Tag Archives: real estate
July sees subdued valuation and survey activity in UK housing market
Housing market activity in the UK in July was more subdued than normal but is still up 57% compared to the same month in 2014, the latest survey and valuation research shows. However, overall valuation activity in July dipped 24% compared to June 2015, according to the report from Connells Survey & Valuation. But, according to John Bagshaw, the firm’s corporate services director, the housing market momentum is only getting stronger and the slight monthly wobble is more than outweighed by the annual growth across all sectors. ‘July has been a little more subdued than normal as the post-election feel good factor began to taper out. But, fundamentally, the high pace of annual growth demonstrates that the property market is strong. As wages continue to outstrip inflation, job security increases and interest rates remain at record lows, people young and old are feeling ever more confident about the property market. There’s every reason to feel very optimistic,’ he explained. The report also shows that the number of valuations for existing owner occupiers seeking to move home in July was down 33% compared to the previous month of June. However, yearly activity has climbed 48% on July 2014. Similarly, despite the number of first time buyer valuations slipping 25% on June 2015, year on year activity accelerated 40% compared to July last year but Bagshaw believes that home movers and first time buyers are in a strong position. ‘At first glance the monthly figures might suggest we’ve endured a slow July. However, this is mainly because home movers and first time buyers are most affected by housing market seasonality. These two groups possess neither the capital of most buy to let investors or the pre-existing property of remortgagors. First time buyers in particular tend to be more sensitive to headwinds,’ he pointed out. ‘Moreover, the yearly figures indicate that first time buyers are showing no real hesitancy in getting on the ladder. Government schemes such as Help to Buy, alongside local authorities attempting to drive up property development, are giving the home mover and first time buyer markets a vitality not seen for many years,’ he said. Meanwhile, valuations in July for buy to let investors and remortgagors increased on a year on year basis. Buy to let and remortgaging valuation activity grew 76% and 75% respectively, when compared to July 2014. However, on a monthly basis, July’s buy to let valuation activity fell back 21% on June, while remortgaging activity declined by 16% over the same period. ‘Remortgagors and those in the buy to let business have had an exceptional year’s stretch. Since the first glimmers of the economic recovery, remortgaging was the first sector to make up lost ground because it was viewed as the least risky by lenders and that momentum has obviously continued into this month. Meanwhile, the latest threats… Continue reading
Home sales fall slightly in Canada, latest monthly index shows
National home sales activity edged slightly lower on a month on month in July with prices up 8.9% on average nationwide, according to the latest real estate index. The data from the Canadian Real Estate Association (CREA) shows that sales were down 0.4% from June to July while actual, not seasonally adjusted activity is up 3.4% compared to a year ago. While the national sales price is strong, when Greater Vancouver and Greater Toronto are removed from the calculation then annual price growth drops to 4.1%. It is the second consecutive monthly decline in sales activity but CREA pointed out that transactions in May, June and July reached their highest monthly levels in more than five years. July sales were down from the previous month in about half of all local markets, led by declines in Hamilton-Burlington and in the Durham Region of the Greater Toronto Area (GTA). The monthly decline in sales for these two markets represents a pullback from record levels in June and CREA says it likely reflects an insufficient supply of listings. By contrast, sales in Newfoundland and Labrador were up the most on a month on month basis, marking a rebound from a quiet month of June for the province. ‘National sales activity remains solid, fuelled by strength in British Columbia and the Greater Toronto Area, where listings are in short supply or trending that way,’ said CREA president Pauline Aunger. According to Gregory Klump, CREA chief economist, markets elsewhere across Canada are largely well balanced and in some cases have an ample supply of listings. ‘It’s fair to say that the strength of national sales is still a story about two cities, but it’s equally about how trends there are spreading out in their respective provinces,’ he explained. ‘Trends in British Columbia and Ontario have a big influence on the national figures, since they account for about 60 per cent of national housing activity. As a result, the national picture reflects how demand is running high for the short supply of single family homes in and around the GTA while the balance between supply and demand is tightening in B.C.’s Lower Mainland. These remain the only places in Canada where home prices are growing strongly,’ he added. Actual, not seasonally adjusted, sales were up from year-ago levels in just over half of all local markets, led by the Lower Mainland region of British Columbia and the GTA. While Calgary continued to post the largest year on year declines in sales compared to last year’s record levels, activity there is nonetheless running roughly in line with five and 10 year averages for sales during the month of July. The number of newly listed homes was little changed, up 0.2% in July compared to June, marking the fourth consecutive month in which new listings have held steady. New supply was up in a little more than half of all local… Continue reading
UK commercial property investment return falls slightly
Total return on investment in UK commercial property fell to 1.2% in July from 1.3% in June, according to the latest CBRE Monthly Index. July’s fall was mainly a result of weaker performance from central London, but despite this monthly fall, over the last 12 months rental value growth in central London offices has now reached a post-recessionary high of 9.65%. Overall rental and capital values continued to grow in July, but did so at a reduced rate, with rental values growing at 0.3%, slower than the 0.5% for June, and capital values growing at 0.7%, down from 0.9% the previous month. The office sector was one of the biggest movers in July. While the market recorded another month of good performance, after a strong second quarter, July’s returns fell from 1.8% in June to 1.3%. The report says that this was largely down to the central London market, where total return fell to 1.1% from 1.7% the month before. Total returns were also down in outer London/M25 and the rest of UK, but not to the same extent as in central London. Overall, however, the central London office market is booming. Annual rental growth for the 12 months to July 2015 is now at a post-recessionary high of 9.65%, overtaking the previous peak in the year to October 2011 of 7.13%. Central London offices now have the highest rental growth of all UK commercial property markets over the last 12 months, driven by 12.48% growth in the City, and 10.52% growth in Midtown. ‘Despite the slight dip in July, office rents and capital values in central London market have been growing strongly over the last year. As a result of this performance, investment into the market has grown from £2.4 million in in the first quarter of 2015 to £4 million in the second quarter,’ said Michael Haddock, senior director of CBRE. ‘The high level of competition for central London assets means that investors, both local and foreign, are increasingly looking at opportunities in the rest of the UK and activity has been growing at an even faster rate outside London,’ he added. High street shops and industrials also recorded positive rental growth, but with some marked geographical divergence across the UK. In both sectors, the South East outperformed the rest of the UK. Rental value growth for high street shops increased from 0.2% to 0.5% in the South East, while rental values for the rest of the UK were flat for the month. Similarly, the industrial sector recorded 0.7% rental value growth in South East up from 0.5% the month before, while the growth rate fell in the rest of the country from 0.4% to 0.2%. Continue reading
