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Top end property prices in Hong Kong set to fall by 15% this year
Stock market volatility and the interest rate rise in the United States has dampened investment sentiment in the property markets in Hong Kong, according to a new report. Overall the luxury sector prices remained broadly steady, with apartment prices on Hong Kong Island and Kowloon recording some mild declines, says the latest briefing report from Savills World Research. In the fourth quarter of 2015 primary sales rebounded after the quiet summer months but secondary sales declined further, and total transaction volumes of 10,000 were the lowest since 2002. The report suggests that prime residential prices are on course to decline by 15% this year, with little positive news expected in the short term. The data shows that sales sale on Hong Kong Island declined by 36% quarter on quarter in the final three months of 2015 while prime apartment prices fell 0.9%. However, there was still a 9.3% price growth over the year as a whole. Mid-Levels, with the highest concentration of primary launches and future supply among all districts, saw prices remain relatively stable in the last quarter of 2015, with an 8% increase overall for the year. Supported by a few house sales on the Peak in the fourth quarter townhouse prices remained stable over the quarter and recorded an 8.3% increase overall in 2015. Luxury transaction volumes in Kowloon and the New Territories also fell heavily by 62% and the report says this was due to a lack of significant new launches over the quarter, with most first-hand transactions coming from the remaining units of projects launched earlier in the year. Luxury prices in Kowloon declined by 1.4% while prices in the New Territories remained largely stable. ‘With investment sentiment dwindling, and few market highlights, many purchasers held off making investment decisions. This, coupled with the increasing number of newly completed luxury units being made available for lease amid declining rents, caused some potential purchasers to switch to the leasing market to avoid uncertainties over the next one to two years,’ the report explains. Mass residential prices declined by 2.9% across the board in the fourth quarter of 2015 and the report says that unlike previous declines in 2012 and 2013 which were in response to various restrictive government measures and thus short lived, the residential market seems to have turned a corner, due to the uncertain economic environment, a further possible rate hike and a potential tightening of funding to reduce capital outflows. In fact, while developers in general achieved satisfactory sales of primary projects in the quarter with 4,606 primary units sold, a 32% increase from the third quarter, this was mainly through providing more incentives, steeper price discounts, or both. The result was that the secondary market was frozen out and the 5,563 secondary transactions recorded, as well as the 10,169 total transactions recorded, were both all-time quarterly lows since 2002. Global economic uncertainties, stock market volatility and fears of further capital outflows from the local banking… Continue reading
Proposals released for 24,000 new homes in London’s historic Royal Docks
Surplus industrial land around the historic Royal Docks in London is to be released for new home building under proposals put forward for consultation by the city’s Mayor In the 19th and early 20th centuries, the Royal Docks in East London were at the very heart of London's commercial success, acting as a hive of industry and attracting trade and people from all over the world. The Mayor’s vision is to restore the Royal Docks to its former glory and the area is currently enjoying an incredible transformation. Chinese developer ABP has secured planning permission for a large financial and business district at Royal Albert Dock with work starting later this year alongside two new hotels which are already underway. The Silvertown Partnership has already started restoring the iconic Millennium Mills at Silvertown Quays and will eventually deliver a new development including creative workspace, exciting new brand buildings and over 3,000 homes. The Docks are also set to benefit from major transport infrastructure projects such as Crossrail and new crossings over the Thames, such as the Silvertown Tunnel. Now, the Mayor is building on that success by launching a consultation on proposals to transform further parts of the Docks and adjoining Beckton Riverside to become a world class business destination as well as 24,000 new homes. ‘This part of London was once a global standard bearer for trade and industry and we are already bringing about a new era of prosperity with exciting schemes transforming Royal Albert Dock and Silvertown Quays,’ said Mayor Boris Johnson. ‘Now we want to take that success to a new level and transform further parts of the Royal Docks, capitalising on the potential of Crossrail and other transport infrastructure improvements to deliver more of the homes and jobs London so urgently needs,’ he added. A planning framework for the Royal Docks and Beckton Riverside focuses on releasing surplus industrial land and intensifying other sites, which City Hall believes will open up further developable land on the north banks, potentially leading to the delivery of 24,000 homes and 60,000 new jobs. The plans also explores the need for new and improved transport infrastructure to serve key development sites and improve the capacity of the existing network, including proposing new routes, a river walk and a network of open spaces. ‘With careful planning, the potential exists to build on the work we have already done at Royal Docks and deliver tens of thousands more homes and jobs. I hope this consultation brings forward exciting ideas about how we can further regenerate this historic part of the capital,’ said Sir Edward Lister, Deputy Mayor for planning. The Royal Docks and Beckton Riverside Opportunity Area Planning Framework forms a major part of the Mayor's vision for East London. In October last year he launched 'City in the East' which is a visionary framework detailing how major development should take place from London Bridge to the Isle of Dogs and Greenwich Peninsula, right through to… Continue reading
Equity release lending hits new record in UK
Equity release lending activity on homes in the UK surged in the second half of 2015, recording its strongest growth rates since 2008. The in-depth report from the Equity Release Council shows the average initial amount of housing wealth unlocked by equity release customers via drawdown mortgages in the last six months of 2015 was £49,607. It points out that continued house price growth across much of the UK means many homes can 'earn' more than the average salary. This increases the appeal for home owners over the age of 55, who may no longer be working themselves, to improve their finances in later life by unlocking wealth tied up in their home, while retaining the right to tenure. The most common age to draw money through equity release is 65 to 74 but there has been particular growth in the 55 to 64 age group and those aged 85 and over. Over half of 55 to 64s opt for lump sum lifetime mortgages, while from 75 onwards four in five plans are drawdown mortgages Every region in England saw drawdown mortgage customers take an initial advance worth more than a year's take home pay for the average full time worker in that region. In London, drawdown customers withdraw the equivalent of 130 weeks' pay at £72,858. For lump sum customers in all UK regions except Scotland, where 91 weeks' worth of pay is released, the average withdrawal of housing wealth was equal to more than two year's take home pay. London again had the greatest sums taken out at £209,739 or 373 weeks' income. The five years from 2011 to 2015 have all seen a surge in equity release activity during the second half of the year. Indeed, the second half of 2015 saw a 26% rise in the value of lending compared with the first half, from £710 million to £898 million, the biggest half year growth rate of the post-2008 era. The Council's analysis of data for the second half of 2015 also shows product choice differs by age group, however. Between 65 and 74 product preferences closely match the overall market and 68.2% of plans taken out by this age group are drawdown and 31.8% are lump sum. The UK average is split 66.6% drawdown to 32.8% lump sum, and home reversion made up the remainder. Customers aged 55to 64 bucked the overall trend with the majority, 54.5%, choosing lump sum products. In contrast, from age 75 onwards four out of five opt for drawdown plans, taking an initial sum in later life while preserving an additional sum to withdraw as the need arises. ‘Equity release products continue to prove versatile in helping customers meet a range of financial needs before, at and during retirement. As a result, there is growing recognition from UK consumers, regulators and politicians that housing wealth can, and should, play a greater role in financial planning for retirement,’ said Nigel Waterson, chairman… Continue reading
