China Haunted By Empty Properties as Economy Cools
China’s real estate market has continued to cool and the trend is set to endure throughout 2015, according to data from the country’s own National Bureau of Statistics. Property values in China saw their fifth consecutive month of drops as the housing market corrects itself. The average fall was 5.1% year-on-year, and there were sharp drops in Beijing and Shanghai.
While China’s GDP has continued to grow at just over%, a figure many Eurozone countries would be letting off fireworks about, the housing sector contributes about 15% to GDP in China and following years of overdevelopment there is a whopping seven years’ worth of inventory waiting to be sold. Until that level of stock can be reduced, Chinese property markets will continue to be haunted by ghost cities.
Chinese Investors Turn to California
Chinese investors are transferring their attention to major American cities in increasing numbers, and California is a focus for their activities. The California Association of Realtors (CAR) recently released its 2014 International Home Buyers Survey, which indicated that international homebuying was still rising even as domestic demand stuttered.
The report showed that one in six participating realtors closed a deal with an international client in 2014 - an unchanged figure from the previous year - and that almost a third of international buyers were Chinese.
Super-Rich Own $3trn in Houses Worldwide
The world’s ultra-wealthy own $3trn (£2trn) of premium, owner-occupied property between them. Of the world’s 211, 275 ‘high net worth individuals’ (defined as individuals with assets of $30m (£20m) or above), 79% own at least two properties. Desire for holiday homes and vacation spots, as well as the dictates of international business, are behind the figures.
Irish Rental Inflation Slows
Ireland’s red-hot rental market has begun to cool, showing a reduction in rent inflation in the final months of 2014. In figures released recently by Daft.ie, Irish rents saw decreased inflation in the fourth quarter of 2014, rising at 9.7% year-on-year as compared with 10.8% in the second and third quarters.
New QE from Eurozone: What Will it Do to Asian Markets?
The latest round of quantitative easing in the Eurozone is expected to have a strong impact on Asian markets. The European Central Bank (ECB) has unveiled a €1.1trn quantitative easing package intended to stimulate the Eurozone economy over the next 18 months. According to Dr Richard Barkham, Global Chief Economist for CBRE, this will have mixed effects on Asian markets.
‘The continued weakness of the Eurozone economy will result in slower and more cautious corporate real estate decision making by European occupiers in Asia Pacific in the short-term. However, in the medium to longer term, Asia Pacific will remain a priority for revenue growth,’ Dr Barkham said.
Athens Reforms Tax Code
Greece’s new government has embarked on a radical overhaul of the country’s taxation system. Athens plans a new tax code featuring a ‘Large Property Tax’ that will apply to homes as well as to works of art and other possessions, with a €300, 000 tax-free threshold. When calculating eligibility for the new tax, all assets, not just real estate, will be included. The Single Property Tax (ENFIA) is to be scrapped and a number of tax exemptions for those on lower incomes.
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