Internationalisation of Developments and Residential Estates - Professor Mark Sharp

Global Perspectives

Professor Mark Sharp

AIPP Chief Executive

Scope Overview of AIPP

Overview of global trends

AIPP 2011 objectives

Working together

Summary

Who we are

Not for profit organisation.

Set up to improve the standards of professionalism in the international property market.

Provide the consumer with confidence.

Who we are

Provide a united voice for professionals.

Members follow robust Code of Conduct.

Who we are

Members pride themselves on: Honesty

Integrity

Transparency

Who we are Members therefore provide a

professional service and are accountable to the AIPP via:

Complaints Procedure Reprimanded, fined,

suspended, expelled.

Dispute Resolution Procedure Arbitration

Global trends

Generally global economy is in slow recovery with pockets of resistance.

Australia seeing significant signs of house price inflation (18%) as is Canada (16%).

Global trends China’s tourism starting to

gather pace and luxury housing will start to attract consumers although purchasing is restrictive in Asia.

Turkey is experiencing significant growth both in economy and second home buyer investment as are certain areas in Russia (Moscow) and Brazil (Sao Paulo).

Global trends

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

-15

-10

-5

0

5

10

15

World trade Developed countries Developing countries

(c) Economist Intelligence Unit 2010

World trade figures between developed countries and developing countries 05 -12

Western markets

Lending strategy dominates the market - USA just breaking even.

UK domestic market is up on the year but still 5-10% down on 2007 highs.

Where UK is spending

Europe Russia Americas Australasia Middle east Asia Africa£0

£200

£400

£600

£800

£1,000

£1,200

£1,400

£1,600

£1,800

£2,000

Direct investment from UK £m

Dept of Business, Innovation and Skills 2010

Where UK is spending 2007-2012 comparison (units in 000)

Spain France US Bulgaria Portugal0

5

10

15

20

25

30

35

20072012

Dept of Business, Innovation and Skills 2010

Who is buying international property by age - UK

>18 18-24 25-34 35-49 50-64 <650.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Dept of Business, Innovation and Skills 2010

UK Buyer Profile

Knowledgeable UK consumers are now knowledgeable about the market and the do’s and don’ts of international real estate.

USA Is regulated via NAR but not to international markets.

UK Buyer Profile Market

Generally better than it was a year ago.

Reluctance to buy off plan.

Sceptical with regards to investment claims.

Risk adverse towards liability.

Outreach UK Consumers

At a recent UK Exhibition 91% of UK consumers looking to buy are aware of the AIPP.

Business We provide opportunities to develop business not just other agents but wider industry development such as independent lawyers, foreign exchange and media companies.

Outreach Fractional ownership

AIPP now ‘actively involved’ in fractional ownership and so welcomes the fractional industry.

Home ownership We continue to recognise businesses offering whole ownership.

Outreach

Opportunity Membership enhances profile and consumer confidence.

Consumer Guide We produce an annual guide that has a large distribution; all AIPP members are listed.

2011 Development Association

Code of Conduct established now introducing standards as a guide to members.

Proposing country specific panels in Spain, Turkey, Cyprus, USA, Holland.

2011 Development Members

Provision of enhanced PI insurance.

Introduction of Latent Defect Insurance for overseas property (much aligned to NHBC warranty).

Viewing trip insurance to comply with EU regulations.

2011 Development

Consumers

Defective Title Insurance

Occupiers Liability Insurance

AIPP Bond

2011 Development Education

Established a National Qualification Framework (NQF)

On-line (modular) training for both members and consumers

Developing an MSc in International Real Estate

Going Forward Data

Data collection and usage are needed.

UK Data collection for research dissemination and consumer knowledge outputs.

International agreement for data collection.

Going Forward Data

KPI’s to monitor performance of the industry

Benchmarking

Trend tracking

Going Forward Consumer confidence

Undertake AIPP training and it will increase consumer confidence in you and your product.

Promote best practice and knowledge exchange.

Going Forward• Consumer

AIPP and partners to promote consumer knowledge by holding events

Provide marketing opportunities via publications

Summary Overview of the AIPP

Identified the global trends

What UK buyers want

2011 Development

Summary

Next steps…….

…………lets keep communicating