The once thriving real estate market in New York’s prestigious Manhattan district has experienced a heavy blow in the last three months. Sales have gone down by 50% and prices have continued to sink, leaving owners little hope to sell their apartments for a nice profit.

Jonathan Miller, CEO of real estate appraiser Miller Samuel, stated: “Sales were off by 50% because of the weak economy, rising unemployment and, most important, the credit crunch.”

 

Halstead property, another real estate firm reported that since last year prices for an average Manhattan apartment have fallen by 24% to around $1.26 million. The company also pointed out that the median price for apartments in the district were at a low $795,000. This is the lowest it’s been since the second quarter of 2007, having dropped 19% from the previous year alone.

These hard facts are clearly indicative of the larger problem that exists nationwide. The biggest drops were seen in the luxury market which has been accredited to a certain degree by the pay cut of many Wall Street employees and the lack of available loans from banks and lenders.

CEO of PropertyShark.com, Bill Staniford said: “There was a lot of wealth that we’re not seeing anymore.”

On the opposite side of the spectrum price cuts weren’t as vindictive at the lower end of the market. Loans were more readily available for that level which has resulted in a better market in comparison. Despite the negative events in the real estate market some agents report positive signs that promise a recuperation in the not so distant future.

Corcoran CEO Pamela Liebman said prices have slumped, but deal activity is increasing. She said: “The stalemate is over buyers have returned.” Liebman also said that closings rose between 10% to 15% compared to the first quarter this year which is a good indication that buyers were indeed back in the game.

Halstead’s President reported similar findings as well. She stated: “I am seeing a light at the end of the tunnel.”

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The recession has shown that Dubai’s growth was financed by billions of pounds of debt and this burden is threatening to drag the city under the desert sands.

Several government-backed developers were at the forefront of major residential and commercial buildings in Dubai.

Shares in the largest listed Arab developer Emaar Property had 10% wiped off their price on announcement of the merger with Dubai Properties, Sama Dubai and Tatweer.

These three companies are all subsidiaries of Dubai Holdings, which has the backing of the Dubai royal family and analysts fear in the background assets are just being shuffled on paper to shore up ailing companies.

 

The new company would have assets of £32 billion, according to Emaar chairman Mohammed Alabbar. The problem is no one knows how far property prices have plunged in Dubai and whether they have hit the bottom yet.

Dubai has already issued a $10 billion bond tranche to help the crisis hit economy, but still faces debt issues.

The last official figures showed 40% was wiped off residential property values in the first few weeks of this year  - and Alabbar confirmed his valuation of the assets was on figures for the end of 2008.

The mergers smack of debt consolidation by using Emaar’s stronger balance sheet as security against the weaker financial positions of the other companies.

The move has yielded mixed results for Emaar, with Standard & Poors (S&P) saying it revised its ratings for the firm to developing while Moody’s Investors Service, in a separate statement, said it placed Emaar on review for possible downgrade. Moody’s also downgraded Dubai Holding’s and placed it on review for further downgrade.

S&P also downgraded credit ratings for port operator DP World, the Jebel Ali Free Zone and Dubai Multi Commodities Centre Authority, all of which had been on negative credit watch since April.

“The rating actions reflect Standard & Poor’s reappraisal of the likelihood of extraordinary financial support by the Government of Dubai to government related entities to ensure the timely repayment of their financial obligations,” said S&P.

The downgrades also “reflect our view of the stand-alone credit profiles of the entities, which in certain instances, we consider to have deteriorated,” said S&P.

The agency added the reappraisal also was the result of “increased uncertainty regarding the government’s willingness to provide such support” to Nakheel, the property developer famed for building Dubai’s manmade islands.

For property investors, the S&P and Moody’s downgrades are definite red light to putting any more cash in to Dubai until the storm has settled and the full extent of how much debt the government is carrying as a major shareholder in just about every business deal in the country.

Investors should remember that all property market and financial data is historical and it may take a year or so for accounts and statistics to catch up with what is really happening on the ground in Dubai.

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Wealthy Chinese investors are taking advantage of relaxed Australian foreign investor laws to buy property in Melbourne. Agents in Melbourne’s eastern suburbs have reported that many buyers are part-time residents from China, Hong Kong and other Asian countries like Taiwan. There is also an increase in Asian companies who buy property in Australia to accommodate their staff.

 

Last month a house in Balwyn sold for $1.838 million as a result of auctions that are being held in English and Mandarin. Company Marshall White in Armadale and Hawthorn are now sending their agents to Shanghai to look into possibilities to establish real estate offices there in order to attract more buyers from China.

