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IMF no longer concerned about property price bubble in Dubai
The International Monetary Fund (IMF) has announced that it is no longer concerned about a property price bubble in Dubai. According to Masood Ahmed, head of the IMF's Middle East and Central Asia Department, price growth on the emirate has moderated considerably. He said that Dubai authorities had taken steps to limit speculative buying and along with mortgage curbs the market is now much less likely to see a spike in real estate values. However, he said there were still areas that needed to be watched, and that real estate projects needed to be sequenced and carefully managed to avoid encouraging excessive risk taking by government related enterprises. The IMF had previously warned that rapid rises in Dubai real estate prices, which earlier this year were in some cases a third higher than they were 12 months previously, could lead to another bubble and then a crash in the UAE emirate. A report by property consultants JLL last month found residential rents and sales prices rose 2% and 1% respectively in the third quarter compared to the previous quarter, slower than the 3% and 6% recorded in the second quarter of the year. Between June and August 2014, prices in some of Dubai's most popular areas fell by almost 4% according to a Mashreq Bank report. Jumeirah Park saw prices fall by 3.5% the largest of the declines, while Greens saw a decline of 3.1%, the Springs and Meadows dropped 3.4%, Arabian Ranches 3.3%, Jumeirah Village 2.6% and JLT 0.9%. Dubai Marina saw the smallest drop with prices declining just 0.2%. Meanwhile, Jumeirah Beach Residence (JBR) prices continued to rise. Between June and August, prices rose by 3.2%, bringing the overall annual increase to 15.2%. Mohamed Alabbar, chairman of Dubai's biggest real estate developer Emaar Properties, said he welcomed the slowdown in the emirate's property market and vowed to keep supplying new homes to help hold prices at 'a reasonable level'. 'In 2013, things went crazy because supply was limited. For me as a long term developer, this spike scares me, so I'm glad people are saying the market is cooling down. I think that is healthy,' he said at the launch of the first phase of a new high end residential development called Dubai Creek Harbour, a joint project between Emaar and Dubai Holding, the personal investment vehicle of Dubai's ruler Sheikh Mohammed bin Rashid al-Maktoum. Continue reading
Prime property prices in Edinburgh up for fifth quarter in a row
Property prices in the Edinburgh City prime market rose for the fifth consecutive quarter between June and September despite a slowdown due to the referendum vote. Prices increased by 1.3% and are 4.9% higher on an annual basis and so far in 2014 transactions are 8% higher than a year ago, according to the latest report from real estate firm Knight Frank. Low stock levels and high demand are the main two characteristics which have typified the Edinburgh market so far this year and they have put upwards pressure on price. A snapshot of stock levels at the end of September reveals that there were 27% fewer properties available for sale than the same time last year. However, applicant numbers were 19% higher in 2014 to date compared to 2013 and viewings increased by 1% over the same time. According to Knight Frank, it is evidence of just how resilient the Edinburgh property market has been this year in spite of the uncertainty surrounding the outcome of the referendum. Indeed, agents reported activity only noticeably slowed in the three week period before the vote. Since the result was announced activity has returned to more normal levels, suggesting that at least for now it is back to business as usual. The result means there is now a more certain environment for the property market to function and it is expected that this, combined with growing consumer confidence, should act as a further boost for the city’s already robust prime market. ‘While the flurry of activity that was predicted in the event of a No vote hasn’t materialised yet, we have dealt with a number of buyers and vendors who put off making decisions until after the vote,’ said Edward Douglas-Home, head of Edinburgh City sales at Knight Frank. ‘The recent figures highlight just how buoyant the Edinburgh market has been. Premiums have been paid for the very best homes in the best locations and high demand from would-be buyers is evident across the market. We expect that activity will continue to pick up in the coming months,’ he explained. However, despite the optimism in the market, the market has more hurdles to clear, most notably the ongoing negotiations between Holyrood and Westminster concerning further devolution and the upcoming May 2015 UK general election could create more uncertainty, especially when it comes to tax changes affecting high-value residential property. Additionally, from April 2015, Stamp Duty for Scottish residential and non-residential property sales (SDLT) will be replaced by a new Land and Buildings Transaction Tax (LBTT), which will be administered and collected within Scotland. Guidance surrounding the final rates will be provided this month, but it is expected that buyers of more expensive homes will have to pay more tax up front when purchasing a property. Meanwhile, the No vote in the referendum could Now that the uncertainty of the referendum is over there could be a rise in the number of people from London who would rather own property in Edinburgh and commute,… Continue reading
More British buyers in top end of UK country house market
British buyers are active again in the top end of the UK’s country house market, making up two thirds of buyers in the five million pounds plus sector since the start of the year. This compares to less than half of this market in the same timescale last year, according to research by leading international real estate firm Knight Frank. The figures show that British buyers have become a more regular feature in the super prime country house market this year, accounting for 71% of all sales since the start of 2014. In 2013 they accounted for just 46% of the market. The improving UK economy and growing confidence in the property market outside of London over the course of the year have contributed to the rise in British buyers at this level of the market, according to Rupert Sweeting, head of Knight Frank Country. ‘The increase in mergers and acquisitions and the stock market has also encouraged UK national buyers to buy having been waiting in the wings for a while. Some company owners now feel they can invest their dividends in a home rather than keep them in reserve for their business,’ he said. ‘However, they have often had to outbid international buyers who whilst wanting to move to the UK for education, political and work reasons have found their currency a little weaker against the pound,’ he pointed out. Since the market low in 2009, super prime country homes have risen in value by around 12%, in prime central London price growth over the same period has been in excess of 70% making the country seem good value in comparison. The firm is starting to see an increase in the number of London buyers active at the top end of the country market, with some London dwellers choosing to take advantage of record prices in the Capital and spend their budgets on large country properties. As well as rising demand from domestic buyers, demand from Asia has increased. Chinese buyers have accounted for 6% of the market since the start of 2014, up from 0% last year and 2% in 2012. While economic conditions in the UK are favourable, the political backdrop has become more unpredictable, the firm also pointed out. Taxation, for example, is likely to become more of an issue in the run-up to the general election and could have a direct impact on the demand for luxury property and on price performance. Continue reading
