Tuesday 3 September 2013

House prices continue to rise in China

House prices in China continued to rally in August, extending momentum for the 15th straight month.
The average price of new houses in 100 cities climbed 0.92 percent from July to 10,442 yuan ($1,703) per square meter, the China Index Academy said yesterday. That compared to a growth of 0.87 percent in July and June.s 0.77 percent rise.
The number of cities that registered monthly price increases rose from 61 to 71. Of those, 31 saw growth of more than 1 percent. Fuzhou in the southeastern Fujian Province led last month.s gainers with a 3.92 percent rise.
There were price drops in 29 cities, with Wuhu in east China.s Anhui Province suffering the biggest retreat of 2.29 percent.
In the 10 largest cities, the average price of a new home rose 1.49 percent to 17,871 yuan per square meter last month, accelerating from its growth of 1.34 percent in July and June.s 1.01 percent.
Beijing continued to lead the first-tier cities with a rise of 3.22 percent, followed by Guangzhou, Shenzhen and Shanghai, which saw increases of 1.68 percent, 1.34 percent and 1.07 percent, respectively, the academy said.
.However,. it added, .with an expected increase in new home supply over the coming two months as the market has entered its traditional high season for property sales, we will see rather mild price increases in most of the Chinese cities except for those that have remained undersupplied..
In Shanghai, new home sales saw double-digit growth to exceed 900,000 square meters in August with the average price down more than 5 percent from July amid weaker demand for high-end properties, according to a separate report.
Purchases of new residential properties, excluding government-subsidized affordable housing, jumped 16.4 percent from July to 904,200 square meters, data released by Shanghai Uwin Real Estate Information Services Co showed.
The average cost of new homes, however, fell 5.4 percent to 23,348 yuan a square meter, the lowest in three months.
.New home transactions in Shanghai will very likely exceed the 1 million threshold again in both September and October as demand from first-time buyers remainrobust,. said Huang Zhijian, Uwin.s chief analyst.
Across the city, the top three best-selling residential projects in August cost no more than 18,000 yuan per square meter, Uwin data showed.

Sunday 11 August 2013

Staggering rise in US farmland values

The United States Department of Agriculture (USDA) has just released its latest farmland values report and some of the figures are staggering.
While the UK media has always been fascinated by the ongoing strong performance of farmlandover here  relative to other asset classes, what is happening across the Atlantic puts that growth in the shade.
In North Dakota, for example, cropland values rose by 41.5% between 2012 and 2013 to $1,910/acre (£1,248/acre).
While the relatively low value of land in that part of the US could partially help to explain this sudden rise, values in what is known as the Corn Belt also rose incredibly strongly.
Iowa, which has the highest land prices outside New Jersey and California, saw values rise by almost 18% to $8,600/acre (£5,620/acre).
Over the past five years prices have jumped 112%, says the USDA. In England, average price growth over the same period has been 26%, according to the Knight Frank Farmland Index.
A number of commentators are now suggesting that US farmland is a bubble set to burst.
Whether this happens remains to be seen. But US farmland values are certainly more dependent on the support provided by cash rents, which are closely linked to commodity prices, than in the UK where other factors also play a strong role.
With wheat prices well down on the year on the back of bullish predictions for the 2013 global harvest, some of that support could start to weaken.
As an aside, it is interesting that the USDA regards the price change of farmland as sufficiently important to keep track of. In the UK, the government stopped producing its own farmland index some time ago.

Saturday 10 August 2013

Hong Kong luxury house prices and rents fall in July

Hong Kong’s residential sales market was quiet in July as Government cooling measures continued to have an impact on transactions.
A series of as anti-speculation moves including the doubling of Stamp Duty in February for all transactions over HK$2 million, has had the desired effect on the residential property market.
Investors and mainland buyers have retreated from the market – in fact the proportion of mainland Chinese buyers has dropped from around 30% in October 2012 to only 9.4% in January 2013 (in the Hong Kong luxury market).
In July, prices in the luxury residential sales market dipped by 0.3%, while rents fell by 0.9% month-on-month.
On the supply side, the latest statistics released by the Transport and Housing Bureau show that the number of new flats commencing construction surged 500% quarter-on-quarter, in the second quarter of this year, to reach 6,600 units – the highest number since 2004
Thomas Lam, Director and Head of Research & Consultancy in Hong Kong, said: “Government data show that 70,000 new units could be available in the next three to four years. Of these, about 60% will be small to medium-sized units with saleable areas of less than 753 sq ft, meeting the demand from first-time homebuyers.
“However, residential supply will remain tight in the short term. With various cooling measures remaining in place, we expect the residential market to stay quiet and sales to fall about 10% in 2013. We believe mass residential prices will drop around 10%, while prices in the more resilient luxury sector will fall 5%.”

