Real Estate & Investment News in All from Propertyshowrooms.com

Only in London tourism campaign announced by Boris Johnson

Tue, 24 Mar 2009 00:00:00 GMT

Boris Johnson, the mayor of London, has announced a new £2m marketing campaign for the capital. 'Only in London' aims to boost overseas visitor numbers to the city.

Johnson unveiled the details of the Only in London campaign yesterday on the London Eye, according to TravelWeekly. The announcement came on the first day of British Tourism Week, when Johnson also launched Only in London 100 - 100 examples of what makes England's capital an unequalled tourist destination.

Only in London, which will benefit owners of London apartments by attracting more holidaymakers to the city, has been developed taking visitors' wishes into account. Recent research into London's visitor market revealed that people were keen to visit the city but were concerned about expense.

Announcing the campaign, Johnson said: "As well as the massive choice of things to do and see, our overseas visitors will find London even greater value for money today. They'll see that their travel budget buys so much more in London and the only limit to their enjoyment will be not having enough hours in the day to fit it all in."

Only in London is expected to generate a further £60m for the city's economy by the end of 2009. The campaign will be officially launched in the UK at the end of April. It will then be extended to target overseas markets in Europe and North America during the summer.

This story was brought to you by holidaylettings.co.uk, the UK's No.1 for holiday homes worldwide.

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Madonna & Jesus Luz renting luxury Florida villa

Wed, 18 Mar 2009 00:00:00 GMT

Madonna and current boyfriend Jesus Luz are renting a mansion in Florida. The singer is leasing the property in Wellington for a month and is also said to be looking for a new home in the Palm Beach area.

The luxury villa in Florida where Luz, Madonna and family are rumoured to be living measures 6,277 square feet, according to the Real Estalker blog. The property, which costs US$50,000 per month to rent, also has a separate guest house.

The six bedroom Florida rental property overlooks the golf course at the Palm Beach Polo and Country Club and has a covered terrace, swimming pool, spa, pavillion and outdoor kitchen. The interior of Madonna's temporary home is thought to have been furnished by a top New York designer.

Madonna is reported to have been spending increasingly more time in the Palm Beach area and is thought to be looking to buy a new property there. She previously owned a property in Florida's Miami Beach area. The singer, who recently split from husband Guy Ritchie, was also rumoured to be buying a Manhattan townhouse for US$38m.

This story was brought to you by holidaylettings.co.uk, the UK's No.1 for holiday homes worldwide.

Keen investors still entering overseas property market

Fri, 17 Oct 2008 00:00:00 GMT

Dedicated foreign property buyers are continuing to snap up residences in other countries, an analyst has stated.

According to Mark Bishop of A Place in the Sun magazine, there are fewer people around spending about £40,000 or £50,000 on a house.

This, he stated, is partly because the credit crunch has restricted people's finances, leaving the way open for more affluent buyers with greater disposable income.

Mr Bishop commented: "What we have got delivered in this current market is the keenest of the keen."

He described this group as people who are "perhaps" a more sophisticated type of buyer, who probably have greater wealth and specialist knowledge.

Mr Bishop added that the many of them are also likely to be a little bit older than those who bought foreign property prior to the credit crunch.

According to Cater Allen Private Bank, more than three million people are expected to buy a property overseas within the next two years.

Investors seeking advice to secure their investments

Thu, 16 Oct 2008 00:00:00 GMT

In response to the global financial crisis, naseba and the Council of Saudi Chambers of Commerce and Industry have decided to add two exclusive panel discussions to the program of the Real Estate Investment World Summit. The discussions will focus on the state of that crisis and its impact on the Middle East markets and respond...

Investors could make money overseas

Sat, 20 Sep 2008 00:00:00 GMT

Prospective property buyers have been advised that investing overseas could be highly lucrative.

According to A Place in the Sun Live, foreign property investors could potentially benefit from the current economic downturn.

Mark Bishops, investment expert at the group, said this is because the credit crunch has forced prices down in many popular locations.

Therefore, buyers could be able to snap up a bargain before the market picks up again in the future.

Speaking to Property Wire, he commented: "I believe that the credit crunch offers an opportunity for people to invest in property abroad at some of the best prices in a generation."

Mr Bishops stated that those with the necessary finance should "seriously think" about taking advantage of the current situation.

Consumers were urged not to let the "negative vibe" put them off investing overseas.

According to a study by Savills and Holiday-Rentals, people from the UK now own 425,000 foreign properties.

Estimates suggest that these are collectively worth in the region of £58 billion.

Rental investors advised to make the most of their property

Sat, 20 Sep 2008 00:00:00 GMT

Owners of rental accommodation overseas have been urged to try to maximise its full potential.

According to AccessibleAccommodation.com, property owners need to consider a number of issues in order to attract the highest possible number of people.

For example, the website stated that many holidaymakers may have mobility problems and would therefore need to be catered for, reports NuBricks.com.

Buy-to-let investors were also encouraged to market their property to niche groups such as elderly travellers, partly because they often travel out of season.

Therefore, property owners could potentially collect healthy rental yields during relatively quiet periods.

AccessibleAccommodation.com said: "It is important to ensure that your real estate investment maximises the returns it generates."

This comes after Sarah Chambers of Holiday-Rentals told the Independent that rental investors should market their residence to consumers on the internet.

She stated that advertising on their own website would be beneficial to property owners, along with displaying their homes on other online portals.

Holiday homes still popular with lifestyle buyers

Tue, 16 Sep 2008 00:00:00 GMT

The credit crunch is not putting lifestyle buyers off purchasing an overseas property, an expert has stated.

According to Jacqui Daly of Savills, over-50s in particular appear to be very keen on the idea of spending time in a holiday home abroad.

Speaking to the Guardian, she said this is because many in this age group have plenty of equity and do not need to take out a mortgage.

"They're still heading for the sun," she commented.

"Lifestyle buyers just want to relax and don't worry about renting out or selling for a profit."

Indeed, Ms Daly has predicted that the recent changes in the economic climate could lead to lifestyle buyers dominating the overseas property market in the near future.

According to a study by Savills and Holiday-Rentals, people from the UK now own 425,000 foreign properties.

Estimates suggest that these are collectively worth in the region of £58 billion.

Investors need to be levelheaded

Fri, 5 Sep 2008 00:00:00 GMT

Overseas property buyers have been advised to remain calm when looking at prospective purchases and not to be swayed by hype.

According to Shelter Offshore, there is currently an "overwhelming amount" of positive press relating to buying abroad, despite the ongoing economic slowdown in the UK.

Therefore, people who are planning to snap up a foreign residence have been encouraged to be level-headed when reading promotional material from companies who are desperate to sell their stock.

Shelter Offshore commented: "One has to be wise and savvy when it comes to considering buying property abroad - no matter which property in which country."

The online portal added that investors should apply common sense when looking at possible acquisitions and look beyond a company's "marketing magic".

Earlier this week, Investec Private Bank revealed that the slowdown in the British housing market has dented the appeal of the country among many top-end buyers in the UK.

