Tag Archives: europe
Weekly rents across Australian capital cities down by 0.4% in June
Weekly rents in capital cities in Australia fell by 0.4% in June and annually they are now 0.6% lower, the latest rented property index shows. However, while a majority of capitals saw a drop in rental rates over the month, on an annual basis, half of Australia’s capital cities actually recorded a rise in rents. These included Sydney up 0.4%, Melbourne up 1.7%, Hobart up 4.6% and Canberra up 1.9%. This takes the combined capital city rental rates to $487 a week for houses and $469 a week for units, the data from the CoreLogic June Rent Review report shows. According to CoreLogic research analyst Cameron Kusher, the large rental falls in Perth of 8.6% and Darwin at 16.2% have pulled the combined capital average lower, with rents also down by 0.3% in Brisbane and by 0.4% in Adelaide. ‘It is anticipated that the weakness in the rental market will persist and where on an annual basis, we will see rents fall even further over coming months,’ he said. At a combined capital city level, gross rental yields were recorded at 3.2% for houses in June 2016 and at 4.1% for units, each of which are sitting at record low levels. ‘A year ago, gross rental yields were recorded at 3.5% for houses and 4.4% for units across the combined capitals, indicating a fairly sharp compression of yields over the year,’ Kusher pointed out. ‘It’s also likely that we’ll see yields compress further over the coming months. However, this will be dependent on growth in home values as well as the direction of rental rates. As a result, capital growth, which has slowed from its peak, will continue to be a much more important factor for property investors than rental returns,’ he added. He explained that changes to rental market may have repercussions for older stock, particularly units as tenants look to move into newer dwellings and making it harder for owners of older units with fewer amenities to compete with better located and facilitated new unit stock, particularly if there is little pricing differential. The factors forcing rental rates lower include the lowest wages growth on record, relatively high levels of housing investment following record highs recently, historically high levels of new construction, most of which are units which are more than twice as likely to be rented, and the slowing of population growth which creates less overall demand for housing. ‘The combination of all these factors means that landlords have little scope to increase rents. There are reports that some landlords are having to reduce rents in certain areas in order to maintain their renters,’ Kusher added. Continue reading
UK property prices record surprise 1.3% rise in June
Property prices in the UK increased by 1.3% in June but the underlying pace of growth is slowing with year on year prices down to 8.4% from 9.2% in May, the lowest since July 2015. This takes the average price to £216,823 and the data from the Halifax house price index also shows that quarterly growth was 1.2%, also down, compared to 1.5% the previous month and the lowest since December 2014. ‘House prices continue to increase, albeit at a slower rate, but this precedes the European Union referendum result, therefore it is far too early to determine any impact since,’ said Martin Ellis, Halifax housing economist. He pointed out that the month on month changes can be erratic and the quarter on quarter change is a more reliable indicator of the underlying trend. The figures show that despite Brexit the UK housing market is fundamentally strong, according to Russell Quirk, chief executive of eMoov. ‘With a continuing, acute shortage of new housing being built and a growing population even if immigration numbers are now curtailed, the demand and supply imbalance and the prospect of even low interest rates will underpin the market,’ he said. David Cheetham, market analyst and FX broker at XTB, pointed out that the month on month rise could be regarded as unexpected following an increase of just 0.6% the previous month. ‘The rise is somewhat surprising considering the impact on house building shares and property funds that has been seen following Britain's decision to leave the EU last month,’ he explained. ‘The worst hit shares in the FTSE100, in both the immediate aftermath and days that followed the Brexit were in the building sector with the majority of observers forecasting the decision to be negative for UK house prices. So far this week numerous asset managers have taken the steps of suspending trading in their property funds as withdrawals have surged amongst jittery investors,’ he pointed out. Sales should start to pick up in the coming months, according to Rob Weaver, director of investments at property crowdfunding platform Property Partner. ‘The fundamentals in the housing market remain unchanged. People still need a roof over their heads. There’s been a stand-off between sellers and buyers with transactions dropping off since the stampede in March to beat the stamp duty deadline. But sales should start to pick up in coming months with the weight of uncertainty now partially lifted,’ he said. ‘While people clearly delayed house purchases in the lead-up to the referendum, that backlog in transactions should unwind through the second half of the year. Life decisions like moving house can’t be put on hold forever. During periods of volatility in the stock and currency markets, investors tend to prefer assets which can provide a reliable income, combined with lower risk to preserve their wealth. For investors, residential property offers both of these attributes,’ he pointed out. ‘Historically, residential property has been the best performing… Continue reading
UK residential tenants out of pocket from unexpected rental costs
Tenants in the UK are being caught out by unexpected costs not covered by their landlord, for example boiler repairs, flood damage, and property maintenance, new research shows. Some 14% are facing unexpected costs of £165.41 per person on average each year with 70% of them not agreeing with the reasons for the charges given by their landlords, the study from insurance providers Endsleigh shows. The study also shows that 47% were not expecting yearly rises in rent, worsened by a high confusion of the possible effects of the recent 3% surcharge on stamp duty. It found that 45% of tenants are unaware of what is their responsibility when it comes to tenancy agreements, driving apart expectations between landlords and tenants across the country. The study also sheds lights on the current relationship between tenants and landlords. Despite possible grievances, some 83% of tenants surveyed said they were happy with their current landlord, while 41% of landlords say they would unreservedly go an extra mile to keep their tenants happy. Unknowingly to tenants, some 28% of landlords say they would absorb the cost of rental increases to keep reliable tenants in their property for a longer period. ‘Although the research could paint a picture of discontent in the worlds of both landlords and tenants, the positives far outweigh the worries. Noticing the number of landlords surveyed willing to go the extra mile for their tenants is reassuring to say the least, highlighting the fact that they are valued, and listened to,’ said David Hadden, head of property at Endsleigh Insurance. ‘Inevitably, costs will continue to be held high on the tenants’ agenda, and though unexpected charges may occur in some cases, hearing that almost a third of landlords will absorb these is very encouraging,’ he added. Continue reading