Director John Bongiorno said: “The massive wealth that they’ve got is quite daunting in some instances. What’s attracting them is that there’s so much space here — it’s such a safe haven for them to park their money in terms of good real estate. It’s a safe lifestyle, great schooling for their children, no pollution and cheap property by their standards.”

The influx of overseas buyers increased when Australia changed their property laws late last year. Temporary residents to Australia (those that hold a temporary visa for 12 month of more) can now buy established homes and new property in the country. The same goes for those people who are currently holding a bridging visa.

Previously, buyers had to report to the Foreign Investment Review Board when they bought property Australia which ofgten took 30 days, making biding at auctions impossible. The new law also grants foreign companies to buy homes for their staff.

BCI International Consulting has been running organized property tours from China to Melbourne for a couple of years now. The tours run for groups of 15, bringing them to Melbourne to look into properties.

Mr Jan who works for BCI International Consulting said: “We find that there’s a bigger influx at the moment because of the change of laws and secondly the strength of the Chinese yuan against the Australian dollar.”

He also organizes Australian property exhibitions in China. On these exhibitions Mr Jan signs people up for these property tours to Australia. Due to the short-term stay of these wealthy buyers, the market is still alive and kicking, even at the top end. Chinese buyers are so keen to buy, they often don’t haggle and simply pay the price.

The main reason Chinese buyers have their eyes set to Down Under is to give their children a Western school education. The Chinese value good education and by establishing their base here they can take advantage of both cultures.

Many of Melbourne’s top schools are right in the City of Boroondara where most of the Chinese buy property. This has resulted in a boom of enrollments by international students in these schools.

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Imagine a hotel with champagne that costs £36 a glass, offers remote controlled toilets (no kidding) when you go for your private business and is situated on one of the most remarkable coastlines of Europe - introducing the very expensive Mardan Palace on the Turkish coast of Antalya. Reminiscent of a European Dubai as the Times Online labelled the area, Antalya is fast becoming the latest tourist hub for sun starving tourists of northern regions.

 

The fact that the English pound still has some buying power in Turkey also helps to draw a healthy amount of tourists to the regions of Antalya.

Boasting some remarkable hotels already, Antalya is now going to be home to the most expensive hotel in Europe at a cool price of £1bn.

Hotel Lobby

Aquamarine Restaurant

Ballroom

Deluxe Hotel Suite

Events Area

Grand Hamam Suite

Gym

Seminar Hall

Natural Surroundings

Swimming Pool Area

Premium Hotel Suite

Sauna

Mardan Palace at Night

Looking at the pictures of the hotels website Mardan Palace we can’t help but be reminded of the grandeur we often come across in Las Vegas. Hand picked staff will cater to your every whim at all hours of the day and night and the international airport is a short 15 minute car ride.

The hotel is fitted out in so much gold leaf you could probably plaster all the walls of your home with it and more. There are some 10,000 square metres of gold leaf, aided and abetted by 500,000 crystals and 23,000 square metres of Italian marble.

Musicians will entertain the distinguished guests and no expense has been spared when the hotel was built. Just take the pool itself, a full five acres of sparkling blue waters with bridges inspired by Leonardo da Vinci. Guest can enjoy gondola rides to be ferried across the pool and a trip from one end to the other of the pool takes 30 minutes.

In the middle of the pool sits a sunken aquarium with some 2,400 fish.

The waterside Italian restaurant is stocked with Hermès crockery worth £1.35m.

Telman Ismailov, president of the Russian group AST, is the owner of the Mardan Palace. A first time hotelier he has spared no expense to build the best hotel that has ever been seen anywhere in Europe.

The hotel features some 560 rooms and the whole “show” is certainly not for the faint-hearted or low budget minded hotel guest.

There are certainly plenty of “tacky” aspects as the TO called them and also offensive ones like the man made beach that needed sand dredged from Egypt to provide guests with the silkiest beach ever. In sight of the global recession this certainly is a sore eye for many, especially those who can barely feed their children.

What do you think? If you had the money, would you stay at a hotel like the Mardan Palace or do you feel it is not necessary to use luxury in such measures?

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The billionaire capital of the world is New York City according to Forbes latest posting of the top cities for billionaires. With 55 billionaires, New York reigns number one even after losing 16 billionaires since last years rating.

As the world slips deeper into a recession even the rich are feeling the pinch and this is closely reflected by the loss of billionaires all around the globe. New York celebrity rich Henry Kravis and Stephen Schwarzman have both lost fortunes respectively.

