Auckland and surrounding area sees most new home building
Image Auckland and its surrounding regions have driven most of the recent growth in building consents for new dwellings in New Zealand, according to the latest official figures to be published.
In September 2015, some 2,242 new dwellings were given in permission in the country as whole, up 13% from the same month last year, the data from Statistics New Zealand shows.
The regions with the largest increases were Waikato, Auckland, Bay of Plenty and Northland while the regions with the largest decreases were Wellington and Canterbury. However, Canterbury still accounts for almost one quarter of the national total.
However, in seasonally adjusted terms, the number of new dwellings consented fell 5.7% in September after a 5.3% fall in August but this is following on from a 20% surge in July, and the trend is increasing.
‘In the regions surrounding Auckland, growth is being driven by new houses, while in Auckland itself, apartments are also a big part of the picture,’ said Statistics New Zealand business indicators manager Clara Eatherley.
‘While we see a bit of volatility from month to month, the overall picture recently has been growth in building consents, both on the residential side and the non-residential,’ she added.
NZ prices up year on year but down month on month, latest index shows
Image Residential property sales in New Zealand increase by 18.6% year on year in October but where down 4.1% compared to the previous month, according to the latest index figures.
The national median price was $460,000, up $30,000 or 7% on October 2014 and down 5.1% on September, the data from the Real Estate Institute of New Zealand shows.
Excluding the impact of the Auckland region, the national median price rose $28,500 to $370,000 compared to October 2014 to reach a new record high and rose 1.4% on September.
There was a new record national median price excluding Auckland of $370,000, up 8.4% compared to October 2014 and up 1.4% on September and new record median prices for Northland, Manawatu/Wanganui, Wellington and Nelson/Marlborough.
But the market paused in Auckland with a year on year rise of 16.8% with month on month median prices down by 3%.
The data also show that there was a 57% rise nationwide in the number of sales over $1 million year on year and a 47% rise in the number of properties sold by auction.
‘The drop in the number of sales in Auckland in October is the result of a softening of demand over the past few months and the new IRD and bank account rules introduced at the start of October,’ said REINZ chief executive Colleen Milne.
‘However, the fundamental supply and demand drivers of the Auckland market remain in place, and the result for October is indicative of the market adjustment phase as it adapts to these new requirements,’ she explained.
‘Elsewhere across the country we are seeing increasing demand and rising prices as buyers of all types emerge to take advantage of low interest rates. It is further evidence of the halo effect of Auckland based buyers searching for value in regional markets,’ she pointed out.
‘During winter and into early spring, the property markets in a number of regions have been far more active than would normally be expected, thus a slowdown or pause is not surprising following this burst of activity,’ she added.
Overall 10 regions recorded increased sales volumes compared to September, with Central Otago Lakes volumes growing 31%, followed by Southland with 21% and Canterbury/Westland, 15%. Compared to October 2014, all regions recorded increases in sales volume, with Waikato/Bay of Plenty recording the largest increase of 54%, followed by Hawke’s Bay with 52% and Central Otago Lakes with 50%.
On a seasonally adjusted basis, the national median house price fell 5.5%, indicating that prices fell slightly more in October than would normally be expected at this time of year.
Northland, Manawatu/Wanganui, Wellington and Nelson/Marlborough all reached new record median prices in October. Northland recorded the largest percentage increase in median price compared to October 2014, at 18%, followed by Auckland at 17% and Taranaki at 12%.
Hawke’s Bay recorded the largest percentage increase in median price compared to September, with a 9% increase, followed by Northland with 7% and Nelson/Marlborough with 5%.
Improved economy and political stability boost Cairo property markets
Image All sectors of the Cairo real estate market have witnessed a positive performance and improved sentiment during the first three months of 2015 due to stronger confidence and investment appetite created by increased economic and political stability.
A new analysis from international real estate firm JLL says that this confidence is most clearly illustrated by the recent announcement of the mega real estate project Cairo Capital which will serve as an extension for New Cairo and will draw the centre of gravity further to the East of the existing city.
The performance of both the tourism sector and other parts of the real estate market are expected to continue to benefit from increased levels of foreign investment into Egypt, committed at the recent Economic Summit in Sharma El Sheikh in March 2015.
The report points out that Cairo’s residential market continues to recover with improved sales figures as a result of the recovering economic and political sentiment. Apartment and villa sale prices increased during 2015 across all the areas monitored by JLL as many residential developments have few units left and have increased prices accordingly.
