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Issue 5: Green shoots at last
Is the property market making a comeback?
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| Torcana Ltd Investment Newsletter |
May 2009 |
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Good afternoon and welcome to Issue 5 of the Torcana Newsletter.
This might be contrary to the opinion of many of our readers, but as the weeks go by, I'm getting more and more confident that a sustainable recovery in our most important economies is definately underway.
We are still in a global recession, but in the United States at least, the rate of decline is moderating and the bottom of the housing market and the overall economy is coming into view. This isn't a hopeful claim from a real estate broker in Florida; it's a quote from the chief economist at Moody's.
Stock markets also gained worldwide yesterday after confirmation by the US Treasury that none of the 19 major US banks are at risk of insolvency.
These institutions were stress tested to see if they have sufficient cash reserves should the recession worsen. The New York Times also reported that less than $100 billion in total should be needed to bolster the current balance sheets of these banks - a hefty sum to be sure, but far less than most economists had feared.
Florida Update
Orlando is still the safest place to purchase foreclosed properties in the US in our opinion, and we have been doing a fairly brisk trade in Single Family Home and Condo sales over the past 10 days. You'll see further details of the most popular developments below and in the US listings of our website.
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Torcana.com Interactive Site
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| On sale this week... |
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| Aviana, Orlando $159,900 |
| Dr Phillips, Orlando $354,900 |
| Earlsfield, London £220,000 |
| Putney, London £345,000 |
| Calpe, Spain €172,000 |
| Costa Brava, Spain €199,000 |
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Latest News from Britain
Meanwhile in the UK, the decline in construction activity slowed markedly in April as optimism in the industry rose to its highest level for almost a year. It marks a seven-month high for the index, leading to hopes that the worst of the recession in construction may be over.
With rental yields extremely strong and exchange rates favourable (you can buy a £100,000 property with high LTV financing and low interest rates for less than €113,000) the month of May is a great time to consider an investment purchase.
My opinion on Spain
Quite a few people have asked me about Spain recently and whether or not it would be wiser to wait a little longer until prices drop further.
The truth is that the Spanish market has not bottomed out yet, and there are many banks and developers who will shortly be joining the ranks of those who are already very distressed. This increase in supply is going to cause a drop in median house prices.
However, this doesn't make it any easier to predict how far the markets might fall or when the "best" time to buy might be. We also need to bear in mind that many countries now have two very distinct property markets - foreclosed/distressed properties and regular properties.
At the moment, we have highly distressed stock (in great condition) that is reduced 25-40% from peak levels - have a look at the two properties below in Costa Brava. I can't see the price of a foreclosed property falling much further to be honest, even though prices of regular properties will continue to drop.
Taking it a little too far..
If you want an extreme example of how much property developers are suffering in Spain, then look no further than the Belgian developer in Marbella who kidnapped a local bank manager at gunpoint in an attempt to secure a 50,000 euro loan he was previously denied. Thankfully, he was arrested and nobody was harmed. Apparently the bank manager used coded language in a phone call to his branch who then alerted the police.
I kid you not folks, it was reported in El Pais.
As always, there's a great selection of properties for you to look through below.
Kind Regards
Colin Murphy
Director
Torcana Ltd
Tel: +353 1 4433 991
Fax: +353 1 2586 016
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USA - Aviana 4 Bed Single Family Home
Aviana, Orlando, Ref 350
- $159,900
- 1,940 sq ft
- 4 Bed, 3 Bath
- 50% Discount on previous sales price
An immaculate property within a modern community and great facilities. It is within 5 minutes drive of Reunion and world class golf!
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USA - Dr Phillips 4 Bed Single Family Home
Dr Phillips, Orlando, Ref351
- $354,900
- 2,822 sq ft
- 4 Bed, 2 Bath
- Reduced by $225,000!
Stunning property in one of Orlando's most sought after neighborhoods. This property is ideal for long term rental.
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| UK - London SW17 1 Bed Apartment
London Earlsfield, SW17, Ref U133
- £220,000
- New build, recently completed
- Good city connections
Finished to a high standard this property is well located near some of London's most stylish venue's and shops.
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| UK - London SW15 2 Bed Apartment
London Putney, SW15, Ref U132
- £345,000
- New build, recently completed
- Gorgeous location
Located next to Richmond Park with stunning views this property is also within minutes of Putneys bars, restaurants and shops.
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| Spain - Calpe 3 Bed Apartment
Calpe, Costa Brava North, Ref S120
- €172,000
- 3 Bed, 2 Bath
- 120 sqm living area with 13 sqm terrace
This apartment comes with top quality finishes and spacious rooms. There is also a pool within the development.
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| Spain - Denia 2 Bed Apartment
Denia, Costa Brava North, Ref S129
- €199,000 (27% discount)
- 2 Bed apartment
- 70sqm living area and a huge 97 sqm terrace
This development is within walking distance to the town and all it has to offer as well as a beautiful sandy beach.
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