Home loans go under hammer online

The Internet is proving to be an exciting new frontier for property transactions. Going beyond websites that highlight the best buys, homebuyers can now take a virtual seat and participate in real-time auction happenings over the worldwide web.


Some of these sites are so creative that houses are even offered to the lowest, unique bidder! Thus, by law of natural progression, it comes as little surprise now that home loans too are being put under the hammer in cyberspace.


Believed to be the first scheme of this kind in the world, and not just over the Internet, New Zealandbased website Fundit.co.nz has hundreds of Kiwis rushing online to auction their mortgages to the best home loan financial institutions can offer. Put simply, lenders compete directly for the borrower’s business.


According to the site’s webmasters, Fundit aims to help borrowers, first-time homebuyers and property investors by arranging online auctions and attracting banks and other lenders in the market to bid for their business.

And the website says it has already conducted more than 500 such auctions since it was launched last year, all of which have proven successful.

The financial institutions currently bidding online with Fundit include established names such as the Bank of New Zealand, Kiwibank, First Mortgage Trust, Loan and Building Society, Southern Cross Finance and Southland Building Society.

The Bank of New Zealand, which has been a significant participant in these auctions, reported a surge in its share of the mortgage market since the website was launched.

Property experts in the country are also giving the concept the thumbs up, saying the scheme challenges mortgage brokers as New Zealand’s property market continues to tighten.

Fundit arranges the auction process at no charge to the borrower, and online, they can see lenders compete directly for their business.

A former chairman of finance agency Mike Pero Mortgages, Abigail Foote, described Fundit as “a fresh approach to finding a home loan at a testing time in the property market”.
“The housing market is becoming tighter and I believe this will give homebuyers an edge they need to get the best mortgages out there... lenders who aren’t on emerging websites such as Fundit may shut themselves out of a key part of the home loan market.” - Chris Prasad

Singapore REITs may merge as Credit Squeeze Tightens

Singapore's once booming real estate investment trusts (REITs) may face a round of mergers to weed out the weak who find it increasingly tough to raise funds and refinance loans because of the global credit crisis.

At least six of Singapore's 20 listed REITs are valued below what their properties are worth, as are many trusts in Japan and Australia, which means expansion is hampered by higher financing costs and investor returns are limited.

Some of the trusts will face higher interest payments when they need to refinance their debts in coming months, leading to lower earnings and distribution to unitholders.
"I would expect consolidation to gather pace in the course of the next 6-12 months," said Tony Darwell, head of Asian equity research at Nomura. "The cost of debt has risen and it is impacting everyone, especially entities that are highly geared."

For investors, many of whom are already steering clear of property and other assets that rely on debt financing, the takeover speculation means some REITs such as Macquarie MEAG Prime may get bid up to prices closer to book value.

But others such as Mapletree Logistics Trust could see their shares fall further, due to large amounts of debt on their books.

"Singapore's REIT market is still young and shouldn't have reached the stage for consolidation, but the situation now is quite conducive (to that)," said Credit Suisse analyst Tricia Song.
Singapore's market for property trusts, Asia's third largest, has grown rapidly since 2002 when the first REIT, CapitaMall Trust, went to market. The industry has since grown to 20 REITs worth US$19 billion (US$1 = RM3.19), although that number may shrink as at least two players are up for sale.

Acquisition targets include REITs trading at high yields, at large discounts to book value, or with quality assets that bigger funds could be interested in, Song said.

Industry experts say the first Singapore REITs that may be taken over will be those that have ties to firms or property funds in Australia, Asia's biggest property trust market.

Macquarie MEAG Prime REIT, which owns two large properties on Singapore's Orchard Road shopping belt, said it may sell assets or go private after main shareholder Macquarie received unsolicited offers for its 26 percent stake.

Allco Commercial REIT, which owns office properties in Singapore and Australia, is being closely watched as its Australian parent, Allco Finance, is trying to sell assets to meet debt repayment deadlines.

"The yield is so high at 9 per cent; Allco REIT can't raise capital and their debt is due soon. They need to do something soon," said a hedge fund manager.

Allco in November dropped plans for a S$150 million (S$1 = RM2.29) share sale due to weak markets. In January, Moody's cut its credit rating to "Ba1", or junk, from a "Baa3" investment grade rating, citing potential problems in refinancing S$550 million in short-term debt due in July.

Other REITs downgraded or placed on review for downgrade this year include MMP, Mapletree Logistics Trust and Suntec REIT, on concerns of refinancing risks.

Suntec REIT last week closed a five-year convertible bond issue worth S$250 million at a 4.25 per cent yield to maturity, much higher than its average financing cost of 3.13 per cent as of end-December.

