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Archive for December, 2010
Florida has been very good to Torcana his year with many successful launches under our belts (with Mosaic, Arbor Lakes & Sabal Point being the standouts).
More will follow in early January as we continue to source high end condos with bulk discounts in affluent middle class areas that are pre tenanted by local professionals. Net yields will generally be 8% and prices 70% below peak rates.
Early in the new year we will bring other US products to the market including a variety of bespoke services for investors seeking to purchase multiple units (please get in touch if you´d like to know more).
Lies, damn lies and statistics (Disraeli)
I´ve had US housing numbers coming out my ears this year and I´m going try and ignore them for the next two weeks. For those who don´t want to watch Harry Potter or Willy Wonka on television, there´s no shortage of housing statistics on the USA market available online.
I´ll just give you two graphs in this newsletter though, one which shows the inventory in Orlando over the last 3 years and other which shows new contracts issued in Orlando during the same period.
Off the top of my head, I can think of half a dozen Housing Ministers in the EU and elsewhere that would sell their grannies for stats like these.
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Warm Regards Colin |
That´s it from me for this year folks - many many thanks for all your support during the year.
Wherever you are, and on behalf of all the Torcana team, I hope you have a very Merry Christmas and a successful New Year.
I´ll leave you with a few useful Christmas quotes for those awkward moments when you´ve ran out of things to say.
The Supreme Court has ruled that they cannot have a nativity scene in Washington, D.C. This wasn”t for any religious reasons. They couldn”t find three wise men and a virgin. Jay Leno
Larry Wilde
Warm Regards
Colin
Let´s get the bad news out of the way first. The views I expressed on Ireland and Spain in the Xmas newsletter in December 2009 have not changed one iota. Both are high risk - low return investment destinations and I can´t see that changing in the near term (it will eventually). I also wrote a detailed overview of the Spanish market last month which you can view here.
Brazil will get a lot of attention next year from property investors. Most of the overseas interest will be in the (relatively) high end coastal properties and holiday resorts dotted along the north eastern coast. I´ve absolutely no interest in that though.
However, the second round of a huge social mortgage program (MCMV2 if you want to google it) is quite interesting. Millions of middle income Brazilians are purchasing homes for the first time with government backed mortgages, and there are a several ways international investors can get involved. It wouldn´t be for the faint hearted and it´s still early days as far as my research is concerned. I might have something in 3-4 months though.
Renewable Energy investments will continue to increase in importance in 2011. I´ve been on a steep learning curve with them this year as they are deceptively complex products that come in a very wide variety of structures. I think solar is best suited to regular €50,000 - €150,000 investors and we´re looking forward to promoting these in the new year.
Wind, hyrdro and biomass are more suitable for high net worth individuals. The low entry level (€20,000) forestry products such as teak, bamboo and agarwood strike me as a fad. I´ve looked into about half a dozen of them, some promoted by companies I respect, and I just don´t like the concept. My gut tells me to stay away.
Warm Regards
Colin
When the financial crisis first hit in 2008, the economic and political collaboration between Europe & America was unprecedented. That isn´t happening anymore.
Europe´s citizens (UK included) are now enduring massive spending cuts while the USA is still stimulating its economy.
Or, to put it another way, Europe has checked itself into rehab while the USA wants to inject steroids a little while longer.
Why?
Setting aside the theoretical pro´s and con´s, a big part of the reason is that the US Dollar is the world´s reserve currency and the USA is the only country that can print it. A very large portion of global imports and exports, including crucial commodities like oil, are all based in dollars.
On the one hand, that makes quantitative easing a lot easier, but on the other, countries that hold US dollars (particularly major oil exporters and China) are not too happy about how those actions are diluting their existing reserves.
In the short term however, these tax breaks and stimulus packages should ensure the US Economy has a healthy 2011. It might even continue to be fine in the medium term, but they´ll have to address the debt situation eventually, because it is clearly unsustainable.
Real long term recovery does not involve the US government pumping money into the economy for years on end - that is a once in a generation activity. It is far more important that the private sector figures out new ways to produce goods and services that US citizens and other countries want to consume.
Warm Regards
Colin
If you´ve had a tough year in the office and have spent the past couple of days trying to fly out of an Irish or British airport you could be forgiven for missing this - but the world economy hasn´t done too badly at all this year. The Economist magazine estimates that it has grown by 5% - which is way above what people were forecasting in 2008 and 2009.
Manufacturing is up, global stock markets are doing well and the big fears of double dip recessions in the US & UK never materialised. The economies of Germany, Brazil, China and India - big players all - have been tearing through 2010.
Not so good if live in the wrong part of the EU
While Germany is putting a nice shine on the overall EU performance, the nations on its periphery (Ireland, Portugal, Greece and Spain) are facing a very grim 2011 and all still have the potential to wreak more havoc in Europe and beyond.
Additionally, Europe´s existing banking model is (in my opinion) unfit for purpose and needs serious alterations. Some banks are sick and some are healthy, but almost all have either borrowed from or lent huge sums of money to vulnerable EU economies. A bickering and fractious EU leadership does not inspire confidence at a time when new shocks and major political decisions are almost certainly imminent.
Warm Regards
Colin
