Tag Archives: news
Rising demand and falling supply boosts recovery of Portuguese property market
Solid demand and falling supply is helping the recovery of the residential property market in Portugal as price rises are seen across all regions. However, new sales instructions have fallen at a time when demand is growing and there has been a modest upturn in rental values, according to the August 2015 RICS/Ci Portuguese Housing Market Survey. The report shows the imbalance between rising buyer enquiries and falling new sales listings continues to underpin a steady increase in house prices. Likewise, in the lettings market, solid tenant demand growth has pushed rents up marginally although a relatively flat trend is still projected in the near term. In the sales market, new buyer demand rose again month on month, with the pace of increase edging up gently relative to the previous month. At the same time, new instructions to sell dropped back modestly for the first time since December 2014. Despite the solid demand backdrop, sales volumes only recorded the most marginal of increases. Nevertheless, going forward, transactions are expected to pick up at a smart pace in the near term. The report explains that with demand outstripping supply, house prices continued to recover across all regions. What’s more, the latest data suggest the rate of house price inflation accelerated across each market during August. Overall, respondents to the survey remain confident that prices will rise further over the next quarter and the next 12 months. Indeed, over the year ahead, contributors forecast national prices will increase by around 3% and on average by roughly 5% per annum over the next five years. Meanwhile, the national confidence indicator, a composite indicator of three month sales and price expectations, rose to +32 from +28 previously, extending its run in positive territory into a twenty second consecutive month. In the lettings market, tenant demand increased sharply alongside a steep fall in new landlord instructions. Consequently, rents inched up again following last month’s marginal increase. Notwithstanding this, rents are expected to hold broadly stable in the near term, although expectations for future lettings market activity strengthened notably. ‘In August, the Algarve benefited from strong demand and price dynamics, showing greater improvement in the results compared to Lisbon and Oporto regions in some Algarve cities, there is already a lack of new houses to sell at a time when demand is expected to remain high,’ said Ricardo Guimarães, director of Ci. According to Simon Rubinsohn, Royal Institution of Chartered Surveyors chief economist, employment growth has been encouraging over the past year, driving an increasingly widespread revival in housing market activity. ‘Nonetheless, the labour market recovery still has a way to go and sustained progress is needed to underpin the residential property sector going forward,’ he added. Continue reading
Gap between house prices in London and major UK cities widens
The gap between house prices in London and other major regional cities in the UK is at its widest for 20 years, according to the latest house price index. Prices in London experienced 4.6% growth in the three months to August and a 10% increase in the last 12 months, according to the cities house price index from Hometrack Overall city level house price inflation is running at 8.3% up from 6.6% in May. A similar expansion has been recorded in sales volumes which has translated into higher prices across UK cities, the report says. The highest rate of growth is in Cambridge at 11.2% and lowest in Aberdeen where prices have fallen by 2% due to the weakness in the oil price affecting the demand for housing. Compared to a year ago house price inflation has increased in five cities led by Edinburgh and Glasgow where growth is running at 9% and 5.3% respectively ‘City level house prices continue to increase as demand for housing grows in the face of constrained supply,’ said Richard Donnell, director of research at Hometrack. ‘A changing mix of buyers is compounding the scarcity of housing for sale with rising numbers of first time buyers and investors buying property while having nothing to sell. Only a recovery in the number of moves amongst existing home owners or an increase in new supply will ease the current housing scarcity which seems unlikely in the near term,’ he pointed out. ‘The gap between house prices in London and other major regional cities is at its widest level for 20 years. This highlights a seemingly over valued London market, on a price/earnings basis, and the prospect of further price growth to come in the large regional UK cities,’ explained Donnell. ‘London’s price earnings ratio is at an all-time high while there remains value in most other regional cities. The pricing differential to London could well assist city regions attract new investment as the cost of housing starts to influence decision making for both households and businesses,’ he added. Continue reading
Spain is top target for commercial real estate investors in Europe, new poll shows
Active commercial real estate investors see Spain as the top investment target in Europe for next year as values are still below peak, new research suggests. This is a sign of the Spanish commercial market’s recovery, with Germany following close and Germany is next on the list, according to a poll of investors carried out by international real estate firm Knight Frank. ‘The fundamental rationale behind investing in Spain is even stronger than this time last year. Prime CBD office rents have risen by 20% over the past 12 months, but remain nearly 40% below the 2008 peak, and both footfall and sales have been increasing in dominant shopping centres for six consecutive quarters,’ said Humphrey White, head of Capital Markets at Knight Frank Spain. At the same time some 25.4% chose Germany as their preferred target and Knight Frank says that the results mirror the buoyant investment activity seen in the country, with a total of €30 billion invested in property during the first half of 2015, an increase of 35% compared to the first half of 2014. According to Joachim von Radecke, head of German Desk at Knight Frank in London, the increase is driven by the rising flow of foreign capital into the country and the 50% increase of domestic investor activity. ‘Foreign investors’ share of the German market continues to grow, and now accounted for almost 60% of all transactions in the first half of 2015. We saw the usual trend towards the big five markets of Berlin, Frankfurt, Munich, Hamburg and Düsseldorf, with 78% of total office transactions recorded in these cities,’ he added. The UK also featured strongly in this year’s poll, attracting 17.4% of the votes, on the back of the continuing recovery which has now extended to the UK regions. ‘The UK is well ahead of the rest of Europe in terms of the property cycle and has already seen significant yield compression,’ said Chris Bell, managing director of Europe at Knight Frank. ‘However, it is encouraging that rental growth is beginning to re-emerge more widely across Europe, helped by the strengthening of occupier demand and the steadily falling availability of good quality space exacerbated by the lack of development over the preceding recessionary years,’ he added. Continue reading
