Overseas Real Estate Blog

Hania Beach images released today. Please go to http://www.jet2letproperty.com to view.

This building brings a real architectual integrity with a contemporary building but also reflects an Egyptian landscape. Designed so that most of the 171 apartments get sea views and with an attractive and large swimming pool. This is an excellent beach front line buy.

Allocation of units expected very soon now. Just waiting for final floor plans and confirmation of common parts.

Refundable £2,000 reservation fee.
Egypt viewing trips £225 per person - a whole one week through us at Jet2Let.
Rental company established for Hania Beach to ensure high letting yield

Reported recently was the following story on Egypt's currency rating and reflects how this economy is likely to be grabbing more news headlines. The big reduction in government debt, and the likely economic growth around last years rate of 7.1%, adds to the positive story that Egypt is increasingly viewed as a key economy and one that will attract increasing amounts of foreign investment as domestic economic activity drives the demand for goods and services.

We have many clients who about to complete on properties and a number who are watching markets very closely for more signs of sterling strength to optimise their foreign currency payment timings.

Well, I have some more encouraging news in the report below from International FX. You will see regular blog reports on currency on this blog. Currency and property investment are intertwined and clearly affordability of property can be changed either way with currency movements. Please see previous posts on some comment on about how to take advantage of.

Also check out offers here and on www.jet2letproperty.com that are in UK Pounds, if that is your main currency. If you have euros or dollars or other currencies then currency can be still relevant as you need to consider what currency to take any mortgage out on.

So here is yesterdays currency report from our sponsors, International FX

USD

The dollar remained firm against the Euro as speculation mounts that the Federal Reserve may soon pause from cutting interest rates while the European Central Bank is more widely expected to begin trimming borrowing costs in the coming months. Markets anticipate the Fed will cut interest rates by a quarter point next week but expectations are building that it could then refrain from any further cuts. Data out this afternoon showing US new homes sales plummeted 8.5 percent did little to unseat this view and the dollar remained firm. Ashraf Laidi, currency strategist at CMC Markets, said any signal from the Fed next week that the cycle of rate cuts could herald the start of a significant recovery for the US currency. "In the event that the FOMC shows any sign of reducing its easing policy, then currency markets will obtain the necessary green light to accelerate the buying in the dollar," he said. The number of U.S. workers filing new claims for unemployment benefits fell unexpectedly last week, a government report said Thursday. Initial claims for jobless benefits decreased by 33,000 to 342,000, the Labor Department said.

Economists surveyed by Dow Jones Newswires had expected a climb of 3,000 new claims which in turn boosted the dollars strength. Even the four-week average of new claims, which economists use to smooth out volatility in the weekly numbers, decreased last week by 7,250 to 369,500 from 376,750. Still, concerns about a weak labor market persist in wake of a recent Labor Department report that showed jobs in March suffered the biggest decline in five years. A healthy job market is key to a healthy economy, but turmoil in financial markets triggered by problems in the mortgage market threaten to push the economy into recession mode.

Euro

By contrast, expectations have built today that the European Central Bank will be forced to cut interest rates in the coming months following a much weaker than expected German business survey. The Ifo research institute said its April business climate index for Germany fell to 102.4 from 104.8 in March, well below analysts' forecasts of a decline to 104.3. In recent months economists have been surprised at the strength of Ifo surveys, providing support to the idea that the Euro zone economy has out witted the US and will weather the credit crunch relatively unscathed.

However today's data and yesterday's weak Euro zone manufacturing PMI survey mean many analysts are now questioning this idea, boosting expectations the European Central Bank will be forced to cut interest rates in the coming months. "The Ifo figures out of Germany this morning look very weak which would stem inflation concerns slightly and may give room for the ECB to cut rates," said Mic Mills, a trader at TradIndex.com Sterling Sterling rose against the Euro but fell against the dollar on Thursday as contrasting data from the UK economy gave investors mixed signals on prospects for interest rate cuts. Bank of England policymaker Andrew Sentance said the pound was likely to remain weak for some time and expectations of further interest rate cuts were driving sterling lower.

The pound got a brief lift on Wednesday when it emerged that Sentance and fellow BoE policymaker Tim Besley voted to keep rates on hold this month, but it came under renewed pressure as investors still expect rates to fall. Investors will eye UK GDP data that is out today for more clues on the health of the UK economy.

