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Global Investor
The monthly newsletter from
The Worldwide Property Group
Market snapshot
Global interest rates: Exchange rates £1 buys:
UK = 1% US Dollar = 1.45
US = 0.25% Euro = 1.14
Euro zone = 2% Yen = 139
Japan = 0.1% Aus Dollar = 2.24
Australia = 3.25% Canada Dollar = 1.82
Canada = 1%
Generally, worldwide economic conditions are continuing to weaken with many leading economies now officially in recession, however, there are clear signs that stock market volatility is calming and the markets are starting to settle. Global inflationary pressures continue to subside as interest rates reach ever lower levels and fuel and energy costs decrease. Subsequently, transport costs and related areas such as food prices are also falling back.
At home the Bank of England base rate has now hit another record low of just 1%, with many economists believing it will drop further in the near future. As we move further into the New Year average property prices are continuing their downward trend, but at a slowing rate. Both the Nationwide and Hometrack house price surveys reported a fall in January of 1.3% and 1% respectively. In a surprise move however the Halifax reported a 1.9% increase during January.
Commenting on the figures Martin Gahbauer, Nationwide’s senior economist said “The 3-month on 3-month rate of change, a smoother indicator of the short-term trend in prices, improved for the fourth consecutive month from -4.2% in December to -4.0% in January”.
With property pricing now at greatly reduced levels in many global regions and developers offering ever more enticing incentives in an effort to sell units there now exists incredible opportunity for the savvy investor.
In the news
90% of Euro banks expect to increase non-resident lending in 2009
A recent survey from mortgage broker International Private Finance (IPF) indicates that 90% of Spanish, French, Italian and Portuguese banks are set to maintain or increase the range and type of non-resident mortgage they provide in 2009.
The company interviewed 20 lenders across the respective countries, including: BBVA, Barclays Italy/France, Deutsche Bank, BNP Paribas, GE Moneybank, Banif, Credit Lyonnais and Societe Generale; to find out what this year held for non-resident lending.
The banks said that the most popular product developments, they feel are of interest to international buyers in Spain, Portugal, France and Italy, are higher loan-to-value (LTV) mortgages, an increase in interest-only finance options and more special purpose vehicles (SPVs) for those looking to buy within a company or tax efficient structure.
“As the world’s population becomes increasingly mobile, the need for flexible and efficient ways of financing and owning assets in different geographical locations is becoming more pressing,” said Fiona Watts, managing director of International Private Finance, and author of the report.
Portuguese lenders said that in 2009, the intent to lower the deposit amount required by non-resident investors was the top on their list of priorities, while 100% of French and Italian banks plan to maintain or increase their range of mortgage products available to overseas buyers. Spanish banks, some of the most exposed to the downturn in the real estate sector, said that while some products had been downgraded, 50% expect to maintain current product levels in 2009, while 66% expect demand from international buyers to be maintained, or increase, in 2009.
Country profile – Portugal
Location – South-Western Europe
Capital – Lisbon
Government – Parliamentary republic
Economy – 36th* by GDP (nominal)
International membership – European Union, NATO, OECD, United Nations
Currency – Euro
Population – 10.7 million
Language – Portuguese
Portugal is a small country occupying the far western tip of the Iberian peninsular on the edge of the Atlantic Ocean. Once one of the words great colonial powers the country handed over its last overseas territory in 1999, however, the archipelagos of the Azores and Madeira are still a part of Portugal. A stunning country of great contrasts Portugal boasts beautiful beaches, mountains, plains and rolling hills. With an average annual temperature of 20 degrees, Portugal is one of the warmest countries in Europe.
Since the country’s accession to the European Union (EEC as it was) in 1986 it has undergone rapid modernisation and economic development. Portugal’s traditional industries of textiles, clothing, wood products and wine have given way to new services and industry such as computer software, car manufacture and of course tourism.
Tourism is fast becoming the backbone of the Portuguese economy with ever increasing visitor numbers. Health and wellbeing holidays have become major aspects of the country’s tourism sector with the introduction of world class spa resorts mixed with a wonderful climate. Beach holidays continue to draw families mainly from the wealthy countries of Northern and Central Europe.
And then there is golf.
Portugal has successfully become one of the top golf destinations in the World. A mix of superb golf courses and perfect climate attracts ever increasing numbers of golfers not just from Europe but also North America and beyond. The incredible rise in visitor numbers is set to increase over coming years as the country’s infrastructure continues to improve and more low cost airlines add the destination to their schedules. The construction of the new Lisbon airport at Alcochete is a prime example of this drive to improve infrastructure.
The future for property investors therefore looks very bright indeed. With a modern and stable economy and banking system, high rental demand, excellent value for money and incredible medium to long term capital growth potential, Portugal ticks all the boxes of a good investment location.
Interested in investing in Portugal? Take a look at our current investment opportunities – CLICK HERE TO VIEW.
* Source=International Monetary Fund
What is it?
Equity
Equity in respect of property is quite simply the difference between a loan (typically a mortgage) on your home and the property’s value. If you were to sell the house tomorrow and pay off the loan the money that would remain is equity.
Of what use is equity?
Tied up in the value of your home equity is of very little use, it is effectively ‘dead money’. However, it needn’t be this way; equity can be released and re-invested to really make it work. One way to achieve this is simply to re-mortgage the property at a higher level. The difference between the existing mortgage and the new is now real money and yours to do with as you like. So now you have the funds to invest in another property, maybe a Caribbean villa or a house in a university town to rent to students. Either way the money is now working for you.
1 Day training workshop
Over the coming months we will be delivering a series of free 1 day training workshops for our registered members. These events are designed to give attendees an understanding of the business concepts behind property investment. As an open and ethical company we believe it is essential that our clients have an understanding of these concepts before investing in property, whether they purchase through us or another company. We therefore offer this as a free course to anyone who would like to attend.
These informative sessions receive excellent feedback from all those who attend. They are delivered only to small groups and convey real information; they are in no way a sales pitch.
If you would like to attend one of these sessions please take a look at the events calendar on our website CLICK HERE to see which date and location best suits you, then simply give us a call and book your place.
Remember, there is no charge for attending one of our training workshops.
Mentoring
If you can’t make any of our training workshops or you would like help in creating a goal achieving strategy, then why not consider booking a one to one mentoring meeting. Our mentoring programme is designed to help you achieve your investing goals by giving you the tools you need to be successful and then guiding you in the right direction.
Mentoring is a service that we offer to all of our clients without charge. It is important to us that you invest with knowledge and understanding. If you would like to sit down with one of our highly experienced consultants simply give us a call on 01235 553569 and we can book a suitable time and date for you.
Tell your friends
If you like what you experience through the Worldwide Property Group don’t keep the secret, tell your friends and family. We offer a very generous referral programme, details of which you will find on our website. Click here to register your interest.
Current investment opportunities
Why not take a look at our current investment opportunities. We have high quality property in some of the world’s best locations including Greece, Cyprus and the Caribbean; all offering incredible investment returns. Take a look at our website CLICK HERE for full details.
On a lighter note
"Politics is the art of looking for trouble, finding it, misdiagnosing it, and then misapplying the wrong remedies." – An unknown university lecturer
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