"Credit spreads have widened significantly over the past month. We believe this is likely to place pressure on both the cost and availability of future debt," Merrill Lynch analyst Melinda Baxter said in a note to clients last week. - Reuters

The RM312mil land deal with the country’s most reputable university, University Malaya

After long speculations, finally University of Malaya (UM) announced that the university through its investment arm, UM Holdings Sdn Bhd, has agreed on a joint venture with a consortium, PPC-Mint and Glomac, to develop a parcel of land measuring 11.13ha. The land is located within the UM’s main campus and adjacent to the thriving and flourishing area of Damansara/Bangsar.

In a statement released by the university last week, it revealed that the joint venture will generate the university with a minimum income of RM312 million or the land value of RM200million plus a share of the developer’s profit, whichever is higher. The UM deputy vice-chancellor (academic and international relations) Prof Datuk Dr Mohd Amin Jalaludin also highlighted the land would be developed to benefit staff and students.

The development of University Malaya’s main campus is not something out of the blue. In fact, many developers have had their eyes on this strategic land. However, the development of the university land seems to be quite sensitive and controversial. Some developers had denied that they were keen on it, and tried to distant themselves from being involved. Goucoland, a subsidiary of Hong Leong Group is one of them. So when the university announced the joint venture proposal, it actually shocked several parties.

A few interesting points here on this deal:

a. There is no explanation or clarification from UM’s statement about the mode of payment on how the university will receive their profit.

b. No justification on how the most reputable educational institutional in the country make its decision on the development proposal. Simple question arise, why Glomac? Why not Sunrise, IOI, SP Setia, YTL, IGB, IJM, etc? The decision process is not transparent.

c. According to the statement, eight developers were invited to submit development proposals but only five did. The question arising here is who were the eight shortlisted?

d. The students from the university are facing problems of accommodation shortage. Is it advisable to dispose the university’s land for development or build more hostels for the graduate?

The Location Plan of the UM Land

Note:
The members of UM Holdings are Prof Amin, Prof Emeritus Tan Sri Dr Augustine Ong, Anuar Mohamad, Azhar Haron and Prof Dr Muhamad Zakaria.

The Oval – A good deal for GuocoLand?

GuocoLand (formerly known as Hong Leong Properties Bhd) will launch its high-end condominium, The Oval, in the Kuala Lumpur City Centre (KLCC) enclave by mid of the year. The Oval is located on a 2.14-acre land along Jalan Binjai. It comprises two 41-storey blocks, East Tower and West Tower, with 70 units in each block. The estimated saleable floor area or net floor area is approximately 586,356sq.ft.

The Oval is an interesting project whereby it was formerly owned by a private developer, Titan Debut Sdn Bhd. The project was thence sold to tycoon Tan Sri Quek Leng Chan, for RM475.58 million or RM811psf when it was almost 30% completed. According to the Chief Executive of Guocoland, Paul Poh, approximately 30% of East Tower had been sold after a sales preview in Hong Kong last month. Most of the units are Sky Villa, offering a built-up area of 3,750 sq ft. Each block also offers eight Mansionary Villa, measuring 7,500 sq ft each. The price ranges from RM1,200 to RM1,900 per sq ft.

With this new selling price range, the estimated Gross Development Value generated by this project is approximately RM800million. The resale price is about double of what Tan Sri Quek has invested! Is this, then, a great deal by Guocoland? It is still too early to comment. The move by Tan Sri Quek reflected the confidence in the city’s luxury residential sub-sector. However, investors should not forget that the current rental market within the KLCC is experiencing a tremendous slowdown. Furthermore, there are a few more high-end condominiums such as Troika, Park 7, etc. which will crowd the market when they are completed.

A GLANCE OF JOHOR BAHRU PROPERTY MARKET

Overview
The overall property market in Johor has experienced moderately slow growth in the first half of 2007. The focus and concentration of local and foreign investors are largely centred on the Iskandar Development Region (IDR). The Johor government expects to capitalize on the prospects of IDR and consequently secure firm commitment from investors. In conjunction with the government’s role to drive and promote IDR, some key promoters of the project such as UEM World and Danga Bay have also shown their commitment and enthusiasm by speeding up their catalysts projects. One notable project that has been added to the Johor market recently is the RM1.4 billion Asia Petroleum Hub (APH) developed on a 40-hectare reclaimed island off Tanjung Bin Petrochemical Area. The APH, to be completed by 2009, provides integrated bunkering services to ships and forms part of the petroleum trading network and bulk-gateway to regional and domestic markets.

Nevertheless, despite effort and incentives from the government as well as local players, the IDR has received relatively lukewarm response from foreign investors since its launch. Property players, consultants, and analysts have maintained a neutral stance on IDR and reiterate their caution on both the business viability and project execution. JP Morgan, in its Asia Pacific Equity Research (Issue 05 July 2007), states that the IDR is still rather conceptual in the short-term and will take over 20 to 30 years of execution to achieve the “end-state model”. In view of the massive scale of IDR and the huge undeveloped land bank, the impact of IDR towards the Johor property market in the short term will not be significant. Furthermore, Johor is currently experiencing an oversupply of property. The CIMB Research Report (Issue 19 March 2007) highlights Johor’s massive property glut, which remains one of the toughest markets in Malaysia. The spillover effect of oversupply in the Johor property market will substantially affect the IDR as well as the overall property development of the state.

