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Hong Kong saw residential property prices stabilise in June
Residential property prices in Hong Kong stabilised in June with more activity mainly in the primary sector, as developers launched new projects with deep discounts and other enticements. According to the Land Registry, residential sales in June edged up 0.7% month on month, reaching 4,620 units. The gain was attributed mainly to robust activity in the new homes market. Meanwhile there have been more home buyers returning to the market looking for bargains, according to the latest monthly market review report from international real estate consultants Knight Frank. It points out that several new residential developments were oversubscribed in June. One example was Park Yoho Venezia in Yuen Long, which managed to sell over 90% of its available units within hours on the first day of the launch. This trend is expected to continue, with developers offering deep discounts and aggressive mortgage schemes to boost sales. Interest in the ultra-luxury residential market showed no signs of abating. For example, the top floor unit in Severn Villa on the Peak sold for HK$232 million or HK$170,463 per square foot, making it the most expensive apartment in Hong Kong. Knight Frank believes that high net worth individuals are expected to continue acquiring premium residential properties in Hong Kong given their scarcity and high status. The report also points out that the government of Hong Kong has announced that seven residential sites, capable of providing 4,800 flats, will be available for sale by application in the third quarter. As of the end of May, the number of homes pending pre-sale consent had risen 11% month on month to 14,526 units, the highest level in eight months, according to the Land Department. ‘Given the increase in supply and uncertainty brought about by Brexit, we maintain our forecast of a 5% to 10% drop in luxury home prices and up to a 10% decline in mass residential prices over the year,’ the report concludes. Meanwhile, in the commercial sector Grade-A office leasing on Hong Kong Island remained subdued in June. On the supply side, tight availability limited choices in the market, while on the demand side mainland companies slowed their expansion pace in Hong Kong after the previous leasing boom. The report points out that the Kowloon East office market remained very active, with the key driver being relocation demand from tenants across the harbour. One reported example involved Kingfisher, which moved from Cornwall House in Quarry Bay to KOHO in Kwun Tong. Over the past few months, a number of co-working space operators have been aggressively expanding in Hong Kong, becoming one of the major sources of demand for office space. For example, WeWork reportedly took up large office space of about 60,000 square feet in Asia Orient Tower in Wan Chai last month. A US co-working space operator reportedly took up four floors, spanning 29,000 square feet in Soundwill Plaza in Causeway Bay. ‘Looking ahead, we expect rents in core business areas to rise… Continue reading
Average house prices in UK continued to rise in May, latest ONS index shows
Average house prices in the UK increased by 8.1% in the year to May 2016, unchanged from the previous month and continuing a run of strong growth seen since the end of 2013. The data from the Office of National Statistics (ONS) also shows that the average UK house price was £211,000 in May 2016, some £16,000 higher than in May 2015 and £2,400 higher than April 2016. The ONS report says that the main contribution to the increase in UK house prices came from England where they increased by 8.9% over the year to May 2016, with the average price in England now £227,000. Wales saw house prices increase by 3.6% over the latest 12 months to stand at £143,000. In Scotland, the average price increased by 4.0% over the year to stand at £141,000 and the average price in Northern Ireland is currently £118,000. On a regional basis, London continues to be the region with the highest average house price at £472,000, followed by the South East and the East of England, which stand at £306,000 and £265,000 respectively. The lowest average price continues to be in the North East at £124,000. London was also the region which showed the highest annual growth, with prices increasing by 13.6% in the year to May 2016. The South East at 12.9% and the East of England at 12.8% also had high annual growth. The lowest annual growth was in the North East, where prices increased by 3.2% over the year. It is low interest rates, increasing employment and wage inflation that are supporting house price growth, according to John Goodall, chief executive officer of peer to peer platform Landbay. But he pointed out that the index has yet to see the effects of Brexit on prices. ‘What is clear is that a lack of housing supply will remain a crucial issue. Theresa May's new government must now commit to further housebuilding pledges and recognise the increasingly important role the private rented sector plays in the housing mix,’ he added. Rob Weaver, director of investments at property crowdfunding platform Property Partner, believes that housing activity was relatively mute in May due partly to a double whammy of tax changes, namely the stamp duty hike for second homes and the cuts to mortgage interest relief. ‘However, prices appear to be holding and even increasing in many areas due to the fundamental imbalance in supply and demand. Despite a recent slowing down in London, the capital still remains the engine of the housing market in the longer term, showing price rises more than almost double the annual rate of all other regions apart from the South East and East of England,’ he pointed out. ‘Following recent Bank of England announcements on softening monetary policy, it looks likely home owners mortgage interest payments will remain historically low for much longer than expected. This could help continue to support prices over the next 12 months,’ he added. However, Jonathan Hopper, managing director of the buying… Continue reading
UK’s new housing minister urged to get on with tackling major challenges
The new housing minister Gavin Barwell has been urged to tackle the major challenges facing the property industry including lack of supply and new home building. Estate agents and letting agents welcomed his appointment in the new government under new Prime Minister Theresa May and said that his appointment as Minister for London should help tackle the housing issues that particularly affect the capital city. ‘This is a crucial time for housing, with demand greatly outstripping supply and an urgent need to reshape Britain’s housing mix,’ said David Cox, managing director of the Association of Residential Lettings Agents (ARLA) and Mark Hayward, managing director of the National Association of Estate Agents, in a joint statement. ‘We worked closely with the previous administration to increase transparency in the UK property and sector and remain very supportive of the need for a beneficial ownership register,’ they pointed out. ‘Property transparency is particularly a problem in London where housing stock has increasingly become a vehicle for money laundering operations, so we applaud the decision to provide the Minister with a duel oversight for London,’ they added. The statement pointed out that the Government’s decision to sell the Land Registry risks reversing its good work on transparency and they are calling on the new minister to work with the new Business, Energy and Industrial Strategy Department to think again on this proposal. They say it is also essential to honour the commitment of the previous Housing Minister to bring forward a review of the need for mandatory Client Money Protection (CMP) for letting agents, following the discretionary powers that were brought in as part of the Housing and Planning Act as they believe that only this can provide the adequate level of protection for landlords and tenants alike. ‘These challenges are not insurmountable and we greatly look forward to working with the new Minister to find a solution to these issues in the months and years ahead,’ the statement concluded. Barwell said that he is looking forward to working with councils, housing associations, developers and investors to ensure ‘we build the homes people need and deserve and to working with the Mayor of London to ensure the continued success of our wonderful diverse capital and that all Londoners share in it’. Barwell has previously held various parliamentary private secretary roles, including to the Minister of State for Decentralisation and Planning Policy and Secretary of State for Education, and has more recently been Assistant Government Whip and Lord Commissioner of HM Treasury. He is taking over from Brandon Lewis who has moved to the position of Minister of State for Policing and Fire Service. Barwell joins the team at the Department for Communities and Local Government (DCLG) which is led by Sajid Javid, who was appointed Communities Secretary last week. Continue reading
