Tag Archives: cities
Gap between house prices in London and major UK cities widens
The gap between house prices in London and other major regional cities in the UK is at its widest for 20 years, according to the latest house price index. Prices in London experienced 4.6% growth in the three months to August and a 10% increase in the last 12 months, according to the cities house price index from Hometrack Overall city level house price inflation is running at 8.3% up from 6.6% in May. A similar expansion has been recorded in sales volumes which has translated into higher prices across UK cities, the report says. The highest rate of growth is in Cambridge at 11.2% and lowest in Aberdeen where prices have fallen by 2% due to the weakness in the oil price affecting the demand for housing. Compared to a year ago house price inflation has increased in five cities led by Edinburgh and Glasgow where growth is running at 9% and 5.3% respectively ‘City level house prices continue to increase as demand for housing grows in the face of constrained supply,’ said Richard Donnell, director of research at Hometrack. ‘A changing mix of buyers is compounding the scarcity of housing for sale with rising numbers of first time buyers and investors buying property while having nothing to sell. Only a recovery in the number of moves amongst existing home owners or an increase in new supply will ease the current housing scarcity which seems unlikely in the near term,’ he pointed out. ‘The gap between house prices in London and other major regional cities is at its widest level for 20 years. This highlights a seemingly over valued London market, on a price/earnings basis, and the prospect of further price growth to come in the large regional UK cities,’ explained Donnell. ‘London’s price earnings ratio is at an all-time high while there remains value in most other regional cities. The pricing differential to London could well assist city regions attract new investment as the cost of housing starts to influence decision making for both households and businesses,’ he added. Continue reading
Core UK regional city markets see office rental growth, latest data shows
Growth in prime headline office rents has continued across the UK’s regional property markets with an average increase of 4.3% in the year to June 2015. The growth has been seen across the core eight markets covered by the index from property consultants JLL and reflects a solid outlook for demand and tight supply of new space. The firm says that headline rents are expected to continue on an upward curve with average growth of 2.9% per year in the core regional markets over the period from 2015 to 2019. ‘Sustained levels of occupier demand combined with the decreasing availability of Grade A office supply has contributed to healthy rental growth with year on year increases witnessed in all bar one of the core eight cities,’ said Jeremy Richards, dead of national office agency at JLL. The data shows that Manchester and Leeds saw the most significant increases with rents up by 6.5% year on year to £33 per square foot and by 6% year on year to £26.50 per square feet respectively. According to JLL’s research report office take up across the regional markets reached 3.8 million square feet in the first half of 2015 and is forecast to exceed last year’s full year total of 7.3 million square feet, well ahead of the 10 year average of 6.6 million square feet. The figures also reveal that Manchester and Birmingham dominated activity in the first half of the year accounting for 677,000 square feet or 18% and 650,000 square feet or 17% of take up respectively. The falling supply of good quality office space remains a key theme according to JLL. Available office space across the core markets stands at 19.5 million square feet with an average overall vacancy rate of 8.2%, down from 9.1% over the year. The Grade A vacancy rate is just 2.4% on average, with Leeds and Cardiff the lowest at 1.5% and 1.3% respectively. JLL’s report shows that total pre-leasing jumped sharply in the first six months of the year to 837,000 square feet across 14 transactions in comparison to 138,000 square feet across five deals in the whole of 2014. Some 5.36 million square feet is currently under construction speculatively across the core cities in 58 schemes, which compares to just 3.3 million square feet in the first half of 2014. ‘Partly aided by pre-lets, the development pipeline is now responding to the supply issue with Manchester accounting for the greatest volume of speculative development activity at 875,000 square feet,’ said Richards. Office investment volumes across the core cities hit £1.9 billion, well up on the £1.5 billion traded in the first half of 2014. Domestic investors accounted 74% of investment volumes with the weight of money targeting the regions continuing to place inward pressure on prime yields, which now range between 5% and 5.25% for the largest regional cities,… Continue reading
Auctions set to continue as popular means of selling a home in Australia
While housing market conditions remain strong in Australian cities, particularly in Sydney and Melbourne, auctions will continue to be a popular way of selling a residential property, new research suggests. Over the past financial year some 25.6% of all properties advertised for sale were taken to auction across Australia’s capital cities, with Melbourne, Sydney and Canberra showing more than one third of all listings being taken to auction, according to data from real estate firm CoreLogic. There were approximately 380,000 dwellings advertised for sale across Australia’s capital cities over the 2014/2015 financial year, of which roughly 84,000 or 26% were advertised as auction sales. The proportion of auction sales has broadly been rising since the 2008/2009 financial year when auctions comprised a much lower 16% of all dwellings listed for sale. According to CoreLogic RP Data research director Tim Lawless, the rise in the proportion of residential properties taken to auction should come as no surprise, considering how hot housing market conditions are in the auction centric cities of Melbourne and Sydney. ‘When market demand is high and buyers are highly competitive, the auction process is likely to provide the best possible price on a property transaction. The opposite is true when housing market conditions are weak, auctions aren’t as popular due to fact that there is less urgency amongst buyers and the competitive bidding environment isn’t likely to be as conducive to finding the best possible price on a home,’ he said. ‘Melbourne, Sydney and Canberra have a well-established auction culture with this sale method well accepted by vendors and buyers. The other capital cities still list the vast majority of homes for sale via private treaty,’ he added. The data confirms that across the capital cities, Melbourne is still the city where auctions are the most popular method of selling a home. Some 39% of all Melbourne's residential property listings over the past financial year were taken to auction, with Sydney and Canberra not far behind at 38% and 36% respectively. However, an examination of the proportion of listings taken to auction across product types, Canberra and Sydney are both showing a larger proportion of auction listings for houses than Melbourne. The remaining capital cities are all showing auctions to be a far less popular method for selling a home. Some 16% of Adelaide listings were taken to auction over the past financial year, while 11% were taken to auction in Brisbane and Darwin and less than 5% of listings in Perth and Hobart were auctions. It is generally the more expensive or unique dwellings in these cities that are taken to auction. ‘With auction clearance rates remaining in the high 70% range across Sydney and Melbourne, as well as values continuing to show a strong rate of appreciation, we can expect the high proportion of auction listings to remain in these cities,’ Lawless explained. Looking across the suburbs, there were five suburbs, all in Sydney, where more than 95% of… Continue reading