Spanish housing market shows signs of recovery

There’s no doubt that Spain’s property market has endured a difficult few years and residential prices in the country tumbled in the wake of the economic downturn. 
But now Knight Frank’s representative office in Spain, says buyer confidence in the market is starting to return
Barcelona based agent Lucas Fox notes that the fall in prime residental prices in Spain is begining to slow and as a result investors are sensing a potential turnaround in the market.
Data released by the agent suggests that prices in some of Spain’s most desirable areas have fallen up to 50% since the property crash of 2006/7. However, sales have begun to rise more recently as British and Scandinavian buyers return to the market.
• In Barcelona, the Costa Brava and Marbella, prices have fallen between 20% and 50%. In some areas, they may have reached the bottom.
• Property sales in Barcelona are up 13.5% from January to May 2013 compared to the same period last year
• Lucas Fox has seen the strongest two quarters of trading since the start of the property crash of 2006/7
• The luxury property market is doing particularly well, primarily in Barcelona, the Costa Brava, Ibiza and Mallorca where the average sales price of properties sold by Lucas Fox in the first six months was over a million Euros. In these key areas the property markets are still being driven by international clients
• Mallorca was the most popular tourist destination in Spain in the first half of 2013, with many British and Scandinavians returning to the market
• On Ibiza, prices remain buoyant and the demographics of buyers is changing with more young European buyers in the 30 to 40 year age group
Alexander Vaughan, co-founder of Lucas Fox, said: “The first six months of 2013 saw further encouraging developments in the property market in prime areas of Spain. In all regions we cover, the numbers of offers and sales completed were significantly up on the same period in 2012.
“It remains a buyer’s market with even the best properties transacting at 20% to 30% below their peak prices and sellers increasingly open to negotiation on asking prices. Our advice to potential buyers is to focus on location and quality.
“There are some great deals to be had and we think that in most areas, particularly Barcelona, the Costa Brava and Marbella, prices are at, or very close to, the bottom. We expect the trend of sellers lowering asking prices in line with buyer expectations to continue for at least the rest of 2013 and quite possibly the next couple of years.”

Monday 5 August 2013

How do waterfront locations affect prices around the world?

Waterfront properties in sought-after coastal locations cost 63% more, on average, than similar properties that are landlocked, according to Knight Frank analysis.

To find out what the biggest premiums for coastal views are, they surveyed local agents in 10 popular second-home destinations around the world to find out the premium paid to live on the water.
Across the board, prime waterfront properties in coastal locations around the world are worth an average of 63% more than their inland counterparts.
However, there are regional differences from city to city. Waterfront properties on Italy’s Lake Como and in Barbados have the highest price premium. In both locations coastal homes can command prices 100% higher than equivalent homes inland. They were followed by homes in Phuket in Thailand and the central Algarve along Portugal’s southern coast where values increase by 89% and 75% respectively.
At the other end of the scale prime waterfront properties in coastal locations in Dubai are only worth an average of 10% more than inland homes. In The Hamptons, home to some of the most expensive residential properties in the US, the presence of water only increases the value of a property by an average of 30%.
The full list can be seen below.
Lake Como, Italy: 100%
Barbados: 100%
Piglet, Thailand:89%
Central Algarve, Portugal: 75%
Miami, USA: 60%
Cannes, France: 40-60%
Cape Town, South Africa: 56%
Mallory: 50%
The Hamptons,USA: 30%
Dubai 10%

Saturday 3 August 2013

Dubai's luxury home prices rise 6%

The price of luxury homes in Dubai rose by more than six percent in the second quarter of 2013, according to the Knight Frank Prime Global Cities Index.
The index also showed that prime real estate prices in the emirate have increased by 21.6 percent over the past year, making it the second best performing market in the world.
With prices also up 11.9 percent in the last six months, only Jakarta in Indonesia has seen prices rise more in the the year to June, Knight Frank said.
"The price of luxury villas began to rise in early 2012 and apartments are now following suit," the real estate consultancy said in a report.
"The city is attracting demand fromNorth African, Asian and Middle Eastern buyers,many are cash buyers which may mitigate the impact of the prospective mortgage cap which is currently under discussion," it added.
The average price of luxury homes in 28 of the world’s key cities increased by 2.4 percent in the second quarter of 2013, a marked improvement on the 0.4 percent fall recorded in the first three months of the year.
Although Europe, with an annual fall of 0.9 percent, remains the weakest performing region it is up from -3.4 percent a year earlier.
Madrid was the weakest performing prime residential market in the last 12 months, declining by 11.9 percent, the index showed

