Tag Archives: real estate
Demand continues to fall in prime central London property market
Although the wider UK property market is yet to suffer any detrimental impact from Brexit, London’s prime market is seeing demand continue to fall, the latest index suggests. In the £1 million plus sector in London demand has fallen by 10%, the lowest level on record and a further drop since demand cooled following April’s changes to stamp duty for buy to let and second homes purchases. The data from the prime central London property index from hybrid estate agent eMoov shows that the five areas where demand is at its lowest are Mayfair at 3%, St Johns Wood, Knightsbridge and Belgravia all at 4% and Fitzrovia at 5%. The index, which records the change in supply and demand for property above £1 million by monitoring the total number of properties sold in comparison to those on sale, shows that some 75% of London’s most prestigious locations have seen demand remain static or drop since the second quarter of the year. Indeed, the only places to have seen a positive uplift in demand for property over the last three months are Holland Park at 44%, Marylebone at 38%, Notting Hill at 17% and Primrose Hill at 9%. Notting Hill is also fourth hottest where demand levels are concerned, currently at 14%. With Belsize Park enjoying the highest demand across the prime central London sector at 18%, followed by Islington at 17%, Chiswick at 15% and Holland Park at 13%. According to Russell Quirk, eMoov chief executive officer this slowdown was always likely to happen as these areas of London rely heavily on high end foreign investment and second home visitors to survive. ‘Whilst the rest of the UK market seems to be ticking along with little impact as of yet, the immediate weakening of the sterling and negative response from the rest of the EU seems to have had an instantaneous knock-on effect on the prime central London market,’ he said. Continue reading
Auckland house market shows unmistakable signs of slowing
For the first time in five years the housing market in Auckland, New Zealand’s largest urban area, is showing signs that prices are stabilising, and may even be slowing. The average price in July was $867,681, a fall of 4.5% from the previous month and 2% below the average price for the previous three months, according to the latest data from Barfoot & Thompson. The trend is not as evident in the median price, which at $840,000 was the same as in June, and 2.1% higher than the median price for the previous three months. ‘There has been a definite change in the market in the last month. The winter months, school holidays and a slowing in the number of new listings all contributed to the slowdown in July, but buyer determination to pay whatever is necessary to achieve a property was tempered,’ said Wendy Alexander, chief executive officer of Barfoot & Thompson. ‘Buyers remain prepared to pay a fair price, and under the hammer sales at auctions of 70% were still high, but sales activity is slower than it was at the same time last year. In the three months May to July this year we sold 3,508 properties. In the same period last year we sold 3780, a 7.8% difference,’ she explained. She pointed out that the year on year increase in prices is still occurring, but at a much slower rate than in the past four years. The average price has increased by 5.3% over the past seven months compared to 2015’s full year average price increase of 14%. Meanwhile, the median price increase over the past seven months has been 6% compared to 17.4% for 2015. ‘Whether price increases will continue in the remaining months of the year is unclear. Normally, prices rise as we enter the spring/summer months, but the Reserve Bank’s new regulations affecting investors will start to have an impact from August,’ said Alexander. The data also shows that in July Barfoot & Thompson sold 1,034 properties, down 11.5% on the number in June and down 25.5% on those for the same month last year. New listings at 1,426 were down 19.4% on those in June and down 19.6% for those in July last year. At end of the month the firm had 3,012 properties on its books, some 2.6% higher than in June and 7.5% higher than in July last year. During July the firm sold 383 properties, or 37% of all sales, for more than $1 million and sold 94 properties, or 9.1% of sales, for under $500,000. Continue reading
Rents in central London’s prime market down but activity is stronger
Rental values in the prime central London lettings market fell by 3.6% in the year to July 2016 but activity is stronger than last summer, the latest index shows. Values were down due to higher stock levels and a degree of uncertainty surrounding the European Union referendum result, according to the report from international real estate firm Knight Frank. Where the rental value is regarded by prospective tenants as being right properties are being taken up and the number of tenancies agreed in the three months to June rose 3% compared to 2015 and viewings increased 15.8%, the data from Knight Frank also shows While overall the number of new prospective tenants fell 6.8% over the same period, the number of tenancies started via Knight Frank’s corporate relocation service increased 72% in the same period but prime gross rental yields were flat at 3.1%. According to Tom Bill, head of London residential research at Knight Frank, there are parallels between the lettings and sales markets because the Brexit vote has reinforced the existent pricing trends rather alter market fundamentals. ‘Demand has been relatively flat since the start of the year due to uncertainty surrounding the state of the global economy, particularly in the financial services sector, which contributed towards a slowdown in rental value growth from its last peak of 4.2% in May 2015,’ he said. ‘This trend has been compounded by higher levels of supply as stock has moved across from the sales market, with more vendors becoming landlords due to weaker conditions in the prime sales markets,’ he pointed out. ‘In the three months to the end of June this year, the number of new rental properties placed on the market rose by 49% compared to the same period last year. As a result, landlords are reducing asking rents to prevent void periods and tenants are becoming more selective,’ he explained. Indeed, properties where the asking rent is perceived as too high are struggling to get viewings and Bill believes that the referendum result has simply reinforced this dynamic and landlords are increasingly taking a pragmatic approach to asking rents against the background of wider Brexit uncertainty and rising stock levels. He also pointed out that despite the three month decline in the number of new prospective tenants registering, the expectation is that rental volumes will continue to rise over the summer and into the autumn. ‘The uncertainty ahead of the Brexit vote could be an explanatory factor for weaker registrations, although early signs are positive with no significant announcements that companies are pulling back from relocating staff to London following the referendum,’ he added. Knight Frank also found that relocation budgets in many cases have risen due to the effects of a weaker Sterling, which means tenants are looking in higher-value areas and at higher value properties compared to last year. The number of new prospective tenants registering with a budget of £1,500 plus per week increased 11% in the three… Continue reading
