Giant investment funds are poised to start buying Japanese property in the first half of next year when prices are expected to be at rock bottom, it is claimed.

Global investors including Carlyle Group, Blackstone Group and Lone Star Funds are still waiting for prices to drop a bit further, according to Ben Duncan, managing director of CB Richard Ellis Japan.

‘The market is steering toward big, opportunistic funds. They’re waiting for prices to fall further. At the moment they are not seeing as much distress as they hope for. But as the market starts to bottom out they’ll probably start to buy,’ he explained.

Commercial land prices in Japan fell 4.7% to a three-year low in 2008, with the decline increasing to 5.4% in the three largest metropolitan areas of Tokyo, Osaka and Nagoya, official government figures show. Office vacancies in Tokyo’s main business districts increased for the 17 month in a row in June to 7.25%.

Blackstone has already said publicly that is plans to invest in Japanese property companies that need financing.

One factor that is hampering a move forward is that Japan’s banks have been lenient in allowing companies to refinance borrowing rather than forcing them to liquidate assets, Duncan said.

‘That’s held back recovery in that the market hasn’t corrected. If there had been more pressure we’d see more transactions and investment from all sectors,’ he added.

Firms like Barclays Capital are indicating a turnaround is not far off. ‘Pessimism has been retreating recently with the re-emergence of office contract and condominium sales transactions,’ it said in a statement.

Other factors are being taken into account. Tokyo, for example, recently overtook Shanghai as Asia’s most attractive city for real estate investment, according to the Urban Land Institute and PricewaterhouseCoopers LLP.

‘What we’ve seen in the last three quarters is a lot of upgrading. Companies in good shape are taking advantage of the market to move into more attractive quarters at no increase in cost,’ Duncan said.

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

Asian investors, particularly from China, are setting their sights on property in Australia as it has not been as severely hit by recession and is regarded as a safe place to invest.

Richard butler, senior managing director of CB Richard Ellis International Investments said there were lots of bids for a prominent building in Sydney recently.

His firm has calculated that overseas investors accounted for 12% of total transactions in Australia in the first half of this year, up from around 9% in 2008.

‘What they are seeing is Australia probably is a safer bet, where returns will be more secure and safe because of the transparency. Whereas no one wants to go into markets that are decimated like Singapore at the moment which is suffering from massive oversupply,’ Butler explained.

The fact that values have not been decimated in Australia adds to the feeling of safeness. According to Jones Lang LaSalle prices for commercial properties in Sydney fell some 15% in the first quarter of 2009 from a year ago, but that is compared with a more than 30% drop in Shanghai, Hong Kong, Tokyo and Mumbai.

It also says that rents fell around 25% in Sydney while Singapore, Tokyo and Mumbai saw more than a 30% drop in the first quarter.

Recently in the commercial sector those investing include Woori Investment from South Korea, and Japanese builder Sekisui which is to develop homes in Sydney and Brisbane. The Chinese are active in the residential sector too. ‘There is a fair bit of movement, with wealthy Chinese having their children study in Australia,’ said John Bongiorno, director for real estate agent Marshall White based in Victoria.

The company is considering opening an office in Shanghai or Beijing to attract more buyers. ‘They are attracted by the safety of the country, by the high standard of education we offer, by the high standard of living we offer,’ he said.

Analysts said the timing may be good for foreign investors to enter the market as many local players are currently inactive due to tight credit. David Green-Morgan, Asia Pacific research director for DTZ, said that he expects transactions to pick up as foreign investors are likely to rush and get the best deals.

‘They are coming in at this point of the cycle as they see opportunities. They will be happy to hold for five to eight years and then they’ll get out when the market gets back up,’ he added.

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

Property vultures are circling to pick the bones clean of deals as the US property clock has wound prices back to the same levels as they were in 2003, according to financial researchers Standard and Poor’s.

House prices fell 18% in April in S&P’s 10 and 20 city indices.

Commercial property has crashed alongside home prices registering a 20% decline, with market expectations of another good way to go – perhaps another 20%.

“Now that the meltdown has happened, the new emerging market is the United States,” Tom Shapiro, president of real estate investment firm GoldenTree InSite Partners, said at the Reuters Global Real Estate Summit in New York.

“I think there’s going to be the best opportunity to make money in the last 20 years in real estate in the US.”

GoldenTree InSite pulled the plug on US real estate investment in 2006 and focused attention and cash on Brazil instead, with investment in residential and office properties.

The company has a war chest of about a $1 billion to sink in to property, and is ready to return to the US market and take advantage of the right projects that need or will need money when they come up short.

“We are just at the point now where we are seeing some very interesting entry points on certain transactions,” he said.

New York-based GoldenTree InSite invests institutional funds.

Shapiro said his firm likes big cities, such as Los Angeles and New York where struggling commercial real estate markets tend to rebound strong.

