U.S. Most transparent Real Estate Market, Australia Top 3

10/07/2012 12:45 pm

The United States has been ranked the world’s most transparent market in 2012, according to Jones Lang LaSalle’s 2012 Global real estate transparency index. The United Kingdom was the runner up and Australia rounds out the top 3.  Dr David Rees, JLL Australasian head of research, says changes to the methodology in the questionnaire resulted in a shuffling of the ranking for the top 3 countries, “But the gap in the scores amongst the top 3 remains paper thin.”

Markets are assigned to one of five transparency levels, ranging from highly-transparent, transparent, semi-transparent, low-transparency to opaque. The index assesses transparency in 97 real estate markets worldwide, weighting 83 transparency factors.

Australia's transparency performance has been maintained in the survey since it was established two years ago.

Markets to consider avoiding according to the survey include,Venezuela, Mongolia, Tunisia, Ghana, Iraq, Pakistan, Algeria, Belarus, Angola, Nigeria and Sudan.

‘Leading improvers’ from the 2010 survey were growth markets Mexico, Indonesia, South Korea and Turkey. Turkey was found to have improved most in terms of transparency.

Canada, Australia, United States, United Kingdom and France continued to lead the index in data availability and regulatory oversight.

Jones Lang LaSalle says key drivers for further transparency progress will include:

  • Emerging economies’ growing recognition that their current lack of performance indicators and accurate market information is hindering inward investment
  • Credit and sovereign wealth crises will motivate regulators, central banks, foreign investors and real estate professionals toward improved transparency; offering more public data on debt and monitoring lenders more closely
  • Properties’ sustainable characteristics having increased influence on leasing and investment decisions, forcing greater transparency on energy efficiency and green benchmarking

To find out more check out the report from JLL  and also stay tuned for our Blockbrief posts on this very topic. One of the Australian Property industry's greatest challenges is the public perception of developers. Not reality, perception. The level of local and state government probity on development applications, rezoning and delivery of projects is exhaustive. And yet, at any Local Council meeting and "Friends of..." group on any day of the week developers and those elected are accused of corruption and wrongdoing.

Here at BlockBrief, we have and will continue to show the realestate market that through presenting our reports and information to the likes of banks and non-traditional lenders that a project has many other factors that need to go into their credit risk departments when they are faced with assessing development facilities. Our assessment of Councils and the political framework means that we can tell "The Faceless Men" of the property development industry (credit risk analysts) that a development in any Council is more likely or less likely to be approved given statistics of development approvals vs. refusals vs. political agendas of individual Councilors and the community. It is essential for financiers to understand the statistics and commentary on which Councils are pro-development and which are against in their models. We need to stabilise and minimise the amount of variables in our feasibilities and developments or banks will continue to factor in more risk, debt will still be unattainable, expensive and highly conditioned i.e. 2.5 times interest cover and 45% leveraging.
BlockBrief will change all this. Stay tuned for more posts and features which are about to be made publicly available.