Foreign giving Russians became illiquid





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17.08.2010 11:49
The Russians, who bought up en masse to the real estate crisis in the EU, now can not sell it. The number of troubled assets to the real estate market has increased so that in 85% of the world customers refuse to buy a home even with a huge discount.

As estimated by experts of the Royal Institute of certified appraisers (RICS), reducing the demand for distressed property or "problem" Property today occurred in 85% of the world. To clarify this, in the second quarter of 2010 on this indicator revealed an upward trend. Thus, the number of transactions in real estate concern, has increased in 13 out of 25.

In the first quarter of 2010 the increase was recorded in 17 countries. The study says that more successful than others in the second quarter 2010 sales of "hard" real estate moving to Portugal, Ireland and the USA. In three countries, Portugal, Spain and Germany to increase the number of deals with "problematic" real estate is most noticeable.

A positive trend, indicating a decline in illiquid assets, found in Brazil, Russia, India, Canada and China. Experts believe that the third quarter of 2010 will be a turning point for this market segment. The number of objects that are "problematic" history, will increase in the third quarter of 2010, half of the 25 countries. In the second quarter this figure had risen to 18 countries. Reports suggest that the number of distressed assets particularly sharp rise in Ireland, Portugal, Scandinavia and Spain. Most of all get rid of "unwanted" property in the first quarter of 2010 attempted to Irish and Americans.

Sale on the Cheap
According to Julia Titova, director of real estate agents Rentsale, under the subject property can be understood as different things (buildings built without permission, not divided among the heirs of the estate, etc.). "Most likely in this context, it comes to real estate collateral, which banks are selected by the court from the owners for nonpayment, and now sell it. This segment is now in demand ", - said Julia Titova.

Director of International Investment IntermarkSavills Igor Indriksons to the subject real property includes assets that have recently, in the midst of crisis, it was commonly called distressed assets: Owners motivated to sell real estate, buys mutual funds with a considerable discount.

"Why have decreased the problem of such a property? Because all sold out, only in London real estate bought up blocks. In January 2010, here you could buy an office building with a return of 12-14% per annum. Today, that figure fell to 6%, that is the price of the building doubled. As a result, six or seven months out all the funds that could buy on the cheap ", - explains the expert.

In particular, these distressed assets were formed in many countries, where there was a widespread mortgage. For the Russian market this situation is actively represented on the real estate market in Spain. "Banking offers here a lot, but really of interest for the Russians totally piece things.

Thus, of the thousands of proposals may be three to five challenges. Demand for Russian buyers in Spain fell in response to the crisis and long, yet many are attracted just such collateral objects. They must be treated very carefully and cautiously. If the purchase is done for personal use, I would not advise to focus on such options, "- said Julia Titova.

Fishers Spanish mining
The company IntermarkSavills agree with the report of RICS. According to Igor Indriksons, the most difficult situation today is really from Spain, which now stands in second place in the EU after Latvia, the number of unemployed.

The main problem of Spain, taken back in the 80-ies of the economic policy of uncontrolled building their resorts for the sake of attracting investment and replenishment. The main buyers of the housing on the coast were British: the number of permanent residents in Spain close to 1 million people.

However, Britain has suffered greatly during the crisis, and the pound collapsed. Today, sales of housing in Spain are growing, but experts believe that the growth of prices in the coming years are not affected. Rather, they may fall further by 5-10%.

According to Mark Staklina, owner and editor of the Spanish Property Insight, an expert on the Spanish real estate today to sales of own Spanish homes Britons often pushes low rate of the pound, to compensate for losses from the sale of housing in the reverse transfer of funds to the British currency.

As a result, the hardest hit demand on the coasts, where most of the real estate is a holiday home, and the demand for "beach" home always disappears during a recession.

Mark Staklin speaks to the fact that the market had gone speculative investors during the boom constituted a large part of it. The only investors are still bargain hunters and fishermen bottom ", which, he believes, is hardly able to revive the market.

Spain is waiting for stability
According to the Society of Appraisers Spain Sociedad de Tasaciones, SA, during the first half of 2010 average price per square meters of new housing in the capitals of the Spanish provinces fell by 0,8% compared to December 2009.

