Tag Archives: real estate
Prime property prices in New York driven by strong demand and limited supply
A global powerhouse, domestic and international wealth has fuelled the expansion of New York’s prime residential real estate markets, according to a new analysis report. New York is one of the most diverse, globally connected and high performing cities in the world and alongside London, it stands apart from any other city as a true global powerhouse, says the prime residential report from international real estate firm Savills. It points out that as a world leader in financial services, technology and media, New York hosts a large number of global company headquarters, is an important centre of education and a tourism destination. Download the full PDF report > > The sheer diversity of factors in the city’s success make New York’s residential real estate highly sought after, from the international wealthy seeking a foothold in a global city through to local young families realising the appeal of urban living. It explains how strong occupier demand and limited supply has pushed up prices so affordability is a growing issue for many. However, although costly by US standards, prime New York residential real estate is still relatively good value by global levels . For example, prime property prices in New York are 35% less than London and 61% below Hong Kong. But prices are rising, up by 42% from $1,200 per square foot in 2008 to $1,700 per square foot in 2015. The longest established prime residential markets are in Manhattan on the Upper East Side and Upper West Side, bordering Central Park. The Upper East Side is known for its large, classic New York apartments, while the Upper West Side is a somewhat more relaxed and accessible alternative. Together, these two large neighbourhoods accounted for 38% of all $1 million plus transactions across Manhattan and Brooklyn in 2015, and 47% of all $5 million plus transactions in 2015. The report explains how the generation of new wealth in the city has pushed the prime markets into new neighbourhoods. The Financial District saw 385 deals over $1 million in 2015, more than 10 times the 35 deals recorded in 2005. Harlem, Williamsburg and Park Slope all saw increases of a similar magnitude and even Downtown Brooklyn, a market where no deals over $1 million were seen in 2005, recorded 64 such deals last year. At the upper end of the prime market, Chelsea, Greenwich Village, Tribeca and Midtown have all seen rapid growth in the number of $5 million plus sales. From just a handful each in 2005, all these neighbourhoods recorded more than 50 in 2015. This comes as new condominium stock is delivered to appeal to the super prime market, the report says and price growth has been especially apparent in Midtown where many super prime condo schemes are concentrated. The average sales price here rose by 193% to $3.8 million in the 10 year period. New York’s prime residential market is dominated by two property types: cooperatives and condominiums (condos). Condos have… Continue reading
Mortgage lending in UK boosted by buy to let frenzy due to stamp duty change
Gross mortgage lending reached £25.7 billion in the UK in March, a rise of 43% compared with the previous month and up 59% year on year. The surge in lending was driven by a dash by buyers to beat the 3% property stamp duty surcharge on additional homes that was introduced on the 01 April, according to the latest report from the Council of Mortgage Lenders. The data also shows that lending was the highest March figure since 2007 when gross lending reached £30.9 billion. Gross mortgage lending for the first quarter of this year was therefore an estimated £62.1 billion. This is the same level as in the previous quarter, but 39% higher than the first three months of 2015. ‘Against a backdrop of a recovering market, the substantial jump in lending in March was significantly influenced by a late surge of activity to beat the government’s stamp duty change on second properties, which came into effect at the start of April,’ said CML economist Mohammad Jamei. ‘The distortion caused by this stamp duty change appears to be larger than any previous stamp duty change we’ve seen. As a result, we expect there will be about 10,000 fewer mortgaged transactions each month in the second quarter of 2016 than would otherwise have been the case, offsetting the increase in activity seen in March,’ he added. According to Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), although the initial buy to let lending rush has passed, repercussions will continue to ricochet through the market. ‘Other efforts to manage demand among landlords, like reductions to mortgage tax relief, will impact on those looking to expand their portfolios. At IMLA we expect the tax increases to spur more remortgaging as landlords look at other ways to keep costs down,’ he said. ‘However, importantly, the changes will mean the sector then shrinks, the private rental sector will continue to grow perhaps more slowly to meet the demand of a rising population, continued affordability problems and the dearth of new housing supply,’ he pointed out. ‘While the failure to constrain price rises and to build more homes has been the biggest block to increased homeownership, other factors have also taken their toll. Areas beyond the mainstream market have been less well served in the more tightly regulated environment that has emerged post-financial crisis, and more consumers are falling into this category,’ he explained. ‘For example, we have seen a substantial lift in self-employment in the last five years as the labour market has evolved, but those working for themselves have had fewer tailored financial support products to choose from,’ he added. ‘However, lenders are expecting mortgage availability to improve for these types of clients in 2016. First time buyers in particular are identified as the segment of the market with the biggest growth potential. In the near future, lending levels may look lower after the buy to let rush, but over the long… Continue reading
Property prices in Spain rose in February as recovery takes hold
The prices of homes in Spain increased by 0.6% in February year on year, taking average values to €1,233 per square meter, according to the latest data from the General Council of Notaires. Prices are strongest in the single family home sector with growth of 3.8% year on year while the price of apartments fell slightly by 0.2% compared to February 2015. The average price for single family homes is now €1,007 per square meter, for second hand apartments it is €1,350, up 0.6%, and for new apartments it is €1,619 per square meter, a rise of 0.3%. At the same time sales are rising steadily, up 22.9% year on year with the growth being led by apartments with transactions in this sector up by 25.9%, the data also shows. Sales of single family homes also registered a significant increase year on year with growth of 22.6% but new homes are not as popular with transactions down by 5.1%. The report from the Notaires states that in general terms the figures reflect an underlying trend of recovery. The recovery is also being reported by estate agents. Barcelona based Lucas Fox International said it recorded a 33% increase in sales in 2015 and much of the growth is coming from Spanish buyers rather than from those from overseas. Property sales to Spanish buyers were up by 86% year on year, according to the company’s latest market report and it said this is a sign that the Spanish property recovery is well underway. International buyers, however, continue to dominate high end sales. Some 17% of prime market buyers in Barcelona purchasing property above €950,000 were to national clients compared to 11% the previous year, the majority of whom were purchasing primary residences. ‘The increased market activity by local buyers was the standout trend in 2015. Spanish buyers have been active predominantly at mid end of the market, attracted by property prices at an eight year low, a recovering economy and increased lending from Spanish banks,’ said Tom Maidment, partner at Lucas Fox. ‘For several years the market has been dominated by international buyers and whilst foreign investors still account for the majority of our sales, the number of local buyers is clearly on the rise and we expect this trend to continue apace throughout 2016,’ he added. Sales to the British were also up by 50% in Barcelona, and in Lucas Fox’s Ibiza office, UK buyers accounted for more than two thirds of home sales, primarily due to the strong Pound against the Euro during 2015. The Barcelona office also saw a significant rise in Dutch and US buyers during 2015. The number of Russian buyers has dropped substantially, however, and are being replaced by buyers from the Middle East. Sales to the Spanish were also particularly strong in Valencia where transactions to local buyers more than doubled. There were also significant increases in Maresme, the coastal area to the North of Barcelona, and… Continue reading
