In brief

‘Dysfunctional aspects’ of Spain’s property market need to be stabilised if the country’s remarkable economic performance is to maintained, the OECD has concluded in its latest country survey..

Stabilisation of the property market, the prices of which have doubled in real terms since 1998, would reduce macroeconomic and financial risks, according to the report. ‘It is also important to correct the property market distortions that spur demand and make it more difficult for less well off and younger households to enter the housing market. Many dwellings remain vacant and the rental sector is very limited, which also works against regional labour mobility, thereby hindering further falls in unemployment. These problems appear to have prompted the measures adopted recently to develop the rental housing market. However, until such time as the main property market dysfunctions have been overcome, these measures are likely to have only a limited effect’.

Romanian property prices moved up 5.5 per cent between the third and fourth quarters of last year, figures from the National Statistical Institute reveal. Based on price per square metre Lovech had the fastest rising prices – up 18.6 per cent – followed by Targovishte – up 18.3 per cent – and Stara Zagora – up 15.5 per cent. In the capital, Sofia, prices were up 3.6 per cent on the quarter, lower than the national average of 5.5 per cent . However, the city was the second most expensive area listed – with dwellings costing £470 per square metre compared with a national average of £306. The most expensive region, at £480, was Varna, and the third most expensive, at £439, was Burgas.

France and Spain remained UK property investors’ two favourite countries in which to buy property last year, the HIFX Annual Global Property Hot Spots report has concluded. But both ‘old faithfuls’ are losing out to a handful of emerging markets such as Bulgaria, Dubai and Cape Verde, said the foreign exchange specialist.

‘Owning an overseas property is no longer the preserve of the wealthy and as a result we’re beginning to see the commoditisation of the overseas property markets’, said HIFX managing director Mark Bodega. ‘In many cases the emerging markets offer property which is significantly less expensive than the traditional favourites. As UK property prices have continued to rise dramatically in the UK over the last 12 months, combined with rising interest rates, we’ve seen the overseas property market open up and become accessible to more of the UK population’.

‘As people look to where they can make the most money and returns, they are more likely to look away from the traditional markets to areas of expansion and new development. We’ve seen properties in the emerging markets snapped up by investors in 2006. Bulgaria remains a popular investment destination with investors keen to cash in when it joined the EU and we’re seeing a consistent amount of interest in Romania for the same reason’.

South Africa’s residential rents have been rising at their fastest for three years, property management company Trafalgar has reported. Its latest rental index showed rents increasing by just under 7 per cent for the year to December, but by 5 per cent in the last six months. In Johannesburg rents jumped by 9 per cent in the last six months.

Even so, with property prices still rising, investors are seeing relatively low yields, said Trafalgar, which is predicting rents will continue to rise faster than inflation, probably by between 15 and 20 per cent.

Trafalgar said reduced house price affordability meant more people were renting rather than buying. The result was that an over supply of rental development units had been mopped up meaning the market had reached ‘equilibrium.

What is claimed to be the first exhibition dedicated to golf property is to be held at the East Sussex National Golf Resort & Spa in March. Entry to Golf Homes Worldwide will be free. The show aims to bring together agents and developers offering golf property from Brazil, Bulgaria, Canada, the Caribbean, Cyprus, Dubai, Egypt, Florida, France, Germany, Italy, Morocco, Portugal, South Africa, Spain including the Balearic and Canary Islands, and Turkey, as well as independent legal, financial and investment experts. Click here for further information about Golf Homes Worldwide.

An online survey of 3,000 overseas property investors named Bulgaria as the best place to invest over the next five years. More surprisingly, Brazil was the next most nominated country, followed by Dubai, Turkey and Morocco. Spain was sixth on the list, followed by the USA and Australia.

'Online polls are only an indication of what is going on in the minds of property investors and can also be affected by where the traffic has come from’, said Nicholas Marr, chief executive of Marr International, the company behind the overseas property site www.homesgofast.com. ‘However it gives a great indication of the feeling amongst those interested in overseas property. For me the big surprise was Brazil. It is an emerging market that seems set for big things and one that investors seem to be keeping a keen eye on’.

A number of recent surprises, including the Bank of Thailand’s reserve requirement on short-term capital inflows, the new year’s eve bombings and proposed amendments to the Foreign Business Act, have dampened the Bangkok property market outlook, according to real estate services and investment management firm Jones Lang LaSalle.

‘Before the end of 2006, we were quite positive on the prospects for the Bangkok property market and expected the market to continue to perform well in 2007’, said Jones Lang LaSalle Thailand managing director Suphin Mechuchep. ‘Nonetheless Thailand has unexpectedly experienced a number of events over the past one month, all of which have negatively affected sentiment for the economy and the Bangkok property market despite strong market fundamentals’.

However, Mechuchep said she believed the uncertainty would be resolved shortly. And once the Government policies become more stable, investors’ confidence will return, she predicted.