Planet Pegasus International Property Report

"Global Fear Out of Control"

2011-08-11T20:34:00.000-07:00

by Estela Lopez -Project Pegasus Inc

Fear and negativity.....that was the title of my last report, and things have gotten progressively worse on that front. We currently appear incapable of reining in that negativity which continues to undermine all recovery, much like a runaway horse that’s been spooked. The juggernaut of fear and uncertainty has reached panic proportions. Riots in London, and mass hysteria ripping through the stock markets.....and why? One word fear , fear of the unknown, fear of loss, fear from the sheer weight of negativity. One of the first markets to open trading ahead of others is the Australian stock market, which opened on Monday wiping 60 billion because of fear. A ridiculous one at that, purely based on sentiment and not logic because the source of that fear, has no real impact at all on Australia. All because of reaction to the downgrade of the US credit rating by Standard and Poor’s to AA++. First of all....was it really that much of a shock? It’s been feared for some time. Secondly.... it’s not the end of the world, and there are still two other rating agencies Moody’s and Fitch who are maintaining the AAA. Thirdly.... and perhaps most importantly, it should be noted that S&P stated their decision was based on the lack of agreement by political parties in the US, over raising the debt ceiling.......that’s the irony that it had less to do with the actual state of the economy. The more shocking concern was that many US legislators appeared not to care if the US defaulted..... thus the decision by S&P to downgrade.

It was mildly depressing to watch the reaction of people interviewed on the streets of NY outside Wall Street. Although most admitting to not really having a clue what was going on.......all were ready to predict the end of the world as we know it. Aside from US pride taking a dent, is it really that catastrophic? Gee.... I don’t know ask Brazil who’s just had their credit rating lifted by Fitch to BBB, and their economy is being held up and recognised around the globe as going from strength to strength. The point is you can always find a number of reasons to predict disaster, yet you can equally gain a measure of hope if you look at economies around the world, like Brazil who are not only picking themselves up from the GFC but growing steadily. Harder to not get lost in the doom and gloom I know....unfortunately there are many doomsday merchants who seem to actually revel in predicting dire straits, rather than exercising some restraint and looking for a way out. Much like what's currently wrong with Washington, and their inability to come together as a cohesive group of lawmakers, instead of playing the blame game.

Not everything is as gloomy as publicised, oil price is falling and the corporate sector is doing quite well, manufacturing for one. Many companies have recorded record profits, companies like Apple 15.7 billion in revenue, Toshiba, Starbucks and many more. Economic research from Scott Macdonald of Aladdin Capital Holdings, indicated the outlook was overall not quite as catastrophic as we are led to believe. He was on CNN only a few weeks ago, stating US corporate sector was sitting on 2 Trillion in cash. This is in fact reflected in commercial vacancy rates continuing to decline.

From the first quarter of this year to the first quarter of 2012, NAR expects vacancy rates to decline 0.5 percentage point in the office sector, 1.3 points in industrial real estate, 0.1 point in the retail sector and 0.9 percentage point in the multifamily rental market. The fact remains, as mentioned in my last report.......lack of construction will essentially result in demand. Lawrence Yun, NAR chief economist, said a pullback in construction is helping stabilize the market. “Very limited construction of new commercial real estate over the past few years has essentially fixed the supply of available space,” he said. “This means vacancy rates could fall quickly from any increase in demand for commercial space.”

"US Economy, Fear and Negativity"

2010-12-22T18:11:00.000-08:00

By Estela Lopez -Project Pegasus Inc

NEW YORK — Five Wall Street heavyweights say it's time for individual investors to shun the perceived safety of bonds — and get over their fear of the U.S. stock market — so they can take advantage of what they predict will be a year of solid gains for stocks in 2011.

Economists have also said the new tax deal will help the economy grow faster in 2011. Mark Zandi, a prominent economic forecaster with Moody's Analytics, expects a 3.9% pace of growth in 2011, up from an earlier forecast of 2.8%.

Sales of single-family homes, townhouses, condominiums and co-ops rose 5.6 percent from October, to a seasonally adjusted annual rate of 4.68 million, says the National Association of Realtors.

Foreclosures are dropping not rising, foreclosure activity decreased by 21 Percent in November According to RealtyTrac(R) U.S. Foreclosure Market Report.

