Real estate loans in foreign currency record?

To finance real estate apart from the classical forms such as the annuity and the fixed-rate loan and the option to add a foreign currency loan. For a foreign currency loan, the loan was not included in the national currency, but a foreign currency such as in Swiss francs, U.S. dollars or Japanese yen.

The borrower goes to the foreign currency loan in fact such a thing as a wager.
He speculated that he repay the foreign currency rate changes must ultimately less money than if he had taken out a normal mortgage.
This form of financing a property is generally suitable only for borrowers who do not shy away from risk and act like speculative.

In general, foreign currency loans will be issued as a bullet loan. That is, while running the real estate loan, including interest, are repaid. To repay the loan at maturity a return of capital is used, such as a unit-linked life insurance. Are the favorable capital market conditions, it may be that the borrower will benefit from interest rate fluctuations and can exploit advantages. In the best case, the borrower in a foreign currency loan to pay back less than a “standard mortgage”.

Where there is light, there is shadow
The risk of a foreign currency loan should not be underestimated. The developments in the exchange rates are not predictable. All interest and principal payments made in foreign currency and an unfavorable exchange rate development of not only melts the potential interest savings. It is equally possible that the foreign currency loan will ultimately more expensive. Reason alone should borrowers who take out foreign currency loans as mortgage, always have enough equity in the back. For the financing of their own four walls foreign currency loans are not suitable.

For borrowers who want to fulfill the dream of your own four walls, the traditional real estate lending in the form of an annuity loan, the more predictable and better version, which should of course always used with an appropriate equity in the back.

Bauri, Riester pension – will take you to home ownership?

“Riester-building” – home ownership as a retirement

Is it worth the Riester pension really for you?

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• Is the Riester pension optimal private pension for you?
• Riester-building “- residential property for your retirement?
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• What you can do for your retirement?
• Get the maximum state support already?

Spanish property for a bargain?

In 2006 the real estate market peak in Spain. In eight years time, house prices have quadrupled in some locations and the annual production of houses and apartments increased to over 700,000 units. By comparison, this is more than the total production of Germany, Great Britain and France combined. Since then, prices according to official sources declined by about 12%, while unofficial sources, however, speak of an average price reduction of at least 30%. The question now is, from the last estimate, whether the time is an investment in property in Spain to consider? First some facts:

1. The offer
Estimates of the number of houses and apartments that are vacant vary considerably. Again, official sources speak of a stock of about one million units, while nationally operating agency of the double speak. He added that certainly 300,000 units under construction. At the current sales pace, even the official stock brokers enough to the 7 to 8 years trying to keep.
2. The price level
The messages that buying real estate prices have fallen about 30%, cause potential buyers jitters and obviously necessary for some of them already enough to get on. Calculating back from the record prices of 2006 seems a discount of 30% natural lot. Prerequisite for this thinking is that the principle of reasonable and healthy 2006 eight. The latter is now very difficult, since the peak of each cycle is created under the influence of extreme optimism, supported by an irresponsible banking sector, coupled with historically low mortgage interest rates up to 120% of the purchase price.
3. Houses Cycle
Supporters of the 18-year business cycle that the last cycle started around 1992, culminating in a peak in 2006/2007, after four years of the recession cycle perfect. This implies that in 2011 the starting year for the next cycle. Economist Fred Harrison 300 years history has been studied to verify this theory and found that only under extreme circumstances such as war, the normal 18-year cycle is interrupted. The crisis of 2008, however, is often compared to war.
4. Accredit
Each tree house is associated with broad and flexible loans. The crisis of 2008 abruptly put a stop to it and it does not appear that the restoration of credit around the corner. There are indeed increasing capital requirements for banks. Reason is partly that Spanish banks particularly exposed to the consequences of further price declines and thus require a larger buffer.
5. Strong hands?
Much of the housing stock is owned by banks and supervisors, with the help of the government and the ECB has so far been able to keep the price somewhat. The festering crisis sovereignty (insolvent countries) that can sometimes support a rapid end. Then banks and supervisors have difficulty renewing their loans, making sales is essential.
6. Customers
To what extent can we expect a strong recovery in demand? Foreigners in the past could rely on the strong domestic market, for example, second mortgages possible. The credit lines are tightened internationally. In domestic demand due to the persistent high unemployment can not expect much. Only at a dramatically lower price level homeownership again the liberty costs.

