Tag Archives: london
Dubai to get mandatory affordable housing quotas
A proposal by Dubai Municipality to introduce mandatory affordable housing quotas for all new residential developments is expected to bring a wide range of benefits to the emirate, it is claimed. The move will create further maturity in the market and is long overdue, according to a new report from international real estate consultants, Cluttons. With the residential market in Dubai now meandering through the second half of the current property cycle and with values stabilising following the tremendous growth recorded in 2013 and the first half of 2014, the timing for the introduction of such legislation is ideal, the firm says. According to Steven Morgan, chief executive officer of Cluttons Middle East, the issue of affordability has been one that has been quietly bubbling away in the background for some time. ‘With the introduction of the Federal Mortgage caps and the doubling of property registration fees, we saw genuine end users in the market forced into a holding pattern as they attempted to make the transition from rented accommodation to owner occupation,’ he said. ‘The surging rents, driven by the exceptionally strong underlying demand, which was linked to the robust economic growth, meant that household finances were coming under tremendous pressure on several fronts,’ he pointed out. ‘Now of course, with rents starting to show greater stability, households have a window of opportunity to consolidate their finances and make that leap to owner occupation. The prospect of those on monthly incomes of between AED4,000 and AED12,000 being able to control their rental outgoings will no doubt go some way to aiding the speed at which deposits can be amassed,’ he added. He also pointed out that it is important to remember that there is a huge pent up demand for affordable housing in the UAE and with rental affordability thresholds being breached in many cities, we welcome the news on this key issue. According to Cluttons, the idea of affordable housing is not a new concept and it has served cities such as London well, where developers are liable to provide affordable housing for developments starting with as little as ten units. In particular it has aided in the creation of diverse communities, while allowing people from all financial backgrounds to live alongside one another. ‘There have of course been exceptions to the rule, where developers have been permitted to build off-site affordable housing, with land costs being cited as the primary driver for this. Dubai stands to learn a valuable lesson from this as the authorities in London have often been criticised for effectively creating lower income neighbourhoods through this method,’ said Cluttons' international research and business development manager, Faisal Durrani. He explained that Dubai is clearly not short of affordable neighbourhoods. Karama and Satwa are two key stand out areas that evolved organically at the edges of the Deira-Bur Dubai and Jumeirah districts, respectively. ‘During the course of expansion of any city, affordable districts often tend to spring up on the fringes… Continue reading
US holiday home sales soared in 2014, annual report shows
Holiday home sales in the United States soared 57.4% in 2014 to above their most recent peak level in 2006, while investment purchases fell for the fourth straight year, new data shows. The annual survey by the National Association of Realtors reveals that holiday home sales increased to an estimated 1.13 million last year, the highest amount since NAR began the survey in 2003. Investment home sales in 2014 decreased 7.4% to an estimated 1.02 million from 1.10 million in 2013. Owner occupied purchases fell 12.8% to 3.23 million last year from 3.7 million in 2013. Lawrence Yun, NAR chief economist, described the holiday sales market as having seen astonishing growth, nearly doubling the combined total of the previous two years. ‘Affluent households have greatly benefited from strong growth in the stock market in recent years, and the steady rise in home prices has likely given them reassurance that real estate remains an attractive long-term investment,’ he said. ‘Furthermore, last year’s impressive increase also reflects long term growth in the numbers of baby boomers moving closer to retirement and buying second homes to convert into their primary home in a few years,’ he added. Overall holiday home sales accounted for 21% of all transactions in 2014, their highest market share since the survey was first conducted. The portion of investment sales fell to 19% compared to 20% in 2013 and owner occupied purchases declined to 60% from 67% in 2013. ‘Despite strong rental demand in many markets, investment property sales have declined four consecutive years to their lowest share since 2010 as rising home prices and fewer distressed properties coming onto the market have further reduced the number of bargains available to turn into profitable rentals,’ said Yun. The median sales price of both holiday and investment homes declined in 2014. The median holiday home price was $150,000, down 11.1% from $168,700 in 2013. The median investment home sales price was $125,000, down 3.8% from $130,000 a year ago. According to Yun, the decrease in vacation and investment sales prices is likely due to the increase in holiday and investment buyers purchasing condos and townhouses, which contributed to a decline in the median size of 200 square feet for both. Additionally, the rise in holiday home buyers purchasing distressed properties and buying in the South, where home prices are often lower, contributed to the overall decline in the sales price of vacation homes. The share of holiday home buyers who paid in cash fell to 30% from 38% in 2013. Investment buyers who paid in cash decreased to 41% from 46% a year ago. Of buyers who financed their purchase with a mortgage, nearly half, 48%, of holiday home buyers and 41% of investment buyers financed less than 70% of the purchase price. The data also shows that 45% holiday homes and 44% of investment homes purchased in 2014 were distressed properties, either… Continue reading
Property prices near London Crossrail stations set to outperform local markets
On average property prices within a 10 or 15 minute walk from the new Crossrail stations in and around London have already outperformed prices in the wider area by some 5%, new research shows. While there are pockets of sustained outperformance, especially in central London, average residential property prices around a few of the stations in the Eastern and Western sections of the line show a more mixed picture. Yet those areas where price growth has lagged the surrounding areas may offer significant opportunities for further price uplifts, especially where large scale regeneration and development is underway, according to the major analysis report from real estate firm Knight Frank. It points out that when fully complete in 2019, Crossrail will bring an additional 1.5 million people to within a 45 minute commute of the centre of London. ‘In many cases, it is not just the reduced travel times that have the potential to create value, but also large regeneration projects connected with Crossrail, which are not only improving the realms around stations, but providing a wider choice of higher level amenities as well as residential property options,’ said Grainne Gilmore, Knight Frank head of UK residential research. The firm has previously assessed how residential prices around central Crossrail stations performed between 2008, when Royal Assent for the project was granted, and 2012 and found that on average, prices within a 10 minute walk of the stations outperformed the wider prime central London market by 8%. Now it has taken its analysis further and also looked at how property prices around each of the stations from Shenfield to Maidenhead have moved over the last seven years, and comparing this with average price growth in the surrounding areas. In total, there are 2,976 residential units in schemes which have been started within a 10 minute walk of central Crossrail stations and a further 10,096 units with planning approved. ‘Some of these schemes may be phased, and take some years to deliver but the development potential of the areas surrounding the stations is clear,’ said Gilmore. ‘The research shows that prices around Canary Wharf Station have lagged the strong growth seen in prime outer London from 2008 to date, but the scale of development taking place in the area, and further East, make this an area to watch,’ she pointed out. Residential property prices within a 10 minute walk of the central stations have risen, on average, by 57% since 2008 compared to 43% growth in the prime central London market over the same period, according to Knight Frank’s own index. The biggest rises in residential prices have been seen within a 10 minute walk of Bond Street with an 82% uplift in prices in the area surrounding the station, which encompasses much of Mayfair. ‘While some of this increase has been underpinned by the buoyant central London market, it does not explain the full uplift. Prices in the wider Mayfair market were some 30% higher… Continue reading