Wednesday 31 July 2013

San Francisco leads surge in US house prices

The City by the Bay is the place to be for home sellers.
San Francisco led the country in the rapid rise of home prices as values across the nation increased over a year ago. 
Frisco homeowners saw sales prices increase by a stunning 24.5% compared with last year, according to data from S&P/Case-Shiller’s latest 20-City index. New York home prices rose a much more modest 3.3 percent during that time.
The numbers signal a steady recovery from the housing market crash as the overall economy improves, experts say.
Craig Lazzara, senior director for S&P Dow Jones Indices, said prices nationwide remained well below peak values, but it’s still good news.
“What has happened in the course of the past year, it’s clear that the market has bottomed and has begun to rebound,” Lazzara said.
San Francisco’s numbers, while certainly eye-catching, also highlighted the brutal fall of four years ago. Frisco home prices bottomed out in 2009, diving 46% in fewer than three years. By comparison, New York’s market had a far shorter fall. Prices here dropped about 27%.
“They went down farther, so they’re coming back a lot harder,” Lazzara said of San Francisco.
Both cities remain well below all-time highs, but values have surged across the country. In the 20-city index, sales prices increased a total of 12.2% in May compared with 2012.
West Coast locales have rebounded far faster than their Eastern counterparts, according to the index. Las Vegas followed only San Francisco in the race toward normal after taking the nation’s most prolific tumble in the housing crash. Phoenix, Los Angeles and San Diego all posted double-digit gains.
Denver and Dallas hit all-time highs, a first for any of the 20 cities since the financial crisis.l

Tuesday 30 July 2013

Price of prime global property rises 2.4%

The price of luxury homes in Jakarta increased 27.2 percent during the second quarter from a year ago, topping the rankings of Knight Frank's Global Cities Index for the third consecutive quarter. Overall, the average price of luxury homes in prime global cities increased by 2.4 percent in the second quarter, compared to a 0.4 percent decrease during the first quarter of the year, according to Knight Frank's latest report.  
"The index now stands 27 percent above its financial crisis low in the second quarter of 2009 and has recorded its strongest quarterly growth for three years," Kate Everett-Allen, international residential research, said in the report.  
Dubai, Shanghai, St. Petersburg and Tel Aviv rounded up the top five for luxury homes price increases during the last year. Across the 28 cities tracked by the index, prime property prices increased by 5.6 percent in the year to June.  
Europe remains the weakest performing region for the index, with Rome, Paris and Madrid taking the bottom three spots. Prime residential prices in Europe fell 0.9 percent during the quarter. However, that is a contrast to a 3.4 percent decrease a year ago. Some European economies are introducing "Golden Visas" and tax incentives to attract foreign investors, Knight Frank reports.  
In contrast, Asian governments are working to cool price growth in major markets, but the efforts seem to be having only a marginal effect. Even with the various cooling measures in Singapore, luxury prices increased 5.5 percent during the quarter, mostly due to one project, Twentyone Anguilla Park. 

Sunday 28 July 2013

How do Asia's top cities fair for property investments?

IP Global's second quarter Global Property Barometer takes a close look at Asia as real estate curbs in the region's long regarded safe havens, such as Singapore and Hong Kong, look set to remain firmly in place. 

Given the increase in the cooling measures can these cities remain Asia's top property investment hotspots? Which Asian markets are investors looking to as investment alternatives and which of these provide the best opportunities? Below you can find the cities that IP Global and investors are taking an interest in, their market performance analysis and forecasts and how they rank in this quarters barometer.
This has seen the Australian mining town of Mackay, Kuala Lumpur and Jakarta move into the property fast lane.

