US Homes

International purchases of American homes are ramping up, and a new Senate bill designed to boost the ailing real-estate market would encourage globe-trotting investors to buy even more.

The bill, co-sponsored by Charles Schumer (D-N.Y.) and Mike Lee (R.-Utah) would grant a U.S. visa to international investors who agree to spend at least $500,000 on residential real estate here.

If passed, the legislation could add to a surge in homebuying by international purchasers over the past year or two that’s already given some local U.S. markets a welcome boost.

Growing international interest

Foreigners spent $82 billion buying up U.S. homes in the 12 months ended in March, up 24% from a year earlier, according to the National Association of Realtors (NAR). That represents 8% of total U.S. sales.

In places like South Florida, international buyers already account for a whopping 25% of the market. California, Texas and Arizona also attract many foreign buyers, as do Hawaii and New York.

South Florida condo sales have been surprisingly strong, said Brad Hunter, chief economist for Metrostudy, a housing analytics company. “And the majority of those sales are to South Americans and Canadians,” he said.

Your local forecast

All that international buyer activity has been a tonic for the anemic Florida market. Housing starts were up nearly 20% in the three months ended Sept. 30, according to Metrostudy.

In Manhattan, there’s been a steady baseline of foreign condo buyers, said Jonathan Miller, CEO of Miller Samuel, a New York appraisal firm. They generally account for about 15% of investors, but in recent years, the buyer mix in New York City has shifted, he said.

When the euro was strong in the mid-2000s, buyers from Western Europe — and particularly Ireland — dominated.

The Irish “economy was so strong back home — the ‘Celtic Tiger’ years — that many were flush and wanted to invest and take advantage of the spread between currencies,” said Miller. “There were marketing groups that would go to Ireland and sell packages of condos here.”

Now, said Miller, the New York market now attracts more Asian and Latin American buyers than in the past.

Wei Min Tan, a real-estate agent with Charles Rutenburg Realty who specializes in selling Manhattan real estate to Asians, said his volume has more than doubled this year.

“I tell [buyers] it’s going to be a stable investment that should go up 10% a year,” he said. That’s “not as much as they might get in Hong Kong or Shanghai,” but there’s less volatility, he said.

Even better for homeowners, foreign sales can be very easy: The buyers are often affluent and buy more expensive homes. The median sale price of $175,000 they pay in Florida, for example, is well above the median sales price of $136,500 for all transactions.

There’s also no hassle over financing or waiting around for a mortgage lender to approve the deal: Overwhelmingly, international buyers pay cash.

Indeed, the Senate bill would require buyers to pay cash for the homes to qualify for the new “homeowner” visa. They’d also need to pay U.S. taxes and spend at 180 days a year in the country, and can’t work here or take out home-equity loans against the properties. In return, they’d get to live here for at least three years.

A vote of confidence

The program could improve the housing market nationwide, said Schumer.

“We think a very significant number of people will be brought in,” he said. “They’ll sop up the extra supply of homes we have right now that has been dragging down the economy.”

Foreigners seem to have more confidence in the U.S. real estate market than Americans do. Almost half of buyers surveyed by NAR cited the profitability or safety of their investments as the main factor that persuaded them to buy.

“With the economic distress in Europe,” said Miller, “people are still looking for safe havens for investing and the U.S. is perceived globally as safe.”

Plateau State government

Plans by the Plateau State government to add an additional Government’s House has yielded result as it has entered into a N 4.5 Billion contract with a construction firm for a befitting modern Government House construction about five kilometers from the present one.

As a result, the current one use in Rayfiled will be converted to a presidential lodge, the government said. At a brief but colourful ceremony at the Rayfield Government House, the Secretary to the State Government, Prof Shedrack Best signed the contract on behalf of the state Governor Jonah Jang with Mr. Noca Giacofo, Director of Eagle construction limited standing in for the company.

The SSG disclosed that the Presidential Lodge was converted to the present government House and the Tunde Wada Government lodge remains as such, saying the decision become necessary to meet the challenges of modernity.

According to him, “the state government had acquired the land and has been doing minor activities on the land towards the actualization of the Jang’s 10 point agenda, saying the new Government House is key to the actualization of the 10 point agenda.