Residential
The 2007 second quarter Property Market Status Report Quarter released by Valuation & Property Services Department (JPPH) reveals that Johor continues to have the highest number of overhangs in the country (8,043 units), which make up 30.4% of the market share. The value of these units stands at RM1.44 billion. The district of Johor Bahru accounts for 77.8% (6,261 units) of the overhang in the state. Most of these units (5,487 units) have been in the market for more than 24 months after their sales launch. Johor continues to account for the bulk of the unsold residential properties in the market comprising 23.7% (12,521 units)

Transaction levels on conventional properties such as terraced and semi-detached units have not experienced significant movements. The bulk of the overhang completed terraced units in the country is still from Johor. There are 3,189 units of 2-3 storey terraced and 1,576 units of single storey terraced properties overhang in Johor. Some of the pricings of the completed terraced properties need to be reduced in order to improve their sales status. For instance, the pricing of the completed double-storey terrace houses at Tebrau Development Corridor has been reduced from RM280,000 to RM250,000 to stimulate sales. The oversupply condition for condominium/apartment components is also relatively serious. For ongoing constructions, there are 7,047 unsold terraced units and 2,250 unsold condominiums/ apartments units.

Shop-Offices
Generally, Johor has registered the highest number of overhang shops in the country as of the second quarter of the year (2,279 units), which accounts for 46.9% of the national share. About 65.0% (1,483 units) of the overhang shops in the state are located in the district of Johor Bahru. Similarly, Johor also registered the highest number of unsold under-construction shops in the country (1,703), which account for 37.0% of the total. About 57.1% (973 units) of these unsold units are located in the district of Johor Bahru.

Purpose Built Office
Demand and supply of purpose-built office space in Johor, particularly Johor Bahru, have remained stagnant compared to the previous year. The same status quo applies in respect of occupancy and rental rates. As of 2nd quarter of 2007, there is 9.46 million square feet office space available in Johor and approximately 7.08 million square feet (75%) is situated in Johor Bahru. There will be an additional 1.31 million square feet office space added to the Johor market (1.28 million square feet in Johor Bahru) in the near future. The average occupancy rate in Johor and Johor Bahru hovers around 74%. The prime space is let at an average of RM2.30 per square foot gross per month whilst offices at secondary locations average RM1.20 per square feet gross per month.

Retails
In comparison to the year 2006, there has been no substantial change in the retail sector with regards to demand and supply. The existing supply of retail space as of 2nd quarter of 2007 is estimated at 11.3 million square feet (8.57 million square feet from Johor Bahru) and approximately 62.9% is occupied (64.3% for Johor Bahru). Prime gross rents of shopping centers which are doing well (with occupancy rates in excess of 85%) range from RM15 to RM25 per sq ft per month. Some notable retail centers located in Johor Bahru area:

Johor Bahru City Square
Johor Bahru City Square is a shopping centre located in the Central Business district of Johor Bahru. The Government Investment Corporation of Singapore owns 70% of City Squares shares. The remaining shares are divided between the Johor Bahru City Council and MBJBT. Like Komtar, city Square is located on Jalan Wong Ah Fook. Due in part to its proximity to the Johor-Singapore Causeway, City Square attracts many shoppers from Singapore. The building interior consists of five storeys of shopping malls, including a thirty-six storey office block, which is divided into lower, middle and upper zones. The car park occupies three levels of the basement. The building is the tallest in Johor Bahru.

City Square also enjoys a trendy and stylish reputation amongst youngsters in Johor Bahru, similar to shopping areas in Bukit Bintang, Kuala Lumpur and Singapore’s Orchard Road. Prominent names which operate their business in City Square include financial institutions such as Maybank, Affin and RHB Bank. TOPS supermarket, previously located at Basement 1, was declared bankrupt in 2002, and replaced by Kapitan Mart. The Mega Pavillion Cinema has also been upgraded recently to Cathay Cinemas with new theaters at both level 5 and level 7.

The Johor Bahru City Square is currently enjoying nearly full occupancy rate and the average rental fall in the region of RM18psf to RM20psf.

Kompleks Tun Abdul Razak
Kompleks Tun Abdul Razak or KOMTAR is also located along Jalan Wong Ah Fook. KOMTAR is probably the oldest shopping complex in Johor Bahru. Officially opened on March 11, 1979, by the third prime minister of Malaysia, Tun Hussein Onn, KOMTAR consists of a two-storey shopping centre and a 25-storey office tower block. Currently the Komplek Tun Abdul Razak is temporarily closed down for refurbishment and renovation.

