Tag Archives: finance
Rising demand and falling supply boosts recovery of Portuguese property market
Solid demand and falling supply is helping the recovery of the residential property market in Portugal as price rises are seen across all regions. However, new sales instructions have fallen at a time when demand is growing and there has been a modest upturn in rental values, according to the August 2015 RICS/Ci Portuguese Housing Market Survey. The report shows the imbalance between rising buyer enquiries and falling new sales listings continues to underpin a steady increase in house prices. Likewise, in the lettings market, solid tenant demand growth has pushed rents up marginally although a relatively flat trend is still projected in the near term. In the sales market, new buyer demand rose again month on month, with the pace of increase edging up gently relative to the previous month. At the same time, new instructions to sell dropped back modestly for the first time since December 2014. Despite the solid demand backdrop, sales volumes only recorded the most marginal of increases. Nevertheless, going forward, transactions are expected to pick up at a smart pace in the near term. The report explains that with demand outstripping supply, house prices continued to recover across all regions. What’s more, the latest data suggest the rate of house price inflation accelerated across each market during August. Overall, respondents to the survey remain confident that prices will rise further over the next quarter and the next 12 months. Indeed, over the year ahead, contributors forecast national prices will increase by around 3% and on average by roughly 5% per annum over the next five years. Meanwhile, the national confidence indicator, a composite indicator of three month sales and price expectations, rose to +32 from +28 previously, extending its run in positive territory into a twenty second consecutive month. In the lettings market, tenant demand increased sharply alongside a steep fall in new landlord instructions. Consequently, rents inched up again following last month’s marginal increase. Notwithstanding this, rents are expected to hold broadly stable in the near term, although expectations for future lettings market activity strengthened notably. ‘In August, the Algarve benefited from strong demand and price dynamics, showing greater improvement in the results compared to Lisbon and Oporto regions in some Algarve cities, there is already a lack of new houses to sell at a time when demand is expected to remain high,’ said Ricardo Guimarães, director of Ci. According to Simon Rubinsohn, Royal Institution of Chartered Surveyors chief economist, employment growth has been encouraging over the past year, driving an increasingly widespread revival in housing market activity. ‘Nonetheless, the labour market recovery still has a way to go and sustained progress is needed to underpin the residential property sector going forward,’ he added. Continue reading
Spain is top target for commercial real estate investors in Europe, new poll shows
Active commercial real estate investors see Spain as the top investment target in Europe for next year as values are still below peak, new research suggests. This is a sign of the Spanish commercial market’s recovery, with Germany following close and Germany is next on the list, according to a poll of investors carried out by international real estate firm Knight Frank. ‘The fundamental rationale behind investing in Spain is even stronger than this time last year. Prime CBD office rents have risen by 20% over the past 12 months, but remain nearly 40% below the 2008 peak, and both footfall and sales have been increasing in dominant shopping centres for six consecutive quarters,’ said Humphrey White, head of Capital Markets at Knight Frank Spain. At the same time some 25.4% chose Germany as their preferred target and Knight Frank says that the results mirror the buoyant investment activity seen in the country, with a total of €30 billion invested in property during the first half of 2015, an increase of 35% compared to the first half of 2014. According to Joachim von Radecke, head of German Desk at Knight Frank in London, the increase is driven by the rising flow of foreign capital into the country and the 50% increase of domestic investor activity. ‘Foreign investors’ share of the German market continues to grow, and now accounted for almost 60% of all transactions in the first half of 2015. We saw the usual trend towards the big five markets of Berlin, Frankfurt, Munich, Hamburg and Düsseldorf, with 78% of total office transactions recorded in these cities,’ he added. The UK also featured strongly in this year’s poll, attracting 17.4% of the votes, on the back of the continuing recovery which has now extended to the UK regions. ‘The UK is well ahead of the rest of Europe in terms of the property cycle and has already seen significant yield compression,’ said Chris Bell, managing director of Europe at Knight Frank. ‘However, it is encouraging that rental growth is beginning to re-emerge more widely across Europe, helped by the strengthening of occupier demand and the steadily falling availability of good quality space exacerbated by the lack of development over the preceding recessionary years,’ he added. Continue reading
Average rent for newly let properties in England reach new record level
The average rent for a newly let property in England has increased by 3.8% in the last 12 months to £946 per calendar month, according to the latest index figures. In August the month on month average increase was 2.5% the data from one of the UK’s largest letting agents, Countrywide, shows and rent levels have reached their highest level since the index began. Annual growth in rent for new let properties was recorded in all regions except central London. The South West saw an increase of 7% and the Midlands and increase of 6.3%, the highest growth year on year. Overall some 45% of tenants renewing their tenancies had rent increases in August, the highest since the index began and in London and the South East more than half of tenants renewing faced higher rents, according to the analysis. The report explains that rents have been growing throughout 2015, driven by a lack of homes available to rent and high levels of tenant demand. The total number of homes advertised to let was down 8% in August compared to last year, whereas the number of registered applicants was up 4%. With fewer options available for tenants looking to move, those choosing to renew their tenancy are more likely to see their rent increase. However, they are still better off compared to those moving home. The average increase in rent of 2.5% for a renewing tenancy is still less than the annual increase in rent for newly let homes, the report points out. It also explained that rental growth remains well above CPI inflation, which slipped back to zero this month. The South West and Midlands saw rents rise faster than anywhere else in the country with growth of 7% and 6.3% respectively. Growth in newly let rents was seen in all regions except in Central London where rents decreased 1.4% year on year. Greater London, although still growing, has seen its rate of growth in rent halve since the start of the year. The South West has seen the highest rental growth in the UK since the start of the year. ‘Falling numbers of homes available to rent and increasing demand from tenants have been the defining features of rental market so far in 2015. Competition for rented homes has intensified and led to accelerating rent growth,’ said Johnny Morris, research director at Countrywide. Indeed, there are now nine tenants are registered for every home available to rent, up from 7.5 in August last year. ‘With pressure on rents and increased competition for homes on the market, the proportion of renewing tenancies seeing an increase in rent has grown. Faced with the choice of staying put or moving in a market with more competition and increasing rents, more tenants are choosing to accept a smaller increase in rent to extend their existing tenancy,’ Morris explained. ‘Rental price growth in the South of England, outside of London is being fuelled by an… Continue reading