Roughly 212 million Americans went shopping for the official start of the holiday shopping season spending an estimated $45 billion. The turnout was up from 195 million shoppers over the same period last year. Americans also spent more, according to the survey, with the average shopper spending $365.34, up from last year's $343.31.

The economists, Robert Denk and Paul Emrath, suggested that "builders will have a lot of catching up to do as the economy improves and household formations return to trend levels." This will in turn supply jobs.

Data from the National Association of Realtors show the United States needs to build 1.3 million to 1.7 million housing units annually to keep pace with yearly household formations averaging 1 million to 1.4 million, in addition to replacing the 300,000 obsolete dwellings that are razed each year.

Statistics published earlier by Freddie Mac, however, show that only 910,000 units were started in 2008 and 550,000 in 2009. Ah Hello....can anyone say undersupply looming ahead?

Although freedom of the press, is fundamental of any democratic society, responsible journalism should question headlines and stories that purely focus on sensationalism. This need to get a reaction often produces an effect that is bordering on mass pandemonium, which only undermines economic recovery. Reporting positive facts can go a long way towards bolstering economies, and should be a priority during these times. Focusing primarily on the negative can only assist in stalling growth. Ask yourself this question, do we ever hear real and positive facts extolled and given the same treatment as the negative aspects occurring? Everyone knows the answer to that.....often times the facts are just not as exciting or noteworthy enough. The bleaker the news the more prominence it receives. Then we have the doomsday prophets, those that will seize on the concerns and fears voiced by some, and predict them as foregone conclusions. If you listen to these people long enough they will have you believing the US is now a third world country or headed there!

"Following the Sun"

2010-09-17T22:53:00.000-07:00

By Estela Lopez - Project Pegasus Inc

It is no real surprise to find that some of the best investment opportunities are places with the best climate and sunny beaches.

When you mention South Africa, in truth scary crime headlines have managed to keep many away from experiencing the beauty of that country. In fairness to Capetown those statistics are not a fair assessment of the place. As a world traveller I would have to say Capetown still remains one of my favourite cities, and I believe it is one of the most beautiful cities in the world. The majestic view of mountains and coastline makes it difficult to find anything without a view. In addition pristine beaches and fantastic weather have long made it a holiday destination.

South African real estate has now finally emerged from almost relative obscurity into the international limelight since being the focus of the recent 2010 World Cup Soccer. International stars, members of elite society and business executives alike, have responded to the beauty of this country and the attractive exchange of the rand, 1 euro=9.38 Rand, and 1USD = 7.16 Rand. Much of the world cup featured the beautiful city of Capetown, and provided visitors with an introduction to fantastic shopping, incredible artworks and artistic creations from jewellery to artefacts, a cultural mix of cuisine, historical dining and accommodation venues, quality Vineyards, and wildlife parks, all adding to an exotic experience.

Now according to both the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD), Africa’s economy is recovering faster than initially expected from the global economic crash, thanks to higher commodity prices and rising levels of foreign investment. Little wonder savvy investors are starting to take a long hard look at South Africa.

Brazil – As discussed in our last report “Flying down to Rio” is continuing to go from strength to strength. A recent guide written for Property-Abroad.com stated the following. "The middle class is growing rapidly and there is a real shortage of affordable housing. Now, savvy investors from around the world are snapping up low cost properties and filling this void. Joined by thousands more buying holiday homes at massively reduced prices, also with investment potential as Brazil's prestige grows," the report stated. Rio is without doubt one of the most vibrant cities in the world, and the 7,491 km of coastline is unparalleled.

Spain - The story in Spain continues, as mentioned in our report last year “The Campaign in Spain” banks lent at times indiscriminately to developers to build. Many overextended and started projects that are now half completed; they thought the party would never end. Credit and financial crises combined with major oversupply plunged property prices to staggering levels. Banks need to purge their loan books and some have reportedly offered customers and international buyers property for at times as little as 50 cents on the euro.

Spain is as desirable a place to vacation or retire as it has always been. Last year, Spain greeted just under 60 million foreign tourists. Culture, restaurants, beautiful beaches, breathtaking coastlines, mountains, golf, and skiing can all be there at your fingertips. That dream of owning your very own Spanish castle styled home, is actually within reach. Amazing prices under 200,000 euros for ocean view property. Best of all you can now not only profit but buy your Spanish dream home for cents on the euro.

