Uk
Rural land prices in the UK set to fall in 2016, says RICS
Rural land prices in the UK are expected to fall throughout 2016 due to a global drop in crop prices, according to the latest report from the Royal Institution of Chartered Surveyors (RICS). Some with 34% more rural surveyors expect to see prices drop than rise which could make rural property more attractive to non-farmers. Across all farming sectors, demand for rural land is expected to fall over the next 12 months. While in the last half of 2015, the only areas where demand for land grew were the North East and South East of England. Land yields remained relatively stable over the second half of the year at 1.8%, from 1.7% previously, while arable and pasture land rents fell by 4.5% and 4% respectively over the course of the year. The RICS data shows that 25% of rural land sales are to non-farmers such as people starting up cottage industries. This is up from 18% in the first six months of 2015 and it is a trend that is strongest in the south east of England where sales to non-farmers stood at 32%. The data also shows that property developers accounted for just 1%, a decrease of 2% in the second half of 2015. While saes to individual farmers fell from 62% to 57%. The report explains that this comes at a time when commercial and residential property prices in towns and cities are continuing to rise and this is likely to make rural land increasingly attractive to those outside traditional farming communities. Already, a quarter of all countryside land is being purchased by non-farmers, so called lifestyle buyers or hobby farmers and RICS expects this trend to increase. ‘Start-up businesses do not have to be confined to the trendy streets of East London, Britain’s countryside has a great deal to offer young entrepreneurs. Market conditions appear to be encouraging a wave of new types of rural business, and help must be given to support this trend further if our countryside communities are to thrive,’ said RICS chief economist Simon Rubinsohn. ‘New entrants to farming businesses continue to face barriers, but at RICS we are currently working with the Fresh Start Land Enterprise Centre (FSLEC) who are developing a pilot matching service for potential land entrepreneurs, helping to bring together those looking for new opportunities in agriculture with those who have land and rural real estate to let,’ he pointed out. Continue reading
New home building in Australia saw strongest ever year in 2015
New home building approvals in Australia recorded their strongest ever year during 2015, up 13.7% compared to 2014, according to the latest data from the Australian Bureau of Statistics. But they fell towards the end of the year, down by 4% in the final quarter of the year, although there was variation according to housing type. In 2015 as a whole approval for flats increased by 30.2% but for detached houses they fell by 1%. Shane Garrett, senior economist for the Housing Industry Association pointed out that last year a total of 232,078 new homes received approval for construction, well above every calendar year on record. ‘New home building has been a crucial support to economic growth over the past two years, particularly in light of the mining investment downturn. The challenge during 2016 will be manage the transition to lower volumes of new home building in an orderly fashion,’ he said. The ABS data shows that approvals decreased in December in the Australian Capital Territory by 21.9%, by 3.1% in Western Australia, by 0.8% in Tasmania, by 0.4% in New South Wales and by 0.4% in South Australia. They but increased by 1.8% in the Northern Territory, by 1.6% in Victoria and by 1.1% in Queensland in trend terms. In trend terms, approvals for private sector dwellings excluding houses fell 0.1% in December. In contrast, approvals for private sector houses rose 0.1%. Private sector house approvals rose in Queensland by 0.8%, in Victoria by 0.7% and South Australia by 0.5% but fell in Western Australia by 1.8% and in New South Wales by 0.2%. The seasonally adjusted estimate for dwelling approvals rose 9.2% in December following a 12.4% fall in November. The rise in December was driven by apartments. The value of total building approved rose 0.2% in December, in trend terms, after falling for four consecutive months. The value of residential building rose 0.1% while non-residential building rose 0.4%.The volume of new home construction in Australia has fallen for the third month in a row with data for November 2015 also showing that new homes sales are falling. The new home sales report from the Housing Industry Association (HIA) says that a confluence of factors is driving a decline in leading indicators of new home construction. ‘The lagged effect of slowing population growth, an up-tick in variable mortgage costs, over reach on the part of APRA’s credit controls, and an easing in property price growth in Sydney and Melbourne are all in play,’ said HIA chief economist Harley Dale. Continue reading
Record foreign investment in UK commercial property, but it is slowing
Last year saw record foreign investment in UK commercial property but a sharp slowdown in the second half of the year will make 2016 more of a challenge, a new analysis suggests. Some £67.5 billion was invested in UK commercial real estate in 2015, a 5% decrease on the record of £70.7 billion invested in 2014, making it the second strongest year on record and 46% above the 10 year average, according to the latest research from CoStar Group, a commercial property information provider. Momentum slowed sharply in the second half of the year, with investment down 19% from the previous year. The firm says that this reflects the fact that investment activity has been especially strong over the previous 18 months and good opportunities are harder to find, but also that increasing global economic and political uncertainty is impacting investment decisions. Nevertheless, 2015 was a strong year for the UK's big six regional cities. Office investment increased 16% to £3.2 billion, which is the highest level since the recession and more than double the eight year average. Foreign investors seeking standing assets and development opportunities underpinned much of this investment. Foreign investment into the UK totalled a record £27.8 billion in 2015 a 6% increase on 2014’s £26.2 billion. International capital accounted for 45% of the total volume of transactions, with investment into the UK being spearheaded by the US with a total of £11 billion. But the report shows that investment into UK commercial real estate from the Middle East dropped dramatically by 62% to £1.6 billion, the lowest level since 2012, and it says that this is largely attributed to the collapse in oil prices and the political uncertainty in the region. In contrast, Far Eastern investment increased by 62% in 2015 to £6.4 billion as investors from Singapore and Hong Kong in particular flocked to the relative safe haven of the UK. ‘Despite it being a record year for international capital investing in UK commercial property, we have started to see signs that the market is slowing down. Total investment in the second half of 2015 was down 19% compared to the second half of 2014,’ said Richard Yorke, director of market analytics at CoStar. ‘With 2016 beginning with severe stock market volatility, heightened worries about China’s economy, falling oil and other commodity prices, and uncertainty about the UK’s place in the European Union, total investment may continue to ebb,’ he added. The report also show that demand for alternative assets such as hotels and students accommodation rose strongly in 2015. A sum of £5.5 billion was spent on hotels in 2015, a 47% increase on 2014 making it the strongest year ever. In addition, £4.3 billion was invested in student accommodation, more than double the level invested in 2014 and the strongest year on record. In terms of sector, offices dominated with £29.5 billion spent… Continue reading
