Paris, troisième ville la plus chère d’Europe pour les loyers d’appartements

Les loyers de ce type d’appartements ont reculé de 3 % dans le monde et de 5% en Europe depuis un an. Paris fait exception avec des prix de location qui stagnent.

Un trois-pièces parisien se loue 1650 euros par mois en moyenne, ce qui place la capitale française au 3e rang européen et au 7e rang mondial des villes les plus chères pour un locataire particulier, selon le nouveau baromètre des prix établi par ECA international. Cette étude prend en compte les logements d’environ 80 mètres carrés situés dans 132 villes de 66 pays. Elle est notamment utilisée par les directions des ressources humaines des grandes entreprises pour calculer les indemnités de logement de leurs cadres expatriés.

Globalement, la tendance générale est à la baisse : les loyers de ce type d’appartements ont reculé de 3% dans le monde et de 5% en Europe depuis un an. Paris fait exception avec des prix de location qui stagnent. La moyenne parisienne de 1650 euros par mois pour un trois-pièces reste toutefois loin de celles de Moscou et de Londres.

Dans la capitale russe, il faut débourser 2100 euros par mois pour un 80 mètres carrés situé dans un quartier d’expatriés. A Londres, malgré une baisse de 200 euros depuis un an, le loyer mensuel moyen est de 1900 euros, ce qui en fait la 2ème ville la plus chère en Europe après Moscou, et la 5e plus chère dans le monde. A noter que les loyers à Paris, Londres et Moscou se situent largement au-dessus de la moyenne européenne qui est de 1005 euros par mois.

En dehors de l’Europe, on constate des variations de prix très fortes, à la hausse comme à la baisse. “La crise financière a provoqué une baisse des loyers dans beaucoup de pays et le départ de nombre d’expatriés a permis d’améliorer la disponibilité des locations”, explique Frédéric Franchi, porte-parole d’ECA International. Autrement dit, les propriétaires se retrouvent avec des appartements vides sur les bras, et le prix des loyers recule. Ainsi, Dubaï, 13e du classement, a-t-il perdu 4 places par rapport à l’an dernier en raison d’une chute des loyers de 37%.

Inversement, certaines destinations voient leurs loyers flamber. Caracas, par exemple, connaît la plus forte progression avec une hausse des loyers de +43%. Explication : la communauté internationale résidant dans la cité vénézuélienne occupe des habitations sécurisées, donc plus coûteuses. Caracas devient ainsi la deuxième ville la plus chère du monde, juste derrière Tokyo où le loyer est deux fois plus élevé qu’à Paris avec un prix moyen de 2980 euros.

Le tableau des villes les plus chères du monde
Classement Ville Loyer mensuel en euros
1 Tokyo (Japon) 2986
2 Caracas (Vénézuela) 2927
3 Abu Dhabi (Emirats Arabes Unis) 2221
4 Moscou (Russie) 2098
5 Londres (Royaume-Uni) 1902
6 Singapour (Singapour) 1701
7 Paris (France) 1650
8 Bogota (Colombie) 1629
9 Hong Kong (Hong Kong) 1624
10 Amsterdam (Pays-Bas) 1600
11 Istanbul (Turquie) 1573
12 Almaty (Kazakhstan) 1538
13 Dubai (Emirats Arabes Unis) 1507
14 San Francisco (Etats-Unis) 1468
15 Genève (Suisse) 1450

London property prices give less value for money

I thought I’ll share this read, it’s very a interesting view!

Prime residential and commercial property in London, the financial capital of Europe, is up to six times more expensive than in other global centres, according to research from international real estate adviser Savills.

A 2,000-square-foot apartment in desirable areas of West London, including Kensington, Chelsea and Holland Park, sells for an average of £3.7m (€4m) at today’s near-peak prices. It would rent for an average of £8,670 a month, according to Savills.

