Castle Asia Share Discussion Threads

[waldron] 29/5/2006 08:12

Madrid shares AFX at a glance outlook

MADRID (AFX) - Shares are expected to open flat to higher in quiet trade
after Wall Street extended gains Friday, but trading will be quiet with many US
and UK traders away due to public holiday's in those countries, dealers said.
Friday, the IBEX-35 index ended up 206.6 points or 1.84 pct at 11,414.8,
after trading in a range of 11,225-11,415, on turnover of 4.589 bln eur.
The June future on the IBEX-35 index closed at 11,399, up from 11,186 the
previous day, on volume of 18,406 contracts.

FORTHCOMING EVENTS
-Jazztel's 377 mln eur law suit against Telefonica begins
TOMORROW
-Banco Popular AGM
-Logista press conference(10.00 am)
-Iberia AGM (2nd call)
-Spain preliminary May HICP

TODAY'S PRESS
-Iberia has 2.0 bln eur war chest for Latin American acquisitions (Europa
Press)
-Prisa plans to seek listing for radio assets in end 2006, start of 2007
(El Economista)
-OHL raises stake in Chilean motorway unit to 70 pct ahead of listing (El
Economista)
-Gas Natural says Endesa bid 'permanently damaged' by Supreme Court ruling
(El Mundo)
-Spain's CNMV approved Telefonica's 2005 Terra buyout despite irregularities
(El Mundo)
-Spain's Technicas Reunidas to make market debut with 250 mln eur war chest
(Expansion)
-Teliasonera expects to close acquisition of majority Xfera stake tomorrow
(Expansion)
-ACS plans to increase windfarm capacity to 2,281 MW vs 430 currently (Cinco
Dias)

WEEKEND PRESS
-Jazztel loses three out of four new clients in April (Cinco Dias)
-Repsol YPF mulling acquisitions - Chairman (Cinco Dias)
-IMF's Rato sees continued 'moderate' rises in global interest rates (El
Mundo)
-Inditex to study accusations co used child labour in Portugal (Europa
Press)

LATE CORPORATE NEWS
-Telefonica outlook revised to negative; 'BBB+' corporate credit rating
affirmed

MACROECONOMIC NEWS
-Spain April PPI up 5.7 pct yr-on-yr; energy, metal industry prices weigh
heavy

MARKET COMMENT
-Equities are expected to open higher after Wall Street held on to last
week's gains, with Telefonica still expected to be strong after the stock gained
3.69 pct Friday.
"Telefonica still looks cheap and Friday's dividend news together with the
company's announcement it is slowing its acquisition drive should still boost
the stock, any profit taking will be minimal," a dealer at a local brokerage
said.
Arcelor could recovers from Friday's losses on news that investors in
Arcelor have criticised the European steelmaker's proposed merger with
Severstal.
Arcelor's current suitor, Mittal Steel is reported to be continuing with its
25.8 bln eur hostile offer, while its advising bank Goldman Sachs is seeking to
co-ordinate formal resistance to the Severstal deal.

[e-mail]
jg/ks

[waldron] 24/5/2006 05:53

House prices pose threatto stability
By Chris Giles and Scheherazade Daneshkhu in London
Published: May 24 2006 03:00 | Last updated: May 24 2006 03:00

Overvalued housing markets and rising long-term interest rates represent one of the greatest combined risks to advanced economies, the Organisation for Economic Co-operation and Development said yesterday.


The housing markets of the US, Spain, France, Ireland and Sweden were most at risk, with a greater than 50 per cent chance of seeing a drop in real prices if prices continued to rise this year and long-term interest rates went up.

"The risks posed by high and in places inflated house prices to financial and economic stability should not be overlooked," Jean-Philippe Cotis, the OECD's chief economist, said in its twice-yearly economic outlook. The report argued that the "extent to which real house prices look to be fairly valued depends critically on longer-term interest rates remaining at or close to their current low levels".

The OECD believes there is a significant risk that bond yields might rise faster than its benign central projection assumes.

Several factors that had contributed to low bond yields were welcome, OECD economists said. These featured lower expectations of inflation among investors and the public in most advanced economies and the failure of inflation to rise significantly even as oil prices had risen in recent years.

