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Value of US housing stock in 2015 down from overall growth the previous year
The value of all homes nationwide in the United States grew $1.1 trillion in 2015 and is expected to end the year at $28.5 trillion total. However, the value of the entire housing stock grew 4.1% in 2015, slower than the 6% growth in 2014, according to the data from real estate firm Zillow. The total value of all homes has regained $5.3 trillion since hitting its lowest point during the housing bust in December 2011, but is still $782 billion below the bubble peak value of $29.2 trillion, reached in October 2006. The dollar amount itself underscores the significance of housing to the US economy. In the third quarter of 2015, the US gross domestic product was $18.1 trillion, $10 trillion less than the total value of the housing stock. ‘This reminds us of the large role housing plays in the overall economy. Total home value growth slowed this year, but there was still a significant increase in overall value, and many markets are more valuable than they've ever been,’ said Zillow chief economist Svenja Gudell. ‘At the same time, more renter households and rising rents combined to set new records in rental spending in 2015. Americans are spending a lot of money on housing, and that will make affordability an important issue next year,’ she added. The research data shows that housing value isn't distributed equally across the country. California is home to about 12% of the population but the state accounts for nearly a quarter of the country's total home value, driven by highly valued markets like Los Angeles and San Francisco. Zillow data also shows that Americans shelled out nearly $20 billion more in rent in 2015 than in 2014 as people around the country set up 1.8 million new renter households and median monthly rents rose at a record pace. In all, renters spent $535 billion on rent in 2015, nearly as much as the total budget of the Department of Defence ($575 billion), according to a new Zillow rentals analysis. In 2014, they spent $516 billion. Renters of single family homes and apartments spent about the same amount on rent this year, with apartment renters paying $239 billion and single family home renters paying $245 billion. Renters in the New York/Northern New Jersey metro area spent the most on rent in 2015 at about $56 billion. Los Angeles area renters spent nearly $35 billion, and San Francisco renters spent $17 billion. About two thirds of the total rent paid in 2015 was spent in the 50 largest metros. Home values rose 3.9% annually in November to a Zillow Home Value Index of $183,000, according to Zillow's November Real Estate Market Reports. Denver home values grew fastest for the tenth consecutive month at 15.5% annual appreciation. Miami joined Dallas, San Francisco, San Jose, and Portland as other metros seeing double digit growth. Rents also continued their steady climb, growing 3.8% annually to a Zillow Rent Index of $1,382. The pace of rental… Continue reading
A year of above average leasing predicted for central London office market
The central London office market is set to experience another year of above average leasing and investment activity in 2016, according to a new report. However, some 22 million square feet of space could be needed in the next five years, says the analysis from international real estate advisor Savills. Low vacancy rates will help prime rents to climb, although a lack of new buildings capable of demanding the highest rents is likely to lead to topmost rents stabilising over the course of the year, the report explains. Whilst the gap between average prime City and West End rents continues to widen at £74.15 per square feet and £106.98 per square feet respectively, elsewhere there has been a marked convergence of rents on average Grade A/B office accommodation across Central London. This is likely to mean less movement of occupiers from West to East London or from core to fringe locations. Longer term, Savills predicts that population and economic growth, combined with lease expiries and building obsolescence, could lead to 22 million square feet of additional space being required in London over the next five years. Part of this demand will be serviced by four consecutive years of above average levels of completions in both the City and West End markets, although 21% of space in the City has been pre-let, and 15% in the West End. In the investment market, non-domestic investors attracted by London office’s relative stability and strong comparative returns will continue to drive demand, with 2016 set to be above average in terms of investment volumes. Despite stock market volatility and concerns over a slowdown in the Chinese economy those international investors who have been canvassed continue to identity London as a core focus for their future direct investment activity, with Savills predicting further capital flows from the Middle East, China and North America. Notwithstanding the continued appetite from overseas, Savills expects the market to consolidate around an appetite for core plus and value-add opportunities and therefore a continued sharpening of prime yields, currently at 3% in the City and 4% in the West End, is unlikely to continue. Volumes may well fall as the market becomes more hesitant in the lead up to the outcome of a Brexit referendum. ‘We predict that the Central London office markets will see above average take-up, rental growth and investment volumes in 2016, but these increases will not be as notable as they have been in recent years,’ said Mat Oakley, head of commercial research at Savills. ‘We don’t foresee that an increase in the Bank of England’s base rate will have an impact on yields whilst rents continue to rise. As with the investment market, the leasing market may slow due to external factors such as further ripples from China’s slowdown and a drop in business confidence in anticipation of a Brexit referendum,’ he added. Continue reading
Spain, Cyprus and Portugal expect more sales to British buyers in 2016
Spain, Cyprus and Portugal could offer British buyers looking for a holiday home some bargains in 2016 with experts revealing that properties are starting at €50,000. Some parts in Spain in particular currently offer some low priced properties that are not the wrecks usually associated with the bottom end of the market, according to Martin Dell, director of Spanish property portal Kyero. ‘There are thousands of Spanish properties available for under €50,000. Nor are they just remote country houses in need of vast repairs, this kind of money gives you plenty of choice in Spain these days. You can pick up a three bedroom townhouse, a six bedroom country cottage or a city apartment with a shared pool,’ he pointed out. For buyers looking to spend closer to €100,000 Cyprus offers possibilities, according to Ideal Homes International. It has a two bedroom apartment in Paphos with a shared pool in this price range. ‘Cyprus has got some real bargains at the moment and the climate is perfect for those looking for a holiday retreat away from the rain and cold back home. The market is unlikely to move much over the next few months, which means UK buyers can take their time to research the area they would like to own in without fear of getting priced out of the market while they do,’ said the firm’s director Chris White. White, who runs boutique estate agency Ideal Homes Portugal, added that there are holiday homes in the country for around €150,000 in the Algarve which is popular with British buyers as there are flights available from across the UK. In this price range the possibilities include a two bedroom apartment with a terrace and garden in Portimão, or a three bedroom with a pool in Albufeira. Those with more to spend and looking for something a little more upmarket could find their dream holiday home on the Balearic Islands for as little as €200,000, according to Marc Pritchard, sales and marketing director of Taylor Wimpey España. ‘There's nothing like owning property in an island location for achieving ultimate relaxation, which is precisely what a holiday home should provide. For many people the sea has a calming effect and Mallorca's plentiful restaurants, shops, beaches, golf courses and marinas really do offer something to suit all tastes,’ he said. Two bedroom apartments with direct access to the beach start at €235,000 at Costa Beach but there are plenty of pricier properties such as a cliff top townhouse with a communal infinity pool for €625,000 at Cala Magrana Mar. After the warmest autumn on record, Mallorca’s real estate market has enjoyed a buoyant year of sales that has surpassed expectations according to the island's international real estate agent, Engel & Völkers. Sales towards the close of the year look set to close up by approximately 25% over 2014 and prices are starting to creep up for top locations by up to 15%. Hot spots have… Continue reading