He added that the pains of having a new Government House is worth it as when completed it will be the second to none in the country because it is going to house the governors’ office and residence, Office of the First Lady, Government House clinic as well as other office facilities.

Prof. Best urged the people of Plateau State to develop interest in the project by visiting the site which will make it a people’s project rather than seeing the project as strictly government affairs.

He described the project as a big one, noting that government was hopeful that Eagle Construction would deliver the project before the 36 months in line with Jang administration’s commitment to giving the people of Plateau State a befitting Government House that the administration would be remember for across the state.

The Director of Eagle Construct Limited, Mr. Noca Giacofo assured that his company would complete the project within the time frame, adding that they have been partnering with the state government on contracts.

“This is not the first time we are entering into such contract with the government of Plateau State. We handle the Plateau State liaise office in Abuja”, he said.

Block of flats at Igbogbo Housing Estate 11, Lagos

From Sir Otedola Housing Estate at Odoragunshin in Epe, to Ijaiye Housing Estate, Elegant Court in Ikota and Hon Rotimi Sotomiwa Estate in Igbogbo, Bayeku Local Council Development Area in Ikorodu within two months, Lagosians have been told to expect more housing projects by their governor, Mr. Babatunde Fashola.

“In the next two weeks, the government will begin work on another 80 units of one, two and three bedroom flats beside the existing Oba Adeboruwa Housing Estate in Igbogbo, Ikorodu,” the Commissioner for Housing in Lagos State, Mr. Bosum Jeje, who represented the governor, stated this during the inauguration of the estate in Ikorodu at last week. Governor Fashola said the housing units being commissioned were targeted at the masses, adding that his government would ensure that the houses are affordable. On the price and payment basis, the commissioner, urged people to wait for government to unfold the prices of the houses and the mode of payment.

He said the applicants would become proud owners of home after the 30 per cent advance payment with the balance spreading over a period of 10 to 20 years. “We are launching the mortgage system soon. It is then residents can pass judgement whether the houses are for the masses or elite, but I am assuring you that these houses are for the people and it is affordable in all ramification,” he said.

He said the government has already launched a website through which potential buyers can apply, adding that the state has enacted the Arbitration Rules to guide the transaction. Speaking on modality of achieving mass housing in the state during the commissioning of Elegant Court in Ikota at Lekki, Lagos penultimate week, Jeje, said the ministry has developed a template for appraising interested private developers as well as facilitating necessary sign-off from the relevant ministries and government agencies on behalf of developers. Jeje added that it is worthy of note that the Public Private Partnership is already yielding fruits as some of the partners have completed their projects while some have reached advance stages of work.

DAYO AYEYEMI

Governor Musa Kwankwaso

The Kano State Governor Musa Kwankwaso has flagged off the construction of three model cities under a public private partnership arrangement to decongest the Kano metropolis.

The governor said 24,600 plots have been earmarked for the construction of the model cities, one of which is Kwankwasiyya Model City.

He said the new cities would help to decongest Kano and discourage the use of Carve-outs, which he said have led to chaos in Kano.

Kwankwaso said: “This is a milestone in the history of Kano State. I promise you that within the next 16 months, 700 plots of land here in Umarawa would be transformed into a model city with state-of-the-art facilities, such as recreation centres, parks and gardens, hospitals, hotels, Governor’s Lodge, drainages, electricity and road network.”

Kano State, the governor noted, is the most populous state in Nigeria, adding that there is need for the government to open up other areas for human habitation.

He said the three model cities would help to reduce the housing deficit in the state, adding that the focus of his administration is to provide decent accommodation for the residents.

The governor noted that the model city project would begin with the development of 700 plots at Umarawa within 16 months in the first phase, while another set of 2,300 plots at Gurjiya would kick off upon the completion of the Kwankwasiyya City.

He said another city, covering 3,600 plots, would be built at Tumfafi, while the final phase is billed for Western By-pass with 18,000 plots.

The cities are to be built on the outskirts of Kano.

Kwankwaso assured that his administration is determined to complete the project, through partnership with corporate organisations, the Federal Housing Authority and the Federal Mortgage Bank.

The Managing Director of the Federal Housing Authority (FHA), Terver Gemade, noted that the state government’s initiative would reduce the housing deficit in the country.