New special offer in today. Desert Pearl 1 (see real photos on this page) Excellent apartments in a just completed development with swimming pool. 24 hour security. close to beach and the New Hurghada promenade with its shops and restaurants. All year round rental income.

These apartments are contracted in UK pounds - so no currency risk.

C004 2 Bed DP1C004 Price £46,035

C302 StudioDP1C302 Price £19,800

C401 2 Bed DP1C401 Price £46,035

D303 StudioDP1D303 Price £19,800

F005 1 Bed DP1F005 Price £25,495

F305 1 Bed DP1F305 Price £25,495

F404 Studio DP1F404 Price £21,780

G106 Studio DP1G106 Price £19,800

H203 Studio DP1H203 Price £19,800

I204 Studio DP1I204 Price £19,800

J003 2 Bed DP1J003 Price £32,495

J004 2 Bed DP1J004 Price £32,495

go to www.jet2letproperty.com to view plans. 10% refundable reservation fee.

Call for Egypt buyers guide and for £225 per person one week viewing trips to see a large selection of Egypt property

Just reported today is the good news that "the number of foreign tourists who visited the in January and February of 2008 has gone up 23.4% compared to the same months of 2007.

Bulgaria's total revenue from tourism in these months was EUR 97.8 M, which is 19% more than in the same period of 2007.

The news was announced by the Chair of the Bulgarian State Agency for Tourism Aneliya Krushkova on Wednesday. Krushkova presented data from a poll about the winter vacation in Bulgaria.

The poll results show that 78% of all foreign tourists, who visit Bulgaria, were ready to recommend it as a tourist destination."

COMMENT: Clearly much of this is due to better snow conditions but there is no doubt that visitor numbers will rise very fast particularly in Bansko as 2008/9 season sees more finished accommodation and improved infrastructure.

One comment we hear is "that Bansko gondola queues will be a disaster until they build another gondola" well the truth is that, apart from New Year and a few peak weekends last season which coincide with holidays and good weather, the queues were nothing major in not just Bansko but all the three major ski resorts - Bansko, Borovets, Pamporovo (but don't forget the other three Vitosha, Panichishte and Malyovitsa). More news on the development of Sapareva Banya and Panichishte very soon.

The reality, having being skiing most years since 1970, is that the French and Swiss and Austrian resorts usually didn't put any new lifts in until queues were horrendous and I think the speed with which a new resort in Bansko (Ulen/First Investment Bank) has taken shape is admirable.

The €550 million investment is also very impressive in the Super Borovets project and whilst prices of many things are rising in BG (alarmingly fast it has to be said) these resorts are not necessarily inferior to many ski resort in France where a hot chocolate up the mountain is a €10 pleasure! That said I await with interest the start of a new gondola, the two new runs from the new chair lift for this season were very welcome addition. Now a 70km of runs resort.

Thanks to Richard at International IFX for this useful currency report:

With the Bank of England’s mortgage lenders rescue plan being the talk of the markets at the moment we have seen Sterling see-saw against the major currencies over the last week; in particular yesterday where we saw recovery in the second half of the session against the dollar.

Against the dollar, sterling fell just short of a new two week high. Nearer home versus the euro, sterling managed to fight its way back from above an all time low.

The Bank of England’s initiative to lend major mortgage lenders 50 billion pounds is aimed at kick starting new mortgage applications and stemming off repossessions. This effectively (for the time being) allows the MPC to look at interest rates solely to control inflation and keeping the economy afloat without having to get too involved in the housing market, a recent thorn in the side of the UK financial system.

Initially this was not seen as a positive move, however late yesterday traders began to see this as a more positive move for sterling following comments from Tim Besley regarding the UK housing market. Since December we have seen reductions of 75 basis points and there has been widespread speculation that the MPC would have to reduce rates further and more aggressively harming the currency’s yield appeal. However, without having to factor the housing market into the decisions, and with inflation above the target of 2 percent it is unlikely we will see dramatic interest rate cuts like those by the Federal Reserve in the US.

Sterling’s recovery versus the dollar could also be off the back of a euro/dollar rally which took the euro to another a new high as particularly positive comments from the European Central Bank boosted the single currency.

