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NAEA: Property prices will remain stable within the first quarter of the year

28 January 2010

The National Association of Estate Agents International today revealed its predictions for the global property market over the next 12 months.

Predicting a market hugely dependent on the strength of the sterling, the Association said:

- Purchasers will be looking for 'less risky' investments and in particular towards the more stable markets such as France and Italy but for the very best bargains you may wish to try Spain or Turkey

- Property prices will remain stable within the first quarter of the year so purchasers are advised to make a cash offer by March if they want to secure a bargain in any of these countries.

- Balance of supply and demand will stabilise once house prices pick up and the pound strengthens against the Euro

Linda Travella, spokesman for Italy at NAEA International says:

“After a slow start to the year, the last quarter of 2009 saw sales and interest returning to the international market, with Italy being considered a safer investment than many other markets around the world. As always, the strength of the pound will have a significant bearing on the quality and quantity of sales and this year it looks to stay at the same strength.

“Even though the UK appears to have fallen behind other economies in the race out of recession and economic recovery, sterling has held pretty firm against the single European currency, trading two to three cents either side of 1.10 during the second half of last year.

“For the first quarter of 2010 the number of international buyers is expected to remain low and therefore offers are more likely to be accepted making it a very good time to purchase an overseas property. However by late spring, property prices are expected to increase by 3-5%. Key areas to invest in include Tuscany, Le Marche and the Lakes of Maggiore & Garda, where good deals can be found if you buy sensibly.”

Des Rowson, spokesperson for Spain at NAEA International said:

“Spain has seen a difficult 12 months on the sales front as buyers have been particularly reticent about purchasing during an economic downturn. Bargains are available but remember price reflects position and quality. Unfortunately the coming year will not change too much until we see the pound strengthening and clients accepting that the registered agents do know what purchasers are prepared to pay.

“House prices are expected to increase steadily to around 3% by the first half of the year as the cheaper end of the market dries up. So if you are thinking of purchasing a property, do so in the early part of 2010.”

Richard Edgar, spokesperson for Turkey and the Caribbean at NAEA International said:

“The last year has seen overseas sales fall dramatically as a result of the global credit crunch. It has, however, seen the cream rise to the top as weak developers, projects and agents have gone to the wall whilst those strong enough to survive the recession have introduced better deals and incentives along with stricter due diligence to stimulate investment and sales.

“In Turkey bargains are to be had as developers try to encourage sales with significant discounts particularly for cash buyers and this trend will continue through 2010 in an attempt to mop up excess stock.

"There is a glut of unsold properties providing some genuine and excellent bargains particularly on completed projects where developers are keen to clear remaining stock, with some offers of up to 40% discount for cash buyers.

“Not surprisingly off plan sales and re-sales are proving very difficult and unless the project is exceptional we see little movement in these areas during 2010.

“Rent guarantees and fractional ownership deals are springing up in an attempt to stimulate sales, but buyers should be extra cautious and get their lawyer to check through the contract before signing on the dotted line to ensure its authenticity.”

Keith Baker, French expert and Vice Chairman of NAEA International said:

“Although the global economic downturn has made the last 18 months hard for the global real estate industry, France has benefitted from not having an overpriced market and a system that is more cautious in terms of lending. Having said that, France has not escaped the global crisis and there has of course been a knock on effect.

"Prices have dropped in most parts of the country over the past 18 months and most owners will certainly consider offers from serious buyers. French property is likely to be the most affordable for many years. Property prices are now at a more reasonable level of affordability and are set to continue stabilising in the coming months.

“As for picking up a bargain in 2010, the general opinion has been that most properties have already had their asking prices reduced and new vendors are likely to price their property accurately so there may be less opportunity to negotiate. It is still a buyer's market and confidence is very much apparent. Good quality properties in great locations are always highly sought after.”

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