News
Spanish prime property market bounces back
The prime property market in Spain has recovered strongly with buyers from Latin America and the Middle East rising, according to the latest index report. The recovery of the market mirrors the recovery of Spain’s economy which is expected to see growth of 2.6% in 2016, more than the UK and Germany, says the analysis from international real estate firm Knight Frank. ‘Ultra-loose monetary policy by the European Central Bank and low oil prices have led to an increase in consumer spending, higher employment and rising household incomes. The market fundamentals are improving,’ said Kate Everett-Allen, Knight Frank partner, But she added that a backdrop of global uncertainty remains. The report highlights two key property market trends. Firstly, the rise of the non-EU buyer. Latin Americans now have a strong presence in Madrid, Middle Eastern buyers are active in Marbella plus Swiss purchasers in Ibiza as the profile of Spain’s luxury buyers shift. The second key trend is the strength of the €1 million to €3 million price band and nearly all of our prime markets now consider it their most active market segment while confidence is returning to Barcelona where the number of residential sales increased by 86% between 2012 and 2015 Online property searches on Knight Frank’s website by Middle Eastern web users searching for a property in Marbella increased by 164% between 2014 and 2015. A third of Madrid’s prime buyers now come from abroad. In 2015 Latin American buyers accounted for 30% of all the prime sales agreed by Knight Frank’s Madrid sales team. The report also says that the top tier of Ibiza’s property market has become uncoupled from the wider market, recording price growth of 10% in the year to April 2016 while Mallorca saw a 55% increase in the number of applications for new residential projects in the first two months of 2016 compared with the same period in 2015. Overall, the report says, rising sale volumes in Marbella suggest confidence is returning to the market. Price growth is slowly shifting into positive territory with newly built modern villas in good locations, beachfront properties along the Golden Mile and gated communities such as Sierra Blanca, Camojan and La Zagaleta outperforming the wider market. It also points out that the recent ruling regarding Marbella’s 2010 Town Plan, which affects around 15% of Marbella’s housing stock, has led to some caution for those properties affected, but it has also refocused attention on properties in established areas which comply with the 1986 Urban Plan, as well as those which sit beyond the municipal boundary in areas such as Benahavís and Estepona. Meanwhile, Mallorca’s prime market, having reached its trough in the winter of 2014, has entered a new cycle of growth. The island’s prime markets of Andratx, Son Vida and Deià remain firm favourites with British, German and Scandinavian buyers. The report also explains that in Mallorca, not only has foreign demand strengthened with sales to foreign buyers up… Continue reading
House sales failures in UK up 9% quarter on quarter
The number of house sales failing to successfully complete in the UK increased in the second quarter of 2016, with more than one in four sales falling through. A house sale fall through rate of 29% was recorded by the latest research from independent home buyer Quick Move, up 9% from the first quarter of the year. The annual year to date fall through rate ended the second quarter of the year at 25.18%, up 3.56% since the end of the first quarter, the data also shows. According to Danny Luke, business manager at Quick Move, the first half of 2016 has been an interesting time for the UK property market. ‘Strong demand and low supply in many areas has led to a strong financial performance, but the market also faced a great deal of uncertainty with stamp duty changes, more challenging conditions for investors, and most recently the European Union referendum. This uncertainty is reflected in the reasons why sales fell through before completion,’ he said. The top reason was a buyer changing their mind, accounting for 47.37% of failed sales, followed by 15.79% due to the seller renegotiating a better offer with a new buyer, the same amount was due to difficulty securing a mortgage and the buyer or seller pulling out of the sale because they felt it wasn't progressing quickly enough while 5.26% was due to legal issues. ‘It seems the uncertainty that has dominated the property market in the last quarter has led to prospective buyers putting in panic offers. It used to be usual to do at least a second viewing, potentially even a third, before making a formal offer on a property, but shortage of supply in some areas, alongside widespread market uncertainty as we drew closer to the referendum, led to many prospective buyers feeling pressure to make offers on a first viewing, fearing that they may miss out if they delay,’ Like explained. ‘Once the dust has settled and the sales start progressing, the cold feet can start to set in, possibly due to nerves about the size of the financial investment and whether they've selected the right property or when surveys highlight potential issues,’ he pointed out. ‘As we move forward in post-Brexit Britain, I would expect to see the market slow, and potentially see the fall through rate continue to rise, as market uncertainty and instability continue,’ he concluded. Continue reading
Capital city property prices up just 0.5% in June with five seeing values fall
There was a 0.5% rise in capital city dwelling values in June with Sydney, Melbourne and Hobart recording another substantial rise but five cities recorded falls. Higher dwelling values across Australia’s two largest capital cities continued to push the CoreLogic Hedonic Home Value Index to new record highs, with dwelling values across the combined capital cities rising by 0.5% in June to be 8.3% higher over the past 12 months. The June results continued to show a rebound in housing market conditions after CoreLogic reported weaker results for the final quarter of 2015 when the combined capitals’ index was down 1.4%. However, the pace of capital gains in June was substantially lower than the April and May results when CoreLogic reported a 1.7%, and 1.6% month on month lift in capital city dwelling values. ‘The monthly growth rate reduction is likely to be very much welcomed by state and federal government policy makers and regulators who may be concerned about a sustained rebound in capital gains,’ said CoreLogic Asia Pacific research director Tim Lawless. He pointed out that home values in Sydney have been rising for four years, and have increased by a cumulative 59% over this time frame. Melbourne dwelling values have been rising for the same length of time and have moved 41% higher over the growth cycle to date. The combined capitals’ headline result was driven by a strong 1.2% rise in Sydney dwelling values, and a 0.8% gain across Melbourne’s housing market. Hobart values also showed strong conditions with dwelling values moving 1.8% higher over the month. A breakdown of the figure shows that in Sydney prices increases 1.2% month on month, 6.8% quarter on quarter and 11.3% year on year to a median price of $780,000 while in Melbourne they increased by 0.8%, 3.5% and 11.5% to $587,500. In Hobart growth was 1.8%, 1.9% and 6.2% to a median price of $341,500. In Brisbane prices fell 0.1% month on month but were still up 2.2% quarter on quarter and 5.3% year on year to a median price of $475,000 while in Adelaide they fell 1.3% month on month but were up 0.8% quarter on quarter and 2.2% year on year to $420,000. In Perth prices have fallen across the board, down 0.8% month on month, down 3% quarter on quarter and down 4.7% year on year to $505,000 with a similar story in Darwin with a month on month fall of 1.6% a quarter on quarter fall of 2.5% and a year on year fall of 1.1% to a median price of $510,000. Canberra is seeing prices fall for the first time in over a year. Values were down 1.1% month on month but still up 2.6% quarter on quarter and 3.9% year on year to a median price of $560,000. ‘While the higher rates of capital gains in Sydney and Melbourne can be tied back to strong economic conditions, and high rates of population… Continue reading