Investors had curbed their demand for "term premium", insurance against higher inflation eroding bond values with higher yields for long-dated bonds. This aspect of the reduction in term premium could be regarded as an enduring feature of bond markets, the report noted. But the outlook also cited factors behind low bond yields that were not so welcome and which might not last, implying that buoyant housing markets could be built on sand.

These considerations included an increased desire for saving in Asia and among oil producers since the late 1990s, which has reduced bond yields as money has poured into bonds. Asian central banks have also sought to prevent currency appreciation by accumulating foreign exchange reserves. In turn, this has constituted a leading source of global trade imbalances.

Since such factors were likely to dissipate slowly, the OECD predicted bond yields would rise gradually this year but added that "the risks are skewed to the upside". Rising yields, it said, could spell the end of climbing house prices.

The OECD looked at past peaks in housing markets and searched for a statistical link to interest rates to see whether markets would be vulnerable to a rise in bond yields. It found that if long-term interest rates were to rise by 1-2 percentage points from their current levels, only the markets in Denmark and New Zealand were likely to suffer a reversal.

[waldron] 19/4/2006 19:25

Elderly targeted to release equity for homes abroad

Published: 17:53 Tuesday 18 April 2006
By Lorna Bourke, Money Columnist

It's little wonder the FSA is concerned about the mis-selling of equity release, and in particular home reversions.

Publicity put out by some of those involved in this market is clearly designed to appeal to elderly homeowners' fantasies – if not greed.

Economic Lifestyle claims close to a million retired people 'are currently considering escaping the humdrum of British life to live abroad'. It says around 328,000 retired people would look to release over £30,000 of equity from their homes if they were to move abroad.

Economic Lifestyle says the average value of a British-owned property in Spain and France is £109,500, 'and an elderly couple with a £500,000 house could raise as much as £220,000 through an equity release scheme'.

'The development of the equity release market, which saw retired homeowners release £1.1 billion from their homes during 2005, will fuel the number of retired homeowners buying properties abroad,' says Mark Neal, managing director of Economic Lifestyle.

It promotes a number of plans for the elderly including home reversions and equity release. 'In addition to this, Economic Lifestyle offers retired homeowners a number of options for releasing some of the equity in their homes or to live in a property that they would not normally be able to afford.' This sounds suspiciously like encouraging the elderly to live beyond their means.

The FSA is consulting on the regulation of home reversions and home purchase plans. Norwich Union, the largest provider of equity release products, has also been campaigning to get home reversion schemes regulated.

[ariane] 14/4/2006 08:42

Escape second-home traps
(Filed: 18/03/2006)


Mike Warburton explains easy but little-known ways to save on tax

Second homes in Britain or overseas can trigger tax liabilities but these may be diminished or avoided if you know what you are doing.


Expensive idyll: a bit of forward planning can reap rewards for holiday home owners

Unfortunately, many people seem to ignore the tax benefits of a bit of careful forward planning. This applies either for people buying a second house in the UK, or a holiday home overseas where a profit can still be taxable.

When this happens, there is both an opportunity and a trap for the unwary. It normally manifests itself when people come to see me as they are selling their second property and want to know about the capital gains tax position.

Any property that has at some stage been your principal private residence (PPR) will obtain a capital gains exemption for the period it was your PPR - as well as the last three years of ownership, whether or not it is let out during that period.

In practice, the tax relief is even better than this where the property has been let out for part of the time, because you can claim up to £40,000 letting relief against the capital gain. This is available to anyone with a share in the property. So a couple holding the property jointly would each get up to £40,000 relief. After taper relief is taken into account, you can usually make a substantial capital gain on a property before any capital gains tax is due.

With a second property, therefore, you would ideally claim capital gains tax relief for the last three years out of the period of ownership, but for this to happen the property must have been your PPR at some point. When you buy a second property you can elect which one is to be treated as your PPR, provided you make the decision within two years.

