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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
Greater London sees fall in home lending in first quarter of the year
There was a decline in in house purchase lending in Greater London in the first quarter of 2015 but increased remortgage activity, according to the latest regional data from the Council of Mortgage Lenders. First time buyers in Greater London borrowed £2.4 billion representing 10,100 loans, down by 16% in value and down 16% in number of loans compared to the last quarter of 2014. Compared to the first quarter of 2014, the total number of loans was down 14% and the amount borrowed decreased by 11%. Home movers saw a decrease in numbers to 7,200 loans advanced in the period, valued at £2.5 billion, which was down 18% by volume and down 15% by value on the previous quarter. Year on year comparisons show a decrease of 18% by volume and down 11% by value. Remortgage lending increased totalling 10,800 loans at £2.9 billion, which was up 10% by volume and up 13% by value. Compared to the first quarter of 2014, remortgage lending in London was up 2% by volume and 8% by value. According to Peter Rollings, chief executive officer of Marsh & Parsons, the lending market has calmed down from the heady heights of 2014 and the general election earlier this month also had an impact. ‘But cheaper mortgage rates are now making waves in the market, and with the wealth of products now available, we can expect this to ripple out into a stronger summer of lending,’ he said. He believes that the election result means political certainty and that along with a greater choice of homes on the market, and incentives like reduced stamp duty and Help to Buy support schemes at the lower rungs of the ladder will keep the market going. Continue reading
Scotland sees boost in interest from buyers at home and abroad
There has been a clear increase in interest and property viewings across Scotland from local, national and international buyers, according to an independent consultancy. The traditionally busy spring period has been followed by even stronger growth in the first few weeks of summer with property valued up to £500,000 selling especially well, says CKD Galbraith which has offices across the country. However, homes valued above the £500,000 level are still tending to stay on the market for longer and overall the market has experienced the natural peaks and troughs in activity in the run up to events such as elections, referendums and holiday periods. But overall CKD Galbraith said its offices have witnessed a considerable increase in buyer activity recently with many sales resulting in competitive bidding and closing dates. ‘We have seen an especially strong surge in activity across the country recently and believe this is due to a number of factors. Political uncertainty has eased and potential buyers and sellers have a renewed confidence in the property markets from the south of England to the north of Scotland,’ said John Bound, partner at CKD Galbraith. ‘There has been increased activity right across Scotland and in Edinburgh demand for high end city centre property continues to rise. The Inverness office is experiencing some extremely positive movements. We were instructed on 26 new properties in the past three weeks and we are being invited to pitch for more on a daily basis. There have been over 50 viewings in a fortnight with prime property on the west coast continuing to do very well indeed,’ he pointed out. The Edinburgh property market made an extremely strong and promising start to 2015 and shows no signs of slowing down, despite any uncertainty which surrounded the general election, according to Lorna Donaldson from CKD Galbraith’s Edinburgh office. ‘During the first three months of 2015 the Edinburgh residential team sold over 40% of its city centre offerings to cash buyers, with just under half of all city sales going to closing date, and with properties achieving up to 14% over the home report valuation,’ she said. ‘May has definitely marked a return of confidence and increase in interest from buyers who are ready and able to act fast and pay a premium for the right property in their preferred location,’ she added. The firm’s Perth office has also reported a notable boost in activity with three properties having gone under offer in the last week alone and rising viewing figures for properties sensitively priced across all price brackets. The team in Perth is also preparing to launch a further 16 properties to the market and expect interest from buyers both locally and national, as well as the international buyer. The Castle Douglas office has seen a good level of new property coming to the market in Dumfries and Galloway. ‘Accurate and sensitive pricing remains key to buying and selling property in the region,’ said David Corrie. Continue reading