Therefore, a growing number are turning their attentions toward prime areas in countries such as Italy and France.

African Real Estate: A Scary Reputation but a Good Market

Wed, 3 Sep 2008 00:00:00 GMT

Mention Africa and watch people cringe. The news coverage on the continent is disproportionately about turmoil caused by diseases, vicious wars and dictatorships. Troubled countries abound: Zimbabwe, Sudan and Somalia are all making news for the wrong reasons. Natural disasters such as floods and...

Green Investing Gold Rush

Tue, 2 Sep 2008 00:00:00 GMT

The “green rush” is on. From large to small investors, the financial community is mining for green investments, making them one of the fastest-growing areas of the market. Billionaires and millionaires are pouring trillions of dollars into green companies, while smaller investors are putting...

Asset Location in an Investment Portfolio

Mon, 25 Aug 2008 00:00:00 GMT

Location, location, location—that’s what it’s all about in real estate, and in retail and other traffic-sensitive businesses. But how important is the location of assets within an investment portfolio? For some investors, the question crops up each year when it’s time to rebalance...

Seafront property 'immune to crunch'

Tue, 19 Aug 2008 00:00:00 GMT

The seafront property market is unlikely to be harmed by the credit crunch, an investment expert has said...

US house figures in surprise rise

Thu, 7 Aug 2008 00:00:00 GMT

The US sees an unexpected increase in agreements to buy homes in June, according to a real estate organisation...

Africa is the next emerging market-070808

Thu, 7 Aug 2008 00:00:00 GMT

Africa has been tipped to experience considerable growth in its housing market over the next few years.

According to property developer Kensington Real Estate, the continent is an emerging destination which offers numerous opportunities.

The company refuted the image of a politically unstable region which has been put across by the media, saying this perception has been "over-hyped".

Indeed, company director Ashish Thakkar has described Africa as a fresh and new market which is set to see millions of pounds worth of investment in the near future.

He commented: "The whole of Africa is booming.

"We're trying to create a brighter, more positive impression of Africa as a whole."

The comments may be of interest to people who have interests in emerging African markets such as Morocco.

Overseas property investors were recently advised to look at the Moroccan market by Fleewinter.com, which said buyers could be able to cash in on growing tourism in the country.

Visit our off-plan property Morocco page

Glamorous beach resorts and their affordable alternatives

Wed, 6 Aug 2008 00:00:00 GMT

Beachside homes in glamorous resorts are always in demand, but how far will your money go? Property investors who can't quite afford bricks and mortar in the hotspots still have plenty of up-and-coming areas nearby to choose from.

The Times selects its favourite beach resorts and explains what overseas property investors can get for their money.

St Tropez. This is "the place to see and be seen", meaning that property comes at a premium; the average price is about £8,000 per square metre. If this is out of your budget then consider St Raphael or Ste Maxime. Just across the Gulf of St Tropez, property in these locations is about half the price and just 15 minutes' away by boat.
Costa Smeralda. The north-east corner of Sardinia is "one of the world's most prestigious holiday spots"; Roman Abramovich bought a villa there for £24m last year. The discreet villas are very expensive with prices starting at approximately £2.4m. Just a few miles in either direction the prices drop sharply and the beaches and scenery are just as beautiful. The northern coastline is one of the most affordable areas, although investors need to factor in buying costs and an annual "luxury tax" for non-residents.
Seychelles. Until recently it was almost impossible to buy there but the Seychelles' government has opened up property ownership to foreigners via certain developers. "Competition is fierce" and prices are high. Most developments are leasehold but ownership in a big development usually confers residency rights.
Bondi Beach. Bondi Beach in Sydney is gradually "moving up in the ranks" from its reputation as a paradise for "surf dudes". Property on the beach could cost between £4m and £6 but prices are a lot lower a few blocks back. If you definitely want a beach view then you should head further south to suburbs such as Tamarama where beach properties are more affordable. Non-residents buying in Australia need to have their purchase approved by the government and buy through a state-approved specialist.
Ipanema Beach. Ipanema "has long been one of Brazil's most exclusive enclaves and one of the most expensive places to live in Rio de Janeiro". Beachfront property costs about £3,800 per square metre but prices in Copacabana are about half that. The Bahia region, north of Rio, is less hectic and plots of ocean-facing land are available from £200,000.

This story was brought to you by holidaylettings.co.uk, the UK's No.1 holiday home website.

French firms partner with finance specialists to add value (01 August 2008)

Tue, 5 Aug 2008 00:00:00 GMT

Strong Euro creates high demand for mortgage and FX services say agents...

A Place in the Sun Live event to 'co-locate' with Ideal Home Show (01 August 2008)

Tue, 5 Aug 2008 00:00:00 GMT

The October show will now be run in conjunction with the event in April next year...

Developers offering new incentives

Thu, 31 Jul 2008 00:00:00 GMT

Property developers have been offering a range of incentives to tempt buyers to purchase their newly-completed homes...

Cyprus projected to develop

Thu, 31 Jul 2008 00:00:00 GMT

Cyprus will become an even better place to invest in overseas property in the next few years as the planned nature of development makes significant changes to the island, it has been predicted...

Bodrum peninsula is Turkey's answer to St Tropez

Tue, 29 Jul 2008 00:00:00 GMT

Turkey's Bodrum peninsula has been recommended to overseas property investors. Described as Turkey's St Tropez, the Bodrum peninsula was once the haunt of artists and intellectuals, but it is now a firm favourite with second home owners.

The jewel in the crown of Turkey's Turquoise Coast, the "fat fist" of the Bodrum peninsula found fame on television's 'A Place in the Sun' programme, reports The Financial Times.

Network Turkey, which represents UK estate agents and construction companies, explained the attraction of the area: "The climate is wonderful and likewise the food and hospitality. And it has a fascinating history." The paper adds that "Turkey has more Greek monuments than Greece and more Roman sites than Italy" and Bodrum in particular boasts over 5,000 years of stories.

There are several overseas property investment opportunities for those interested; from apartments and villas near Bodrum marina to small, exclusive developments outside of Bodrum town. Investors should note that earthquake insurance is compulsory and if you are buying anywhere that overlooks a Greek island, therefore deemed militarily strategic, all foreign nationals must apply for military permission to check that the title is not in a restricted area.

The Bodrum peninsula is home to a third-century BC amphitheatre and the underwater ruins of the ancient city of Myndos. Meanwhile, Bodrum town's marina with "super-sleek yachts bobbing" in the water is in stark contrast to the region's historic monuments.

This story was brought to you by holidaylettings.co.uk, the UK's No.1 holiday home website.
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Eurogroup Must Shed Complacency

Tue, 29 Jul 2008 00:00:00 GMT

Two aspects of the eurozone economy are often mixed up. One is its overall performance. The other is the divergences that at any time exist within the single currency area. The Spanish economy may be about to fall off a cliff. But Spain accounts for only 11.8 per cent of the eurozone's gross domestic product. If you look at the eurozone from a great height, a meltdown of the Spanish economy looks like a minor regional wildfire.