Typically, people buy a second property and assume they do not need to make an election because they would like their main house to be their PPR. When they come to see me, it is almost invariably the case that no election has been made. Had they made an election for their main house to be their PPR within two years of acquiring their second property, they would then be able to vary their election and nominate their second property as their PPR in the year or so prior to selling it. This would automatically give them three years' worth of capital gains exemption and, if the property has been let out, letting relief.

Unfortunately, most people fail to realise the need to make this election - and, I have to say, HM Revenue & Customs does not take it upon itself to remind taxpayers of the opportunity. You may assume that there would be a disadvantage in electing for your holiday home to be your PPR because it limits PPR relief on your main house. As it happens, the period that you need the election on the second property to run can be very short indeed. The Revenue manuals give an example where the period is one week.

There are some occasions, however, that give an opportunity for re-triggering the two-year time limit for an election. For example, someone may have their main home and a holiday home, but then acquire a third property.

I have a client who recently acquired a third property in Switzerland because he is spending time there as part of his job. This restarts the two-year limit and will enable him to elect his London home as his PPR and open up the planning opportunity in respect of both other properties in due course. Likewise, marriage or a civil partnership can restart an election opportunity.

For the taxman, it is the change in the combination of residences that is the triggering event. Today, with people marrying again, or later in life, it is becoming more common for both of them to have their own house when they marry - and this is a tax-planning opportunity that everyone in that position should know about.

The message is to plan ahead and make sure that you do not miss out.


Mike Warburton is senior tax partner at chartered accountants Grant Thornton

[ariane] 30/3/2006 06:55

Zara is homing in on Britain with launch of new furniture outlet

By Elizabeth Nash in La Coruna

Published: 30 March 2006

Spain's clothes retail giant Inditex, the parent company of the Zara clothes chain, is planning to launch its home furnishings line Zara Home into the UK this year, the chief executive Pablo Isla said yesterday.

The move reflects the company's continued confidence and plans for growth in the "especially competitive" British market, he said.

Britain's first Zara Home store will open in a prestigious site in London's Regent Street. "This marks an important expression of our expanding operation in the UK, since Zara Home represents a flagship project for us," Mr Isla said.

He was speaking at Inditex's headquarters in Arteixo, near the northern Spanish city of La Coruna, the design and distribution centre for all Zara's clothes sold worldwide.

Mr Isla announced a 21 per cent increase in Inditex sales for 2005, from €5.57bn to €6.71bn. Gross margins were 23 per cent and net profit rose 26 per cent to €803m in 2005, compared with €638m in 2004. The latest figure eclipsed first-quarter figures from its Stockholm-based rival Hennes & Mauritz which disappointed analysts with a rise of just 11 per cent.

Inditex announced a 40 per cent increase in dividend for shareholders. Mr Isla said the company planned to devote 50 per cent of profits to dividend payments and 50 per cent to new investments. Some 34 per cent of shares are publicly quoted. The rest remain in the hands of the company's reclusive president, Amancio Ortega - Spain's richest man - and his family.

Inditex plans to open 410 to 490 stores next year and step up investment in new shops by up to €850m. "This ambitious plan of growth and investment will guarantee the future of the company in coming years," Mr Isla said. He attributed the international success of the group's "rapid fashion" formula to its "absolutely avant-garde" computerised system of design and distribution.

The opening of Regent Street's Zara Home will mark the debut of a line the company is rolling out worldwide with much fanfare. Last year Zara Home opened 48 stores internationally, and plans to open up to 45 in 2006. The group, which includes the successful teenage fashion chains Bershka and Oysho, opened 448 new stores in all.

The opening date for the Regent Street store has not been fixed, and depends on when the building is available. Zara, which uses window displays and shop fronts as almost its sole means of advertising, chooses its sites with care. It likes to locate its stores alongside luxury designers who charge higher prices.

Italy, France, the UK and Germany continue to be the main growth areas, but the company plans ambitious growth and expansion in Asia and the Pacific region.

Results in the UK continued to be "very satisfactory," Mr Isla said, although he acknowledged that the British market was "very developed". He declined to comment on cut-throat price competitors in the British market, but said prices "eased slightly" worldwide by about 5 per cent. More branches of Zara will open in Britain in 2006, he said.

