Tag Archives: investment
Buy to let rush boosted rental supply in the UK, especially London
The buy to let rush in the UK ahead of stamp duty changes in April boosted rental supply with London seeing the biggest increase, a new analysis report shows. The rental market received a boost of 8% more new properties advertised to rent in the second quarter of the year compared to the same quarter in 2015, according to the data from property portal Rightmove. The majority of new properties were in London, up by 22% on the same period last year, resulting in a small drop in the region’s average asking rental price to just under £2,000 per month. Despite the increase in supply, all other regions recorded a rise in average asking rents this quarter, with the East of England’s 5% annual change leading the way. The data also shows that rental enquiries were up 2% in the second quarter 2016 compared to last year, and up 1% in the two weeks after the referendum compared to same two weeks in 2015, as the lettings market shows no immediate signs of a Brexit impact. The supply boost failed to stop rents rising 2.8% in the second quarter outside London in England and Wales, though this is only 0.1% higher than the rise in the second quarter of 2015. The East of England’s year on year increase of 5% was the highest of all regions, while the South East saw rents increase the most over the quarter, up by 5.1%. London saw the biggest increase in supply this quarter compared to any other region with growth of 22%, resulting in a fall in average asking rents by 1.1% to just under £2,000 per month. ‘The big spike in March transactions resulting from a large number of investors beating the more punitive stamp duty tax deadline has created a rental supply boost which is good news for prospective tenants actively looking for a new place to live,’ said Rightmove’s head of lettings Sam Mitchell. ‘Now that the stamp duty changes have come in this boost may be short-lived, as landlords consider whether or not to make further purchases. Our own research among landlords shows that just under a third of them are concerned that the stamp duty changes, plus the forthcoming tax relief changes, will potentially wipe out their profits,’ he explained. ‘Once the tax relief changes start to be phased in from next year new buy to let activity could slow further. However rental demand is still outstripping supply in many areas of the country so we may see a shift by investors to look in areas that offer better yields for long term property investments,’ he added. The report suggests that investors planning to continue expanding their portfolio could look to some of the areas with highest demand from prospective tenants. The top five places include Ashton-Under-Lyne, Stalybridge and Oldham in Greater Manchester where average asking rents for two bedroom properties are around £520 per month and you can buy a two bed… Continue reading
Median sales prices hit record high in five regions in New Zealand
Five regions in New Zealand saw median sales prices hit a new record high but overall the median price nationals fell by 1% in June, the latest real estate index shows. The median sales price now stands at $500,000 with the Waikato/Bay of Plenty region recorded its fifth record median sale price for 2016, reaching $438,000, while the median price in Auckland reaching $821,000. The data from the Real Estate Institute of New Zealand (REINZ) also shows that Northland recorded a new record median of $360,000, while Otago reached $295,000 and Central Otago Lakes hit $730,050. The index figures reveal that sales fell 13% month on month which is in line with the general trend at this time of the year although an increase of 6% was recorded in June 2015. ‘Although the onset of winter means that June is generally a quieter month for the real estate market, there has been no let-up in the rate of price increases across the country, with five regions recording new record median prices,’ said REINZ spokesperson Bryan Thomson. ‘Although there is much discussion about the housing market and increasing new build supply, the fact remains that the vast majority of the supply comes from the sale of existing properties,’ he added. The data also reveals a rapid declines in the volume of properties available for sale right across the country, with a number of regions, such as Wellington and Hawke’s Bay, recording very low levels of properties for sale. Thomson pointed out that while Auckland continues to be the largest single region, its influence on the national picture is waning due to its own weaker sales and strong growth in sales in other regions, particularly Waikato/Bay of Plenty and Northland. Auckland’s peak share of national sales was 39.7% in January 2014, however, its share is now just over 33.8%. Over the same period Waikato/Bay of Plenty’s share of national sales has increased from 14.3% to 19.0%. A breakdown of the figures shows that Central Otago Lakes recorded the largest percentage increase in median price compared to June 2015, at 42%, followed by Waikato/Bay of Plenty at 26% and Otago at 19%. The number of properties available for sale across all regions in New Zealand has continued to fall between June 2015 and June 2016. Wellington has the fewest properties for sale with just over seven weeks of supply, closely followed by Hawke’s Bay with nine weeks supply and Auckland with just under 10 weeks of supply. The number of days to sell has only improved by three days at the national level over the past 12 months, although the regions have seen some significant improvements with nine regions seeing a decrease of 20% or more in the number of days to sell. Auckland was the only region to see a lengthening of the number of days to sell over the past 12 months. Between June 2015 and June 2016, the number… Continue reading
European commercial real estate investment up 2.5% in second quarter of 2016
Commercial real estate investment remained strong across Europe in the second quarter of 2016 totalling €54.0 billion, up 2.5% on the previous quarter and 30.4% on the 10 year average, new research shows. However, overall activity fell short compared to the second quarter of 2015 with the office sector having the strongest quarter, seeing an 8.3% increase on the first three months of 2016, driven by a particularly strong performance in the Nordic region. The research from CBRE also points out that despite uncertainty in the UK caused by the European Union referendum, sentiment remained strong in other European markets and investment levels were stable year on year. Investment volumes in France and Sweden, Europe’s third and fourth largest markets, were particularly resilient. The data shows that over the last year investment in these markets has grown 32% and 20% respectively. Indeed, second quarter results in both France and Sweden were boosted by buoyant office sectors. Ireland also performed extremely strongly, transacting a record €2.3 billion of commercial property deals in the second quarter of 2016, more than double that of the same quarter last year, although the sale of the Blanchardstown Centre for close to €1 billion closed during this quarter. Poland followed suit, transacting €1.5 billion in the second quarter, over three times the level recorded in the same period last year. But Germany showed decreased levels of investment in the second quarter, which is likely connected to a lack of availability of stock in the core markets, which dampened the European total. Core property in Germany remains highly regarded as a safe haven and sentiment remains strong. The UK also performed less strongly than its continental European counterparts in the run up to the Brexit vote although strong fundamentals continue to underpin the UK market. The recent depreciation of sterling, coupled with low interest rates, has attracted the attention of overseas investors to the UK, and with the spread between bond yields and property being the widest on record, the fundamentals of UK and continental European real estate remain attractive. ‘Whilst investors have reacted cautiously to Brexit, the market fundamentals remain strong and investors still have significant capital to deploy. The uncertainty means that many investors will watch and see how the market develops before deciding how to act, said Jonathan Hull, managing director of Investment Properties EMEA at CBRE. ‘However, sentiment is already improving as the UK enters a more stable political environment and there are signs that the market is responding positively to this,’ he added. According to Miles Gibson, head of UK research at CBRE, the EU referendum risk was undoubtedly one factor affecting investment activity in the second quarter. ‘But instability in the financial markets earlier in the year was similarly important in causing investors to be more risk averse,’ he added. Continue reading