Plaza Kota Raya
Plaza Kota Raya is located along Jalan Abdullah Ibrahim next to Puteri Pan Pacific. The mammoth Plaza Kotaraya covers an 11-acre site. The big players include Mun Loong's, a local department store, and Shop 'n Save supermarket, which enjoys regular patronage despite its limited stock. The complex also houses a mosque; hence it is port and alcohol free. The Plaza Kota Raya is also enjoying nearly full occupancy rate and the average rental fall in the region of RM 8psf – RM12psf.

Hotel
With the launching of the Visit Malaysia Year 2007 Campaign by YAB Dato’ Seri Mohd Najib bin Tun Abdul Razak, the Deputy Prime Minister of Malaysia, various tourism promotion activities have been introduced by the Malaysian Tourism Board. The success of the marketing and promotion activities have significantly increased the number of tourists visiting Malaysia. Cumulatively, tourist arrivals recorded from January to August 2007 are 14,047,276, representing an increase of 22% compared to 11,518,288 in 2006.

The increased of tourists to Malaysia has also improved hotel occupancy rates and leisure businesses in Malaysia. A glance of the hotel industry in Johor reveals that the total number of hotel guests recorded has slightly increased from 2.83 million in 2005 to 2.99 million in 2006. According to the statistics provided by Tourism Malaysia, the ratio distribution of total hotel guests in Johor between domestic and foreign guests is 68:32 in 2006. Together with Kuala Lumpur and Selangor, Johor forms the top three domestic hotel guests, consisting of a mix of leisure and corporate guests.

The total existing supply of hotel rooms in Johor stands at 12,811 rooms from 273 hotels. Amongst them, approximately 4,305 rooms are recorded from hotels in Johor Bahru. The table below shows the distribution of hotel rooms in Johor Bahru in terms of star-rating.

The average occupancy rates of hotels in Johor, particularly in Johor Bahru and Johor Bahru CBD are found to be satisfactory compared to other states in Malaysia. The table below shows the average occupancy rate of hotels by locality in year 2005 and 2006:

Some notable hotels located within Johor Bahru include:

Malaysia Property Market 2008 - The Times Ahead

What has happened in 2007?

The Year 2007 was a significant year for Malaysia as the country celebrated its 50 years of independence. The Malaysian property market enjoyed a flying start in 2007 as it inherited the spill-over effects of strong market sentiments after the launching of the ninth Malaysia Plan (9MP) and the establishment of the Iskandar Development Region on 4 November 2006. The government has also introduced several incentives and implemented numerous measures to enhance competitiveness, spur economic activities, and improve the country’s attractiveness to foreign and domestic investors. These incentives have directly and indirectly affected the property market especially in the first half of the year. Among the notable measures pursued by the government are inclusive of the following: -

a. Establishment of Economic Corridors
- The Master plan for the Northern Corridor Economic Region (NCER) was launched on 30 July 2007 and encompasses Kedah, Perlis, Penang and northern Perak.
- The East Coast Economic Region (ECER) which covers states of Kelantan, Terenganu, Pahang and the north of Mersing district of Johor was launched on 30 October 2007.

b. Amendment of rules and regulations in relation to the property sector
- The waiver of the Real Property Gains Tax (RPGT) effective from 1 April 2007;
- The introduction of a few measures to relax the forex rules by Bank Negara Malaysia effective 1 April 2007 has further liberalised Malaysia’s foreign exchange policy;
- The introduction of Certificate of Completion and Compliance (CCC) to replace the Certificate of Fitness for Occupation (CFO) with effect from 12 April 2007;
- The set-up of the new One-Stop Centre to ensure that development projects are given fast-lane approval within four months;
- The introduction to the Building and Common Property (Maintenance and Management) Act 2007 which was gazetted on 12 April 2007;
- The amendment of the Housing Development (Control and Licensing) Act 1966 to incorporate service apartments;
- The amendment of the Strata Titles Act 1985

c. Transport Infrastructure
- Expansion of the local bus route, RapidKL, in the Klang Valley
- Announcement of the Penang Monorail Project scheduled to take off in Year 2008 undertaken by Syarikat Prasarana Nasional Berhad (SPNB)
- Extension of the LRT network to be implemented in Selangor’s prime urban areas
- The announcement by the Cabinet Committee to revive the shelved Ipoh-Padang Besar double tracking project

The second half of the year has been relatively slow compared to the first half of the year. The property market was dramatically affected by some global issues toward the second half of the year. The US Sub-prime mortgages crisis has resulted in the decline of stock markets worldwide. The effects of this meltdown has spread beyond housing and disrupted global financial markets. Besides, crude oil prices have been creeping higher and higher in recent months. The persistently high crude oil prices have impacted the global economic performance significantly. Towards the end of the second half of the year, the market generally adopted a more cautious approach.

Market View on 2008 – Break the trend?
The Malaysian Property Market has shown some positive surprises in the past few years. Can this trend continue or will it be broken in the year 2008?