A Zara spokeswoman said it could withstand pressures from low-cost competitors "because we compete not just on price but on quality - we sell the latest designs at accessible prices". She added the UK market is one of the most competitive in the world.

[ariane] 30/3/2006 06:53

Inditex "buy"

Wednesday, March 29, 2006 9:55:50 AM ET
Ibersecurities

LONDON, March 29 (newratings.com) - Analysts at Ibersecurities maintain their "buy" rating on Inditex (IXD.ETR).

In a research note published this morning, the analysts mention that the company is likely to hike its special dividend, while maintaining its ordinary dividend for 2005. The analysts expect Inditex to report healthy 2005 results, with a 4% rise in same-store sales

[grupo guitarlumber] 25/3/2006 06:55

Spanish eyes on holiday homes
Simon Lambert, This is Money
25 March 2006
MANY of us love the idea of a place in the sun. And despite surveys regularly claiming that Bulgaria, Romania or Estonia are the place to be, it's Spain where most Brits still opt for a holiday home.



TAX TARGET: Authorities in Spain will no longer turn a blind eye to undeclared income from letting holiday homes

Thanks to Spain's popularity and easy access, for many there has been the added bonus of being able to rent out the property to friends or holidaymakers and make some spare cash.

But a large number of Britons who let properties have been omitting to tell the Spanish taxman and, after years of turning a blind eye, the authorities are now on the hunt for extra revenue.

A bill to catch foreigners avoiding tax went before the Spanish parliament early this month and even before new legislation comes in, the crackdown has begun.

Having latched on to the opportunity to make some cash from the half-a-million Brits with homes in Spain, the taxman has started hatching cunning plans to snare dodgers.

The authorities have begun searching rental agents' listings, scanning small adverts and talking to local businessmen and hoteliers to find out who is renting out properties and comparing their findings to people who have registered for tax.

And thanks to the internet, the taxman's task has become a lot easier and a lot more lucrative, with holiday rental sites providing rich pickings.

Britons who own Spanish homes but are non-resident in the country should pay two sets of annual taxes.

There is a wealth tax, based on a property's value, and levied on a sliding scale – generally in tranches of e170 and starting at 0.2%.

In addition, there is a notional annual income tax that should be paid even if a property is not rented out, which is based on a percentage of rateable value.

Frank Porral, a Madrid tax specialist for Rastrollo Porral Abogados, says most areas have set the level of this tax at 1.1% of the rateable value, with the taxpayer charged 25% of that figure.

If a property is rented out, a further tax of 25% on actual income should be paid, which can be offset against the notional tax, with income declared within 30 days of the rental period.

While this may sound like an impenetrable maze of confusion, Mr Porral says in fact there is one simple form that covers all the taxes, but unfortunately most Britons are unaware of its existence and it only comes in Spanish.

He said: 'The problem is the majority of people rent out properties through third parties and don't realise that their information about rental income can end up in the hands of the tax authorities.

'If the agent then doesn't inform them, then they can expect a letter from the taxman telling them to pay up and imposing a penalty.'

'The Spanish authorities should help people though and print the simple form in different languages. People could even file it on the internet, if only they could understand what they were filling in.'

As part of the tax-drive the Spanish authorities have started targeting letting agents and firms that sell apartments off-plan claiming guaranteed rental income.

British residents renting out properties in Spain should also be paying tax on income to the British taxman and with the Spanish crackdown starting, there is the possibility dodgers may be reported to HM Revenue & Customs too.

A tax treaty exists between Spain and England, which means people should not pay double tax, so the 25% income tax in Spain could be offset against a higher-rate payers tax in Britain.

Simon Rylatt, tax specialist at British firm Boodle Hatfield, said: 'If you are subject to UK income tax and capital gains tax then any income should be declared on your UK tax return.

'In principle, if you don't do this then the Revenue can impose penalties, interest and back tax. It is always safer to disclose everything.'