In Paris, a similar-size apartment at a desirable address sells for £2m, and in Geneva it sells for £1.3m. In the Far East, Hong Kong is among the more expensive of financial centres for property, with 2,000-square-foot prime apartments selling for £2.6m and renting for £6,112 a month.

Dubai is the exception among the largest financial centres, where the same space averages £618,700 to buy and £2,730 a month to let, likely down on recent years following deterioration in the local property market.

London has also become more attractive to foreign buyers with the depreciation of sterling. The currency is down 25% against the US dollar over the past two years, and has lost 16% against the euro.

The cultural and educational offerings and the quality of the housing stock as reasons why London continues to command some of the highest rates for prime residential property. Similarly, commercial real estate also commands a premium in London over other financial centres.

A 2,000 square foot office costs on average £165,055 per annum to lease in London’s West End and £100,743 a year in the Square Mile.

The same office at Manhattan’s most desirable addresses lets for about £86,988 a year, while prime commercial space in Frankfurt lets for £70,631 a year and in Zurich for £79,182 a year.

While residential property in Dubai has taken a hit, commercial space, however, continues to command a premium. A 2,000-square-foot prime space lets for £126,394 a year in Dubai.

In Hong Kong, rents average £82,156 for 2,000-square-foot prime commercial space, but this could soon change, according to Liam Bailey, head of residential research at estate agent Knight Frank.

“London is more expensive for several reasons and will maintain its differential over other major cities, with the exception of high-growth Asia which is beginning to catch up.”

Massive Drop in London House prices

LONDON — Estate agents are selling less than one property a week as a lack of mortgage finance hits the number of people moving house, fuelling plummeting prices, a surveyors’ body said on Tuesday.

The Royal Institution of Chartered Surveyors (RICS) said its members sold an average of 11.5 homes during the three months to the end of September — the lowest level since its surveys began in 1978. Last month, the figure was 12.7.

Surveyors are hopeful the situation will pick up after Prime Minister Gordon Brown unveiled a bank nationalisation programme on Monday, saying that as part of it, he expected banks to restore customer lending to 2007 levels.

RICS spokesman Jeremy Leaf said the announcement “raises the possibility that the lack of mortgage finance that has so damaged the housing market might be eased” after the recent turmoil.

“The housing market continues to hold its breath and unless mortgage liquidity improves, the market is likely to remain a dormant beast for some time to come,” he added.

New mortgage lending fell 95 percent in August to 143 million pounds according to the Bank of England — the lowest level since records began.

Meanwhile, house prices slumped 12.4 percent in September compared with the same time last year, the sharpest fall in 25 years, home loans provider Halifax said this month.

The RCIS’s findings are based on a survey of 300 member firms.

 

One flat in Folkestone, Kent, went on the market on January 28 this year at £125,000, and has now been reduced to £75,000.

The one bedroom lower ground floor property lies in an upmarket area of the coastal town, and is in need of refurbishment.

When Sky News Online posed as cash buyers, the estate agent Fell Reynolds confirmed the flat had been slashed from £125,000 to £99,950 and then to £75,000 because of the housing slump.

“We felt that because of the lack of interest and the market conditions, £75,000 would be a realistic price,” the agent added. “It’s a nice little flat in a good area.”

Other properties in the UK have fallen even more sharply, according to Propertysnake, a website which measures price reductions.

One two bedroom house near Worthing, West Sussex, was first advertised last October at £319,950 – but is now down a staggering 53% to £149,995.

 

 

A similar home in Cardiff, Wales, has been slashed by 45% from £184,950 to £100,000 in less than a year.

The news comes as new figures out this morning show estate agents are selling only one house a week.

The Royal Institution of Chartered Surveyors (RICS) said its members sold an average of just 11.5 homes during the three months to the end of September – the lowest level since its survey first began in 1978.

The situation is even worse in London, where estate agents have made an average of just eight sales during the period.

Some London homes on the market are down 20% from original asking prices, taking them back to levels seen in 2005 and 2006.

And completion prices are even lower because of ‘gazundering’ in the capital, where buyers cut their offer at the last minute.

