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Virtual meters - real losses of

Not all investments in foreign real estate will allow investors to gain income in 2010. Experts recommend not to chase excess profit, and to pay attention to the stable and liquid markets .

“You will not regret

if you make the investments in real estate of the United Arab Emirates: a constant increase in prices, a possibility of payment by installments, obtaining the income from delivery of apartments for rent. Come to our Moscow office or to Dubai where you will be able to look at ready and objects under construction“, - representatives of the company which is engaged in sale of real property of one my acquaintance who deliberated where to attach the money received from sale of the Moscow apartment which got by inheritance so convinced. And if at the beginning realtors convinced that 400 thousand dollars are cheaper. not to find housing even on objects under construction, a week later it became clear, as in already ready houses it is possible to pick up apartments within 300 thousand dollars

Is possible, it also would be solved on purchase if not news of problems of Dubai World holding - actually state corporations of the Emirate of Dubai. Few years ago its main projects (“Palm islands“ and The World) to the United Arab Emirates assuming construction of bulk islands in the form of the palm leaf and the archipelago reminding the world map caused rough delight in most of buyers and investors from around the world. But from the beginning of financial crisis the number of persons interested to acquire superelite housing sharply decreased - for last year the average cost of 1 sq.m not only in unfinished elite projects, but also in the secondary market of the United Arab Emirates, according to Global Property Guide, dropped almost twice (by 48,1%). As a result the Dubai World projects on creation of bulk artificial “Palm islands“ and the archipelago “World“ in the Persian Gulf had to be frozen. And on November 25 last year the company announced the semi-annual suspension of payments on the debts making about 22 bln. dollars, or nearly 30% of a total debt of the Emirate of Dubai. In reply S & rating agencies; P and Moody “declared s serious decrease of credit ratings of the Emirate of Dubai and the related structures.

Intensity fell down after news of receiving by the government Dubai the help from the capital emirate of Abu a little - Dabi of 10 bln. dollars. But the situation remains disturbing: according to the experts S & P, Dubai World holding in the next three years has to pay about 50 bln. dollars that makes about 70% of GDP of all Emirate of Dubai.

By the way, for some investors the burst Dubai bubble in housing market became the real mortal blow. In March, 2009 the Irish businessman John About “Dolan, one of co-owners of the island of “Ireland“ in the The World project, committed suicide. The main reason - the financial problems connected with low sales of apartments and houses on the Dubai island. Other investors enclosed in large megaprojects (see the reference), solve a difficult problem: to leave the project, having recorded million losses, or to continue building counting on return of buyers - foreigners in process of improvement of world economy.

of the Power of Dubai in every way try to smooth a situation. On January 4 official opening of the highest building in the world - 828 &minus took place; meter skyscraper of “Burj Khalifa“. In it 90% of the areas are sold already out.“ Opening of a tower will stimulate property sales in the buildings located near it“, - builders hope. And according to the representative of the Dubai real estate agency, opening of “Burj Khalifa“ showed to the whole world that the difficulties of Dubai caused by crisis, already behind and in 2010 the prices if do not return to pre-crisis level, then at least will get closer to him.

Today local realtors still eloquently and convincingly paint with

advantages of purchase of real estate of Dubai, here only buyers whose 99% - foreigners, not too trust in bright future of local housing market. According to experts, in the come year real estate prices in the United Arab Emirates will fall by 20 - 30%.“ Who will buy housing in the desert now? For the United Arab Emirates so huge volume is obviously superfluous. As for foreigners, first of all Americans and Europeans, hardly anyone - from buyers and investors of the Dubai real estate really was going to live there constantly. The adust desert and sand with climate, quite heavy for the European, the Muslim country with the orders and customs. A half of investors left from here a year ago, the second half - at the end of 2009 − go. There were those who just did not manage to throw off the depreciated housing in time“, - one of analysts says.

according to the director of the department of investments into foreign real estate of the IntermarkSavills company Igor Indriksons, the Dubai market would burst also without any crisis:“ It was constructed on strategy of Real Estate Option Trading (trade in real estate options). Trade in options can make the investor fantastically rich in the shortest possible time, but the markets of real estate based on this strategy have very low liquidity of the real estate and high liquidity of options (contracts). Here it is possible to draw an analogy to other financial instrument - the future for oil. To the trader who bought the future for 1000 barrels of oil, oil for resale is not necessary. He is not interested in the product, and plays on (derivatives) derivative of this product. Also and in real estate“. The buyer of the Dubai real estate could bring only 10% of cost of the apartment, and at resale gains income from a gain of the price of all asset. Even if growth of the price of an asset made 10%, then on the invested money the investor received a double gain. But, as usual happens, the last investor in a chain who waited for keys from object and not in time “to come off“ in time this pyramid loses.

New bubbles

B 2010 many countries can repeat a way of the Dubai market. In particular, according to the similar scheme the Panama market develops. “If you invest money here, it is not necessary to be engaged in self-deception: you do not invest in real estate, and play derivatives. It is possible to tell that Panama is Dubai - 2, and this market is dangerous not owing to crisis consequences, and in itself - as a classical example of the speculative market“, - Igor Indriksons considers.“ Exactly here mass construction of facilities of a good class at low consumer ability of local population takes place, and the segment of ready secondary housing has extremely low share from a common market of real estate. And practice shows that during crisis the markets with a sufficient volume of the secondary market and high consumer ability of local population best of all feel“, - Yulia Kaynova, the head of department of foreign real estate of Century 21 Beverlywood Realty adds.