[Abuse team] 17/3/2006 19:38

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[Abuse team] 16/3/2006 19:01

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[waldron] 16/3/2006 05:54

nice posts rc

cheers

[chapman123] 15/3/2006 21:33

anyone want any info on Northern Morocco give me a shout prices rise fase could be 30% in 2006 as appartments still only £500 per sq even in tallin their over £1000 and in spain and canaries nearer £2500 as all do you own research.

prices ar Marina Smir started less than 12 months ago at 33k now alsmost built and selling for £54k for 2 bed 71sq appartment and thats still very cheap

richard chapman
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[Abuse team] 15/3/2006 21:32

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[chapman123] 15/3/2006 21:27

Low cost expands to North Africa as EasyJet opens route to Morocco

UK budget carrier EasyJet has become the first airline to take advantage of new liberalised air services agreements with countries neighbouring the European Union to add flights to three new markets outside the Union, launching its first services to Morocco, Turkey and Croatia this summer.
The move comes as the EU expands its liberalised air transport market beyond its borders through a series of open skies agreements with neighbouring states. Morocco was the first African country to sign a liberalised air services agreement with the EU in mid-December. Turkey and Croatia also signed deals late last year and EasyJet is the first carrier to exploit the open rules.

EC officials in Brussels hope to create a European Common Aviation Area (ECAA) covering the vast majority of Europe outside Russia with the same competition, safety and security rules as the EU.

The Gatwick service to Marrakech and Luton flights to Istanbul will be served daily, while Rijeka and the Basle-Istanbul services will be four times weekly.

It becomes the first European budget carrier to operate the routes. London-Marrakech is currently served by British Airways (BA) and Royal Air Maroc, together with the RAM's budget division Atlas Blue, while BA and Turkish Airlines (THY) currently connect London with Istanbul – although both serve Istanbul's Ataturk Airport.
EasyJet chief executive Andrew Harrison describes the move as the carrier's most significant expansion since entering the central and easLtern European markets two years ago. He says: "Croatia, Turkey and Morocco are forging an ever-closer relationship with the UK and Europe. As a consequence, the demand for low-fares to these countries is growing quickly, and EasyJet will be in a unique position to benefit from this development."

[waldron] 08/3/2006 06:17

Estonia Europe's hotspot for the second year
By Edmund Conway, Economics Editor (Filed: 08/03/2006)


Estonia was Europe's property hotspot last year, while UK house price inflation dropped faster than anywhere else on the continent, research has shown.

An annual survey from the Royal Institution of Chartered Surveyors shows how much the property pendulum has swung in favour of Europe's younger democracies. Its other conclusions are that the riskiest place to buy is the Mediterranean coast and that Ireland and Holland have had the biggest house price booms.



Unprecedented demand for properties in the Baltic states helped push Estonian house prices up 28pc in 2005. The country - whose popularity has been boosted by cheap flights to its capital, Tallinn - was top of the RICS European house price inflation league for the second year running. Experts said the country's success was also due to its proximity to Finland, which provides much of its investment.

Professor Michael Ball, author of the RICS report, said: "We are essentially talking about Tallinn here. There is a lot of overseas interest in property there, although it's essentially a very different market to other countries in Europe, is starting from a low base and is very small. They, along with a number of overseas countries, have also started to introduce mortgages recently, so domestic demand is now picking up."

The UK, which in 2004 was one of Europe's fastest-growing markets, had house price inflation of just 3pc last year, making it one of Europe's worst performers.

Prof Ball warned that the days when one could make thousands on the European property markets may now have passed.

"People from around the world have been buying houses in Europe," he said. "There might have been bargains five years ago but I'd be very surprised if there were now. The riskiest area to buy would be around the Mediterranean," he added. "There is a lot of local demand and, given the European Central Bank is raising interest rates, homeowners may suffer. There is also a lot of house building."

Despite the slowdown, Britain has had the continent's third-biggest property boom, with prices 137pc higher than when activity accelerated in 1995. But the report concluded it is Ireland, with inflation of 243pc since 1992, that has seen the biggest bubble.

