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Rents, sales and prices record moderate falls in Dubai in first quarter of 2016
The Dubai residential real estate market is experiencing moderate declines in rents and sales prices and transaction volumes are also down, according to the latest UAE property review. The analysis report from Asteco suggests that a focus on affordability is becoming more prominent in the emirate’s real estate market. Whilst no significant rent reductions were recorded during the first quarter of the year this may have been due to limited supply and the general trend continued to be towards increased competition amongst landlords. Leasing demand was stable in the first two months of 2016, however, a slowdown was recorded from March onwards, especially for more expensive properties where take-up was slower than usual. On average, rental rates stabilised in the affordable segment, and declined by 2% and 3% for mid and high end apartments, respectively. Asteco says that this minimal decrease was due to a combination of landlords trying to retain tenants rather than insisting on higher renewal rates, a decrease in the number of newcomers to the city, and in some sectors, housing allowance cuts and redundancies. Compared to the previous quarter, sales prices remained stable, with the exception of high end apartments and villas where 2% average declines for both markets were recorded. However, according to the Dubai Land Department (DLD), the first quarter of 2016 was considerably worse than the first quarter of 2015 as the overall residential transactions by total value were down by 25%, transaction numbers by 17% and the average sales price by 11%. Leasing activity at the beginning of the year started well, however, enquiry and transaction levels tapered off in March. The report suggests this was partially due to property owners keen to retain their existing tenants, and therefore willing to negotiate rental rates instead of having a property vacant. As a result, fewer tenants were seeking to move to a new unit. Asteco also noted a tendency for the more expensive units in buildings to remain vacant for longer, as tenants became more conscious of their spending habits. Whilst declines were limited over the quarter, year on year comparisons indicated an average of a 4% decline across the board. The most affected areas were those that had seen previous rapid rental increases for a relatively undifferentiated product. For instance, Jumeirah Lake Towers recorded a 12% decline year on year. ‘Indeed, whilst the community is attractive overall, the quality of most residential towers are below the tenant’s expectations considering the high rental levels. We have noted an increase in demand for affordable units. However, rental rates have not fallen far enough to warrant tenants to relocate from the Northern Emirates to Dubai yet,’ the report points out. ‘This is further compounded by the fact that for a similar priced product in the Northern Emirates would equate to a much smaller unit in Dubai. For instance, AED60,000 would mean a two bedroom unit in Sharjah as opposed to a studio or a small… Continue reading
New homes sales in Australia bounced back in March after a decline the previous month
Total new home sales in Australia bounced back in March with growth of 8.9% following February’s sharp decline of 5.3%, the latest housing data shows. Sales of detached houses increased by 7% and sales of multi-units were up 16.3%, according to the new home sales report from the Housing Industry Association which covers the country’s largest volume builders. The data also shows that new home sales increased by 2.8% in the first quarter of the year but were 1.7% lower than the same quarter in 2015. It is another positive update for the residential construction sector, according to HIA economist Diwa Hopkins and she pointed out that the bounce in March has moderated the downward trend that emerged in the second half of 2015. ‘The current level and trajectory of new home sales and approvals provides a strong signal that new home building activity in 2016 will remain strong,’ she added. She also pointed out that a cut to the official cash rate will also provide additional support to the residential construction sector. A breakdown of the figures show that detached house sales increased in four of the five mainland states, up 13.2% in Queensland, up 9.8% in Western Australia, up 8.3% in New South Wales , up 2.8% in Victoria but down 6.9% in South Australia . Quarter on quarter detached house sales were up 11.2% in Victoria, up 5.8% in Western Australia and up 4.3% in Queensland. Sales declined over this period by 4% in New South Wales and down 5.7% in South Australia. Meanwhile, in an encouraging update for the new home building industry, data from the Australian Bureau of Statistics (ABS) shows that a total of 19,371 homes were approved for construction in March this year, some 3.7% more than in February. Approvals rose for both multi-unit and detached homes, increasing by 2.4% and 5.1% respectively. Hopkins pointed out that despite the increase during March, the broader trend in approvals is that of decline from the record levels during the middle of last year. During the March 2016 quarter, the number of approvals was lower than in the previous quarter, by 1.6% and also 8.8% lower than 12 months previously. The HIA expects that the number of new homes commencing construction during 2016 to remain very strong at around 200,000, albeit less than 2015’s record of 220,000. A breakdown of the figures shows that during March total seasonally adjusted new home building approvals saw the largest increase in South Australia with a rise of 8.7%, were up 7.3% in Western Australia, up 6.9% in New South Wales, up 5.7% in Queensland and up 3.7% in Victoria but fell by 18.7% in Tasmania. In trend terms, approvals saw a 19% increase in the Australian Capital Territory and an 18.4% fall in the Northern Territory. Continue reading
Over a third of UK landlords experience problems with tenants abandoning their property
Some 36% of landlords in the UK have had property abandoned by tenants before, according to new figures from the largest landlord association. Abandonment occurs when a tenant moves out of a property before the tenancy has ended, without informing their landlord. The issue can be costly as it often occurs when outstanding rent is owed. However, the tenant still has a legal right to return and take up residence at any time and it is a criminal offence for landlords to do anything to prevent the continuation of the tenancy. The only option for a landlord is to go through the legal process for regaining possession of an abandoned property which can take months. While on average a third of landlords have had property abandoned before, more landlords in the North East of England have experienced the problem than anywhere else across the UK, with 58% having had a property abandoned. Some 51% of landlords in the North have also experienced the issue. At the other end of the scale, 31% of landlords in the South West of England said they have had a property abandoned before, the lowest proportion across the UK, with 33% of London landlords having had to deal with the problem. The figures are released as the Housing and Planning Act which contains measures to tackle the problem recently received Royal Ascent. ‘The process of recovering an abandoned property is too long, frustrating, and costly for landlords at the moment,’ said Richard Lambert, chief executive officer of the National Landlords Association. ‘Many people will be shocked by just how common this problem is, and landlords will be relieved to know that the Housing and Planning Act will create a new process to deal with the issue, giving them far greater security and peace of mind when recovering properties they believe to have been abandoned,’ he added. The Housing and Planning Act also contains proposals to allow local councils to keep hold of the proceeds they make when carrying out landlord prosecutions as well as introducing stiffer civil penalties and banning orders for landlords found breaking the law. ‘We’ve long argued that councils should be able to hold on to the money they make when carrying out landlord prosecutions as this better enables them to implement long term enforcement strategies to tackle the rogues,’ Lambert explained. ‘The Government missed the chance to apply these changes in the Queen Speech, but we hope they waste no further time in giving councils these important powers,’ he added. Richard Blanco, who had a property in Tottenham, London, abandoned a few years ago, said that one morning he received a call from a concerned neighbour saying the door to the property had been left wide open. ‘It turns out that my tenant just upped and left without any warning, taking his dog with him,’ he added. As it is a criminal offence to end a tenancy without going through the proper legal motions, he… Continue reading
