Effect of terrorist attacks on India Property Market

The recent terrorist carnage in Mumbai has pushed India into the spotlight with many questioning the horror and condemning those responsible. In the aftermath of the attacks, concerns have been raised about the country’s financial and commercial economy with attention drawn to the deceleration of the Indian property market.

India’s property market was previously thought to be a ‘crunch-free haven’, being seemingly unaffected by the recession. Merrill Lynch had even predicted a 700% increase in property prices from 2005 – 2015, yet evidence has now shown a damaging slow down in home sales.

The immediate response to the attacks with property advisors revealing a massive loss of pace in enquiries and sales of properties in many areas of India. Concerns are rife that because British and Americans were targeted in the attacks, there has been a vast loss of interest in property entrepreneurs from these countries. There are also worries of more attacks resulting in property demand decreasing further.

The terrorist attacks are not solely the reason the markets in India have been falling back. Recent months have already seen a great deal of pressure on India’s property trade with predictions of land prices falling by a quarter in the coming year. The recent attacks have magnified the flailing market but the real causes being the uneven supply and demand in property with there being more property than people are actually willing to buy. With the recession diminishing confidence in buying property, interest rate upsurges together with the rapid rise in home prices help to slow sales of properties. There is also the ‘wait-and-watch’ effect with many potential investors waiting for prices to drop so they can take full advantage so there is hope for a pick-up sometime soon.

In the short-term there has been an effect as a result of the attacks but it is important to remember that the property market was already sluggish before the attacks.

But bargain hunting anyone?

Trump bumps India up the overseas property ladder

New York-based Trump Organisation has plans for India - big, big plans. On the one hand, US-based billionaire Donald Trump is wooing potential buyers from India for his 45-storey Trump International building coming up in Manhattan and on the other, Trump Jr is setting up a $1bn (£500.5m) fund to buy property in India.

Astute property investors are hedging their bets on the likely outcome of this sudden rush in Indian property investments and developments. It could all come crashing down like many other property markets or it could see an influx of foreign property investors.

The Indian property market is growing year-on-year, mainly because of the growth in the middle classes. However, the developments that will potenitally be on offer by the likes of the Trumps are high-end therefore not affordable by the middle classes.

Driving through the different towns in India, it's not unusual to see abandoned half-built developments. Once promising, these high-end property developments now lie barren due to investor pull-outs, untrustworthy suppliers and most of all, lack of interest from the Indian buyers. There is a definite over supply of properties in many parts of the country yet a rosy picture is being painted for foreign investors.

Polical strife in Thailand puts investors off

Overseas property investors can strike yet another destination of their list. Violent protests in Thailand which left one person dead and 43 injured have put a black cloud on the otherwise booming property market in Thailand.

Thai stocks are set to fall, with fears of further political unrest dominating the market.

Credit Suisse Group are advising investors to avoid stocks in Thailand and to re-think property investments. A statement from them suggested violence will continue and the country will soon become 'ungovernable'.

British holidaymakers are being warned to avoid trouble-hit Thailand unless it's very essential. Frequent attacks, including bombing and shooting, due to insurgency and civil unrest continue.

Going Green Could Save You Green

Energy Efficient Homes provide hope to Property Investors

Carbon appeal is set to surpass 'kerb appeal' for property buyers claims a new research from the Energy Saving Trust. The survey reveals that energy efficient homes could be a vital driver to keeping the property market moving in the current doom and gloom climate. The study results show that half of UK homeowners believe homes with greener features are easier to sell in the current market and 53% of all householders say they would be willing to pay extra for them.

The research reveals however, that estate agents could be under-selling the value of greener homes through a lack of information.

Despite the fact that householders are willing to pay on average £3,350 more for a 'green' home, almost half (49%) feel that estate agents don't put enough value on a home's green features and 56 per cent feel that estate agents don't know enough about energy efficiency performance.

There is a clear appetite for clearer information however, as two-thirds (66%) of householders would like more guidance from estate agents on the likely running costs of a home.

The research also indicates that failing to pay enough attention to a home's 'carbon appeal' could make it harder to sell, as over three-quarters of those surveyed (78%) agree that having 'poor' energy rating on their Energy Performance Certificate (EPC) could lead to buyers haggling down the price of a home on the market; furthermore two-thirds (66%) agreed that in light of the current economic climate, home-buyers are more likely to consider the EPC to ensure a home has lower-running costs.

India’s "crunch-proof" property market brought to London by Navyroof.com

As house prices in London and surrounding areas are in freefall, some selling for over £50,000 less than originally purchased, London property investors are looking to India for profitability where Merrill Lynch has predicted a 700 per cent increase in property prices by 2015.

A seminar at the City Hotel, Brick Lane, London, at 7pm on September 17th will give London property investors valuable information on how they can benefit from investing in India’s thriving property sector.

It is hosted by Navyroof.com – the company that brings investment opportunities from the most up-and-coming areas of India to the UK.