Traders said they saw strong demand for the euro after Yves Mersch, a member of the ECB’s governing council, said the central bank might revise its inflation target upwards and was surprised some analysts thought the ECB were considering future interest rate cuts.

One such analyst, Hans Redeker, at BNP Paribas, said he had adjusted his currency forecasts accordingly after seeing increasing signs that the ECB was flirting with the idea of raising rates

Later today we will see the release of the minutes of the BoE’s interest rate decision meeting earlier this month. It’s a fairly straightforward way to see how feelings lie with the bank’s nine policy makers. Markets will wait to see if the decision was a unanimous 9-0 decision to reduce rates or more divided vote, with some members preferring not to cut. The outcome may give some hints as to when the next rate cut, if any for the time being, will happen

Opportunities exist right now to get genuine under market value off plan property. Why? With less development finance available for developers, your agent should be working very closely with the best developers to get under market offers. Where? For example we at Jet2Let Property work very closely with reputable developers in Egypt and Cape Verde, to deliver to our investors a share in the development profit in return for a commitment to buy. We aim to get our early investors a bigger slice of the equity upside for early commitment.

The other advantage is that I believe that there is often is less risk is attached to developments that are under market priced, and therefore sell the quickest. One example we are promoting is in Egypt and Hania beach, Hurghada for example. This is a front line beach development of 171 apartments, mostly with sea views of which in just five weeks was over 50% reserved. One bedroom apartments still available from £42,000 (£700 per m2) and studios even less - but will be going up to over £900 per m2 soon as the developer can raise prices closer to those of other comparable developments, £950 plus.

How do you make comparisons for under market to other property offers? You should focus on property location, design, quality, facilities and rental potential. Due diligence is part of this process to ensure that the developer is reputable and that its not an under market offer that is "too good to be true". Caution should also be exercised when looking at comparable property, and these should include completed property prices as well as other off plan property offers. So a good mix of buyers from many different countries rather than overly dominant UK resorts because this removes reliance on one single country for resale interest.

Overall we are entering good bargain hunting time for well located and under market value property.

There's no doubt there has been some reticence to buy
in euro linked countries at current rates - if you earn UK pounds. However this makes Egypt such a good option as most of our property there is in UK pounds. Price from £15,000 and proper on the beach front line from £28,000 (Hania Beach). Watch out for more great offers for Egypt.

For the Cape Verde market we have worked hard to get some great deals. Every week there will be at least one special offer in Dunas Beach Resort. These are proving to be euro busting deals which bring the effective rate up to better than €1.50=£1

THESE ARE THE EXCEPTIONAL DEALS OF THE WEEK!

We handpicked the following properties and applied bespoke terms and prices.

Deal Number 1 on Dunas (LOW PRICE & SPECIAL 80% PAYMENT OPTION) €239,950

Dunas Block 1 Apt 14 (Type F) – this apartment is on the ground floor, has a private garden, has excellent pool view and is south-east facing.

SHOULD BE €289,950 AND NORMALLY ONLY QUALIFIES FOR PAYMENT OPTION 85%

Deal Number 2 on Tortuga (LOW PRICE & SPECIAL 80% PAYMENT OPTION) €169,950

Block 44, Apt C1 (Type C) – this apartment is on the first floor, has excellent pool views and is north-west facing.

SHOULD BE €178,500

Deal Number 3 on Tortuga (LOW PRICE & SPECIAL 80% PAYMENT OPTION) €165,950

Block 2 Apt C1, (Type D) – this apartment is on the 1^st floor, has fantastic sea views and is west facing.

SHOULD BE €178,500 AND NORMALLY ONLY QUALIFIES FOR PAYMENT OPTION 85%

Deal Number 4 on Dunas (LOW PRICE & SPECIAL 85% PAYMENT OPTION) €299,950

Villa 17 (Type A) – this villa has its own private pool and garden and is north facing.

SHOULD BE €339,950, AND NORMALLY DOESN’T QUALIFY FOR PAYMENT OPTION 3

Deal Number 5 on Dunas (LOW PRICE & SPECIAL 80% PAYMENT OPTION) €173,950 (SOLD IN 10 minutes)

Block 3, Apt 529 (Type A) – this apartment is on the 2^nd floor, has excellent pool view, has a upper penthouse and is east facing.

