Tag Archives: real-estate
Property prices and rents continue falling in Cyprus and sales are down considerably
Property prices and rental values are continuing to fall in Cyprus but there are much fewer sales than normal due to the banking crisis, according to the latest quarterly index report from the Royal Institution of Chartered Surveyors. The Property Price Index has recorded falls in almost all cities and asset classes, with significant falls being recorded in Nicosia. RICS says that Nicosia is clearly feeling the impact on the government and banking sector, which dominate the local employment market, whilst other cities are progressively bottoming out. Across Cyprus, residential prices for both houses and flats fell by 1.6% and 0.5% respectively in the fourth quarter of 2013. The biggest drop was in Larnaca where house prices were down1.4%, and Nicosia which saw a 6.8% fall in prices for flats. Values of retail properties fell by an average of 3.2%, whilst those of offices and warehouses fell by 1.4% and 0.7% respectively. Compared to the fourth quarter of 2012, prices dropped by 13.3% for apartments, 10.5% for houses, 19.8% for retail, 12.8% for office, and 15.4% for warehouses. Across Cyprus, on a quarterly basis rental values decreased by 1% for apartments, 1.3% for houses, 3.0% for retail units, 1.4% for warehouses, and 1.6% for offices. Compared to the fourth quarter of 2012, rents dropped by 13.3% for flats, 12.3% for houses, 29.4% for retail, 18.0% for warehouses, and 18.8% for offices. ‘The majority of asset classes and geographies continue to be affected, with areas that had dropped the most early on in the property cycle now nearing the trough. Only properties in Famagusta district showed a marginal increase in both capital values and rents, as the market there appears to be stabilising,’ the report says. At the end of 2013 average gross yields stood at 3.8% for apartments, 1.9% for houses, 5.3% for retail, 4.5% for warehouses, and 4.3% for offices. The report points out that the parallel reduction in capital values and rents is keeping investment yields relatively stable and at very low levels compared to yields overseas. ‘This suggests that there is still room for re-pricing of capital values to take place,’ it adds. The report also points out that during the fourth quarter of 2013 the Cyprus economy began stabilising from the impact of the decisions of the Eurogroup on 15 and 27 March to bail in the depositors of two of Cyprus’ largest banks, to close down Laiki Bank, and to impose capital restrictions. The secondary implications of these decisions, mainly the reduction of bank staff, the increase in unemployment, and further decreases in salaries, were unfolding throughout the quarter. ‘Given prevailing economic conditions and the turbulence in Cyprus’ banking system, there was a lack of transactions during the quarter. Local buyers in particular were the most discerning as the increase in unemployment and the worsening prospects of the local economy led to a sharp reduction in interest. Furthermore, those interested were unable to access bank finance or… Continue reading
Property value growth in Australian capital cities slows, latest monthly index shows
Residential property value growth in capital cities in Australia didn’t really move last month with the market pausing for a breather, according to the latest RP Data Rismark home value index. The combined capital cities index recorded no change overall during February with Sydney, Hobart and Darwin the only capital cities to record a slight lift in dwelling values. The index recorded zero month on month growth. This follows eight successive monthly increases where dwelling values rose by 10% and values are up 13.2% since June 2012. Also, recent growth has taken capital city dwelling values to 4.8% higher than their previous peak in October 2010. ‘The February market results are in stark contrast to earlier readings where capital city dwelling values moved 2.6% higher over the past three months. The likelihood is that the weak reading for February is an adjustment from the strong readings in December and January rather than the beginning of a flat to negative growth phase across the macro level housing market,’ said TP Data research director Tim Lawless. Additional metrics tracked by RP Data show that buyer demand remained very strong in February with RP Data’s valuation platforms recording a record month for average daily levels of mortgage related activity. Also, auction clearance rates remained strong and with little slippage in vendor discounting levels or average selling times. However, Lawless said there will need to be further months of flat to negative movements before it can be said confidently that the housing market is slowing. ‘Our view is that housing market conditions will start to wind down later this year as affordability constraints and low rental yields dampen market conditions. Additionally, with a belief that mortgage rates are likely to start tightening later this year, it may help to quell some of the exuberance we have been seeing,’ he explained. Rismark International chief executive officer Ben Skilbeck, pointed out that Sydney continued to be the standout performer. ‘When looking at individual capital cities, the Sydney market has had a surprising run of nine successive month end increases totalling 14.1%. In keeping with what other capital cities have experienced, we would have expected some dips along the growth trajectory over a nine month period,’ he said. ‘Despite the recent strong Sydney capital gains, over the past decade Sydney values have compounded at just 2.9% per annum. Arguably this market is playing catch up before settling into a more sustainable rate of growth,’ he added. The February results show that the premium end of the housing market continued to gather pace while at the more affordable end of the market, capital gains have been slowing. Dwelling values across the most expensive quarter of capital city housing markets are up 3.8% over the three months to February 2013, and 6.8% over the past six months while homes at the most affordable end of the market have seen values remain flat over the past three… Continue reading
