Property Investment

The recovery in the US residential real estate market is continuing to mature with Spring buying activity started to take marginal effect on short term price trends, according to the latest analysis from Clear Capital.

Its latest report also shows that quarterly, national and regional gains saw a slight uptick over April but price growth remains mixed at the metro level.

The West, South, Northeast and Midwest saw quarterly gains of 2.4%, 1.1%, 0.8% and 0.7%, respectively while nationally, home prices saw a 1.3% quarterly gain, and a 8.2% annual gain.

But the data shows that price trends at the national and regional levels can tell a very different story. Las Vegas saw yearly gains soar by 27%, surpassing the yearly gains of 25.7% in Phoenix. This is the first time since April 2012 that Phoenix has not led the top 50 major metro markets in yearly gains.

While Las Vegas yearly gains continue to pick up steam, the market has a long road ahead, according to Alex Villacorta, vice president of research and analytics at Clear Capital.

‘Current prices remain 57.1% below the peak and would need to climb another staggering 133.3% to reach peak values. It would take Las Vegas home prices nearly four years at the current annual growth rate of 27% to get back to 2006 levels. While this is unrealistic over the short or even mid term horizon, it puts the current gains into context,’ he explained.

He pointed out that Phoenix, on the other hand, has seen a slight moderating pattern over the last several months, a healthy move for a market that has been very hot over the last year. ‘This market also has a long road ahead, with prices still 45.9% below their peak,’ he said.

Source: http://www.propertywire.com/news/europe/us-real-estate-mature-201306067865.html

Pending home sales in the United State improved slightly in April and continue to be well above a year ago, according to the latest report from the National Association of Realtors.

Price gains in the Northeast and Midwest of the country were offset largely by declines in the West and South.
Overall the Pending Home Sales Index, a forward looking indicator based on contract signings, rose 0.3% to 106 in April from 105.7 in March, and is 10.3% above April 2012 when it was 96.1.

Home contract activity is at the highest level since the index hit 110.9 in April 2010, immediately before the deadline for the home buyer tax credit.  Pending sales have been above year ago levels for the past 24 months.

Lawrence Yun, NAR chief economist, said a familiar pattern has developed. ‘The housing market continues to squeak out gains from already very positive conditions. Pending contracts so far this year easily correspond to higher closed home sales in 2013,’ he explained.

Total existing home sales are expected to rise just over 7% to about five million this year. ‘Because of inventory shortages, higher home sales will push up home values to the highest level in five years,’ Yun said.

The association is also predicting that the national median existing home price should increase close to 8% and exceed $190,000 in 2013.

The PHSI in the Northeast jumped 11.5% to 92.3 in April and is 17.7% above a year ago. In the Midwest the index rose 3.2% to 107.1 in April and is 15.1% higher than April 2012.  Pending home sales in the South slipped 1.1% to an index of 119.2 in April but are 12.3% above a year ago. With pronounced inventory constraints, the index in the West fell 7.6% in April to 94.6 and is 2.6% below April 2012.

Meanwhile, in the commercial real estate sector vacancy rates have fallen modestly and rents risen moderately as financing remains a challenge for small business, according to the NAR quarterly commercial real estate forecast.

Source: http://www.propertywire.com/news/north-america/us-real-estate-market-201306047856.html

Pending home sales in the United State improved slightly in April and continue to be well above a year ago, according to the latest report from the National Association of Realtors.

Price gains in the Northeast and Midwest of the country were offset largely by declines in the West and South.
Overall the Pending Home Sales Index, a forward looking indicator based on contract signings, rose 0.3% to 106 in April from 105.7 in March, and is 10.3% above April 2012 when it was 96.1.

Home contract activity is at the highest level since the index hit 110.9 in April 2010, immediately before the deadline for the home buyer tax credit.  Pending sales have been above year ago levels for the past 24 months.

Lawrence Yun, NAR chief economist, said a familiar pattern has developed. ‘The housing market continues to squeak out gains from already very positive conditions. Pending contracts so far this year easily correspond to higher closed home sales in 2013,’ he explained.

Total existing home sales are expected to rise just over 7% to about five million this year. ‘Because of inventory shortages, higher home sales will push up home values to the highest level in five years,’ Yun said.

The association is also predicting that the national median existing home price should increase close to 8% and exceed $190,000 in 2013.

The PHSI in the Northeast jumped 11.5% to 92.3 in April and is 17.7% above a year ago. In the Midwest the index rose 3.2% to 107.1 in April and is 15.1% higher than April 2012.  Pending home sales in the South slipped 1.1% to an index of 119.2 in April but are 12.3% above a year ago. With pronounced inventory constraints, the index in the West fell 7.6% in April to 94.6 and is 2.6% below April 2012.

