Majorca Property News

European market for luxury real estate remains stable

Many people think of when talking about the crisis, this would cover everybody equally. However, there are many sunny and still prosperous islands in the troubled sea, even with these difficult times, survivors of the crisis to attract. One of these islands is the European market for luxury real estate. The U.S. real estate crisis has also reached the European property market, this can not be denied, however, requires a differentiated approach. While in most regions and countries of Western Europe the average price of real estate in 2008 to partially fallen twenty percent, has the market for luxury real estate crisis and showed stable. A substantial consolidation of this market has so far not taken place and will continue for the next time is not expected.

If the European market for premium or luxury real estate is mentioned, it is essentially the traditional fine, and always been highly popular areas of Europe, where rates of one million euros to 125 million euros for selected and is currently in the market are real, free-standing luxury villas, to be paid and exclusive apartments with prices from 750 `000 euro traded up. Such real estate is a luxury consumer goods, like sports cars, yachts and jewelry. These are generally less strongly influenced by the general market decline. A purchase of this luxury property as qualified property shall be based on a more emotional, because a rational decision. In addition, purchase prices often play only a minor role, because for the acquisition of necessary resources are in the target clientele are usually available. The purchase is subject to a different and divergent rules, as in the average house buyer, who often purchase their own four walls as a single issue and purchase of the largest economic life exercises.

Very much comes to the fact that buyers of luxury real estate financing instruments, not to fall back. This fact distinguishes them from the vast majority of European property buyers who make a purchase with a debt of up to ninety percent of the purchase price and, more sustained link of the current crisis are concerned. The Euribor interest rates for loans coupled between the years 2005 and 2008 first sustained increase, leading to a steady increase in the debt burden has led. Together with the loss of employment, this has meant that many home buyers due their rates no longer have to operate. The banks, however, sometimes again and again as a patient and proved their credit debt payment deferral. This is mainly due to the fact that a period without revenue from interest income and redemption payments from Bank of view represents the lesser of two evils, because at present can be explained by the only alternative to the banks that are forced, in many regions and countries on the ground because of the market, neither a realistic price, yet in many cases covers the auction proceeds to achieve the loan amount together with the costs. All this applies only for the normal real estate market and is reflected in the luxury and premium sector is not settled.

The luxury sector is still stable. In particular, this applies to selected areas of Europe, which has traditionally been popular with international investors enjoy, such as the Zurich and Geneva in Switzerland, for the Cote d'Azur / Provence in France, the Balearics and Marbella in Spain, northern Italy , Portofino and Sardinia, and, with a few swabs, London. All these regions are characterized by an international and affluent audience, as well as through its excellent infrastructure, outstanding cultural and recreational opportunities. Although the prices of luxury properties in these places no longer by an average of ten percent or more per year increase, as expressed in the past decade been the case, and although customers are now buying time to come to a purchasing decision is the demand Premium real estate after unabated. The demand exceeds the supply of available properties in most of these places still. From experience with local brokers in those markets is always to hear, still propagated that it was difficult enough high-end properties in order to meet the needs. Many of these markets are still sellers markets and this status will continue to retain.

The traditionally strong market for luxury property in Marbella, Spain is currently going through a difficult phase. This is not in connection with the financial crisis, but is the result of years of flourishing corruption in construction and public administration. Building permits for the construction of detached villas and apartment facilities, especially in first sea line, were in their thousands to private builders and commercial developers by local authorities, although in practice the approval evident contradiction with the national legislation has confessed. Many of these permits have been in the recent past, collects and demolition orders. However, this is the price structure on the local market is not affected. The reason is probably that the majority of luxury properties in so-called "private gated communities" is a few minutes drive from the coast in the surrounding hills and mountains with overwhelming views over the coastline and the Mediterranean Sea and partly embedded in complex golf course facilities . These objects provide for their exclusive locations and the connection to exclusive golf courses, top services, the maximum safety standard and desirable features.

Safety reasons in recent years as justification for repeatedly called that owners of luxury real estate on the Cote d `Azur movements specifically for the benefit of Marbella and the Balearic Islands make. Nevertheless, even on the Cote d'Azur, the increased presence of "gated communities" to determine as they roughly SAP founder Dietmar Hopp and his "Domaine de Terre Blanche" a few years ago launched has a positive impact on performance of all its premium properties. This applies particularly to the regions of St Tropez, Nice and Cannes, which is always a strong demand have delighted.

In most of these regions, U.S. investors, especially buyers from New York City, Long Iceland and the Hamptons a steadily growing group of buyers; whereas those to follow some of their famous people, such as actors George Clooney, on the property in Northern Italy has, Michael Douglas, of its European luxury property many years ago in Mallorca found or Brad Pitt, whose election to the south of France has fallen. Additionally, some of the best-known New York entrepreneurs and captains of industry a luxury property in Europe these premium locations and their own continually bring new buyers to their favorite spot.

In particular, the region of Marbella and the Balearic Islands in Spain and the Greater Zurich in Switzerland are the preferred areas for American business people. This is the local stable prices for luxury properties in the upper price category also owed, such as the highly international environment, good accessibility, thanks to connections to international airports, direct connections to most destinations within Europe but also beyond transatlantic offer. Nichtzuletzt expected but also the fact play a role that many European entrepreneurs, managers and wealthy executives at these places also have a premium property, and often a substantial part of their time here and spend so easy ways to make business contacts and maintain leave.

Southern France, in contrast, is liable to the reputation of a primary destination for the best weeks of the year, where the luxury real estate focus as holiday homes and only a few weeks a year. This environment attracts especially numerous sizes from film and television. The infrastructure shall be considered bad in relation to the Balearics or Marbella. As an essential comfort and exclusivity shortcoming is the fact felt that the airport of Nice as a bottleneck to the entire arrival and departure traffic in the region must shoulder.

According to the "World Wealth Report 2007, prepared by Merrill Lynch and Capgemini, there are 9.5 million U.S. dollars-millionaires, according to previous 7.2 million in 2003, as potential buyers of luxury real estate are eligible. Although many of these nouveau riche just potential property buyer to newly created upper middle class in India and China are to be counted, especially taking more and more Americans substantial investment in the premium property sector in Western Europe before.

n the current economic situation are appropriate real estate investment is an interesting possibility of diversification of investment. The international stock markets are volatile, and nobody expects currently a calming of the sector within the coming months. Moreover, it seems impossible to predict how the overall financial and banking crisis will develop, which companies in the risk of insolvency, or at least be advised even rougher waters thwart them. Well-chosen investments in premium real estate are more than just a compromise solution to his property against imminent losses. Such an investment in the right place and in the right property enables even today, in relation to interest income, equity and commodity gains above-average returns on capital and on the other hand is currently the most safest way of investment. Everything, what is much important is the right place, because in matters of real estate investment is still the selection criterion "location, location, location" as the core of decision-making. In addition, it is also on the right, holistic monitoring of an investment in a premium property, reflecting the complexity of such transactions in the millions sufficiently into account. Preferably here offer exclusive real estate in stores, which offer their clients a holistic, comprehensive and individual service packages, including legal and tax services offer intimate knowledge of the market and on the advice of the most demanding international clientele specializing.

The current prices of the traditional premium locations in Europe in any case represent a favorable time, sustained investments in premium real estate to make and equally of future performance to be able to benefit. Whether in the low-luxury segment with the initial prices for detached houses of around one million euros, or in the high price segment with minimum investment amounts of at least 3.5 to 5.0 million euros in the most prestigious locations.