Tag Archives: european
British buyers returning to French property market
There is a renewed optimism in France’s residential property market which has led to a significant upturn in sales, according to a new analysis report. A new analysis points out that a more stable economic outlook in the country, which is still popular with overseas buyers, has filtered through into buyer sentiment. The latest data from international real estate firm Knight Frank shows that sales in France doubled between 2014 and 2015, whilst enquiries from prospective buyers increased 87% year on year. It also points out that the figures from the Notaires de France, backs this up, with the most up to date statistics showing sales across the country have increased by 12.5% year on year. The analysis also points out that with favourable mortgage rates of around 2.3%, prices stabilising in most prime markets and the euro weak against both the pound and the US dollar, buyer confidence has strengthened. But this confidence is price dependent. Sales volumes are strongest within the €1 million to €5 million price bracket but transactions above €5 million are slow. According to Mark Harvey, head of Knight Frank’s French department, two indicators underline the extent to which the market has shifted in the last two to three years. Firstly, the performance and convergence of France’s prime prices and secondly excess supply is being absorbed. ‘Not only have prices reached their floor in the majority of France’s key second home markets, but all of our five regions saw prices shift within a range of only 5%five percentage points. For several years we saw a marked disparity between France’s strongest and weakest markets, this has now all but disappeared,’ he said. ‘The excess supply that was evident for several years in areas such as Gascony and Provence has now largely been absorbed back into the market. Add to this the slow recovery in house building it is possible that when prices start to pick up they could do so relatively quickly due to limited stock levels,’ he explained. Another key factor for the recovery of France’s property market is that British buyers are back. The British own more second homes in France at 69,000 than in any other European country. ‘Given the lifestyle on offer, France’s proximity and the currency advantage in recent years it is perhaps no surprise that the British are active once more and represent a key source of demand in all of our markets,’ said Harvey. He also pointed out that equipped with a strong dollar, American buyers are also increasing in number, particularly in Paris and parts of Gascony, whilst Evian continues to be in favour with high net worth buyers from the Middle East, drawn to its lakeside living and easy access to The Alps. Demand from domestic buyers has also strengthened. ‘Faced with lower purchasing power abroad, a more positive political sentiment, cheap finance and good value, particularly in Paris, French buyers are seeking a slice of their capital’s real estate,’ Harvey explained. ‘Across France interest… Continue reading
Investment in European commercial property up by 25% in 2015 year on year
A total of €64.5 billion was invested in European commercial property in the final quarter of 2015, which took volumes for the full year to €238.5 billion, a 25% increase on 2014. However, the fourth quarter total was only slightly up, by 0.5%, on the same quarter of 2014, indicating that investment growth lost a little momentum towards the end of the year, according to the latest European quarterly commercial property outlook report from Knight Frank. However, it shows that increases in investment activity were widespread in 2015, with the core markets of the UK, Germany and France all seeing transactions rise by more than 20%. Among peripheral markets, investment volumes grew particularly strongly in Italy and Portugal, both fuelled by surging demand from international investors. The strength of investor demand kept European prime yields under downward pressure throughout 2015, although the pace of yield compression slowed in the final quarter. Also, the European weighted average prime office yield came down by four basis points in the final three months of 2015 to an all-time low of 4.79%, largely on the back of yield compression in Amsterdam, Berlin, Brussels, Copenhagen and Lisbon. The report points out that with large amounts of capital continuing to target European property, strong investment activity is expected to continue in 2016. However, the exceptional growth in transaction volumes seen in 2015 is unlikely to be repeated. Knight Frank’s forecast is that European investment in 2016 will be broadly in line with 2015 volumes. Many of the factors that supported the investment market in 2015, including the stabilising Eurozone economy, low interest rates and wide yield spreads to other asset types look set to remain favourable to property investors throughout 2016, the report says. The report also points out that Eurozone GDP growth is forecast to improve modestly to around 1.7%, following an increase of 1.5% in 2015. The European Central Bank has indicated that it may be prepared to make further interest rate cuts to support economic growth at a time when its main refinancing rate is currently 0.05% and the deposit rate is already in negative territory at -0.3%. Supported by the stabilisation of the Eurozone economy, European occupier market activity improved healthily in 2015. On an annual basis, aggregate take-up in the major markets monitored by Knight Frank rose by 10%. This was despite falling take-up in Europe’s two largest markets, London and Paris, and was driven by the strong performance of German, Iberian and CEE markets. Prime rents remained stable in the majority of European markets in the fourth quarter but the Knight Frank European Prime Office Rental Index rose by 0.9%, driven by increases in Dublin, Frankfurt, London (City), Madrid and Stockholm. The report suggests that rental growth may spread to a wider range of cities in 2016 with Paris, for example, expected to see prime office rents increase following more than two years of stability. Continue reading
UK home lending was broadly flat in January, latest CML data shows
Home buying lending in the UK was flat in January but remortgaging activity was boosted by a plethora of low deals, the latest published figures suggest. The data from the Council of Mortgage Lenders, now available on an unadjusted basis for the first time, gives a more complete picture as it makes it easier to spot underlying trends, according to Paul Smee, CML director general. He explained that while the unadjusted data appears to show large falls month on month, stripping out the usual January lull gives a different picture. ‘We see a general picture of flat house purchase lending but a significant uptick in remortgage activity as borrowers continue to seek attractive new deals despite the lower for longer expectations for interest rates,’ Smee said. On an unadjusted basis, the figures shows that home owners borrowed £8.4 billion for house purchase, down 25% month on month but up 12% year on year. They took out 46,200 loans, down 27% on December but up 5% on January 2015. First time buyers borrowed £3.3 billion in January, down 27% on December but up 14% on January last year. This totalled 21,400 loans, down 28% month on month but up 6% year on year. Home movers borrowed £5.1 billion, down 24% on December but up 11% compared to a year ago. This totalled 24,800 loans, down 26% month on month but up 3% on January 2015. Home owner remortgagors borrowed £5.8 billion, up 35% on December and 32% compared to a year ago. This totalled 33,100 loans, up 28% month on month and 19% compared to a year ago. Landlords borrowed £3.7 billion in January, up 9% month on month and 42% year on year. This came to 23,100 loans in total, of which 13,400 were for remortgage, up 3% compared to December and up 31% compared to January 2015. Peter Rollings, chief executive officer of Marsh & Parsons, pointed out that with interest rate rises postponed into next year or beyond, remortgaging activity is going from strength to strength, reaching its highest monthly level for seven years. ‘Landlords are in more of a hurry, and don’t have long left to snap up investment properties before being struck with more debilitating stamp duty. As a result, this storming growth in buy to let borrowing is likely to be short lived, and be balanced out by a more sedate second quarter of the year,’ he said. ‘But Government support schemes have proved a tonic for first time buyers, and this is likely to provide good vitals throughout 2016 as a whole. Existing home owners should be feeling revived too, as house prices show healthy improvements, triggering many to make the plunge and start trading up. It’s supply of homes on the property market that is the fly in the ointment currently, and is the biggest threat to quashing this confidence,’ he added. David Whittaker, managing director of Mortgages for Businesses, explained that in the… Continue reading
