Tag Archives: crisis
US pending homes sales fall month on month after record breaking 2015
Pending home sales in the United States fell by 2.5% in the first month of 2016 following the highest average year in nearly a decade, the latest index shows. On the South saw sales rise, but sales are still 1.4% higher than they were a year ago, according to the forward looking index from the National Association of Realtors. Although the index has increased year on year for 17 consecutive months, last month’s annual gain was the second smallest and NAR chief economist Lawrence Yun said that a myriad of reasons have contributed to the drop in January. ‘While January’s blizzard possibly caused some of the pullback in the Northeast, the recent acceleration in home prices and minimal inventory throughout the country appears to be the primary obstacle holding back would be buyers. Additionally, some buyers could be waiting for a hike in listings come spring time,’ he explained. Existing home sales increased last month and were considerably higher than the start of 2015, but price growth quickened to 8.2%, the largest annual gain since April 2015 when it was 8.5%. While the hope is that appreciating home values will start to entice more homeowners to sell, Yun said that supply and affordability conditions won’t meaningfully improve until home builders start ramping up production, especially of homes at lower price points. ‘First time buyers in high demand areas continue to encounter instances where their offer is trumped by cash buyers and investors. Without a much needed boost in new and existing homes for sale in their price range, their path to home ownership will remain an uphill climb,’ Yun pointed out. Existing homes sales this year are forecast to be around 5.38 million, an increase of 2.5% from 2015. The national median existing home price for all of this year is expected to increase between 4% and 5%. In 2015 existing home sales increased 6.3% and prices rose 6.8%. A breakdown of the figures show that the index in the Northeast declined 3.2% but is still 10.9% above a year ago. In the Midwest the index fell 4.9% but is still 1.4% above January 2015. Pending home sales in the South inched up 0.3% but remain 1.3% lower than last January. The index in the West decreased 4.5% but is still 0.4% above a year ago. Continue reading
Commercial property rents in London saw average growth of 8.5% in 2015
Growth in commercial property rents across London fuelled average total return of 18.1% from investments in the capital during 2015, new research shows. The London markets analysis report by Levy Real Estate and MSCI examined more than £30 billion of assets across 20 key submarkets and found that rental growth increased year on year from 7.8% in 2014 to an average uplift of 8.5% last year. The strongest rental growth was registered by the Camden/King’s Cross submarket where the continued success of the King’s Cross Central development saw the prevailing level of rents grow on average by 17%. High occupier demand and a lack of space in other submarkets is also driving rents, the report says, adding that Mayfair, for example, where the continued conversion of office property to residential has limited the supply of new space saw rental growth of 11.9% last year. ‘The latest research shows a market which still has significant momentum. Returns are now increasingly being driven by a growth in rents and this suggests that London’s commercial property investment sector can expect further sustainable growth in values,’ said Levy Real Estate Investment Partner, Simon Heilpern The progressive rents in and around King’s Cross also meant that the Camden/King’s Cross showed the highest total return for a single submarket of 27.3%. It was followed in the total return rankings by the Eastern Fringe at 24.7% and Marylebone and Euston at 23.1%. Overall, Mayfair retained its position as the submarket with the most keenly valued property: the average equivalent yield for its property was just 3.7%. The area has also seen a continued conversion of office property to residential which has contributed to an upward shift in rents, the report points out. The biggest inward yield shift during 2015 was in the Western Fringe locations of Clerkenwell, Smithfield and Farringdon where average equivalent yields moved in 80 basis points to 5.2%. However, the general picture is a slowing down in yield shift which illustrates the growing importance of rental growth. ‘The London investment market had another good year in 2015, with strong returns on the back of healthy rental value growth across the commercial property market. As in 2014, fringe markets outperformed last year with locations such as Camden/King’s Cross and the Eastern Fringe remaining attractive to both occupiers and investors,’ said Colm Lauder, MSCI vice president. ‘Pricing in the London market also strengthened further during the course of 2015, but the rate of yield compression has slowed as key market locations begin to reach record yield levels which question price fundamentals,’ he explained. ‘This has resulted in rental growth taking over as the main performance driver, as confident, and expansionary, businesses compete for space,’ he added. Continue reading
Homes in commuter locations in Peterborough and Milton Keynes sell fastest in UK
Properties in Peterborough and Milton Keynes are selling faster than anywhere else in the UK, taking a median average of just 13 days for a sale to be agreed, new research shows. A key factor is that both towns are considered an easy commute to London, as home buyers and property investors alike look to move out of the capital in search of better value, according to the research by Home.co.uk. Bristol is another area where property sells fast with city having five out of the top 10 postal districts in the firm’s property hotspot list of fastest selling location outside of Greater London. This includes the BS2 postcode area, which is next to the city centre's university, suggesting that the buy to let market for student accommodation is a strong motivator for buyers in Bristol. The continued interest in investing in student accommodation is also a factor in the Woodley area of Reading being named another property hotspot. In this area of the city, which is close to Reading University, it takes just 15 days to sell, in terms of the median average. Suburban Glasgow is another property hotspot. Clarkston and Giffnock, which are both affluent areas to the south of the city centre, take two top 10 spots in terms of median average time to sell outside of Greater London. Greater London's property hotspots are also dominated by suburban areas, showing heightened interest in commuter belt homes, the research report says. But while 10 areas outside of Greater London have a median average time to sell of 15 days or less, just two areas of the capital, Uxbridge and Sidcup, have such a quick turnaround. This research shows that properties in the UB7 area of Uxbridge, near to Heathrow Airport, and the DA15 area of Sidcup take only 15 days to sell. Sidcup takes one further Greater London top ten property hotspot place, with nearby Dartford claiming two places and Bexley, which is also near to Sidcup, another spot. The remaining top 10 places also show how popular such commuter belt districts are. Sutton has two postal code areas ranked among this elite group, while Romford and Kingston-upon-Thames claim the remaining places in terms of median average time on the market. ‘Our figures show that the really hot areas in the current property boom are now outside of the M25. These top sellers' markets are typically well to do districts where already premium prices are going through the roof, as buyers compete for the very limited supply of properties for sale,’ said Doug Shephard, the firm’s director. Continue reading
