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Residential property prices in Portugal set for moderate growth
Residential property prices in Portugal are expected to rise modestly over the first few months of 2015 after eight months of stability as housing market activity levels continue to rise. There is a strengthening in sales market confidence, with forward looking indicators showing rising optimism, according to the latest RICS/Ci Portuguese Housing Market Survey. In the lettings sector, sustained growth in occupier demand, coupled with a contraction in new landlord instructions, is helping to stabilise rents and rent expectations, it also shows. In the sales market, new buyer enquiries continued to rise, extending the run of uninterrupted demand growth stretching back almost a year and a half. Meanwhile agreed sales increased for the 12 month in a row in December. ‘Significantly, sales expectations are the most buoyant in four years and this sustained recovery in activity appears to have stabilised house prices, which have now remained more or less unchanged for the past eight months,’ the index report shows. ‘Crucially, prices are now expected to rise marginally. Although this is a positive development, we would warn against reading too much into this at the current juncture, given the still challenging economic backdrop,’ it adds. As a result of this improvement in sentiment, the national confidence index, a composite indicator of price and sales expectations, increased to +27, a new high for the series. In the lettings sector, occupier demand continues to rise at a steady pace and this is being accompanied by a significant fall in new landlord instructions. As a result, although still in decline, rents are falling at the slowest pace on record. Furthermore, rent expectations are pointing to a relatively stable trend over the next three months. According to CI spokesman, Ricardo Guimaraes, it is interesting to note that in some markets several real estate agents mention that there is a relative lack of housing available for sale. ‘At the same time, there has been a clear increase in demand. Naturally, this demand is oriented towards the most central locations and main cities,’ he explained. RICS senior economist, Josh Miller, believes that the bottom of the home price market has been reached and the lettings sector is not far behind. ‘Whether the market can transition from a broadly stable picture, to a genuine recovery very much depends on if the economic recovery can be sustained. On this front, things look promising but we are not out of the woods just yet,’ he said. Continue reading
UK buy to let sector surging ahead, it is claimed
The UK’s buy to let sector surged ahead of other areas of the housing market in January, according to the latest research from Connells Survey and Valuation. While most of the housing market began the year with a subdued outlook, buy to let bucked this trend and was the strongest performing sector with 37% growth in activity since the previous month, and on an annual basis the smallest dip of just 4%. It means that the sector has bounced back from a disappointing performance in December 2014 when it recorded one of the biggest monthly falls, according to John Bagshaw, corporate services director of Connells Survey & Valuation. He believes that as landlords are now ‘spoilt for choice’ with a record number of mortgage products to choose from, they are beginning to invest more. Low mortgage rates have also continued, posing even more attractive deals for potential landlords or those expanding portfolios. The first time buyer sector of the housing market was the only other sector which saw a monthly increase in valuations activity. On a month on month basis, activity for first time buyers increased by 3% though on an annual basis it saw one of the biggest falls of 28% compared to January 2014. ‘First time buyer activity increased on a monthly basis despite a stark contrast in performance with January 2014 when this sector had dominated the housing market. This was largely due to the flurry of activity as customers rushed to secure deals before the Funding for Lending Scheme (FLS) stopped mortgage funding at the end of January 2014. At the time the policy had boosted the housing market, particularly first time buyers by lowering mortgage rates,’ said Bagshaw. ‘Since then however, a series of policies have been introduced that have restricted lending criteria which have affected first time buyers more than other sectors and consequently had a major impact on demand. However, this month on month growth is encouraging and indicates that as the sector stabilises and adjusts to the new regulatory landscape, it should continue improving in the coming months,’ he explained. By contrast, activity for those already on the property ladder has been subdued. On a monthly basis activity dipped by 4%, though compared with January last year, valuations activity fell by a steeper 23%. Similarly, remortgaging saw one of the biggest falls in activity both on a monthly and annual basis. Since December, recent activity fell by 25%, while compared with January 2014 it decreased by 28%. ‘The current economic outlook indicates that low inflation and therefore the low Bank rate will continue for some time. As a result it appears that this is giving rise to optimism as more borrowers anticipate that lenders will be able to lower their mortgage rates even further. They are now waiting before securing a deal,’ said Bagshaw. ‘However, it is… Continue reading
UK commercial property rental value reaches highest growth since 2007
UK commercial property markets have recorded their highest rental value growth since the third quarter of 2007, a new report from real estate firm CBRE shows. Of 1,022 locations monitored, some 16% showed an increase in rental value but prime yields fell by an average of 8 basis points and the UK All Property average currently stands at 5.6%, with 35% of locations recording falling yields. In 2014 total prime rental value growth was 3.8%, up from 2.8% in 2013, with the rate increasing steadily over the last 12 months. The average prime yield recorded a fall of 41 basis points over 2014, compared to 32 bps in 2013, and the combination of continued falls in yields and strengthening rental value growth resulted in capital value growth of 11.8% for 2014. ‘During 2014 we have seen prime rental growth strengthening across many UK markets. Prime yields also recorded a substantial improvement, reflecting the growth in investment activity over the last year,’ said Michael Haddock, CBRE senior director. ‘At a national level, total transaction volume reached £61.7 billion in 2014 compared to £54.5 billion in 2013 and just beating the total reached in 2006,’ he explained. Within the office sector, central London experienced the strongest rental value growth, at 11.4% in 2014 compared with 8.1% for the UK as a whole. However, yields are showing the reverse of this pattern, with the strongest falls in office yields being recorded in the rest of the UK. Over 2014, the South East and Eastern regions stood out because of the lack of rental value growth. The report explains that yield shift is spreading to the rest of the country meaning that capital value growth has been fairly evenly distributed across the country. In contrast the industrial sector is seeing an even pattern of both rental value growth and yield shift across the country, although the West Midlands, which is experiencing a shortage of good quality industrial space, appears to be leading the way. Yields in the shopping centre and retail warehouse sectors stabilised in the fourth quarter 2014 after sharp declines in the first three quarters. Although, prime yields were flat in these two sectors in the last quarter, they have recorded the highest average fall for the year as a whole, with the average prime yield down by 53 and 63 basis points respectively compared to the all sector average of 41 basis points. ‘Capital value growth in the Office sector has been seen across the whole of the UK. Central London recorded growth of 7.2% for the quarter and 15.6% for the year as a whole,’ said Andrew Marston, CBRE director. ‘However, the gap between London and the rest of the UK is narrowing, with capital value growth of 10.6% for the UK, excluding London, South East and Eastern. In the fourth quarter of 2014 East Midlands and Yorkshire and Humberside recorded the highest capital value growth in the office sector. ‘All Industrials also performed very… Continue reading
