Tag Archives: asia
Residential property market in Abu Dhabi slow in first quarter of 2016
In Abu Dhabi real there was a slight decrease in demand for higher priced residential units but sales activity was slow although relatively stable except for a handful of transactions concluding at below market rates. A fee of 3% on home rentals was announced as a Municipality Contract Fee, which will be applied to all Abu Dhabi’s expat residents and this could affect the market, according to the latest UAE property review from Asteco. Rental rates for prime and high quality residential apartments fell 2% compared to the fourth quarter of 2015, the report data shows. However, apartment rental rates remained, on average, 4% higher than the previous year’s rates. Mid and low quality units, in contrast, recorded stable rates with only a slight decrease for larger units, as tenants moved to newer developments offering similar or lower rental rates. Similar to the apartment sector, rental rates in the villa market were relatively stable in the first three months of 2016. However, there was a slight decrease in demand for the higher priced but older villas that are predominantly located on Abu Dhabi Island. In comparison, the majority of newer prime and high end villa developments, which include the Saadiyat Island projects, Golf Gardens, and Al Raha Beach, recorded their highest rental rates. The report suggests that a lack of quality villa communities continued to be the main factor behind the high rental rates throughout Abu Dhabi. Over the last 12 months, the prime and high quality villa projects recorded between 4% and 7% rental increases, while those for lower quality private villas decreased by more than 10% over the same period. A breakdown of the figures show that price movement varied with rates down by 5% to 7 % over the quarter in Reem Island communities whereas Saadiyat Island and Al Raha Beach recorded growth of 2% and up to 6% respectively and the report suggest this is due to the relative small availability of stock actually for sale in the market. The amount of upcoming supply on Reem Island, together with sales rates peaking in 2015, resulted in a large decrease in demand from buyers in the first quarter of 2016. Sales prices on Reem Island recorded an overall downward trend for the first three months of the year with rates for City of Lights dropping by approximately 10%, Sun and Sky Towers and The Gate Towers decreasing by 5% and 6% respectively, and Marina Square prices falling by 6%. The traded price at Marina Square in Q1 2016 ranged between AED 1,230 to AED 1,350 per square foot. The report also shows that after a period of strong demand for villas throughout 2015, the first three months of 2016 recorded limited sales activity. In particular, the more affordable units in the Al Raha Gardens and Al Reef developments saw only a few transactions taking place, of which most were below market rates. In comparison new developments on Yas Island were… Continue reading
Tracker report confirms UK property sales soared in first quarter of 2016
Property sales in the UK were 10% higher in the first quarter of 2016, boosted by a rush in demand for buy to let and second homes due to a stamp duty surcharge, new figures show. Some 275,002 transactions were registered between January and March, up 10% from the previous first quarter record from 2014, when 251,042 transactions were logged, according to the latest Conveyancing Market Tracker report from Search Acumen. The report points out that the 2014 rush was due to a surge of activity ahead of the Mortgage Market Review (MMR) rule changes in April 2014, as consumers moved to secure mortgage finance and complete deals before affordability checks were tightened. The latest tracker, which uses Land Registry data, also shows that sales volumes in the first three months of 2016 were also up 15% year on year, as conveyancers pushed second home buyers and landlords to completion before the introduction of the new 3% stamp duty surcharge which was introduced on 01 April 2016. The report points out that the potential for a time lag due to extended timelines for Land Registry applications being completed means the higher volume of conveyancing transactions may also continue into the second quarter of 2016. Year on year, those firms ranked 11 to 20 in terms of transactions completed experienced the biggest growth from the first quarter of 2015 to the first quarter of 2016, with their transaction volumes rising 24% from 801 to 994 on average. Firms ranked from 21 to 50 experienced the second best year on year growth rate, with average sales in the first quarter up from 551 to 665, a rise of 21%. Overall, the top 1,000 firms in the market experienced 16% annual growth, compared with 11% outside the top 1,000. It means that the aggregate market share for the top five firms has now been 6% or less for each of the last five quarters since the fourth quarter of 2014 as competition has heated up further down the ranks. ‘Conveyancers’ services have been in high demand so far this year as buyers of second homes and buy to let properties have created a stampede to beat the April 2016 stamp duty deadline,’ said Mark Riddick, chairman of Search Acumen. He pointed out that the artificial stimulus of government intervention has put major pressure on workloads, more than the firm has seen in the opening exchanges of any year since the recession and topping the pre-MMR rush of 2014. ‘Our analysis points to another interesting trend in the market, where challenger firms have enjoyed the biggest benefits of the year on year rise in transactions. As conveyancers pause for breath after the stamp duty frenzy, there may be some who are left licking their wounds or feeling their business performance could have been better,’ explained Riddick. ‘Periods like this, when services come under pressure from extra demand, can be testing all round, and it’s important for conveyancers to ensure their… Continue reading
Commercial property lending market in UK seeing renewed confidence
Confidence has returned to the commercial property lending market in the UK as new loan originations hit a post crisis high, new figures shows. Indeed, the value of outstanding loan books saw its first increase since 2008, according to the most comprehensive study of the UK’s commercial property lending market from De Montfort. The total amount of outstanding debt at the year end in 2015 was £168.4 billion, representing a 1.9% increase from £165.2 billion at the year-end in 2014, and the first increase recorded since 2008. Overall some £53.7 billion of loan originations were recorded during the whole of 2015, compared to £45.2 billion in 2014 and while new lending volumes rose, the proportionate increase moderated to 18.8% in 2014/2015, compared to a post-crisis record of 51.2% in 2013/2014. The report says that further evidence that the market has recovered can be seen in the decline of almost 50% in the value of distressed loans, that is those in default and in breach of financial covenant. At the year-end in 2015, the value of distressed loans reported to the research was £12.1 billion, compared to £23.2 billion a year earlier and £47.6 billion at the end of 2009. Loan to value (LTV) ratios on existing loans continue to fall, reflecting the rise in commercial property values and banks continuing to lend on similar terms to recent years. At the year-end in 2015, some 87.5% or £123.5 billion of outstanding debt had a LTV ratio of 70% or less, compared to 77% or £107 billion at the year-end in 2014 and 63% or £99 billion at year end in 2013. Outstanding debt with a LTV between 71% and 100% represented 7.5% or £10.6 billion of the market, and just 5% or 6.9 billion had a LTV greater than 101%. Notably, average lending LTVs fell during the course of 2015 for all sub-sectors, suggesting good lender discipline despite the strength of the market. Although they still dominate the market, UK banks and building societies saw their market share continue to decline. They represented 34% of new loan originations at year end in 2015, the lowest level ever recorded by the research, compared to 39% the previous year. The proportion of outstanding debt held on their books also fell, from 49% of the total at year end in 2014 to 45.5% in 2015. For the first time, insurance companies were the second largest category of new loan originators, representing 16% or £8.57 billion of the total in 2015. The exposures of insurance companies now account for 15.1% or £25.4 billion of the market, compared to 12.7% or £21 billion in 2014. Regional distribution of outstanding loans showed a strong bias in favour of central London; 43% of the total outstanding debt is secured against real estate in the capital city, the highest result ever recorded by the research, and a dramatic increase from the 26% recorded in 2010. This indicates… Continue reading