In summary, we can say that given the huge stocks, still historically high prices, tough credit conditions and the absence of willing buyers a recovery of the real estate market in Spain is still far away and that further price reductions are needed to recovery. The cycle in this difficult time argument is a weak argument.

Trends in real estate

• The significance

Real estate is considered the most important sector of the economy. It is the collateral for most part of all funds worldwide.

In fits and starts the rising prices of real estate made possible an expansion of credit, but which eventually led to a veritable explosion of credit many negative side effects.

In 2006, a historic turning point occurred in the property sector, with falling prices since the collateral of the credit market under pressure.
The resulting credit crunch has temporarily put an end to the already 60-year debt cycle. ( see blog article of 05/11/19 )

The expectations of property price movements, given the importance of credit and related economic growth, not only important for investors and buyers for their own use.

The government and banks have their policies and strategic location depend on it.
Ultimately, the prosperity of everyone directly or indirectly influenced by!

• The impact of the crisis of 2008

Until the crisis the property had the wind quite in the back:

1. Favorable economic environment
2. Favorable financing conditions
3. Attractive interest rates
4. Large gains in real estate
5. Fairly strong rental market

After the crisis The situation changed adversely:

1. Emergencies aside, must be reckoned with low economic growth over the next 5 years
2. The role of government will not support the cutback trend (perhaps even hostile: think of the discussion on the mortgage)
3. The movement of the average consumer is limited by its high debt
4. From a historical perspective, interest rates will remain low, but the financial terms are tightened, for example:
* stricter selection by banks
* higher advances
* periodic review of the value of the collateral (whether or not additional payments?)
5. The trend indicates earlier than depreciation in value of the property
6. The rental market is under pressure

• Market Developments by sector

1. Office

The cold statistics tell a large part of the story: a total stock of 48 million m2 of office space is 14% empty. In a normal frictional vacancy rate of around 4% there is a huge oversupply of 10% or 4.8 million m2. ABN / AMRO expects that it oversupply In 2015 another doubled will be.

Why the high vacancy rate? There are many reasons for this:
1. economic growth remains below expectations
2. reduces the aging workforce
3. The “new works” (flex points, ZZP, s, combination home / office) reduces the need for office space
4. the “upward” move allows less competitive buildings behind
5. communities feel the need to stimulate new construction, especially in terms of employment
6. NVB (association for developers and building contractors) perform an effective lobby for its members, with the main argument of qualitative scarcity

This tremendous oversupply, the office rents declined on average over the last 10 years and are now (nominally) at the level of the early 90s. Also the constant value increases has ended.

From various sides is therefore a overall building freeze calling and called for conversion of vacant buildings into elderly housing, youth housing, temporary housing and commercial space.
A crucial point here would be a more dominant role for the government!

Conversion rather than new construction places no unnecessary pressure on space and materials, but is often hampered by partial vacancy. Over 60% of the vacancy is partly because in buildings in use.

The building freeze cuts in particular wood because of two very strong underlying trends: the “new work” and aging. Both trends in the coming years will only increase in strength.
2. Retail

The figures for the retail market are less depressing than those for the office.
The total retail space in the Netherlands is more than 28 million m2, with a vacancy rate of 6%. Here, at 800,000 m2 per year, however, and here too a number of negative trends in the market under pressure:
1. aging provides an overall decline in purchasing power as 65 and over 20% spend less
2. Internet shopping eaten more and more revenue from the shops
3. The weak growth in consumer spending slows down

Most vacancy is located under the peripheral concentrations and community centers. The main shopping areas and inner cities continue to be well up, as long as sufficient attention is paid to accessibility, security, offering complete and cozy decor.