SHOULD BE €209,950, AND NORMALLY QUALIFIES FOR PAYMENT OPTION 80%

Well those good folks at the affordable six star Palm View Resort have reduced the price (including for those who have already reserved a place) for the Boa Vista viewing trip on the 25th April. Direct flight leaves at 10:00am from Gatwick North terminal and returns on Sunday at 6.40pm.

Some people have asked why Boa Vista, isn't miles away from completion compared to Sal? For sure golf course and marina are behind Sal by 4 years or so - but direct flights start this October with Thomson.

As always its about taking a look and I know everyone will be wowed by the beaches here, in Sal here are very good here they are amazing. I reckon that Boa Vista will establish itself as the up market island. Sal Rei on Boa Vista is considered by those who have seen both as nicer than Santa Maria in Sal. Interestingly, for both islands, I am seeing buyers who are looking to spend extended vacations here. This is is good news as people see this as a year round comfortable place to live possibly more so than Spain for weather as it doesnt get too hot in Summer and of course its never crowded.

All developments are low density and the Cape Verde Investment authority I are doing a good job in keeping it this way and therefore I do not see these islands as being "cheap" holiday destinations just good value compared to equivalent Caribbean offerings and the all important advantage of no jet lag and within 6 hours flight from UK and Northern Europe.

So for £295 including flights, meals, entertainment etc this is a great deal - importantly there is no "hard sell" here so come and take a look and decide for yourself. Call soon as we still have some allocated seats left and I am sure these will be all gone soon.

As for Palm View resort its six star but at much lower prices. In addition there is 10% discount until 21st April and the discount applies for all folks who reserve on the trip and for five days after their return.

Today I have been speaking to the MD of the UK developer of Hania Beach. Delighted that I have had confirmation that some important finish details such as branded bathrooms with decent showers and quality tiles that I submitted to the developer have actually been incorporated. Final plans due soon and images in a few weeks. Due diligence completed here and satisfied developer owns land etc. As always our clients always use a lawyer to verify ownership and for due diligence.

The investor and buyers response to Hania Beach, front line has been superb. Priced right now at 30% less than competing developments. 125 apartments on reservation (refundable reservation fee) out of 171 apartments and t specification is going to be top notch here. This would be a good buy at £1,000 per m2 but at £700 it a steal. Price goes up to £800 soon and £850 in a around a month. Final sell price will be £1,150 - if there are any left of course.

The policy of pricing to sell gives comfort to both the buyer and the developer alike and is just what is required to make and a successful development.

However this is only part of the story an excellent development requires a strong rental demand giving investors a growing rental return. Again this is where so far matters are looking good for Hania Beach with a company already appointed to manage tour operator rentals and most importantly to actively promote the development to the travel companies.

Overall the image of the Egyptian Riviera is changing fast from a destination of specialist and marginal appeal only a few years ago to one that is being advertised as a mainstream high quality and value destination. Easyjet now flying there is yet another part of the jigsaw which will I think will stimulate further interest from both travelers and property investors alike. I expect to see more flights added over the next 12 months as existing flights are very full.

The cost comparisons with Spain are that property here, like for like, is less than a third of Spanish prices. One investor said to me that even in todays market he could not find front line Spain at less than £350,000. This value is further enhance if you consider that the peak rental periods of Christmas, New Year, February school half term, Easter, May school half term, October school half term are all peak rental seasons but mainly low rental season in Spain so opportunity for high rentals in these peak periods exceeds the typical Spanish Costa destination.

I just got back from Bulgaria which included some holiday time with perfect skiing in Bansko and trips to Velingrad, Sapareva Banya, Sofia and the area north of Sofia around Svoge.

BANSKO:

Firstly Bansko. Well as always there is so much comment on the fortunes here that I will not try to make any extensive observations. The focus this time was the skiing. Better than ever with my new grand slalom Fischer skis and a first rate instruction from Kim, a holidaying qualified English ski instructor and Bansko apartment owner, my enthusiasm for skiing has never been higher. Thanks Kim!

Blue skies and sunshine near perfect snow the ski run down from the Plato joining the Tomba (black run) with its half pipe shape is as good as any on piste run I have skied on anywhere!
Here's a taste of the quality skiing conditions - me captured by Kim on video tackling the Tomba run (named after Alberto Tomba)

No queues and this was 30th March and pleased to report that the season is set to be good for some time yet. The town probably had more people strolling around than on the pistes which reminds me that Bansko makes for a pleasant non skiers destination in the same way some Alpine resorts I have seen like Courmayeur in Italy or Chamonix in France are.