Dubai’s real estate sector gets ‘smarter’
Dubai’s real estate sector gets ‘smarter’ Issac John / 11 February 2014 World Expo will have limited direct effect in 2014 because of restricted short-term activity, says real estate advisory firm. Expo 2020 will have a positive impact on the UAE over the long-term with hospitality, logistics and retail being the major winners, Jones Lang LaSalle, a leading real estate investment and advisory firm, said on Monday. However, the World Expo will have limited direct effect in 2014 because of restricted short-term activity, the real estate advisory firm said while warning that both price expectations and excessive new supply would require careful management leading up to 2020. In its “2014 top trends for UAE real estate” report, Jones Lang LaSalle (JLL) brushed aside concerns that Dubai would experience another bubble with unsustainable price growth in the residential market, increasing cost pressures and return of speculative activity. On the other hand, JLL said there are many differences this time around that makes for a ‘smarter’ market with investors getting more cautious, better regulations, and phased out property development in line with demand. “There is also less reliance on pre-sales and sub-developers and significant levels of new supply are being provided,” JLL noted. The International Monetary Fund has cautioned that Dubai might need to intervene in its property market if there are signs of overheating to prevent another boom-and-bust cycle. “When you see rapid increases in any asset prices then you just need to be prepared to act,” Masood Ahmed, the IMF’s director for the Middle East and North Africa, has said. In its report, JLL said mega projects that were either put on hold, significantly slowed or were not initiated during the financial crisis are a reality again because of growing confidence in the UAE’s market. “The plans are more measured and there is an increased focus on phasing projects over many years in line with end user demand. In Dubai, these master-plan communities include Dubai Canal, Mohammad Bin Rashid City and Dubai Waterfront. In Abu Dhabi, they include Saadiyat Island and Capital District, now known as Zayed City.” JLL predicted more varied approaches to funding real estate. It expects that equity would be a preferred funding approach in 2014 rather than debt. Pre-sales will remain important in the residential market and pre-leases and build-to-suit will be funding many new office projects, it said. “Sale and leasebacks, REITs (real estate investment trust) and IPO’s (initial public offering) and last mile financing will become increasingly popular options for funding as banks remain cautious to enter into new relationships. There may be some further IPO’s and bond issuances in 2014, but these are not expected to be widespread and to be limited to just a few major real estate players,” it said. Overall, JLL expects that 2014 will remain primarily a tenants’ market with little decline in the current excessive vacancy levels in Dubai or Abu Dhabi. However, with pent-up demand increasing from corporates who are now freeing up more capital for expansion of their business, JLL sees an increase in corporate activity in the UAE in 2014. “The current two-tier market is likely to continue, with the best buildings experiencing increased take up and little demand for secondary space. As corporates focus on more innovative workplace solutions, such as hot desking and open floor plans, efficiencies are being achieved that will result in the demand for real estate growing less quickly than employment levels.” JLL also expects more investment sales in the hotel sector across the UAE, as owners now have more realistic expectations and hotels continue to perform strongly. “There remains strong interest from investors in this sector and the willingness of owners to make strategic disposals will allow this interest to be converted into more sales than have been experienced in recent years.” Dubai became the first country to back new international property measurement standards (IPMS) in September 2013, and this should help better regulate the market in 2014, the real estate advisory firm observed. According to JLL, Dubai is growing towards the South with Dubai World Central, which includes the Expo 2020 site and Al Maktoum Airport, driving this trend. There is also a notable trend towards development closer to central Dubai, in filling some of the gaps left by the previous scattered development. “Mohammed Bin Rashid City is a good example of this trend, incorporating many of the components originally envisaged for Dubailand.” — issacjohn@khaleejtimes.com For more news from Khaleej Times, follow us on Facebook at facebook.com/khaleejtimes , and on Twitter at @khaleejtimes Continue reading