Among the dropped from last year’s list are Maurice Greenberg who lost his fortune and is worth less than $100 million a year later. Another one dropped from the who is who of world billionaires is Citgroup chairman Sandy Weill. His Citi shares have lost nearly all of their value. News Corp. chairman Rupert Murdoch, shareholder activist Carl Icahn and real estate titan Donald Trump also lost considerable amounts of their fortunes.

However, not all is gloom in the billionaire department. Some like Mayor Michael Bloomberg, actually saw his net worth rise.

2. London

London takes second place in the rankings with a total of 28 billionaires. The city continues to attract the wealthy from other countries, like Indian citizen and steel magnate Lakshmi Mittal. Others like Russian oil and chemicals tycoon Leonard Blavatnik and Dutch Heineken and heiress Charlene de Carvalho-Heineken also reside in London.

3. Moscow

Moscow ranks third with 27 millionaires after last year’s whopping 74 (which scored the city a number one rank).

Plunging real estate markets, oil prices and commodity prices are responsible for the demise of the Russian capital. Many of Russia’s upper class have seen tremendous losses. Dmitry Pumpyansky, is an industrialist from the resource-rich Ural mountain region, and he lost $5 billion as shares of his pipe producer, TMK, sank by 84%.

Russia’s richest man, metals mogul Mikhail Prokhorov, is worth $9.5 billion and lives in Moscow.

4. Hong Kong

Hong Kong ranks in at fourth place and takes the podium the most popular city for Asian billionaires. A total of 21 billionaires live in the former British colony.

The richest man of Hong Kong is Li Ka-shing, head of Hutchison Whampoa. Other Hong Kong billionaires are Lee Shau Kee, Henderson Development Chairman and the Kwok family.

5. Los Angeles

Fifth on the ranking scale of top ten billionaire cities in the world is Los Angeles, California. With a combined net worth of $2.4 billion a total of 17 billionaires live in the city and many are born from the entertainment industry. Steven Spielberg, is one of them.

6. Dallas

In sixth place is Dallas, Texas with 14 billionaires. Despite falling oil prices, Dallas has risen from last year’s rankings to sixth place. Wildcatters T. Boone Pickens and Ray Lee Hunt live there, as does the outspoken owner of pro basketball’s Dallas Mavericks, Mark Cuban.

7. Istanbul

Turkey’s Istanbul clocks in at seventh place with a combined 13 billionaires. Considered the crossroads between East and West, Istanbul fell three spots from last year. Back then Istanbul had 34 billionaires with a combined net worth of $58.7 billion. The current cumulative net worth of all 13 billionaires is $18.5 billion. Its richest resident is Harvard-educated banker Husnu Ozyegin, worth $2.9 billion.

8. San Francisco

With 12 billionaires, San Francisco, California is home to some of tech’s biggest superstars, including Google guys Larry Page and Sergey Brin, who remain the Bay Area’s richest residents despite each losing more than $6.5 billion this year. Frisco ranks eight.

9 & 10 - Chicago and São Paulo

Chicago and São Paulo, Brazil, are both newcomers to the top rankings. With 10 billionaires each, the Windy City ties Tokyo, Sao Paulo and Mumbai for ninth place. Famous residents include celebrity billionaire Oprah Winfrey, hedge fund maven Ken Griffin and real estate mogul Sam Zell.

Even though these guys have billions at their disposal they too suffer tremendous losses due to the current economic conditions. It will be interesting to see who makes the list next year.

São Paulo is the only South American city in the top 10. Nearly 11 million people live in the teeming metropolis, including Joseph Safra, head of Banco Safra and Dorothea Steinbruch, who controls one of Brazil’s largest steelmakers, Companhia Siderurgica Nacional.

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Bahrain has long been the forgotten little brother of glittery Dubai in the housing investment industry. For years we have been told countless stories on why we had to buy property in Dubai and all the while Bahrain has quietly sneaked up in the housing stakes.

 

Since reports of a falling Dubai have become stronger every month, Bahrain has only suffered “small damage”. After having spent many years in its bigger brothers shadow, Bahrain is ready to raise the stakes and claim back some of its past status as a strong and reliable financial business centre in the Arabian world.

The Bahrain Economic Development Board’s chief operating officer Kamal Ahmed said:

“In tough times, people want to be in the most stable place. Of course, nobody is immune to the crisis, but we have certainly shown we are less exposed.”

The CBB (Central Bank of Bahrain) has established itself as one of the better regulators if we are to believe the latest news reports from the Middle East due to the lack of available finance overall. Some even say that Dubai’s loss has resulted into being Bahrain’s gain but clearly it is early days at the moment. Signs are positive though and industry watchers are positive that Bahrain might attract more investors in the next year due to its stable economy despite the global crisis elsewhere.

