What Property Market Insights from the Property Investor Show?
Many see the property shows as a barometer of how the industry is faring, given the currrent climate. So having recently attended the Property Investor show on 22nd October '09 it provided a convenient snapshot of the property market in general. Whilst attendance seemed lower than normal and the number of exhibitors somewhat fewer in number, there was sustained interest in the numerous seminars running.
A panel debate called "Ask the Editor" featured a Question & Answer session, featuring editors from The Sunday Times, Express Newspapers and Property Investor News. The session covered a range of opinions from the more up beat to the more minority pessimistic view that the sustained property recovery was a long way off yet. One emerging view was that there is still a polarised UK market, with specific areas of the country driven by City bonuses, like London and the Cotswolds property markets (as recent press reports supoort). These areas seem to have a degree of immunity to the current crisis and have slightly different dynamics.
One universal view was that low interest rates have prevented the property price decline being too acute.
For Overseas property there were some classic snippets of advice, about investing in cities where there is likely to be constant demand for buy-to-lets, rather than in some more rural, or lesser-known places where property might seem fairly cheap.
Property "Stock Markets" were quoted - the likes of Dubai, Florida, Bulgaria were quoted as examples - as not being the top places for investment of late, due to the property price "surge and slow", partly as a result of what some see as speculative investment and off-plan flipping. Some of these countries were considered to be an overseas destination of lifestyle choice, rather than the best property investment hot spots This is a general issue where there are question marks over sustainability of property market growth.
"Has the Recovery begun in Spain?" -Spanish Homes
Featuring a panel comprising a mix of journalists, Spanish developers and banks. This session hosted a lively debate about the thousands of illegal dwellings on Costa del Sol, that are not currently incorporated in the General Plan, but there were some assurances that they are in all ikelihood to be regularised. It is a moot point about whether these are properties of the type that would have been attractive to overseas buyers or not and hence to what extent they would have been affected.
There were also calls for Rental Law reform (Law of Urban Leasing) so that property could be rented out more easily and flexibly. Spanish law currently makes it difficult for landlords and tenants, by preventing landlords from renting their properties on a long term contract (Contrata de Vivienda i.e. over 12 months), for less than 5 years, even if tenants agree.
Just 13% of Spanish households live in rented accommodation, (especially amongst the young, as 65% of Spaniards between 25-29 live at home with parents) compared to more than 40% in Germany and France, and around 30% in the UK. The law results in low labour mobility, reduced access to housing, high levels of unmet demand for housing and a slew of empty homes, estimated to be around 3 million.
On a different note, other modes of investing in property, such as Fractional Ownership (not the same as Timeshare, which does not have right of Title/ownership) seemed to attract attention, as people start to seek other, creative ways of funding their dream holiday home. Owning part of a property, even if it be a 1/12th, thereby giving rights to 4 weeks' usage, is an attractive proposition to some who still want to have an overseas property to call home. Fractional ownership does enable individuals to buy into a more upmarket property than they might be able to afford on their own.
Whichever way you look at it, there is still interest and activity in the property markets around the world, although evidently at a subdued level.
Posted 3rd November '09
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