Sterling hit a two-year high against currencies of major trading partners and a 15-month peak versus the euro, buoyed by expectations the Bank of England would raise interest rates in November, but may be due for a correction if it does not manage to break 1.9040 against the dollar. Recent data showing a record rise in mortgage lending and the BoE minutes showing policymakers are getting more worried about inflation expectations reinforced the rate hike view in a market increasingly driven by yield differentials.
The pound rose to 103.50 on a trade weighted basis, its highest since August 2004. Against the euro it rose to 67.01 pence, its highest since June 2005 and up a quarter percent on the day.Sterling hit a two-week high of $1.9040. The dollar meanwhile hovered around two-week lows against the yen and the euro on Friday after data showed more signs of a slowdown in the U.S. economy, keeping expectations high that interest rates will stay on hold. The Philadelphia Federal Reserve's business activity survey for September showed its first negative reading in over three years, indicating a significant decline in manufacturing in the mid-Atlantic region. The sharp drop in the index provided the first clear sign of the slowing housing market impacting the broader economy. We reiterate that US growth related data would come back into the forefront. Two reasons explain this. First, the market already has the view that the Fed will not hike further. Easing oil prices and base effects of Hurricane Katrina falling out of inflation numbers soon mean that inflation pressures will come off sharply. Hence, with the market expecting the next move to be a cut, the question is when would the next rate cut be. In this sense, growth related data would be crucial. Secondly, the market will look towards next week’s data releases (housing sales, consumer confidence, durable goods orders and the Chicago PMI) to understand if the Philly Fed survey was an outlier or whether it does signal a clear turning point for the economy. Analysts at BNP Paribas expect upcoming US data releases to increase the probability of surprise for the Fed (as well as the market). In such an event, it is likely that we see a change in the way the curve would trade. While weak growth data has, over recent weeks, kept the curve in inversion, the data could well prompt a steepening as rate expectations are adjusted. The central bank kept overnight rates unchanged at 5.25 percent for the second straight time at a policy meeting earlier this week. While the dollar has hung on to its rate advantage against the euro and the yen, the end to the Fed's two-year tightening cycle has coincided with a rise in key rates elsewhere. Rates in the euro zone are at 3 percent, and are expected to climb as high as 4 percent next year, while the Bank of England last month raised to 4.75 percent. Still, some traders said that the dollar, which has fallen from a five-month high of 118.29 yen hit earlier in the week, was finding support from domestic importers before they close their books for the half-year at the end of the month. The euro was at $1.2795 near a two-week high after rising 0.8 percent a day earlier. The single currency inched up to 148.85 yen. The yen has climbed against the euro this week, pulling further away from a record low of 150.73 yen hit late last month.
Traders said that the market's next focus will be on the final reading of U.S. economic growth in the second quarter due next week, which could confirm a slowdown.
Source: Financial Mirror
Friday, September 22, 2006
Thursday, September 21, 2006
Dominic Farrell warns against "blind" property investing
I have returned from the idyllic island of Cyprus and fabulous temperatures in the mid 30 degrees centigrade and have just completed a “Fundamentals…” course in London over the weekend. I really enjoy these opportunities to interact with so many people who have the common goal of creating wealth through property investment and willing to share the little or vast knowledge they have with others. This course was no different to the others we have held over the last 3 years and produced yet another wide array of talents, from property developers to journalists, accountants to IT specialists. Our final course of the year will be held on 18th November 2006 if you wish to attend.
We have a busy month ahead with a couple of TV appearances and a slot on the radio as well as talking/presenting to a number of “wealth clubs” and financial services companies clients. September and the beginning of October are the busiest months in our calendar and as such some events we have been to in the past have to be chopped.
One such event is the Property Investor Show at the Excel Centre which we have exhibited at for the past 3 years with 2 of our companies. I enjoy the event and meeting up with lots of people we know but this year the diary is literally too full and something has to give. However, some of the Bewarethesharks.com team will be there exhibiting under the title of "The Jet-to-Let Bible" where you will be able to buy a copy of my book and also reserve your own copy of the new "Jet-to-Let Magazine." There will also be some very special offers which we have reserved for the show.