Overall, the eurozone economy is in reasonable shape. The latest indicators point towards a slowing in economic growth but not a recession. The European Central Bank is probably a touch too optimistic, as its own forecast has not yet fully taken account of the seriousness of the US downturn. But there are some reasons for guarded optimism. Most of the eurozone does not have a house price problem. Corporate and personal balance sheets are in good shape and credit to the private sector continues to grow at double-digit rates. This does not usually happen when you are about to hit a deflationary slump.

But what about intra-eurozone divergences? I was struck the other day by a statistic from the ECB that shows Spain losing competitiveness relative to Germany, even now. We knew this happened during the years of high economic growth in Spain and low growth in Germany. But the trend continued even when the relative positions of the two countries were reversing. One explanation is that Spanish wages are directly linked to inflation, while German real wages are still declining.

Worse, Spain's slippage comes amid the prospect of a serious downturn in its economy. Last week's collapse of Martinsa-Fadesa, a large property developer, has been a reminder, if any were needed, of the massive scale of the Spanish property crash. Serious financial and economic distress is almost inevitable. Do not be fooled by the fact that Spanish banks had virtually no exposure to US subprime mortgages. Being exposed to Spanish mortgages is probably worse.

Spain is in a more delicate position than the US or the UK because, as a member of a monetary union, the country has fewer macroeconomic adjustment tools at its disposal. The dollar and the pound have devalued in real effective terms, while Spain has one of the hardest currencies in the world. Spanish interest rates have gone up while US rates have gone down.

The good news is that Spain has some room for manoeuvre in fiscal policy, given its low debt-to-GDP ratio. But the whole structural and legal setup of the eurozone requires that, in any adjustment, most of the heavy lifting is done via the real economy. Spain is thus in danger of entering a decade of misery, with falling real wages.

The problem is that even if Spain were to try to pull itself up through competitive adjustment, it is not at all clear that this would work. I am not even sure whether it works all that well for Germany in the long run, but that is another story. Some degree of competitive adjustment is probably needed but the huge scale of the shock that is unfolding in Spain will almost certainly require a macroeconomic response that Spain cannot deliver on its own.

Yet the eurozone's system of economic governance is not designed to produce this type of response. There are no cyclical transfer schemes, only structural funds. No common rules exist on bank bail-outs. Small-minded national banking regulators even refuse to countenance the very obvious necessity of a central banking regulator for cross-border banks. The eurozone does not even have single representation at the International Monetary Fund. The economic shocks to be experienced by Spain, and by Ireland, will seriously test the eurozone's see-no-evil-hear-no-evil approach to economic governance.

I have long thought that the only way the current set-up will be changed is not through debate about future eventualities but as a result of being plunged into crisis. Eurozone finance ministers – the so-called eurogroup – are a complacent bunch. They never do anything until it is absolutely necessary. But they will act eventually. I am relatively optimistic that they will always be able to ward off the worst-case scenario, one that still excites some commentators: the threat of a eurozone break-up.

So what actions would be needed? In the very short run, a transfer mechanism to provide help for countries in severe distress. Of course, any transfers would have to come with IMF-style conditions attached. As a price for an increase in intra-eurozone solidarity, the other member states would almost certainly demand that the beneficiaries end the silly policies that got them into the mess in the first place. Spain, for example, should end the automatic link between inflation and wages. It should also end the monopoly of the one-month euro interbank offered rate mortgage, which has had a hugely pro-cyclical effect on mortgage lending and the housing market.

The one institution that cannot help Spain is the ECB. Its role is to run an optimal policy for the eurozone as a whole. Dealing with this hugely asymmetric shock is primarily a matter for politicians, not central bankers. Anybody who claims to be serious about economic policy co-ordination, such as President Nicolas Sarkozy of France or the European parliament's economic and monetary affairs committee, should therefore stop bashing the ECB for a few months and focus attention on the storm that is building up on the eurozone's western front.

Full story from FT.com

Emerging markets attract investors-240708

Thu, 24 Jul 2008 00:00:00 GMT

The declining fortunes of many established markets are prompting many property investors to look to less-established alternatives.

According to Property Secrets, there was a 43% increase in the number of transactions in emerging markets during the first quarter of 2008.

The website believes this is because the credit crunch has negatively affected the investment potential of traditional hotspots in Europe.

As a result, emerging markets in the east of the continent, such as Romania, are attracting more and more attention from foreign buyers.

Property Secrets comments: "As returns go into freefall in many developed economies, it's unsurprising that big money investors are looking for returns in the most promising emerging markets."

The online portal added that eastern Europe is proving to be one of the most popular regions among those who wish to invest in a less-established location.

According to independent analyst Amberlamb, property in the eastern European country is currently in high demand.

This has led to supply being fairly restricted, which in turn has made available properties much more highly sought-after, thus increasing their prices.

Visit our off-plan property Romania page

Macdonald & Company strengthens architecture consultancy team

Tue, 22 Jul 2008 00:00:00 GMT

Macdonald & Company, the leading recruitment consultancy focusing solely on the property industry, has announced the expansion of its Architecture and Design recruiting team, amidst the rapid rise of the regional real estate market, which is currently valued at USD 1.2 trillion...

Tax advice for beating the credit crunch using your home

Mon, 21 Jul 2008 00:00:00 GMT

Homeowners looking for a way to protect themselves from the credit crunch can use their property to their advantage, new advice suggests. Tax relief on mortgage interest and entering the holiday lettings market are among the suggestions from The Times.

There are some practical ways of making your finances tax-efficient and reducing the impact of record inflation. Advice from the paper includes:

Entering the holiday lettings market. Use your second home to your financial advantage and set it up for "furnished holiday letting". This is an ideal solution for those who don't want to sell their property in the current market. The property must be available to let for at least 140 days in the year and let for a minimum of 70. Holiday homes benefit from favourable Capital Gains Tax (CGT) and Inheritance Tax (IHT) treatment.
Avoid Capital Gains Tax on your second home. Profits made on the sale of your holiday home or buy-to-let property are subject to CGT at 18 per cent, although profits made on your main residence are free of tax. There are ways you can help yourself. If you lodge a "principle private residence" (PPR) with the taxman within two years of purchasing a second home, you can vary this choice in the future in favour of another property. This means that if you make a healthy profit from selling your holiday home you can vary your PPR from your main residence to your second home , and then change it back again immediately once the sale has been completed.
Getting tax relief on your mortgage interest. This is particularly effective if you run your own business. If you have a mortgage, your spouse can sell you shares equal to this amount in your private family company. You can take out a loan to cover this cost and use the proceeds from the share sale to clear your mortgage. Because you have borrowed money for acquiring shares in a private family firm, the full amount of interest on the borrowing qualifies for tax relief at your highest marginal rate. This means interest payments can be set against your other income, which could make you big savings. There is no CGT to pay on share disposals between husband and wife.

This story was brought to you by holidaylettings.co.uk, the UK's No.1 holiday home website.

40% Of Hotel Projects May Not Meet 2015 Deadline

Mon, 21 Jul 2008 00:00:00 GMT

Many of the proposed hotel projects in the Middle East and North Africa (Mena) region will either be delayed or abandoned altogether like other sectors of the real estate market, a new report has revealed...

