Tag Archives: investment
Residential rents flat in Australian capital cities over last 12 months
Residential rents in Australian capital cities were flat in 2015 and growth is now at its lowest level on record according to the latest rental index. Rents increased by 0.2% in January 2016. The only capital cities to see a rise in rents over the month were Sydney, Melbourne, Adelaide, Hobart and Canberra, elsewhere rents dropped, the CoreLogic rental index shows. Currently the median rent rate is recorded at $443 across the capital cities with a combination of factors affecting the market. ‘Among these is a higher level or rental stock resulting in greater options for renters, a slowdown in population growth, higher than normal investment activity and stagnant wage growth,’ said the firm’s research analyst Cameron Kusher. ‘More rental stock at a time when demand is easing due to slowing population growth, and little wage growth for renters, has resulted in flat rental growth conditions over the past year,’ he explained. ‘For renters there is a lot more accommodation options in the market while simultaneously, landlords are now required to respond to a more competitive environment which, in many cases means keeping rents steady or in some areas reducing rents in order to keep a tenant,’ he added. He also pointed out that CoreLogic has tracked annual rental changes since 1996 and over that time, rental growth conditions have never been weaker. At the same time last year rental rates had increased by 1.7% highlighting that the slowdown in rental conditions has been sharp over the year. A breakdown of the figures shows that rents increased in the last year by 1.4% in Sydney, by 2.1% in Melbourne, by 0.1% in Hobart and by 1.8% in Canberra. They fell by 0.7% in Brisbane, by 0.4% in Adelaide, by 8.6% in Perth and by 13.4% in Darwin. Across every capital city except Canberra the rate of annual rental growth or decline is currently lower than it was a year ago indicating that the weaker rental market conditions are prevalent across most capital cities. Weekly rents across the combined capital city measure increased 0.2% over the month of January however they were unchanged over the past 12 months and currently, combined capital city rental rates are $487per week for houses and $465 per week for units. ‘It is possible that over the coming months, rental rates could begin to fall on an annual basis due to additional new rental supply entering the market,’ added Kusher. Continue reading
Canary Wharf set to see strongest office rental growth in central London this year
Canary Wharf is set to have the strongest central London office rental growth in 2016 with an increase of 12.8%, followed by Shoreditch at 10% and Midtown at 9.6%, according to a new analysis. Affordability is the main driver for rents to increase, along with the development of Crossrail, integrating Canary Wharf with the rest of central London, and a general shortage of available offices across London, says the Knight Frank report. This will push tenants seeking high quality affordable offices eastwards, with Canary Wharf well placed to benefit. Expansion by Technology and Creative firms will contribute to the shift, as they are growing fast and increasingly seeking larger offices, it explains. It also says that Shoreditch’s increase in office rents will principally be driven by technology sector expansion. The more mature, established heavy weight tech firms have firmly established a London rival for California’s Silicon Valley in the area, which is set to continue to grow over the next 12 months. Indeed, the technology sector was the largest source of demand for office space in central London in 2015, for the fifth consecutive year, and rents in Shoreditch grew by nearly 24% in 2015, nearly double the 12% increase seen in the neighbouring City Core which is London’s traditional financial district. Moreover, at £65.00 per square foot, rents in Shoreditch have closed the gap on the City Core rents which stood at £70 per square foot at the end of the fourth quarter of 2015. In 2007, Shoreditch rents were £42.50 per square foot, about a third less than the City Core at £63.50 per square foot. Central London vacancy rate levels are at a 14 year low, the report also shows, the lowest since the first quarter of 2001, with the West End at 3.4%, the lowest since 1989. ‘The gap between rents in traditional core areas and other sub-markets has never been so small. Occupiers are making decisions based on quality of product and amenity, availability of scale, adjacency of workforce and not by postcode,’ said Dan Gaunt, head of City Leasing at Knight Frank. According to James Roberts, Knight Frank chief economist, what has surprised everyone is that Shoreditch office rents have got so close to those of the City Core. ‘Everyone assumed the tech firms could not afford rents that high,’ he said. ‘However, the more successful start-ups from five or six years ago have matured into larger, established companies with deeper pockets. They now need bigger, modern, high quality offices, and they can afford to pay to get what they want. It’s what happened in Silicon Valley but there the process took decades, in Shoreditch it has happened in a few years,’ he added. Continue reading
Deal could see fast broadband for new homes in UK
A fast internet connection is one of the top must haves for home buyers in the UK and is set to become a standard for new homes, it has been announced. A new agreement between provider Openreach and the Home Builders Federation (HBF) aims to deliver superfast broadband connectivity to new build properties in the UK. The new deal will see fibre based broadband offered to all new developments either for free or as part of a co-funded initiative. It is estimated that more than half of all new build properties can be connected to fibre broadband free of charge to developers. As part of the agreement, Openreach is introducing an online planning tool for home builders. This will tell them whether properties in a given development can be connected to fibre for free, or if a contribution is needed from the developer to jointly fund the deployment of the local fibre network. The housing industry will have access to a ‘rate card’ from Openreach which details the fixed cost contributions required by home builders in those cases where joint funding is required. Openreach will make a significant contribution itself before seeking any funds from developers. HBF said that it will promote and support uptake of the co-funding offer amongst their members, and emphasise the need to plan for connectivity early in the development. ‘Broadband connectivity is just one thing that home buyers now expect when buying a new build, so this industry-led push to make superfast, or indeed ultrafast, broadband speeds available by default in new homes represents a very important step in meeting the UK’s digital needs,’ said Digital Economy Minister Ed Vaizey. Clive Selley, chief executive officer of Openreach, said it is an important step towards bringing fibre broadband to as many new build properties as possible. ‘We recognise that high speed broadband connectivity is a major factor for home owners when deciding to buy a house. That’s why we’re offering to deliver fibre to all new build developments either for free or as a co-funded model,’ he explained. ‘With the support of the HBF we’ve delivered a series of measures to give developers greater clarity, choice and more funding. This underlines Openreach’s commitment to further extend its fibre network, which reaches more than 24 million premises, to benefit even more communities across the country,’ he added. According to Stewart Baseley, executive chairman of the HBF, said it will help meet home buyers expectations. ‘House builders are constantly striving to deliver on and surpass the expectations of customers as we continue to see housing supply grow,’ he pointed out. ‘Broadband speeds are an increasingly important factor in the home buying process and this offer to developers will see more new build purchasers benefit from the very best connectivity to go alongside the many other advantages of purchasing a brand new home,’ he added. Continue reading