For those that know quality, an amazing and beautiful development we have had the pleasure to visit and represent in Costa Blanca, is known as “Cumbre del Sol.” It truly is a savvy investors dream. The location could not be better minutes from Benidorm, and close enough to Alicante and Valencia for day trips. Not to mention the boat trips to Ibiza that leave from the port of Denai. “Cumbre del Sol” boasts spectacular cliff face ocean views, and is a well thought out and planned development, with the right mix of amenities catering for residents. Built by a group of reputable established builders, VAPF has a reputation spanning over 40 years and have built some of the finest properties in Costa Blanca. “Cumbre del Sol” has access to a quiet beach, diving caves, nearby golf, and quaint seaside restaurants nearby. Driving this amazing coast is an experience that is reminiscent of Monte Carlo.

Project Pegasus is an International Real Estate and Community Lifestyle Specialist. We pride ourselves in choosing a select number of projects worldwide. Let us know what destination interests you, and we will provide the information you need for the right investment.

"Flying Down to Rio"

2010-07-31T20:24:00.001-07:00

By Estela Lopez of Project Pegasus Inc

Brazil is fast becoming one of the best options for international investment. Diversity and vastness are its main features, besides its really low prices, compared to the global market. With the upcoming 2014 FIFA World Cup, and 2016 Summer Olympics hosted in Rio, Brazil is poised for a potential property boom.

Danilo Canuto, executive director of the Association for Real Estate and Tourism Development (ADIT), told the Brazil Investment Guide that a total of 50 billion AUS (32 billion GBP) of projects have been planned for 12 key cities hosting events in the 2014 football World Cup and the 2016 Olympic Games. The Brazilian government is concentrating on spending 6.2 billion reais (2.2 billion GBP) on modernising the country's ports and airport ahead of the World Cup and Olympics. Such improvements to infrastructure should provide huge growth potential.

When comparing a property in Europe, with another one with exactly the same features in Latin America, we can talk about huge price differences, in some instances even ten times cheaper. Add to that, cost of living is a fraction of what it is in Europe and the UK. Also consider terrorism and environmental issues are just some of the reasons to see the whole of Latin America as one of the safest options in the world. If those reasons aren’t enough for you, consider the fact that investment brokers Goldman Sachs, have identified Brazil as one of the big four emerging economies, which include Russia, India, and China. The Brazilian economy has been reporting positive growth with 83% last year, inflation is at an all time low 5.7%.

In our last report “The South American Dream”, we mentioned the thriving agricultural industry, now add the growing manufacturing industries, and reports that Brazil will soon be self sufficient in oil. Really? Yes, the country that pioneered fossil fuel alternatives, in particular, ethanol, is on the verge of an energy milestone. Brazil has announced that by next year it expects to be self-sufficient in oil. Oil now makes up just 30 percent of the country's energy sector. The flex-fuel system allows cars to run on gasoline, ethanol or a mixture of the two in the same tank. Brazil has long been a leader in producing cars that run on ethanol made from sugar cane. With encouragement from the Brazilian government, carmakers in South America's largest country have been producing ethanol-powered vehicles since the late 1970s.

In a nutshell Investors looking towards Brazil should move fairly quickly if they want to see the most significant returns for their investment. Early investors are already seeing excellent returns in hot-spot areas as high as 20%. Here are just a few more reasons why savvy investors will definitely be “Flying down to Rio” as the Mike Nesmith song says.

Amazing climate, year-round sunshine.
Spectacular rainforests
Natural beauty with fantastic scenery
Breathtaking coastline 7,491km
Vibrant cities with carnivals and music.
Low international risk of war, terrorism or SARS in Brazil.
Proximity to other vibrant cultural and resort locations in South America
Easy access via direct flights from many international airports

"The South American Dream"

2010-05-22T02:33:00.000-07:00

By Estela Lopez of Project Pegasus Inc.

Investors are taking a good look at South America, particularly in view of the current economic situation in many developed nations. Like many other emerging markets, governments in that region of the world see the benefits of foreign investment, and steps are being taken towards creating a more hospitable investment environment. Further evidence of this fact, are the latest developments by foreign financial and commercial organizations, setting up business.

