Dubai
Prime country house prices in Scotland affected by new land and building tax
Prime country house prices in Scotland increased by 0.2% between April and June taking annual growth to 1.4%, the latest index analysis report shows. But this is down from the recent high of 2.8% in June last year and the recently introduced Land and Building Transaction Tax (LBTT) seems to have had the greatest bearing on market performance. The analysis report from Knight Frank also suggests that the recent landslide SNP general election victory in Scotland on 07 May has had an impact, albeit a more modest one. Under LBTT those buying homes worth less than £333,000 now pay less tax for homes, but those purchasing property with a value above this threshold now pay more in purchase taxes. For example, a house in Scotland valued at £1.5 million would have attracted a stamp duty liability of £43,750 under the old system. Based on the new LBTT rates, that same property now attracts a bill of £78,350, a near 80% increase. As a result, buyers and vendors brought forward prime transactions prior to the introduction of LBTT in order to benefit from the lower stamp duty charges. There was a spike in activity during the first three months of 2015 with the number of sales completed by Knight Frank nearly 50% higher year on year. Since then, however, the prime market has been subdued, with the number of sales completed between April and June notably lower than the same period of 2014. There is likely to be an ongoing period of adjustment at the top end of the market as individuals factor in the increased cost of moving, according to Ran Morgan, head of Scotland residential sales at Knight Frank. He pointed out that there are still pockets of activity in Scotland’s prime market however, mostly in areas within commuting distance of large towns and cities. Prices in the central Scottish region, within an easy commute of Edinburgh and Glasgow, for example, rose by 0.4% between April and June and have risen by 2.8% on an annual basis. ‘In spite of higher levels of tax, Scottish property prices remain some way below their previous market peak. The market continues to offer good value, especially when compared with London and southern England,’ Morgan added. Continue reading
Property prices and sales still falling in Dubai and Abu Dhabi
Residential sales and prices in Dubai are still on a downward trajectory and in neighbouring Abu Dhabi the market is also down apart from rentals. The Dubai residential property sales price index from REIDIN fell by 1.29% in May and prices are now down 5.7% year on year. A breakdown of the figures shows that apartment sales prices fell 1.19% month on month and are down 6.8% year on year while villa sales prices registered were down 1.72% on a monthly basis and down 0.8% year on year. Residential property prices in the Dubai rental market fell by 0.37% in May 2015 but have increased 1% year on year. In this sector apartment rental prices fell 0.44% month on month but are up 1.2% year on year while villa rental prices also fell 0.44% month on month and are unchanged on an annual basis. The firm’s Abu Dhabi residential property price index fell by 0.27% in May and prices are down 2.3% compared to May 2014. A breakdown of the figures shows that apartment sales prices fell 0.52% month on month and 4.5% year on year while villa sales prices increased 0.8% on a monthly basis but are still down 1.2% year on year. Residential property prices in the Abu Dhabi rental market have fared better, up 0.37% month on month and up 5.1% compared to May 2014. Apartment rental prices increased by 0.18% month on month and 2.8% year on year while villa rental prices were up 0.68% on a monthly basis and 7.5% year on year. Meanwhile, the latest figures from the Dubai Land Department (DLD) show that Dh64 billion of property transactions were completed in the first quarter of 2015 of which Dh24 billion was from property and land sales and Dh37 billion the result of new mortgages. The most popular areas for unit sales were Business Bay, where 1,202 units were sold for a combined Dh1.84 billion, followed by Dubai Marina. Of the Dh24 billion worth of land and property bought, some Dh9 billion was bought by GCC investors with Dh5.8 billion to Emiratis and Dh1.9 billion to Saudis. Dh3 billion was from other Arab investors and Dh12 billion from non-Arabs. When it comes to buyers outside of the Gulf region, the data shows that Indians bought Dh3 billon of properties, British buyers bought Dh1.9 billion and Pakistanis bought Dh1.4 billion. Iranian and Russian buyers rounded out the top five nationalities of non-Arab investors. ‘The figures are showing a well-established trust in our real estate market,’ said the DLD director general, Sultan Butti bin Mejren. Continue reading
Residential property prices in Dubai still falling, latest analysis suggests
Residential real estate prices in Dubai continued to fall in the first six weeks of the second quarter of this year compared to the first three months of 2015, according to the latest data. However it is not necessarily bad news, according to the mid quarter research report from Phidar Advisory. ‘The ongoing erosion of sale prices is a healthy correction. The more significant concern is the scale and nature of the upcoming launched and announced projects,’ said Jesse Downs, the firm’s managing director. The report shows that apartment lease rates decreased a nominal 2.4%, while sale prices decreased 1.5%, marginally tightening yields. Lease rates for villas decreased 0.6% and sale prices decreased 2.9%, which pushed up yields slightly. In the first five months of 2015, apartment transaction volumes were down a modest 1.5%, compared to the same period in 2014. SFH volumes contracted almost 25%, over the same period. This is based on initial transaction data from the Dubai Land Department, which is subject to revision. The report references income specific supply-demand imbalances. The most vulnerable segment is housing supply with current annual rents of AED100,000 to AED160,000 per annum, which could be oversupplied by up to 40% in five years. ‘If we consider only under construction and launched projects, the majority of the development pipeline is justified due to sufficient total demand,’ said Downs, who added that over building in the middle high income segment is likely to increase competition and lead to supply reordering. The potential for total market disequilibrium increases significantly when adding announced projects into the supply pipeline, the report points out. Total market vacancy could reach 11% by 2020. Factor in a healthy frictional vacancy and the total vacancy rate converts to a 7% oversupply. ‘There is an opportunity to reposition upcoming products to meet the city’s anticipated housing needs. If current announcements convert into launches, the probability for instability by 2020 will increase significantly,’ concluded Downs. Continue reading