A five-bedroom house in Herne Hill has been cut by 37% from £1,275,000 to £795,000 as the number of homes sold in London falls to its lowest level since records began 30 years ago.

One London agent said: “We’re 20% down. There are some very, very keen sellers out there.”

In other figures out today, the number of first-time buyers getting on to the property ladder slumped to a record low during August.

An RICS spokesman said he hoped this week’s bail-out of three high street banks would help the housing market and restore buyer confidence.

Owning Property in London

Key property deals in the City of London are falling through as funding dries up due to the worldwide credit crunch.Sellers are struggling to complete deals as liquidity in the banking sector has virtually dried up. Values are also falling.

German fund manager SEB has pulled out of buying ING Real Estate’s 88 Wood Street development. It had agreed to buy the scheme last month for around £180 million but has been unable to secure the necessary funding in the current poor economic climate.

It is the second time a sale has fallen through on the building. Atlantic Property Partners had offered £190 million but that deal also fell through.The 17 floor iconic building, designed by leading architect Lord Rogers, was bought by ING for over £230 million in 2006.

Do cheer up. There is no such thing as all bad news. Every cloud has a silver lining. Most Britons are still in work and a third of them are on secure state incomes. In the words of Rudy Giuliani, the New York mayor, after 9/11, take the kids to the park, buy a pizza, see a show.

Nor is that all. Some good things are happening. The price of oil has tumbled 40% since July. House prices are down 13% from last year. Whatever the papers imply, this is good news far more than it is bad. Those with strong nerves and some money can even buy shares that are unbelievably cheap.

Restaurants are emptying, air travel is easing and I noticed last week that central London traffic jams were strangely diminished. Soon hotels will be discounting heavily and plumbers will not cost an arm and a leg.

that the best things in life are free.

The collapse of the buy-to-let market should lead to rents plummeting and people spending realistically on housing. The end of the home-ownership boom should encourage existing owners to sublet and reduce the underoccupancy that has long inflated British house prices. This is a good thing for all.

The impact of recession on government should be even more benign. Only now do we see how casually the rampant growth in revenue has led ministers to behave. There should be no more extravagant pay settlements for doctors; no more thoughtless purchase of NHS and ID-card computers; no more of the £70 billion that Labour has spent on “advice” . The death of spurious consultancy and the reassertion of civil service morale should be another gain of the recession.

 

 

 

 

 

 

 

TAX

A businessman whose family owns more than half a dozen houses, including a £50m mansion on Britain’s “Billionaires’ Row”, has disclosed how to avoid paying tax on multi-million-pound property deals.

Hossein Ghandehari bought Toprak Mansion on The Bishops Avenue in north London with his 75-year-old mother Hourieh Peramam and his wife Yassmin this year.

Ghandehari, a 43-year-old Iranian-born businessman whose family is said to be worth £1 billion, mainly from property, said transactions involving vast sums were being kept hidden from official records using legal methods.

“There are many, many ways in which what is registered on the Land Registry is different from what you end up paying,” he said.

The price declared to the tax office, and then recorded by the Land Registry, is used to calculate stamp duty. The top rate is 4%, implying a saving of £40,000 for every £1m lopped off the declared price.

Ghandehari said one method was a process known to property dealers as “flipping”, in which a buyer sells on a house before he is due to complete his own deal. He said: “One of the ways these things happen, and I’m not saying this is the case of what happened here [with Toprak], is you buy a property for £4m and [if] I am an offshore company, I buy it for £4m with a six-month completion, and then some other company comes along and I flip it for £6m.

“What the [tax office] ends up receiving is . . . the tax on £4m. But that ‘upside’ is just not there, the £2m. And that could go on indefinitely, it could go up to £20m, £50m if the market justifies it.”

Ghandehari insisted such dealings were “all legal”. He said: “The fact is you sell the company which owns the property, or you flip it and they all complete at a certain date.