Gemade said the Federal Housing Authority has opened a window of opportunity for state governments to partner the Federal Government to provide affordable housing units for low-income earners.

Under the model city project, the Federal Mortgage Housing Authority would build about 10,000 housing units.

Kolade Adeyemi

frsc

Federal Road Safety Commission (FRSC) has concluded plans to deliver about 5,000 housing units to its staff spread across the country in the next two years.

Corps Marshal and Chief Executive of the commission, Osita Chidoka, who disclosed this in Abuja, said Phase One of the housing scheme which would be driven under a public private partnership would enable its personnel own about 5,000 houses.

The housing units range from one bedroom terrace to three bedroom semidetached bungalows to be developed in Abuja, Lagos, Ibadan, Lagos, Port Harcourt, Oshogbo and other state capitals.

This was contained in a statement issued by FRSC Public Education Officer, Nseobong Akpabio.

Chidoka, represented by the Deputy Corps Marshal, Training, Standard and Certification, Aminu Dutse, said the present housing scheme is a follow up to the Masaka housing Estate in Nasarawa State which was completed in 2009 and the Lokogoma in the FCT which is slated for completion before end of this year.

He added that it was a further fulfillment of the FRSC management’s desire to engender improved service delivery among staff through provision of affordable and seamless staff housing scheme across the country on an owner-occupier basis.

In his presentation, Head of the FRSC National Housing Fund Unit, Assistant Corps Commander, Emmanuel Adebisi, recalled that the scheme forms part of the FRSC response to the present trend where about seven million people experience housing deficit and the need to redress the development.

According to him, the FRSC has endorsed memoranda of understanding (MoU) with three accredited property developers – T and G Partners Limited, Camics Consults Limited and Nice Dreams Property Limited.

By Chibuzor Emejor

Speaking during the signing of the Memorandum of Understanding, Vision 2030 Delivery Board Chairman, Dr. James Mwangi, hailed Tatu City master planners for developing a holistic urbanization model that is cognizant of the social and economic pillars of Vision.

“The government is keen to ensure that the social and economic developments of our citizens are at the centre of our policies. This is the main driver of Vision 2030. The approach taken by the promoters of Tatu City clearly demonstrates that this is also at the heart of the master plan they have developed.”

The city, whose master plan was launched in October 2010, is an all-inclusive development incorporating 11 different land uses with residential accounting for 60% of the total land area. The balance will be allocated for a technology park, commercial retail and hospitality developments. On completion, Tatu City will be home to an estimated 62,000 residents and is expected to have 30,000 day visitors.

Speaking during the ceremony, Tatu City Chairman, Nahashon Nyagah confirmed that the partnership would go a long way in promoting the socio-economic development of the country in line with the Vision 2030.

“We are delighted to collaborate with Vision 2030 whose goal for sustainable development for our Nation inspired Tatu City.  At a macro level, this is a project that will not only positively impact the livelihoods of the ordinary Kenyan but will also assist the government in its efforts to adjust its policies to accommodate similar projects” he said.

He commended the government for supporting projects that support the betterment of the life of Kenyans pointing out that the private sector must play its role in the implementation of the Vision for a globally competitive and prosperous nation by 2030.

Vision 2030 Delivery Secretariat Director General, Mugo Kibati, added that the partnership will also promote private-public exchange, debate and cooperation in Kenya.

“Vision 2030’s main aim is to accelerate the transformation of our country into a newly industrialized globally competitive nation by 2030. As a model for sustainable urban development, Tatu City will reposition Kenya’s property development and housing landscape making it a reference point for other African countries,” Mugo said.

Mugo added that the partnership would enable the government identify the policies most capable of attracting investment in the housing development sector. It would also facilitate adoption of best practices for the development of green satellite cities around Nairobi and other urban hubs in the country.

The signing of the MoU demonstrates the consultative and cooperative spirit between the promoters of Tatu City on the one hand and all regulatory bodies involved with the project over the past year on the other.

Nyagah confirmed that the project was still on schedule for ground breaking by the end of the year.