IP Global Property Barometer

Bright Property OutlookFair Property OutlookCloudy Property Outlook

Chinese house prices still rising despite government intervention

In March, the central government announced a 20 percent capital gains tax on pre-owned home sales.
 Several cities announced detailed policies of their own at the end of March.
But sales only slumped briefly. Market activity was brisk in the second quarter. Prices have kept rising.
According to the China Index Academy, a Beijing-based real estate research organization, the average housing price in 100 cities was 10,258 yuan ($1,671) per square meter in June, up 4.55 percent from January.
In Beijing, which has the toughest curbs, prices rose 10.8 percent in the same period to 27,783 yuan per sq m.
According to the National Bureau of Statistics, housing prices in 63 of the 70 cities that it monitors rose month-on-month in June, compared with 65 in May.
Most experts interviewed by China Daily said prices will keep rising for the remainder of the year, although momentum will slow.
They noted that housing investment, a leading indicator of the property market, is picking up. Developers' financial health greatly improved during the second-quarter sales boom, meaning housing investment was being scaled up, particularly in first-tier cities.
Already, land markets in first-tier cities are heating up, with surprising premium bids at auctions in Beijing, Shanghai and Guangzhou. The higher land prices will initially at least translate into higher housing prices.
Second, housing transaction volume is high because of robust demand and supply.
On the supply side, developers usually offer more units in the second half. On the demand side, the number of first-time home buyers is still high. Demand is being boosted by an increasing number of buyers seeking to trade up.
"Prices will be buoyed by buyers' expectations that prices will rise indefinitely, given the fact that prices remained stubbornly high under the last round of curbs," said Lian Ping, chief economist of Bank of Communications.
However, analysts also said that whether on a month-on-month or year-on-year basis, price gains will be smaller in the second half of this year than in the first half.
An important reason is that China's property market didn't warm up significantly until the second half of last year. Thus, the first-half base of comparison is lower than that for the second half, according to He Tian, head of research at the China Index Academy.
Another factor is property tax, a long-anticipated move to rein in housing prices that is expected to be imposed in more cities beyond the pilot sites of Shanghai and Chongqing.
Given the moderate outlook for the second half of the year, most analysts said further tough curbs are less likely to be announced by the central government.
Analysts said current policies, mainly administrative measures, do not align with the "market-oriented" reform the new leadership is pushing. Further, they noted, GDP growth in the second quarter slowed to 7.5 percent and is expected to dip further in the third quarter.
Thus, the central government will be very cautious about further steps to cool the property sector, which has proven to be very effective in shoring up the broader economy when the manufacturing sector is weak.

Saturday 27 July 2013

House prices in Europe set to continue to fall

House prices are set to continue falling in much of Europe this year, with some of the steepest declines coming in core eurozone countries such as the Netherlands and France, according to a Standard & Poor's report.

The rating agency said the direction of the market was a result of high unemployment and low consumer confidence caused by the recession in the region – though it added that Germany and the United Kingdom would likely buck the trend.

Spain will be worst hit, with house prices tumbling 8 per cent this year and another 5 per cent in 2014 because of "a lack of solvent demand to absorb excess supply", said S&P economist Sophie Tahiri. But she warned that the fall could be even worse.

"We believe Spain's bad bank SAREB, which holds 30 per cent of the country's repossessed housing stock, will gradually disinvest it gradually over the next two or three years so as not to precipitate a market collapse," she said. "An acceleration of this disinvestment process could in our opinion push house price declines into double digits in 2013-2014."

The second steepest drop in house prices will come in the Netherlands, S&P said, putting it down to weak growth, falling purchasing power, higher unemployment and changes to regulations. It forecast declines there of 5.5 per cent this year and 1 per cent next year, with the market bottoming out in 2015.

France will experience a 4 per cent fall this year and next year, despite the market there proving "more resilient" than the rating agency expected. "Low interest rates and supportive lending policies imply a softer landing in France over the next 18 months," the report said.

Meanwhile Germany will see house prices rise 3 per cent in both this year and next year, as a result of "a better-than-European-average economic outlook, low interest rates and strong national and international demand for homes as a safe capital investment", S&P said.

However, the rating agency noted that it considered the increase in prices in Germany to be a "normalisation" because it did not experience a boom over the last 20 years, and because the market there is still undervalued by 20 per cent according to an affordability ratio of house prices to incomes.

In the UK, a more positive economic outlook and improved availability of credit meant the recover was stronger than S&P expected, according to the report. Homes are still considered to be overvalued in the UK, yet prices are expected to rise 2.5 per cent this year and 2 per cent in 2014.

In the long-term a shortage of supply matched with rising populations means the prospects for the European housing market "appear brighter", S&P said.

