Tag Archives: technology
Economy driving Dublin office market recovery
Strong economic fundamentals are set to drive continued recovery in the Dublin office market in 2015, according to a new analysis. Overall the performance of Dublin’s office investment market will be increasingly linked to ongoing economic performance rather than dramatic change in capital market expectations, says the report from Knight Frank. It predicts that rents will grow to between €55 and €57.50 per square foot in 2015 and political risk is the greatest cause for investment uncertainty in 2015. However, the critically low availability of prime city centre space will induce increased take-up in the suburbs this year and the rise of the concept of the Global City will play an ever increasing relevance for Dublin in 2015 and beyond. Office take-up reached 2.48 million square feet in 2014, a 28% increase on 2013 and the highest level seen since 2007. An increase in the number of deals was the main driver of the increase in take-up with 228 agreed over the course of the year, compared to 190 in 2013. The Dublin market is now dominated by the Technology, Media and Telecommunications (TMT) sector which accounted for four of the five top deals and for approximately half of take-up in 2014. Tenant demand continues to be concentrated in the city centre and with a Dublin wide vacancy in the order of 12.9%, the suburban market was disproportionately affected by the economic downturn, although the critically low availability of prime city centre space will induce increased take-up in the suburbs in 2015, the report explains. It points out that this should help build on the recent recovery of suburban rents to levels in excess of €20 per square foot, up from €12 to €15 per square foot at the bottom of the market. The lack of new office supply, combined with strong occupier demand, has put severe upward pressure on prime city centre rents in 2014, increasing from €35 per square foot to €47.50 per square foot over the course of the year. ‘We expect the pace of rental growth to moderate somewhat with rents forecast to be between €55 and €57.50 by year’s end which would represent a year on year growth of at least 16% in 2015, down from the 36% witnessed in 2014,’ the report says. Further speculative office development is due to come on stream in the second half of 2016. ‘Due to the lack of supply coming on stream in the short term, it is likely that a significant amount of pent-up demand will have emerged by then, providing plenty of scope for further development potential,’ the report adds. ‘Dublin has a compelling global identity that has allowed it to punch above its weight on the global stage, enabling it to successfully pivot to the world’s leading companies. With the continued rise in importance of the concept of the Global City, the global challenges and opportunities that face the Dublin office market have never been greater,’ the report says. ‘With… Continue reading
House valuations increase in the UK despite house price growth falling
House price growth in the UK may be falling but last month saw a rebound in valuations activity on a monthly basis, according to the latest research from Connells Survey & Valuation. The total number of valuations conducted in September increased by 42% compared to August. However, this was not enough of a seasonal rebound to take valuations volumes ahead of September 2013. On an annual basis, housing market activity has decreased by 12%, a steeper fall than the 4% annual drop seen in August 2014. ‘Sustainability is the new watchword for the housing market. Higher interest rates are getting closer and caps on mortgage to income ratios officially come into force in October, both closely following the Mortgage Market Review which has now become a settled feature of the landscape,’ said John Bagshaw. ‘In particular a base rate rise isn’t just a factor for the financial world. In the property market, buyers and sellers are increasingly factoring in slightly higher interest costs and a potential slowdown in house price growth,’ he added. He pointed out that steadier progress isn’t necessarily bad news. ‘Autumn last year was exceptionally good for housing market activity. Now, as the UK searches for a long lost measure of normality, the housing market is displaying sensible levels of caution, a healthy and often life-preserving characteristic. Stability will be important as activity keeps growing into 2015,’ he explained. Remortgaging was the strongest performing of all sections of the housing market in September. Compared to August remortgaging activity is up 57%, leaving remortgaging valuations down 9% since September 2013, the smallest annual fall. According to Bagshaw remortgaging levels appear to reflect the wisdom of crowds. ‘Most people don’t follow the detailed workings of monetary policy, and no-one can predict inflation or UK growth in six months’ time. And yet households are taking advantage of cheaper mortgage rates now, as the perception grows that locking in to that market will not be possible for ever,’ he added. First time buyers have seen the second fastest monthly pick up in activity since August, up 39% on a monthly basis. On an annual basis, this leaves first time buyer activity down 13% compared to September 2013. Activity was slightly more muted for those owner-occupiers moving home further up the property ladder, with such home mover activity up 32% compared to August. However on an annual basis the number of home mover valuations has seen the same 13% drop as first time buyers since September 2013. Bagshaw believes that first time buyers are proving unwavering and many are now ready and determined to buy their first home after putting off the move for many years due to the financial crisis. ‘Alongside this sheer number of potential home owners, lenders are increasingly playing their part and are even more willing to back new buyers, partly thanks to Help to Buy. The overall result is a consistent buoyancy… Continue reading
Foreclosure and distressed property sales in the US fall considerably year on year
There are fewer homes in the United States being sold which are in foreclosure as the real estate market continues its recovery. The national foreclosure inventory fell by 33% year on year in August 2014 to approximately 629,000 properties, or 1.6% of all homes with a mortgage, down from 936,000, or 2.4% in August 2013. According to the data from CoreLogic this marks 34 months of continuous year on year declines in the inventory of foreclosed homes, including 19 straight months of declines greater than 20%. Also in August, the 12 month sum of completed foreclosures continued to decline, dropping 20% from a year ago to 576,000. The seriously delinquent inventory fell to 1.6 million loans, a 21.7% decline from August 2013. The five states with the largest year on year drop in the foreclosure inventory were Utah which was down 46%, Idaho down 45.6%, Arizona down 44.5%, Florida down 43.6% and Iowa down 42.6. The data also shows that 49 states posted declines in the foreclosure inventory from a year ago, with 44 states showing decreases of more than 20%. Only the District of Columbia and Wyoming saw year on year increases in foreclosure inventory. Florida has seen the biggest improvement, falling 7.3% from its February 2011 peak level of 12.5% to its August rate of 5.2%. The foreclosure rate in New Jersey peaked in March 2013, much later than in Florida and the state has a 1.6% improvement in the foreclosure rate from its peak rate. Both New York and Hawaii experienced peak foreclosure rates in September 2012, and have experienced similar declines in foreclosure rates, with New York falling 0.9% from its peak and Hawaii falling 1.1% from its peak. Distressed sales (Real Estate Owned and short sales) accounted for 11.1% of total home sales in July 2014, the lowest share since December 2007 and a strong improvement from the same time a year ago when this category made up 15.5% of total sales. Within this category, REO sales made up 7.1% of total home sales, and short sales made up 4% of total sales in July. At its peak, the distressed sales share totalled 32.5% of all sales in January 2009, with REO sales making up 28% of that share. CoreLogic says in its report that the ongoing shift away from REO sales is a driver of improving home prices, as REOs typically sell at a larger discount than do short sales. There will always be some amount of distress in the housing market, so one would never expect a 0% distressed sales share, and by comparison, the pre-crisis share of distressed sales was traditionally about 2%. Michigan had the largest share of distressed sales of any state at 26.3% in July, followed by Florida at 23.3%, Illinois at 23.3%, Nevada at 21.9% and Georgia at 19.8%. California experienced a 13.7% drop in the distressed sales share from a year earlier, the largest of any state. California also saw the largest improvement from peak distressed… Continue reading
