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- Transparency and Tax Reform Help Improve Greek Investment Market
- No Bubble Burst in Sight for Middle East
- Recognizing National Holidays of Multinational Clients
- Buying May be Best Option for Short -Term Stays
- U.S. States Seek to Attract FDI
- Making the Most of Currency Transactions
- Global Workforce: Stay Current with Free Online Publication
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Great vacation spot, but should I invest? Greece has historically presented challenges for investors due to an unclear legal, tax and town-planning framework. Things may be changing. Kathimerini News, an English language newspaper distributed with the International Herald Tribune in Greece and Cyprus, recently cited the general director for Athinaiki Economiki, the firm representing Jones Lang LaSalle (JLL) in Greece, as noting that the Greek property market is "slowly but steading obtaining the characteristics of a mature market." Reasons cited include changes to laws about property investment companies, introduction of a value-added tax on newly built constructions, and local market transparency. Additionally, the tax system creates a "more rational environment" for foreign investors and returns are competitive compared to other Mediterranean countries. However, in JLL's 2006 Transparency Index, Greece was cited as still lacking an accessible land registry or reliable performance indices and as having poor data on market fundamentals. So, as with all investments, research and due diligence is required. Those seeking local property expertise should contact a member of the Hellenic Association of Realtors, which is affiliated with both NAR and ICREA. The law firm of Latsoudis & Arvaniti offers a Greek real estate and property law guide.
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The high price of oil has resulted in vast amounts of private liquidity in the Middle East, which has been a tremendous boom to the real estate market. The boom in the Gulf region, especially Dubai, Saudi Arabia and Kuwait, may be unparalleled elsewhere in the world, begging the question of whether real estate is an over-rated investment asset class. In 2005, real estate maintained its position as one of the premier sectors in the Gulf-Co-operation Council (GCC) states, driven by the enormous liquidity in the region and increasing demand. Property World Middle East estimates that private liquidity in the GCC region is US$1.5 trillion, and the contribution of the real estate sector to GDP totaled US$27,274 million in 2004. Of this, Saudi Arabia accounted for US$12,800 million followed by the UAE with US$8,049 million. An overview of the GCC real estate sector reveals a move away from the primary rental market and a greater focus on commercial property development, speculative property purchases and real estate investment funds. Read more about the region's market capitalization, market trends and market indicators. Investors interested in this region take note of two upcoming property conferences: Islamic Real Estate Finance 2006 and Cityscape Dubai 2006.
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Stay uppermost in the minds of foreign and multinational clients (or to help keep referrals coming from around the world) by acknowledging holidays--cultural or national--that are meaningful to clients and colleagues. For example, a Chilean national who receives an e-mail on Sept. 18 recognizing the Chilean Independence Day, or a native Czech who hears from you on Sept. 28 (Day of Czech Statehood) is likely to remember the REALTOR® who sent it. Earth Calendar lets you to search for holidays by country or by date, as well as custom searches. Word of caution, don't assume everyone recognizes or celebrates religious holidays. Research how "mainstream" the holiday is, or look for little known or fun, dates such as Princess Märtha Louise of Norway birthday (Sept. 22) to send a note to Oslo; Librarian's Day in Argentina (Sept. 13) to send an online book gift certificate to Buenos Aires; and our favorite, Talk Like a Pirate Day (Sept.19), on which day you can presumably send a note to any fun-loving old salt with a "Ayyyy, matey" and a hardy "Arrr!" Although note that "Yarrr!" tends to be a British variant and "Yarrgh" seems to be favored by the Dutch, according to the official Talk Like A Pirate Day website.
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Foreign nationals living in the U.S. for even a relatively short time may find that buying is more economically alternative to renting, particularly in New York, San Francisco, Los Angeles, Boston and Honolulu, which top the list of Most Expensive Rental Markets in the U.S., according to
real estate research firm Global Real Analytics, which publishes, the National Real Estate Index (NREI) a proprietary series of local market property prices, rental rates, and capitalization rates. As a result of higher interest rates and the slowing of the housing market in many areas, the rental market is getting much tighter, pushing monthly rental rates up. NAR's Commercial Real Estate Outlook projects that the apartment rental market will see average vacancy rates of 5.2% in the fourth quarter of this year, down from 6.2% during the same period in 2005. Forbes.com offers a snapshot view of the 20 most expensive rental markets, including the price per square foot and a five-year price change for Class A and B apartments. In top markets, monthly rents of thousands of dollars can easily equate with a monthly mortgage payments, but provide the benefits of equity and tax advantages.
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As several U.S. states prepare to market themselves to foreign investors at the first MIPIM Asia property marketing show in late September, one state, eyeing Europe, is taking it a step further and hiring an on-the-ground representative. The Arizona Global Network (AGN) was created as a public-private partnership to attract FDI to Arizona, As one of AGN's first initiatives, a firm has been hired to generate leads with European companies that might be interested in setting up operations in Arizona. The partnership includes several metro economic councils and the Arizona Dept. of Commerce. The real estate industry stands to benefit greatly if objectives for new jobs and capital influx are realized. The group projects that within three years, 25-50% of new investments could be international, which can create higher wage jobs than domestic investments because overseas companies tend to be high-tech and knowledge-based industries. Higher salaries mean increased activity in the housing market, and opportunities related to relocating foreign management. In 2003, 59,800 Arizona workers were employed by foreign-controlled companies. Increasing Arizona's FDI to the same level as its ranking in exports (factors typically correlated among top-performing states), would mean an additional 40,000 jobs and $8 billion in capital investment. FDI Magazine provides insights on international and domestic FDI, including several U.S. state profiles and also on the real estate sector.
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REALTORS® working with foreign buyers and sellers need to stay on top of currency fluctuations, as rate chances of just a few cents can make a huge difference on a high-priced property. International specialists can count on future client referrals if they work to limit a client's exposure for loss or monitor opportunities for gain. Options include "forward contracts," which fix an exchange rate for purchase or sale of currency for up to two years, a "stop loss order" which allows a client to set a minimum level at which currencies are bought or sold, and a "limit order," allowing a client to set a higher target exchange rate at which, if the rate is achieved, their currency will be purchased. Learn more about these options in an article in International Property by Stuart Rogers of Moneycorp. To help agents understand the basics of currency fluctuations and their impact on real estate transactions, NAR offers an interactive training resource for use in a firm sales meeting. Download for free, or check out NAR's complete series of broker training resources on international topics.
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REALTORS® working closely with individuals immigrating for purposes of employment should subscribe to "Globility," a free online publication that provides news briefs from on employment issues related to foreign workers. Read the latest issue, or view the archives. Globility is a service of Worldwide ERC® (Employees Relocation Council), which offers resources and training for professionals in the field of global workforce mobility, including the professional designation GMS (Global Mobility Specialist). Select information on international relocation issues and data is available free to nonmembers.
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Report compiled by NAR International Operations, narglobe@realtors.org.
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