Newsletter May 2009
| May 2009 Update |
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Welcome
Welcome once more
to the monthly update from ProVenture. We hope you find this short newsletter of interest and keeps you up-to-date with the property investment scene in Germany. Kind Regards,
Mat
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| Please click on the following titles to read the content or scroll down to read the whole newsletter |
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Some roots?
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ECB down to 1%
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A Guide to Our Guide Prices
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3-4 Coming Soon
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Your Life in Property…have you seen it?
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German Economic Outlook
Germany continues to suffer from a drop
in exports and is facing decisions regarding the basis of the economy
and its reliance on manufacturing. It is being argued (Axel Weber,
the president of the Bundesbank) that increased domestic consumer
consumption has the capacity to minimise the effect of the downturn
and an increased emphasis on the delivery of services would diversify
the economy (away from the current emphasis on manufacturing). These
changes will take time, a change in culture and political will.
in exports and is facing decisions regarding the basis of the economy
and its reliance on manufacturing. It is being argued (Axel Weber,
the president of the Bundesbank) that increased domestic consumer
consumption has the capacity to minimise the effect of the downturn
and an increased emphasis on the delivery of services would diversify
the economy (away from the current emphasis on manufacturing). These
changes will take time, a change in culture and political will.
In
protecting the job market, the
government-backed Kurzarbeit scheme helps workers and companies by
allowing workers to go to shorter working weeks (typically 4-day
week) with the government making up the majority of any wages lost
due to working-time cuts. The scheme will run for 24 months and has
been successful thus far in keeping job losses to a minimum.
protecting the job market, the
government-backed Kurzarbeit scheme helps workers and companies by
allowing workers to go to shorter working weeks (typically 4-day
week) with the government making up the majority of any wages lost
due to working-time cuts. The scheme will run for 24 months and has
been successful thus far in keeping job losses to a minimum.
Unemployment across the country currently stands at 8.3%.
Other
“lead” indicators on the economy are staring to look positive
with gains on the DAX index through the month.
“lead” indicators on the economy are staring to look positive
with gains on the DAX index through the month.
Let’s see if these
take root in future months.
take root in future months.
Finance Update
The ECB cut interest rates to 1% yesterday, the lowest since the
currency was launched in 1999. The effect is yet to be seen on the 5
and 10 year swap rates, the rates banks use to determine the rates
for the 5 & 10 year fix rates that most of our clients choose.
Pay rates are now around 4.1% (5 year fix) and 4.8% (10 year fix)
currently. If you are coming close to finalising a finance deal, the link below shows the daily swap rates very clearly and which way
they are trending.
currency was launched in 1999. The effect is yet to be seen on the 5
and 10 year swap rates, the rates banks use to determine the rates
for the 5 & 10 year fix rates that most of our clients choose.
Pay rates are now around 4.1% (5 year fix) and 4.8% (10 year fix)
currently. If you are coming close to finalising a finance deal, the link below shows the daily swap rates very clearly and which way
they are trending.
Favourable loan-to-value finance is still available for our clients
up to 80% of the property value or purchase price paid.
up to 80% of the property value or purchase price paid.
The swap rate is at:
Activity on the Ground
During April,
inspection trips to both Berlin and Leipzig were undertaken. A total
of 6 clients from UK, Russia and Switzerland were introduced to some
of our investments in the area. In terms of letting activity,
Septima continued to have another busy month and signed an above
average number of tenants last month. Confirming increased
commercial activity and confidence in the city, Septima completed 2
commercial tenancy contracts in April after only 2 weeks of
marketing.
inspection trips to both Berlin and Leipzig were undertaken. A total
of 6 clients from UK, Russia and Switzerland were introduced to some
of our investments in the area. In terms of letting activity,
Septima continued to have another busy month and signed an above
average number of tenants last month. Confirming increased
commercial activity and confidence in the city, Septima completed 2
commercial tenancy contracts in April after only 2 weeks of
marketing.
Top Tip – A Guide to Our Guide Prices
A feature of the
properties that we bring to the market can be that a process of
negotiation is required to achieve a sales price that proves
acceptable to both buyer and seller. We always try to get the best
price for our clients and we are very close to the market through our
sales volume and attendance at public auctions etc. To provide
clients with a good indication of the likely sales price (and yield
on purchase) we take time to reflect on each property and set a
“guide price” accordingly. On occasion, the price that the
seller will accept is fixed and we will present it as such.
properties that we bring to the market can be that a process of
negotiation is required to achieve a sales price that proves
acceptable to both buyer and seller. We always try to get the best
price for our clients and we are very close to the market through our
sales volume and attendance at public auctions etc. To provide
clients with a good indication of the likely sales price (and yield
on purchase) we take time to reflect on each property and set a
“guide price” accordingly. On occasion, the price that the
seller will accept is fixed and we will present it as such.
Over the past 12
months, the graph below shows the relation of sales price to the
guide price we set. We usually get very close to the guide price
although sometimes the eventual sales goes above or below for
individual reasons.
months, the graph below shows the relation of sales price to the
guide price we set. We usually get very close to the guide price
although sometimes the eventual sales goes above or below for
individual reasons.
Well done to the
investor in September (you know who you are)!
investor in September (you know who you are)!
Over the past
year, the average sales price is 98.3% of our guide price quoted.
We are very happy with this figure as we feel we are reflecting an
accurate yield projection in our expose and web listings. As the
market becomes firmer, particularly at the sub 500k Eur level, we
will ensure we continue to set our guide prices at a level that is
realistic and keeps pace with any market movements.
year, the average sales price is 98.3% of our guide price quoted.
We are very happy with this figure as we feel we are reflecting an
accurate yield projection in our expose and web listings. As the
market becomes firmer, particularly at the sub 500k Eur level, we
will ensure we continue to set our guide prices at a level that is
realistic and keeps pace with any market movements.
There is a lot of
science behind how prices are set and we would be very happy to
discuss this with you on an individual basis when taking an overview
of the market or looking at offering on individual property. We hope
to continue to price property that reflects a true guide to you as an
investor and enables you to make decisions most effectively. Any
suggestions from you as our client on how we price property are of
course very welcome.
science behind how prices are set and we would be very happy to
discuss this with you on an individual basis when taking an overview
of the market or looking at offering on individual property. We hope
to continue to price property that reflects a true guide to you as an
investor and enables you to make decisions most effectively. Any
suggestions from you as our client on how we price property are of
course very welcome.
E-Book
For those of you
who missed it, a free ebook has been published on the website. The E
Book has been written to discuss the overall approaches to property
investment, approaches that will prove successful regardless of the
market conditions faced. A number of models are introduced to
describe successful investment and property management strategies
that we hope you will find useful. Also included are a number of
links to websites that professional investors use day-to-day in
determining areas to invest in.
who missed it, a free ebook has been published on the website. The E
Book has been written to discuss the overall approaches to property
investment, approaches that will prove successful regardless of the
market conditions faced. A number of models are introduced to
describe successful investment and property management strategies
that we hope you will find useful. Also included are a number of
links to websites that professional investors use day-to-day in
determining areas to invest in.
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