As a result, the average price per square meters of new housing in the provincial capitals at the end of the first half of 2010 decreased from 2,589 euros per square meters. m on 31 December 2009 up to the mark in the 2,537 euros per square. m «construido» on June 30, 2010 (falling to 52 euro per sq. m). For residential real estate area of 100 square meters. m at the new price is equivalent to 253.7 thousand euro.

How much housing in the Spanish capital?
In the capitals, occupying the first three positions among the most expensive cities on the value of real estate in Spain, the price of housing has changed little: in Barcelona, it was 3907 euro per sq. m (for the year the price dropped to 134 euros per square. m, or 1,4%), San Sebastin-Donostia-3776 euros per square. m (minus 46 euros per sqm. m per year, or 0,6%). In Madrid, the price dropped to 3360 euros per square. m, down 35 euros per square. m per year, or 0.4%.

Experts Sociedad de Tasaciones, SA expect that the number of new housing, free for sale, will be gradually reduced. Rhythm reduce inventory proposal will depend on the number of completed construction projects, which still actively contributing to this trend (number of new income housing market in the first half of 2010 decreased by 65% over the same period last year), the study said.

The evaluators believe that the potential demand for housing in Spain there, although at a lower level than in the pre-crisis periods. His recovery will depend on the financing of credit and investment sector, lower prices for new housing due to the profitability of projects and the financial strength of developers. And, of course, on the economic stability in the country, which can improve only by the end of 2011.

Attempts to clear the subject property in Ireland Igor Indriksons explains that the boom in "green dragon", as referred to Ireland, in the real estate and the economy is over: today it is increasingly dependent on Britain. And if England is now being actively restored, then Ireland went into a dive, and the real estate market of the country cools down.

The economy of Ireland has suffered from the crisis is particularly strong, since excessive lending led to a construction boom, which abruptly ended in late 2008. As a result, the country was the first representative of the European Union, felt the impact of the recession, out of which Ireland was only in the first quarter of this year. Ireland`s GDP in January-March, according to official statistics, increased by 2,7% compared with the previous quarter, but fell by 0.7% in annual terms.

"The real estate market Scandinavian countries are more or less stable: they are variations in the 3-5% are considered to be frivolous. In the U.S., as anticipated a year ago, segregate the market. Where not given subprime-mortgage loans, because of which there was a global crisis, is raising prices. And in those areas where the loans were given, a fall in prices continues, and such areas in the U.S. is much more "- explains in IntermarkSavills.

Insidious Commission
As suggested by Igor Indriksons, at this crisis, the Russians lost the most, as our compatriots originally bought the most illiquid proposals that could be collected all over the world, including property in Bulgaria, Spain, etc. "This whole property is now impossible to sell, the demand for it microscopic, and the price continues to fall. We came to the illogical, seem to be situations where the property is sold at below cost. And this is exactly happening in Spain ", - said Konstantin Kovalyov, managing partner of Blackwood.

The reason for the Russian boom in the European unmarketable, experts say, is that agents that promote these offers, pay a higher commission than facilities in other countries. "The average commission on international markets is around 1-4%. Bulgaria offers a commission of 15-20%, only to agents to sell. Developers, in turn, such commissions are not paid, they just throws on top of the price, and pays the buyer. So, back in 2006 nobody was selling agent in England for 1.5%, all sold to Bulgaria with a commission of 12% ", - says Mr. Indriksons.

Housing prices in Spain`s slow decline
In the hands of illiquid assets
Today, owners of non-profit housing, which is no longer any pass or sell it at a profit, according to Konstantin Kovalev, unable to sell their assets. "Their liquidity is uniquely low, the sale of such housing in 90% of cases is doomed to failure, to overcome the crisis and not rely on the income. You can suggest yet to leave his house and keep it up to the best of times ", - said Kovalev.

"In Spain, about 1 million worth of homes on the coast are those who sell them?" - Asks Igor Indriksons. He said, rents in countries with illiquid assets minus and is close to zero, since the homeowners is its content. And get rid of the estate of our compatriots are trying to price of 500 euros per square. m in Bulgaria and up to 1000-1500 euros per square. m in Spain.

Market experts are advised to purchase such property to Russians only if they want to buy it for himself, without regard to the investment attractiveness of the object, and the impossibility of selling it for many years. Apparently, such a house can be useful if another occurrence of smog in Moscow.
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