Tag Archives: asia
Rents still falling slightly in Spain, but market is more stable
It is clear that the Spanish property market is recovering in terms of sales and even prices but the rental market is not doing as well. The average rent fell by 0.3% in February compared to the same month of 2015, according to the latest data from the National Statistics Institute. Rents have now fallen in Spain for 35 months in a row but the outlook is not too negative as rents are down less than the consumer price index which fell by 0.8% and month on month have been fairly stable lately. A breakdown of the figures show that all regions saw rents fall apart from Galicia, the Balearics, Navarre and Catalonia with slight rises of 0.3%, 0.3%, 0.1% and 0.1% respectively while rents in Murcia were unchanged. The biggest decline was in La Rioja with a fall of 2%, followed by Castilla y León and Castilla La Mancha both down 0.9%, Madrid and Extremadura both down 0.8%, the Basque Country down 0.6%, Asturias and Cantabria both down 0.5% and Valencia down 0.4%. Elsewhere in the market is regarded as good news that overseas buyers have returned to Spain. But it may be that some are more interested in older properties rather than new homes. According to data from the Spanish Ministry of Public Works, foreigners bought 69,196 homes in Spain during 2015, up 13% over the previous year, and accounted for almost one in every five of the homes sold in the country last year. Non-resident foreigners purchased a total of 4,846 homes in Spain last year, up 10.1% over a year earlier, while resident foreign buyers bought 64,350 homes last year, an increase of 13.3% compared to the previous year. Valencia was the top region for foreign buyers in 2015 with a total of 20,219 sold to foreign buyers, followed by Andalucía with 14,384 homes being registered to foreign buyers and then Catalonia, with 10,264 homes sold to foreign buyers. Research from boutique overseas real estate agency Ideal Homes International has found that resales now account for 76% of sales to British buyers but there is still interest in new properties from Scandinavian and Belgian buyers. According to director Chris White many British buyers are looking for dual purpose properties. In the immediate term they want a holiday home that also has the potential to earn income as a holiday let. In the longer term, they want somewhere that can act as investment for their golden years, either as somewhere to escape to for a life in the sunshine or as somewhere that will grow their capital so that they can sell it to fund their retirement. ‘There was a time when British buyers flocked to new build developments in Spain. The financial turbulence of the past decade has had an interesting impact on British property purchases in Spain. Confidence is back and the market is growing at a healthy pace, but the type of property that buyers are seeking has definitely… Continue reading
Investment in European commercial property up by 25% in 2015 year on year
A total of €64.5 billion was invested in European commercial property in the final quarter of 2015, which took volumes for the full year to €238.5 billion, a 25% increase on 2014. However, the fourth quarter total was only slightly up, by 0.5%, on the same quarter of 2014, indicating that investment growth lost a little momentum towards the end of the year, according to the latest European quarterly commercial property outlook report from Knight Frank. However, it shows that increases in investment activity were widespread in 2015, with the core markets of the UK, Germany and France all seeing transactions rise by more than 20%. Among peripheral markets, investment volumes grew particularly strongly in Italy and Portugal, both fuelled by surging demand from international investors. The strength of investor demand kept European prime yields under downward pressure throughout 2015, although the pace of yield compression slowed in the final quarter. Also, the European weighted average prime office yield came down by four basis points in the final three months of 2015 to an all-time low of 4.79%, largely on the back of yield compression in Amsterdam, Berlin, Brussels, Copenhagen and Lisbon. The report points out that with large amounts of capital continuing to target European property, strong investment activity is expected to continue in 2016. However, the exceptional growth in transaction volumes seen in 2015 is unlikely to be repeated. Knight Frank’s forecast is that European investment in 2016 will be broadly in line with 2015 volumes. Many of the factors that supported the investment market in 2015, including the stabilising Eurozone economy, low interest rates and wide yield spreads to other asset types look set to remain favourable to property investors throughout 2016, the report says. The report also points out that Eurozone GDP growth is forecast to improve modestly to around 1.7%, following an increase of 1.5% in 2015. The European Central Bank has indicated that it may be prepared to make further interest rate cuts to support economic growth at a time when its main refinancing rate is currently 0.05% and the deposit rate is already in negative territory at -0.3%. Supported by the stabilisation of the Eurozone economy, European occupier market activity improved healthily in 2015. On an annual basis, aggregate take-up in the major markets monitored by Knight Frank rose by 10%. This was despite falling take-up in Europe’s two largest markets, London and Paris, and was driven by the strong performance of German, Iberian and CEE markets. Prime rents remained stable in the majority of European markets in the fourth quarter but the Knight Frank European Prime Office Rental Index rose by 0.9%, driven by increases in Dublin, Frankfurt, London (City), Madrid and Stockholm. The report suggests that rental growth may spread to a wider range of cities in 2016 with Paris, for example, expected to see prime office rents increase following more than two years of stability. Continue reading
Residential rents in England and Wales rise for first time for several months
Rents in England and Wales increased by 0.1% between January and February, the first monthly rent since autumn 2015, according to the latest index. This took the average rent to £791 a month and could be the first of several rises as the private rented sector braces for anti-landlord policies such as tax changes. The data from the buy to let index from Your Move and Reeds Rains also shows that year on year rents are up 3.3%, or an extra £25 a month for the average tenant. Average rents are now rising on a monthly basis for the first time since September 2015, up 0.1% between January and February. Rents across England & Wales now stand at £791 per month as of February, 3.3% higher compared to this point last year – or an extra £25 per month for the average tenant. On a regional basis rent rises were led by the Midlands. In the East Midlands tenants have seen the fastest annual rent rises, up 7% over the last 12 months. This is followed by the West Midlands with 6.3% and the East of England with rents 6.2% higher than in February 2015. These three regions all stand ahead of London on this basis, with rents in the capital 4.8% higher than 12 months ago. As recently as November, London consistently led the field in terms of annual rent rises. Meanwhile, at the other end of the spectrum rents are lower than a year ago in three out of 10 regions. These exceptions are led by the North East where the average rent is now 2.5% lower than in February 2015, followed by Wales with rents down 1.5%, and the South East with a marginal 0.1% annual drop. Five out of 10 regions have now seen rents rising month on month. On this basis the East of England leads with rents in February 1.1% higher than in January 2016. The South East and the East Midlands are joint second on this measure with rents up 0.6% between January and February. By contrast, rents in Wales and the North East are now 0.9% lower and 0.7% lower than in January, respectively. On the back of the latest monthly increases, monthly rents in the West Midlands have set a new an all-time record high, at £596, alongside a new all-time record for Yorkshire and Humber rents at £559. The East Midlands, while home to the fastest annual rent rises in the twelve months to February, has seen rents remain just £1 short of the all-time record high set at £610 in November 2015. Adrian Gill, director of lettings agents Your Move and Reeds Rains, pointed out that rents are rising at a time when demand is growing. ‘Rent rises could now accelerate further. If government attacks on landlords bite, having worsened again in this week’s Budget, the flow of investment… Continue reading
