Buenos Aires now a home away from home
Buenos Aires is attracting foreign capital again after reclaiming its title as South America’s most cosmopolitan city.
Property in Buenos Aires is still relatively inexpensive after Argentina’s recovery from the economic crisis of 2002, when property values fell by 50 percent, the London Times reported. But according to Argentina’s College of Notaries, demand for second homes in Argentina’s capital increased property prices by 37 percent in 2006.
Developers in Argentina are catering to international buyers by developing gated communities with golf courses, polo fields and lakes. In addition, developers are teaming up with famous designers, including Philippe Starck, to build luxury second homes.
Analysts say the influx of international capital will continue because Argentina’s government has no restrictions on property owned by foreign buyers. In addition, all property deals in Argentina are closed in U.S. dollars, giving Europeans a discount because of the favorable exchange rate.
Buying boom in Berlin
Germany’s economic revival is creating a wave of foreign buyers of second homes in Berlin. Residential real estate prices in Berlin fell each year between 1996 and 2004. But growing demand is expected to eventually drive up prices, the International Herald Tribune reported.
Approximately $8.36 billion was spent on Berlin properties in the first three quarters of 2006, and many analysts believe the year-end total may set a new record. Berlin residential property is still 20 to 25 percent less expensive than in London — a bargain for foreign buyers, according to real estate brokerage BIST Immobilien. Approximately 25 percent of the brokerage’s sales recently have been to non-Germans — mostly Americans, Britons, Italians, Irish, Scandinavians and Greeks.
While some foreign buyers are moving to the capital, others are investing in properties to avoid staying in hotels, or buying apartments for children studying at Berlin universities. Buyers can expect profits in the long term as the German economy continues to grow slowly.
Japanese office market tightens with legislation
It’s a landlord’s market when it comes to Japanese office space. Tenants are facing rent increases — up to 50 percent in some situations — with little room to argue. Analysts say Japan’s vacancy rate of 2.7 percent reflects the severe tightness in the office market.
Fixed-term leasing legislation passed several years ago, allowing landlords to terminate rental arrangements in lease agreements, and is partly responsible for the changing balance of power in Japan’s office market.
The fixed-term leasing is currently limited to new large office buildings in Tokyo, the International Herald Tribune reported.
Hotel vacancies in India are rare — and costly
India is reaching a new level of demand for hotel rooms. As the economy continues to grow, travelers are paying for pricey hotel rooms — that’s if they’re able to find a vacancy. In all of India, there are only about 110,000 hotel rooms, not much more than the number of hotel rooms in New York City, according to the International Herald Tribune.
Because of the limited supply of rooms, peak season rates skyrocketed for a standard room in India during the past year. To meet the demand, brand-name hoteliers Accor, Hilton and Wyndham are developing projects in India. Accor has 41,000 hotels worldwide and plans to bring 200 hotels to India in the next 10 years. According to the Tourism Ministry, $6.5 billion is currently invested in hotel development with 140,000 new hotel rooms expected by 2010.
Foreigners drive Russian real estate boom
Russia’s real estate boom ended the year on a high note as a result of foreign capital. According to some surveys, Moscow ranks fourth among cities with the most expensive office space. The index of Russian real estate prices, IRN, reported the average sales price per square foot for office space in Moscow has increased to $386 this December from $204 last December.
With foreign real estate funds financing many properties, prices in St. Petersburg doubled last year. Foreign funds are also responsible for major building projects, including the development of a 550-acre plot outside St. Petersburg for $1.3 billion. Limitless, the real estate branch of holding company Dubai World, also has plans for an $11 billion development on 44,000 acres outside of Moscow.