Newsletter August 2009
| August 2009 Update |
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Welcome
I’d like to welcome
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| Please click on the following titles to read the content or scroll down to read the whole newsletter |
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Positive Indicators
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FX Update
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Buying at Auction
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German Economic Outlook
Most of the
economic indicators coming out of Germany were positive during this
month. Not only did stock markets perform well in line with other
developed countries but also unemployment remained broadly stable in
July as government labour market subsidies continued to shield
workers from mass layoffs. The fact that the unemployment rate was
unchanged at 8.3 per cent was a "small sensation" given the
difficult economic conditions, said Olaf Scholz, labour minister.
economic indicators coming out of Germany were positive during this
month. Not only did stock markets perform well in line with other
developed countries but also unemployment remained broadly stable in
July as government labour market subsidies continued to shield
workers from mass layoffs. The fact that the unemployment rate was
unchanged at 8.3 per cent was a "small sensation" given the
difficult economic conditions, said Olaf Scholz, labour minister.
German shoppers are showing
surprising strength with consumer confidence in the eurozone’s
largest economy hitting its highest level for more than a year, even
as evidence mounts of a credit squeeze across continental Europe. The
Nuremberg-based GfK research group has forecast its “consumer
climate” index will rise from 3.0 points in July to 3.5 points
in August, the highest since June last year. The unexpectedly steep
increase will strengthen expectations of a significant rebound in
Europe’s largest economy in the second half of this year. Last
week, the German Ifo
business confidence index also rose strongly, hitting the highest
level since October.
surprising strength with consumer confidence in the eurozone’s
largest economy hitting its highest level for more than a year, even
as evidence mounts of a credit squeeze across continental Europe. The
Nuremberg-based GfK research group has forecast its “consumer
climate” index will rise from 3.0 points in July to 3.5 points
in August, the highest since June last year. The unexpectedly steep
increase will strengthen expectations of a significant rebound in
Europe’s largest economy in the second half of this year. Last
week, the German Ifo
business confidence index also rose strongly, hitting the highest
level since October.
German industrial production was
3.7 per cent higher in May against a month earlier, the fastest
increase in nearly 16 years, Germany’s economics ministry reported
yesterday. Although overall volumes were still 17.9 per cent below
levels of a year earlier, the increase surprised even economists
given to bullishness after news that the level of orders received by
German manufacturers in May had jumped more than in any month for
about two years.
3.7 per cent higher in May against a month earlier, the fastest
increase in nearly 16 years, Germany’s economics ministry reported
yesterday. Although overall volumes were still 17.9 per cent below
levels of a year earlier, the increase surprised even economists
given to bullishness after news that the level of orders received by
German manufacturers in May had jumped more than in any month for
about two years.
Andreas Rees, an economist at
Unicredit in Munich, said what "may look like voodoo economics"
was more likely the result of "signs of life in the global
economy" – leading to a pick-up in foreign demand for German
goods. This will prove a crucial factor in Germany’s emergence from
the recession.
Unicredit in Munich, said what "may look like voodoo economics"
was more likely the result of "signs of life in the global
economy" – leading to a pick-up in foreign demand for German
goods. This will prove a crucial factor in Germany’s emergence from
the recession.
Finance Update
We now have an fx update from Gary Field – Senior FX broker at Cornhill FX:
The
month of July followed a similar pattern to June. The markets were
fairly range bound but we saw some exaggerated moves as liquidity was
thin. Major market orders and increased risk appetite were the main
market drivers and over the last week of the month the pound improved
in value by over almost five cents and dealt at its highest point
since last October, at $1.6770
against the dollar on the 31/7.
This is mainly due to the weaker dollar, rather than a sudden
interest to buy sterling, but the market seems to have shaken off
most of the concerns that affected the pound during the financial
melt down at the end of last year. Also helping to drive Sterling
strength was the news that the BOE
would review their QE policy
at the upcoming MPC meeting
(after spending GBP125B on asset purchases.
month of July followed a similar pattern to June. The markets were
fairly range bound but we saw some exaggerated moves as liquidity was
thin. Major market orders and increased risk appetite were the main
market drivers and over the last week of the month the pound improved
in value by over almost five cents and dealt at its highest point
since last October, at $1.6770
against the dollar on the 31/7.
This is mainly due to the weaker dollar, rather than a sudden
interest to buy sterling, but the market seems to have shaken off
most of the concerns that affected the pound during the financial
melt down at the end of last year. Also helping to drive Sterling
strength was the news that the BOE
would review their QE policy
at the upcoming MPC meeting
(after spending GBP125B on asset purchases.
Meanwhile,
data was less than impressive from the Euro zone with any better than
expected PMI results out from Germany and the broader region being
easily offset by the much weaker than expected German retails sales.
