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Residential property sales in Hong Kong up over 40% month on month in December
Residential property sales in Hong Kong rebounded in December, up 43.1% from the previous month, according to data from the land registry. A total of 2,153 primary residential sales transactions were recorded, more than doubling those in November, while secondary home sales increased 6.4%. The data also shows that in December, over half of new home sales involved three major developments: Capri in Tseung Kwan O, The Bloomsway in Tuen Mun and Yuccie Square in Yuen Long. The latest monthly Hong Kong review report from international real estate firm Knight Frank points out, however, that total residential sales volume for 2015 was still down 12.3% from 2014, with primary sales dropping only 0.2% and secondary sales losing 16.6%. The report suggests that both landlords and buyers held a wait and see attitude amid various uncertainties in both local and external markets. The housing supply target in the coming 10 years was reduced from 480,000 to 460,000 units, according to the Transport and Housing Department, as the projected number of new households during the period was less than previously forecast. ‘With the US interest rate hike and a projected increase in housing supply, home prices are expected to come under pressure this year. We expect luxury home prices to fall up to 5%, while mass residential prices could decrease by 5% to 10%,’ the report says. When it comes to the office market, the report explains that, facilitated by various policies to enhance cross border financial integration, mainland Chinese financial firms expanded rapidly in Hong Kong’s CBD, driving up Grade-A office rents in Central by as much as 13.7% in 2015. In December, for instance, a Mainland firm secured a 14,773 square foot office space in Cheung Kong Center in Central and Kowloon East continued to see robust leasing activity, with many companies relocating from Hong Kong Island and other business districts to the area, attracted by the abundant supply of cost effective new space. The Knight Frank report suggest that in 2016 landlords will face pressure in rental negotiations as they compete for tenants to drive down vacancies. This comes on the back of a year in which the office sales market improved, with the total volume and value of transactions rising 21.7% and 49.6% respectively, driven by increased demand from both investors and owner-occupiers seeking to reduce rental costs. However, the report point out that some Mainland firms which had actively taken up Grade-A office space run into various problems. For example, some delayed renovating the space they had let, while others failed to take up the units at the start of the lease term. There were even cases of firms exiting their Hong Kong business. ‘However, with limited supply in core business areas, we still expect their vacancy rates to remain low and their rents to rise by 5% this year. In decentralised areas, however, rents could drop by up to 5% in 2016,’ the report adds. In the retail… Continue reading
Mortgage lending in UK up 23% year on year, says latest CML data
Gross mortgage lending in the UK reached £19.9 billion in December, some 3% less than the previous month but up 23% year on year. The data from the Council of Mortgage Lenders (CML) brings the estimated total for the year to £220.3 billion, an 8% increase on 2014’s £203.3 billion and the highest annual gross lending figure since 2008. Gross mortgage lending for the fourth quarter of 2015 was therefore an estimated £62.3 billion. This is a 1% increase on the third quarter and a 23% increase on the fourth quarter of 2014. ‘Lending ended the year stronger than it started, with our estimate of nearly £20 billion lent in December. This brings total lending to just over £220 billion for 2015 as a whole, and slightly higher than we had anticipated,’ said CML economist Mohammad Jamei. ‘The low inflation environment, along with real wage growth, an improving labour market and competitive mortgage deals have all helped to underpin demand. Having said this, the upside potential looks limited over the near term, as the supply of existing and new properties on the market remains weak, and affordability pressures weigh on activity,’ he pointed out. ‘There is an added element of uncertainty as we wait to see the impact of tax changes on the buy to let sector,’ he added. John Eastgate, sales and marketing director of OneSavings Bank, believes that the stamp duty tax changes on second properties from April are expected to increase mortgage lending activity ahead of their rollout. ‘However we don’t see this as a long term trend. The end of the year is a difficult time to conclude a great deal. Regulatory changes are expected to cause a short term spike in demand from investors, which will be reflected in first quarter figures, while overall conditions are supportive of sustainable growth in gross mortgage lending,’ he said. ‘Investor demand may balance out after the April rush, but the Help to Buy ISA will help underpin long term first time buyer demand, and the diminishing prospect of an interest rate rise will help keep a lid on monthly mortgage payments. As UK employment hits a record high, all this bodes well for borrowers’ finances and the health of the market,’ he added. The indusry should not be concerned about that dip in December, acdoring to Rishi Passi, chief executive officer of Oblix Capital. 'In the longer term, low inflation and reasonable wage growth look set to improve affordability for first time buyers and those on the bottom rungs of the ladder,' he said. 'Help to Buy will also go some way to fill the void left by any buy to let landlords downsizing their portfolios, so developers with one eye on the future should be preparing future stock to meet this shifting demand,' he added. Continue reading
Buy to let demand keeping UK housing market buoyant say surveyors
The UK housing market saw an unseasonal rise in demand in December with anecdotal evidence suggesting this is due to an increase in buy to let investors. An extra 3% stamp duty levy due to come into force in April which will affect buy to let property and second homes could be behind the lift in demand, says the latest monthly residential report from the Royal Institute of Chartered Surveyors (RICS). It says that demand for properties reached a three month high in December and the month saw the first rise in new instructions since the beginning of 2015 with anecdotal evidence pointing to a jump in buy to let interest leading this demand. Since the Chancellor George Osborne announced the extra stamp duty levy in his Autumn Statement last November some 16% more chartered surveyors reported a rise in new buyer enquiries. ‘The housing market has experienced an unusually buoyant December. Those in the industry have been speculating that this is the result of the Chancellor’s announcement last November,’ said RICS chief economist Simon Rubinsohn. ‘Potential buy to let investors are looking to pick up properties before the increased stamp duty levy comes into force next April. If that is the case, then we can expect to see the housing market heating up further over the next few months,’ he explained. The belief that demand was fuelled by announcements included in the Autumn Statement was further supported by qualitative responses to the survey. ‘December was busier than normal as stamp duty changes have brought buyer back to the market, ahead of April,’ said chartered surveyor Robert Green of Chelsea based estate agent John D Wood & Co. While James McKillop of Knight Frank in London said: ‘The 3% Stamp Duty Land Tax (SDLT) proposal in the Autumn Statement has led to more buyers firming up their intention to buy additional residences in my region before April 01’. The RICS report also says that house prices in London, the South East and East Anglia look set to rise by a further 5% per annum in each of the next five years, compared to a UK average of 4.5%, despite offering the poorest value for money in the UK. Some 62% of respondents said that homes in the South East were either expensive or very expensive given the relative benefits they offered, with 57% of contributors in the capital taking the same view. By way of contrast, 100% of Northern Irish respondents and 92% from the North of England believe that homes in their areas offer fair value for money. A net balance of 50% of respondents reported that UK house prices had risen since November, with East Anglia and the South East of England witnessing the strongest growth. Robert Grigg, managing director of Property Finance at Hampshire Trust Bank, said that the report highlights that 2015 was yet another year in which becoming a home owner was out of reach for many. ‘The government’s Help… Continue reading
