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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
Neighbourhood plans take up edging towards maintaining status quo, research finds
The take up of neighbourhood plans, a cornerstone of the UK government’s Localism agenda, is concentrated in the south of England, according to new research. They are generally in more affluent areas within Conservative led authorities, with a mixed picture of providing for or resisting development, says the research published by planning consultancy Turley. To date, over 980 applications have been made by neighbourhood organisations for formal approval to draw up a neighbourhood plan. Of these, over 750 areas have been approved by local authorities to proceed. The research also shows that 75 neighbourhood plans have been published for consultation, but only six Neighbourhood Plans were formally in place at the end of February 2014. Of those plans published, 73% have been produced in areas with Conservative led councils, with just 9% having been produced in areas which are Labour controlled and 75% of all published plans have been produced in the south of England. The Turley research also highlights that areas of below average affluence have so far been less involved in the neighbourhood planning processes, with just nine plans published in areas categorised as ‘most deprived’. ‘We have reviewed over 4,000 pages of draft neighbourhood plans and a clear picture is emerging. The preparation of neighbourhood plans is popular but is being recognised more by communities in the south of England compared to the North. It also appears that less affluent communities are not yet engaging fully in the neighbourhood planning process,’ said Rob Peters, executive director in Turley’s Bristol office who led the research. The research found that, of the plans published so far, the smallest population of a neighbourhood plan area is Walton in Wakefield in West Yorkshire, representing just 225 people. The largest is Winsford in Cheshire representing over 30,000 people, highlighting the difference in size, scale and geography of the plans. Some 67% of all published plans cover rural neighbourhoods and one third relate to urban areas while 55% of all neighbourhood plans seek primarily to resist new development, with that number increasing to 63% in rural areas. ‘I am not yet convinced that neighbourhood planning is an emphatic success or that the plans are making satisfactory provision for development, as the government has suggested, when so few plans have been made (i.e. adopted),’ said Peters. He pointed out that neighbourhood plans have been stalling in their progress to adoption with adjourned examinations in Winslow, Aylesbury Vale, rejections by Examiners in Slaugham, and legal challenges in Tattenhall, Cheshire. ‘The picture that emerges from the published neighbourhood plans is one of the majority seeking to maintain the status quo and restricting new development, with a smaller minority of plans encouraging growth. This suggests a potential for conflict between localism delivered through neighbourhood planning and the positive presumptions and growth that underpin Government policy,’ he added. The Turley research recognises that neighbourhood forums can provide a useful route to achieve meaningful engagement, but in some cases the views of land owners and… Continue reading
UK average asking prices up 3.3% month on month, latest index shows
New sellers have helped push up property prices in the UK, with the average asking price seeing a rise of 3.3% or £8,103 last month, according to the latest data from Rightmove. The average property coming to the market is now priced at £251,964, some 6.9% or £16,223 more than a year ago which is the highest annual rate for over six years. The real estate website also reports that new listing numbers jumped by 18% compared to a year ago, but the supply shortage continues as they fail to keep pace with numbers coming off the market. It says that buyers with a property ‘yet to sell’ are the losers as the market heats up, with agents reporting buyers able to proceed with speed are winning the property battle. Also market momentum continues to build with all of Rightmove’s 10 busiest ever days being in January this year, breaking 50 million pages in a day for the first time. ‘The market rebound continues. While February is historically a positive month for prices of property coming to market, this is the second highest February rise since our index began in September 2001,’ said Miles Shipside, Rightmove director and housing market analyst. ‘New sellers are now asking over £16,000 more than those who came to market a year ago, a rate of increase not seen since before the credit crunch took hold in 2008. Those contemplating trading up, down or out may well be encouraged to come to market as they see their equity grow as prices rise,’ he pointed out. The data also shows weekly new listings averaged 27,768 over the last four weeks compared to 23,607 over the same period a year ago, an increase of 18%. While the sizeable year on year uplift is partly explained by a sprinkling of snow around this time last winter, this is the highest weekly run rate at this time of year since 2008. New supply is scarcest in the south where increased demand is greatest. London at 15%, the South East at 13% and the South West at 10% are all below the national average of 18%. Furthermore, even this significant boost in property coming to market is exceeded by the number of properties coming off the market, suggesting that the extra supply is being soaked up by buyer demand, an early indicator that transaction volumes will be considerably higher in 2014 than 2013. As a result there was a slight fall in the average available stock per estate agency branch, from 58 properties to 57. If increased listing levels are maintained, the firm points out, and they start to outstrip buyer demand, upwards price pressure will ease. It will take more than one month of improvements in new listing numbers to bring the market back into balance however, indeed some local market hotspots have not seen any uplift at all. ‘The housing market can only help to support a wider economic recovery if there is… Continue reading
