Dubai
Latest real estate data shows how new mortgage cap is affecting Dubai
The villa market in Dubai is slowing at a quicker pace than apartments, leaving prices 4.3% down on a year ago in the first quarter of 2015, new research shows. Overall property prices in the emirate fell by 0.3% in the third quarter of 2014 and by 0.5% in the final quarter, leaving the total increase in average prices last year at 3.4%, considerably down on the record 51% rise recorded in 2103. The data from the latest residential market outlook report from Cluttons also shows that villa values fell 1.2% in the third quarter of 2014, then 0.9% in the fourth quarter and 1.5% in the first quarter of 2015. The analysis in the report suggests that the Federal Mortgage Cap that was introduced just over a year ago to cool the market is now having an effect. ‘The impact on the villa market has been particularly pronounced,’ the report says. It has also affected sales. The data shows that during 2014 just 1,300 villas were sold, down 52% on 2013 and the number of transactions in the first three months of 2015 was down 36% on the same quarter in 2014. The mortgage cap means that the deposit needed for the purchase of an AED5.5 million villa has increased from 20% to 42% and a growth in rents over the last 18 months means those looking to buy face a challenge saving for a deposit. The report says that a strengthening supply line means that villa prices are likely to fall further. ‘During 2015 alone we expect a further 4,000 villas to be delivered to the market, followed by 6,000 in 2016 and an additional 3.700 in 2017,’ the report says. ‘The step change in the rate of villa deliveries will be met with a financing landscape that is vastly different to when some of these schemes were conceived. The secondary market in particular will be hardest hit by the rising supply,’ it adds. The report also points out that villa sellers in the secondary market are now very much on the back foot and there are substantive price declines due to a rise in distressed sellers. ‘While villa prices are expected to continue slipping by 2% to 4% per quarter over the second half of the year, apartments, which have shown more resilience, are also expected to weaken by between 0.5% and 1% each quarter this year,’ the report explains. ‘Despite this sluggish outlook, demand is expected to remain very stable in the medium to long term, particularly as the government continues to drive economic diversification, which will fuel job creation,’ it adds. The residential rental market has also continued to soften. In the fourth quarter of 2014 rents fell by 1.9%, leaving the total rental value growth last year at a marginal 0.4%. But the report points out that this has been negated by a 0.4% dip in average rents during the first quarter of 2015 which leaves rents 1.5% lower… Continue reading
Rich West Africans now buying in London’s prime property sector
Russians and the Chinese are known to be keen buyers in London’s prime property market but now investors from West Africa are entering this prestigious market. Prime London estate agent, Harrods Estates Mayfair Office, is reporting a surge in demand from West African buyers in Mayfair with a 40% rise in sales of luxury property to the nationality in the last 12 months and up 400% compared with the previous year. Shirley Humphrey, director at Harrods Estates, explained that the firm has seen a considerable increase in demand from West African’s looking to purchase a pied a terre in Mayfair. The majority are looking to spend between £2.5 million and £6.5 million on a two or three bedroom apartment, where they can stay when visiting London on business or for pleasure. As with many international buyers, West Africans are seeking apartments in luxury developments, which offer 24 hour security, concierge and spa facilities. ‘Family is very important to them and they prefer to cluster buy more than one apartment in the same building so that they have somewhere for their children, parents and grandparents to stay,’ said Humphrey. She pointed out that Mayfair is seeing resurgence over the coming years, with an array of new luxury developments in the pipeline and the return of many commercial buildings put back to residential use. The area has long appealed to British nobility, aristocracy and high society as well international wealthy individuals from around the world, including Middle Eastern, Chinese, Indian and Russian buyers. ‘Mayfair offers a village lifestyle in a fantastic central location. The excellent shopping on Mount Street and Bond Street, fantastic restaurants and five star hotels, contribute to the areas popularity and with Hyde Park and Knightsbridge a short stroll away, many of our clients love the location as both an investment and lifestyle choice,’ explained Humphrey. ‘West African purchasers are drawn to living north of Hyde Park or just off Park Lane on Upper Grosvenor Street or Mount Street and prefer period buildings with newly refurbished luxury interiors which they can move straight into. Although they are buying property as an investment, the key thing for West Africans is owning a home in London which they can use for a minimum of a few months of the year,’ she added. Continue reading
Prime central London real estate agents report major boost from election
Reports from estate agents in the prime London property market shows there has been a surge of high end deals since the election result just a few days ago. Over £200 million worth of residential property has been sold since it became clear that the Conservatives would win the election and form the new government. Peter Wetherell, chief executive of Wetherell said that the firm is currently processing some £29 million worth of offers that were made on Mayfair property on Friday 08 May straight after the election, which included a £26.5 million property in Mayfair. ‘I’ve had correspondence last Friday and over the weekend with some 70 clients and other property contacts and all of them have said to me that the luxury London market is now back in business, especially with the mansion tax worries now over,’ he explained. ‘Whilst stamp duty remains a significant cost on the prime London market, I believe that we will now see a wave of new luxury residential sales and new instructions coming onto the Mayfair and wider West End marketplace,’ he explained. ‘I’ve already had several clients coming onto me on Friday and over the weekend asking me to prepare launching new luxury properties into the market shortly. The next few months will be very exciting for the luxury residential market in central London,’ he added. Gary Hersham, managing director of Beauchamp Estates said that firm is still busy finalising the multi million pound of business activity that started on Friday, most notably a £20 million pound property in the West End which exchanged on Friday. ‘We will now see property activity in prime central London return to previous levels, if not surpass them, as delayed and pent-up activities are given the green light. Property played a very influential role in this election, voters wanted economic stability and their homes safe from a mansion tax,’ he pointed out. ‘We will now see a big wave of previously pent up demand unleashed in the London housing market, which will lead to a rise in new instructions and sales across London and the Home Counties in particular, especially in the premium sector of the housing market,’ he added. Becky Fatemi, managing director of Rokstone, revealed that the firm had exchanges and offers on prime London property worth a cool £59.7 million at the end of last week, the biggest set of deals since the rush on the day before stamp duty changes. The activity included a £20 million penthouse in Belgravia, and a £2.2 million flat on Duke Street in Mayfair. It also had offers on £37.5 million worth of additional property consisting of a £7.1 million house in South Kensington from a Lebanese buyer, a Saudi family offered on a £2.5 million apartment in St Johns Wood, an investor made an offer on a £6 million property in Hyde Park Street, and there was… Continue reading
