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Residential sales in Hong Kong up 45% month on month, prices down
Residential sales in Hong Kong increased by 45% month on month in March from their lowest level in 25 years, reaching 17,106, according to the latest data from the Land Registry. The rise was attributable to a number of primary project launches after Chinese New Year and a reviving resales market, with some flat owners willing to cut prices, says the latest market analysis from international real estate firm Knight Frank. As a result, prices fell further, with official figures showing that home prices had decreased for five consecutive months, for a cumulative decline of 11%. But the market continued to polarise, with the luxury sector remaining relatively resilient, it explains. Reported landmark deals of the month included an en-bloc transaction at South Bay Close in Repulse Bay for HK$668 million, or about HK$30,000 per square foot and a unit in Cluny Park in Mid-Levels West, which sold for over HK$53,000 per square foot, the highest price in the development. With potential buyers expecting increasing supply and a further drop in home prices, residential sales are expected to fall to around 50,000 units this year. ‘Although luxury home prices overall are expected to drop 5% this year, prices of super luxury houses and apartments should remain firm. Mass market prices could drop up to 10% in 2016,’ the report says. In the prime office market a lack of available space continued to limit Grade A leasing activity, the report also shows. To avoid high rents in Central, some firms with a long presence in the area relocated to non-core areas as they became increasingly cost conscious, the report explains. It also points out that high office rents in Central have been supported by a lack of supply rather than strong demand as office leasing demand from both domestic and overseas firms has weakened in recent months. The Kowloon Grade A office leasing market saw a number of relocation deals involving insurance sourcing companies in March. Office rents in Kowloon East, however, have been under increasing pressure from the increasing supply coming on line, the report says. ‘Despite the economic uncertainties in Hong Kong and the mainland, office rents in decentralised areas could drop 5% in 2016 due to abundant supply in the pipeline. This polarisation trend is expected to continue until the new supply is absorbed and the market regains balance,’ the report adds. It also says that notable declines in retail sales and visitor arrivals continued to put pressure on retail property rents and adds that the retail property landscape will continue to evolve to cope with the downturn. Continue reading
Airbnb popularity is a growing threat to residential landlords
The Airbnb phenomenon that is soaring in popularity is a growing issue for private sector landlords as tenants embrace the trend without checking if their tenancy allows them to do so. According to the UK’s tenant eviction firm Landlord Action the number of cases where tenants have sub-let properties without their landlord’s permission has trebled. It point out that aside from breach of tenancy agreement and additional wear and tear to the property, landlords are left exposed to being in breach of their mortgage terms and buildings insurance. The share economy is a growing phenomenon, with models such as Airbnb giving people a platform to view themselves as a business. But according to Landlord Action founder Paul Shamplina it is also enabling those who do not have the right to do so, from profiting from someone else’s asset. An example is Joy Philips, a landlord who decided to let out her West London home so she could afford to take time out to volunteer at an orphanage in Africa. She thought she had found the perfect tenant in a young doctor who wanted her home for a three year lease. It all seemed very promising until she started receiving emails and calls from her neighbours complaining about the volume of people coming and going at her house. Joy was shocked to discover that her house was not being used as a home for the young doctor, but being rented out room by room as a boutique hotel on the Airbnb website. Making thousands over the rent being paid to Joy, her tenant was breaking the no sub-letting clause in her contract. By having so many people in the house, Joy’s home insurance was also at risk of being void. She was forced to give up her volunteer work in Africa to return to the UK and got in touch with Landlord Action in the hope of getting her property back. ‘We have had concerns for some time now regarding the protection of properties which are being uploaded and offered as holiday lets via Airbnb. We continue to receive a growing number of instructions from landlords who want us to start possession proceedings against tenants who have sublet their property via Airbnb without consent,’ said Shamplina. ‘Whilst Airbnb do provide a level of protection for hosts, naturally certain conditions and limitations do apply. My concern is that there is not enough safeguarding with regards to obtaining proof from the individual who is advertising the property that they are the legitimate owner. Or, if they are a tenant, that they have consent from their landlord to rent out the property in this way,’ he pointed out. ‘We have seen cases where, quite clearly, tenants are making thousands of pounds from exploiting the service to a high volume of holiday makers on a weekly basis. In a recent case, it… Continue reading
Majority of people in Ireland think house prices will continue to rise in 2016
Three out of four people in Ireland expect house prices to rise over the coming year according to a new property consumer sentiment survey. Some 20% of those surveyed said they expected prices to remain static while just 4% said prices will fall, according to the research from property website MyHome.ie. One in four of those surveyed said they planned to purchase a property in the next 12 months while just under a third said they had no plans to purchase a property and 41% said they were undecided. While the largest proportion, 47%, said house prices would increase by up to 5%, some 25% said they would increase by between 5% and 10% while 4% said they would increase by more. According to Angela Keegan managing director while the findings reflect growing consumer confidence, it was clear the Central Bank’s new lending rules were having a major impact on the market. She pointed out that 51% said the planned Central Bank review of its lending rules would make them consider holding off on a purchase for the time being while 28% said they didn’t have the funds to pay a deposit. ‘When we asked people for the factors which they believed would influence participation in the housing market, over 40% said lowering the deposit required, 38% said more stock coming on the market and 35% said confidence in the overall economy,’ she explained. ‘So really these figures support what we are hearing from estate agents on the ground. First time buyers, particularly in Dublin, are struggling to meet the new deposit and 3.5 times loan to income ratio laid down by the Central Bank last year. In the survey 13% of respondents said their application for a mortgage had been refused, which is quite high,’ she added. She believes that while the CBI measures were necessary to curb runaway inflation the supply part of the equation has continued to deteriorate and this has led to an increase in rents and the first priority of the new government should be to address this issue before putting a comprehensive housing plan in place. The research also shows that three bedroom houses remains the most sought after property type at 47%, followed by the four bedroom at 33% and the two bedrooms at 17%. Almost half of respondents, 45%, said that a garden was the most important feature in a home, followed by 22% opting for an open plan kitchen on 22% and 20% off street parking. The preference for a second hand house versus a new build was two to one. Proximity to schools or crèches was the most important amenity for 27% of respondents, followed by good public transport network for 23% and proximity to extended family for 18%. Continue reading