“You just buy the company which owns it . . . everything takes place offshore, nothing takes place here, no tax, no nothing, so the property becomes the asset of that offshore company.”

Ghandehari, his wife and his mother are all tax registered outside the UK. He and his wife live at Toprak Mansion when they are in Britain, while other members of his family live permanently here, some of them in The Bishops Avenue.

Land Registry records state that the mansion, a neo-classical 30,000 sq ft building, was bought for just under £41m in January by an offshore company controlled by Peramam.

Ghandehari said his family actually paid nearly £9m more for the house, which was named after Halis Toprak, the Turkish businessman who built it, but has now been renamed Royal Mansion.

Other rich homeowners in the street include the steel magnate Lakshmi Mittal and members of the Saudi royal family.

Ghandehari, who said he first bought a house in the Hampstead street six years ago because he felt it was an “excellent place to live”, said his family intended to buy more houses there. “Once my mum said we should buy the entire Bishops Avenue, should it become available. If we have the money and they are good properties, yes we are buying.”

However, he said the poor state of the market meant purchases would be put on hold.

Ghandehari said he had recently been offered £80m by a Russian oligarch for Royal Mansion but refused to sell because he loved the house. “He managed to see it for about 10 minutes and [the agent] said, ‘What price would tempt you?’ and I said £100m, but I didn’t mean it, and he came back and said, ‘£80m and he wants to buy it there and then’, and I said no.”

There was gossip when the purchase of Toprak was announced in January, with some questioning how Peramam, who fled her native Kazakhstan at the age of 17, accumulated such wealth.

A Kazakh exile said the country’s president, Nursultan Nazarbayev, was indirectly involved in the purchase of Toprak Mansion. Ghandehari denied this, although he said he knew Nazarbayev’s family.

The Ghandeharis’ spending began in July 2002 when, according to the Land Registry, Ghandehari paid £4.2m for No 33.

In 2006 the family bought two neighbouring plots that became Wyldewood, where they lived until last year. The offshore firm that now owns Wyldewood is run by Yassmin Ghandehari.

Last November, £4.9m was paid for No 24, by another offshore trust also run by Yassmin. At the same time a plot of land behind No 31 was bought for about £900,000.

In January, a third offshore firm bought Toprak. Mortgage documents show the company is run by Peramam. Ghandehari said his family also owned a few more houses in the road.

Tax rates

Buying property costing more than £500,000 incurs a stamp duty of 4%, but if the property is owned by a company, anyone buying the firm pays duty on only 0.5% of the purchase price and then owns the property. Offshore companies are exempt from stamp duty entirely

 

Fall of investment in British Buyers

It is a dream of thousands of Brits – to buy a second home in a picturesque spot in France and wile away hot summers converting a dilapidated barn into the perfect home in the sun.

But there are signs that many are abandoning their plans to buy a plot over the Channel as the economic downturn hits the second home market. And the situation has become so bad that some second home-owners wanting to sell up in France have had their properties on the market for as long as three years, according to agents. Experts say the overseas property market could be down by as much as 40 per cent on last year.

A popular trade show has also moved its flagship London event because of fears that the slump in the market would make for dismal visitor numbers.

Brits spent about £24bn on overseas property last year but that is expected to see a big fall this year.John Wall, who set up his estate agency after moving to France and falling in love with the Pyrénées-Orientales region, has noticed the fall in British buyers. “There is no question that the market has slowed,” he said. “Anyone still looking to buy is being far more selective and looking for a good price, which means that anyone putting a property up for an unrealistic price has a much poorer chance of selling.”

The property exhibition A Place in the Sun Live was due to take place last weekend at London’s ExCel centre but was withdrawn as those behind the event feared it would not attract enough visitors. A similar show was held in Birmingham last month and the fear was that demand was too low in the current climate to warrant another one so soon. “Developers were keen to attend but we were worried about visitor numbers,” said an organiser.