Nevertheless, here too the underlying trend is negative and the new plans seem optimistic, and restraint needed.

Retailers in good locations, which are also ample attention to their web presence need not fear for the future.
3. Commercial Market

The statistics of this market resembles that of the office. The vacancy of the total stock of more than 16 million m2 and 13% despite the improving global economy is still growing.

Much of this offer is in poor locations and consists of old buildings. That kind of structural vacancy is not easy to solve.
Also here is the reluctance of government allocation of land required to be greater to avoid oversupply.

Much will depend on the logistics sector in the Netherlands.
As long as a distribution Netherlands still gaining importance, negative factors such as more efficient inventory management and “move up”, be compensated.

4. Housing

Rabobank gives three reasons for the expected 2% decline in the housing market in 2011:
1. The new funding rates are lower
2. The repayment terms are tightened
3. mortgage rates will rise

After the house prices in 2008 reached their peak, they fell by 7% and so does the number of transactions dropped sharply. If one can believe Rabobank, this trend continues.

How long this trend will continue depends on the development of world economy and whether the political advice of the IMF, the mortgage interest reduction, will take to heart. The IMF expresses concern because the high indebtedness of the Dutch homeowner, including created by the generous interest deductibility.

So much is clear, from a potential downturn in the economy, the politicians will surely fail again even throw salt in the wounds by partial elimination of the mortgage.

• Investments Properties

The net yield of the entire property sector in 2010 was 4.6%. Of all retail sectors scored the highest with 7.8%, the office market accounted for 3.5% and the market for industrial and residential dangling down by only 2.9%.

Given the negative trends, it seems unlikely that the returns in the near future will improve. This “yield compression” forces investors to focus and take into account the new reality.

More attention will be given to cost, but in good locations and durability of the buildings.

In cooperation with municipalities provides conversion of vacant buildings have reasonable chances of returns. Think Addressing the latest trend in which older people move away from the “green sites” and choose a safe urban environment. Remember that the number of people over 65 in the next 20 years from 9% to 25% of the population will grow!

For those more internationally oriented, there are probably better opportunities. The famous economist N. Roubini sees the glass as half empty developed countries, but instead of emerging as half full. As an example he cites of Rio de Janeiro, with dot risen to fourth most expensive cities in the world. Last year the property prices there by 47%!

Property to keep us from Armageddon!

Economist Jeremy Rifkin expected to change in policy, humanity within a maximum of 100 years will actually endangered.

The danger of such strong statements is that people are strongly inclined to close immediately, because the enormity of it is simply the comprehension beyond.

Before Jeremy Rifkin, however, directly in the category of “sensation-seeking prophets of doom” stops, one has to remember that especially European leaders like Sarkozy, Merkel and Zapatero regularly call upon his services as advisor on economy, energy and climate. (Cynics among you will of course still not seen as a recommendation.)

In an interview, which follow on YouTube with Dutch subtitles, his bold statement Rifkin slightly increased extensively.
In short it down according to him, that three other nursing crisis inexorably to humanity and forcing her to drastic measures to force.

• First there is a financial crisis, which he originated in 2008 when the record high oil price of $ 147 a barrel the economy inflicted such a shock, so that the weaknesses of a house of cards built on debt were brought to light.

Result, not only did doubt the solvency of banks, but even those of sovereign states. The latest developments are not encouraging and indicate earlier deterioration of the situation than a solution to the problem. (See the Blog on June 28 j.l.)

• Second there is an energy crisis caused by peak oil, that oil production barely increased, while demand continues to increase it. The result is that the oil price keeps rising to the point that high growth rates and thus reduce the demand again.The West has used cheap energy in the last century, managed to build a welfare state, which now has come under strong pressure to stand. Rifkin goes so far as to say that the economy is now on a drip and can no longer count on the consumer collapsing under heavy debts. The second industrial revolution is on its last legs!
• Third get the world to deal with problems in the food supply. The global warming brings drastic changes in local climatic conditions with them, which affect agricultural production.
  It appears that each time the optimistic predictions of climate change and have been much faster than thought to be overtaken by events.

