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Turkish Housing Market Improving
The global financial crisis struck a staggering blow to the Turkish real estate market between 2007 and 2011, but a recovery may finally be in the offing. Residential property prices increased 9.13% when adjusted for inflation for the year ending in January 2013, according to statistics from REIDEN. Construction rates are up and interest rates have plummeted, providing a jolt to the market on both the supply and demand side. Also helping is that Turkey has ended two major restrictions to foreign property buyers, which has opened up the market to many new potential investors. For more on this continue reading the following article from Global Property Guide.
Turkey's property market is rising strongly, after lacklustre performance in recent years.
Nationwide residential sales prices for existing homes soared 17.11% during the year to January 2013, according to REIDIN. When adjusted for inflation, house prices rose 9.13%.
The REIDIN Turkey residential property price indices (TRPPIs) are calculated monthly and cover 7 major cities, their 71 districts and 481 sub-districts. The national TRPPI is a weighted average of those city indices. It uses June 2007 as the base year (June 2007=100).
During the year to January 2013:
In the primary housing market, prices are also rising, albeit at a slower pace. REIDIN's GYODER new home price index rose by 9.24% (1.8% inflation-adjusted) during the year to January 2013.
This is in line with data published by the Central Bank of the Republic of Turkey (CBRT) which showed that existing home prices rose by 11.5% (5.1% inflation-adjusted) in 2012 from the previous year. Over the same period, prices for newly-built houses increased by 12.5% (6% inflation-adjusted).
The total number of houses sold rose by 1.76% to 103,543 units in the third quarter of 2012 from the same period last year, according to the Turkish Statistics Institute (TurkStat). However, housing sales actually dropped by 2.35% in Q3 2012 from the previous quarter.
Property prices in Turkey are expected to continue rising in 2013, according to some local property experts.
Primary market: smaller house prices rising fasterSmaller-sized houses in Turkey have seen the highest price increases in the primary housing market during the year to January 2013.
- The average price of 51-75 square metre (sq. m.) newly built houses rose by 9.9%
- Prices of 76-100 sq. m. houses rose by 9.59%
- Prices of 101-125 sq. m. houses increased by 9.31%
- Prices of 126-150 sq. m. houses rose by 8.75%
- The average price of 151 sq. m. and bigger sized properties increased by 7.58%
Global crisis hit Turkey's housing marketOver the period 2007 to 2011, house prices in Turkey fell by 2% (-29% inflation-adjusted). From an annual average GDP growth of 6.8% in 2002-2007, Turkey's growth slowed sharply to 0.7% in 2008, mainly due to the global financial meltdown. Existing house prices plunged 22.45% (-14.65% inflation-adjusted) in 2008.
Turkey's economy remained depressed in 2009, with real GDP contracting 4.8%. Despite this, existing house prices rose a nominal 3.52% y-o-y in 2009, by 2.63% in 2010 and by another 7.81% in 2011. But when adjusted for inflation, house prices actually dropped by 2.82% in 2009, by 3.54% in 2010 and by 2.39% in 2011.
Now, construction activity is risingThe total number of permits (for two and more dwelling residential buildings) rose 16% to around 722,600 units in 2012, after declining by 24.8% the previous year, according to the CBRT. The total value increased 27.3% to TRY75.3 billion (US$41.6 billion) in 2012.
From 2005 to 2009, the average number of dwelling permits (for two and more dwelling residential buildings) was around 520,000 per year. Then in 2010, it soared by 83.4% to 829,000 units, in line with the 9.2% real GDP growth.
Interest rates have declined dramaticallyTurkey's mortgage market has expanded rapidly in recent years, mainly fuelled by falling interest rates. Total outstanding housing loans increased almost six times, from TRY12.4 billion (US$6.8 billion) in 2005 (about 1.9% of GDP) to TRY86 billion (US$47.5 billion) in 2012 (6.1% of GDP).
In 2012, total outstanding housing loans in Turkey rose by 15.4%. Deposit money banks hold almost 92.4% of outstanding housing loans, while participation banks hold 7.6%.
Non-performing housing loans fell to about 0.8% in the third quarter of 2012, down from 0.9% in 2011 and 1.4% in 2010.