Tatu City is the first major privately funded Vision 2030-driven initiative. It joins similar pioneering projects like Kenya Railways Commuter Rail and Railway City; JKIA’s Greenfields Airport Terminal; Kengen’s Geothermal Power Development; and KICT’s Konza Technology City (all funded by the government) as Vision 2030 flagship projects in the respective sectors.

About Vision 2030

Vision 2030, launched in June 2008, is Kenya’s development roadmap aimed at transforming the country into a prosperous and competitive nation in two decades. Vision 2030 is anchored on three pillars, Political, Economic and Social, all targeting to improve the lives of all Kenyans. Vision 2030 is built on strong foundations also known as macro-enablers and these include energy, infrastructure, science technology and innovation as well as land and public sector reforms.

About Tatu City

Tatu City is a comprehensively planned, all-inclusive development that will have 11 different land uses with residential accounting for 60%, while the balance will be allocated for a techno park, institutions, commercial retail and hospitality. On completion, Tatu City will be home to an estimated 62,000 residents and is expected to have 30,000 day visitors.

Gov Fasola

Governor Babatunde Fashola of Lagos State, has handed over to the public, the pilot home ownership scheme at Epe. He also urged the Federal Government to embark on the repeal of Primary Mortgage Institutions, PMI, Act and replace same with a new law that will guarantee mass housing initiative in the country.

This came as Commissioner for Commerce and Industry, Mrs. Olusola Oworu, said that 93.7 per cent of the businesses in the state were in the informal sector.

Fashola, speaking at the commissioning of 336 units of Sir Michael Otedola Housing Estate in Odoguranshin, Epe, said his administration set up the mortgage board to give hope to Nigerians to own homes of their own and ensure that low income earners have access to own homes.

He said the Federal Government should, as a matter of urgency, look into the Primary Housing Mortgage Institution, PMI Act, with a view to repealing it and replace same with a law that would guarantee the needed capital to fund mass housing initiatives in the country.

He said: “With competing demands for other social services, we are convinced that the future for mass housing delivery should be private sector-driven with government strengthening the operational environment and legal framework for such participation.

“The result is that the public gets quality and affordable houses while the private sector gets new business opportunities.”

He noted that the problem of housing was not that of building alone but of sustainability, which manifests itself in various forms, such as the congestion of ports, which compounds the cost of imported components of building materials, the rate of foreign exchange, which adds to cost of building, the absence of long-term mortgages and funding, exacerbated by high interest rates which force citizens to desperate situations in order to raise money to pay for houses in one single payment.

The Mandharini concept has been rooted in specialist research from international property management consultants, King Sturge – now merged with Jones Lang LaSalle to make the one of the world’s largest property consultancy companies.

King Sturge carried out a detailed feasibility study on Mandharini concluding the development will deliver rental yields of approximately 11 per cent for incoming property buyers.

The consultants forecast annual property appreciation of 5 per cent and 11 per cent rental returns and provided potential owners with an Independent Information Memorandum predicting a net return on investment of 11 per cent per annum.

Mandharini, a luxury eco-friendly resort in Kilifi is set on 150 acres with its own forest conservancy, beach club, restaurants, health club and golf course is unique in East Africa for its low density and quality of offering, advised the international consultancy.

It will be run by an international operator, which will rent out the houses for short-term holiday lettings providing international and regional marketing and top-class management.

For investors in residential villas in Nairobi, net rental yields are currently running at around 6 per cent, according to the latest data from the Hass property index. However, for investors now building on the growth in domestic tourism, the Mandharini model represents a new opportunity for much higher yields.

The economic survey 2011 reported the number of Kenyan residents staying in local hotels has grown by 50 per cent since 2008, to now 2.9m, with the greatest demand being for coastal holidays. The Tourism Ministry projects a 15 per cent growth in tourism numbers this year.

“Mandharini is a unique development that combines the best of Kenya, nature, culture, hospitality and lifestyle,” said Friso Abbing, Director of Hello Properties, Mandharini’s developer.

Mandharini’s properties cost from Sh30m to Sh70m and are targeted at affluent entrepreneurs and top and mid-level executives from across East Africa, and Europe.

the Morningside Office Park is under development on Ngong Road with office spaces for sale

Moves by Kenyan individuals to resolve the country’s shortages themselves are changing the country’s future, not least in real estate, where Home Afrika has emerged as a unique development company formed by 120 Kenyans determined to provide low-cost urban housing for the nation’s lower classes.

