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Posted January 14th, 2015 by Charles Purdy

Property market update for 2015 from OGC Key countries

With Christmas already feeling like a long time ago, inevitably our thoughts turn to 2015 and what this year will bring. For many of our readers, this year will be the year they find their dream home in a new location, and finally make that move abroad. To help, we have spoken to our expat writers in each of our key locations to look at the property market there – and what expectations are for the year ahead:

Canada
The Canadian property market performed much better than expected in 2014 – there are low borrowing costs and a shortage in single family residences available in some of the key markets (Toronto and Vancouver for example), leading to a rise in the average residential sales price by 6.8% year-on-year.

Throughout 2015, constant demand on the residential property market is expected, thanks to both overseas investors making permanent moves to Canada and baby boomers who are looking to downsize in significant numbers.

Generally speaking, the outlook for the Canadian property market is bright, with strong price increases in the more developed markets.

Cyprus
After four years of stagnation, the number of properties sold across Cyprus increased 20% year-on-year in 2014, and experts predict that this rise will continue into 2015. This rise comes after very low sales in 2013 – the lowest level of activity since records began in 2000.

Despite this rise in the number of properties sold, the price of residential properties in Cyprus fell by 9.6% year-on-year in the third quarter of 2014. The largest drops were recorded in Nicosia and Limassol, with house prices dropping 3.4%. Local buyers still have low confidence, meaning early 2015 is ripe for the international buyers looking at the country.

France
The French property market, like much of Europe, is very much a buyer’s market. There have been some price increases, notably in Paris, the Alps and Cote d’Azur (the expensive areas), but in general prices have remained stable or even decreased in many areas. This is partly because the French economy, unlike the UK’s, has not yet recovered – although experts predict that recovery will begin to towards the end of this year.

There are still plenty of bargains to be grabbed and numerous different property types on the market. Now is an excellent time for UK buyers: there is more consumer confidence in the UK economy and property market, extremely low interest rates in France, allowing French property to be financed cheaply and easily, and the pound has gained substantial strength against the euro. A UK buyer would save several thousands of pounds on a property now, compared to the same price last spring.

Vendors in France have become much more in tune with the market in recent times, meaning prices are starting to level out. It is expected that this will continue into 2015, leading to increased demand from buyers and kick starting the market – making this an excellent time to buy property in France.

Greece
The upcoming elections mean there is much confusion around various issues in Greece at the moment – particularly with the possibility of a ‘Grexit’ from the EU. Despite this, there have been some positive signs over the last year, which could offer comfort to those who wish to buy in Greece.

In 2010, a new law was passed which froze foreclosures on homes with outstanding mortgage debt of 200,000 euros or less – saving thousands of Greeks from becoming homeless when there was also mounting unemployment. This law also meant that homeowners who COULD afford to repay their mortgages withheld payment for fear of losing their homes. The government is now forcing those who are able to pay to do so, meaning that Greece’s four largest banks plan to double mortgage lending.

What’s more, prices across the country are still fairly low – meaning there are bargains to be had.

Italy
At the beginning of 2014, reports suggested that this would be a year with small recovery for the first time since the beginning of the economic crisis. Experts predicted that the housing market had reached the minimum peak of the crisis. There certainly appeared to be an easing in the aspects of weakness apparent in previous years, with falling prices diminishing and a rise in the number of new properties for sale.

This is expected to continue in 2015, making now a great time to invest in an Italian property – prices are stable and there are many properties available, especially in some of the ‘newly discovered’ regions. What’s more, it is still relatively easy to barter prices down in some areas. Italy is considered a much safer environment than in other Eurozone countries, such as Greece, and the purchase process is less bureaucratic.

New Zealand
It is still a seller’s market in New Zealand, with greater demand than supply and prices continually on the increase. The national average price in December was $480,815, slightly down on November but still 7% higher year-on-year.