Over the past decade average interest rates on housing loans in Turkey have fallen enormously, from about 48.25% in 2002, to just 9.46% in March 2013, according to the CBRT. In May 2010, the CBRT adopted the one-week repo rate as policy rate, then cut this rate four times from 7% in May 2010 to 5.5% in December 2012. The CBRT has kept it at 5.5% since then, while cutting the borrowing rate from 4.75% to 4.5%, and the lending rate from 8.75% to 8.5%.
Source: http://www.1realestateinvesting.com/turkish-housing-market-improving/
Fed Budget Questions Impacts DC Rents
Just three years after reigning as the top national office market, government cutbacks have pushed back leasing in Washington, D.C., placing tenants in full control.
First quarter 2013 results from a few commercial real estate companies show Washington, D.C. rents have stayed flat for eight straight quarters, and concessions remain high. Of the major markets CBRE tracks, Washington, D.C. had the highest increase in its vacancy rate in the first quarter, 40 basis points. The office vacancy rate now stands at 14.2 percent, according to CBRE. "Strength has definitely switched in the past 18 months in favor of tenants," says Jeff Kottmeier, director of research and analysis with CBRE's Washington, D.C. office.
The slowdown can be directly traced to both the uncertainty with the federal budget, and to public and private tenants looking to reduce size for efficiency reasons, says John Germano, an executive managing director with CBRE. "I don't think we really saw a hit from sequestration," he says. "It's mostly firms such as General Dynamics and Northrop Grumman who have just decided not to move forward with expansions until they understand more what the federal cutbacks will mean."
On the public side, along with drops in personnel, the Office of Management and Budget has frozen all further leasing plans, and is requiring all federal tenants to come up with a three-year plan to reduce occupancy, with the report due by mid-May. "While many large tenants are being proactive and entering the market today well in advance of their 2015-2017 lease expirations, near-term tenant demand is limited," says Mike Ellis, mid-Atlantic market director for Jones Lang LaSalle.
Thomas Fulcher, an executive vice president with Studley in Washington, D.C., says the law firms in particular are looking to cut back, he says, and a number of large firms are looking at lease expirations in the 2016-17 timeframe, including Sidley Austin and Venable. "It's going to be an interesting time to see where everybody lands," he says. "Where 10 to 15 years ago, all the law firms thought 750,000 sq. ft. was a good size to be in, now everybody's getting tighter and looking for probably around 550,000 to 600,000 sq. ft."
More significant, Fulcher says, is that with a current tightness of large blocks, there is a glut of small space. "We did a space report recently on the 40,000-sq.-ft. range, and there were about 50 options," he says.
However, both Germano and Fulcher agree that the region is still a stable, top-shelf market, regardless of the current slowdown. Buyers still outnumber sellers of office buildings, and development is starting to crop up in choice markets.
The CityCenterDC project, a four-block mixed-use property being developed by Hines along New York Avenue, is expected to be finished by the end of the year, but the 520,000-sq.-ft. office portion will be complete in June. Covington & Burling anchors the project at 420,000 sq. ft., the American Hospital Association recently agreed to lease 40,000 sq. ft. and two other tenants have committed to leases to bring the offices to 95 percent occupied, says Howard Riker, managing director of Hines in Washington, D.C.
Source: http://www.1realestateinvesting.com/fed-budget-questions-impacts-dc-rents/
It's Time To Invest In Cleveland Real Estate
Cleveland has become the poster child of American revival in core industries. It combines a solid business infrastructure with education, lifestyle and an affordable cost of living. The universities attract researchers and students from around the world. The city has a great orchestra, museums and recognized sports teams. There are miles of park trails, the shores of Lake Erie and The Rock and Roll Hall of Fame. All of this adds up to make Cleveland a great place to live and work, and thus an attractive investment climate for rental real estate.
Let's look at some compelling research from HomeUnion Services about Cleveland and its Northeast Ohio region.
Business
North East Ohio Employment:
Living
Economy
The macro environment is critical when looking at rental real estate investments, and Cleveland hits all the markers. There is strong rental demand, and a good economy leading to stable renters and great cash flow for investors.
Source: http://www.1realestateinvesting.com/its-time-to-invest-in-cleveland-real-estate-2/