Investors advised to get contents insurance-160708

Wed, 16 Jul 2008 00:00:00 GMT

Overseas property investors have been advised to make sure the contents of their home are covered.

According to research by Zurich Private Clients, 1 in 10 holiday home owners do not have any insurance for the items inside, which are worth an average £15,200.

This has prompted to the British Insurance Brokers Association to say that it is "really important" for people to make sure they are fully protected.

Graeme Trudgill, corporate affairs executive at the organisation, commented: "You have got a considerable amount of contents there that will add up to this kind of money."

He added that most people would need specialist insurance policies that cater for the fact that holiday homes are often left empty for a period of time.

According to figures from the Office for National Statistics, about 211,000 people in the UK have a second home overseas.

DEC, Robodh Contracting to Develop AED4.5 bn Project

Wed, 16 Jul 2008 00:00:00 GMT

Dheeraj East Coast (DEC) and Robodh Contracting - one of the leading contracting companies in the Middle East have entered into a strategic partnership with the signing of a joint venture term agreement for a property portfolio of over Dh4.5 billion...

LaSalle launches ‘special situations’ team

Wed, 9 Jul 2008 00:00:00 GMT

LaSalle Investment Management has launched a team aimed at investing corporately, and in structured debt and equity opportunities...

Budget airlines transport more passengers-090708

Wed, 9 Jul 2008 00:00:00 GMT

Two leading budget airlines have reported that passenger numbers have grown in the last 12 months.

According to Ryanair, 5.17 million people boarded its services in June 2008 - up from 4.35 million a year earlier.

This is an increase of nearly one-fifth, illustrating the continuing desire for affordable flights to foreign destinations among overseas leisure travellers.

The trend was reinforced by rival carrier easyJet, which has also seen passenger numbers go up by a similar amount during this period.

Figures showed that 4.1 million people booked passage with the low-cost airline in June 2008 - up from 3.4 million 12 months earlier.

This comes after Vision/Totem revealed that the number of people taking holidays abroad is set to go up to 1.1 billion within 2 years.

TravelMole reports that the organisation believes consumers will continue going overseas, despite rising fuel prices and environmental concerns.

Maguire Properties Received Offer

Tue, 8 Jul 2008 00:00:00 GMT

Maguire Properties came under renewed attack from hedge-fund investors after it was revealed the company rejected a buyout proposal...

$33 bn Middle East seaport expansion under way

Mon, 7 Jul 2008 00:00:00 GMT

Massive economic growth is driving major seaport expansion in the Middle East worth in excess of $33 billion to handle record volumes of containers and bulk cargoes, say leading maritime industry observers...

Property exhibition will offer 'unique opportunities'

Wed, 2 Jul 2008 00:00:00 GMT

A property event held later this year is promising buy to let investors a chance to take advantage of unique opportunities in the property market...

Branded hotel condos boost luxury market in Asia

Tue, 1 Jul 2008 00:00:00 GMT

Property investors in Asia are prepared to pay a premium for their investment if a luxury branded name is attached to the development...

Wachovia Waives Mortgage Fees

Tue, 1 Jul 2008 00:00:00 GMT

Wachovia is waiving all prepayment fees associated with its "Pick-A-Pay" mortgage program to help customers cope with declining home values and the credit crunch.

Property investor show will feature exclusive zone on regulation of the international market

Mon, 30 Jun 2008 00:00:00 GMT

One of Europe's biggest shows for property investors will host an exclusive zone for the Association of International Property Professionals when it opens in September...

Middle Eastern company buys Thamesside residential development site

Mon, 30 Jun 2008 00:00:00 GMT

A consortium of Middle Eastern investors has revealed plans for a luxury residential project next to London’s Battersea Power Station.

European property investment at weakest level since 2003

Mon, 30 Jun 2008 00:00:00 GMT

Direct investment into European real estate fell 14% to €32bn (£25.4bn) in the second quarter of the year in the weakest performance since 2003.

Irish buyers still banking on French residential

Mon, 30 Jun 2008 00:00:00 GMT

Irish investors demand for luxury residential property in France is still high, according to Chez Riviera.

Overseas property proves sound

Mon, 30 Jun 2008 00:00:00 GMT

New Star International Property fund has done well due to geographical diversification

Escalating inflation seen as threat to booming property markets in Asia

Fri, 27 Jun 2008 00:00:00 GMT

Asia is showing signs of its property boom coming to an end according to financial experts...

Shouldn't a best-cities-in-the-world list include New York and London?

Mon, 9 Jun 2008 00:00:00 GMT

Copenhagen topped the list of the world's best cities, according to London-based lifestyle magazine Monocle. But what surprised me is that the list, which measures quality of life, skipped over London and New York (both tops on my list). Interestingly, the magazine chose to include two U.S. cities -- Honolulu and Minneapolis -- and not more obvious choices such as Miami, Los Angeles, New York, Chicago or San Francisco.

What would your list include?

This is what London's The Independent said about the list.

Cities usually considered big-hitters were notable in their absence. Neither New York nor London – which was lambasted by philosopher and writer Alain de Botton for its "bland" developments – made it into the 20 featured locations. To be thus neglected by Monocle magazine, which since it was set up 18 months ago by the Wallpaper* founder Mr Brûlé, has established itself as the observer of things cool and contemporary, will come as a shock to both cities.

Here were the winners:

Best cities for quality of life
1 Copenhagen
2 Munich
3 Tokyo
4 Zürich
5 Helsinki
6 Vienna
7 Stockholm
8 Vancouver
9 Melbourne
10 Paris
11 Sydney
12 Honolulu
13 Madrid
14 Berlin
15 Barcelona
16 Montreal
17 Fukuoka
18 Amsterdam
19 Minneapolis
20 Kyoto
*Best global city : Paris
*Best business city: Madrid
*Best cultural city: Berlin
*Best design city: Copenhagen
*Best retail city: Fukuoka

Brad Pitt takes real-life role as resort designer

Tue, 3 Jun 2008 00:00:00 GMT

Brad Pitt isn't the first celebrity to lend his name to help sell a real estate project. But it's not common for movie stars to design five-star luxury hotels.

Pitt, who has long had a passion for architecture, will help design an 800-room green hotel and resort in Dubai. He won't have to give up his day job because he'll be part of a team of professional consultants from Los Angeles-based architecture firm GRAFT.

Here's a video of Pitt on Charley Rose talking about his love of architecture.

Currency Market Commentary - Summary of March 2008

Sat, 1 Mar 2008 00:00:00 GMT

GBP/EUR

Key data out this month:

From the UK:

Mortgages Approval
Business Investment figures
Nationwide House Prices
Consumer Confidence
Bank of England's Credit Conditions Survey

From the E.U:

German IFO business index at 104.8 (104.1 previously)
26th of March EUR ECB'S Trichet Attends EU Parliament Debate
Euro-zone trade balance

Impact of data in the market place:

We saw the Euro exchange rate remain strong against other major currencies as data from the IFO business climate index showed a rise in German business sentiment. This was measured by the IFO business index, and figures rose from 104.1 in February to 104.8 in March, being the third consecutive monthly rise in the data and a surprise to many who were expecting a slight fall.

