The government of Abu Dhabi is creating a financial free zone on Al Maryah island, hoping to lure international companies away from similar financial centers in Dubai, Qatar and Bahrain.

The Abu Dhabi World Financial Market will offer companies a variety of incentives to set up offices in Al Maryah, including the ability to operate without a local business partner, easily ship money out of the country and work under international laws.

It would be a direct competitor to the nine-year-old Dubai International Financial Centre, a 90-minute drive away, which successfully developed Dubai as a center for the regional financial community. Among other advantages, the DIFC established its own court system, which has won praise for bringing Western-style legal proceedings to disputes within the financial center's jurisdiction.

The Abu Dhabi World Financial Market will officially brand the 114-hectare Al Maryah development as the capital's financial center. Formerly known as Sowwah Island, the project is home to the new headquarters for the Abu Dhabi Stock Exchange.

"I can tell you that all the local Emirati investors are talking about [the financial zone]," Fathi Ben Grira, the chief executive at Menacorp, told The National. "All the big international financial institutions would love to be in Abu Dhabi, because of its stability. There is a general perception that they can seize opportunities in terms of business."

The competition for international financial companies has intensified in recent years, with Bahrain and Qatar aggressively pursuing Middle East operations. Abu Dhabi and Dubai both offer several free trade zones, but Dubai has been the leader in attracting the regional finance and banking industry.

"I don't think [the Abu Dhabi World Financial market] necessarily is competition for the DIFC," Kai Schneider, a partner at the law firm Latham & Watkins in Dubai, told Dow Jones. "If you use Europe as a model, there's room for more than one financial center in a region and each financial center can focus on a separate sector of financial services. London is asset management, Luxembourg is where funds are domiciled and Ireland is where they're administered."

The specifics of the Abu Dhabi zone still need to be worked out, industry observers note.

"For now the first steps have been taken to build a legal and regulatory framework," Nick Clayson, a partner at the law firm Norton Rose in Abu Dhabi, told Dow Jones. "But it's not clear whether any particular laws, regulations or the judicial position will be the same as the DIFC."

U.K. house prices increased the most in 18 months on an annual basis in May as the recovery in the market for residential property gained momentum, Nationwide Building Society said.
Prices rose 1.1 percent from a year earlier, the most since November 2011, the Swindon, England-based customer-owned lender said in an e-mailed statement today. They climbed 0.4 percent from April to an average 167,912 pounds ($254,000).
“The housing market is gradually gaining momentum,” Robert Gardner, chief economist at Nationwide, said in the statement. The economy and credit policy “provide reasons for optimism that activity will continue to gain momentum in the quarters ahead,” he said.
On a three-month basis, prices rose 0.4 percent, down from 0.5 percent in April, though this “smoother measure of the underlying trend” has shown growth since October, Nationwide said.
Central bank officials extended the FLS by a year to January 2015 last month. In their quarterly forecasts published May 15 they raised growth projections for the next three years and lowered their expectations for the peak in inflation, indicating a squeeze on consumers may be easing.

U.S. commercial property prices hit record levels last month, a new report suggests.

Green Streets Advisors' commercial property index moved one percent higher than the record achieved in August, 2007, fueled by low interest rates and "modest economic growth." The index rose one percent in April, after a two percent increase the month before, Bloomberg reports.

"It's likely we'll see more gains," Green Street analyst Peter Rothemund said in the statement. "Real estate continues to be attractively priced relative to the returns on offer in the bond market."

As confidence rises in U.S. commercial markets, investors looking for higher returns than those available from bonds are increasingly purchasing office and apartment properties, industrial buildings, malls and retail centers, according to Bloomberg.    

California-based Green Street bases the index on approximate value of portfolios of REITs which usually own high-quality properties. Not all studies agree about the levels of overall prices.

In February, the Moody's/Real Capital Analytics Commercial Property Price Index released in April was 20 percent less than a 2007 peak, Bloomberg notes.

Home prices in Hong Kong could drop as much as 25 percent in the next two years, as new government regulations and rising mortgage interest rates impact the market, analysts say.

Sanford C. Bernstein offered the most pessimistic forecast, predicting a 25 percent decrease in prices as new apartment sales will "remain largely subdued" in upcoming months.

As reported previously, many industry observers believe the Hong Kong boom may be over. New government regulations, including a 15 percent tax on purchases by foreign buyers, is expected to finally put an end to one of the largest run-up in property prices in the region. Despite the global economic crisis, Hong Kong prices have more than doubled in recent years.

But not all analysts agree on the extent of the drops.  UBS Investment Research predicts home prices will fall only 5 to 10 percent this year.

"We don't think home prices will drop as much as others have predicted because the supply problem is not yet solved," UBS head of Hong Kong and China property research Eva Lee told the South China Morning Post.

Deutsche Bank forecasts prices drops as much as 20 percent over the next two years, while Macquarie expects home prices to fall 10 percent this year.

But there are a wide range of opinions about the fate of the market. Puru Saxena, a Hong Kong money manager, recently noted that Hong Kong prices have fallen by 50 to 60 percent in previous boom-bust cycles. The current bubble in Hong Kong is "even bigger than the bubble we saw in the U.S."

Five years after the economic crash, the timeshare industry posted another year of upbeat sales in 2012, defying naysayers who predicted the business would fade in the wake of the economic crash.

Total timeshare sales increased to $7 billion for 2012, up 7.6 percent from 2011, according to preliminary data from Ernst & Young, presented this week at ARDA World, the annual trade show for the industry. While still far below the $9.7 billion in sales in 2008, industry executives are proudly boasting of the resilience of the shared-ownership market.

"Some of the things we had to give up, we learned we could do without," said Don Harrill, chief executive of Holiday Inn Club Vacations and chairman of the American Resort Development Association. "We had to readjust strategies and maybe lose our egos."

The news from ARDA World wasn't as good for the fractional and destination club industry, which focuses on selling shares in vacation homes. Sales volumes continued to fall, hitting $497 million in 2012, compared to $552 million in 2011, according to data compiled by Ragatz Associates.

At the peak in 2007, fractionals and clubs--which allow the customer to buy a slice of ownership in a property, instead of a set block of time--generated $2.3 billion in sales.

With the prices for vacation homes depressed around the world, the value proposition to buy a share of a unit is a tougher sell, said Richard Ragatz, president of Ragatz Associates.

"It's been an awful five years," Mr. Ragatz said, emphasizing that he believes the model will take hold when prices for vacation homes rise again.

"I feel there is a lot of pent up demand," he said. "People continue to appreciate the concept."