Main events of global property markets (March – April 2009)

In the beginning of 2009 many overseas property markets have become even more affordable for Russians, both pricewise and due to various amendments in legislation that concerns foreign property buyers. The structure of Russians’ interest has also changed over the first months of this year.

The study of Russian buyers’ preferences, which had been conducted by the Prian.ru portal during the specified period, has revealed a certain tendency: over the first months of 2009 Russian buyers’ interest towards Bulgarian and Finnish properties has declined, interest towards Spanish properties has remained considerably stable, while US real estate has gained a high degree of attention. That said, in Q1 2009 Bulgarian property market was still a top-priority market for Russian buyers (18.87% of all requests submitted to the Prian.ru portal’s property database).

Bulgaria
Residential property prices have decreased by 12.4%, nationwide, in Q1 2009, compared to the preceding quarter. The median cost of Bulgarian square meter has declined to €608.5. The most expensive housing is located in Sofia - €1 213 per a sq. m. The capital is followed by Varna - €1,074 per a sq. m., and Burgas - €916 per a square meter. The cheapest properties are located in Kyustendil (€306).

UK
British property market, one of the most severely affected by the crisis, was the first to start a recovery. According to the largest national mortgage bank Halifax, local housing prices had averagely increased by 1.9%, January to December. The bank has claimed that property prices had started to increase for the first time in 10 months.

Already this February, however, the prices have declined by 1.8%, in comparison to January, Halifax says. The prices plunged even further in April, loosing 1.7%, compared to March.

Same period’s data, but provided by the National building society Nationwide slightly differs from the abovementioned figures: according to this organization British housing prices have increased by 0.9% in March, compared to February, later declining by 0.4% in April.

Cyprus
In 2008 Russian buyers have spent €430 million on Cyprian property. According to the Gordon Rock real estate agency, deals involving Russian nationals are accounted for 40% of all property deals concluded in January-February 2009. That said the total quantity of deals concluded on the island fell by 65% in Q1 2009. The number of Brits represented on Cyprus has plummeted: they had accounted for 40% of all Cyprian property buyers in 2008, and barely for 15% in January-February 2009.

According to the BuySell Home Price Index, Cyprian home prices have declined by 1.7% in Q1 2009, quarter-on-quarter. During the last 12 months local residential property prices have plunged by 2.2%.

Latvia
Latvian housing prices have plummeted by 24.7% in Q1 2009, quarter-on-quarter.

In Latvian capital, Riga, median apartment prices have decreased by 7.6%, February to January. In yearly comparisons the decrease works out 41.6%. This March, the average price of a standard apartment in Riga has plunged by 21.8%, followed by a 5.7% decrease in April (down to €572 per a square meter).

Since the beginning of 2009 Yelgava has become a leader of property price depreciation rate. The average price of an apartment in this city has plummeted by 49% (down to €377 per a square meter) during the first months of 2009.

USA
This January the declination of property prices in 20 first-tier cities of US has worked out 19%, year-on-year. This has become a record-breaking indicator for the whole history of the Standard & Poor's/Case-Shiller index. According to the index the prices have decreased by 2.2%, February to January.

The Federal Housing Finance Agency, however, presents more positive information. According to the agency’s version the price growth has worked out 0.7% in February 2009.

Laws and taxes

UAE authorities have announced an introduction of a six-month renewable residency visa for foreign property buyers. Owners of homes that cost more than 1 million dirham ($271.75 thousand) are eligible for such kind of visa. Monthly income of applicants should be not lower than 10 thousand dirham ($2.7 thousand). Besides that a unit must be a freehold and suitable for all his family to live in.

Montenegrin government has officially allowed foreigners to purchase local land plots without any restrictions. The exceptions would be made only for land of strategic importance, national parks and historical monuments.

Cambodian authorities have also permitted foreigners to purchase real estate in the country. Currently foreign nationals may lease local properties for up to 99 years. New legislation will allow them to purchase homes and flats in total ownership; this does not however cover land ownership.

Taxes on buying and maintaining property have been increased in Bulgaria. For instance, you will have to pay 1.5 times more than you would’ve paid earlier for a 59-meter-large flat located in a premium-district of Bulgarian capital. In this particular case the property tax has increased from €59 to €85.5 while prices for garbage removal services have soared from €60.8 to €91.2.

Since January 16th Israeli housing priced less than NIS 1,026,660 ($265.9 thousand) is exempt from real estate purchase tax, but only if the buyer doesn’t possess any other units. Properties that cost not more than NIS 1.442.870 ($374 thousand) are subject to a 3.5% purchase tax, if the purchase price exceeds the present threshold sum the tax rate will work out 5%.