So instead of France, some investors are now looking further afield to secure a bargain. Places previously considered too politically volatile or far away are starting to attract British buyers. Thailand, Bulgaria and Venezuela are some of the destinations seeing increased interest from Brits. “Opportunities to make capital gains in so-called ‘emerging markets’ has accelerated this phenomenon,” said Mr Bishop. “Countries such as Turkey, Cape Verde and Cyprus are growing in popularity among buyers wanting some personal use of holiday properties, while pure investors are purchasing increasingly in the EU accession states, the Caribbean and elsewhere.”

According to Mike Holwill, of the estate agent Someplace Else, investors previously put off by South America are now deciding to take a risk on the region. “Brazil and Argentina were seen as too risky in the past, but their lack of reliance on liquidity has meant they have largely escaped the ill effects of the credit crunch,” he said.

Bargain in Bulgaria A home for £100,000

Bulgaria may not have been top of the list for second homes over the years, and the European Commission’s concerns over rampant corruption in the country cannot have inspired confidence among would-be investors. But it is one of the locations benefiting as investors begin to search out emerging property markets as the potential for making a profit in more traditional markets evaporates. A miserly £116,000 would buy you a three-bedroom villa on the Black Sea Coast, complete with open-plan kitchen, a large garden and three bathrooms. It may not be in the land of wine and cheese, but it is just down the road from Varna, a seaside resort and one of Europe’s oldest cities.

German investors have been popular among UK property owners looking for a quick sale, but the country’s own real estate sector will not be immune for the Europe-wide slowdown.

German banks are among the only institutions in Europe still willing to finance real estate deals, and the country’s cash-rich open-ended funds dominate global property investment.

The biggest economy in Europe, Germany’s dominant export performance recorded solid growth in gross domestic product in 2007, keeping up the momentum in the first quarter of 2008.

However, the economy performed poorly in the second quarter, contracting by 0.5 per cent.

The commercial property market mirrors the gloom. Research compiled by property consultancy DTZ shows that investment transactions in the first half of 2008 totalled €12.1bn – a 55 per cent fall on the previous year – as the crunch keeps debt-driven UK and US buyers away.

As in London, falling transaction levels are quickly translating into lower asset values. DTZ believes yields on German office properties have moved out from their historic low of 3.5 per cent in 2007 to an average of 4.65 per cent today, and are likely to SOFTEN further.

Despite the worsening property outlook, German bank lenders have risen to increased prominence in a market starved of credit.

As well as the big three – Eurohypo, HSH, and Hypo Real – the regional banks, or Landesbanken , are muscling in on the action on the strength of their covered bond method of lending.

Known as the Pfandbrief , the method of repackaging property loans and selling them on to institutional buyers is more highly regulated and requires less leverage than the similar commercial mortgage backed securities (CMBS) model, which has suffered death by credit crunch.

Crucially, this gives German banks liquidity that their European counterparts cannot match. And the result? While few CMBS transactions have been executed, Eurohypo research shows that in the past 12 months, €58.5bn of Pfandbrief loans were issued.

Across the world, the German open-ended funds remain one of the few active operators in the real estate investment market that have the cash and the nerve to execute transactions.

In London, the German fund DEKA recently finalised its £230m purchase of Moorhouse, a City office building, representing a yield of 6.4 per cent. This has come as a shock for a market used to seeing transactions graze the 4 per cent mark little over a year ago.

This is quite a turnround from 2006, when, following a series of corruption and valuation scandals, the open-ended funds engaged in the mass-selling of property assets, as investors withdrew their money.

However, the profits generated by selling assets near the top of the market attracted investors back in, and the cycle appears to have turned in their favour.

“The German funds have always liked London because of the long leases with upward-only rent reviews, and the fact that the tenant is liable for the upkeep of the building,” Mr Farquhar says.

“Provided that it is a core asset that ticks all those boxes, the thought of falling values is not stopping them from buying now.”

The ambitions of the open-ended funds are not limited to London.