ZURICH, May 20 (Reuters) - Swiss private bank EFG International (EFGN.S) has opened two representative offices in Uruguay, seeking to establish itself in a country regarded as a regional financial hub and upscale tourist haven.

MONTREAL -- Jazz Air Income Fund, Air Canada's regional affiliate, is investing directly in the fast-growing Latin American air travel market. The airline said Monday it will put $15 miilion U.S..into Latin American Regional Aviation Holding Corp.(LARAH), which in turn will control 75 per cent of Uruguay's flagship carrier Pluna Lineas Aereas Uruguayas after a restructuring. In return Jazz will own a one-third equity stake in LARAH.

With 2.75 million acres under cultivation in five countries, Argentina-based farming company El Tejar is only one of dozens of corporations snapping up South American farmland in recent years. What may surprise North American farmers is that El Tejar is hardly alone in its quest for plantation-scale farming in the world's last agricultural frontier. Agribusiness Bunge announced this week that it is gauging investor interest in an investment fund of perhaps $100 million to buy land in Brazil; it already owns a sugarcane farm that will begin operations next month. Brookfield, a firm with $100 billion in real estate assets under management, owns and operates more than 370,000 acres of Brazilian agricultural land and is one of the largest suppliers of sugarcane to the country's ethanol industry. Behind the investment interest is the knowledge that global food demand will double by 2050 and skepticism that seed companies and agribusiness alone can engineer higher yields to solve the problem. In that case, perhaps 125 million to 200 million new acres will need to be brought into cultivation to feed and fuel the world over the next few decades, analysts believe, but little capacity exists inside North America or crowded western Europe to expand their farmland base.

Brazil offers a wide variety of investment opportunities; from cities such as the modern, urban Sao Paulo and the beach resort city of Rio de Janeiro to vast areas of farmland and timberland, there are opportunities for large and small investors alike.

Chile has a dynamic market-oriented economy characterized by a high level of foreign trade. Chile’s economy has seen growth rates of 5-7% over the past several years. In 2006, Chile became the country with the highest nominal GDP per capita in Latin America.

Uruguay offers a broad selection of areas, communities, property types, and price ranges, from the most rural setting to the continent’s most fashionable resort. What sets Uruguay apart from many other offshore locations is that foreigners can buy and sell real estate in Uruguay with the same rights and protections as residents. According to Paradise Uruguay, “Uruguay’s real estate provides one of today’s best second home, retirement, and investment diversification opportunities”. Uruguay has beautiful beaches, a nice climate, and lots of recreational opportunities.

Some affordable and appealing options were named, by Kathleen Peddicord of Panama City, Panama, author of “How to Retire Overseas.” According to her a minimum amount for a comfortable retirement in a number of appealing places — Cuenca, Ecuador, and La Barra, Uruguay, being two examples — would be about $1,200 a month.
With life expectancies growing — and some pension plans diminishing — some baby boomers are doing the numbers and concluding that moving overseas makes more sense than aging in place.

"Eyes on Asia"

2010-02-11T04:00:00.000-08:00

By Estela Lopez of Project Pegasus Inc.

Owning real estate in Asia, is an exciting concept for many savvy investors keeping a close eye on the current property boom in China, and other regions. Asia is a vast continent which includes some of the world’s fastest growing economies including China and India. This region of the globe includes many countries that are either just rising on the international scene or will rise as their economies continue to develop.
Asia Pacific’s volume at $49.9 billion, is excluding China, still a significant transaction volume in this marketplace. As in China, though, development rights sales drove volume in most of the seven countries in this zone that vie for most of the non-China-targeted investment dollars, whether domestic or cross-border: Japan, Hong Kong, Australia, South Korea, Taiwan, Singapore and India, each of which exceeded $1 billion in sales through November.