Danger of some other markets is covered with

in a problem of a virtual increase in prices when the real estate grows only on paper. Builders increase the prices in a price - sheets in the course of construction of object, and these data get to statistics, disorienting buyers. The last make the decision, relying only on statistics, not analyzing from where it undertakes. It is quite natural that, having seen 50 − the percentage increase in prices for housing in this or that region, the investor is put in it, rubbing hands waiting for profit. And further the market develops as a classical financial pyramid: the first manage to skim off the cream and to leave with profit, and final buyers of apartments remain with real estate on which there is no demand. Today Thailand, Vietnam, Tunisia, resort objects of Egypt, Bulgaria and Spain have an illness of a virtual increase in prices for real estate. Domestic demand for new buildings in these countries is too insignificant, and the markets keep only on demand from foreigners.

Housing market of Spain one of the first beginnings the falling. Especially areas with large-scale new construction, such as Costa - Blanca and Costa - del - Salt were damaged. Today Spain approached the price bottom. Considering that demand still remains at very low level, stagnation in the Spanish market can drag on for years.“ The set of purchases was caused often not by reasonable ease in receiving a mortgage on such acquisitions here. Objects were not a requirement subject, and demand for them, as well as for any apartments and houses relating to resort real estate during crisis and stagnation falls first of all“, - the CEO of the Penny Lane Realty company Georgy Dzagurov warns.

However, perhaps, for patient investors it is chance to earn.“ In Spain the low taxation, low expenses on the maintenance of apartments and houses, excellent conditions on a mortgage (loans under 3,5 - 4% per annum), perfectly developed infrastructure, rich history, fine tourist conditions, a high standard of living of the population and, of course, good climate. All this is appreciated first of all by Europeans, the same British, Scandinavians, Germans, Russians. Considering that the bottom is already close, investors can get quite good options from the point of view of future profitability“, - Yulia Kaynova considers.

to Catch a bottom - a task difficult, but in some countries it is already quite distinctly observed. For example, the Latvian market is in a condition of the deepest recession, reduction of cost of housing of rather peak indicators of the middle of 2007 reached 70%. It nearly record value of falling of prices for apartments among the European countries. But exactly here it is possible to expect rise. Local banks offer quite good terms on a mortgage including to nonresidents, and the government does everything possible to attract investors. So, the authorities consider the possibility of providing residence permit that who acquires real estate in the country. Well and, of course, attracts an entrance threshold: the average price is 1 sq.m in Latvia of only 488 euros.

The have less than

, the better

analysts advise

At the choice of object of investment to pay attention not to the countries with a considerable potential of an increase in prices for real estate, and to the markets which already passed a sharp phase of crisis, and the countries with stable economy. In this case it is possible to earn 10 - 20% per annum, at the same time the Dubai scenario is completely excluded here.

So, specialists of the Knight Frank company read out as the most attractive from the investment point of view the English market, “first of all the central London where the increase in prices began in March, 2009“. The highest rates of an increase in prices in the market of the central London were recorded in October of last year (+2,1%). Now the prices are 11,4% higher registered in March 2009 − go a minimum though is still much lower - for 15,2% - the maximum recorded two years before.“ Contrary to the expectations based that the commercial real estate of Great Britain fell as strongly as in the USA, similar falling of residential real estate in the United Kingdom did not happen. As the main indicator of restoration of the market it is possible to consider the fact that banks started issuing the credits under purchase of housing already over again. For today the coefficient of borrowed funds reaches already 70 - 75%“, - consider in IntermarkSavills.

That to whom the resort directions are interesting should pay now attention to French Riviera of France and the coast of Italy where there is a good opportunity to get a high-quality real estate object with a considerable discount (to 30%), having used at the same time exclusively favorable conditions on crediting.

From the resort countries less others the market of Cyprus suffered. Of course, and here did not do without decrease of the activity of buyers and volumes of construction. So, for January - November of last year sales volumes of real estate dropped by 47% in annual basis, and the number of the issued construction licenses was reduced by 8,6%. At the same time to fall of 2009 the situation considerably improved: in November the number of transactions increased by 9,5% in comparison with the last month. Stability of the local market of real estate in many respects is explained by timely steps of the government in support of financial sector and economy in general. From the moment of the beginning of crisis of a condition of mortgage lending here not only did not change for the worse, but even improved. It, undoubtedly, will be an incitement to an increase in prices for real estate.

Reduction of number of tourists - a temporary phenomenon, after restoration of a tourist`s stream it will be possible to wait also for growth of the market of rent from which the investors who decided to acquire here housing will be able to earn. Pathos remains the best place from the point of view of property rental, 70% of the market of rent of Cyprus are here. The real estate bought in such area will constantly rise in price.“ Earlier here it was possible to ski from Olympe`s mountain or to lap in the sea and to enjoy sandy beaches of the well-known resort of Koral - Beat, but lack of yachting considerably reduced number of potential tourists. Today this weak link is liquidated. Many years went rumors about construction of a marine to Koral - Beat, and here at last implementation of this project began. The government of Cyprus invested considerable means in infrastructure. Besides marines the second Evrodisneylend and new 14 golf courses will appear here“, - Igor Indriksons tells.

according to experts, present buyers do not wait for fast return, and as the main criterion of the choice often serves the rent income from the offered objects. In this regard realtors advise to pay attention to the capitals or large cities of EU countries.“ Types of objects can be various, depending on needs and the investor`s opportunities. Here it can be favorable as acquisition of country houses, land plots, and blocks of apartments to the subsequent leasing“, - Yulia Kaynova considers. Germany gives the highest profitability from rent for today, and it does not surprise as 58% of the population of Germany live in leased housing. It is possible to buy the whole profitable house in the center of Berlin for 1,6 million euros (24 apartments, 96% of the areas are handed over). The income of the owner of such house will make more than 100 thousand euros a year (taking into account maintenance costs and taxes).