Tag Archives: sales
Saudi Arabia set to see continued growth of its residential real estate market
Saudi Arabia has seen its residential property market expand rapidly over the last year due to increased demand caused by various government initiatives to boost the housing sector. Over the past year, residential prices in Riyadh have risen by 5% to 7% overall, according to the Riyadh residential research report from international real estate firm Knight Frank. However, it points out that there have been variable performances across the capital’s districts, with congestion issues in the south, for example, responsible for prices stagnating. Meanwhile, in the north, which has seen notable development activity, prices have seen a healthy uplift of around 9%, the report says. In the short to medium term, with new supply unlikely to be able to fully offset pent-up demand, the firm expects residential prices to continue to move in an upward direction. In recent years, Saudi Arabia’s residential construction sector has been expanding rapidly. Indeed, the latest available data from the Saudi Arabian Monetary Agency shows that the value of residential building construction across the kingdom rose for the ninth consecutive year in 2012, increasing by 11.4% year on year. Riyadh is an important driver of construction activity in Saudi Arabia and the capital city accounted for an average of 27% of all residential and commercial permits issued across the Kingdom between 2003 and 2013. Moreover, the number of permits issued in the capital rose by 319% over the 10 year period, outperforming Saudi Arabia as a whole, which experienced a 215% increase. The report points out that despite rising development activity demand for residential units continues to outstrip supply in Riyadh. Indeed, the capital has a requirement for around 50,000 housing units per annum over the next five years and has an estimated housing inventory of just 1.15 million units. However, due to construction delays and the lack of available land, developers have found it increasingly difficult to bridge the gap between supply and demand. What’s more, although there are a number of large housing schemes planned to be completed in the short term, there is unlikely to be enough capacity in the system to deliver the required number of units to satiate current levels of pent up demand. Figures from the Central Department of Statistics and Information (CDSI) show that just 60% of housing units in Saudi Arabia are owner occupied and in Riyadh this drops to 53%. By comparison, the levels of owner occupation in neighbouring countries is much higher at 75% in the United Arab Emirates, 80% in Qatar, 82% in Bahrain and 83% in Oman. The report explains that in order to address the housing undersupply issue, the government has launched a number of projects in recent years although not all of these have achieved the success that had been envisioned. For example, in 2011, the government announced a programme of works to build 500,000 homes across the kingdom.’ However, the scheme struggled to gain traction due to issues related to a lack of land availability, complexities in allocating aid and slow moving… Continue reading
Non standard UK home borrowers face lack of clarity on mortgages
Fears of a future clampdown by regulators are preventing mortgage lenders from offering loans that stretch into people’s retirement, according to a new report. The report from the Intermediary Mortgage Lenders Association examines the impact of post financial crisis mortgage regulation on the growing army of ‘non-standard’ customers who fall outside the traditional core of salaried borrowers with no credit blemishes who can pay off their loans before a set retirement date. IMLA argues that people seeking a loan which is likely to remain outstanding beyond their normal retirement age are suffering from a lack of clarity in the Mortgage Market Review (MMR) rules, which is resulting in older borrowers being frozen out. Most private sector employees now hold defined contribution (DC) pensions, which often prevent accurate predictions of their pension income making it hard for lenders to determine how affordable a loan may prove beyond the point of retirement. With the MMR requiring lenders to ensure mortgages are affordable for the lifetime of the loan in order to ‘protect borrowers from themselves’, the scope for interpretation has convinced many lenders that lending into retirement now carries extra risk if borrowers find at a later date that their retirement income disappoints. In response, many mortgage lenders have imposed lower maximum age limits rather than risk future accusations of breaching the rules where customers’ pensions prove insufficient to keep up their mortgage repayments after they retire. With house prices rising faster than incomes, many borrowers are not managing to purchase an appropriate family home until their forties or even fifties. But anyone over the age of 40 is seeking a loan with a standard term of 25 years will be borrowing beyond a normal retirement age of 65 and is liable to find their options restricted. IMLA argues the upcoming thematic review of the MMR by the Financial Conduct Authority, which is set to examine responsible lending in the first half of 2015, must provide extra clarity so that lenders can offer the flexibility required to meet borrowers’ changing needs without fear of future censure. ‘This issue goes beyond the transitional arrangements for existing borrowers, and means that efforts by the lending community to follow the spirit of MMR with new customers are being hampered by the very real concern that it may be cited against them in future,’ said Peter Williams, executive director of the IMLA. ‘Uncertain pension incomes make it difficult for lenders to assess mortgage affordability in later life, and this may become even harder when the new pension freedoms take effect next year. To avoid a situation where regulation brings about the extinction of mortgage terms that stretch into retirement, we need clarity and confirmation about where the boundaries of responsible lending truly lie,’ he explained. ‘MMR has been a big step forwards but having put a strong framework in place for the future, attention must now… Continue reading
Sales in Miami soared last month due to increased demand
Sales in the Miami real estate market, one of the most popular US locations with overseas buyers, soared in October, exceeding record activity recorded in 2013. Single family home sales increased by 13.6% compared to October 2013 condominium sales increased 6.5% while combined, residential real estate sales increased 9.5% compared to a year ago. ‘Miami continues to experience population growth, interest from foreign and domestic second home buyers, and economic expansion,’ said Liza Mendez, chairman of the Board of the Miami Association of Realtors. ‘The Miami real estate market continues to strengthen due to demand for local properties, as evidenced by sales that exceed record activity in 2013,’she added. Overall the data shows that single family home prices, which again increased in October, remain at affordable 2004 levels despite 35 months of consistent year on year growth. Condo prices also increased in October, marking 40 months of growth in the last 41months. Condo prices declined in August for the first time in more than three years but rebounded in September. The median sale price for single family homes increased 9.1% to $240,000 but the average sale price decreased 6.6% to $393,515 last month. Compared to October 2013, the median sale price for condominiums increased by 8.8% to $185,000 and the average sale price for condominiums increased 22.3% to $362,657. The association monthly report points out that Miami properties continue to sell rapidly and at nearly asking price, reflecting strong demand. The median number of days on the market for single family homes sold in October was 43 days, an increase of 7.5% from October 2013. The average percent of original list price received was 95.3%, down a negligible 1% from a year earlier. The median number of days on the market for condominiums sold in October was 58 days, an increase of 31.8% compared to the same period in 2013. The average sales price was 93.7% of the asking price, a decrease of 3.9%. Cash sales in Miami continue to decline as more financing becomes available. Still, access to mortgage loans for condominium buyers remains limited, impeding further market strengthening. Some 55.8% of total closed sales in October were all cash transactions, compared to 61.7% in October 2013. Cash sales in Miami are still more than double the national figure of 27%. All cash sales accounted for 40.8% of single family home and 67.8% of condominium closings compared to a year earlier. Since nearly 90% of foreign buyers in Florida purchase properties all cash, this continues to reflect the much stronger presence of international buyers in the Miami real estate market. After three years of record sales activity that resulted in an inventory shortage, seller confidence continues to result in more properties being listed for sale in Miami. But new listings are now increasing by narrower margins, according to Francisco Angulo, residential president of the Miami Association of Realtors. ‘Seller confidence is resulting in greater inventory becoming available in the Miami real estate market. But strong home sales in Miami continue… Continue reading