Getting back on topic to Bansko property, it was clear that the downturn in apartment sales, and ban on new building permits has stopped new construction projects starting. Resales are picking up now, and well located apartments are still selling in the used market at around 25% increase from two years ago. However, less well located property some distance away from the gondola I heard anecdotal evidence of sales made at lower prices. There is no doubt the building site feel still exists but, depending on area in Bansko, this year will see more roads go in, more finished buildings and by the start of the 2008/2009 ski season Bansko will feel more complete. New projects have to be special and I like design of Edeland Ridge near golf course and also the yet to be launched Bansko Plaza just 150m from gondola.

I was particularly heartened by talking to skiers on the gondola over on holiday who were impressed with the service they had received in their hotel/apartments building and also from the ski instruction. The area of service is a permanent challenge in Bulgaria and Bansko especially but I think we are seeing many signs of improvement. As for food, this varies but generally all enjoy the Mehanas (Taverns) of which there are over a 100 scattered around the town. The Happy End Bar on a Friday and Saturday night in the ski season offers a top rock band and DJ that creates a really lively atmosphere and last weekend was no exception. Warning: beer here costs a lot more than outside Bansko and many other places but at about £1.70 a pint is still not too bad but, when 80p is still normal, its worth being prepared.

As for value compared to most other countries Bulgaria is still amazing value and a family of four can ski here including accommodation, flights and transfers for £1,000. The food on the mountain, ski hire, instruction eating out all make useful savings for a family ski holiday. With the growing tourism from Greece, Macedonia, Serbia, Russia and Ukraine as we as other western european countries I suspect the 600,000 visitors this season will be exceeded next year by over 10%.

Six new golf courses are at planning stage and will supplement the current Ian Woosnam 18 hole course now about to be declared fully open in May. More ski pistes then facilities are likely to grow over the next 5 years. With the airport at Gotse Delchev, 30 mintes away, now having being sold to an investor by the local municipality then there is some expectation of improved access - but when is not known.

VELINGRAD:

Moving on to Venlingrad just over an hour from Bansko makes a good day trip (as does Melnik for wine tasting and Sandanski for shopping). Velingrad is hugely popular with Bulgarian visitors and was also a holiday place for wealthy Russians for its mineral water. Good to see new hotels already completed and a general feeling of prosperity returning to the town.

The wide pedestrianised promenades and open vegetable market make this an good alternative to Blagoevgrad to stock up on general provisions.

SAPAREVA BANYA:

Returning to Sapareva Banya saw the start of the luxury chalets on the mountain side overlooking the town. The views are wonderful and it is this area of how Spa tourism will progress and some would say offers even greater prospects than Velingrad because of its proximity to Sofia and its gateway to the seven rila lakes.

New roads are complete before construction and because of this land prices here are up over 50% in a year and local interest is high here as land is still a tenth of the price in Sofia just an hour away. We expect more news here as the first developments are noticed by investors who are keen to find new hot spots. Rental returns are better than you would think as all year round Spa tourism as well as corporate training is a real possibility. Arguably much better than a ski resort alone!

SVOGE AREA:

Talking of proximity to Sofia I like the look of property and land to the north of Sofia in the Stara Planina (Balkan Mountain range). Again here we have scenic and dramatic landscape property with good access to Sofia. South facing houses are plots are to be found. My visit to the valley villages around Svoge impressed me. Here's a video to give a taste of what I saw:

At the moment very little foreign investment here but some savvy Bulgarians have just started to buy here. This is quality commutable territory with 18 trains and 20 buses a day to Sofia and a house/land here could prove a good long term buy.

I see a shortage of reasonable priced houses in Sofia generally but am also mindful of a general oversupply of old rural houses in Bulgaria due to declining rural populations. This area is close enough to Sofia to be an exception.

When I discovered locals just starting to buy land in Sapareva Banya then it was well worth taking a closer look. The reason is that Bulgarians, just like us, have a tendeny to follow what others do. The trick is to be at the beginnig of the interest to maximise on the price curve which can be quite spectacular.