In my view you should not invest overseas without first reading the book and subscribing to the FREE Jet-to-Let Magazine. Many of the mistakes investors make, including believing the marketing hype of some agents, will not be made by those who digest fully the contents of the book and magazine.
This is a nice lead in to my main point this week.
DO NOT invest in a development in the UK or overseas without visiting the project site first or at least with the option of a full refund of the reservation fee if your inspection proves unsatisfactory.
How many people buy a suit, dress, perfume, car, sunglasses or shoes without first trying them out! It appears a lot more than try out the development before investing off plan.
I wandered around a project site recently which I know was mainly sold largely unseen on the internet to investors. I know the area extremely well as I have a house in the beach area and for the life of me why anyone would have wanted to invest in this particular project is beyond me. You only have to stand on the site to realise that the re-sale and rental market will be very difficult as the market does not want this location – why?
Because there is nothing there:
No infrastructure
No shops
No supermarkets
No restaurants
No bars
No beach and the pool is an afterthought.
and to cap it - a dangerous road notorious in the area for accidents.
In fact the pool which is meant to service many, many apartments looks smaller than my family pool at home! Because an apartment may look cheaper, have a "discount" or look favourable on a comparable basis, just make sure that the sellers are comparing "apples with apples" and not "apples with oranges"
No surprise to see lots of “For Sale” signs and very little sign of anyone living or renting there.
So, please do not be tempted by marketing materials, investment appraisals, “you need to buy now before they all go…” without visiting the site first and using your common sense and working out the target market that the property will appeal to (or maybe not) aka Exit Strategy.
We have a busy month ahead with a couple of TV appearances and a slot on the radio as well as talking/presenting to a number of “wealth clubs” and financial services companies clients. September and the beginning of October are the busiest months in our calendar and as such some events we have been to in the past have to be chopped.
One such event is the Property Investor Show at the Excel Centre which we have exhibited at for the past 3 years with 2 of our companies. I enjoy the event and meeting up with lots of people we know but this year the diary is literally too full and something has to give. However, some of the Bewarethesharks.com team will be there exhibiting under the title of "The Jet-to-Let Bible" where you will be able to buy a copy of my book and also reserve your own copy of the new "Jet-to-Let Magazine." There will also be some very special offers which we have reserved for the show.
In my view you should not invest overseas without first reading the book and subscribing to the FREE Jet-to-Let Magazine. Many of the mistakes investors make, including believing the marketing hype of some agents, will not be made by those who digest fully the contents of the book and magazine.
This is a nice lead in to my main point this week.
DO NOT invest in a development in the UK or overseas without visiting the project site first or at least with the option of a full refund of the reservation fee if your inspection proves unsatisfactory.
How many people buy a suit, dress, perfume, car, sunglasses or shoes without first trying them out! It appears a lot more than try out the development before investing off plan.
I wandered around a project site recently which I know was mainly sold largely unseen on the internet to investors. I know the area extremely well as I have a house in the beach area and for the life of me why anyone would have wanted to invest in this particular project is beyond me. You only have to stand on the site to realise that the re-sale and rental market will be very difficult as the market does not want this location – why?
Because there is nothing there:
No infrastructure
No shops
No supermarkets
No restaurants
No bars
No beach and the pool is an afterthought.
and to cap it - a dangerous road notorious in the area for accidents.
In fact the pool which is meant to service many, many apartments looks smaller than my family pool at home! Because an apartment may look cheaper, have a "discount" or look favourable on a comparable basis, just make sure that the sellers are comparing "apples with apples" and not "apples with oranges"
No surprise to see lots of “For Sale” signs and very little sign of anyone living or renting there.
So, please do not be tempted by marketing materials, investment appraisals, “you need to buy now before they all go…” without visiting the site first and using your common sense and working out the target market that the property will appeal to (or maybe not) aka Exit Strategy.
Tuesday, September 19, 2006
Cyprus property price inflation accelerates
Residential house prices rose for their sixth consecutive month in August.