Auckland and Canterbury are the most difficult areas to find property – Auckland is the most populated city in New Zealand, and Canterbury is still suffering from the results of the earthquakes in 2010 and 2011. Those finding it the hardest are those with smaller budgets and first home buyers. This is expected to continue in 2015.

Despite this, it’s not all bad news – outside of these two major towns, house prices are much more reasonable; in Hamilton on the North Island for example, you will easily find a three bedroom family home for under $250,000. Your money gets you much more property if you are open to living outside of the major town centres.

Portugal
The outlook for the Portuguese property markets in 2015 looks positive, relatively speaking. Back in October 2014, The Portugal News reported that confidence was at its highest level since 2010 – showing increased sales activity and a stabilisation of prices.

Prices began to increase for the first time in several years, although this was subject to serious regional variations – in Q1 Central Portugal recorded increases of 15%, whilst Faro’s figures were slightly down. In the Algarve, the Golden Triangle area always seems immune to financial hardship and the market there has been buoyant, thanks to luxury property investments.

There are some indicators that it has become easier to access finance for properties in Portugal, with lenders talking of 80% loan-to-value mortgages for non-residents and even higher LTVs for residents. For UK buyers, the strong exchange rate is a huge factor – making any property in the Eurozone, including Portugal, better value than it has been for sometime.

Spain
The end of 2014 saw small but significant positive movement in the Spanish property market – for the first time since 2008. Property prices are on average 45% lower than six years ago, and most Spaniards are not in a position to kick start home sales. However, the Bank of Spain believes that house prices in Spain have finally bottomed out – and in some areas they have already been going up. Generally the cost of buying is still beyond most Spanish people, meaning rentals have become increasingly popular, and those in a position to buy, like foreign buyers, can buy to let.

Spanish local banks are beginning to offer mortgages again for the first time in years, for financially stable applicants who have deposits of at least 20% of the property’s value. It is generally assumed that mortgages will be made available to a wider variety of buyers this year, thanks to the low Euribor, which is the rate on which mortgage interest is based.

The number of building permits awarded has continued to increase during 2014, meaning the construction industry will start to recover after almost completely stalling.

Turkey
The drive of the Turkish property market has been constant in the last year – and new figures expect this to continue from Istanbul to the western coasts in 2015. In 2014, Turkey’s property market reached a new high, with 59% more units sold between January and November.

The three main provinces showing promise are Istanbul, Antalya and the Aegean coastal province of Aydin. In these provinces, an average of 15000 property transactions were completed a month, generally by overseas buyers. There was increased interest from purchasers in Russia and the Middle East, but Brits and Germans continue to lead the way – Scandinavians were also continuing to show lots of interest.

One of the major draws of Turkey is that it is a stable Muslim country, held in high regard by fellow Muslim nations. What’s more, the Turkish Lira is weak, meaning more Lira to the pound – so the cost of property is more affordable. Prices across the board still hold steady, with a two bedroom property in Didim selling for around £30,000 and a three-bed villa with a pool asking for upwards of £60,000.

USA
The 2015 property market is looking particularly good for first time buyers. Builders have been working hard to increase the quantity of affordable homes for entry-level buyers, to try and bring supply up to meet demand.

New lending guidance was put into place in December 2014, allowing first-time buyers to get a mortgage with only a 3% deposit, and looser lending standards, coupled with a strengthening job market, will make it easier for first-time buyers to enter the market.

House prices at the lower end of the market are also appreciating roughly one and a half times as quickly as those at the higher end of the spectrum. Strong recovery is a reflection of the improving American economy and the recent drop in oil prices has lowered home energy costs and reduced the price of gas at the pump. Increased consumer confidence has encouraged people to start spending money on bigger items – like houses.

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Posted January 8th, 2015 by Charles Purdy

Why planning is key to currency transfers in 2015

Expats and overseas property buyers should take extra care when making overseas payments in 2015, thanks to a string of political and economic events that could cause volatility in the currency markets. Anyone on the verge of repatriating or sending funds abroad could be exposed to yo-yoing exchange rates if they are exchanging their money  Continue Reading…

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