Dear IPA Friend,
My mention of Bulgarian real estate fraud certainly seems to have touched a raw nerve judging by the response. Lots of you seem to be looking at various deals that seem to be too good to be true (always a sign that you should walk away). I will be spending the next hour or two sifting through these emails and getting replies off to you. Meantime, I see that Bulgaria is setting up a special body to regulate real estate agencies and remove what we might call the grey economy. We will have more on both of these topics shortly - meantime, have a look again at the last IPA newsletter where we worked through a typical fraud. It took place in Hungary but could just as easily have been in Bulgaria.
We talked of Dubai earlier in the week and our friend Peter Esders at the International Law Partnership sent me an interesting email about the delays there and the sorts of stories that developers come up with! "Iain, The comments about Dubai are interesting - particularly regarding the delays. We are seeing an increasing number of people coming to us and wanting to see what they can do about the delays that they are experiencing with the construction of their properties in Dubai. Invariably these people have not used a lawyer in the first place. The interesting issue is that most developers try and invoke an "Act of God" clause in their contract as a reason for the delays. In most cases the Act of God is actually of the developer's own making." The secret of success of course is to get legal advice before rather than after this all happens.
Peter also sent me an article from the International Herald Tribune which I had missed. Italy is now rolling out a high-speed rail network and, as we have seen in London and France and elsewhere, this tends to lead to property price rises in those areas along the route. The high-speed train service (TAV or treno ad alta velocità) runs between Rome and Naples and part of the Turin to Milan route opened in 2005. The rest of that route and the Milan to Rome service are set to commence at the end of 2009. The rule of thumb seems to be that a new station triggers a 30 to 40 per cent rise in real estate values in about three years. The smart money is on Milan to Genoa, close to resorts such as Portofino.
Mark Wilkins at The Rights Group over in Spain had a day out in Gibraltar this week and gave us a quick update, "Had a very interesting day - looking at three tower blocks in Gib. All sold in 48 hours. Prices vary from 500k GBP to 2.7m GBP. The first block seems to have risen in value since off plan around 30 per cent in two years. Amazing quality and a number of people are flipping at these valuations. Extraordinary when compared with the core off-plan Spanish market less than 15 miles away." We have talked of Gibraltar a few times in recent months - both in IPA and in SPA - and said it was one to watch (and indeed the nearby coast in Spain) and it seems there is even more to come judging by Mark's comments. We will have updates.
Iain Maitland
Editor, International Property Alerts
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