Ahmed further stated that it wasn’t the banks fault that Bahrain has lacked the attention it supposedly deserves but more so the lack of media attention overall.

The World Bank also helped to establish Bahrain as a strong business centre by ranking it 18th in the world for doing business with last year. Another encouraging sign of a stable economy is the number of new lending institutions licensed in 2008. There were a total of 44 new start ups compared to 38 start ups in 2007.

Bahrain’s financial specialty if one could say that is Islamic finance. The launch of the Bahrain Financial Exchange in 2010 will also see the position of this small emirate strengthened overall.

But even so Bahrain’s economy is relative stable, the emirate has experienced plenty of heartache in the banking sector too. Profit margins of banks declined by 17.6 per cent in 2008. During the same time, retail banks saw a surge of 112 percent in loan to deposit ratios.

Some financial organizations are also being scrutinized by the Bahrain government. With over 400 institutions in the country, there are too many right now to satisfy the lack of demand while showing healthy growth over time so eventually some of them will take the fall for sure.

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Professional investors who have held a portfolio of properties for some years are cashing in on the buy-to-let market as for the first time in many years mortgage rates are so low that cash from tenants is actually yielding a profit.

Best yet, is for established landlords, as capital appreciation slips away, rental income is tax free because in recent years they will have built significant income tax losses against their properties, reports the Financial Times.

No wonder cash rich investors at home and abroad are swooping on London to cherry-pick the best properties as developers, homeowners and less experienced landlords are forced to sell at well below market value.

For these property vultures, picking the bones of the market for the choicest deals is good business as rents give high yields, which will eventually fall as mortgage rates rise, fuelling a rise in capital appreciation.

Some newly built flats and houses are selling at 40-45% below their peak market value - it’s not only the London market where these deals can be found, but also Birmingham, Liverpool Nottingham and Leeds as well.

“Yields look favourable,” said James Mannix, head of residential investment at Knight Frank. “For the first time in years it is possible to buy investment property and take an income out of the rent. Investors are buying cheap so they are going to get significant capital upside once growth returns.”

One of the key sources of new builds is off plan strategies that have taken a nosedive because speculators are failing to get mortgage offers. Now, these speculators are losing cash by walking away from the deals and accepting that they will lose cash deposits of up to 10% and leaving developers with completed but unsold properties that are now often worth less than the combined cost of land and building costs.

Many of these off plan speculative deals were signed 18 -24 months ago, when the market was at the top of the boom-bust cycle, said Tim Wright, partner at agents King Sturge.

“Some developers have been very keen to sell existing stock and have been giving further discounts on the market falls just to recall cash into their business,” he said

Developers are targeting long-term UK investors with little or no gearing and buyers from the Euro zone as Sterling has slipped to parity. According to agents, some of these investors have bought between 50 and 150 properties.

Interest from international buyers jumped 70 per cent in December, said Charlie Bubear, an agent in Savills’ Knightsbridge office. Foreign applicants – particularly French and Italians – represent about 70% of buyers looking in and around Knightsbridge. Buyers are particularly interested in flats in the £2m bracket at top addresses. Bubear said they see these as a “bullet-proof” investment, because of the prestigious address, long leases, and state-of-the-art design.

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Flipping off-plan property was a mainstay strategy of property speculators over the past few years. With fast rising house prices, the idea was to put a deposit down on a home before building starts and then sell it when construction is completed.

Meanwhile, all the capital at risk is the deposit and the profit comes rolling in at the end as the property value appreciated during the construction time. Now, builders are mothballing their projects or selling them off at a supposed discount to stave off the creditors as off plan speculation has dried up.

Off plan was always a high-risk strategy- and now it’s hit a wall with the recession, according to the International Herald Tribune.

 

Successful off-plan strategies have several pillars:

1. An Appreciating Market Driven by Property Inflation

With property prices still falling and no one brave enough to announce they have hit rock bottom, this driver is gone.

2. An Exit Strategy in the Form of Cash, a Mortgage or Buyer

These have all but dried up as well. Finding a mortgage is the holy grail of most house hunters and no one with any sense is going to stump up cash to buy a depreciating asset, so this driver is in the bin, too.

The problem is not confined to the UK, all over the world, countries with once thriving off-plan property markets are suffering, but not always for the same reasons.

3. Property Available at a Competitive Price

Granted, plenty of property is available at a competitive, below-market value price, providing you can define the market value.

If I am selling a property for $75,000 that was worth $100,000 a year ago, is it really worth $75,000 or the $50,000 you have offered me?

Most accountants would argue that the market value is the price paid and if you buy at $50,000, that’s open market value and not below-market value.