Attendees will gain detailed knowledge of the Indian economy and the long term sustainable factors driving its rapid growth; they will also discover the areas that give the greatest capital appreciation on investment and will have the opportunity to listen to expert guidance on the purchasing process. The seminar will cover all aspects of the market, including Indian property law, to give investors all the information they need to escape the doldrums of the UK property market and to take full advantage of India’s booming economy.

Mother IndiaThe seminar will also explain how London’s non-resident Indian community can give back and profit by investing in their motherland.

India’s strong economic growth reflects the profound changes occurring in society. Over half of India’s current population is under 25, giving India the world’s largest population of workers and consumers by 2020. Increased urbanisation and modern young Indians preferring to live on their own means demand for housing has never been higher. Mortgage lending increased tenfold between 2000 – 2005 yet the ratio of mortgages to GDP remains low, which shows the massive potential in the property market.

Andrew Fassnidge, Managing Director of Navyroof.com said, “This seminar will show both UK investors and non-resident Indians how easy, effective and profitable investing in India can be. All the economic indicators project a bright, sustainable future for India with Merrill Lynch predicting a seven-fold increase in the Indian property market by 2015. In the last two years alone, property prices in India increased by 70 per cent. Industry commentators are mooting that whilst the USA and Europe look to be involved in an economic downturn, emerging markets such as India, may be the ‘crunch proof’ economies. Anyone with even a small amount of capital should come along to the seminars to find out what opportunities there are for them to escape the UK property decline.”

Invest In India Seminar Harrow 3rd September - 7pm

Invest In India Seminar Brick Lane 17th of September - 7pm

Invest In India Seminar Hounslow 23rd of September - 7pm

Attendance can be secured for the 17th of September by signing up at http://www.navyroof.com/ or calling 020 7242 2452

Morocco rules the roost this week

Morocco was rated one of world's top elite destinations in a recent article in the Home Overseas. This North Africa country has displaced other leading investment hotspots such as Australia and Slovakia. No surprises as Morocco not only offers affordable house prices but has recently seen a democratisation of public life, education and health, and strengthening of basic infrastructure leading to both social and political stability.

Investing in Morocco could potentially lead to high return and it offers great investment potential for overseas property buyers. Among the advantages of investing in Morocco, the low cost and the high quality of labour leads the way; closely accompanied by their policy of structural reforms which attract the interest of the investors.

Costa de la Luz in Spain and other beach areas have been overbuilt and are therefore over-priced. These escalated prices have lead investors to look to Morocco. It offers the same sunny weather, the same Mediterranean coast and is only 9 miles away in northern Morocco at sometimes 1/10 of the price.

As the property market in the UK shows no signs of improvng, investors can choose from a number of foreign destinations offering great returns.

The 10 easiest UK postcodes to sell property

From the Times (Full article)

Some interesting stats and facts:

- In June 2006 there were 124,000 homes sold in England and Wales.
- In June 2007 there were 105,000 properties sold. (A drop of 15 per cent)
- So far, just 17,681 sales have been recorded in June this year. (A drop of 83 per cent)

Here are the ten postcodes that registered the highest number of sales in June.

1.CV6 (Coventry): 44
2. CR0 (Croydon): 40
3. S6 (Sheffield): 36
4. BN3 (Hove): 35
5. SW19 (Wimbledon): 35
6. BN1(Brighton): 34
7. E14 (Poplar): 34
8. ST5 (Newcastle-under-Lyme): 34
9. FY8 (Lytham Saint Annes): 33
10. SG2 (Stevenage)

Dubai in danger of property 'overheating'

Dubai property prices could be down by 10% by 2010, according to a new report. This is despite the opening of Concourse 2 at the new Terminal Three which will ease the overcrowding at the Dubai Emirates Airport. One would have thought that with the opening of this $US4.1 billion terminal, property prices would have direct positive impact.

But investment Global Investment Banking firm, Morgan Stanley predicts otherwise. Prices in the Dubai property market have risen a massive 79% since the start of 2007. Morgan Stanley report concludes that oversupply to hit Dubai in 2009, will leading to a period of price declines.

Panama - the latest property hotspot

Following John Darwin's exposẻ, the media has paid a lot of attention to Panama City. Mr Darwin faked his own death in a canoeing accident four years ago in order to enjoy a new life overseas with his wife. The media highlighted the lifestyle options that made Panama an attractive destination.

The 20 year tax exemption for buyers in Panama, good health care provision, and cheap property prices makes this Central American country hugely attractive to property investors.

More and more British property investors are looking to invest in emerging markets to reap the rewards the property boom first promised.

