Tag Archives: real-estate
Residential property market in China picked up in third quarter of 2015
The residential property market in mainland China picked up gradually in the third quarter of 2015 amid a series of favourable policies such as cuts in interest rates, relaxed restrictions on foreign purchase and an easing of housing provident fund loans. Luxury home prices rose further in first tier cities including Beijing, Shanghai and Guangzhou, where the markets continued to clear inventories, according to the latest Greater China property market report from international real estate firm Knight Frank. It says that the favourable policies will continue to benefit first tier cites, but are less effective in lower tier cities with high inventory levels and weak demand. ‘With Chinese and Hong Kong’s stock market volatility and concerns over an interest-rate hike in the US, Hong Kong’s luxury home buyers tended to wait and see, while secondary landlords were also firm on asking prices, resulting in declines in home sales, rents and prices in the luxury market,’ it explains. It points out that more residential properties are scheduled to complete next year, which will impose further pressure on luxury home rents and prices. In Taipei, amid the government’s regulatory measures, luxury home transactions declined. Landlords became more inclined to hold and rent out their residential assets, leading to increased leasing supply. Nevertheless, luxury residential rents and prices remained stable during the third quarter and the outlook is one of polarisation. The report says the market will be affected by cooling measures, the launch of a combined property and land tax and market expectations. ‘Premium residences in the downtown area will have prices remaining firm, while non-prime luxury homes will experience downward pressure on prices,’ it adds. For the commercial market, the report says that Chinese stock market volatility coupled with growing fears of a slowdown in domestic economic growth, led to a slower pace of corporate expansion, hence weighting on Grade-A office rents in major mainland cities. On the other hand, the People's Bank of China has actively cut interest rates and the reserve requirement ratio since the beginning of this year, aiming to release liquidity in the financial system and ultimately to boost the economy. Grade-A offices prices in Beijing, Shanghai and Guangzhou rose as investing in such properties became increasingly attractive in such a low interest rate environment. With the completion of more Grade-A office buildings in the cities, rents are expected to face further downward pressure in the future. Hong Kong's Grade-A office market recorded strong performance. With sustained office demand from mainland financial institutions but a lack of supply in core business areas, the vacancy rate fell sharply and companies had to rent at higher rental costs. Due to extremely low availability and high rents in core areas, some firms shifted to more cost effective offices in non-core areas where supply was abundant. This trend is likely to continue next year, the report says, with further growth in office rents in core areas. In Taipei, over 80,000 square meters of Grade-A… Continue reading
Over half of UK home owners think EU vote will affect property prices
The UK referendum on the country’s future in the European Union is still years away but already home owners think it will have an impact on property prices. Some 55% believe that leaving the EU will have an impact on house prices in the UK. Of these 34% think leaving the EU would actually strengthen the value of their home, with 21% believing it will lead to a decrease in their property price, according to the poll by eMoov. It is thought the economic impact of leaving the EU will be felt hardest in London, however some 52% of those surveyed in London think it will push up the price of their property, with just 23% thinking the opposite. When Britain first joined Europe in 1973, the average house prices was just £9,045. Despite a post legislative referendum in 1975, UK house prices continued to increase for another 16 years to 1989. During Britain’s tenure as a member of the EU the average UK house price has increased by more than 2,000%. Based on these figures, it would seem the EU has been good for the UK property market, but Britain’s future in Europe still remains uncertain. ‘The consequences of exiting the European Union stretch far beyond its effect to UK property prices, however homeowners across the nation are understandably apprehensive as to the impact it could have on their property price, as our research shows,’ said the firm’s chief executive officer Russell Quirk. Pro EU campaigners have forecast central London will be worst hit if Britain does choose to leave the EU. ‘We saw how pre-election uncertainty froze property demand in the prime central London market. The uncertainty of Britain’s future in the EU could result in a similar effect on a much larger scale, but 52% of home owners in London seem confident a Brexit will only strengthen the value of their home,’ he explained. ‘This said, post-election stability failed to revive the high end London market, so who’s to say the same won’t happen if we do come out of the EU,’ he concluded. Continue reading
South east and east of England and Scotland seeing strongest house price growth
The south east and east of England are likely to see the strongest house price growth in the UK in 2015 with Scotland also likely to be a strong performer, according to the latest outlook report. The south east is expected to see overall growth of 5.8% this year with the east of England and Scotland both at around 5.8%, according to the report from Strutt & Parker, with Greater London at 5.1%. The firm’s five year outlook also sees these regions having some of the strongest growth with price inflation of 22.8% predicted for the east of England, 22.7% for the south east, 19.8% for Greater London and 18.5% for Scotland. Other areas of interest include the south west with five year growth of 16.5% expected. ‘From our Housing Futures research we know that there is a huge aspiration to live there,’ said Stephanie McMahon, Strutt & Parker’s Head of Research ‘Our national survey showed that 15.6% of respondents who said they had plans to move within the next five years wanted to live in the south west, particularly for retirement and lifestyle reasons,’ she explained. ‘That said, our survey also showed that taking into account all respondents, and analysing by age, that the south west was one of the areas that would experience a large exodus of people between the ages of 18 to 29, indicating that older people have perhaps greater flexibility in their working styles,’ she added. The outlook report predicts house price growth of 15.7% for Northern Ireland over five years, 15.4% for the east midlands, 14.2% for the west midlands, 13.4% for the north west, 11.7% for Yorkshire and Humber, 11.3% for Wales, and 10% for the north east. The report also explains how major developments and events are likely to affect house prices. For example, central London, most notably locations such as Farringdon and Shepherd’s Bush are seeing rises due to the Crossrail infrastructure project. Outside of London, the electrification of the Great Western line with the first stages due to open in 2017 between London, Oxford, Newbury, Bristol and Cardiff means that property prices could rise and homes in the south east, Oxford and Bicester could benefit from the train line from Marylebone being brought into Oxford. The report mentions that there is real concern about potential interest rate increases in 2016 even although they are likely to come incremental shifts. This could affect first time buyers and also home owners with interest only mortgages. Another concern on the horizon is the Bank of England having powers over the buy to let market which could limit the sector and looking further ahead the referendum on whether the UK should remain in the European Union has the potential to have an effect on markets. ‘The EU Referendum will take place before the end of 2017. The lobbying has already begun and will escalate over the coming months. Although an immediate and direct impact on the majority… Continue reading
