Real Estate weekly digest
Baltic States: the rate of decline in housing prices has slowed in Lithuania, Latvian residential property appreciates. Dubai: the crisis is not over yet. Bulgaria: local parliament has approved a law that bans buying property for cash.
Upon the results of 2009, apartment prices in major cities of Austria have increased by 6-8%, while one-family homes have appreciated by 4%. Experts explain the growth of national housing prices by the stability of local mortgage market amid the global economic downturn, which thoroughly “fi lters out” borrowers.
Following the results of 2009, Irish home prices have plummeted by 18.5%. The average price of a residential property unit in the country has dropped to € 213,183, as of December 2009.
In Q4, average residential property prices in Latvia have gained 7.4%, compared to the preceding quarter; up to €494 per a sq. m. Prices have been growing particularly active during November-December 2009.
The rate of decline in Lithuanian housing prices has started to slow down. In Q4, the
cost of housing in nation’s fi rst-tier cities has climbed down by 4%, compared with the
preceding quarter. In, Q1, Q2 and Q3 2009, the rate of decline has been working out 11%,
9% and 6%, respectively. If such dynamics would prevail, supposedly, prices would stop
decreasing by mid-2010, which will be followed either by stagnation or recovery.
Over Q4 the cost of apartments in Denmark has increased by 1.3%, compared with the
preceding quarter, while the prices for one-family homes has climbed up by 0.2%. The
sharpest increase in apartment prices has been registered in Copenhagen, while homes
have appreciated the most on the island of Bornholm.
Within the last six months, Indian home prices have soared by 30%. This has mainly
occurred in the most prestigious districts of India’s major cities due to the limited volume
of supply. However, the future development of the situation the housing market will depend
on the stock markets.
In December, the cost of housing on Dutch secondary market has decreased by 5.3%,
year-on-year. In comparison to November 2009, the decrease works out 0.4%.
The number of transactions with Spanish residential property has increased by 5.3%,
November-to-October. It seem like the buyers have fi nally realized that the downturn
on local property market will not last forever, and have decided to buy before the prices
increase once again.
Specialists of the Nomura Holdings Inc. analytical company predict that housing prices
Dubai could decrease even further over 2010 (upon the results of 2009 prices have
plunged by almost a half). That said, in comparison to 2009, prices in the UAE capital -
Abu Dhabi - are not expected to change over 2010.
Bulgarian parliament has approved a new law, which implies the introduction of a depositsystem
designated for settling real estate transactions, in fi rst reading. According to a
new scheme, a buyer should transfer payment for the purchased property to his/hers
account in the State Bank, which would be specifi cally created for this purpose. After a
certain period of time, required for the transaction to be closed, the seller would be able
to withdraw these funds from the account.
In mid-January, new rules on taxation of property transactions have come into effect in
Israel. Currently the tax on residential property purchase is not implied if the property
costs less than 1.085 million shekels (€205.3 thousand). Previously, the transaction was
charged when property value exceeded 1.027 million shekels (€194.3 thousand).
P.S.
One of the “hottest” spots of the world, Bagdad, spends tremendous amount of money
on housing projects. Within 10 years, the government of Iraqi capital is willing to allocate
$30 billion for this purpose. Moreover, they are trying to lure those foreign investors, who
love the “hot sauce” in the country with these projects.
Alexey Lahov
