Tag Archives: real-estate
Saudi Arabia set to see continued growth of its residential real estate market
Saudi Arabia has seen its residential property market expand rapidly over the last year due to increased demand caused by various government initiatives to boost the housing sector. Over the past year, residential prices in Riyadh have risen by 5% to 7% overall, according to the Riyadh residential research report from international real estate firm Knight Frank. However, it points out that there have been variable performances across the capital’s districts, with congestion issues in the south, for example, responsible for prices stagnating. Meanwhile, in the north, which has seen notable development activity, prices have seen a healthy uplift of around 9%, the report says. In the short to medium term, with new supply unlikely to be able to fully offset pent-up demand, the firm expects residential prices to continue to move in an upward direction. In recent years, Saudi Arabia’s residential construction sector has been expanding rapidly. Indeed, the latest available data from the Saudi Arabian Monetary Agency shows that the value of residential building construction across the kingdom rose for the ninth consecutive year in 2012, increasing by 11.4% year on year. Riyadh is an important driver of construction activity in Saudi Arabia and the capital city accounted for an average of 27% of all residential and commercial permits issued across the Kingdom between 2003 and 2013. Moreover, the number of permits issued in the capital rose by 319% over the 10 year period, outperforming Saudi Arabia as a whole, which experienced a 215% increase. The report points out that despite rising development activity demand for residential units continues to outstrip supply in Riyadh. Indeed, the capital has a requirement for around 50,000 housing units per annum over the next five years and has an estimated housing inventory of just 1.15 million units. However, due to construction delays and the lack of available land, developers have found it increasingly difficult to bridge the gap between supply and demand. What’s more, although there are a number of large housing schemes planned to be completed in the short term, there is unlikely to be enough capacity in the system to deliver the required number of units to satiate current levels of pent up demand. Figures from the Central Department of Statistics and Information (CDSI) show that just 60% of housing units in Saudi Arabia are owner occupied and in Riyadh this drops to 53%. By comparison, the levels of owner occupation in neighbouring countries is much higher at 75% in the United Arab Emirates, 80% in Qatar, 82% in Bahrain and 83% in Oman. The report explains that in order to address the housing undersupply issue, the government has launched a number of projects in recent years although not all of these have achieved the success that had been envisioned. For example, in 2011, the government announced a programme of works to build 500,000 homes across the kingdom.’ However, the scheme struggled to gain traction due to issues related to a lack of land availability, complexities in allocating aid and slow moving… Continue reading
Gazumping is back in the UK with buyers in Brighton most affected
Brighton leads the way as the gazumping capital of Britain with 34.9% of residents losing out in this way, new research has found. As if getting a foot on the property ladder wasn’t already hard enough for some, the danger of being gazumped is now becoming a reality again for property buyers, according to a study by online estate agent eMoov. It found that on average across the UK some 22% have experienced the turmoil of being gazumped which can leave prospective buyers out of pocket and back to square one in the buying process. In the London market gazumping is over the national average with 31.9% in the capital have come within touching distance of a purchase before it was snatched from their grasp. The tactic of sealed bidding, particularly rife in the capital, provides the ideal environment for potential gazumpers. Outside of the South East the average drops from 22% to 18%. Birmingham figures show 27% of property buyers in the area have been gazumped with Sheffield at 22%, Bristol at 21%, Leeds and Nottingham at 20%. Although gazumping is not a new concept it has become a more regular occurrence across the country. The research also found that the higher the price of the property, the more likely you are to be gazumped. Of those that had been previously gazumped 27% were over properties of £500,000 or above. This dropped to 25% for properties valued between £200,000 and £500,000 and a further 6% for properties under £200,000. ‘It is one of those things in the current structure of property purchasing unfortunately. Buyers that have displayed honest interest in a property only to be let down by owners with pound signs in their eyes, often encouraged by traditional estate agent looking to increase his fee percentage,’ said Russell Quirk, the firm’s chief executive officer. Liverpool was the least affected area of England for gazumping at just 13%, however this doesn’t necessarily put an end to unethical behaviour during the buying process. ‘If these markets cool off too much, we could see gazundering coming back in. This is a tactic in areas with little demand where the buyer calls up just before the exchange of contracts and demands to pay less,’ explained Quirk. Continue reading
Home building reaches a new high in Australia
This year has seen a record number of new homes being built in Australia, according to the latest outlook report from the Housing Industry Association. However, the growth in new residential construction has been slower to gather momentum and breadth in terms of both geographical location and dwelling type, it says. According to HIA chief economist, Dr Harley Dale, this means that the ‘look and feel’ of this building cycle is different to historical experience. ‘In aggregate, we will commence nearly 190,000 new dwellings in 2014, surpassing the previous record of 187,000 back in 1994,’ said Dale. ‘The momentum culminating in this milestone has provided a substantial boost to Australia’s economy at a crucial juncture in the cycle. Below trend economic growth and weak labour market outcomes would be considerably worse without the reach a new home building recovery is exerting into the broader economy,’ he explained. He pointed out that against this backdrop the HIA believes it is unfortunate that policy makers have failed to grasp the reform initiative required to compliment record low borrowing costs and send new home building levels higher still in 2015 and 2016. ‘Australia’s economic growth and labour market performance will be weaker than otherwise as a consequence of this lack of policy action. Record low borrowing costs have combined with other factors such as high net overseas migration to unleash substantial pent-up demand for new housing,’ said Dale. ‘These factors will keep the level of new homes commenced at historically elevated levels. However, what the economy needs is further growth in new home building over the next couple of years, but that will only occur as a consequence of taxation and regulatory reform,’ he pointed out. ‘It is still an impressive achievement to build a record number of new homes, at a level that approaches what the average build rate will have to be if we are to adequately house our growing and ageing population in coming decades,’ he said. He explained that renovations investment has not joined the new housing ride this cycle, increasing by only 0.3% in 2013/2014 from a decade low. ‘Unemployment concerns, a lack of available credit, and an elevated household savings rate are but three elements in the current environment which mean there has not been room for a renovations recovery alongside new home building activity and existing property price growth,’ said Dale. But he pointed out that that situation looks to be slowly changing as growth of 0.9% in renovations investment in 2014/2015 is forecast to accelerate to 2% growth in the subsequent three years. ‘That would be a great outcome, but it is a long road back for this important sector of Australia’s domestic economy,’ Dale concluded. Continue reading