Anyway, the point is made, so let’s leave that one to the pedants to argue the rights and wrongs.

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Off-plan has hit the buffers in Dubai mainly due to the way developers work, meaning they can’t churn out the properties quick enough to turn an off-plan profit.According to the latest European Property Review published by the Royal Institute of Chartered Surveyors, the outlook for 2009 is:

Provided you have the spare cash-flow and fancy a spot of sea change, then you might like to invest into a second home somewhere more exciting and away from home. But with investment usually comes cost and lifestyle change and we wonder, if it is really worth it?

Only those who have taken the plunge know this with certainty, for all others you can dream on by looking at the world’s most expensive cities to own a home. Compiled by the guys from Global Property Guide.

 

1. Monte Carlo

Who would have guessed that Monte Carlo ranks as the most expensive city in the world for the second year running… yes, right we did. With average prices of $47,578 per sq.m. it is no wonder.

Long known as the playground for party-friendly billionaires, starlets and everything in between, Monte Carlo does offer something for everyone. Let’s see, there is the casino, the stunning scenery, the Formula 1 Grand Prix and plenty of sunshine all year round.

If that is not reason enough to buy a home there what else would be. And we did mention that just around the corner is Monaco with one of the best yacht harbours in the world.

2. Moscow

Seeing Moscow rank so high is actually a surprise for us. Especially since it outranked London, known to be expensive. Moscow clocked in with $20,853 per sq.m.

Given the fact that it is in Russia, maybe all that new wealth Russian money did affect the market, skyrocketing property prices like crazy.

3. London

As already mentioned, London is only a fraction behind Moscow with $20,756 per sq.m. But given the choice we would buy in London any day before going to Russia (no offense intended). It’s just that we love London’s vibrancy and what the city can offer residents. There is never a dull moment and besides the weather - here we go again - we really love London to bits. It’s the city that never sleeps for sure.

4. Tokyo

Ranked as the 4th most expensive city in the world, Tokyo real estate costs $17,998 per sq.m. Now if you are the type who loves eternal supplies of sushi, sashimi and Kirin beer, then you should seriously consider moving to this city of glitz and neon advertisements.

Plus, you’ve got to love crowds too. And did we mentioned the Shinkansen?

5. Hong Kong

Victoria peak, harbour junks, quick access to mainland China and a sophisticated mix of ethnic races share Hong Kong, a former British colony as their home. We admit, this city kicks butt and offers a ton of exciting experiences to visitors from all around the world.

If you decide to fork out your hard earned money for your own home, then you can take advantage from hidden markets, nearby islands and lovely local beaches. If you are keen you can always visit Disney too. All of this would come at a price of $16,125 per sq.m.

6. New York

The Big Apple as New York is lovingly known is the only city in the US included in the list. Costs of $14,898 per sq.m. offer you a home in one of the most vibrant cities in the world. From Central Park to Manhattan’s skyscraper jungle you can find just about anything you want in this city.

Good food, great shopping outlets and not to forget plenty of water are all draw-cards for potential buyers.

7. Paris

The city of romance and love or so they say. Quite frankly we are not that keen about Paris. We think it is dirty and sometimes even rude. Whoever said it was a place to go for loving?

But jokes aside, it has its niceties. Take the Eiffel Tower for example, great views from the top. Or a boat trip on the river Seine should not be looked over for a weekend trip. Buying a home there though requires some decent funding with $12,122 per sq.m. not cheap but certainly more affordable than Monte Carlo.

8. Singapore

If you like clean and order, then Singapore is your city. With strict laws about littering and plenty of green in and around the city, this cosmopolite in Asia is a favourite for many. It will set you back some $9,701 per sq.m. but think how close you would be to the rest of Asia.

9. Rome

All roads lead to Rome, right? They certainly do. And if you find yourself lost on an European road trip in search of a new home, then Rome will set you back some $9,166 per sq.m.

But as a reward you might get to see the pope or visit the Spanish steps. One thing the Italians certainly know is how to live life and yes we forgot, how to cook. Living in a city like Rome will most certainly pile on the extra kilos.

10. Mumbai

India, or Mumbai clocks in in 10th position. Quite astounding when we think back how not to long ago we saw India as a 3rd world country.These guys have certainly busted their behinds in the race of world domination and consequently built and grown some impressive cities.

If you want to buy real estate in Mumbai, you are looking at around $9,163 per sq.m.

All of these data has been based on the average price of a 120 sq.m. apartment within the city centre and in good condition. In total, more than 110 cities around the world were surveyed for this purpose and data was collected during 2008.

So tell us, where will you buy your home?

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