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November 5, 2017

Washington DC



The property market of the US capital and its districts are relatively stable after modest gains in much of 2017, with few of the peaks and troughs of other major cities. 


Aggregate prices across all dwelling types rose 2.6 per cent in February this year against 12 months earlier - less than half the 5.9 per cent rise seen nationally, according to the National Association of Realtors. It builds on a steady previous year. Single family homes and townhouses in the District rose 1.4 per cent to an average of $649,000, real estate data from Black Knight found, the eighth consecutive year it has risen. 


Condominium prices in the District fell 2.85 per cent to a median price of $426,500 over 2017, with transactions down by about 300, although condos in the Maryland suburbs rose 3.64 per cent, with single family homes flat in the latter suburb. Price rises were strongest in Northern Virginia, the third district, where single family homes, townhouses and condos all rose more than 3 per cent.  


Brokers told media that inventories continued to reduce, drying up the more plentiful supply from the previous year. Listings in February of this year were lower by 13 per cent than 12 months earlier, as new options quickly changed hands - an average of 18 days. Dwellings priced more than $1 million were also a brisk trade, with Redfin finding that the luxury property sector rose 32 per cent last year alone.


Sales last year were also more frequently of newer buildings compared to the previous, where there typically is a premium over older buildings. Indeed, buyers are winning more negotiations on renovation requirements with the seller, intermediaries told The Washington Post.  









Luxembourg has enjoyed a solid 2018, building on economic gains from over the last couple of decades to create a property market low on vacancies, and balanced on supply and demand. 


It is a simmering market, all right. Apartment prices rose 5.59 per cent in this year’s first quarter against the same period the previous year to an average € 5,669 per square metre, according to the National Statistical Institute. Existing apartment prices rose 7.82 per cent over the same period, three times the 2.42 per cent rise in new apartment prices.


Demand is on the ascendancy: transactions rose 16.9 per cent in 2017 compared to the previous year. City centre apartments range from between €7,000-8,000. 


And apartments are the preferred investment vehicle for landlords - gross rental yields range from 4.25 per cent to just over 5 per cent, while rental yields for houses are nearer 3 per cent.


Despite its reputation as a tax haven, there are a number of taxes involved in purchasing, owning, renting and selling. Rental income is taxed as per the investors tax band, capital gains tax is just over 19 per cent providing a property is held at least two years; and while there’s no inheritance tax, residents are taxed on their worldwide income. 


The taxation structure has been reformed, however, which partially accounts for the solid performance recently. As of last year, taxable rental value has been abolished, mortgage interest deductions relating to a primary residence has risen, and the tax deductible on home savings has risen. CGT has also been halved for sellers. But an economist at the central bank (BCL) warned earlier this year that the market may be overvalued by 6.85 per cent. 








The economic capital of Italy, Milan is home of the stock market, a range of financial institutions and many of the major-league designers.


And while the city is associated with fashion, it is in real estate that Milan is presently in vogue and turning heads. The apartments and townhouses are far less expensive than Paris, London and New York. New developments such as the Fintech district are bringing the city into the 21st century and its mix of new industries to complement the endless stately buildings and ancient monuments. 


Italy overall is still struggling economically. Gross domestic product was 0.2 per cent in this year’s second quarter – down from 0.3 per cent in the first quarter – and the 1.2 per cent annual growth was down from 1.4 per cent, year on year.


Prices are also steady, without being spectacular. Elite Immobiliare predicts a 0.8 per cent house price growth for 2018, with just a 0.2 per cent rise for offices, though it did note that the gap between listing price and offer is closing. Idealista.it found that house prices in Milan 0.6 per cent in Q1 2018 against a year earlier.


But Milan currently represents value to institutional investors. Principal Real Estate Europe a property investment manager, bought the 7,000 square-metre property at Via Giovanni Battista Pirelli 18 for €34 million through one of its funds earlier this year. The question is how to call the bottom of the market – prices in Italy generally have been falling for the last nine years. But with transactions in the city up 8.1 per cent in this year’s first quarter against the same period last year, some certainly see a market up-turn ahead.





















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