This news was described by analysts as another indication that the Eurozone economy is continuing to resist following in the woeful footsteps of the US economy. So far the ECB has refused to follow in the footsteps of the Federal Reserve in slashing interest rates in the face of the credit crisis and it appears that there is little chance of any interest rate cuts facing the Eurozone in the near future.

The ECB continued to take a tough stance on policy with President Trichet continuing to concentrate on the inflation risks. In particular, there is a strong determination to minimise the risk of secondary pressures from the high level of energy prices.

Markets responded by moving to lessen expectations for interest rate cuts later this year with futures markets cutting the chance of any rate cut to around 50%. There were further stresses within the money markets and the ECB added additional liquidity to help ease the tensions.
There were reports of European irritation over the US Administration's dollar policy, but comments in public by European officials were still relatively restrained. French president Sarkozy was more vocal in the opposition to Euro strength.

Jean-Claude Trichet has continued to focus emphasis that the main goal of the ECB at the present time is to control Eurozone inflation which is predicted to remain significantly above 2% throughout most of 2008. This leading to an indication that conversely to cutting interest rates, there is a much greater chance that there will be a rise in the Eurozone interest rates in order to control inflationary pressures.

A strengthening Euro exchange rate quite simply makes buying Euros more expensive, the stronger a currency, the less of it you get for your money. The fact that the ECB are likely to increase interest rates in an attempt to control inflation means that the strength of the Euro currency is only likely to become greater, making buying Euros continually more expensive.

The strength of the Euro and the weakness of the Pound has caused the GBP/EUR exchange rate to fall continually over recent months finding little resistance. The fact that for reasons explained above the Euro is likely to strengthen will only mean that contrary to the opinion of hopefuls looking to buy Euros with their Sterling, the GBP/EUR exchange rate will continue to fall. Just because the rate has come down, doesn't mean it has to go back up!

Central bank rates:

UK: (MPC) 5.25%

EU: (ECB) 4.00%

High & Low of the month:

High: 1.3161 (10/03/08)

Low: 1.2524 (31/03/08)

Difference of cost on a £200k property:

High: 263,220 euros

Low: 250,480 euros

A difference of 12,740 Euros

GBP/USD

Key data out this month:

From the UK:

CIPS Services PMI for February. Previous 52.5 index Actual 52.1
BOE Leaves interest rates unchanged at 5.25%
UK Trade Balance for January. Previous £-7.6bn Actual -£7.5bn

From the US:

Non-farms Payroll in March fell dramatically to -17k, was predicted to come out at 70k
US Trade Balance for January. Previous $-58.8bn Actual -$61.1B and came out -$58.8B
Housing starts for January, previously 1004K, came out higher than expected 1012k
FOMC lowers interest rates by 0.75% to 2.25%
CPI for January Previous 0.4%m/m, came out flat
Consumer Confidence came out lower than expected at 75, forecasted at 82

Impact of data in the market place:

The Bank of England elected to keep rates on hold at 5.25% during their meeting last month as risks to the economy remain finely balanced. The release of the minutes from the meeting revealed a 7-2 in favour of no change with the two dissenters both voting for a 25bps cut. The overall tone of the minutes suggested that the committee remain concerned about the outlook for the UK economy and that further rate cuts remain likely in the months ahead.

UK House prices fell for the fifth consecutive month according to the Nationwide building society which again weighed heavily on the Pound. The survey indicated that prices fell 0.6%m/m in March, bringing the annual rate of inflation to 1.1% y/y; the slowest rate of growth in 12 years.
Further evidence of the credit crisis taking its toll on the UK housing market was seen when First Direct closed its doors to new customers. Other lenders also began reducing their offerings with reports suggesting that the number of products available has fallen by half compared to twelve months ago.

In the US, data releases continue to paint a mixed picture of the economy with many commentators talking of the possibility of a recession. The employment report showed that the number of new jobs created fell to a negative 17k jobs whist the unemployment rate remained steady at 4.8%. The news kept the Dollar on the back foot against all its major counterparts.

At the FOMC meeting, the Fed again cut interest rates, this time by 0.75% to 2.25%. Since September ’07 the Fed have cut by a total of 3.0% from 5.25% to 2.25% in an attempt to shore up the economy and prevent a recession.

Central bank rates:

UK: (BOE) 5.25%

US: (FED) 2.25%

Difference of cost on a $200k property:

High = £101,421.42

Low = £98,057.00

EUR/USD

Key data out this month:

From the EU:

Euro-zone gross domestic product released in line with expectations at 0.4% QoQ and 2.2% YoY.
ECB interest rates decision. Interest rates held at 4% as expected.
German ZEW economic sentiment survey more positive than expected at -32.0 compared to expectations of – 40.
Euro zone Consumer Price Index (CPI) released at 0.3% MoM and 3.3% Yr on Yr.

From the U.S:

US Non-farms weaker than expected at -22k.
US unemployment rate at 4.9%.
US Trade Balance shows further deficit from a previous $-57.9billion to $-58.2billion.
US Consumer Price Inflation released at 4% in comparison to a previous 4.3%.
FOMC interest rate decisions released showing a further interest rate cut of 0.75%.
New Home Sales fall again to -1.8% MoM.

Impact of data in the market place:

Data being released from the Eurozone remains robust as the European economy continues to be resistant to the pressures created in financial markets by the credit crunch. The ECB still have had no cause to amend interest rates since June 2007 and many commentators expect their rates to remain steady in the months ahead.

Although there are some clear inflationary pressures within the Eurozone the outlook in comparison to the US markets is much more bullish with further potential for growth.

US Non-farms payroll figures show that for 2 months in a row the US economy has lost jobs. This in turn puts pressure on the FED to cut interest rates to ease the pressure currently within the market.

Inflationary pressures however, are a concern. With CPI registering at a high 3.3% this is a full 1.3% above the European Central Banks official target of 2% inflation. Technically above target inflation rates should call the ECB to action to raise interest rates and tighten monetary policy going forward. In contrast price growth in the US slowed to 4% compared to a previous 4.3% in Jan, this is the slowest rate of expansion in four months. Looking in to this in further detail it can be seen that cooling energy prices have helped to curb the impact of increasing food costs.

The FEDs most recent cut to interest rates now leaves the US Dollar as the second lowest yielding currency in the developed world. Since the last meeting of the FED the credit crisis has continued to rampage the US economy. The US dollar has fallen to record lows with the fear of risk having severe implications on liquidity in the market.

Central bank rates:

US Federal Reserve; 2.25%

Bank of England; 5.25% (next meeting 10th April)

High & Low of the month:

High: 1.5904 17/03/08

Low: 1.5145 03/03/08

Difference of cost on a €250k property:

$7,880.41

GBP/AED

The AED is pegged to the USD dollar, averaging around 7.35 this month although as already mentioned it is an extremely volatile time at the moment, thus having an impact on the GBPAED.