Generally, market analysts and economists have predicted that the year 2008 will have a tough start globally due to the twin Macro stresses of weakening US consumption and China’s policy tightening. The global economic outlook could be affected by the fallout of the US Subprime mortgage crisis. The excessive mortgage-related losses and the downturn in US housing market will potentially push the country into recession. In addition, economists also extend their worries over the possibility of China continuing to implement measures to tighten its national policy in order to rein in accelerating inflation. If China implements the tightening measures at the same time that the US economy is weakening, the risks of a sharper-than-expected deceleration in China’s growth are higher, which would also have ripple effects regionally. The two Macro impacts and the persistently high oil prices, which is another threat to the world economy, will create significant dampening effects towards the global market inclusive of Malaysia. These effects will also translate into the real estate sector in the form of slowdown in sales volumes, low confidence amongst investors and substantial price increase in construction material.

Notwithstanding the above mentioned risks, the global economy is anticipated to continue expanding at 5.2% in 2008 (5.2% in 2007) with Japan, Europe and emerging Asia, in particular China and India, counterbalancing a possible moderation of the US Economy. Malaysia is well positioned to take advantage of the growing external market as well as the increasing trade and investment opportunities, supported by continuous efforts to enhance national competitiveness and resilience.

Business Opportunities
In view of the potential global market challenges, we must adopt a very cautious strategy in any financial commitment. Having said that, there is also good potential magnitude, path and direction in the real estate market that we can seriously consider: -

a. High levels of equity capital particularly from Middle-East Countries continue to pour into the Malaysia property pool;

b. The practice of relocating corporate offices especially in the finance, insurance, real estate and business support services, from big cities such as New York and London to other cities which have lower operation costs;

c. The active promotion of Islamic Finance by the government being an alternative financial instrument offers both developers and investors a lucrative financing package in Malaysia real estate markets.

Sell Your Home Fast with High Profit

You want to sell off your property at a good price. How do you convince potential buyers that your house is an irresistible offer? Take some simple steps without spending a lot of money on renovation or advertising. The most effective steps can sometimes be overlooked because they are so simple.

Clear away the clutter in your house. This does not only make the house look spacious but also attractive. You might want to invest a little in your property by giving it a new coat of paint. Choose a light colour, when in doubt, because it makes the house look more spacious and breezy. Scrub your bathrooms ad kitchens for dirty tiles or walls may put off potential buyers and lower the value of your property.

Try baking homemade cookies or place lemons around the house to get a sweet smell. Play some classical music for the visitors or invite them to sit in the garden if you have a water fountain feature. The sound of water or soft music will soothe nerves and endear your house to the potential buyers.

Place a plant or throw open a window to make your house look more attractive. You may have taken your house for granted but for the visitors, it’s a first impression that will make or break the deal.

Invest in the Best Location

Maximizing income and minimizing outgoings are the ultimate aim for all property investor. Choosing the right property will always help in this sense. There are a few tips shared by property expert, Glen Franklin, on how to choose good and potential properties.

Look for potential economic redevelopment zones
Watch the national and local news for areas that have been really run down but something big has happened. It could be the announcement of a new Super Casino, new high speed rail link into a big city, the creation of a large inward investment -- think of what happened to property investments in Atlanta,GA when that city hosted the 1996 Olympics.

The development of a town as a commuter hub, the re-development of inner city areas into fashionable places to live are all great places to invest. Once the development starts happening, the Starbucks, Borders, banks and bistros all follow. For today's urban professional these are places that they will want to live- delivering good demand forcing rents higher and reducing the rest of rental vacancy periods.

College Town
Places that are college or university towns are always high on any investors check list. Not only do they guarantee a regular influx of prospective tenants, the youth and energy of students rubs off on the rest of the town- they are happening places with loads of things to do, fun places to eat and good sports facilities.

University "towns" such as Columbus, OH (Ohio State), Tempe, AZ (Arizona State), or Austin, TX (University of Texas) represent solid places to invest as there will always be fresh potential tenants.

The one potential downside is that sometimes students may have difficulty in the transition from having good ole' Mom taking care of everything to taking care of that cleaning and cooking gig-- so check out your students to avoid high maintenance costs!

Commuter Towns
These towns may not be the prettiest but their very location means that they are always going to sought out by those workers who need to be within commuting distance of the work but either don't want to or can't afford to live nearer to their work. Places located near to Interstate intersections, great rail stations, local commuter airports, even ferry stations (think Staten Island!) are always going to be chosen by people who need to commute. The presence of the infrastructure allows them to commute further, quicker and more efficiently.

An additional investment benefit here is that as the prices of property nearer to the workplace rise, the value of your property will rise as workers look farther away to get the right accommodation for the money that they are prepared to pay.

The State Capital or a Regional Hub
The demand for property in a capital hub city is generally higher that the amount of property available for purchase or rent so although the costs of purchasing such a property may be high, you will be rewarded by high levels of demand, consistent levels of demand and good capital growth.