Prices increased by 1.6% month on month in August.
On a year on year basis, prices are accelerating. Residential house prices rose by 10.3% year on year in August--the highest year-on-year growth on record.
Source: Financial Mirror
Prices increased by 1.6% month on month in August.
On a year on year basis, prices are accelerating. Residential house prices rose by 10.3% year on year in August--the highest year-on-year growth on record.
Source: Financial Mirror
Wednesday, September 6, 2006
Budget airlines being lured to Cyprus
EFFORTS to attract low-cost airlines to the island are underway in an effort to boost the country’s tourism industry.
Pantelis Ioannides, Press Officer for the Cyprus Tourism Organisation, yesterday told the Cyprus Mail that negotiations began approximately 12 months ago under previous CTO Chairman Photis Photiou.
“The attempt to have airlines expand their flight schedules to include Cyprus is an effort to increase tourist numbers and to bring people to Cyprus from countries that don’t currently have direct flights, such as Sweden. Passengers who previously wouldn’t have had an easy opportunity to visit have been targeted, with lower prices giving an incentive to travellers,” he said.
“Our new board of directors, appointed on August 1, have been continuing with negotiations. If we reach an agreement with the airlines, such as easyJet, Ryanair and FlyMe, we expect flights to begin shortly.”
When asked whether the initiative will be seen as stepping on the toes of long-established airlines such as Cyprus Airways and British Airways, Ioannides said: “Not at all. We are trying to establish flights from destinations where we don’t have current satisfactory flight connections, with new travel points added. All airlines are working together to bring tourists to Cyprus through any opportunities.”
Backing up the CTO’s views was Marianna Trokoudes, BA’s Cyprus manager.
“We believe that competition is healthy for the industry and the country. It is to the benefit of the consumer to have choice,” she said.
“British Airways are leading the way in the airline industry. BaConnect for example has started operations to Cyprus with a Manchester to Paphos route which is extremely popular. Maybe this will open the way for other carriers.”
Speaking from England, an easyJet spokeswoman would only say that, “the company is in discussions with around 50 European airports regarding expansion.”
Source: Cyprus Mail
Pantelis Ioannides, Press Officer for the Cyprus Tourism Organisation, yesterday told the Cyprus Mail that negotiations began approximately 12 months ago under previous CTO Chairman Photis Photiou.
“The attempt to have airlines expand their flight schedules to include Cyprus is an effort to increase tourist numbers and to bring people to Cyprus from countries that don’t currently have direct flights, such as Sweden. Passengers who previously wouldn’t have had an easy opportunity to visit have been targeted, with lower prices giving an incentive to travellers,” he said.
“Our new board of directors, appointed on August 1, have been continuing with negotiations. If we reach an agreement with the airlines, such as easyJet, Ryanair and FlyMe, we expect flights to begin shortly.”
When asked whether the initiative will be seen as stepping on the toes of long-established airlines such as Cyprus Airways and British Airways, Ioannides said: “Not at all. We are trying to establish flights from destinations where we don’t have current satisfactory flight connections, with new travel points added. All airlines are working together to bring tourists to Cyprus through any opportunities.”
Backing up the CTO’s views was Marianna Trokoudes, BA’s Cyprus manager.
“We believe that competition is healthy for the industry and the country. It is to the benefit of the consumer to have choice,” she said.
“British Airways are leading the way in the airline industry. BaConnect for example has started operations to Cyprus with a Manchester to Paphos route which is extremely popular. Maybe this will open the way for other carriers.”
Speaking from England, an easyJet spokeswoman would only say that, “the company is in discussions with around 50 European airports regarding expansion.”
