In the UK property market over the last 12 month Student accommodation has been the best-performing asset with average double-digit returns these have been driven by strong rental growth.
Over the last 10 years the student housing sector has grown to a market worth in the region of £103bn. This growth has been driven by a rise in the number of students enrolling on university courses, up from 100m in 2000 to over 150m last year.
According to the property index student housing funds have returned close to 12% since the start of the year this compares with an average return of only 1.3% across the rest of the property market and an average 6% for other investments.
Over the last year a number of large investment funds have bought into the sector as
they believe that the sector is not greatly affected by the present economic downturn and lenders are also turning to student accommodation as one of a handful of property types which they view as low risk: vacancy rates run at about 5%, less than one-third of the figure elsewhere in the property sector.
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St. Lucia’s increasing property market
St Lucia is often called “The Helen of the West Indies” for its captivating beauty. With a total land area of about 620 square miles, St Lucia is one of the most beautiful islands in the world.
The island has excellent beaches, scenic waterfalls, mountains, rainforests, orchids and exotic plants. The twin mountain peaks of Les Piton drop dramatically to the water´s edge on the west coast. In the south, visitors get close to bubbling pools of lava and steaming sulfurous spouts at Sulphur Springs Volcano, or splash in the sulfur-infused waters of the Diamond Waterfall and Mineral Baths.
St. Lucia is increasingly seen as one of the world’s most interesting property markets. The island is in many ways comparable to neighboring Barbados, but St. Lucia’s property prices are about 40% to 60% lower.
Reasons for the rising buzz about St Lucia:
The island is one of the most accessible in the region, with direct flights from the US, Canada, Germany, and the UK. British Airways recently increased direct flights from Gatwick to St. Lucia.
One of the region’s lowest crime rates.
A tax haven with no VAT, no capital gains tax, no inheritance tax and no estate tax.
Top destination for weddings and honeymoons
St Lucia’s first casino recently opened, plus a multi-million pound shopping mall, multi-screen cinema, and new restaurants and bars.
St. Lucia has a new niche—health and wellness.
With the support of the government and other private institutions, the first St
Lucia Health and Wellness Retreat is set to open mid-November 2011 with the new Alaia spa designed and operated by ESPA opening on the Marquis Estate 2 years later.
St Lucia’s currency is pegged to the US dollar at EC$2.7 to US$1.
Property values rose by about 10% to 15% annually from early-2000s to 2008, local analysts estimate. The northern coast, with most residential developments, saw the highest house price rises.
According to the Global Property Guide research prices now in St Lucia range from US$1,207 to US$2,649 per square metre (sq. m) for houses from 150 sq. m to 700 sq. m.
Typical prices in March 2011:
150 sq. m. house: US$181,050
250 sq. m. house: US$390,750
350 sq. m. house: US$927,150
700 sq. m. house: US$1.32 million
130 sq. m. condo unit: US$389,220
The average condominium price was US$2,994 per sq. m.
Most new developments are in the island’s north, including Castries, the capital city, and Rodney Bay. South Coast development is limited by strict planning laws, and by the area’s dense rainforest.
St. Lucia’s economy expanded by a healthy 4.4% in 2010 after a 1.3% decline in 2009 and 5.8% growth in 2008, mainly due to an increased activity in construction and tourism, supported by a buoyant property market.
Inflation was 3.3% in 2010, up from -0.2% in 2009. From 2003 to 2007, St Lucia had average inflation of 2.6% per year.
According to the latest IMF report, “In the face of increasing headwinds from subdued growth in the U.S. and Europe and an uncertain global financial environment, we expect growth at about 2% in 2011, shored up by post-hurricane reconstruction. High world commodity prices are expected to put temporary pressures on inflation and the balance of payments in 2011, but these will subside over the medium-term”.
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House prices and the state of the property market have probably hit rock bottom, according to banks and building societies.
Property values are about to level out and then show a modest increase, says the Council of Mortgage Lenders (CML), which speaks for all Britain’s major mortgage lenders.
Mortgage availability is also ‘broadly stable’ and has remained at around the same levels for two years, adds the CML.
The housing market analysis is based on the latest economic figures released by the government and the Bank of England.
The CML backs a Treasury forecast that suggest house prices have bottomed out and will stabilise over the next 18 months or so before beginning to rise in line with wage inflation.
“Despite the weakness of consumer sentiment associated with ongoing pressure on household incomes and the uncertain economic outlook, there are no signs of significant house price falls,” said CML chief economist Bob Pannell.
“Values continue to be strongly underpinned by the limited volumes of new build and forced sales. While current survey data suggests that house prices nationally may be drifting modestly lower in nominal terms, the prevailing view among economists is for house prices to stabilise through 2012 and then revert to growth of four to five per cent per year from 2014 onwards.”
Meanwhile, research by the Intermediary Mortgage Lenders Association (IMLA), the trade body representing lenders that market products through brokers, has revealed 34 per cent of intermediaries believe standard mortgage business levels will improve during the fourth quarter of the year, with 26 per cent expecting business levels to increase between three per cent and seven per cent.
IMLA chairman John Heron said: “This positive attitude from intermediaries is a reflection of the general improvement seen recently in the mortgage market. The pickup is slow but market conditions are gradually improving, particularly in the buy-to-let and remortgage markets.”
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