[waldron] 18/1/2006 06:17

The Times January 18, 2006

Spanish tax for expats 'against EU rules'
From Graham Keeley in Barcelona



BRITISH expatriates in Spain are expected to save thousands of pounds after a legal move to cut capital gains tax by the European Commission.
The Commission is to refer the Spanish Government to the Court of Justice over its taxation of non-residents who sell their villas or on their personal income. If the court rules that Spain has flouted European law, as seems likely, it will be forced to reform its domestic law, reducing high tax rates for non-residents.



The move would benefit thousands of British people who are not registered with the Spanish authorities as residents if they want to sell property, or those working for short periods in Spain.

The decision to take Madrid to court came after Spain had failed to change its legislation after a formal request from the Commission in July.

Under existing Spanish law, capital gains of non-residents made from the sale of property held for more than one year are taxed at a rate of 35 per cent, even if they are European Union residents. Those who are official residents pay only 15 per cent.

Per Svensson, of the Foreign Property Owners' Institute in Spain, said: "If they change the law, people will be able to charge the real rate for their villas or flats. At the moment they charge less or pay money 'in black', or undeclared cash, to evade paying capital gains tax."

Spain also applies a flat withholding tax rate of 25 per cent on employment income for non-residents. Residents pay only 15 per cent.

The Commission said that the discriminatory treatment regarding employment income was particularly unfair to those expatriates on low wages, such as Britons teaching English or working in bars during the peak summer holiday season.

A large number do not register as residents because they are put off by Spain's daunting red tape, do not speak Spanish or do not want to be visible to the tax authorities.

A spokesman for the Commission said: "The Commission considers that the Spanish tax legislation failed to conform to the EC Treaty requirements, in particular to the non-discrimination principle.

"The higher tax burden on non-residents makes it less attractive for Spain to recruit labour from member states other than from Spain and thus represents an obstacle to the free movement of workers." The spokesman added that the tax on capital gains on the sale of property went against EU rules on the free flow of capital.

[grupo guitarlumber] 28/12/2005 12:14

TUI, Moroccan investors set up no-frills airline JV in Morocco

HANNOVER AFX - TUI AG and private Moroccan investors are setting up a
no-frills airline in Morocco, a TUI spokeswoman said, confirming media reports.
She said TUI will hold 40 pct stake in the joint venture, which is due to
start in the first quarter.
The spokeswoman added TUI's investment in the project is in the small
single-digit million euro range, with TUI also sharing its know-how in the
no-frills airline business.
[e-mail]
mog/tc

[grupo] 09/12/2005 06:27

Global house prices

Hear that hissing sound?
Dec 8th 2005
From The Economist print edition

Our latest update of The Economist's global house-price indicators


THE air is slowly leaking from the global housing bubble. In most of the countries that The Economist tracks each quarter the pace at which house prices are climbing has slowed over the past year. An overwhelming majority of experts are still predicting a soft landing with no drop in prices. But property in many countries is so overvalued that even if prices do not fall, they could stagnate for up to a decade.

America's market has remained hot for longer than most, but even it now seems to be coming off the boil. The 12-month rate of house-price inflation slowed to 12% in the third quarter of 2005, from 14% in the second. Prices of new homes, however, rose by only 1% in the year to October, down from 16% in early 2004. A glut of new building is forcing developers to cut prices. The best signal of a further slowdown to come is the increase in the stock of unsold homes. The number of existing homes on the market was equivalent to 4.9 months' sales in October, up from 3.8 months' sales in January.

For a clue on where prices are heading, American homeowners should keep a close eye on Britain and Australia, where housing bubbles started to deflate in 2004. In Britain the Nationwide building society's price index has risen by only 2.4% over the past 12 months; in the summer of 2004 it was clocking up annual growth of more than 20%. Two other surveys, published by Hometrack and the Royal Institution of Chartered Surveyors, suggest that prices have in fact fallen over the past year. This week one British lender said that it would no longer offer buy-to-let mortgages on new properties.

The downturn in the Australian market has now spread beyond Sydney, where prices are already at least 10% below their peak. In the third quarter prices also fell in Melbourne, Brisbane, Hobart and Canberra. Nationally, average prices increased by only 1% in the year to the third quarter. In real terms, they fell.