CB Richard Ellis research estimates that the funds collectively have €22bn to spend on property. The Asia Pacific region is a big target for many, including RREEF, which is targeting investments in China and Malaysia, and Union, which has already invested in Japan, Singapore and South Korea.

However, ironically, actual German investment vehicles are struggling. Real estate funds listed on London’s Alternative Investment Market have performed particularly badly because of their often high levels of gearing

“When these funds floated, high debt levels were considered desirable in order to drive high equity returns,” says Mark Young, real estate analyst at Oriel Securities.

“However, these high levels of indebtedness are now a cause for concern, leading to severe de-ratings in recent months.”

Develica Deutschland, a German commercial property investment fund is the biggest faller to date. It is 286 per cent geared, and has lost 82 per cent of its value in a year.

A separate Aim fund, Deutsche Land, only became fully invested in December 2007, meaning that much of its investment portfolio of 54 commercial assets was acquired at the top of the market.

Activist investors have been sniffing around the sector because of the deep discounts to net asset value, but now the powerhouse is slowing, German real estate is less of a tasty prospect.

 

 

The market for the most expensive homes in London is expanding despite the economic crisis, research for the Standard has found.

Sales at £10 million and more have increased, with the number of transactions up by a third in the year to last month. Virtually all the buyers at this price at present are foreign, with the Middle East dominating again. The survey, carried out by estate agency Savills, found that the upper end of the London property market now falls into three distinct “leagues”. At the top is the narrow tier of homes selling for £10 million plus. In the larger tier below, prices range from £5 million to £10 million. Here, sales volume is down by a third. This is the section of the market where City staff who have enjoyed big bonuses have been competing with wealthy – but not billionaire – foreigners. Below that is the £1 million to £ 4 million bracket, almost entirely driven for the last few years by City employees on the expectation of their bonuses. In this category, sales have slumped by 45 per cent. In the lower two leagues, much reduced demand has been driving prices down. But in the £10 million-plus “premier league”, prices have actually gone up, by 0.6 per cent since June. “In the traditional areas of Knightsbridge, Mayfair, Chelsea and Belgravia, old money and international demand are keeping prices more stable. “However, only the very top tier – the ultra-prime £10 million plus market – continues to see demand and values holding firm, driven as it is by a growing number of global billionaires.” There are indications the boom at the very top end is slowing. Separate research by estate agency Knight Frank found prices in the top tier dropped 1.7 per cent in this sector last month. It comes as figures show the number of new homes being built has sunk to an all-time low. In the three months to September, 38 per cent more surveyors reported a fall than a rise – the lowest since the Royal Institution of Chartered Surveyors study started in 1994.

Drop in London Property Price

         The price of a home in the tax haven has leapt up an incredible 30 per cent in the last year which puts it ahead of London for the first time in five years.Prices in the capital have risen by less then two per cent as the effects of the economic downturn begin to be felt. This contrasts sharply with the final phase of the UK property boom when property prices rocketed by 50 per cent.Demand in property in monaco is high eventough short of suply, based on YourMonaco.comMonaco, traditionally an oasis for the rich and famous, is home to the world’s most expensive street, Avenue Princess Grace, where a four-bedroom apartment can cost £22 million.However, they predicted that the market would slow as the financial turmoil of the past few months begins to be felt more strongly.

 House prices are tumbling; it’s easier to get blood from a stone than borrow a mortgage at a decent rate; stock markets around the world are on a rollercoaster ride; and inflation is still expected to rise for another month or two yet.

The current economic situation is a nightmare scenario for many of us. But the extent of the impact of the credit crunch on your finances differs dramatically according to how old you are. If you are young, in a reasonably secure job and hoping to buy your first home sometime soon, the current turmoil could actually be a good thing. But if you are close to retirement, have student children who depend on you for funding and still have debts of your own to pay off, it is likely to be a disaster.

This week, we will examine the problems that the credit crisis can cause people in their twenties and thirties. Next week, our experts will tackle the difficulties facing those nearing retirement age, and those who have already stopped working.