TSI
Demand for smaller units remains robust in Hong Kong property market
The new build residential real estate market in Hong Kong remained robust in December with small to medium sized units continuing to be sought after, the latest property market report shows. Overall during 2014 some 63,807 residential sales were recorded according to the Land Registry, an increase of 25.9% from 2013 and the first rebound since 2011 after cooling measures were implemented. The report from international real estate firm Knight Frank also shows that luxury residential sales over HK$10 million or above rebounded by almost 50% year on year, to reach a total of 7,778 sales in 2014. The firm points out that this robust trend has extended into 2015 when developers remained active in launching new projects, particularly small to medium sized units. The report also says that in order to tackle Hong Kong’s housing shortage, the government has proposed to increase private home supply to 19,000 units per year in the coming decade. ‘Despite this increase, we still expect to see mild growth of up to 5% in mass residential prices this year,’ the monthly report says. ‘Meanwhile, the potential interest rate rise in the United States and the continuing implementation of government cooling measures are expected to suppress the price growth of luxury flats,’ it explains. ‘More landlords will put their apartments up for lease instead of selling, resulting in an increase in rental supply which will drag down luxury residential rents,’ it adds. The report also records that the office leasing market was quiet in December, traditionally the slowest time for the market. Grade A office rents remained stable while year on year they are up 2% in major business districts in Hong Kong, up 5% on Hong Kong Island but down 6% in Kowloon. Sales were down 37% in 2014 compared with 2013, according to official figures but sentiment increased towards the end of the year driven by demand for large office space from end users motivated by cost savings. ‘In 2015 we expect we expect to see this trend continue with increased demand, not only from large banks and insurance companies looking to own their own offices in Hong Kong, but also from small to medium sized firms seeking to buy their own work space to reduce occupation costs,’ the report explains. ‘Looking forward we expect Grade A office rents in CBD areas to remain firm or experience a modest increase of up to 5% in 2015 given the limited supply and sustained demand,’ it continues. ‘Meanwhile, rents in non core districts should remain stable in 2015 with supply abundant, especially in Kowloon East where about three million square feet of new Grade A office space is scheduled for completion this year,’ it adds. Continue reading
Rent rises in Scotland tumbled during 2014, latest index shows
The pace of annual rent growth in Scotland dropped by two thirds in 2014 with average rents now just 1.2% or £6 higher than a year ago, the latest index figures reveal. This follows a monthly drop in average residential rents, down 0.4% in December to £536 per month, according to the Scotland Buy to Let Index from Your Move, one of Scotland’s largest lettings agent networks. It means that growth has slowed from a 3.9% annual jump in rent prices seen in 2013 but Edinburgh and the Lothians has bucked the trend with annual rent growth over the past year from 2.5% in December 2013 to 4.5% in December 2014. ‘Annual rent growth braked sharply over 2014, reducing the speed of rent rises to a sustainable and affordable pace. This is providing some welcome relief to the thousands of renters itching to jump on the housing ladder, who are already faced with enough hurdles to saving a deposit,’ said Christine Campbell, regional managing director of Your Move. ‘This wider downturn in growth during 2014 marks a return to the natural market rhythm. Scottish rents were holding fast on an even keel throughout 2011 and 2012, until the abolition of tenancy fees in November 2012 sparked a new tide of unnaturally steep rent hikes,’ she explained. ‘This should act as cautionary tale for policymakers considering further constricting changes to lettings legislation. The rental market is thriving by its own hand, and too much undue intervention may poison the current climate of affordability,’ she pointed out. ‘Scaring landlords out of the rental market would exacerbate the current housing shortage, and wound thousands of tenants as competition hots up. Buy to let investment is a vital remedy for the current housing shortage, and for the health of tenant finances,’ she added. A breakdown of the figures shows that overall, rents are higher than a year ago in three out of five regions of Scotland. After a strong acceleration in the pace of growth during 2014, average rents in Edinburgh and the Lothians have seen the fastest year on year increased at 4.5% in the 12 months to December. A 2.2% annual rise in Glasgow and Clyde takes the average monthly rent to £559, however this still represents a significant deceleration in the pace of annual rent growth, declining from 7.3% a year previously. While rents climbed consistently across all regions of Scotland during 2013, the slowdown in rent growth witnessed during 2014 has been more severe in some cases with two regions experiencing annual falls in rent prices. Average monthly rents in the Highlands and Islands are now 2% lower than December 2013. The South was the only other area of Scotland to experience an annual fall, with average rents down 1.8% over the past 12 months. The average monthly rent in the South of Scotland now stands at £484, down from £493 a… Continue reading
Compensation package for home owners on UK high speed rail route confirmed
A package of compensation and assistance for property owners along the London to Birmingham High Speed 2 rail route (HS2) has been confirmed by the UK government. With immediate effect owner occupiers of homes and small businesses between generally 60 metres and up to 120 metres from the line in rural areas can submit an application to HS2 Ltd to purchase their property at the full, unblighted value under the voluntary purchase scheme. This is the value of the property as if there were no plans for HS2. As an alternative to the voluntary purchase scheme, these eligible property owners will also have the option to accept a cash offer of 10% of that same value and stay in their homes and businesses. Transport Secretary Patrick McLoughlin said that this will support people who want to remain in their community. Those beyond the 120 metre boundary but within 300 metres of the line in rural areas will, following Royal Assent of the Phase One HS2 Hybrid Bill, be able to apply for a home owner payment ranging from £7,500 to £22,500, which will enable them to share early in the benefits of the railway. Eligible owner occupiers living any distance from the line of route can now apply to the Need to Sell (NTS) scheme, which also pays the unblighted value to people with a compelling reason to sell their property, but who have been unable to do so, other than at a substantially reduced price, due to HS2. The criteria for the NTS scheme is more relaxed than the exceptional hardship scheme (EHS) it replaces and, unlike the EHS, will consider applications from those who may not need to move immediately. HS2 Ltd has also launched a residents’ charter to help ensure that residents are treated in a fair, clear, competent and reasonable manner. The Residents’ Commissioner overseeing the charter is Deborah Fazan who has considerable experience as a commissioner and property advisor on transport and construction schemes. In her new role, she will ensure that HS2 Ltd meets its commitment to the communication standards and personal support set out in the new charter. ‘This comprehensive package of compensation and assistance is looking after those people who live along the HS2 route while balancing our responsibilities to the taxpayer. People at the heart of this vital new railway will also benefit from HS2 Ltd’s new residents’ charter and the appointment of the Residents’ Commissioner, who will ensure that the commitments in the charter are upheld,’ said McLoughlin. Simon Crowther, HS2 Ltd’s land and property director, said it is important that those living near to the railway are able to easily access the financial assistance that the government is offering. ‘The residents’ charter sets out our commitment to making that happen. We will be working closely with the new Residents’ Commissioner to deliver the standards required, ensure that people are treated fairly and help them understand what they are entitled to,’ he… Continue reading