Difference of cost on an AED 200k property:

High = £27,662

Low = £26,702

GBP/CAD

Key data out this month:

March 4th BoC Interest Rate Announcement

March 7th Unemployment Rate for February

Impact of data in the market place:

Despite seeing interest rates cut to 3.50% at the start of the month the Canadian Dollar has remained strongly underpinned by record highs in oil prices earlier in the month, reaching above $110 a barrel. This was the third rate reduction in three months and furthermore, authorities signalled that more rate cuts were likely as they struggle to keep the economy growing amid lower export demand from the US. Some relief came for Canadian migrants (and fuel prices!) when oil prices tumbled towards the end of the month in a pre Easter sell off, moving the GBPCAD rate above the 2.00 level. The Canadian Dollar failed to capitalise on the resurgent oil prices at the end of the month, weakening further against sterling. However, we could see a re test of the record highs soon with supply worries in Iraq.

The unemployment number remained steady despite possible expectations of an increase in unemployment levels plus new house prices continued to rise, in contrast to the trend that we are seeing south of the border of falling prices in the USA. There are concerns over slowing in growth; GDP rose only 0.8% which is the weakest performance in more than 4 years and due to a drop in exports. It will be important for those needing to purchase the Canadian Dollar over the coming year to consider how they will be affected by developments in the US. For example, the downturn in the US housing sector is hitting timber exports plus, the weakness of the US car industry (with which Canada is closely linked) will also dampen the demand for Canadian exports. The US accounts for the more than three quarters of Canada’s exports so the slowdown in the US is certain to have an impact on Canadian exports and their economy. With this in mind, clients should certainly prepare for further volatility.

Central bank rates:

Bank of England: 5.25% Interest Base Rate (Next meeting April 10th)

Bank of Canada: 3.50% Interest base Rate (Next meeting April 22nd)

High & Low of the month:

High: 1.9517

Low: 2.0608

Difference of cost on a $200k property:

CAD$ 5,425.08

GBP/AUD

Where is it going? The Aussie Dollar Update for March

It’s been another testing month for Sterling. Although interest rates were kept the same at 5.25%, the Bank of England minutes kept outlook lower with future cuts possible. House prices are again showing signs of more slowdowns with the RICS house price balance dropping for the seventh month in succession signaling more than half a year of negative market sentiment.

Australia is still booming, and the continued strong employment growth has eased concerns that recent interest rate hikes (to 7.25%) are harming the economy. But despite this continuing strength, prolonged global equity declines prompted renewed risk aversion this month, with speculators withdrawing their funds from commodities such as gold and minerals (key exports), resulting in the $AUD going above $2.20 for the first time since the beginning of February. This was an improvement of over 10 cents from the lows at the start of the month, giving migrants some long awaited good news!

So does this mean that the downward trend has now stopped? Not necessarily, as it could just be a corrective adjustment and we have already dropped back to around the $2.17 levels, but it is very hard to tell where it is going from here. There is still so much doubt in the market which is causing the volatility we are seeing, and the market has been moving as much as 4 to 5 cents a day, so many sleepless nights watching the computer screens no doubt!

The RBA did leave their rates on hold in their decision on April 1st in a widely expected move, and this could signal the tightening global credit conditions have started to filter through to Australia. However, as stated, the moves we have seen have largely been as a result of cautious speculators taking their profits and just biding their time, waiting to see what happens. Should risk appetite return, then we could easily see a continuation of the Aussie Dollar strength that has seen the rates drop so dramatically over the last 18 months.

You need to make a decision when to buy, and what your budgeted rate is. Many people will be renting for 6-12 months and feel they have time to watch the markets and hope they improve. HiFX have a fully regulated Australian office that can help you monitor the markets and work with you to achieve an agreeable rate, if this is a strategy that you wish to adopt.

Bear in mind, however, that there is no guarantee that your target rate will be hit. How much can you afford to gamble? If the rates were $2.00 in 12 months time then how does that affect your new life in Oz? Those who adopted a similar strategy this time last year and decided to gamble on the market have seen a significant drop in the rates and thus the amount of dollars they have to purchase a house and start their new life with.

There are different ways to buy currency when you are moving your funds abroad and many different things to consider, so you should start thinking about your options and watching the rates of exchange as early as possible. Even if you are not leaving for another 6-12 months, or will not be moving money over just yet, the more information you get at this stage the easier your decision about when to buy will be.

HiFX have a bespoke team who will happily talk you through your options in more detail and discuss a best fit strategy with you. For a free, no obligation consultation please call the Migration Team on + 44 (0)1753 859159 or email migration@hifx.co.uk.

GBP/NZD

Another Volatile Month for £ vs $NZD; What is happening with the Exchange Rate?

It’s been another testing month for Sterling. Although interest rates were kept the same at 5.25%, the Bank of England minutes kept outlook lower with future cuts possible. House prices are again showing signs of more slowdowns with the RICS house price balance dropping for the seventh month in succession signalling more than half a year of negative market sentiment.

There was, however, better news for those moving to New Zealand as the Dollar weakened against Sterling following sharp falls in commodity prices across the board. The aftermath of the Bear Sterns collapse in the US also aided the Pounds rally, bringing about renewed risk aversion and hence the unwinding of the carry trade, something New Zealand is particularly vulnerable to due to its 8.25% interest rates, the highest in the industrialised world.

This resulted in the Dollar losing over 10 cents against the Pound, going over $2.55 for the first time since January. The question on everyone’s lips is will this last? Have we seen a reversal in the overall downward trend of the last 12 months? It seems to be stuck in a range at the moment, between $2.45 and £2.55, but current market conditions makes it very difficult to predict where it will go from here.

Should the tightening global credit conditions filter through to New Zealand then that could have an adverse affect on their economy and as such the performance of the $NZD. There was some mixed data out of New Zealand in March, with encouraging growth figures and strong consumption and business investment, but less positive news from the NBNZ’s business confidence survey. However, the correlation between the strength of the currency and the carry trade is what has really been driving the market of late. Should risk appetite return, we could easily see the dollar strengthen again.

If you look at just the first 3 months of this year, there has already been a 20 cent difference between the high and the low, or $40,000 if you were moving £200,000 across! You need to make a decision when to buy, and what your budgeted rate is. Many people will be renting for 6-12 months and feel they have time to watch the markets and hope they improve. HiFX have an office in Auckland that can help you monitor the markets and work with you to achieve an agreeable rate, if this is a strategy that you wish to adopt.

Bear in mind, however, that there is no guarantee that your target rate will be hit. How much can you afford to gamble? If the rates were $2.20 in 12 months time then how does that affect your new life in NZ? Those who adopted a similar strategy this time last year and decided to gamble on the market have seen a significant drop in the rates and thus the amount of dollars they have to purchase a house and start their new life with.

There are many strategies available to minimise your risk when transferring funds, all of which will be explained clearly by your personalised dealer should you open a trading facility with HIFX. To discuss your requirements in more detail and for a free currency consultation please contact HiFX plc on 01753 859 159 or email info@hifx.co.uk.