The company began with no outside funding, from a meeting of just one engineer and one architect at Parklands Sports Club, where the conversation turned to the use of their professional skills to build up-market housing – in a country bereft of fit housing for the Mwananchi.

By the close of that same evening, the two professionals had vowed to put together a group of interested Kenyans to provide affordable, accessible housing for thousands of families over coming years.

That was in 2008, at a time when the founders could see the bottom of the pyramid market blossoming across other sectors, for Equity Bank in finance, Safaricom with Mpesa, and for the fast moving consumer good companies, with the kidogo economy of small sized packaging.

Yet no company had understood and provided for this low-end market in real estate.

“Within no time an idea sprang in us that an enormous gap exists in the real estate sector, where developers never put the low end market into consideration,” said Mbugua Gecaga, one of the founders.

That idea spread like wild fire. “We shared the thoughts with a group of other friends and business partners” Mbugua explains.

With a proposal and a work plan for a company to provide homes to a majority of Africans, the membership increased to 49. Recommendations saw more people join. The earlier target of 100 members was surpassed. When membership reached 120, further entry was closed.

At that point, Home Afrika Limited was born and 11 directors were mandated by all 120 shareholders to pursue its vision.

In a show of commitment to the founding dream, the directors promised the shareholders that money injected would gain five times in 5 years.

Registered on 17th July 2008, Home Afrika’s initial capital was just Sh200m and the first big task was to make a mountain out of this small pot of capital.

The first major project the company carried out was the construction of the state-of-the-art Morningside Office Park. The office, which cost almost Sh1bn to construct, was completed sooner than expected, in December 2010, and now towers over the skyline of Adams Arcade and houses Home Afrika’s own office.

Even before that first project came to completion, Home Africa had been approached by partners into another joint venture. In August 2010, a deal was agreed and 60per cent of the Migaa development project in Kiambu went to Home Africa, and the rest to partners.

One Airport Square was designed by Mario Cucinella

Actis, a leading private equity investor, and Laurus Development Partners, on Thursday broke ground for the commencement of its 60 million dollar One Airport Square multi-storey project in Accra.

The One Airport Square, an office and retail development, is designed to become the number one corporate address in Ghana and the most environmentally friendly complex of its kind in the country.

Expected to be completed in May 2013, the One Airport Square would house retail facilities, restaurants, bars and a landscaped plaza on the parking floor, office space above and parking in the basement.

The approximately 17, 000 sq metre area, was designed by internationally acclaimed Italian Architect Mario Cucinella , with a very strong eco-friendly focus.

It would also bring along shops, services and jobs to the local community, boosting the supply chain both locally and nationally.

Minister for Trade and Industry Hannah Tetteh, who spoke on behalf of the Vice President, said, the beautifully designed environmentally friendly building sets the standard for future developments in Ghana and shows the world what the country can achieve and noted that government would support investors who can showcase the country internationally.

Mr Alban Bagbin, Minister of Water Resources, Works and Housing, said the project had come at an opportune time when the nation was grappling with a number of challenges in the construction industry.

He said government was committed to contributing towards the attainment of sustainable environment coming up with programmes and polices to address them adding, construction of energy efficient and environment friendly building like the One Airport Square project was therefore highly commendable.

David Morley, Head of Real Estate at Actis, said, “We are excited to break ground on a building which, when it is complete, could hold its own in Munich or Singapore. It will enable Ghanaians to work and relax in the heart of the city and follow in the footsteps of Accra Mall which Actis developed in 2006.”

One Airport Square which will be developed by Laurus Development Partners, is made up of a team of international and local experts in design, project management, construction and

Leasing, said Carlo Matta, CEO at Laurus.

“One Airport Square is a great example of how mixing Ghanaian expertise and international best practices can achieve outstanding results. We hope this project will set a new standard in the Country’s real estate industry”, he added

In a speech read for him, Local Government and Rural Development Minister, Mr Samual Ofosu Ampofo, welcomed the local and international blend of human resources and materials adding, this has become possible due to Ghana’s economic and political stability.