Source: Cyprus Mail
Friday, September 1, 2006
Cyprus economy continues to grow strongly
Cyprus economy continues to grow strongly Cyprus GDP grew in real terms during the second quarter of 2006 by 3.7% year on year. This continues the robust performance of the economy and is in line with expectations. Indicative indices on the performance of various economic activities during the second quarter of 2006 are:
Tourist arrivals +2.6%More importantly tourism revenue +8.3%building permits in M2 +5.9% (Jan.-May)wholesale and retail trade turnover value index +8.2%telecommunications index +2.8%air transport index +6.7%production volume index of electricity +7.8%financial services +19.4% Of particular note in the figures is the strong growth in tourism revenue which is far more important than the number of arrivals. This combined with the overall strategy at governmental level to position Cyprus as a higher net worth destination bodes well and will be seen as a vindication of policy.
These are a very good set of figures.
InvestinCyprus.com
Tourist arrivals +2.6%More importantly tourism revenue +8.3%building permits in M2 +5.9% (Jan.-May)wholesale and retail trade turnover value index +8.2%telecommunications index +2.8%air transport index +6.7%production volume index of electricity +7.8%financial services +19.4% Of particular note in the figures is the strong growth in tourism revenue which is far more important than the number of arrivals. This combined with the overall strategy at governmental level to position Cyprus as a higher net worth destination bodes well and will be seen as a vindication of policy.
These are a very good set of figures.
InvestinCyprus.com
Famagusta District is booming
Data on building permits released by the Statistical Service CYSTAT indicate that the overall construction sector is buoyant, although there are sharp differences depending on the area.
The total number of building permits authorised in May reached 832, a rise of 21.9% compared with May 2005. The value of permits rose by 29.4% to CYP 145.3 mln and the total area rose by 31.5% to 380.1 thousand square metres.
These building permits provide for the construction of 2,090 dwelling units.
This continues a strong trend. During the period January - May 2006, the number of building permits issued rose by 11.7% year on year to 4,155.
The total value increased by 8.8% and the total area by 5.9%. Τhe number of dwelling units recorded a rise of 3.3%.
Free Famagusta up by 64.5%
A breakdown of figures by region shows that the performance of each district differs markedly.
The number of individual dwelling units authorised for Free Famagusta (Ammochostos) rose by a staggering 64.5% to 847 in January-May. Since the number of actual permits rose by a much lower 16.3%, it suggests that there is strong demand for the construction of apartment blocks.
At the opposite end of the spectrum, the number of individual dwelling units authorised for the capital Nicosia dropped by 17.5%. However, a strong rise in the number of permits issued for rural areas (up 41.3%) suggests that the latest fashion is no longer to have a brand new apartment but to have brand new house, even if you can only afford one out of town.
As far as the number of building permits is concerned, the small rise was recorded in Paphos on the west coast of Cyprus, where they rose by only 3.6% year on year.
This indicates a more mature market: Paphos was the first area to benefit from the demand for holiday homes and is also the most expensive.
Source: Financial Mirror
The total number of building permits authorised in May reached 832, a rise of 21.9% compared with May 2005. The value of permits rose by 29.4% to CYP 145.3 mln and the total area rose by 31.5% to 380.1 thousand square metres.
These building permits provide for the construction of 2,090 dwelling units.
This continues a strong trend. During the period January - May 2006, the number of building permits issued rose by 11.7% year on year to 4,155.
The total value increased by 8.8% and the total area by 5.9%. Τhe number of dwelling units recorded a rise of 3.3%.
Free Famagusta up by 64.5%
A breakdown of figures by region shows that the performance of each district differs markedly.
The number of individual dwelling units authorised for Free Famagusta (Ammochostos) rose by a staggering 64.5% to 847 in January-May. Since the number of actual permits rose by a much lower 16.3%, it suggests that there is strong demand for the construction of apartment blocks.
At the opposite end of the spectrum, the number of individual dwelling units authorised for the capital Nicosia dropped by 17.5%. However, a strong rise in the number of permits issued for rural areas (up 41.3%) suggests that the latest fashion is no longer to have a brand new apartment but to have brand new house, even if you can only afford one out of town.
As far as the number of building permits is concerned, the small rise was recorded in Paphos on the west coast of Cyprus, where they rose by only 3.6% year on year.
This indicates a more mature market: Paphos was the first area to benefit from the demand for holiday homes and is also the most expensive.
Source: Financial Mirror
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