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Prime property market in Dubai sees sales fall
Dubai luxury home prices remain relatively resilient despite a drop-off in sales activity, according to the latest analysis of the Emirate’s residential real estate market. Sales in Dubai’s prime segment, comprising properties worth over AED10 million, hit the lowest level since the end of 2012 in the final three months of 2014, the research document from international real estate firm Knight Frank shows. Despite this however, Knight Frank’s prime residential price index saw a relatively modest fall in the three months to December of 1.2% quarter on quarter, the second consecutive quarterly fall. Indeed an examination of the data shows that these two declines nearly reversed the increases seen in the first half of last year, leaving values just 0.3% higher year on year in the fourth quarter of 2014. Despite the lower level of transactional activity however, the nationalities investing in real estate in Dubai remained diverse. Data from the Dubai Land Department (DLD) shows that, in 2014, more than 140 nationalities bought property in the Emirate. A breakdown of the figures shows that Indians remained the top foreign property investors, spending around AED18.1 billion, while the British and Pakistanis invested AED9.3 billion and AED7.6 billion, respectively. Overall though, the Emiratis spending AED 22.8 billion were the leading real estate investors, accounting for approximately 21% of the total spent last year. Between 2013 and 2014 Indians and Saudis increased their levels of real estate investment in Dubai while the British and Pakistanis, as well as the aggregate of the remaining GCC countries, spent 1% to 12% less. The total level of real estate investment from all other countries also fell in 2014, by almost 5% year on year. An assessment of web traffic to KnightFrank.ae’s website shows that around 44% of the total viewings in 2014 originated from the UAE. But the report points out that a significant proportion of these will have been expats. What’s more, another 18% of those clicking through to Knight Frank’s UAE website were doing so from the UK, while 7% were from India and 4% from the United States. As a proportion of the total, the level of web traffic from Russia also fell year on year in 2014 however, this did not come as a surprise since the rouble has nearly halved against the US dollar, to which the UAE dirham is pegged, since July, making it significantly more expensive for this nationality to buy property in Dubai. Finally, the strengthening of the US dollar and the weakness of the euro also means that demand from European buyers has also begun to wane, in turn adding further downward pressure on residential property prices in Dubai. Continue reading
US home prices growing at fastest rate for a year
Existing home sales increased modestly in the United States last month but prices are growing at their fastest pace for a year, the latest index data shows. Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, rose 1.25% in February and are 4.7% higher than a year ago and above year on year totals for the fifth consecutive month. The data from the National Association of Realtors also shows that the median existing home price for all housing types in February was $202,600, some 7.5% above February 2014. This marks the 36th consecutive month of year on year price gains and the largest since last February when it was 8.8%. According to Lawrence Yun, NAR chief economist, although February sales showed modest improvement, there’s been some stagnation in the market in recent months. ‘Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels,’ he said. ‘Stronger price growth is a boon for home owners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before rates rise. Severe below freezing winter weather likely had an impact on sales as more moderate activity was observed in the Northeast and Midwest compared to other regions of the country,’ Yun explained. The data shows that total housing inventory at the end of February increased 1.6% but remains 0.5% below a year ago. For the second month in a row unsold inventory is at a 4.6 month supply at the current sales pace. The share of first time buyers was 29% in February, up slightly from 28% in January and the first increase since November 2014. First time buyers represented 28% of all buyers in February 2014. All cash sales were 26% of transactions in February, down from 27% in January and down considerably from a year ago when it was 35%. Individual investors, who account for many cash sales, purchased 14% of homes in February, down from 17% in January and 21% in February 2014. Some 67% of investors paid cash in February. Distressed sales, that is foreclosures and short sales, amounted to 11% of sales in February, unchanged for the third consecutive month and down from 16% a year ago. Some 8% of February sales were foreclosures and 3% were short sales. Foreclosures sold for an average discount of 17% below market value in February compared to 15% in January, while short sales were discounted 15% compared to 12% the previous month. ‘Investor sales are trending downward due to the continued rise in prices and fewer bargains available from distressed properties coming onto the market,’ said Chris Polychron, NAR president. He added that real estate agents in areas popular with foreign buyers, such as South Florida and the West Coast, are reporting tempered demand from international clients who typically pay in cash and this… Continue reading
UK property prices up 8.4% year on year, but annual growth still slowing
UK house prices increased by 8.4% in the year to January 2015, down from 9.8% in the year to December 2014, according to the latest index. House price annual inflation was 8.5% in England, 4.9% in Wales, 7.8% in Scotland and 7.3% in Northern Ireland, the data from the Office of National Statistics show. Overall it means that annual house price growth is beginning to show signs of slowing across the majority of the UK. Annual house price increases in England were driven by an annual increase in London of 13% and to a lesser extent increases in the East at 9.9% and the South East at 7.6%. However, excluding London and the South East, UK house prices increased by 6.5% in the 12 months to January 2015. On a seasonally adjusted basis, average house prices fell by 0.2% between December 2014 and January 2015. The data also shows that in January 2015, prices paid by first time buyers were 9.7% higher on average than in January 2014 while for existing owners prices increased by 7.8% for the same period. Scotland is seeing strong recovery with house prices up by 7.8% in the year to January 2015, up from 5.5% in the year to December 2014. It means that the index for Scotland is just 0.9% below the record level witnessed in August 2014 and prices are 1% higher than the pre-economic downturn peak of June 2008. Adrian Gill, director of Your Move and Reeds Rains estate agents, believes that more needs to be done to keep the property market recovery on track as it is clear that rates of annual growth have slowed across the board in England and Wales. ‘After storming ahead of the rest of the country in the whirlwind of 2014, conditions have calmed in London and the South East. The capital has already had the first taste of added pressure placed on prime property in the form of revised Stamp Duty, and the £1.5 million to £5 million slice of the market has also been hit by cold feet in the run up to the general election with the threat of a potential mansion tax,’ he said. ‘This let up of high end activity has brought down the average London house price, but it is regions with the lowest average property prices which are dragging their feet. The housing shortage may be propping up property price growth, but more needs to be done,’ he explained. ‘Measures like the Help to Buy scheme and reforming Stamp Duty have airlifted support to the bottom end of the market, but unless more new homes are built, the government are practically playing a zero sum game,’ he added. Nicholas Leeming, chairman of national estate agents Jackson-Stops & Staff, said it shows that the popular Help to Buy schemes must continue. ‘The ONS figures show that, while there is still some pre-election nervousness amongst buyers of higher value properties, the majority of the UK housing market… Continue reading