Currency Market Commentary - Summary of January 2008

Tue, 1 Jan 2008 00:00:00 GMT

GBP/EUR

Key data out this month:

From the UK:

RICS House Prices for December. Previous -40.6 index

Nationwide Consumer Confidence

BoE MPC Interest Rate Announcement

Consumer Price Index

From the EU:

ECB Announces Interest Rates

Trichet speaks at ECB Monthly News Conf

Germany Unemployment Change

German Consumer Price Index

Impact of data in the market place:

January saw Sterling fall to an 11-year low against the Euro; with the value of €1 breaching 75 pence before retracing slightly lower to current levels, although Both the ECB and BoE declined to join the Fed in an emergency interest rate cut and the BoE made it clear from Governor’s King’s speech and from this months meeting minutes that drastic interest rate cuts would not be forthcoming in the face of higher inflation in the economy.

We still expect some rate cuts to materialise in the coming months and the UK economy still has a vulnerable feel for at least the first quarter of 2008, thus leaving GBP/EUR at risk of possible further falls.

UK Consumer confidence declined in December to the lowest in 10 months and retail sales slowed at its weakest rate in 12 month. Rising fuel bills and the lingering credit squeeze left consumers with lower disposable incomes, therefore leading to a sharp downturn in consumer spending.

Also house prices were confirmed to be falling at their fastest rate since the early 1990’s according to the latest RICS report. Nationwide house prices fell for a third consecutive month in January and Rightmove house prices fell to their lowest levels since December 2005.

Central bank rates:

UK (MPC) 5.50%

EU (ECB) 4.00%

High & Low of the month:

High: 1.3614

Low: 1.3130

Difference of cost on a €200k property:

High = £146,907.60

Low = £152,322.92

GBP/USD

Key data out this month:

From the UK:

Nationwide house Prices for January

BBA Mortgage Approvals for December

PPI input &output for December

RICS House Prices for December

Retail sales for December

From the US:

Interest rate cut

Consumer credit for November

Retail sales for December

University of Michigan Consumer Sentiment Survey for January

Existing Home & New homes sales for December

Consumer confidence for January

Impact of data in the market place:

The US Dollar’s structural weakness over 2007 saw significant depreciation against Sterling and most notably the Euro, even more when the US Federal Reserve made a surprising, announcement of an emergency rate cut on the 22nd. The Fed cut by 0.75% from 4.25% down to 3.5%, the first emergency reduction since 9/11. And on the 31st of January, the US Federal Reserve decided to cut the Fed Funds rate by a further 0.5% to 3.0%. Since September the rate has been slashed by a massive 2.25%.

The key weaknesses of the US economy persist, with risks to economic growth firmly to the downside.

The committee took action after Asian and European stock markets tumbled citing concerns about a weakening economy and turmoil in the financial markets, all adding to signs of a US recession. While the initial reaction was relatively muted, the Dollar weakened against the Euro and Sterling, while the trend continued throughout the end of the month.

Central bank rates:

UK: (MPC) 5.50%

US: (FED) 3.00%

High & Low of the month:

High: 1.9957

Low: 1.9335

Difference of cost on a £200k property:

High: $399 140

Low: $386 700

EUR/USD

Key data out this month:

US Pending home Sales for November. Previous 3.7%. Actual -2.6%

EU ECB Interest Rate Announcement

US FOMC Interest Rate Announcement

Impact of data in the market place:

The upward trend of EUR/USD shows little sign of breaking as the US economy continues to remain under pressure moving into 2008. The minutes from the Fed’s December interest rate meeting indicated that further rate cuts would be necessary in 2008 due to the increasing difficulties in the credit markets and further economic slowdown. This highlighted the effects of the credit squeeze had spilled over to consumer spending – a key driver of growth for the US economy. However, the Fed faced the predicament that lowering borrowing costs will fuel inflationary pressures. Ben Bernanke, the chairman of the US Federal Reserve, had signaled at the beginning of the month that the Fed was ready to take aggressive action to fend off recession; this resulted in 2 interest rate cuts (one being an “Emergency rate cut”) from 4.25% to 3% in the space of 7 days. This emergency rate cut was the first since 9/11 and the largest cut in rates for 26 years. It will be a waiting game to see whether this drastic rate cut has the desired effect of reversing the slowdown. Furthermore, the sub prime mortgage lending problem that originated in the US remains an issue in the economy, as the housing sector shows little sign of a turn around.

The European Central Bank decided to keep interest rates on hold this month. The Euro is being supported largely by weaker data from the US and UK, rather than key data from the Eurozone. Whilst all three economies begin to suffer the effects of slowing growth the Eurozone seems to be a lot more concerned with Inflationary pressures and has not ruled out a rate hike in 2008. We can expect continued Euro strength and a continued EUR/USD uptrend going forward the HICP (measure of inflation in the Eurozone) came out higher than expected at 3.2% (targeted at 2.0%) highlighting that the ECB will certainly not be cutting interest rates in the near future

Central bank rates:

US: 3.00% Interest Base Rate

EU: 4.00% Interest base Rate

High & Low of the month:

High: 1.4922

Low: 1.4364

Difference of cost on a $200k property:

€5,206.95

GBP/AED

Key data out this month:

Finance ministers from the six-nation GCC (Bahrain, Kuwait, Oman, Saudi Arabia and the United Arab Emirates) dismissed the abandonment or movement of their pegs to the declining US dollar.

Impact of data in the market place:

After all of the recent volatility experienced due to the market expectations of a decision to unpeg, the market has once again begun to settle. AED remains pegged to the USD at a rate of 3.67 and therefore the movements in the currency mirror that of GBP/USD.

High & Low of the month:

High: 7.33

Low: 7.10

Difference of cost on a £200k property:

High: 1466000 AED

Low: 1420000 AED

GBP/CAD

Key data out this month:

Canada

Gross Domestic Product (Month of Month (MoM)) Nov.Forecast 0.1% Actual 0.1%
Consumer Price Index. Both figures were in-line with expectations – MoM 0.1% and Year on Year (YoY) 2.4%.
Interest rate announcement. 0.25% basis point cut to 4.00%.
Retail Sales. Expected at 0.3% came out at 0.7%.
Housing Starts. Forecast at 221k actual 187.5k

UK

Retail Sales. Forecast for 0.2%, actual -0.4%.
Consumer Price Index came out at 2.1% - expected at 2%.
Bank of England Interest Rate Announcement. Rates held at 5.5%.
Bank of England minutes released showing 8:1 vote to keep rates steady.

Impact of data in the market place:

A very choppy month for GBP/CAD with some big movements on the back of data releases. The Bank of Canada’s move to cut rates by a quarter of a percent may help to preserve the longest economic expansion since World War II even as the U.S, Canada’s largest trading partner, slumps on the back of the credit crisis. 30% of economic output in Canada is covered by exports such as lumber and cars – approximately 80% of these sales are to U.S customers. High Retail Sales figures were boosted by strong fuel prices and the general outlook among consumers remain positive.

