When the going is good for the real-estate business, it is usually time for everyone else to worry. Things are certainly looking up for America's property barons, reports The Economist. Rents are rising, there is a scarcity of good properties and landlords are under diminishing pressure to keep their tenants happy. So, often in the past, it has been a commercial-property boom-turned-bubble that has tipped a steadily growing economy into recession.Predictably, the property folk say that things will be different this time. To support their optimism, they point to some big changes to the property business. This year it will become clear whether those changes are enough to keep the building cycle in check.
In recent months, American property -- particularly in the all-important office market -- has regained a certain 1980s-style exuberance. Newspapers are full of stories of multi-million dollar profits made on nicely timed deals, and features on the people who made them. These include some familiar names,such as Mort Zuckerman, Sam Zell, and the ubiquitous Donald Trump, who reportedly wants to sell his casino business. But there are also some new kids on the office-block scene: for instance, Peter Munk, a Canadian whose firm, TrizecHahn, has been snapping up buildings such as Sears Tower in Chicago.
In the past few months, buying and selling has been frenetic in the New York office market, one of the slowest to recover from the property bust at the start of the 1990s. For instance, last year 100 Wall Street was bought for $37 million and sold for $58 million within a few months. In midtown Manhattan, rents have risen by up to 20 per cent during the past 12 months. However, the vacancy rate for New York offices, currently around 8 per cent, down from 15 per cent a couple of years ago, remains high compared with some markets that started to recover sooner. In Cambridge, Massachusetts, it is around 1 per cent; and under 2 per cent in Atlanta.
Interest competitive on instant access accounts
Giventhat the best laid plans can go awry, it pays to keep a chunk of money easily to hand. Instant access accounts, unlike a sock under the bed, offer the chance of adding to your emergency fund with rates of up to 7.75 per cent, reports Financial Times.
``Instant'', however, is a term that is interpreted very flexibly by the financial services industry. The wide range of instant access accounts has an equally wide range of conditions, varying from minimum balances to a limited number of withdrawals a year.
Most rates rise and fall depending on the amount you have saved; Nationwide's CashBuilder account, for example, will pay 1.4 per cent on balances up to Pound 500 and 3.9 per cent between Pound 500 and Pound 5,000, with rates rising to a top rate of 5.3 per cent on amounts of more than Pound 50,000. So it pays to check the dividing line between different rates of interest -- dipping below by even a few pounds could cost you money.
Woolwich is one of the few that offers a set rate regardless of thebalance. Its Card Saver account requires a £50 minimum balance, but pays 7 per cent whether you have £100 or £100,000 saved. Some of the best rates on the market require minimum balances: Alliance & Leicester pays a healthy 7.5 per cent on its postal First Class Instant account, but you need to have £10,000 to put away.
The market for instant access on low balances was revolutionised last year by the entry of supermarkets J Sainsbury and Tesco, which offered competitive rates for balances as low as £1. The 6.5 per cent flat rate offered by both retailers is still one of the best around, but note that the Tesco account only allows six withdrawals a quarter; after that, you are charged 50 pence a withdrawal.
If you want complete freedom over the number and amount of your withdrawals, choose your account carefully. Limiting withdrawals is one of the easiest ways for banks and building societies to tie up your money but still be able to put an `instant' name tag on an account. Legal & General's DirectAccess account, for example, has a minimum withdrawal of Pound 500.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
