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More supply sees residential property rent growth slow in the US
Annual rent growth in the United States has slowed for the third month in a row but rents are still rising faster than historical norms, according to the latest index data. Rents appreciated 4.5% year on year in October, down from 5.3% in September, down from a high of 6.6% in July and it is mostly due to more properties, specifically apartments, coming onto the market, the Zillow real estate market report shows. A breakdown of the figures shows that tents in large multifamily buildings rose 3.9% annually, while single family home rents grew 4.5%. Overall, newly built apartment buildings are finally opening for new residents and slowing the rate of rental appreciation across the country, but rents are still rising much faster than the historical norm and continue to rise faster than incomes, according to the report. The report points out that multifamily housing starts have been increasing since late 2009, and as units become available, the pace of rental appreciation is slowing. Lack of inventory has been a leading cause of the ongoing rental affordability crisis, especially in fast growing markets. Even the hottest rental markets, which have seen double digit rent appreciation for the past five months, are growing at a slower pace although rents are still rising there more than twice as fast as the national average. The San Francisco metro has the fastest rental appreciation among the nation's 35 largest markets. Rents there are up 15.2% from last year, but they were growing as fast as 19% annually in June and July. ‘Rental appreciation has started to slow down in part due to more rental supply. Many of the bigger multifamily rental projects that were begun a couple years ago in cities nationwide are finally starting to open for occupancy, easing pressure on rents somewhat,’ said Zillow chief economist Svenja Gudell. ‘But despite this recent slowdown in rental appreciation, the rental affordability crisis we've been enduring for the past few years shows no signs of easing, especially as income growth remains weak. It will take a lot more supply, and a lot more renters turned home owners, to fully reverse this trend,’ Gudell added. As rents have grown and rental affordability continues to suffer, the stability and relative affordability of homeownership may be pushing some qualified renters to make the jump to home ownership. A widely expected December rate hike from the Federal Reserve could be an additional incentive for buyers to enter the market while rates remain low. Reflecting this, home values are growing at their fastest pace since November 2014, up 4.3% to a Zillow Home Value Index of $182,800. Continue reading
London mayor gives approval for over 12,600 new homes in Greenwich
The Mayor of London has given his seal of approval for the city's largest single regeneration development in the Greenwich Peninsula which includes over 12,600 new homes. A revised masterplan on the previously disused gasworks will create an entire new district formed of five neighbourhood zones and 12,678 homes on the 80 hectare site. Developers Knight Dragon are already in the process of building a further 2,822 homes on the site, which will bring housing delivery on the Greenwich Peninsula to 15,720. Plans also include 220 serviced apartments, 24,000 square metres of retail use, 60,000 square metres of business use, two new schools and two new hotels. The development will also feature a 40,000 square metre film studio, a visitor attraction and increased green open space including an extension to the existing Central Park. In August, Greenwich council gave outline planning permission for the site, which runs along the River Thames, and the Mayor Boris Johnson has now also given the masterplan the go-ahead. The Greenwich Peninsula site is part of the Mayor's ambitious plans to release surplus public land to boost construction jobs, drive investment and deliver the additional housing to meet a growing population. Of the developable land taken on by the Mayor in 2012 some 99% is now in the development pipeline, while the Greenwich Peninsula is a key element of Johnson's City in the East masterplan, which looks to deliver at least 200,000 homes in east London over the next 20 years. ‘This gigantic site at Greenwich Peninsula has sat dormant for far too long, so I'm pleased that since City Hall took control of this land, we are already beginning to see construction underway. This will not only provide thousands of much-needed new homes for Londoners, but also bring jobs as part of the wider regeneration towards the east of the capital,’ said Johnson. Developers Knight Dragon has 2,882 homes already under construction as part of existing planning permission, of which 1,002 are affordable. The masterplan approved by the Mayor includes 2,928 affordable homes, while a review mechanism has been included in plans, which could deliver an additional 1,572 affordable homes. The affordable housing mix, which will be delivered in all five neighbourhoods in the new district, will be split between social rent and intermediate. Councillor Danny Thorpe, Royal Borough of Greenwich Council member for regeneration and transport explained that the Council has long held a vision to make the most of the huge potential offered by the Greenwich Peninsula. ‘The approval of this planning application makes it one of the most exciting developments in London, bringing huge long term regeneration benefits to the peninsula and cementing it as a new district for London,’ he said. ‘We are particularly proud that, at a time of critical housing shortage, this development will deliver so many affordable homes, of which more than two thirds will be for social rent, at no more than 50% of market rent…. Continue reading
Two sets of figures confirm improvement in sales and prices in Spain
Residential property sales and prices in Spain are rising year on year and more new mortgages are being granted, suggesting the market continues to recover from the economic downturn. The latest figures from the General Council of Notaries show that in September sales increased by 8.7%, house prices rose by 1.7%, and the number of new mortgage loans granted grew by 17.4%. Overall sales stood at 30,328 transactions in September but saes of new homes are not doing well. Indeed, while second hand homes sales increased by 13% year on year, sales of new homes fell by 19.7%. Sales of individual family homes also registered significant growth of 14.7% year on year. The data also shows that the average price per square meter was €1,242, a rise of 1.7% compared to September 2014. Apartments saw prices rise by 2.7% year on year and individual family homes were up 2.3%. A breakdown of the figures shows that new apartments are doing better than existing sales. The average price per square metre of second hand apartments was €1,359, a rise of 2% year on year, while the average price for new apartments was €1,632 euros per square metre, an increase of 13.6% year on year. The Notaires report also says that the home mortgage market in Spain is improving and mirroring the upturn in the real estate sector. The number of new loans approved increased by 17.4% year on year. The average mortgage value was €122,993, a rise of 0.1% compared to September 2014. The statistics also shows that the percentage of home purchases financed through a mortgage was 39.7%, with the average amount of the loan 77.1% of the property value. The latest quarterly data from property registrars confirms the good news. They show that prices increased by 6.6% year on year in the third quarter of 2015, and 2.2% quarter on quarter. It means that prices are now 28.4% below the peak of the market in 2007. The data also shows that sales increased by 6.4% quarter on quarter and 16.6% year on year but they also confirm that new home sales are not doing as well. Quarter on quarter existing homes sales increased by 8.8% while new home sales fell by 2.5%. There has also been an increase in foreign buyers. They bought 13.5% of properties sold in the third quarter compared to 12.8% in the second quarter of 2015. British buyers were the most prolific with 23% of sales to overseas buyers, followed by the French at 8.7%, Germans at 6.4%, Swedes also at 6.4% and Belgians at 5.5%. The number of Russian buyers continue to fall, down to 3.4%. Continue reading
