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Latest real estate data shows how new mortgage cap is affecting Dubai
The villa market in Dubai is slowing at a quicker pace than apartments, leaving prices 4.3% down on a year ago in the first quarter of 2015, new research shows. Overall property prices in the emirate fell by 0.3% in the third quarter of 2014 and by 0.5% in the final quarter, leaving the total increase in average prices last year at 3.4%, considerably down on the record 51% rise recorded in 2103. The data from the latest residential market outlook report from Cluttons also shows that villa values fell 1.2% in the third quarter of 2014, then 0.9% in the fourth quarter and 1.5% in the first quarter of 2015. The analysis in the report suggests that the Federal Mortgage Cap that was introduced just over a year ago to cool the market is now having an effect. ‘The impact on the villa market has been particularly pronounced,’ the report says. It has also affected sales. The data shows that during 2014 just 1,300 villas were sold, down 52% on 2013 and the number of transactions in the first three months of 2015 was down 36% on the same quarter in 2014. The mortgage cap means that the deposit needed for the purchase of an AED5.5 million villa has increased from 20% to 42% and a growth in rents over the last 18 months means those looking to buy face a challenge saving for a deposit. The report says that a strengthening supply line means that villa prices are likely to fall further. ‘During 2015 alone we expect a further 4,000 villas to be delivered to the market, followed by 6,000 in 2016 and an additional 3.700 in 2017,’ the report says. ‘The step change in the rate of villa deliveries will be met with a financing landscape that is vastly different to when some of these schemes were conceived. The secondary market in particular will be hardest hit by the rising supply,’ it adds. The report also points out that villa sellers in the secondary market are now very much on the back foot and there are substantive price declines due to a rise in distressed sellers. ‘While villa prices are expected to continue slipping by 2% to 4% per quarter over the second half of the year, apartments, which have shown more resilience, are also expected to weaken by between 0.5% and 1% each quarter this year,’ the report explains. ‘Despite this sluggish outlook, demand is expected to remain very stable in the medium to long term, particularly as the government continues to drive economic diversification, which will fuel job creation,’ it adds. The residential rental market has also continued to soften. In the fourth quarter of 2014 rents fell by 1.9%, leaving the total rental value growth last year at a marginal 0.4%. But the report points out that this has been negated by a 0.4% dip in average rents during the first quarter of 2015 which leaves rents 1.5% lower… Continue reading
Charity claims rogue landlords are responsible for 740,000 unsafe homes in England
Rogue landlords in England are raking in £5.6 billion a year for 740,000 unsafe rented homes that fail to meet legal standards, a new study has found. These privately rented homes present a severe threat to tenants' health, according to the report from the Citizens Advice Bureau (CAB) with a host of dangers such as severe damp, rat infestations and the risk of explosions. Overall the study reports that 16% of privately rented homes are physically unsafe, far higher than the 6% in the social rented market, some 8% of privately rented homes have serious damp, 10% pose a risk of a dangerous fall and 6% are excessively cold. ‘Rogue landlords are putting profits before safety. With a growing private rental sector, increasing numbers of people are falling prey to landlords who fail to meet decent standards,’ said Gillian Guy, CAB chief executive. ‘The Government has rightly said it wants to tackle the country’s housing crisis and it must make targeting dodgy landlords, giving tenants better rights and driving up standards a major part of that effort,’ she added. With the cost of buying property rising steeply in many parts of the country, couples with children are now the most common household type in the private rental market and CAB says private renters are woefully under protected and have to navigate through numerous pieces of complex legislation to seek legal redress from landlords. It says that taking court action against a landlord can be long, complicated and expensive. This is compounded by the fact many complaints have to be made to local authorities, which often do not have the capacity to act quickly. The charity recommends that tenants should be entitled to rent refunds where properties are dangerous or not fit to live in and is calling for a national landlord register to be set up as this could help ensure landlords operating illegally cannot move to different areas to avoid legal action. It also says that councils should also set up local licensing to tackle specific issues in their private rental markets as this could help to ensure landlords are providing the quality of housing and service the area needs and ensure tenants know what they can expect from a good landlord. However, Richard Lambert, chief executive officer at the National Landlords Association, criticised the report as unfair to the vast majority of landlords. ‘We recognise that bad practice exists in private housing, that it can have a devastating effect on those it affects, and that it needs to be stamped out. But this report uses loose definitions to compound a perception that private housing is insecure and unsuitable across the board, and it ignores the weight of evidence to the contrary,’ he said. ‘The English Housing Survey finds that the average tenancy now lasts just shy of four years, and that only 7% of tenancies are ended by landlords. Our own research shows that 86% of families consider their properties as their home… Continue reading
US existing home sales fell in April, latest NAR data shows
Despite properties in the United States typically selling faster than at any time since July 2013, existing home sales slowed in April, the latest data shows. But sales remained above an annual sales pace of five million for the second straight month, according to the report from the National Association of Realtors. The data report also shows that median existing home prices for all housing types in April was $219,400, which is 8.9% above April 2014, the 38th consecutive month of year on year price gains and is the largest since January 2014 when it was 10.1%. All major regions except for the Midwest experienced sales declines in April with completed transactions that include single family homes, town homes, condominiums and co–ops, falling 3.3% to a seasonally adjusted annual rate of 5.04 million in April from an upwardly revised 5.21 million in March Despite the monthly decline, sales have increased year on year for seven consecutive months and are still 6.1% above a year ago and NAR chief economist Lawrence Yun said that sales April's setback was the result of lagging supply relative to demand and the upward pressure it's putting on prices. ‘However, the overall data and feedback we're hearing from realtors continues to point to elevated levels of buying interest compared to a year ago. With low interest rates and job growth, more buyers will be encouraged to enter the market unless prices accelerate even higher in relation to incomes,’ he added. A regional breakdown of the figures shows that in April existing home sales in the Northeast declined 3.1% but are 1.6%. The median price in the Northeast was $253,200, which is 3.6% higher than April 2014. In the Midwest, existing home sales increased 1.7% and are 13% above April 2014. The median price in the Midwest was $173,700, up 11.4% from a year ago. Existing home sales in the South declined 6.8% but are still 3.6% above April 2014. The median price in the South was $189,400, up 8.5% from a year ago. In the West existing home sales decreased 1.7% but are still 6.4% above a year ago. The median price in the West was $318,700, which is 10% above April 2014. Total housing inventory at the end of April increased 10% to 2.21 million existing homes available for sale, but is still 0.9% below a year ago while unsold inventory is at a 5.3 month supply at the current sales pace, up from 4.6 months in March. With demand far exceeding supply, properties sold in April faster, at 39 days, than at any time since July 2013 when it was 42 days and the second shortest time since it was 37 days in June 2013. Short sales were on the market the longest at a median of 180 days in April, while foreclosures sold in 50 days and non–distressed homes took 38 days. Some 46% of homes sold in April were on the market for less than a month. ‘Housing inventory declined… Continue reading
