Tag Archives: real estate
London property sales over £1 million down 26% in second quarter
London saw a 26% drop in the number of properties sold above the £1 million level year on year in the second quarter of 2015 with the economic slowdown in China regarded as having an impact, a new report says. The situation in China is having a knock on effect on global equities and other buyers are still holding back since the stamp duty increase towards the end of last year, according to Richard Barber, director at agents W.A. Ellis. 'This could be perceived as good news for buyers, signalling a return to normality in the market due to more realistic pricing strategies. Such strategies will play a significant role for vendors looking to secure a prospective buyer this autumn,' he said. 'Discerning purchasers continue to take stock of last year’s increases to stamp duty and the ongoing strength of Sterling. After one of the most tumultuous weeks on record for the world’s financial markets, there is naturally considerable speculation regarding the real estate manifestations of the economic slowdown in China and knock-on negative impact for global equities,' he explained. 'In short, this will depend on the depth and duration of the nervousness that investors are now displaying and whether this becomes a protracted slowdown in investment activity,' he added. He pointed out that UK real estate is one area that traditionally experiences countervailing investment activity, with perceived defensive characteristics against weaker investment alternatives. 'International investment in London commercial property is currently running at around 60% of all Grade A space and this flow will remain strong well into 2016. Residential investment is also likely to experience continued support from international investors, with bricks and mortar investment often being compared with gold for its defensive investment characteristics,' said Barber. He also explained that there are exceptions to this trend, notably from economies experiencing a more severe currency devaluation and Russia, China, and Malaysia are all likely to fall into this category and investment flows from these countries may moderate through the remainder of 2015. In contrast, weak equity and real estate investment alternatives from the largest traditional residential investors, Hong Kong and Singapore, could possibly drive improvements from these countries. The report says that new build residential in London continues to perform well, notably in areas such as Nine Elms and East London, including Canary Wharf, where public transport and infrastructure improvements are driving seismic changes to the underlying real estate value. However, Barber concludes that prime London pricing has been relatively weak for the past 12 months. 'It may well be time that investors begin to again see value in these traditionally favoured locations during times of perceived uncertainty,' he said. According to Tom Middleditch, director at JLL Kensington, the prime lettings market has undergone an important shift in the second quarter of 2015 as pre-election weakness affected both sales and lettings but this was reversed with the Conservative party win. 'Although transactions were not quite at the euphoric levels that some agents reported in the… Continue reading
Sydney again leads home value growth in Australian capital cities
Property values in Australian capital cities increased 0.3% in August with Sydney seeing the highest growth at 1.1% compared with the previous month. The latest home value index from CoreLogic RP Data also shows that there were considerable variations in the performance of the housing market from city to city. Values increased by 0/7% in Adelaide and by 0.3% in Darwin but flat month on month in Melbourne and Brisbane. The remaining capital cities recorded a month on month fall in values. While the August results indicate a slowdown in the rate of appreciation in dwelling values, the quarterly figures highlight just how strong the housing market has been over the past three months with combined capital city dwelling values 5.3% higher over the three months to the end of August. Values across Melbourne were 8% higher over the rolling quarter, and Sydney values were up 7.4%. CoreLogic RP Data head of research, Tim Lawless, said that both cities have seen dwelling values trend substantially higher than other capitals, where the third highest growth rate over the three month period was Brisbane, which showed an increase in values of 2.2% While the three largest capital cities, together with Hobart, have all recorded growth in dwelling values over the past three months, half the nation’s capital cities have recorded a fall in values. Darwin recorded the most substantial decline in values with a fall of 3.2% over the three month period, while Perth values were down by 1.5%, Canberra values were 0.8% lower and Adelaide values lower by 0.1%. With the lower month on month growth rate, the annual rate of appreciation also slipped to 10.2% per annum, from 11.1% last month. According to Lawless, the annual rate of growth highlights how strong Sydney housing market conditions have been. Sydney dwelling values are 17.6% over the past year, and since the beginning of 2009, Australia’s largest capital city housing market has recorded a cumulative capital gain of 76%. Using the median house price from January 2009 as a base, the typical Sydney home owner has seen the value of their home increase by approximately $309,000 since the beginning of 2009. The only cities where dwelling values declined over the past 12 months have been Darwin with a fall of 4.6%, Perth down 1.8% and Canberra down 0.9%. ‘Darwin and Perth have certainly felt the brunt of the downturn in resources investment while conditions in Canberra have been improving but remain volatile. We expect the softer housing market conditions in Perth and Darwin are likely to persist over the coming year,’ Lawless explained. Unit values have recently shown a higher rate of growth city house and unit values than detached houses, with values rising 0.8% over the month compared with a 0.3% rise in house values. The rolling quarterly rate of growth was also higher for units at 6.7% compared with 5.1% across the detached sector. Lawless pointed out that it has generally been the case throughout… Continue reading
Core UK regional city markets see office rental growth, latest data shows
Growth in prime headline office rents has continued across the UK’s regional property markets with an average increase of 4.3% in the year to June 2015. The growth has been seen across the core eight markets covered by the index from property consultants JLL and reflects a solid outlook for demand and tight supply of new space. The firm says that headline rents are expected to continue on an upward curve with average growth of 2.9% per year in the core regional markets over the period from 2015 to 2019. ‘Sustained levels of occupier demand combined with the decreasing availability of Grade A office supply has contributed to healthy rental growth with year on year increases witnessed in all bar one of the core eight cities,’ said Jeremy Richards, dead of national office agency at JLL. The data shows that Manchester and Leeds saw the most significant increases with rents up by 6.5% year on year to £33 per square foot and by 6% year on year to £26.50 per square feet respectively. According to JLL’s research report office take up across the regional markets reached 3.8 million square feet in the first half of 2015 and is forecast to exceed last year’s full year total of 7.3 million square feet, well ahead of the 10 year average of 6.6 million square feet. The figures also reveal that Manchester and Birmingham dominated activity in the first half of the year accounting for 677,000 square feet or 18% and 650,000 square feet or 17% of take up respectively. The falling supply of good quality office space remains a key theme according to JLL. Available office space across the core markets stands at 19.5 million square feet with an average overall vacancy rate of 8.2%, down from 9.1% over the year. The Grade A vacancy rate is just 2.4% on average, with Leeds and Cardiff the lowest at 1.5% and 1.3% respectively. JLL’s report shows that total pre-leasing jumped sharply in the first six months of the year to 837,000 square feet across 14 transactions in comparison to 138,000 square feet across five deals in the whole of 2014. Some 5.36 million square feet is currently under construction speculatively across the core cities in 58 schemes, which compares to just 3.3 million square feet in the first half of 2014. ‘Partly aided by pre-lets, the development pipeline is now responding to the supply issue with Manchester accounting for the greatest volume of speculative development activity at 875,000 square feet,’ said Richards. Office investment volumes across the core cities hit £1.9 billion, well up on the £1.5 billion traded in the first half of 2014. Domestic investors accounted 74% of investment volumes with the weight of money targeting the regions continuing to place inward pressure on prime yields, which now range between 5% and 5.25% for the largest regional cities,… Continue reading