Caribbean beaches can look at $25 million worth of investment and 1.4 million cubic metres of sand

The Dominican Republic is spending $25 million improving its beaches to make them more attractive to visitors. It is part of a wider plan to boost tourism as officials are worried that cuts in flights from the US and other problems such as the recent power cuts could seriously hit the number of people interested in investing in the country, the second largest island in the Caribbean. Full article

Home Resales Decline to 10-Year Low in the US

Latest Bloomberg reports suggest that sales of previously owned U.S. homes fell to the lowest levels this June. This is the worst hit in the last ten years and due to plummeting real estate prices and buyers confidence the housing recession is now in its third year and there are no signals of things looking up. Full article

£18,000 drop in property prices in the UK

Daily Mail, in its latest article about property prices in the UK discusses a new report from property website Rightmove. The report said that in the past two months the average asking price across England and Wales has dropped by £7,281 to £235,219. Just two per cent below the average in July last year, this is the first time Rightmove has recorded an annual drop since it began in 2002. Full article

Aparthotels: the safer property investment option

The latest trend in property investment: an Apartment + a Hotel = Aparthotel

Aparthotels are typically a three-star or higher hotel property looked after by a management company that takes care of all the hassles of ownership, including maintenance and finding hotel users. They typically offer the investor the opportunity to own a plush hotel room that can provide a monthly income.

While the natural choice for a lot of the property investors in the UK would be to invest in London, with the 2012 Olympics on its way, many investors are also looking abroad at holiday hot spots where hotels rooms are in demand all year long.

This trend is still setting in but a few early adopters such as GuestInvest and HomesGoFast are already profiting from it. In their blog, HomesGoFast mention the surprising speed with which these properties sell out highlighting the MGM Grand in Las Vegas, a 576-unit condo hotel, which was expected to sell out in two years but instead sold out in two months! The Platinum, a 255-unit property in Las Vegas, also sold out in just a matter of a couple months. The reason, they feel is that the armchair investor feels secure in this type of development and one that appears to look after itself.

As for us, we think only time will tell. In the current property climate one has to tread with care. The lack of flexibility, the concept of selling a hotel room to another buyer, renovations, and most importantly chances that the hotel might not do very well might make Aparthotels a less exciting proposition than it seems at the moment.

UK Property news round up for the week:

Gloom and doom in June

UK house prices fell by 2% in June, according to the UK's biggest mortgage lender, the Halifax. However the latest survey conducted by Nationwide shows that house prices fell by 0.9% on average in June. Contradictory, as always.The average price of a home is now £180,344, nearly 10 per cent lower than when house prices peaked in August last year. Homeowners who bought a home last year with little or no deposit are now facing negative equity. However, average UK house price remains 2 per cent higher than in June two years ago and more than 10 per cent higher than in June 2005, according to Halifax. A pretty clear indication that the British housing sector still has some way to go before it reaches an all time low.

(Graph Source: BBC News, 1 July 2008)

Several job cuts in house building sector

The latest of the UK House Builders to announce job cuts is Barratt Developments. After a tough couple of months and an even more challenging period ahead, they’re looking at cutting 1,200 jobs by closing two divisions and merging other parts of their business. Earlier in the week, well-known home builder Persimmon announced that the company will reduce its full-time headcount by 1,100 and its flexible workers by 900, cutting its total staff from 5,000 to 3,000. They admitted that profit margins had fallen from 20.8 per cent in the first half of last year to just 14 per cent in 2008. The sector's jobless toll is touching 4,500 so far this year.

Banks set 5% mortgage

Borrowing costs remain unchanged for the third month in a row by Bank of England. Following their latest meeting, Bank of England has decided to keep the interest static at 5%. . Homeowners and businesses hoping for an interest rate cut as economic crunch bites are unlikely to get any joy from the policymakers.

More Falls?

Another recent forecast by Halifax predicts that UK house prices are set to fall by 9% this year - having revised their views from February that the market would be "flat" in 2008. Things seem to be going from bad to worse in the UK property market but some people are still optimistic. A list of the ten most recession-proof UK counties was published by the Times earlier yesterday. The top three resilient counties which didn’t get affected by the economic hit were Oxfordshire, Hertfordshire and Isle of Wight. City of Westminster house prices were up by a whopping 26.4%. The list was based on the asking prices of homes on Rightmove.co.uk, which displays details of around 90 per cent of all property sales across England and Wales. Looks like the housing market might not be so bleak after all!

Dubai with a twist

With this new swirling building in the making in Dubai, UK property investors can add something unique to their property portfolio. The spinning skyscraper, the Dynamic Tower, is being designed by architect David Fisher. The 420-metre tower, offering a hotel, offices and flats, is permanently on rotation.


Fisher told The Times: “The idea came when I was in Miami. A friend told me that one apartment, which overlooked the ocean, was worth $3million but another, which, didn't was worth $1.8million. I started thinking about this dynamic tower.” Full article


(Image source: The Times, 27th June 2008)

The 10 worst property investments ever

The Times have put together a list of the ten worst property investments ever. Projects gone wrong, disagreement between developer and investor, property feud, financial difficulties and more. I'm sure you've heard the expression, ‘If something sounds too good to be true, it probably is.’ Well, in the investment world, they say, ‘If something sounds too good to be true, it definitely is.'

Read article here

First-time buyers trapped by rent rises

From: The Times

The dream of homeownership has slipped farther from the reach of first-time buyers, who have been unable to afford a home because of the credit crunch.

Full article