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Chennai residential market proves to be the most resilient in India
The Chennai residential market is one of the steadiest in India and has proved its resilience just after the global economic downturn which was one of the toughest periods for the country’s property market. Between 2008 and 2009 it remained relatively stable in terms of sales volume and price, compared to cities like Mumbai, NCR, Bengaluru and Hyderabad, according to a new analysis from international real estate firm Knight Frank. It explains that new infrastructure projects begun during the second half of 2014 including the building of the Outer Ring Road (ORR) and the Chennai Metro Rail, will lead to the emergence of new residential property growth corridors like Kuthambakkam, Chembarambakkam and Poonamallee along the ORR, and Vadapalani, Ashok Nagar and Alandur along the metro rail link. However, residential development is nonexistent in North Chennai, primarily due to the unavailability of vacant land, narrow arterial roads and lack of employment opportunities. This has compelled developers to look for opportunities in the South and West Chennai markets. According to Hitendra Gupta, a research consultant from Knight Frank India, the emergence of West Chennai as one of the more successful residential micro markets is as a result of affordable pricing, its proximity to the city centre, the presence of employment hubs and a relatively better developed social infrastructure. South Chennai, comprising OMR and GST Road, has been highlighted as the current growth corridor of the city. Its proximity to Chennai International Airport, the presence of arterial roads and the availability of huge vacant land parcels have enabled it to grow rapidly into an emerging residential hub. Gupta points out that the IT and ITeS sectors, the dominant employer in this region, has a positive outlook for business in 2015. This along with a change in economic sentiment, as well as the stable government at the centre, bodes well for new launches and absorption is set to increase by 31% and 14% in West and South Chennai respectively in the second half of 2014. The weighted average price in the Chennai market is forecasted to increase by 3% for 2014 against a 5% increase witnessed in the first half of 2014, the report concludes. Continue reading
Farm land values in England up 2% in third quarter of 2014
The average value of farm land in England increased by 2% in the third quarter of 2014 and has increased 12% so far in 2014, the latest index shows. The average value of commercial farm land without any land or buildings now stands at an average of £7,689 per acre, or exactly £19,000 per hectare, the results from the Knight Frank farm land index show. Year on year, farm land prices are up 15% and over a 10 year period, farm land has risen in value by 187%, second only to gold at 224%. The 2% growth in the third quarter of the year builds on the 9% growth seen during the first half of 2014. This comes at a time when there is limited supply. The amount of publicly advertised land is down 15% compared with 2013, according to the Farmers Weekly Land Tracker and the ongoing demand from both farmers and investors continues to push up prices. Despite recent falls in the price of agricultural commodities such as wheat and milk, farmers are still focused on the long term and are keen to acquire neighbouring or nearby land when it becomes available. With house builders increasing their output and acquiring more development sites, the number of farmers with roll-over funds to spend on land is growing. As farmland is acquired for the controversial HS2 rail scheme this could also bring new buyers into the market, says the Knight Frank report. Investors’ hunger for land remains undimmed, as highlighted by the recent purchase of the Co-op farms portfolio for almost £250 million by the Wellcome Trust. Part of the problem for investors, particularly funds, is the lack of suitable investment grade land available, combined with strong competition from neighbouring landowners prepared to pay a ‘legacy’ premium for land that they may only have one opportunity to buy and once purchased may stay in their families for generations to come. Because of this, many investment led deals are happening off market. Knight Frank’s Agricultural Investments team, which is acting for a number of wealthy individuals and funds, estimates private deals are outnumbering public ones by as much as two to one. Although large tracts of arable land with relatively little value tied up in high value period farm houses are selling quickly and the market for estates with large residential properties is less fluid, according to Clive Hopkins, head of the firm’s Farms and Estates team. ‘In some instances, this has led to large chunks of an estate’s farm land being sold off separately for a premium price. I think this trend really highlights the strength of the farmland market. Traditionally it has been the house leading the sale, now often it is the land,’ he added. Continue reading
September real estate market moves on from election in New Zealand
There has been a notable increase in activity in the New Zealand residential real estate market with buyers and sellers putting the general election behind them. Sales in September increased by 7.8% compared with the previous month but are still 12% down on a year ago, according to the latest index from the Real Estate Institute of New Zealand (REINZ). The national median price was $420,000 for the month of September, an increase of $20,000 or 5% compared to September 2013, and steady from August 2014. The index also shows that days to sell improved by three days to 35 days compared to August, and eased four days compared to September 2013 ‘The real estate market appears to have moved on from the election, with a noticeable increase in activity over the last 10 days of the month,’ said REINZ chief executive Helen O’Sullivan. But she pointed out that despite stronger activity in the latter part of the month, sales volumes were again well down on the same time last year, meaning that sales volumes compared to last year have now fallen for 11 months in a row. Also, the pace of price increases has eased significantly, with the annual rate of price increase now only 5% compared to more than 10% in April. ‘A key theme reported by agents across the entire country is a lack of new listings. Unusually, listing levels are low even in Auckland where prices are at historically high levels, with the increased prices not tempting vendors into the market,’ said O’Sullivan. ‘There has been some pick up in listings in line with the start of spring, albeit not at the usual levels for this time of year. This may in part be a lag effect from the election. As with sales activity, listing interest is reported as having picked up in the last week of the September. We will be closely watching listing levels in October as a continued lack of choice is frustrating would be buyers,’ she added. Sales Volumes A breakdown of the figures shows that 10 regions recorded an increase in sales volume compared to August with Otago recording the largest percentage increase of 25.4%, followed by Northland with 19.1% and Hawkes Bay with 14.6%. Compared to September 2013 all 12 regions recorded a decrease in sales volume with Taranaki recording the largest fall of 31.5%, followed by Auckland and Nelson/Marlborough with a fall of 17.1%. While the total number of sales was down 12% compared to September 2013, the number of sales below $400,000 fell by 18.2%. This follows a fall in sales below $400,000 of 24.8% between August 2013 and August 2014. Nine regions recorded an increase in the median price and 68% of the increase in the national median price compared to September last year occurred in Auckland, with Canterbury/Westland contributing 20% of the increase and Waikato/Bay of Plenty contributing 5%. Together these three regions accounted for 92% of the increase in the… Continue reading