Look at neighborhoods within the city that have traditionally been seen as the poorer parts as renters will consider these areas which offer better value for money.

Your Own Stomping Ground
It's always worth considering places closer to home. Buying a place next door or just down the street from where you live may seem a strange idea but think about it- you know the place, the neighborhood, the facilities and the sort of people who would be your target market.

Having a place that you can literally keep an eye on and act as your own management agency will reduce your operating costs. Even if you decide to employ a management company to manage the property, a local property allows you to keep a watch on how they are taking care of your investment. Having a local property can be less stressful and time-consuming.

Tips to buy properties

Many people make money through property investment. To be successful in this industry, there are no hard and fast rules. You need to do a lot of homework and groundwork! There are five tips here shared by some property experts:

Tip 1:
Don’t forget property investment is a long-term investment. As an investor, you should focus on building your wealth over a long period of time. Short term fluctuations in the market should not concern you too much. Don’t believe too much on those get-rich-quick property schemes.

Tip 2:
Concentrate on income generating rather than capital appreciation while choosing your properties. Don’t forget, cash flow is important. To have a property that can generate immediate steady income is always better than getting a property pending for capital appreciation but can’t generate income.

Tip 3:
Don’t rush to buy if you haven’t done your homework. The market is getting stagnant; the days when you could make quick money by buying properties are over!

Tip 4:
Focus and specialize on what you plan to buy. Choose a niche and become an expert in it. Don’t forget, property market is an imperfect market. The information is not easy to get. Stay focus and choose a city suburb or even a street of shops or flats where you can get the information quickly.

Tip 5:
Big and expensive property is not always a good investment. Buying a big and expensive property also means paying larger monthly installment for your housing loan. It will make far more sense to buy a smaller dwelling that is easier to rent out rather than a big and expensive house that you need to find certain category of tenant.

We’ll perish if we do not change the way we build

As our population getting larger and larger, more and more cities, towns, neighborhoods and buildings are being built. Excessive buildings and developments have created a lot of social and economic problems. Developers or builders build for the sake of building. The original meaning of architectural beauty has been forgotten.

Saw this Crooked House somewhere. Pretty or pretty awful? Individual preference. Nevertheless, you have to respect the builder’s creativity.

Some description from Allcon (General contractor of the building):

"The building is situated in Sopot, at Bohaterów Monte Cassino Street. It is the compact settlement and it is an extension of the already existing shopping and service center which main entrance is at Haffnera 6 Street. Through booth building leads walking duration connecting service center between Haffnera and Monte Cassino Street. The building with its character refers to fabulous drawings of Jan Marcin Szancer and Per Dahlberg. Exterior elevation suits to very popular Monciak’s promenade style. The building with its floors refers to cornices and floors of neighbouring buildings. Colorful stained glass entrances, stone elevation decors and windows framed with sandstone make impression. There is also unusual roof covered with sheet metal with enamel roof tiles coloured with green shades, see blue and Parishian blue, which in the whole makes illusion of dragon scales. The building was projected as three-storey object with service attic. Communication between three storey assure the lift and allowed staircase freely available. Passage from ground-floor to storey is available thanks to perfectly demonstrated range stairs. Passage from first-floor to second floor leads through reinforced stairs and from second floor to mezzanine through steel stairs which are covered whole by wood."

World’s smallest state for sale

A former World War Two fort in the North Sea, which was settled 40 years ago and declared a state with its own self proclaimed royal family, is up for sale. The Times said yesterday.

The tiny Principality of Sealand, which began life as Roughs Tower in 1941, is a 550-square metre steel platform perched on two concrete towers 11km off the coast of Harwich, eastern England.

It is accessible only by helicopter and boat but according to its owners, who want offers of eight digits or over, boasts uninterrupted sea views, guarantees complete privacy and is a tax haven.

“We have owned the island for 40 years and my father is 85,” Prince Michael of Sealand was quoted as saying.

“Perhaps it is time for some rejuvenation.” – AFP

Top 5 Emerging Real Estate Markets For 2006

Rhiannon Williamson, a freelance writer on property investing and emerging real estate markets has commented on top 5 emerging Real Estate Markets for 2006.

Here with the article offers you an overview of each country so that you can choose where to make your next real estate purchase.

Costa Rica – The CIA World FactBook has recently begun listing Costa Rica as “a Central American success story” because the Costa Rican government have successfully established an economically and politically stable country in which more overseas investors are focusing their financial interests.

The retiree and second home markets in Costa Rica are growing as is tourism interest and the country offers visitors and expatriates a stunning climate, an abundance of rare and beautiful flora and fauna, it is bordered by both the Caribbean Sea and the Pacific Ocean and the standard of living is both high and affordable.
The real estate sector in Costa Rica offers investors an affordable platform and the Costa Rican government offer investors certain tax breaks and incentives to commit to the country.

