Posted by Bellini Lacey — March 12, 2006
Luxury Real Estate's first ever European conference took place in the lovely city of Munich where many of our luxury brokers joined the city's shiki-miki (a local term for the fashionable crowd of Munich) to network with each other and promote their companies internationally.
John Brian Losh lead the conference by expressing his enthusiasm in Luxury Real Estate's expansion in Europe. "We have added 41 brokers throughout Europe in the last two years, all of who have qualified for our program by demonstrating the highest level of expertise in marketing high-end real estate.," reported Losh. The strength of the network in North America and the enormous traffic LuxuryRealEstate.com receives continues to be the leading factors in Luxury Real Estate's growth throughout Europe. Many US luxury brokers have eagerly embraced Europe's luxury brokers with referrals from clients looking abroad for second homes and investment opportunities
It was reported that the business model for many European realtors differs dramatically from US realtors via the open listing policy many European nations have adopted. Many LRE members discussed some of the challenges of marketing a property in an open listing environment and a wish to see more mandates from owners giving brokers approval to market their homes. While many Europeans expressed a reluctance to network within their own country, many are eager to network with brokers beyond their national boundaries.
As a result, those who attended the conference made connections that will strengthen their opportunities in marketing their homes beyond their national borders. "To exchange experiences with other international real estate companies was very important for us. The conference met our highest demands as we made a lot of intersting connections which will help drive our business in the future," says Thomas Lorenz of Exclusive Residences in Munich, Germany.
To view conference photos please visit: http://luxuryrealestate.com/conference/photogallery/munich-photos.htmlContributing comments about the luxury real estate markets in Europe.... Dominique Brizard - Patrick Randi of Paris, France
"We expect the market in 2006 to be much the same as it was in 2005, we do not expect any big change...The offer has been and remains very short...there is little for sale and we cannot build anymore inside Paris. The demand, however, remains important...but if we have no difficulty selling exclusive property (to high class French clients or foreigners), the middle market is much more difficult. The average French families are very cautious and do not want to spend too much per squaremeters. They tend to buy more and more outside Paris in the nearby suburbs. The average simple apartment will sell only if it is very attractively priced. The center of Paris becomes more exclusive and elegant; mainly high class French people, Europeans, Americans and some Chinese now...All the brokers are fighting to find very good properties. This is what I see for 2006 - high class property hunting."Patricia Hawkes - Philip Hawkes of Paris, France
"The first five years of the 21st Century have seen some interesting new twists in the European Real Estate Market - particularly for the Châteaux of France. First of all, throughout the 20th century, anything built in the 19th century, of opulent grandeur, superb landscaping and heavy architecture, was not the flavour of the modern age. It was often difficult to find purchasers for a 19th century pile. All the same, come 2001 the typical Châteaux suddenly became fashionable again, and prices have been creeping up.
Secondly, and more importantly, many European countries abandoned their centuries old currencies to take on the Euro. This has had some fascinating effects, particularly in France where prices have SHOT up; everybody got very muddled with the conversion rates. An average priced property of 5 million Francs in 2001 would, after the conversion, be offered for ONE MILLION EUROS - a jump of 1,500,000 Francs! In 2005, asking prices were often announced at double the real market value, and the market has become very confused.
The problem is that the buyers are not going to be bullied into paying these ridiculously high prices, so either the Châteaux stays on the market for years on end, or finally the vendors are obliged to lower their prices to the market value. A 'foreigner' coming to purchase a beautiful country house in France is hoping to get something for 'French prices', not the incredibly high prices of the English country house market.
2005 was an excellent period for PHILIP HAWKES with not that many Châteaux finding new owners, but what was sold was of high quality and high prices. In particular, PHILIP HAWKES found a buyer for the most expensive Château ever sold in France; it was purchased by a French Bank who intendeds to use it as a campus-like facility for its company. The others went to enthusiastic buyers with plans to improve their houses and use them for the purpose that they were built - family houses. After all, a Château is no more than a 'family home' which might be somewhat older than average, more beautiful than their neighbours, somewhat larger than normal and somewhat draughtier as well!"Oscar Ernstsen - Villas & Fincas of Malaga, Spain
"In the last 5 years the property market in Spain has gone up and up. A rise of 10% to 15 % per year. In the Costa del Sol we have seen rises of even 20%! The Junta de Andalusia expects that in the next 10 years, the population in the coastal areas will double. These estimates implicate a growing demand for houses on the coast. Furthermore, the Spanish economy is growing stronger; the unemployment rate is (slowly) going down. Spanish banks are amplifying the possibilities for a mortgage and there are no indications for a strong rise in interest rates. This means that more people will be able to buy their own homes.
As a result, we expect housing prices will continue to rise. 2005 showed a rise of 12%, at the end of 2006 the average rise is expected to be 7%, according to BBVA and Asprima. This decline in growth, which we already noticed the second half of 2005, is mainly caused by the burst of the bubble in off-plan buying. The off-plan speculators who so distorted the market are no longer buying, indeed many are now undercutting the market by trying to offload discounted contracts they can't complete on.
How does this match with the expected 7% rise in price for 2006? A reassuring note seems to be a continued bedrock of buyers looking for holiday homes and permanent homes in Spain's beautiful surroundings and sunny climate. I think we can say that land speculation has ended as well. Due to a new restricting law it is nearly impossible to develop on rustic land. The existing rural houses and estates are becoming a scarce good because of the law. We see a continuous demand and we expect a moderate rise in prices especially for the properties in easy reach of the coast. That is to say for the houses that are fairly priced. Speculators who have put their houses for sale for ridiculous prices will be stuck with them."Nominate A Luxury Broker For Membership We are taking reservations for the March issues of Country Life & Financial Times