House-price inflation has also eased in France, Spain, Italy and Ireland. However, Japan's 14-year slide in house prices may at last be nearing an end: prices in central Tokyo are now rising, although the national average is still slipping and is now 40% below its peak in 1991.

Japan shows what can happen when home prices lose touch with reality. But exactly how overvalued are property markets elsewhere? A recent report on the rich world's housing markets by the OECD concludes that Australia has the most over-valued housing market, with prices 52% above their "correct" level. Next in line is Britain, where prices are 33% overvalued.

To judge the fair value of homes, the OECD uses the ratio of prices to rents, which is a sort of price-earnings ratio for housing. If prices are too high relative to rents, potential buyers will rent not buy, eventually pushing down real prices. In Australia this ratio is 70% above its average level over the period since 1970.

However, a higher ratio of house prices to rents may be justified by low interest rates, which make it cheaper to buy a home. The OECD tries to calculate the "user cost" of home ownership, which in addition to interest rates takes account of tax relief, property taxes, maintenance costs and expected inflation. It then compares the actual ratio of prices to rents with a "fundamental" ratio based on user cost. It is by this gauge that the OECD finds Australian property to be 52% too dear. It concludes that only Britain, the Netherlands and Ireland also have significantly overvalued housing (ie, by 15% or more). Spain is modestly overvalued, but America, France, Sweden and New Zealand look reasonably close to fair value. Homes in Germany and Japan are undervalued by more than 20%. So is The Economist wrong to talk about a global housing bubble?

One problem with the otherwise excellent OECD study is that its numbers are out of date. It is based on the average for 2004, since when several markets have surged. Using our house-price indicators, we have updated the figures for the third quarter of 2005. For instance, American prices are now 15% higher than the average for last year while rents have risen by 3%, so the ratio of house prices to rents has risen by 12%. Using the OECD's method, this suggests that housing is now 14% overvalued. If we also adjust for the rise in the mortgage rate since 2004, the American market is almost 20% overvalued.

The chart above shows our updates for other countries (outside America interest rates have barely altered, so we have adjusted the figures only for changes in prices). France, Spain, Denmark, Sweden and New Zealand also now look significantly overvalued. Germany and Japan (not shown) are still notably undervalued.

These estimates are highly sensitive to changes in interest rates, especially in euro-area economies, such as Ireland and Spain, where rates are very low (and where most mortgages are at variable rates). A rise of one percentage point (including the quarter-point rise announced by the ECB last week) could make Irish homes overvalued by as much as 50%.

Commentators in Britain and Ireland like to talk about the housing market "stabilising" after years of froth. But when you are teetering on a high wire, stability is difficult to maintain. Without a decline in prices, it could take as long as a decade, at current rates of consumer-price inflation, for British property prices to get back to fair value. A decade of falling real prices is not something to relish.

[ariane] 26/11/2005 17:15

Frozen pensions case to go to Europe
By Ava Hubble
(Filed: 14/11/2005)


Britain's expat frozen pensioners will pursue their case for equal rights at the European Court of Human Rights.


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The chair of the Canadian Alliance of British Pensioners (CABP), Tony Bockman, has announced his organisation will lead an international consortium of about a dozen plaintiffs to the court in Strasbourg.

They will include the British Pensions in Australia (BPiA) organisation and the frozen pensioners' long-serving standard-bearer, South Africa-based expat Mrs Annette Carson.

Mrs Carson's three-year fight through the British courts to get the UK's frozen pensions policy rescinded came to an end in May when the House of Lords, in a four to one decision, dismissed her claim that the policy is discriminatory and in breach of the Human Rights Act.










Annette Carson: court battle ended in disappointment



The Department of Work and Pensions' legal costs in the matter were awarded against her. The total cost of Mrs Carson's initial High Court case and subsequent High Court and House of Lords appeals is said to have been in the region of £1 million. Although her legal expenses were largely met by frozen pensioner organisations in Canada, Australia and South Africa, there were fears that these cash-strapped groups would be unable to quickly raise the money to enable her to carry their case on to Europe.

