Tag Archives: markets
Higher taxes and election uncertainty put brakes on prime London house prices
Prices in the prime property market in London fell marginally in the first quarter of 2015, confirming concerns that higher taxes and pre-election qualms are affecting the sector. They were down 0.5% quarter on quarter and this follows an average 2.6% price adjustment in the final quarter of 2014, according to the latest research from international real estate adviser Savills. The firm says this was triggered by the stamp duty reform announced in December’s Autumn Statement and means that the 12 month rolling prime London average has slipped into negative territory. However, Savills research is forecasting that prices in the prime London market will rise by 23% over the next five years assuming no further taxation of high value property. The prime central London housing market has been most affected by increased stamp duty charges and values are down 1.1% on a quarterly basis and 4.3% year on year, a reflection of the fact that the more valuable markets have borne the brunt of increased stamp duty charges. By contrast, the markets of Islington, Wapping and Canary Wharf continue to show positive annual growth, despite an easing in values in the past six months. Year on year the north west prime market is up 1.8% but down 0.6% quarter on quarter. North London is up 6.2% year on year and down 0.8% quarter on quarter. The data also shows that the East of City prime market has seen prices rise 4% on an annual basis but down 1.5% quarter on quarter while in the south west prime market prices are down 2.6% year on year and down 0.2% quarter on quarter. But over the longer term prices in the prime sector have seen considerable growth. Over the last five years prices in central London are up 30.8%, in north west London up 30.7%, in south west London up 38.1%, in north London up 45.6% and in east of City up 41.6%. Overall the prime market has seen growth of 36.6% over five years. Since the peak of the market prices in price central London are up 33.6%, in north west London up 28.4%, in south west London up 33.7%, in north London up 42.3% and in east of City up 33.6%, taking the growth for the whole of London to 34.3%. ‘As we forecast in November, uncertainty regarding the general election and the potential for further taxation of high value property have contributed to a subdued market in the first part of 2015,’ said Lucian Cook, head of UK residential research at Savills. ‘The stamp duty changes came after five and a half years of sustained price growth for prime London property. This segment of the market is now looking fully taxed and sellers are having to factor in price adjustments equivalent to the stamp duty increase,’ he explained. The analysis also shows that by contrast, the softening in… Continue reading
Australian office markets see trend away from mining industries
Just over one million square metres was leased across Australia’s office markets in 2014 and the year saw a trend away from mining and its associated industries to the services sector. Non-mining sectors took at least 80% of the stock, while 35% of the space leased occurred in the Melbourne market, according to Savills Australia’s latest research. The report found of the 1,050,425 square metres of office space reported leased in CBD and suburban markets nationally, property and business services was the dominant sector leasing 29% of the stock. Other non-mining sectors including finance, government and IT, accounted for a further 50%, while the mining and utilities industry accounted for just 17% of the total. In the CBD markets, which accounted for just under 700,000 square metres, the property and business services sector leased 33% of the stock. The Melbourne market, which is dominated by the service sector, took the majority of space with 35% of the national total. Savills national head of research, Tony Crabb, said the figures underscored the trending shift away from mining and associated industries to the service sector. ‘These are the sort of figures that we expected given the end of the mining investment boom with Melbourne and Sydney leading the way and Perth and Brisbane struggling to adjust to the new status quo,’ he explained. ‘It’s a good news story for Sydney and Melbourne and not so good for Perth and Brisbane, but it’s important to note that this is a cyclical rather than a structural phenomenon and one which the mining states will recover from just as Sydney and Melbourne are now doing,’ he added. Crabb expects vacancy rates to reflect the fluctuating fortunes of the markets with the non-mining states recording minimal change on last year’s figures while Perth and Brisbane struggled with vacancy rates of around 12% and 14%. He pointed out that given the stronger leasing trend, incentives in the Sydney and Melbourne markets were likely to come off post global financial crisis highs, but would remain high in Perth and Brisbane. He also expects some tightening in vacancy rates would also come from withdrawal of stock. ‘We forecast an increase in the amount of occupied space with up to 700,000 square metres of space is expected to be withdrawn, leading to a tightening in the vacancy rate in some CBD’s, especially for prime buildings as upgrade activity accelerates,’ said Crabb. ‘As for incentives, they are mostly paid for by higher face rents. In Sydney, where the incentive has risen from 20% to over 30%, face rents have grown by more than the value of the incentive, this is also the case in Melbourne, Perth and Adelaide with Brisbane the exception,’ he commented. Continue reading
Home sales fell almost 6% in December, latest CREA index shows
Nationally home sales in Canada fell in December compared with the previous month, recording a fall of 5.8%, the latest index shows. However, actual (not seasonally adjusted) activity stood 7.9% above December 2013 levels, according to the data from the Canadian Real Estate Association (CREA). The number of newly listed homes rose 1.1% from November to December and the Home Price Index (HPI) rose 5.4% year on year in December while the national average sale price rose 3.8% on a year on year. The number of home sales processed through Canadian real estate Boards and Associations fell 5.8% in December 2014 compared to November and remained above year ago levels. December sales were down from the previous month in almost two thirds of all local housing markets, led by declines of about 25% in both Calgary and Edmonton. Activity also slipped by about 5% in the Greater Toronto Area. ‘Home sales activity remained above year ago levels in most local housing markets. Sales were also stronger in December than they were the previous month in about one third of all local markets in Canada,’ said CREA president Beth Crosbie. December sales were down from the previous month in a number of Canada’s largest and most active housing markets, indicating a broadly based cooling off for Canadian home sales as 2014 came to an end, according to CREA chief economist Gregory Klump. ‘Even so, sales remain above year-ago levels in many of the same markets. Given the uncertain outlook for oil prices, it’s no surprise consumer confidence in Alberta softened and moved some home buyers to the side lines,’ he explained. ‘With regards to slower activity in Calgary and Edmonton, sales in these two markets had been running strong all year before they returned to levels that are entirely average for the month of December,’ he added. The number of newly listed homes rose 1.1% in December compared to November. Led by Calgary, Regina and Ottawa, new supply was up in just over half of all local markets. The national sales to new listings ratio was 51.8% in December, down from the mid 55% range in the previous four months. A sales to new listings ratio between 40% and 60% is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets respectively. The ratio was within this range in just over two thirds of all local markets in November. More than half of the British Columbia, Alberta and Southern Ontario markets that had been in seller’s market territory in November returned to balanced market territory in December. This list included Greater Vancouver, Calgary, Edmonton, and the Greater Toronto Area. The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity. There were 6.2 months of inventory nationally at the end of… Continue reading