“San Francisco right now is a pretty interesting place to think about because San Francisco is a very diversified economy,” he said.

Meanwhile, residential property prices fell – but the rate of decline is beginning to show signs of holding steady fueling hopes that the market will soon hit rock bottom.

“While one month’s data cannot determine if a turnaround has begun; it seems that some stabilization may be appearing in some of the regions,” said David Blitzer, chairman of the committee in charge of S&P’s index. “We are entering the seasonally strong period in the housing market, so it will take some time to determine if a recovery is really here.”

Phoenix posted the largest annual decline of 35.3%, while Las Vegas slipped 32.2% from last year and San Francisco fell 28%. Denver, Dallas and Boston posted the best performance in terms of annual declines, down 4.9%, 5% and 7.7%, respectively. On a month-on-month basis, Dallas saw 1.7% gain from March while Las Vegas lost 3.5%.

Source: http://www.nuwireinvestor.com/

There has been a rise in demand for residential units in the area known as ‘New Dubai’ during the second half of 2009, according to a new report from Asteco, a property services company.

Apartment and villa sales prices across Dubai decreased by an average 15 per cent and 13 per cent respectively, representing a significant slowdown in negative growth compared to the quarter-on-quarter decline from Q4 2008 to Q1 2009, the report said.

However, Palm Jumeirah, which along with the Dubai Marina forms the area known as ‘New Dubai’, has reported a surge in sales prices during the second half of the year, the report claims.

It was found that villa prices rose by 20 per cent and apartment prices have risen seven per cent. With more properties being handed over, owners are reluctant to sell at a reduced cost and are therefore leasing their units, Asteco claim.

This has led to apartment and villa rental rates on the Palm dropping by 12 per cent and 25 per cent respecively.

“The last few months have also seen distressed sellers being flushed out the market, with remaining owners now refusing to drop below a certain price level,” said Vincent Easton, sales director at Engel and Volkers estate agency in Dubai.

“Increasing numbers of peo-ple are prepared to commute to Abu Dhabi from Jumeirah Lake Towers and Discovery Gardens,” Easton told 7DAYS.

Andrew Chambers, Asteco’s managing director, said the “demand has mostly been for one- and two-bedroom apart-ments and for three- and four-bedroom townhouses” in the ‘New Dubai’ areas.

Source: http://www.zawya.com/

The number of new properties being built is increasing but they are still way below what they were a year ago and the situation is set to result in severe shortages in years to come.

The latest figures from the NHBC show that private sector starts are 36% on a year ago although they have reached the highest point in almost a year.

The warranty and insurance provider received 8,305 applications in June 2009 for builders to start new properties in the combined private and public sectors, the greatest number since July 2008, when 9,530 applications were received. However, private sector new starts (excluding housing associations) were down 36% on the same three-month period a year ago (20,973).

There is a significant fluctuation in the number of applications across the UK, with figures for some regions, including Greater London and Merseyside, more than 50% down on a year ago.

A shortage of new build housing will emerge particularly in the South East of England next year, according to the latest Knight Frank residential development review.

New build starts in the region this year are likely to amount to the lowest since the 1950s. When combined with the lack of supply in the second-hard market, caused by the number of potential vendors opting to ‘wait out’ the recession, this could lead to a real shortage of properties for sale next year.

‘Developers who opt to move now may be in the position of being able to sell into an undersupplied market next year. However, they need to be very cautious, opting to deliver in-demand family housing into those areas with resilient housing markets. Elsewhere, a greater number of forced sales could undermine this strategy,’ said Jon Neale, head of development research at Knight Frank.

The property consultants have noticed a growing interest from residential developers and housebuilders for well located locations. This is in complete contrast to the last quarter of 2008 where there seemed to be little appetite for any form of speculative land acquisition.

But the report suggests that, given the current constraints in the market, it will be difficult for the required delivery levels to be achieved unless new models are found for regeneration schemes or more Greenfield land is released for development.

The National Institute of Economic and Social Research warned that it is a lack of available homes that is driving up recent prices increases in parts of the UK.

As a result, the think tank expects the house price slump to persist for another two years.

‘The temporary rise in prices is probably the result of limited supply. There has been talk of stabilisation and some recovery in the housing market, but we don’t think this is the case. We only see growth in the housing market returning in 2012,’ it said.

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

The United Arab Emirates is leading the way in development in the Gulf region with almost $930 billion worth of projects currently underway, according to a new report.

A study from the Kuwait National Bank says that this amounts to 45% of all projects planned in the Gulf area which amounts to some $2.1 trillion.

The report shows the extent of the boom in development in the region. The value of property construction is four times higher than had been estimated in June 2005 and represents an annual growth rate of nearly 50%.