Because the Chinese real estate market is in its infancy having only truly been established in the mid 1990s, the official real estate buying process is relatively poorly documented and property investors can find it quite a struggle to get a definitive answer about how the purchase process will proceed. The key to making a successful real estate investment in China is to secure local legal representation before even beginning the hunt for property to suit specific investment requirements. In addition to mainland China’s current boom, Hong Kong’s attractiveness proved sustainable throughout 2009, in October, a single condominium unit sold for $57 million, about $9, 200 per sq ft. Hong Kong’s economy is experiencing an enviable recovery that has produced sales volume through November of $7.5 billion, derived mainly from $2.9 billion in office sales and $2.5 billion in retail property sales. Private investors dominate the market with nearly 70 percent of transactions.

In India, according to a Jones Lang LaSalle Meghraj (JLLM) survey, the most viable cities in terms of residential investment potential currently are Gurgaon and Noida in Delhi NCR, Mumbai, Pune, Chennai and Hyderabad. The average price of condominiums in South Mumbai was US$9,542 per sq. m. in Q1 2009, according to the Global Property Guide - a price normally found only in first the world’s leading cities. Delhi, the capital of India, is home to almost 18 million residents. The city will host the 2010 Commonwealth Games. Construction and improvement of infrastructure is ongoing as the city rushes to finish the facilities.

"The Campaign in Spain"

2009-11-03T11:40:00.000-08:00

by Estela Lopez of Project Pegasus Inc.

The property sector has driven the Spanish economy for more than a decade, thus latest concerns resulted in a mighty effort by the Spanish government to bolster the failing property market in 2009. These efforts include a 3 billion euro credit line from the Institute of Official Credit, to assist Spanish property developers putting unsold houses up for rent, and real estate investment trusts (REITs) which they hope will boost investment.

The housing market hit the skids in 2008, caught with the double “whammy” of the global credit crunch and an oversupply that saw values plummet. Much of the glut was due to many high-density cookie-cutter-type apartments, in out-of-the way locations with no amenities or infrastructure. The market was saturated with small time developers who lacked proper backing, yet were too easily able to acquire funding, due to bad lending practices.

Is the love affair with Spain over for investors ?

Think about this... investors in property abroad have long chosen Spain as a favourite destination, for many reasons that have not changed. Spain boasts warm weather, rich culture, exotic locations, theme parks 146 total, and a booming tourist industry because of safe social and economic structures. Despite the current market, international mortgage firm Conti, reported an increase in customer enquiries for Spain, 22 per cent of information requests so far this year, second only to France and up from 14 per cent in 2008. Experienced investors can smell a good bargain, and Spain is ripe for the pickings.

*We have an Australian parent company, with affiliates in Europe and South America. A true international service involves a lot more than bi-lingual staff. Knowledge, resources, and connections, are needed to assist you invest or relocate, while marketing your property to foreign investors.

"The Lowdown Down Under"

2009-11-03T11:16:00.000-08:00

By Estela Lopez of Project Pegasus Inc.

First home buyers in Australia took out 26.5 per cent of all housing loans in January - the largest proportion ever recorded by the Bureau of Statistics. They were seeking to capitalize on the government grant before it reduces by September 30th, from 21k for new property and 14k for established, to 14k new and 10k established.

The Australian property market has been on the move, auction clearance rates around 80% for Melbourne, 69% Sydney, 45% Brisbane. The shortage of stock on the market has meant strong competition for fewer properties resulting in prices rising in most blue chip suburbs. The savvy investors know it’s the right time, but the herd mentality investors, are still sitting on the fence. Sydney’s median price has increased from $565,000 to $593,000 a rise of 6.56% in the last quarter. Other capital cities also followed suit with Melbourne’s median price at $498,000 a rise of 5%, Brisbane $452,500 (2.1%), Adelaide $382,500 (1.3%), Darwin $475,000 (3.35%). The only exception to growth was Perth with a median price declining by 1.36% to $469,000.

So what should you consider as a buyer anywhere ?

• Areas with history of capital gains, likely to have more appreciation due to access to shops, schools, beaches, transport and lifestyle appeal.
• Buy at a price slightly above the median if you want quality.
• Don’t pay too much or become emotional.
• Use a Buyers' Agent, getting to the front of the queue to sniff out those hard to find quality properties.

Our team motto is simple, "We strive for Excellence Efficiency & Ethics", that's what gets us customer loyalty. We will make your property search or next negotiation much easier saving time, money and stress.

Next report will feature Spain as we arrive in sunny "Costa Blanca" next month.

Hasta Luego.