Newsletter August 2010
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| August 2010 – Investment and Property News from ProVenture | ||
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Low stable interest rates, falling unemployment and Eastern European workers now being entitled to work in Germany; what is there not to like about German Property as an investment opportunity? Surely now is the time to consider the German Property Market? Please click on the items on the left to read the content or scroll down to read the whole newsletter
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Full Employment Could Be in Germany’s Future |
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New Low in German UnemploymentFactors indicate continued fallGermany’s latest unemployment figures indicate that the country could soon have under 3 million people out of work, a new low. While some media commentators praise the German economic model, which has helped the country ride out the recession, others warn that vital labour market reforms are still required. Just five years ago, Germany was in the grip of an unemployment crisis with the jobless figure soaring to over 5 million in January 2005, the highest level since the Great Depression of the 1930s. Now, with the industrialized world still reeling from the effects of the financial crisis, Germany is in the fortunate position of seeing its unemployment figures falling steadily and could soon have fewer than 3 million people out of work. On Thursday 29th July, the Federal Employment Agency (BA) released the latest unemployment figures. A total of 3.192 million people were registered as unemployed this month, an increase of 39,000 on June. The unemployment rate was 7.6 percent, up 0.1 percent compared to the previous month. The slight increase is largely due to seasonal factors. The figure is an improvement on the same period last year when 271,000 more people were without work and the joblessness rate was 8.2 percent. The figures point to the success of the German policy of keeping workers on the job under a short-time work program as the country weathered the global crisis, as well as the fact that the country’s exports are increasingly in demand. The government-subsidized short-time work scheme has helped companies to ride out the crisis. While there are still 481,000 people on such schemes, that is just a third of the figure at the height of the recession. “Germany’s economy is experiencing a recovery, the situation on the labour market has improved further,” BA boss Frank-Jürgen Weise said when announcing the figures. Labour Minister Ursula von der Leyen welcomed the figures as “good news,” saying that the slight increase is due to the start of the summer vacation period when business activity slows down.
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“Where should I put my money?” |
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Reasoned Thinking on Where to Invest
As governments tighten fiscal policy, central banks are almost certain to indulge in another round of monetary easing. With interest rates at zero, this means yet more quantitative easing. The question is therefore how do you invest? Quantitative easing is designed to push down yields along the curve and if that takes central bank buying of long dated government debt, that’s exactly what’ll happen… More..the China effect and our recommendations
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German Property Management |
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Thoughts on German Property ManagementExperiences and advice for every property owner!Having been a property investor for the better part of 20 years, Mat shares his views on the topic of property management. This is a huge topic, one which I am still learning after 5 years in the market as an investor in both single apartments and also of apartment blocks across different regions of Germany. There are some huge differences in the way property is managed, certainly to my domestic market of the UK, mainly commensurate with the higher level of renters in the sector and longer residence times.
More…read the full article on deciding on your property management |
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Top 5 Mistakes by Real Estate Investors |
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Real estate investment is perhaps one of the most lucrative forms of investment today. But it is also equally risk-bound especially when one is not well versed with the trends and nuances of the ‘foreign’ real estate market. If you want to invest in property, surely it is best to learn from the mistakes of others and not make the mistakes yourself? Knowing the most common mistakes made by real estate investors will help one steer away from making similar mistakes and ensures good return on investment. We at ProVenture have collated a list of the Top 5 tips to successful property investment and last month we began our countdown at number 5, with “Not planning ahead”. And at number 4…Miscalculating CashflowInvestors whose strategy is to buy, hold and rent out properties need to ensure sufficient cash flow for maintenance. Managing a property could be expensive and the owner is likely to incur more expenses such as mortgage, taxes, insurance, advertising costs. Investors have to allocate their budget and make sure all these expenses are taken care of, or end up having their asset turn into a liability. For a guide to calculating the cash flow expected from a typical investment, please do get in contact with the team and we will be happy to help.
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Business Climate and Finance |
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Ifo Business Climate Index Rises SharplyThe Ifo Business Climate for industry and trade in Germany has risen sharply in July. This increase is the largest since German reunification. The firms have reported a considerably better business situation than in the previous month. Their business expectations for the coming half year are also more optimistic than in June. The German economy is in a party mood. In manufacturing the business climate has brightened strongly. The business situation of the manufacturing firms has clearly improved. Moreover, the survey participants are now more optimistic with regard to the six-month business outlook. With regard to exports the firms see similarly favourable opportunities as in June. Available machinery and equipment is being utilised more strongly than in the spring. Capacity utilisation is now only slightly below the long-term average. Firms’ employment plans are more favourable and point towards slight increases in staff levels. Also in wholesaling, retailing and construction the business climate has brightened. An increasing number of wholesalers and retailers have assessed the current business situation as good. The business expectations of the survey participants for the coming six months are now more positive in both distribution sectors. The survey participants in construction have appraised the business situation considerably more favourably than in the previous month. Their six-month business outlook is slightly less confident than in June. Currency and FinanceLast month, both the European Central Bank and the Bank of England kept their interest rates at 1.0 and 0.5% respectively; great for investors, not so good for savers. The pound continued to remain strong against the Euro throughout July and into August, rarely dipping below €1.20. Meanwhile, elsewhere in the world, not a great month for the US D; peaking at 0.80 Eur/USD in early July, it has dropped 4c to 0.76 Eur/USD. The AUD has risen slightly over the last few days to 0.69, up from 0.67 whilst the Swiss Franc maintains its strengthening trend from last month, still trading around 1.33 CHF. Unfortunately for our Israeli clients, the Israel New Shekel has dipped slightly to 4.93 ILS per Euro.
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LATEST PROPERTY OFFERS |
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Proventure ActivityAnother good month for the team, with 4 clients in town resulting in 5 Letters of Intent to purchase apartment blocks and single apartments in Leipzig. With a good deal of brand new and exciting properties in Berlin and Leipzig, we expect Aug to be even busier. For our latest deals, please check out the properties below.
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