However the pound was also range bound against the Euro trading
1.1510 as the low and 1.1756 as the high for the month. We expect the
wider range is still really stuck between 1.1500 and 1.1850, but we
are still of the opinion that we may see a steady move higher towards
the top end of that band within the first week of August and if
broken push on to 1.1900, profit taking will hinder any further
progress and may instigate some downward spikes in the rate over the
course of the month.
data was less than impressive from the Euro zone with any better than
expected PMI results out from Germany and the broader region being
easily offset by the much weaker than expected German retails sales.
However the pound was also range bound against the Euro trading
1.1510 as the low and 1.1756 as the high for the month. We expect the
wider range is still really stuck between 1.1500 and 1.1850, but we
are still of the opinion that we may see a steady move higher towards
the top end of that band within the first week of August and if
broken push on to 1.1900, profit taking will hinder any further
progress and may instigate some downward spikes in the rate over the
course of the month.
If you wish to contact Gary to discuss any foreign exchange trades – please call him on
The swap rate is at:
Activity on the Ground
During July, we
have increased our marketing effort and now have 32 offers in the
cities of Leipzig, Halle and Berlin with prices from 20,000 Eur right
up to 1.35 million Euro. We continue to find property in the various
locations with yields in the range 5-12%, with an average of around
9-10% on delivery. We are also making initial investigations into
the market in the city of Dresden and will be bringing new offers to
the market during August with yields around 8% on purchase. Activity
from foreign investors seems to be quieter than usual, perhaps an
effect of the summer weather (not in England!) or reduced ability to
purchase in response to the home property and credit markets. Demand
from German investors is proportionally as high as we have
experienced and we have lost deals to domestic buyers during this
month. It will be interesting to see if this effect continues and
what the effect on capital values will be. We have updated our
calendar for inspection visits and you can view this at:
have increased our marketing effort and now have 32 offers in the
cities of Leipzig, Halle and Berlin with prices from 20,000 Eur right
up to 1.35 million Euro. We continue to find property in the various
locations with yields in the range 5-12%, with an average of around
9-10% on delivery. We are also making initial investigations into
the market in the city of Dresden and will be bringing new offers to
the market during August with yields around 8% on purchase. Activity
from foreign investors seems to be quieter than usual, perhaps an
effect of the summer weather (not in England!) or reduced ability to
purchase in response to the home property and credit markets. Demand
from German investors is proportionally as high as we have
experienced and we have lost deals to domestic buyers during this
month. It will be interesting to see if this effect continues and
what the effect on capital values will be. We have updated our
calendar for inspection visits and you can view this at:
Top Tip – Buying at Auction
In addition to the
usual method of property delivery (ie direct from seller) property
deals can sometimes prove attractive when buying at auction.
Although not an easy process for the foreign investors to negotiate,
taking a look at auctions is a worthwhile activity, if only looking
to gauge current market conditions. There are a number of private
auctions organised around Germany as well as auctions organised
through the federal state courts. In the usual case, auction at the
Federal Court is necessary for lenders to clear the land register of
the names of failed loans.
usual method of property delivery (ie direct from seller) property
deals can sometimes prove attractive when buying at auction.
Although not an easy process for the foreign investors to negotiate,
taking a look at auctions is a worthwhile activity, if only looking
to gauge current market conditions. There are a number of private
auctions organised around Germany as well as auctions organised
through the federal state courts. In the usual case, auction at the
Federal Court is necessary for lenders to clear the land register of
the names of failed loans.
You will find many
private auctions listed on the web.
private auctions listed on the web.
A link to one of
the federal court sites (Saxony, in German) is below:
the federal court sites (Saxony, in German) is below:
Please let us know
if you require any further information regarding the auction process
or require support in purchasing in this way.
if you require any further information regarding the auction process
or require support in purchasing in this way.
Latest Property Offers
Below are links to
some of the new property brought to the market during July. More
property in Leipzig, Halle and Dresden will be brought to the market
during August so please monitor the website.
some of the new property brought to the market during July. More
property in Leipzig, Halle and Dresden will be brought to the market
during August so please monitor the website.
Happy investing and good luck,
Mat
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13 Unit residential property in Weissenfels over 5 levels. |
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9 Residential and 1 commercial unit in popular region of Schleussig. Excellent condition – fully refurbished. |
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Two adjacent period buildings. 22 Units in total – 17 Residential and 5 Commercial. |
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Newly refurbished 10 unit property. Excellent condition and close to city centre. |
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Leipzig-Schleussig. Excellent location – single units available from 19k Euro upwards. | Contact us for further details |
| Awaiting Picture | 70 Sqm apartment in Leipzig-Connewitz. Built in 1998 – top condition. 2 bedrooms, wooden flooring, lift, underground parking. |
59.000 Euro
Contact us for more details
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New development in Leipzig-Gohlis – A
range of new apartments fitted Eur |
Contact us for more details |