The Bank of England minutes showed an unsurprising 8-1 vote in favour of a hold. Whilst uber-dove David Blanchflower sited a “greater risk of a sharp slowdown” for his vote in favour of a cut, the minutes showed that the Bank of England is becoming concerned about inflation amidst rocketing energy and food costs.UK consumer price inflation was released above the Bank of England’s target (2%) for the third consecutive month with the biggest upward effect coming from food prices.

Market conditions have been volatile based on the stark contrast between the UK and Canada’s current economic conditions and room for economic growth. This in turn creates a lot of uncertainty in those who need to trade Canadian Dollars. The positive side of this for clients wishing to migrate to Canada is that the economic conditions out there are remaining strong despite the general negative outlook across most of the developed world at present. However, with such large movements being seen it is important to remember the impact that currency fluctuations can have when converting funds. As seen below clients transferring 250,000CAD will have seen a difference of over £6000 in one month.

Central bank rates:

Bank of Canada: 4.00%

Bank of England: 5.50%

High & Low of the month:

High: 17/01/08 - 2.0351

Low: 04/01/08 - 1.9394

Difference of cost on a 250kCAD property:

£6,061.76

GBP/AUD

A choppy start to 2008 as the $AUD shows more volatility:

The New Year started where 2007 left off; more volatility in an increasingly uncertain market, making it even harder to guesstimate where the rates are going! Starting 2008 at around the 2.28 levels, the dollar continued to benefit from a weaker pound and the rates fell to just under $2.17, levels not seen for over 10 years! Only a year ago it was trading at over $2.50 to the pound, but ignoring an uncharacteristic move in August, it has been on a progressive march downwards ever since.

There was more strong data out from Australia, with low unemployment, strong CPI inflationary data and very bullish housing and retail figures. We did see a brief correction in this downward movement, as investors took some of their profits from the so called “carry trades” and this pushed the rates back up to around the 2.28 levels again. However, these gains were short lived and, as expected, the dollar strengthened in the last week of January, finishing the month at around 2.18 – 2.19.

So how low can it go? Difficult to say given the current conditions, an answer that I appreciate has been given for the last few months. The UK are looking at a possible rate cut in February, down to 5.25%, in a bid to calm fears that the UK will follow the plight of the US. The RBA, however, may need to raise their interest rates in an effort to contain inflationary pressures and control their booming economy. This may well be a continuing trend until they can see domestic demand starting to suffer under the weight of a creaking global economy.

The moves we are seeing illustrate just how much the markets can react and what a risky business buying and selling currency can be without the proper planning. It can be such a difficult decision deciding when to buy your currency, and whether to leave it in the UK hoping that the rate will improve, especially when it is your life savings.

There are, however, ways in which to considerably reduce this risk:

The key is to address your exposure from the outset and get a strategy in place that suits you. One popular option is what is known as a forward contract, or ‘buy now pay later’ method, whereby you can lock into a rate of exchange with just a 10% deposit, for delivery up to 2 years in the future. If you had locked in at the beginning of January 07, you would have achieved around the 2.50 mark. In ’08 that figure would have been about 2.27, a massive 23 cent difference, or $56,000 on £200,000! Put into perspective, that is your new house furnishings or even a very nice new car. Even if you take the difference in January of 11 cents, that would be a potential saving, or loss, of $22,000 on that £200,000….in just one month!

The forward contract holds many benefits; you do not need all of your funds available (the majority of peoples funds are tied up in property for example), it gives you peace of mind knowing you have secured a rate and know what you are going to achieve, and it is flexible and can accommodate changes in the time scale originally agreed due to house sales falling through, etcetera.

Of course, it is always tempting to wait for a better rate and only you can decide how much of your wealth you want to expose to risk (you may decide to fix an exchange rate for half or all of your assets). For those of you willing to take a bit of a gamble, you can take out a “market order” or target rate, which is where you set a level at which you want to buy your currency. If and when this level is reached, the money is bought, but obviously it holds the risk that your target won’t be achieved so you will simply have to buy at the prevailing rate on the day.

Some people may not have the money available to them for a forward contract. The UK housing market is currently experiencing a slow down, with houses taking longer to sell, so many people will leave the majority of their funds in the UK. HiFX have an office in Sydney, which is fully ASIC regulated, and an account can be set up with them before you leave the UK, making the transition as smooth as possible
For those of you who are leaving for Australia over the coming months, forward planning is of the utmost importance and could save you thousands of pounds to start your new life. For a free, no obligation consultation about your situation and the options available please contact the migration team at HiFX on +44 (0) 1753 859159, or email migration@hifx.co.uk.

GBP/NZD

$NZD Continues to Strengthen in an Uncertain and Volatile Market:

As we moved into 2008 the $NZD was still experiencing the volatility it suffered throughout 2007 in an increasingly uncertain market. It moved over 16 cents in January, closing at just over the $2.50 levels. Ignoring the blip caused by the sub prime crisis in America in August, the Dollar has been strengthening against the Pound since midway through 2006, where it reached a peak of 3.06.

One of the determining factors of this continued strength has been the large interest rate differential, with NZ rates being at 8.25%. This makes it very attractive for investors who are seeking high returns on their funds, and lends itself to what is known as the “carry trade”, where people borrow in a low yielding currency and invest in one such as the New Zealand Dollar which offers such lucrative returns. Despite deteriorating global growth and market turbulence, the RBNZ kept their rates at 8.25% this month, citing high inflationary figures and an unchanged outlook for the NZ economy from previous months.

The question is, of course, how much lower can it go? Unfortunately this is very difficult to say given the current conditions, an answer that I appreciate has been given for the last few months. The UK are looking at a possible rate cut in February, down to 5.25%, in a bid to calm fears that the UK will follow the plight of the US. The RBNZ’s stance will depend mostly on how the impending US-led global slowdown affects commodity prices, and therefore inflation and growth in New Zealand. In 2005, the rates dropped to just over 2.41, and that was when the Pound was a lot stronger than it is now. In 1996, the rate was just under 2.17!

The moves we are seeing illustrate just how the markets can react and what a risky business buying and selling currency can be without the proper planning. It can be such a difficult decision deciding when to buy your currency, and whether to leave it in the UK hoping that the rate will improve, especially when it is your life savings.

There are, however, ways in which to considerably reduce this risk:

The key is to address your exposure from the outset and get a strategy in place that suits you. One popular option is what is known as a forward contract, or ‘buy now pay later’ method, whereby you can lock into a rate of exchange with just a 10% deposit, for delivery up to 2 years in the future. If you had locked in at the end of January 07, you would have achieved over 2.90. In ’08 that figure would have been about 2.45, a massive 45 cent difference, or $90,000 on £200,000! Even if you take the difference in January of 16 cents, that would be a potential saving, or loss, of $32,000 on that £200,000….in just one month! Imagine how that could change the start of your new life?

For those of you who are leaving for New Zealand over the coming months, forward planning is of the utmost importance and could save you thousands of pounds to start your new life. For a free, no obligation consultation about your situation and the options available please contact the migration team at HiFX on +44 (0) 1753 859159, or email migration@hifx.co.uk.