‘The UAE accounts for by far the biggest share of project activity, totalling around $929 billion and affirming its position as the leading GCC country in attracting capital investment. Some 81% of the UAE projects are in the construction sector,’ the report says.

The report shows that the construction sector dominates in every GCC country while the total value of projects in the UAE is far higher than anywhere else. Although Saudi Arabia has a much larger base of non-construction related projects, some $224 billion which is 28% more than in the UAE. ‘This probably reflects the larger size of the Saudi economy in absolute terms, necessitating a greater degree of industrial diversification,’ the report says.

Also the higher value of non-construction related projects in Saudi Arabia stems largely from the petrochemical, power and utilities sectors. At a combined $127 billion, the value of the Kingdom’s projects in those sectors is about 35% larger than in the UAE.

The overwhelming balance of non-construction-related projects in other GCC countries comes in the oil and gas, power and utilities sectors, with the latter reflecting the region’s growing domestic power needs, the report adds.

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

Dubai property prices and rents recovered slightly in June, signaling that the worst for the sector may be over, Deutsche Bank said in a report on Monday.

The average house price for apartments and villas rose 6.5 percent month-on-month in June to AED1,285 ($349.9) per square foot, while rents rose 1.1 percent over the same period following a 10 percent fall, Deutsche Bank said in its proprietary price index, which covers 13 locations in Dubai.

“Although monthly data should be viewed with caution given the limited number of transactions, recent numbers tend to confirm the stabilization in the market we saw in May,” said Nabil Ahmed, head of research at Deutsche Bank in Dubai in comments published by newswire Dow Jones.

“This might not be the bottom yet, but the worst increasingly looks behind us,” he said.

The global financial crisis has taken its toll on the UAE’s once-booming property sector with the slump so far wiping an estimated 50 percent off Dubai prices since their peak in August 2008, Deutsche said earlier this month.

“We believe the stabilisation in prices was mainly driven by easing pressure from distress sales and potential remaining sellers now being unwilling to sell at current prices, off 50% from peaks on average,” Deutsche Bank said.

“Our industry contacts confirm that prices have tended to stabilise, even increased in some areas, but the level of transactions/ demand remains very low,” it said.

Deutsche said it still expects property prices to bottom out at the end of the year after falling a further 15-20 percent.

“We continue to see risks of further weakness on the combination of expatriates’ exodus during the summer and new supply flowing into the market in the second half of 2009. However, the worst regarding property prices increasingly looks behind us,” Deutsche added.

The latest report on the Dubai market comes just days after one senior analyst described it as one of the “riskiest” property markets of the post war era.

Saud Masud, analyst at Swiss investment UBS, said problems of over-supply and population shrinkage with thousands of jobless expatriates expected to return home when the schools break up next week, would mean continued pressure on house prices.

“In my view Dubai’s property risk profile appears to be one of the highest in the post war era and while one may debate the potential support factor from Abu Dhabi the fundamental oversupply and population dynamics risks are very much there,” he told Arabian Business.

Source: http://www.arabianbusiness.com/

What is the current situation of properties in Dubai and its surrounding states, you can imagine from the following news:

A new property regulatory authority has been introduced in Ras Al Khaimah giving a new layer of protection to real estate investors in the emirate.

The Ras Al Khaimah Investment Authority (RAKIA) Real Estate Regulatory Agency will oversee the implementation of escrow accounts law fro all freehold development projects, officials said.

Several property developers have already registered their projects with RAKIA RERA, which is similar to the Real Estate Regulatory Authority operating in Dubai, and the new watchdog will now monitor developments with a collective value of AED6 billion.

Developers can only register when their project’s concept design has been approved, which will then allow them to open an escrow account and start selling properties. RAKIA RERA will also oversee the construction by sending out a team of engineers to inspect projects.

‘The escrow account has been implemented to prevent mishandling of construction funds and ensure that investors’ money is spent according to the master plan of the project,’ said Yahia Kambris, general manager.

‘The establishment of the new real estate watchdog is an important step in our efforts to safeguard and protect the interest of investors and reinforce the reputation of Ras Al Khaimah as an attractive and practical investment destination in the region,’ he added.

Among the developers that have registered with RAKIA RERA include Select Group, the developer of Pacific; Manazil Real Estate, which is developing Marbella Bay; Pure Real Estate, developer of Blue Mirage; Stallion Properties, which is developing Santorini; and e-myproperty, developer of Bab Al Badr.

Yes Properties, developer of The Quay, is also currently completing the registration process and will soon open an escrow account.

Several banks, including Badr Al Islami-Mashreq, Bank of Baroda, Commercial Bank of Dubai, Abu Dhabi Commercial Bank and Dubai Islamic Bank, have also signed an agreement with RERA to offer escrow accounts.

Source: www.propertywire.com