Tag Archives: crisis
Brexit unlikely to affect Dubai real estate markets
British investors are one of the largest group of investors in Dubai’s property markets but the decision by the UK to leave the European Union is unlikely to have much of an impact, according to experts. As the most open real estate market in the Middle East, Dubai has always found itself more susceptible to external factors. But, despite the interim uncertainty brought about as a result of Brexit the emirate unlikely to feel any long term effects, says a report from international real estate firm JLL. British citizens are the third largest investors into Dubai’s real estate market, potentially leaving them more susceptible to any negative impacts from Brexit, however, JLL’s Craig Plumb, head of research for The Middle East and North Africa, believes that any negative ramifications will only be temporary. ‘Even though it is too early to predict the long-term implications, overall there is a slight probability of British investors being negatively impacted by the devaluation of the British Pound following Britain’s decision to exit the European Union,’ he said. ‘However, we believe the effect of the decision will only have temporary repercussions as a substantial number of British investors who work and reside in the UAE avoid sourcing their income in sterling,’ he explained. ‘If we dissect the market further, particularly for residential, we notice that expatriates in Dubai are most likely to continue renting their homes instead of switching to ownership, resulting in sales being more negatively affected than the rental sector. If external factors stabilize over the rest of the year, we expect the Dubai residential market to easily recover in early 2017,’ he pointed out. During the second quarter of the year, office vacancy rates throughout Dubai showed a general downward trend. However, Plumb attributes this to a lack of supply, confirming that Dubai remains the largest and most active office market in MENA with many businesses still preferring to use the Emirate as their regional hub. Meanwhile, the retail and hotel sectors have fared less well in the immediate aftermath of the decision given the devaluation of the British pound. ‘Dubai and the MENA region as a whole has become an increasingly expensive destination for European visitors,’ Plumb added. Continue reading
Call for administration of UK leasehold property sales to be streamlined
The Conveyancing Association (CA), the leading trade body for the conveyancing industry in the UK, has outlined a number of recommendations to end what it believes to be significant delays and overcharging taking place within the leasehold sector. A growing number of leasehold sales are taking place each year across all UK regions, up from 220,000 in 2011 to 260,000 in 2015, with 57% in Greater London and 40% in the North West. As a result the CA wants to see a streamlined process taking out the unnecessary delays and a cut to what it describes as ‘unwarranted’ fees charged by many lease administrators who administer the terms of the lease to the leaseholder. In a recent survey of conveyancers some 56% of CA member firms said they believe that in 30% of transactions lease administrators charge unreasonable fees, and a further 32% said in 16% to 30% of sales they charge unreasonable fees. On top of this, 62% of estate agents, the traditional buffer between the consumer and the process, say that the provision of leasehold sale information causes real issues in the house moving process, with 34% branding it ‘an absolute nightmare’. Common problems within the process include identifying the lease administrator as there is no registration or regulation required and significant delays can be incurred attempting to find the right person or company. There is also a recognised imbalance of bargaining power between the lease administrator and the leaseholder as there is currently no requirement for the publication of costs or any control over their extent in relation to receipt of service of notice, deed of covenant, share transfer or certificate of compliance. When it comes to overcharging on the part of the lease administrators the CA has seen cases where costs levied are up to nine times more than what the conveyancing industry might expect them to charge for carrying out such work. On average Lease Administrators are charging between £250 per hour and £360 per hour for administrative work, far in excess of what conveyancers and customers might expect those charges to be. The CA also points out that there is also often a duplication of costs with leaseholders required to pay multiple parties to complete their LPE1 (Leasehold Property Enquiry) form and no redress system is currently available to existing or incoming leaseholders with no effective consumer rights and no recourse to the Ombudsman given its lack of jurisdiction over costs unless the complaint is in respect of a breach of agreement for those costs. It points out that there can be significant delays in the provision of the LPE1 information and dealing with other requirements post-sale necessary for the registration and protection of the leaseholder’s title. This causes significant distress to a chain of house movers and can cause sales to fall through. To reduce the impact of these issues the CA suggests that delays in the… Continue reading
City property price index reaches record high in Australia
Property prices in Australian capital cities increased by 0.8% in July, a new record high, with values now 6.3% higher than the first seven months of the year, the latest published data shows. However, while overall values are still rising, four of Australia’s eight capital cities recorded a fall in dwelling values over the month, the CoreLogic July home value index also shows. Simultaneously, the rate of growth across the combined capitals aggregate index slipped back a notch after bouncing higher in April and May. The annual rate of growth, which hit a recent peak at 11.1% across the combined capitals index in October last year, is now tracking at 6.1%, the slowest annual rate of appreciation since September 2013. Sydney and Melbourne have also seen the annual rate of growth slip back to below 10% with the July indices showing a respective 9.1% and 7.5% capital gain over the past 12 months. Previously both Sydney and Melbourne’s capital gains peaked higher with Sydney reaching a peak rate of annual growth in July last year when dwelling values were rising by 18.4% annum and when Melbourne values were increasing by 14.2% per annum over the 12 months ending September last year. Darwin and Perth remain as the only two capital cities to record a negative movement in dwelling values over the past year with prices in Darwin down 7.6% and Perth values falling by 5.6%. July marks the 50th month of the combined capitals growth cycle, which commenced in June 2012. Over the cycle to date, capital city dwelling values have risen by 38.3% and according to CoreLogic head of research Tim Lawless this demonstrates the strength in the Sydney and Melbourne growth trend with dwelling values across the two largest capitals recording a cumulative 61.3% and 42% over the cycle to date. Hobart, where the growth trend has recently accelerated, has been the next best performer with values rising 17.6% over the growth cycle followed by Brisbane at 17.4%, Adelaide at 14.3% and Canberra at 12.4%. ‘The recent moderation in the rate of capital gains should be viewed as a positive sign that growth in dwelling values may be returning to more sustainable levels. However, the growth trend rate is still tracking considerably faster than income growth resulting in a deterioration of housing affordability,’ said Lawless. ‘Using Sydney as a case in point, the Australian National University estimates that Sydney household incomes have grown by approximately 4.5% per annum since June 2012 while dwelling values are up 12.1% per annum,’ he added. Continue reading
