Tag Archives: real-estate
Office market in Saudi Arabia flat as new completions offset higher demand
Annual office take up in key Saudi Arabian cities is continuing to rise but higher demand is offset by new office completions, according to the latest report into the country’s commercial property market. In Riyadh and Jeddah in the 12 months to June 2015 this resulted in vacancy rates remaining broadly stable over the same period and rents were also unchanged in the two cities. The analysis from international real estate firm Knight Frank also shows that in the first half of 2015 Grade A and B office rental values in the capital stood at SAR1,300 and SAR900 per square metre per annum, respectively. Meanwhile, Grade A at SAR1,200 per square metre per annum and Grade B at SAR700 per square metre per annum rents in Jeddah were also flat. In Eastern Province, demand for office space was flat in the 12 months to June 2015 and the report points out that there is little to indicate that demand will rise in the near term, suggesting that the completion of new office projects will exert upward pressure on vacancy rates. However, with landlords in the market largely insensitive to changing supply demand dynamics, it is suggests it is difficult to see rents budging from their current levels of SAR1,050 for Grade A offices and SAR700 for Grade B offices. The report says that the current supply of Grade A and Grade B office stock in Riyadh stands at 3.5 million square meters, the majority of which is concentrated in the central and northern parts of the city. ‘Due to current dynamics we do not expect the market as a whole to see increased vacancy rates or a reduction in achievable rental rates as demand for quality commercial spaces that are well located and benefit from good floor plates will remain strong in the short to medium term,’ it adds. Supply of office space in Jeddah currently stands at 820,000 square meters with over 100,000 square meters of office supply due to be added to the market in the short term. As a result of construction delays, the first half of the year saw few completions which resulted in market wide vacancy rates remaining stable at 10%. Total stock is expected to exceed 1 million square meters in the medium term as new supply comes online and the report says that the second half of the year will see additional supply coming from a number of small to medium sized projects. ‘Due to the historic lack of Grade A stock in the market, we see robust demand for good quality offerings in the short to medium term as tenants look to upgrade to better quality premises and the non-oil economy continues to show healthy growth,’ the report adds. Whilst the Eastern Province does not benefit from a well-defined CBD, supply looks set to grow with a number of projects under construction due to be released to the market between the fourth quarter of… Continue reading
New home building in Australia reaches record high but stamp duty also up
New home building in Australia bounced back in the second quarter of 2015 but overall all home owners are paying more in property tax, new figures show. The number of detached houses beginning construction held steady at a relatively high level, while a rebound in multi-unit dwelling commencements provided the overall lift to reach the highest level for any quarter on record, according to the figures from the Australian Bureau of Statistics. The figures show there was a 0.7% increase in detached home commencements while others, predominantly multi-unit dwellings, jumped by 19.2%, driven by a surge in the state of Victoria. The state recorded over 9,000 multi-unit commencements, which is a record high. In the 12 months to March, almost 205,000 new dwellings were commenced, the first time the 200,000 mark has been breached. According to the Housing Industry Association (HIA) leading indicators suggests that the number of commencements in the June quarter will be even higher. ‘When we get the final result for the 2014/2015 fiscal year it is likely to show more than 210,000 new dwellings were commenced during the year,’ said HIA economist Geordan Murray. A breakdown of the figures show that new home starts increased by 1.9% in New South Wales, by 18.8% in Victoria, 20.9% in Queensland and by 12% in the Northern Territory. But elsewhere, there were sizable declines, most notably in South Australia where the strong result in the December quarter was reversed by an 18% fall. They were down 4.8% in Western Australia, 14.7% in Tasmania and down 14.4% in ACT. However, the HIA is warning that for the whole of the housing market the burden of stamp duty payable on house sales is becoming more of a burden, especially for new builds. Its latest Stamp Duty Watch analysis shows that the property tax has increased across the country. In New South Wales, Victoria and the Northern Territory, the typical stamp duty bill now amounts to over $20,000. Stamp duty bills have increased particularly sharply in NSW and Victoria since late last year, according to Shane Garrett, HIA senior economist. ‘Clearly, stamp duty is a major impediment to housing affordability. It is a particularly onerous tax on new housing. In many instances stamp duty is paid multiple times as transactions occur during the new dwelling’s life cycle. This is one example of the inequitable tax treatment of new housing relative to existing property,’ he explained. ‘Independent research conducted for HIA last year provided compelling evidence of the benefits to Australian living standards and economic growth from the replacement of stamp duty with more efficient, broad based revenue raising measures,’ he added. The highest tax on a typical home is in the Northern Territory at $23,128, followed by New South Wales at $22,490, Victoria at $21,790, Western Australia at $17,053, ACT at $16,350, South Australia at $15,080, Tasmania at $8,735 and Queensland at $5,950. Continue reading
Commuters an hour from London pay 60% less for a home, new research shows
Average house prices drop from £722,000 in central London to £272,000 in commuter towns an hour outside of London, new research has found. It means that people living up to an hour’s rail journey and commuting to London for work save on average £450,000, or 60%, when it comes to buying a home, according to the analysis from Lloyds Bank. Wellingborough tops the list of the most affordable commuter towns but people that work in Birmingham and Manchester can be better off living in the city centre, rather than commuting, the research also found. Towns that are an hour’s commute from central London include Crawley, Newbury, Colchester and Chatham have an average property price of £272,000 and although commuters face paying an average of £4,944 in travelling costs, a commuter would need to travel for 91 years for the total rail costs to wipe out the difference in average house prices. Buying a home closer to central London saves travel time but not money. Indeed, 20 minutes closer and house prices begin to rise. Commuters from towns approximately 40 minutes away from central London, including Reading, Stevenage, Sidcup and Billericay will have to pay an average house price of £349,000, still some £373,000 or 52% lower than in central London and with a less significant average annual rail travel cost at £3,499. Even at up to 20 minutes distance away from the heart of the capital, commuters from towns such as Ilford, St. Albans and East Croydon benefit from an average house price that is nearly £321,000 lower than in central London. Though examples are rare, some commuters to central London do live in areas that command higher average house prices. For example, commuters to London from Beaconsfield pay a higher average house price at £921,516 than central London while also having to cover the cost of an annual rail cost of £3,788. Nearby, Gerrards Cross also has an average house price that is £32,525 higher. ‘It's no surprise, for London at least, that the further you commute the larger the difference in house prices although, of course, the journey also gets longer and more expensive,’ said Andrew Mason, mortgages director at Lloyds Bank, ‘The decision to commute is not simply a trade-off between financial costs and journey times. Quality of life is an important consideration and in nearly all towns in this survey housing affordability is significantly better with a London salary compared to what can be earned locally,’ he pointed out. ‘For commuters with up to an hour's journey to central London, the reward is an annual salary that is, on average, 22%, or £8,500, higher than what they could earn in their place of residence which is close to £38,500. In the 10 most affordable commuter towns the uplift in annual earnings by working in London is nearly £13,000,’ he explained. One of the key factors for most commuters is the significantly higher annual salaries that can be earned from working in… Continue reading