Ghana – Located in West Africa Ghana is a stunningly beautiful country with palm fringed, white sandy beaches and an incredibly forward thinking and progressive government.
The government of Ghana are committed to improving the economic conditions in Ghana and are targeting foreign direct investment and making significant constitutional changes to allow for freer flowing investment which will in turn attract greater overseas economic interest.
The country has a growing tourism sector which requires accommodation units to let out to visitors offering a real estate investor an immediate opportunity for rental yield. And the long term economic prospects for Ghana are positive which should give a property purchaser long term capital growth prospects from any investment made.

Malaysia – Economically speaking Malaysia is built on very solid foundations and is benefiting from closer export ties to China, low inflation, a small external debt and good foreign exchange reserves.

The country also has a growing tourism sector and a vibrant city based young executive market - either of which a property investor could target for rental income. Real estate in Malaysia is affordable and economic indicators suggest that property prices will continue to rise steadily over the medium to long term giving an investor the chance to reap capital growth from any investment made as well.

Qatar – Forget Dubai for she’s a blown rose! The next big Middle Eastern real estate marketplace is Qatar where constitutional changes have been effected to allow for foreign freehold ownership of property in certain key geographic areas and where overseas investment is flooding in.

The Qatari government are actively targeting foreign investment into all business sectors and establishing an oil-independent economy that should be forever sustainable. The property sector is entirely secondary to the government’s focus, therefore an investor can rest assured that demand for real estate in Qatar will remain strong as the majority of buyers are purchasing for long term accommodation not purely for investment gain.

Turkey – In 2005 Turkey finally began the process for EU accession and immediately received substantial investment commitment from Dubai. The real estate market is already doing very well in Turkey especially in Istanbul and along the Turkish Rivera, but this investment boost will help to raise infrastructure standards in Turkey and has also already boosted worldwide interest in this vast and impressive country.

Real estate investors buying today will benefit from a growing tourism market, increased foreign direct investment as Turkey moves towards EU membership and also a property market that is currently under priced and that has massive room for price expansion.
Hopefully these hot tips will give you some food for thought and assist you with your next real estate property portfolio purchase.

By Rhiannon Williamson

Bulgaria Ranks among the hostest real estate investment destination

Currency company FC Exchange quoated a finding from ICWALES that Bulgaria was named one of the hottest property destinations of 2007 for investors purchasing property abroad.

The other property top hot spots will be Cyprus, Central Portugal, America and France.
FC Exchange director Nick Fullerton said that these countries would probably offer the best investment returns in 2007.

The company based its predictions on its “industry expertise and experience of spotting and interpreting patterns and trends. Besides, it also took into consideration the specific features of each country's economy, such as currency strength and property market intensity.

Bulgaria's property managed to attract 'shrewd investors' because the prices were still low as compared to those in the other European countries.

Restructuring of SWIP

Scottish Widows Investment Partnership (Swip) has now divided its property investment team into UK and international divisions.

The UK arm will be led by Peter Lillington and Gerry Ferguson. Lillington will be in charge of the UK property investment with responsibility for all investment transactions and development, while Ferguson is in charge of the UK property fund management with responsibility for all UK property funds. He is also in charge of the Scottish Widows Investment Partnership Trust, Airport Industrial Property unit trust and the Covent Garden Market Partnership.

Swip has more than £7.8 billion in assets. The restructuring of the department is necessary as its property heads, Tom Laidlaw, and his deputy, Mike Channing, will be leaving at the end of the year to set up their own business after 15 years at the firm. (UBR).

Interest Rate Rise in UK

The latest rise of interest rates will add more problems to the current soft market in UK. It will greatly affect the buy-to-let investors.

Due to the recent boom in the UK property market, the property values have increased. This is good news for existing property investors. However, it is not good news for first-time land owners. The boom has caused these green land owners to pay significantly higher purchase prices for suitable investment properties. First-time land owners have to choose carefully the buy-to-let mortgage with the lowest possible interest rate for their investment.

When interest rates increase, it creates a double squeeze on potential investors. The first being a reduced offer and the second, is that once an investor owns a buy-to-let property, higher monthly mortgage payments eat away at the potential financial returns.

Besides, higher interest rate also causes less money to become available to be borrowed. The amount that can be borrowed when buying a property to let out depends, amongst other factors, on how much rent the property generates, as well as the interest rate used by the lender to calculate the funds they are willing to offer. Higher interest rates mean lower mortgage offers and therefore higher deposits are required.” Some experts also reveal: “Investors should also be aware that there may be further UK base rate rises in the months ahead. Existing buy-to-let borrowers, whose mortgages are currently on discounted or variable rates, could also benefit hugely by having their current mortgage deals reviewed against the current investment mortgages available”

To get a Good Investment Property

Nowadays many investors are looking for properties with good rental income for investment. To venture into this investment, you need to prepare a concrete plan or strategy on how you are going to develop your real estate into a money-spinning endeavor. Otherwise, you will end up losing all of your investment.
To find a good investment property, you need to do some data research and keep good relationship with estate agents. Estate agents are your good friends to help you find a profitable rental property. Besides, they are also your friends to help you to dispose off your property when you want to cash out.