Friday 26 July 2013

Beach hut in England sells for £180,000

A tiny wooden beach hut with no water, electricity or even a toilet has sold for a staggering £180,000 within days of going on the market.
But while it may not have many mod cons or amenities, and cost as much as a three bedroom house in Liverpool, the 12ft x 18ft hut boasts priceless views over the The Solent towards the Isle of Wight.
The one-bedroom cabin, which sleeps four people at a squeeze, opens directly onto the beach at Mudeford near Christchurch, Dorset - one of the most sought after pieces of real estate in the world.
But with no mains sewerage, there is no toilet and the buyer will have to walk a nearby amenity block to spend a penny.
The hut went on the market a few weeks ago and sold within days for a rumoured £180,000, it emerged today.
Will Wright, of Waterside Properties, said: 'There was definitely a lot of interest - that’s for sure. It was talk of the town when it went up for sale. The beach huts down there are so popular, I am not surprised it sold so quickly.' 
The one-bedroom hut is not accessible by car and owners will have to walk to the short distance to enjoy their new purchase. There are solar panels on the roof which power the spot lights and one 12v socket, similar to those seen in cars. Water is obtained from a communal standpipe and the sink drains via a soak-away under the property, with toilets in a nearby amenity block. The new owner - who does not want to be named - now owns the leasehold on the property until 2029 and will have to pay a yearly service charge of £1,986.00 to Christchurch Borough Council. It qualifies for a reduced council tax bill of £499.56 but can only be lived in for a maximum of ten months of the year. Former owner Sarah Litchfield, 48, who owned the property for the last 10 years, said she agonised over the decision to sell. She said: 'I had a mad moment 10-years-ago and bought it, I’m a local girl and everyone dreams of having one. 'I have spent many happy years down there and it has been a tough decision to sell.'

Source: Daily Mail

US house prices take seasonal dip

US house prices took what appeared to be a seasonal dip in June, according figures from the National Association of Realtors (NAR). While remaining well above levels experienced during the same month in 2012, a 1.2 per cent fall was noted. This lead to a seasonally adjusted rate of 5.08 million from a downwardly revised 5.14 million in May. However, with June 2012 posting just a 4.41 million unit level, experts aren't concerned.

Lawrence Yun, NAR chief economist, explained there is still enough momentum in the market, despite high interest rates. "Affordability conditions remain favorable in most of the country, and we’re still dealing with a large pent-up demand," he said.  "However, higher mortgage interest rates will bite into high-cost regions of California, Hawaii and the New York City metro area market."

NAR also recorded a rise in national average commitment rates for 30-year, conventional, fixed-rate mortgages. In June the rate increased to 4.07 per cent from 3.57 per cent in May. This is the highest rate recorded since October 2011 and is considerably greater than the 3.68 per cent noted in June 2012.

However, inventory conditions continue to broadly favour sellers, rising 1.9 per cent to 2.19 million existing homes for sale. This represents a 5.2-month supply at the current sales pace, up from five months in May. Listed inventory is 7.6 per cent below a year ago, when there was a 6.4 month supply. A lack of stock is helping to drive up property prices and the national median existing-home price for all housing types was $214,200 (£139,516) in June. This is a year-on-year increase of 13.5 per cent and the 16th consecutive month of year-over-year price increases.

NAR president Gary Thomas, broker-owner of Evergreen Realty, explained price rises are improving the position of homeowners and 16 per cent of realtors now claim to have worked with a client that previously had an "underwater mortgage".

Thursday 25 July 2013

House prices drop in Moscow and St Petersburg

Data from the Federal State Statistic Service show that Russian real estate is doing better on the whole, but the same cannot be said in Moscow or St. Petersburg as home prices drop in the country’s two biggest cities. Economic sluggishness and new rules that require both Russians and expatriates to register where they live are expected to make things even more difficult.
The financial collapse of Cyprus, where wealthy Russians own 40% of bank deposits, is also complicating matters. The Russian government has already said it will not reimburse investors who lost money in the Cypriot collapse, and the fallout may further impact the real estate market. 
Russian house prices are rising - but only just, after inflation has been taken into account, and not in Moscow or St. Petersburg. The price index for all resale apartments in Russia rose by 10.39% during the year to Q1 2013, according to the Federal State Statistics Service (Rosstat).  Adjusted for inflation this represents only a 3.05% real price rise.
In Moscow, Russia’s capital, the price index for resale apartments rose by only 6.17% y-o-y to Q1 2013. When adjusted for inflation, house prices actually fell by 0.89%.
In St. Petersburg, the country’s second largest city, the price index for resale apartments rose 5.31% during the year to Q1 2013.  When adjusted for inflation, house prices fell by 1.68%.
Russia had a massive housing boom from 2000 to 2007, with secondary market prices skyrocketing by 436% while primary market prices rose 362%.  Property prices started to weaken in late-2008, and began falling in the second quarter of 2009.
At RUB 48,795 (US$ 1,485) per sq. m. the average price of new apartments is still 7.6% down in the first quarter on the 2008 peak price, which was RUB 52,799 (US$ 1,607) per sq. m.
According to the Land Code of 2001, private ownership of land properties is allowed for both locals and foreigners. The legislation was extended to Moscow in January 2006.