Tag Archives: real-estate
Property prices and sales still falling in Dubai and Abu Dhabi
Residential sales and prices in Dubai are still on a downward trajectory and in neighbouring Abu Dhabi the market is also down apart from rentals. The Dubai residential property sales price index from REIDIN fell by 1.29% in May and prices are now down 5.7% year on year. A breakdown of the figures shows that apartment sales prices fell 1.19% month on month and are down 6.8% year on year while villa sales prices registered were down 1.72% on a monthly basis and down 0.8% year on year. Residential property prices in the Dubai rental market fell by 0.37% in May 2015 but have increased 1% year on year. In this sector apartment rental prices fell 0.44% month on month but are up 1.2% year on year while villa rental prices also fell 0.44% month on month and are unchanged on an annual basis. The firm’s Abu Dhabi residential property price index fell by 0.27% in May and prices are down 2.3% compared to May 2014. A breakdown of the figures shows that apartment sales prices fell 0.52% month on month and 4.5% year on year while villa sales prices increased 0.8% on a monthly basis but are still down 1.2% year on year. Residential property prices in the Abu Dhabi rental market have fared better, up 0.37% month on month and up 5.1% compared to May 2014. Apartment rental prices increased by 0.18% month on month and 2.8% year on year while villa rental prices were up 0.68% on a monthly basis and 7.5% year on year. Meanwhile, the latest figures from the Dubai Land Department (DLD) show that Dh64 billion of property transactions were completed in the first quarter of 2015 of which Dh24 billion was from property and land sales and Dh37 billion the result of new mortgages. The most popular areas for unit sales were Business Bay, where 1,202 units were sold for a combined Dh1.84 billion, followed by Dubai Marina. Of the Dh24 billion worth of land and property bought, some Dh9 billion was bought by GCC investors with Dh5.8 billion to Emiratis and Dh1.9 billion to Saudis. Dh3 billion was from other Arab investors and Dh12 billion from non-Arabs. When it comes to buyers outside of the Gulf region, the data shows that Indians bought Dh3 billon of properties, British buyers bought Dh1.9 billion and Pakistanis bought Dh1.4 billion. Iranian and Russian buyers rounded out the top five nationalities of non-Arab investors. ‘The figures are showing a well-established trust in our real estate market,’ said the DLD director general, Sultan Butti bin Mejren. Continue reading
Bank voices concern about higher mortgages and potential effect on UK economy
The Bank of England is concerned that home buyers are taking on bigger mortgages because house prices are rising too fast in the UK, but it is first time buyers who are not offered enough, experts warn. The Bank says that with prices rising faster than mortgages there could be rising debt levels and the economy could be at risk if interest rates rise and home owners struggle to keep up with their mortgage payments. The Bank's deputy governor, Sir Jon Cunliffe, said he is prepared to step in if the debt mountain gets out of hand in the bank’s latest financial stability report. 'Our concern is not so much about house prices, it is the chain between high house prices, prices growing faster than people's incomes, and people having to take out bigger and bigger mortgages and the debt that families then have relative to their income growth,’ he explained. Bank took action a year ago amid similar concerns and put a debt to income limit on mortgage lending. While the market cooled in the second half of the year it is now rising again on a steady basis. ‘Prices stopped growing as fast as they have been, mortgage approvals came down. There are now signs the market is coming back up again. We are not seeing the sort of growth in momentum we saw this time last year, but given the high level of debt to income we have in the UK anyway, and the ability of this market to move very fast, this is something we need to watch and that's why we have left that insurance policy in place,’ Cunliffe added. But his comments come at a time when mortgage lending is still low compared with historical averages and experts have voiced concerns about certain sectors in particular are seeing fewer loans available, for example first time buyers who are crucial to the health of the housing market. Indeed, a new analysis in the latest edition of the Genworth/Moneyfacts mortgage tracker report says that new product launches and falling interest rates are masking a growing crisis in high loan to value (LTV) mortgage lending. Despite more products being offered at record low prices, Genworth’s analysis of government and industry data suggests this part of the mortgage market is rapidly falling back into decline. It reveals that with total 95% LTV lending down by £147 million year on year in the first quarter of 2015, average lending per product has dropped by 38% over the same period. This has contributed to a 10% fall in first time buyer numbers which means that 10,400 fewer people have succeeded in buying their first home so far in 2015 than was the case last year. It also points out that new products come with extra price premium despite rates hitting record lows. The Tracker shows the number of products available to house buyers with a 5% deposit hit a… Continue reading
UK prices down 0.2% in June, market sees smallest annual growth since 2013
UK house prices fell by 0.2% in June which meant that annual house price growth moderated to 3.3% from 4.6% in May, according to the latest index report. This takes the average price of a home to £194,258, according to the monthly index from lender Nationwide. The data also shows that in the second quarter prices increased by 1% and are up 4.1% compared to the same quarter in 2014. Eleven of the thirteen UK regions covered in the index saw a slowdown in the annual rate of growth in the second quarter of the year and it is the smallest annual rate of increase for two years. However, most parts of the country continued to see annual house price gains apart from Wales and Scotland which recorded small declines. The North remained static while Northern Ireland and London have the highest annual growth. Indeed, Northern Ireland overtook London to become the strongest performing region, with average prices up 8% year on year but prices remain around 45% below their 2007 peak. London saw a further softening in annual price growth to 7.3%, compared with 12.7% in the first quarter of the year. The Outer Metropolitan area followed closely behind, with annual price growth of 6.8%. The North was the weakest performing English region, with prices essentially unchanged compared with the same period a year ago. Wales saw a 0.8% year on year fall in average prices, similar to the previous quarter while Scotland was weakest performing region with a 1% fall in prices. ‘This maintains the gradual downward trend that has been in evidence since the middle of 2014,’ said Robert Gardner, Nationwide's chief economist, but he added that house price growth continues to outpace earnings. He also pointed out that the slowdown in house price growth is not confined to, nor does it appear to be driven primarily by, developments in London. In quarter on quarter terms, London has continued to see price growth at or above the rate in the UK overall over the past three quarters, while the annual rate of price growth in the capital remains the second highest in the country. He believes that given the gap between population growth and rates of house building, housing stock is likely to be used increasingly intensively until building activity catches up. ‘There are signs that this has been occurring, with the number of vacant properties trending down since 2008, though council tax changes in 2013 impacted reporting and probably overstate the decline in the last two years,’ Gardner explained. He added that the strong relationship between supply constraints and vacancy rates is clearly visible at the regional level. ‘As you might expect, regions where affordability is more stretched see far fewer vacancies. For example, in London, the UK region where affordability is most stretched, only 1.7% of the housing stock was vacant in 2014, around half the 3.5% rate prevailing in the North of England,’ said Gardner. ‘Given… Continue reading