To get started in your rental real estate business, the following tips might help:

·Prepare an investment plan to determine the holding period of your ownership of the particular rental property. Holding period will affect your cash flow. The longer you hold the property, most probably the more you need to spend on maintenance, repairs and improvements. The repair costs incurred might eat into your investment profits. If you are not sure of your holding period, then you’d better adopt a more conservative approach and don’t spend too much. Nevertheless, owning the rental estate property for less time would also create more investment risks especially when buying in an overheated market. To compensate for that risk, you need a bigger potential annual return. For many small investors, however, long-term ownership is smart because it allows them plenty of time to outlast any fluctuations in the market -- and also since the rental income can be a nice supplementary income in the meantime. Being a landlord is also a rewarding day job for some.

·Hunt properties that are going to be foreclosed or already foreclosed. Get to know some bankers or auctioneers, then you will be able to get some additional information of properties that are about to be foreclosed or are already foreclosed. Meanwhile, contact your real estate agent friends to help you to source for possible buyers. Besides, you can also join some property owner’s association in order for you to make contact with the landowners. You can ask the landowners directly to see if they are willing to sell; you may also try looking in newspapers for rental ads or you may drive around neighborhoods in order to search for “for rent” signs.

·Get your finances in shape. If you really want to engage in a rental estate property business you need to have a good credit standing -- meaning less credit card debt and other consumer debts. Generally, lenders usually require bigger down payments, charge higher interest rates and want your finances to be in better shape when you are buying rental properties. Besides, keep some money for maintenance and also holding costs if you cannot get tenants in due course.

·Avoid overspending. The reason why you invest on a rental estate property is for you to gain profit and not to lose every saving you’ve got. Make sure that you have saved enough for your retirement before investing in rental real estate since investment is like any business wherein you tend to lose some and then win some. But just to minimize your risks, try to save as much as you can. Better be prepared than be sorry later on.

US: Homebuilder sentiment rebounds in November

The housing market index compiled by the National Association of Home Builders (NAHB) improved for a second consecutive month to 33 in November (October: 31) as sales incentives improved affordability for consumers. The index of sales expectations in the next six months also jumped 4 points to 46. reading below 50 mean the overall confidence among homebuilders remain poor.

Belgium: Blackrock International Land’s first property investment in Continental Europe

Blackrock Land Continental Limited (a subsidiary of Blackrock) has acquired 90% of a company owning a substantial warehouse and office portfolio in Brussels, Belgium. The other 10% will be held by EuroCapital Property Group, a locally based property investment company.

The properties are located in the Zaventem South business and semi-industrial zone, on the E40 Brussels to Germany motorway, close to Brussels airport. The integrated buildings consists of 23,000 sq.m built up of which 15,600 m sq (168,000 sq ft) are warehouse distribution facilities and 7,400 m sq (80,000 sq ft) are offices.

The properties will be jointly managed by Blackrock Land and EuroCapital Property to maximize the rental income and enhance capital value. The total outlay on the transaction, including costs, is approximately €19.5m. Generating annual income in excess of €1.7 million (inclusive of the rental guarantee), the portfolio will provide a net initial yield of more than 8.7%.

£500M from Morgan Stanley JV Kandahar

Kandahar Real Estate Ltd, a subsidiary of a London-based private property investment and asset management firm, The Kandahar Group, has joined with Morgan Stanley Real Estate's MSREF V International in a 50:50 joint venture project with the intention of investing £500 million (US$944 million) into retail and leisure properties throughout the United Kingdom.

The venture's initial portfolio will include the 560,000-square-foot Drake Circus shopping center in Plymouth, U.K., which was developed for Morgan Stanley by P&O Estates Ltd., and opened on Oct. 5, 2006. Also in the initial portfolio will be Kandahar's 1 million-square-foot UK High Street property portfolio, with a total value of £243 million (US$458.7 million).

In a statement, Morgan Stanley executive director Toby Phelps said that the firm looked forward to taking advantage of the knowledge of U.K. retail investment brought by Kandahar, which holds a portfolio of 13 U.K. retail assets, dating back to the firm's original investment in 2003.

Owned by David Ross' Kandahar Trust, The Kandahar Group is led by the management team of Martin McGann, formerly finance director at Pillar Property Plc; Amanda Hill, former head of property at The Carphone Warehouse, where she led the growth of the store portfolio from 20 to 600 stores; and Mike Tyler, who was responsible for asset management within the Hercules portfolio.

CEO Opinion Survey on 2007 Property Market

What are the CEOs' opinion on 2007 Malaysia Property Market?

These are the findings of an annual survey conducted by a property Consultant firm WTW. Let's see what they said....

Click here to download the report.