Source: http://www.propertywire.com/news/north-america/us-real-estate-market-201306047856.html

The property market recovery in the British Virgin Islands continues. In 2012, home sales were quite strong at both the top-end of the market, as well as in the under-US$ 1 million range, according to Coldwell Banker Real Estate BVI’s Chris Smith. Homes costing from US$ 1 million to US$ 5 million are considered the softest market.

In early 2011, the price of luxury homes remained static. It gained momentum during the second half of the year due to asking price re-assessment done by vendors that caught the attention of property buyers, according to Knight Frank’s Caribbean Desk Head Christian De Meillac.

“The small size of the BVI property market, along with the continued demand and the limited supply, has helped support prices,” De Meillac added.

European buyers dominate the BVI’s luxury market, accounting for 60% of luxury sales, according to De Meillac.

Properties in the main islands of Tortola and Virgin Gorda are popular with foreign buyers, particularly the western tip of Tortola, near Smugglers Cove and Long Bay Beach. Homes with private moorings attract yachting enthusiasts. Demand for waterfront properties is also high.

Potential investors are not only looking for houses, but for land to develop—and the BVI is still largely undeveloped. In BVI, land can be bought starting at around US$ 100,000, versus around US$ 500,000 for developed properties.

Although the housing market is strong, the decline in tourism has been a problem since 2008.  Premier and Minister of Tourism Premier Dr. D. Orlando Smith has proposed new port facilities to accommodate larger ships.

The economy’s “twin pillars”

The British Virgin Islands has one of the Caribbean’s most prosperous economies. After a slump in 2002 (-3.3%) and 2003 (-12%), the BVI bounced back with average annual GDP growth of 5.1% from 2004 to 2007, and then 3.2% from 2008 to 2011, according to the UN Statistics Division.  Growth in 2012 is believed to have been 4%.

For 2010 and 2011 the BVI had low inflation of around 2.4% and 2.3%, respectively.

BVI’s economy is supported by the “twin pillars” of financial services (which account for 60% of GDP), and tourism, which is most of the rest.

BVI’s tourism sector has been in a slump since the financial crisis. In 2009, total visitors to the BVI fell by 8.6%, according to the Caribbean Tourism Organization.  In 2010 visitors were down 0.9% despite stop-over visitors rising 7%, and in 2011, total visitors fell 1.1%. As of November 2012, the BVI had 302,647 stop-over visitors, a 0.3% decline. The decline in cruise passengers has worsened in 2012, falling by 19.4% to 390,579 from 484,715 in 2011.

During his budget address in December 2012, Premier Smith, who is also the Minister for Tourism, pointed out that BVI will continue to experience a decline in cruise ship arrivals unless the government builds new port facilities to accommodate today’s most popular cruise line ships.

Source: http://www.globalpropertyguide.com/Caribbean/British-Virgin-Is/Price-History

Mexican Real Estate Investment Trusts are becoming more popular with both domestic and foreign investors opting for this form of investment which is currently outperforming the wider stock market.

The trusts, known as fibras in Mexico, were debuted in the country in 2011 with the launch of the Fibra Uno which was the only trust until late 2012 when others entered the market. The others now include Fibra Hotel, Fibra Macquarie, Fibra Inn and Terrafina.

‘The attraction at the heart of the fibra is the ability to invest in property without having to buy a building,’ said Andre El-Mann, chief executive of Fibra Uno.

He said that Fibra Uno is up 12.8% year to date, compared to a 0.75% rise in Mexico’s main stock index. Fibra Macquarie is up 13.3% while Fibra Hotel has risen 15.2%.

Experts point out that Mexico’s business properties look attractive compared to countries like Chile, Colombia and Brazil, with Mexico City rents some 40% below those of Sao Paulo.

The success of the fibras coincides with new President Enrique Pena Nieto’s ambitious economic reform agenda that has stoked interest in Mexico’s booming financial sector.

The fibras also offer a way to bet on infrastructure outlay and investment plans expected under the new government, according to Rick Hoss, portfolio manager of Euro Pacific Latin America fund.

‘With these REITs not only do we like the stability and the dividend but we think that the capital appreciation associated with it is probably the best opportunity,’ he told Reuters.

Manuel Gutierrez, the head of Credit Suisse Mexico, said half of the most recent investors in fibras have been foreign, many from the United States and Europe.

In total, Fibra Hotel and Fibra Inn, which are focused on the hotel sector, and Fibra Macquarie and Terrafina, focused on industrial property, have issued about 32.8 billion pesos.

In the past, properties were owned by families who used them as a stable form of income. But in the last decade an increasing number of private consortiums have entered the market.

Fibra Uno began with just 13 properties in its portfolio. By the end of 2012 it had 279 on its books.

More fibras are expected to be launched. Pedro Aspe of investment advisory firm Evercore Partners said that he expects up to 20 new fibras will enter the market in the next five years.

Source: http://www.propertywire.com/news/south-america/mexico-real-estate-property-trusts-201304227695.html