Melting glaciers and tundra would be a problem for the next century. That process has now been put into place, with the result that more and more CO2 is released and the average temperature rises more than expected.

Dr. James Hansen, Chief scientist for NASA, even refers to temperature increases of up to six degrees by the end of this century, which is simply the end of human civilization would.

The agricultural sector in the coming years is to miss the one hand to address the damaging effects of global warming and also the loss of the essential oil harvesting and fertilization.

Surveying all this misery, Rifkin brings to conclude that it is high time for a global approach eleventh hour to humanity is to avoid the almost inevitable destruction.

That approach should be borne by the third industrial revolution. That arises when the information technology of the last 15 years, the free distribution of data over the Internet has enabled, used for the distribution of energy.

This refers to alternative (soft) energy instead of the hard energy generated from coal, oil and gas and uranium.
That soft renewable energy from solar, wind, tidal, bio-waste, hydro ect. would then in the most efficient manner can be stored and distributed using the same techniques that they use the Internet. This allows surpluses and deficits in a smart way to be balanced over large areas.

Essential part of this approach is the neutralization of the largest source of CO2 emissions. Buildings are under Ripkin responsible for one third of those emissions. By massive buildings to convert into energy generators by solar panels, wind turbines, etc. They are a very important part of the solution.

Prerequisite for the success of the plans is that excess energy is not lost but can be temporarily stored. The current storage techniques will have to be applied to a massive end to the unreliability of alternative power generation.

His proposal to save humanity is resting on 4 pillars:

1. renewable alternative energy
2. conversion of buildings to power generators
3. energy storage using hydrogen
4. distribution of energy through an intelligent network

The European Parliament in 2007 this “Third Revolution” formally supported and there are several projects started. Given the urgency, a more energetic approach is certainly desirable, in the light of a moribund construction industry. (See: Trends in the real estate)

It seems a “no brainer” to promote employment while a constructive contribute to solving the global warming problem.

When can we expect house prices to bottom?

Aided by generous sofas and an oncoming tax, are house prices, adjusted for inflation, since 1982 tripled.

Result, an average house is now € 250,000, – and the total cost private mortgage has risen to € 632 billion, which the Netherlands is the frontrunner in the world (107% of GDP).

That does of course not a problem, as long as employment, large credit, tax deductibility and, not least house prices are maintained.

A substantial change in one or more of these factors, however, the vulnerability, which now once associated with a high debt position, mercilessly exposing.

With the lowest unemployment in Europe and the political taboo that rests on the discussion of the tax deductibility of mortgage interest, about these two factors in the Netherlands temporarily well.

The generous credit, however, the last time a real problem to be. That’s not so strange when one considers that The solvency of the banks themselves under suspicion.

The debt crisis in Europe has at least made clear that banks have lent too much money to poor countries and their inhabitants and their fate depends on the political willingness of the resulting threats to shift to the taxpayer.

To the stagnant real estate market that pulling out of recession, the transfer tax is temporarily reduced from 6% to 2%. That makes at least the financing of the buyers a bit smaller. It does appear from this unique action that the government is really worried.

That’s not surprising, with an expected price decline for 2011 of around 6% (according Hans Andre de la Porte of the VEH) And strong sales stagnating. The number of homes now up for sale has doubled since 2008!

This massive supply of houses is probably not only due to the reduction in funding, but certainly also due to the unwillingness of sellers to the price to drop, driven by the expectation that recovery of housing prices around the corner.

Whether this expectation is real, is widely doubted. Expects emeritus professor Hugo Priemus the next five years drops of 5% per year.

In the U.S. property market has been attempted with various support measures afloat. This has had an impact for some time, but now the trend is downwards, and again after an average decline of over 30% from the peak of the market.