There were also doubts as to whether Mrs Carson could reasonably be expected to subject herself to the strain of further court hearings. In the wake of the defeat in the House of Lords pensioner group chiefs also feared that their members might lose heart and abandon the fight.

Appeals for younger pensioners to come forward to help with committee work seemed to attract little response, as did calls for further donations to the fighting fund. Now spirits seem to have been revived, especially by news that the Canadian firm of lawyers, McCarthy Tétrault, has offered to assist on a pro bono basis. The chair of the Canadian alliance, Tony Bockman, also reported that a barrister has been retained in the UK to represent the dozen or so pensioner plaintiffs in Europe.

"We can't wait to get to the Court of Human Rights," he enthused in a statement earlier this month.

"The recent negative judgment from the House of Lords simply cleared the way for us to go to Europe . . . it also contained a minority judgment by Lord Carswell declaring the freezing of some UK pensions to be unlawful and incompatible with the European Convention for the Protection of Human Rights and Fundamental Freedoms."

Mr Bockman, however, gave no indication as to when the case might be heard in Europe. The consensus is it might take at least a couple of years to get a hearing date. Britain's frozen pensions policy penalises expats who retire to most Commonwealth and former Commonwealth countries. Their pensions are not subsequently increased in line with inflation. This is in spite of the fact that they contributed to Britain's mandatory National Insurance Scheme.

[ariane] 17/11/2005 06:10

Off your head' to put overseas property in personal pensions

SIMON BAIN November 17 2005

Anyone buying an overseas property as an investment for their pension fund, as allowed by new government rules next year, "would have to have a screw loose", a pensions expert said yesterday.
The new simplified pension regime from April 2006 has been hailed by the government as offering people saving for retirement new freedom to invest in residential property, fine wines, paintings, and other assets through their self-invested personal pensions, helping to spark a huge sale of Sipp products in recent months.
However, Andy Cowan, of independent advisers and wealth managers JS&P, told accountants and lawyers at an Edinburgh seminar: "The rules have changed and politicians can say how flexible it all is, but the Revenue are making sure you will have to be off your head to actually do it."
Cowan said HM Revenue & Customs would impose punitive tax rates on the supposed "personal use" of assets such as racehorses, classic cars or wine which had been put into Sipps, making it a nonsense to do it.
Buying a property in France or Spain, countries which did not recognise trust law, meant setting up a separate company to own it first, at more expense. "Then in Spain there is local purchase tax of 10%, non-residents' income and capital gains tax of 35%, inheritance tax of 50%, and local property taxes. There is an awful lot of interest in this – but it is not a good thing to do."
Cowan went on: "There will be lots of people who will get bad advice, put their wine collection in, or buy a property in Spain. Watch out for the court cases and the complaints, for the challenges on inheritance tax issues.
"It is going to be a bit of a circus from next April."
The maximum value of residential property that a Sipp can invest in is 150% of the fund value, with the maximum 50% borrowing allowed, and even chief secretary to the Treasury, Des Browne, has had to warn that it is "un-likely to be an appropriate investment for most people", Cowan observed

[grupo guitarlumber] 04/11/2005 16:17

Millions want a home in the sun
This is Money
4 November 2005
THE number of Britons who own property abroad is set to double to 4.4 million in the future, research showed today.

An estimated 2.2m people already have a property outside of the UK, and the same number of people say they are definitely going to buy one.

At the same time 37% of people questioned said they were considering buying a home abroad, according to Barclays.

Spain was the most popular location for people thinking of buying a property overseas, with 30% saying they would buy one there, followed by 15% of people who would opt for the US, 14% who would buy in France, 10% who would like to have a home in Italy and 6% who would go to South Africa.

Other popular destinations included Dubai, Portugal, Bulgaria, Croatia and Morocco.

But 58% of people who were either planning to buy a property overseas or thinking of doing so said they were concerned about being caught out by local legal or tax issues.

Around 17% of people said they were worried about the security of the property while they weren't there, and 14% of people were concerned about being able to understand the local language well enough to make a purchase.

Suzanne Clay, head of European business development at Barclays, said: 'The trend towards owning property abroad shows no sign of abating and could go through the roof if people were more confident of a hassle-free purchase.'