European realtors try valuable incentives
When five houses in Ireland’s Lough Fern Heights development on the northwest coast in County Donegal failed to sell, developer PJ Doherty Construction tried an unusual incentive: buy one, get one free.
In early September, the company began offering those who bought one of the Lough Fern Heights houses a free, 410-square-foot apartment in another one of its developments, Privacy Beach Resort on the coast of the Black Sea, outside of Varna, Bulgaria. Three of the five units in Ireland were still available as of early December, the International Herald Tribune reported.
Real estate agents in Europe are trying ever-more-enticing incentives to draw buyers in a hard-hit market, including offers to “try before you buy” and arrangements for fractional property ownership. But Paul Owen of London’s Association of International Property Professionals said the “buy one, get one free” option is the most unusual incentive he has heard about.
Foreign buyers flock to Kuala Lumpur
Government tax breaks and incentives are helping to draw international buyers to Kuala Lumpur. Real estate values there rose by 30 percent over the past year, the International Herald Tribune reported, even as they have fallen in the rest of the world.
At Kenny Heights, an 88-acre new development in a suburb of Kuala Lumpur, more than 40 percent of sales so far have been to foreigners, including buyers from Australia, Japan, South Korea, the Middle East and Britain, the developer, KH Land, said. Homes in the first phase are villas, designed by Japanese architect Kengo Kuma and priced from $1.3 to $1.6 million. The development will ultimately include condominium towers, retail and office space.
Malaysia offers foreign homebuyers a program called Malaysia My Second Home, which grants them permanent resident status. The country also abolished its real estate gains tax in April, another draw for foreign buyers.
Downturn to hit Asia property markets
Apartment prices and office rents in Hong Kong and Singapore are expected to fall more than 20 percent by the end of 2009, according to a Reuters poll released in late November.
In Tokyo, residential prices are predicted to drop 10 percent this year, and Class A office rents, which fell in 2007 for the first time in six years, could slip by up to 5 percent. In Hong Kong, in addition to the expected 20 percent decline in residential property prices in 2009, prices already fell 15 percent this past year, the International Herald Tribune reported.
More than 400 small- and medium-sized developers and real estate companies in Japan have failed in the past year.
The property downturn in Asia has lagged behind the U.S. and Europe, but the Reuters poll suggests it will be felt more strongly in 2009. Office rents may fall further in 2010 and even into 2011, as financial services companies’ long-term property leases run out.