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Property prices in Ireland recovering well with 15% year on year growth
Residential property prices in Ireland increased by 15% in the 12 months to September, up slightly year on year from the previous month. The data from the Central Statistics office shows this compared with a 14.9% annual rise in August and is much higher than the year on year rise of 3.6% recorded in the 12 months to September 2013. On a monthly basis residential property prices rose by 1.8% in September, down slightly from the increase of 2.3% recorded in August and the same as the increase of 1.8% recorded in September of last year. A breakdown of the figures show that in Dublin residential property prices grew by 2.5% in September and were 23.4% higher than a year ago. Dublin house prices rose by 2.4% in the month and were 22.6% higher compared to a year earlier while Dublin apartment prices were 35.2% higher when compared with the same month of 2013. However, the ONS said that it should be noted that the sub-indices for apartments are based on low volumes of observed transactions and consequently suffer from greater volatility than other series. The price of residential properties in the rest of Ireland rose by 1.1% in September compared with a decrease of 0.1% in September of last year. Prices were 7.0% higher than in September 2013. The latest figures mean that house prices in Dublin are 37.7% lower than at their highest level in early 2007 while apartments in Dublin are 44.2% lower than they were in February 2007 at their peak. Overall residential property prices in Dublin are 39.6% lower than at their highest level in February 2007. The price of residential properties in the rest of Ireland is 44% lower than their highest level in September 2007 and overall, the national index is 39.9% lower than its highest level in 2007. Continue reading
Overseas investment in UK commercial property market set to increase
Overseas investment in the UK commercial real estate market is having a positive impact and is set to increase over the next three to six months, according to new research. There has been a slight tapering in confidence after nearly two years of consistent growth in optimism and fewer property professionals expect investment to increase but around 60% of UK investors believe foreign investment has had positive impact. Increasing numbers expect activity to stabilise and the North West and London based smaller sized operators are more confident about the future, according to the latest confidence survey of real estate professionals by Lloyds Bank Commercial in association with the Investment Property Forum (IPF). Further analysis revealed that nearly73% of larger sized businesses surveyed and 70% of fund managers agreed, though this figure dipped to 60% amongst SME respondents. Given the increased level of foreign investment into this sector, a significant minority, at least 17%, of all respondents said that they had changed their business investment activity as a result of the influx of overseas capital. In particular 42% of fund managers and 30% of larger sized businesses stated that they have altered their business investment plans due to this influx. ‘For many regional commercial property operators the influx of foreign capital has widened the range of exit options and shifted focus away from UK institutional buyers,’ said John Feeney, global head of commercial real estate at Lloyds Bank Commercial Banking. ‘'Further a variety of foreign buyers are now active in regional UK markets including sovereign buyers seeking stabilised assets and more opportunistic investors willing to take asset management risk,’ he added. The latest survey also indicates that confidence in the UK’s commercial property market remains high, with over 60% of respondents believing that activity will continue to increase over the next three to six months. However, an increasing number believe that the market will level out. Around 25% to 36% of respondents now expect activity to remain at current levels for the next three to six months which compares to just under 20% in the CPCM’s last report in April. In line with a slight softening in confidence, the report suggests that prices will begin to stabilise as well. In the Spring 2014 CPCM only 3% of major businesses said prices would stay the same compared to 30% in this latest survey. Investment activity also looks set to increase, with fund managers reporting a slight increase in their investment intentions, rising from 70% to 72%, as did major businesses, with 53% planning to spend compared to 50% in April. ‘The UK’s market has soaked up a lot of capital over a short period of time and some investors, such as private equity funds, are turning their attention to the nascent investment market recovery in certain Eurozone countries particularly in the periphery,’ said Feeney. ‘The UK market is further advanced in… Continue reading
US real estate price growth slows to more realistic level, says latest index
Home value growth has peaked in the United States and the cooling real estate market has banished concerns about a property bubble, according to experts. Home values are still rising in most markets, but the rate of appreciation has slowed considerably, making the housing market less competitive for buyers, according to the latest data from real estate firm Zillow. It means that home buyers who have been priced out of hot markets will welcome the cooling off, and the most recent data should further combat worry about another housing bubble. The rate of annual home value appreciation peaked at 8.1% in April and has fallen in every month since. That means that US home values were up 6.5% year on year at the end of the third quarter, to a Zillow Home Value Index of $176,500. The rate of appreciation is expected to continue to slow. Home values are forecasted to grow at 3%, roughly half their current pace, through the end of the third quarter of 2015, according to the Zillow Home Value Forecast. As the market cools, the dynamic between buyers and sellers is also changing. At the end of the third quarter, there were 18.6% more homes on the market than last year, and more homes listed recently had a price cut. In September, nearly 37% of listings on Zillow had at least one price cut in the past month, up from 33.6% in September 2013. The softening market means home buyers will find less competition. The pace of home value appreciation dropped off significantly in markets that had been among the hottest at times during the housing recovery, particularly in California and the Southwest. In Los Angeles, home price appreciation slowed from 18.5% annually in the third quarter of 2013 to 8.3% over the past year. Annual appreciation in San Francisco slowed to 8.2% compared to 23.5% over the same time period last year. ‘What a difference a year makes. At this time last year, we were worrying about a number of frothy markets that looked like they could be on the edge of another housing bubble, places where homes were appreciating at more than 20 percent per year and where buyers' heads were spinning just trying to keep up,’ said Zillow chief economist Stan Humphries. ‘We always knew these market conditions couldn't last, and it's good to see us now on a more natural and sustained glide path down toward more normal market conditions of roughly 3% annual appreciation and more balance between buyers and sellers,’ he explained. ‘Home values should continue to grow, but that growth will increasingly be driven by traditional market fundamentals like household formation and job growth, and less by artificial stimulants like decreased supply and widespread investor demand,’ he added. Nationally, rents rose 3.5% year on year in the third quarter, to a Zillow Rent Index of $1,335, rising 1.8% compared to the second quarter. Continue reading
