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Prices and sales in Scotland expected to keep rising in first quarter of 2016
House prices and sales in Scotland are likely to keep rising in the first quarter of this year following an unusually buoyant December, according to a new report. The latest monthly survey from the Royal Institution of Chartered Surveyors (RICS) in Scotland said rising demand from would be buyers and a slight increase in the number of properties coming onto the market led to a rise in newly agreed sales last month. Throughout 2015, surveyors reported almost continual growth in prices and this went on into December, with a net balance of 29 per cent more respondents reporting a rise in house prices. A net balance of 35% of Scottish respondents forecast a rise in transactions in the January to March period, with 24% of surveyors also expecting average prices to increase in this quarter. ‘The Scottish housing market has experienced an unusually buoyant December, with growth in transactions, demand and a small increase in properties coming onto the market,’ said Sarah Speirs, director of RICS Scotland . ‘Despite this growth in new instructions, the chronic shortage of housing supply in Scotland continues to result in rising house prices and rents across the country. To remedy the shortage, Scottish Government policy is, and for a considerable amount of time has been, aimed at supporting demand and, more crucially, the new build market and home ownership,’ she added. RICS has launched its manifesto Shaping Scotland’s Housing Future which aims to inform political parties of the role property plays in driving Scotland’s economic growth ahead of the parliamentary elections in May. It calls on policy makers to recognise the scale of the housing crisis, and elevate housing to the top of their political priorities as well as increasing the supply of housing and taking action to maintain and renew Scotland’s existing housing stock. The report also recommends ta review of tax and incentives around all properties and the creation of a Housing Land Agency, which would work with local authorities and developers identifying land, primarily in areas of market failure, and installing any necessary infrastructure for sites. ‘Adequate housing supply is vital to economic growth and the much coveted stabilising of house prices and rents. It is estimated that between 25,000 and 35,000 homes need to be built, per year, to meet demand adequately. This target covers all tenures, not just affordable housing,’ the report says. ‘An independent agency would work with local authorities and developers by identifying new development sites and installing any necessary infrastructure for sites, primarily in areas of market failure,’ it adds. RICS envisages that land acquired by the agency, through reformed Compulsory Purchase Order (CPO) powers, could be sold to less established participants, such as small and medium enterprises (SMEs), private rented sector (PRS) investors, self-build and co-ownership and thus widening participation and assisting a vibrant SME sector and the wider economy. It also points out that the PRS market in Scotland has been dominated by small scale investments from individual landlords who… Continue reading
Tax figures confirm the December was a buoyant month for UK property market
Figures from the UK’s tax collector confirm other evidence from index reports that the property market continued to be buoyant at the end of last year when it would normally be slowing. Sales increased by 1.9% between November and December 2015 and were up by 11.6% year on year, according to the data from HMRC. Over all there were 108,710 residential and 9,700 non-residential transactions. Residential sales increased by 3.6% month on month and 10.6% year in year. According to Peter Rollings, chief executive officer of Marsh & Parsons, it is clear that December defied the normal seasonal slowdown in the UK property market. ‘After a cautious start, there was a clear key change in sales levels after the conclusion of the general election, and the year closed on a high note and defied the usual seasonal slowdown with December experiencing the largest volume of property sales of any month in 2015, as buyers rushed to complete transactions before Christmas,’ he explained. ‘This steady build-up of activity and buyer confidence is even more impressive when you consider some of the adverse changes the housing market has had to stomach over the past 12 months,’ he pointed out. ‘While the shakeup of stamp duty was indeed welcome for many first time buyers and those purchasing property at the lower bands, it has been harder to digest at the middle and top-end, where the increased levy is particularly onerous,’ said Rollings. ‘With an additional 3% of stamp duty coming into effect for second home owners in April, 2016 may well see the opposite with a growth spurt in the early stages of this year that could then taper off in the short term while the market retunes,’ he added. Continue reading
Residential property sales in Hong Kong up over 40% month on month in December
Residential property sales in Hong Kong rebounded in December, up 43.1% from the previous month, according to data from the land registry. A total of 2,153 primary residential sales transactions were recorded, more than doubling those in November, while secondary home sales increased 6.4%. The data also shows that in December, over half of new home sales involved three major developments: Capri in Tseung Kwan O, The Bloomsway in Tuen Mun and Yuccie Square in Yuen Long. The latest monthly Hong Kong review report from international real estate firm Knight Frank points out, however, that total residential sales volume for 2015 was still down 12.3% from 2014, with primary sales dropping only 0.2% and secondary sales losing 16.6%. The report suggests that both landlords and buyers held a wait and see attitude amid various uncertainties in both local and external markets. The housing supply target in the coming 10 years was reduced from 480,000 to 460,000 units, according to the Transport and Housing Department, as the projected number of new households during the period was less than previously forecast. ‘With the US interest rate hike and a projected increase in housing supply, home prices are expected to come under pressure this year. We expect luxury home prices to fall up to 5%, while mass residential prices could decrease by 5% to 10%,’ the report says. When it comes to the office market, the report explains that, facilitated by various policies to enhance cross border financial integration, mainland Chinese financial firms expanded rapidly in Hong Kong’s CBD, driving up Grade-A office rents in Central by as much as 13.7% in 2015. In December, for instance, a Mainland firm secured a 14,773 square foot office space in Cheung Kong Center in Central and Kowloon East continued to see robust leasing activity, with many companies relocating from Hong Kong Island and other business districts to the area, attracted by the abundant supply of cost effective new space. The Knight Frank report suggest that in 2016 landlords will face pressure in rental negotiations as they compete for tenants to drive down vacancies. This comes on the back of a year in which the office sales market improved, with the total volume and value of transactions rising 21.7% and 49.6% respectively, driven by increased demand from both investors and owner-occupiers seeking to reduce rental costs. However, the report point out that some Mainland firms which had actively taken up Grade-A office space run into various problems. For example, some delayed renovating the space they had let, while others failed to take up the units at the start of the lease term. There were even cases of firms exiting their Hong Kong business. ‘However, with limited supply in core business areas, we still expect their vacancy rates to remain low and their rents to rise by 5% this year. In decentralised areas, however, rents could drop by up to 5% in 2016,’ the report adds. In the retail… Continue reading
