Tag Archives: investment
Index report shows Swiss property markets provided strong growth for investors in 2015
Switzerland’s property markets are currently providing strong growth for investors with the latest data showing total returns of 6.6% in 2015. This was up from 5.2% in 2014, which the index report from investment support tools firm MSCI says reflects continued strong growth in the Swiss properties sector. It also says that the strength of Swiss property market signals that the sector benefited from the Swiss National Bank’s (SNB) move last year to scrap the franc’s peg to the euro and lower interest rates. The figures showed that government bond yields and property yields both declined in 2015 from 2014, to -0.04 from 0.38%, and to 4.4% from 4.8%, respectively. The spread between the government yield bonds and property yields increased to 4.45% in 2015 from 4.4% the year before. The strong total return was fuelled by robust capital value growth, which rose to 2.4% from 1% in 2014. This capital value growth marks the second highest growth in the three, five and 10 year average. Residential properties remained the strongest sector in 2015, representing 47% of the measured universe in the index. Total return in this segment rose to 8.4% from 6.1% from the year before. The capital value growth in residential properties reached 4.1, marking the best performance since the index began. Moreover, office property returns recovered in 2015, achieving total return of 5.0%, compared to 4.2% in 2014. However, office property total returns remained below the five year average of 5.1%, and the 10 year average of 5.8%. Across the different sectors, rental growth weakened slightly. Net income return dropped to 4.1%, from 4.3% in 2014. ‘The Swiss property market enjoyed another robust year as the market continues to attract capital. The strong capital growth is a result of increased yield compression following investor demand. This is especially true for the major cities of Switzerland, such as Zurich, Bern, Basel or Geneva,’ said Justus Vollrath, MSCI executive director. ‘What’s particularly interesting is that the move by Swiss central bank to unpeg the Swiss franc and lower interest rates led to slight widening of spreads between government bond yields and property yields. This created an additional incentive for investors,’ he explained. ‘We also see that the residential market showed particular resilience and enjoyed exceptionally strong capital value growth,’ he added. Continue reading
Views sought on UK Government’s Starter Home regulation
The UK government is seeking views on regulations surrounding its flagship Starter Home programme in England and has issued a consultation document. Under the regulations, which will form part of the Housing and Planning Bill, the government plans to allow build to rent developers to build Starter Homes off-site. ‘We propose that private rented sector developments could contribute to starter home provision and the requirement should be met through an offsite contribution for delivery of starter homes,’ the consultation document says. Overall it proposes a new statutory framework for Starter Homes that will include a general duty on local planning authorities to promote the supply of Starter Homes when carrying out their planning functions. The Bill would include a clause that sets a Starter Home requirement which means that local planning authorities may only grant planning permission for residential developments if the Starter Homes requirement is met. There would be reporting arrangements to ensure local communities, and especially first time buyers, are aware of what action local planning authorities are taking to support the delivery of starter home; and powers for the Secretary of State to intervene if local planning authorities fail to carry out their functions related to Starter Homes. ‘We are taking forward ambitious measures to increase the supply of housing and improve prospects of home ownership for many. We aim to deliver one million new homes to boost housing supply significantly. We want to ensure young people are not denied that which their parents took for granted, the opportunity to buy their own home, settle down and enjoy the security that home ownership brings,’ said Housing and Planning Minister Brandon Lewis. ‘That is why we have committed to building 200,000 high quality Starter Homes exclusively for young first time buyers under 40, to be sold at a minimum of 20% below the open market value. We want to see Starter Homes built on housing sites across the country,’ he explained. ‘The Housing and Planning Bill sets out the statutory framework for the delivery of Starter Homes, and will be supported by changes to national planning policy,’ he pointed out. The Government has already announced a £2.3 billion funding package to support the delivery of up to 60,000 Starter Homes. Of this funding £1.2 billion will, in the first instance, be made available to remediate or assemble brownfield land to deliver at least 30,000 Starter Homes through the Starter Homes Land Fund. The technical consultation document seeks views on the details for the regulations to be made under powers contained in the Housing and Planning Bill, including options for the Starter Homes requirement on reasonably sized sites. ‘We want to hear views so the resulting regulations are feasible, proportionate and effective. I am confident that these reforms will help a generation of young people into home ownership,’ Lewis added. The British Property Federation has been calling for build to rent developments to be exempt from providing an on-site Starter Home provision throughout the… Continue reading
Miami residential property market prices still growing
Residential property in Miami, one of the most popular locations with overseas buyers in the United States is seeing prices continue to rise, the latest index figures show. The median sales price for single family existing homes rose 10.3% year on year in February to $270,221 while that for condominiums increased 9.5% to $206,950, according to the data from the Miami Association of Realtors. However, median prices are still significantly below their peak in 2007 and currently remain around 2004 levels despite some sectors seeing strong growth. For example the condo market has recorded prices rises in 56 of the last 57 months. ‘Miami real estate remains a bargain especially compared to other world class cities, and domestic and international consumers proved that in February as total dollar sales volume in single family homes increased 7% compared to the previous year,’ said Mark Sadek, chairman of the association’s board. Sales, which posted a record year in 2013 and near record years in 2014 and 2015, fell by 5.8% year on year but total sales for February remain in line with Miami historical averages. A breakdown of the figures shows that single family home sales fell by just 0.3% in February while condo sales fell by 10.4%. The index report suggests that this is due to a strong new home construction market. Single family home sales spiked 18.5% year on year in February in the $200,000 to $600,000 sector which represented about 59.6% of all total single family home sales in February 2016. Existing condos priced at $150,000 to $300,000 range experienced an 8.6% jump in February sales, representing about 38% of all total condo home sales in February 2016. The median number of days between the listing and contract dates for Miami single family home sales decreased 6% year on year to 63 days. The median number of days between the listing date and closing date for single-family properties decreased 0.8% to 120 days. For condos, the median time to contract decreased 12% year on year to 72 days. The median number of days between the listing date and closing date decreased 2.4% to 122 days. Miami real estate is selling close to listing price. The median percent of original list price received for single family homes was 95.2% in February 2016, an increase of 0.4%. The median of original list price received for existing condominiums was 93.8%, a 0.2% increase. Only 23.4% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 35% in February 2015. Short sales and REOs accounted for 5.7% and 17.8% respectively, of total Miami sales in February. Short sale transactions dropped 25.6% year on year while REOs fell 39.9%. Cash sales in Miami are still twice the national average and due to the high number of overseas buyers. Cash transactions comprised 52.4% of February total sales compared to 58.7% last year. Inventory of single family homes increased 4.7% in February while… Continue reading
