Tag Archives: real-estate
Second home owners returning to Portugal, particularly the Algarve
The availability of cheap finance, investment in infrastructure, appealing tax initiatives and a return to sensible pricing has prompted renewed activity in the Algarve’s property market. Overall, the Portuguese property market’s decline since the economic downturn of 2008 is well documented. Prices in some locations popular with overseas buyers have fallen by as much as 50% in peak to trough terms. But sales volumes and prices have responded, albeit in two phases, according to the latest analysis from international real estate firm Knight Frank. In 2013 the firm saw vendors start to adjust their prices, which led to an upturn in transactions. By 2015 the Algarve recorded its first annual increase in prime prices since 2008 and Knight Frank’s west Algarve office reported a 32% increase in sales in 2015 compared to 2014. The report says that what set the Algarve apart during the downturn was the continual investment in infrastructure. The upgrade of the coastal A22 motorway, for example, has opened up the western Algarve while the improvement to the E1 from Lisbon and Porto and the €32 million expansion of Faro Airport have helped boost economic confidence. Further development is planned at Vilamoura and Quinta do Lago. The report points out that British, Irish and German buyers are still evident in the Algarve but French, Scandinavian and non- Europeans, including South Africans and Chinese, are also increasing in number. A surge in French interest has been seen in the last two to three years with many citing Portugal’s Non-Habitual Tax Residency regime (NHR) as a key incentive. Introduced in 2009, the NHR exempts non-residents spending 183 days a year in Portugal, or those with a primary residence in the country, from income tax on non-Portuguese incomes, including pensions, salaries and capital gains for a period of 10 years. Another initiative, Portugal’s Golden Visa, by far the most successful of the European schemes in existence, has seen inward investment focus on the Lisbon area rather than on the Algarve. To date Chinese buyers account for 79% of the 2,853 visas granted since 2012. The report also points out that there is now a greater focus on the Algarve’s investment potential compared with before 2008. The Algarve’s 37 championship golf courses are responsible for over 50,000 rounds of golf a year and their season extends beyond that of the traditional summer rental period, running from February to May and again from September to November. And it adds that new development is evident once more particularly at the eastern end of the Algarve, but prime projects need to be anchored by a 5-star hotel brand or a championship golf course to pull buyers away from the more established locations such as the Golden Triangle area which stretches from Quinta do Lago to Vilamoura and Vale do Lobo. Continue reading
House prices up year on year in all key cities in UK apart from Aberdeen
House prices in key cities in the UK increased by 3.8% in the three months to April 2016 and were up 10.4% year on year, according to the latest index. But there is considerable variation with Cambridge leading the annual growth with prices up 15.8% whereas in Aberdeen prices fell by 6.1% year on year, the data from the Hometrack cities index shows. The report says that this time last year growth was slowing in the run up to the UK’s general election and looking ahead growth could slow again in the run up to June’s referendum on the future of the UK in the European Union. It also points out that a surge in sales ahead of the new 3% stamp duty surcharge for additional homes resulted in most cities registering a spike in the monthly rate of house price growth in March with slower growth recorded in April. Aberdeen remains the city bucking the national trend with prices falling by 6.1% in the last year where the lower oil price continues to impact the economy and demand for housing. Across the remaining cities, the annual growth rate is higher than 12 months ago in 15 out of the 20 cities covered by the index, led by Cambridge with growth of 15.8%, then London up 14.4% and Bristol up 13.8%. Portsmouth and Southampton both saw prices rise by 9% year on year while in Bournemouth prices were up 8.6%, in Birmingham 8.3%, in Manchester 7.8%, in Leicester 7.4%, in Oxford 7.1%, Leeds 6.7%, in Cardiff 6.3%, in Nottingham 5.9%, in Liverpool 5.5%, in Sheffield 4.7%, in Belfast 4.1%, in Edinburgh 4%, in Glasgow 3.5%, and in Newcastle 2.5%. Aberdeen was the only city to see prices fall with a decline of 6.1%. The report says that the implication of the referendum result for businesses operating in housing is the key unknown. ‘The economic impact of Brexit and consequences for interest rates, investment and incomes has direct implications for housing. The consensus appears to be a short economic shock accompanied by a period of uncertainty for consumers and business,’ it explains. It has an analysis of city level house price growth and transactions over the last 20 years which shows that external shocks tend to have a greater impact on market volumes than house prices, especially where there is no accompanying economic downturn. From 1996 to 2007 house prices posted consistent positive year on year growth but this was not the case for sales volumes which were influenced by a mix of external shocks to sentiment and changing domestic factors such as short periods of rising interest rates. In the decade before 2007, sales volumes fell on four occasions in London by as much as 15% highlighting how London is more prone to the impact of external factors from the crisis in emerging economies and collapse of the Long Term Capital Management hedge fund in 1998 to the bursting of the dot… Continue reading
New homes sales in Australia bounced back in March after a decline the previous month
Total new home sales in Australia bounced back in March with growth of 8.9% following February’s sharp decline of 5.3%, the latest housing data shows. Sales of detached houses increased by 7% and sales of multi-units were up 16.3%, according to the new home sales report from the Housing Industry Association which covers the country’s largest volume builders. The data also shows that new home sales increased by 2.8% in the first quarter of the year but were 1.7% lower than the same quarter in 2015. It is another positive update for the residential construction sector, according to HIA economist Diwa Hopkins and she pointed out that the bounce in March has moderated the downward trend that emerged in the second half of 2015. ‘The current level and trajectory of new home sales and approvals provides a strong signal that new home building activity in 2016 will remain strong,’ she added. She also pointed out that a cut to the official cash rate will also provide additional support to the residential construction sector. A breakdown of the figures show that detached house sales increased in four of the five mainland states, up 13.2% in Queensland, up 9.8% in Western Australia, up 8.3% in New South Wales , up 2.8% in Victoria but down 6.9% in South Australia . Quarter on quarter detached house sales were up 11.2% in Victoria, up 5.8% in Western Australia and up 4.3% in Queensland. Sales declined over this period by 4% in New South Wales and down 5.7% in South Australia. Meanwhile, in an encouraging update for the new home building industry, data from the Australian Bureau of Statistics (ABS) shows that a total of 19,371 homes were approved for construction in March this year, some 3.7% more than in February. Approvals rose for both multi-unit and detached homes, increasing by 2.4% and 5.1% respectively. Hopkins pointed out that despite the increase during March, the broader trend in approvals is that of decline from the record levels during the middle of last year. During the March 2016 quarter, the number of approvals was lower than in the previous quarter, by 1.6% and also 8.8% lower than 12 months previously. The HIA expects that the number of new homes commencing construction during 2016 to remain very strong at around 200,000, albeit less than 2015’s record of 220,000. A breakdown of the figures shows that during March total seasonally adjusted new home building approvals saw the largest increase in South Australia with a rise of 8.7%, were up 7.3% in Western Australia, up 6.9% in New South Wales, up 5.7% in Queensland and up 3.7% in Victoria but fell by 18.7% in Tasmania. In trend terms, approvals saw a 19% increase in the Australian Capital Territory and an 18.4% fall in the Northern Territory. Continue reading
