Here are some comments from an expert about property crisis in UK. Do you agree with these?
Property prices in the UK commercial sector may fall as much as 25% this year as banks curb lending to investors, according to analysts.

The UK sector is expected to do worse than the commercial sectors in both France and Germany, said Moody’s Investors Service.

It is also predicting that by the end of the year, valuations in Britain may have dropped as much as 45% from their peak before the credit crisis started in 2007.

In a report on European commercial mortgage-backed bonds it also said that French real estate may fall as much as 20% and predicted a 15% decline in Germany.

Sales of bonds backed by European commercial mortgages totalled €6.3 billion last year, an 89%decline from 2007. Issuance tumbled because investors shied away from hard-to-value assets as banks reined in property lending, the report said.

‘To stop the downward trend and for the commercial mortgage-backed securities market to reopen to a meaningful extent, the availability of financing for commercial real estate must recover. This is highly unlikely for 2009,’ analysts said in the report.

Moody’s downgraded 55 bonds backed by commercial mortgages last year and boosted the ratings of 11, the report said. Falling property prices will continue to ‘negatively impact’ ratings this year, the report added.

Moody’s is also downbeat about the rest of Europe, Africa and the Middle East with the outlook remaining muted. It described investor sentiment as weak and added that any improvement would not come until lending increases and prices stabilise.

‘We believe that the availability of financing for real estate must recover with property values stabilizing and the capital markets must return to some kind of normality,’ the report concluded.

Thanks to www.propertywire.com

A new survey indicates where property investment experts reckon you can find the best bargains and also reveals where they are likely to buy in 2009.

Asia looks a better bet than other parts of the globe, but for cash rich individuals, London also offers bargains, according to the survey by Reuters.

Tim Murphy, Hong Kong-based founder of IP Global, owns over 100 apartments and houses around the world and started a firm that finds residential property for clients.

‘I’ve just come back from a trip to London and had a very interesting week. In the last few days there are even graver concerns about the UK economy and banks. But there are some incredible property deals, especially for built property,’ he said.

‘Developers want to unload their last assets. For the right deal, you can get anything from 35 to 60% discounts from a year ago. And the currency is a huge advantage. In US dollar terms, a property that was $2 million a year ago is $600,000 now,’ he explained.

In Asia, he recommends keeping an eye on Hong Kong and China. ‘Hong Kong will have a very difficult first half of the year. If there are bargains, I’ll buy, not now, but maybe after the summer. I’m quite optimistic long-term. Rents are coming down, but the cost of funds is coming down much more. If you buy a HK$2 million to HK$5 million dollar property the yield is 4 to 6%,’ he said.

David Edwards, Asia director for LaSalle Investment Management, the property funds arm of Jones Lang LaSalle said he will buy in 2009 and he is looking at the more volatile, faster correcting markets such as Hong Kong and Singapore, which he expects to bottom first.

‘It’s too early to say if it will be the second half of 2009 or the first half of 2010. There’s not enough visibility given the gyrations of panic. But it’s a good idea to build an equity position and get ready,’ he explained.

Aaron Fischer, head of property research at CLSA, is not sure if he will invest this year. ‘I just sold a house in Australia. If I were to pick countries with the smallest declines, they would be Japan and Indonesia. In Japan house prices don’t move,’ he said.

Brett McCarthy, fund manager at Sydney-listed Challenger Kenedix Trust, reckons that the Sydney market is a good prospect. ‘The city is going to grow for a long time and it’s geographically very constrained by national parks and mountains, so in the long term, you think the property price would go up in Sydney, but of course in the short term, some parts of the market have got a lot of pain,’ he said.

Robert Lie, Hong Kong-based Asia head for Dutch property investment firm Redevco, predicts that Asia will recover before other regions. ‘I’d say invest in China, but as a foreigner you have to live there 12 months before you can buy. I think Hong Kong prices will adjust pretty quickly and I do believe that if the global economy revives, Asia will recover first. There’s inherent scarcity in the market for land and apartments. And high-end prices will drop significantly, but they’ll come back,’ he said.

Simon Lyons, London-based joint CEO of Enstar Capital, revealed he has recently bought an apartment in the Swiss Canton of Vaud. ‘That outsiders can buy at all in Switzerland is a relatively new phenomenon. A limited number of property permits are granted to non-residents each year and only certain properties, primarily in tourist areas, are eligible for purchase, meaning demand is always ahead of supply,’ he explained.

Mark Callender, UK-based Head of Property Research, Schroder Property Investment Management, said it is not the right time to buy. ‘UK housing prices look about halfway down right now, so it’s not quite the right time to buy. And the expectation is for prices to drop by another 10 to 15% this year,’ he said.

Source: http://www.propertywire.com/

Here is an abstract of a news published on website www.nce,co.uk/international which itself is disclosing the position of property development in Dubai.

Aldar Laing O’Rourke – a joint venture between Abu Dhabi-based developer Aldar and Anglo-Irish contractor Laing O’Rourke – shed around 200 jobs, about 10% of its staff. Numbers were unavailable for NDY job cuts. “Following the significant downturn in the Dubai property and construction markets in the last quarter of 2008 we have reduced staff numbers in our Dubai office,” said an NDY spokesman. 

The outlook for construction is looking bleak in Dubai as the number of construction contracts awarded across the United Arab Emirates as a whole fell by 85% in 2008, according to research by MEED Projects (NCE 8 January 2009). A range of factors including the shortage of credit, fears of a property oversupply and materials price inflation, have created a downturn in the Dubai real estate market.

Despite the Dubai downturn, markets in other Middle Eastern countries like Qatar and Saudi Arabia are expected to remain buoyant and several large infrastructure projects are progressing.

Our readers are welcomed to comment on it.

More payment plans are being offered to property investors in Dubai is a sign that the real estate market is maturing.

It is claimed and advertised on TV that developers are introducing innovation into their payment plans expanding it over number of months and reducing the instalment size.

The move is also welcomed as a way of lessening the impact of the economic downturn.

The extended plan being offered to existing customers gives 90 months to pay 85% of the value of the property once a threshold of 15 per cent of the purchase cost has been paid and is the first of its kind to be introduced by a private developer.

No doubt ‘Developers can’t afford to be as stiff as they were before. The market is maturing and heading towards the end-user,’ but still some end-users feel that they can loos their investment if market could not mature.

What are your comments?

Your comments are welcomed.