expected of the year. Property analysts say that some of the zero per cent month-on-month change could also be due to the availability of smaller units with a higher psf pricing schedule. Besides shoebox apartments, studios and one-bedders, family-size units in new developments are also now smaller in size than before.

Small apartments aside, prices of completed condominium units in the central region did rise 0.7 per cent after a 0.3 per cent dip in December. In the non-central regions however, prices went the other direction with a 0.6 fall following a 0.5 per cent increase the month before.

26NewtonThe private real estate market could however be looking at more resale properties entering the pen soon as most buyers who have purchased investment properties in 2013 will have completed their 4-year holding period this year. This means they are no longer tied down by the cooling measure which requires them to pay a seller’s stamp duty should they sell their property within 4 years following the purchase. Whether the sector is ready for this influx of properties while pulling themselves sluggishly out of the lull remains to be seen.

Property cooling curbs working in China

Many Asian-pacific countries have placed property cooling curbs on their housing and real estate industry as prices climbed rapidly within the past half a decade. Cities such as Hong Kong, Tokyo, Sydney, Melbourne, Beijing, Shanghai and Singapore are facing not only space and housing issues but also rapid inflation and increasing property prices.

Aerial view of suburban neighborhood, Wuhan, Hubei, China on 11th March 2016. (Photo by Jie Zhao/Corbis via Getty Images)

Aerial view of suburban neighborhood, Wuhan, Hubei, China on 11th March 2016. (Photo by Jie Zhao/Corbis via Getty Images)

The Chinese government has been placing curbs upon curbs on their real estate industry, with perhaps conflicting sentiments as the sector accounts for a large part of the country’s economic growth. But housing prices have been skyrocketing at an alarming rate and for the first time in the past few years, the measures seem to be taking effect.

In Shenzhen, currently the country’s hottest market for new homes, property prices have fallen 0.5 per cent after consecutive dips over the past 4 months. In Shanghai, prices fell by 0.1 per cent, also following a 3-consecutive-month decline. While prices remained unchanged in Beijing, the stabilisation is a start to possible price deflation. News of a possible reduction of land release by more than 3 times that released in 2016 could further reign in price increase.

Park yoho venezia Hong Kong propertyThe price-increase in January was reflected in the smallest number of cities in a year. Home prices have fallen in 20 cities while 45 out of 70 cities saw a gain in prices, down from 46 in December last year. Part of the reason could be the curbs placed not only on buyers but also on banks. Some bank branches in major Chinese cities such as Beijing, Guangzhou and Chongqing have recently increased mortgage rates for first-time buyers. China’s central bank is likely to have even stricter restrictions on credit and housing loans put in place, in particular targeting developers and households, in order to prevent a property bubble.

 

Why property cooling measures are here to stay

ABSD, SSD, TDSR, QC – These abbreviations related to property cooling measures implemented over the course of 5 years have taken root in the local real estate and construction industry and despite a much quieter market, may not go away anytime soon. And with good reason.

Aeon MelbourneThe demand for properties in other major Asia-pacific countries and cities such as Hong Kong, China, Australia and Japan have not seem to wane, reflected by soaring home prices in Hong Kong, Sydney, Melbourne and various top-tier cities in China. And this is despite their governments placing more restrictive regulations in place in efforts to curb investment outflow and property speculation. But perhaps it could be the case of too-little-too-late. And it also goes to show that investors are still looking for markets to hedge their funds and the pool of willing China investors looking to take capital out of their country agains a depreciating yuan.

CasaAerataIn Singapore, despite a gradually decline in home prices, the market has remained resilient and a untimely lifting of property curbs may result in a quick and unrecoverable increase in property speculation. In fact, despite the series of property curbs instrumented since 2013, the property cycle seems to already be reaching the bottom, which could only mean a turnaround possibly within the year. Last year, resale volume rose 28 per cent and total sales increased by 16 per cent from 2015, indicative of a recovering, or at least stabilising, market.