Performance in the rental sector remains more mixed, with some properties experiencing an increase while others are experiencing a reduction due to the unstructured nature of the rentals market in Egypt. An extra 31,000 units are planned to be delivered during 2015 of which 11,000 are in New Cairo and 19,000 are in the 6th of October.
‘The positive economic outlook arising from the Economic Summit is expected to result in additional investment in the residential sector, strengthening the market further in 2015,’ the report says.
During the first quarter of the year some 250 units were completed in Al Rehab City, New Cairo, in addition to 640 units in the Zayed complex, increasing the current supply to around 106,000 units. A further 31 residential developments are expected to complete in the rest of 2015 ten of which will be in the second quarter, adding an extra 30,000 units to the current supply.
The report points out that the Palm Hills Development is notable, with five of their developments planned to be delivered in the second quarter alone. ‘Despite this additional supply, the positive sentiment is expected to result in increased selling prices over the coming year,’ it adds.
Cairo’s office market witnessed a slight improvement during the first quarter of 2015 as rental rates increased significantly in New Cairo due to relatively higher demand. Rental rates in Central Cairo and West Cairo remained unchanged.
The major completion in the first quarter of2015 was Park Avenue located on the Cairo Alexandria Desert Road. This 15,000 square meter development is currently complete but not yet operational.
The report also shows that the vacancy rate has decreased by 2% since the fourth quarter of 2014, signalling stronger demand for commercial space. The year on year increase in vacancy rate is mainly due to the influx of more than 100,000 square meters throughout the year, it adds.
Cairo’s office supply is expected to expand further in 2015, with an additional 37,000 square meters being delivered of which 17,000 square meters is due for delivery in the second quarter of the year. The supply of office space is, however, generally lower than in previous years.
The demand for office space is now equally balanced between Sectors One and Two within New Cairo. Sector two benefits from higher parking availability, new supply and competitive pricing. This high demand is inducing developers to raise the asking price, the report adds.
Falling property prices make Dubai a more mature real estate market
Image Falling property prices in Dubai are not totally bad news as it will make the emirate’s real estate market more mature, a new analysis report says.
The report from international real estate firm Knight Frank explains how over the past decade, Dubai has been on a real estate rollercoaster ride of boom, crash and recovery.
Indeed, property values halved between 2008 and 2010, but then rose phoenix like from the desert to regain most of their losses by 2014. However, the rallying prices of 2013 and 2014 set off the alarm so authorities had to react to prevent a market boom and crash cycle.
At this point Dubai’s market regulators, wielding mortgage caps and a doubling of transaction fees, stepped in to reduce speculation and the report points out that this combined with other factors such as deteriorating oil prices, currency fluctuations and a series of economic and political failures in different parts of world, means lower levels of demand from most regional and international group of buyers looking to purchase properties in Dubai.
On top of this there has been an excess of new build supply and the net impact has been a 12% fall in mainstream property prices over the 12 months to June 2015.
‘Nevertheless, falling prices are not totally bad news. With the government stepping in to curb speculative activity through tightening mortgage regulations and capping price increments, it is evident that lessons has been learnt from the 2008 downturn and the market is heading steadily to be more mature and better controlled,’ says the report.
‘More interestingly, with price falls continuing to outpace rental value declines, initial yields are rising. Reaching more than 7% in rental yields in the mainstream property segment, Dubai still stands tall among real estate capitals in the world for investor seeking income generating properties,’ it adds.
It also points out that the rate of decline in prime residential prices of 4.5% in the year to June 2015 was smaller compared to the mainstream segment while in sub-markets, the picture is a bit more positive as well. In demand areas are mostly in the prime segment including villas, townhouses and apartments in the Palm, Emirates Hills, Dubai Marina and Downtown for example.
‘Even during the 2008 downturn, prime properties saw lower levels of declines compared to less established areas,’ Diaa Noufal, of the MENA research unit at Knight Frank Dubai office.
The report also looks at the wider region. In Qatar foreigners have been able to buy property since 2004, although restricted to a few specific areas. Demand has been rising, albeit with a slowdown this year following the oil price crash and regional instability. Buyers tend to be residents of countries within the Gulf Cooperation Council, although the number of European buyers is rising.
Demand for Oman property from across the Middle East and from India and Pakistan has risen in recent years. Knight Frank says this is partly due to the potential for some buyers to secure residency following purchase, but also from relatively strong annual investment returns of about 6%.
In Saudi Arabia the property market has been seen evolving rapidly over the last decade with mega scale projects by Dubai experienced developers such as Emaar and Limitless.
Abu Dhabi is where the Dubai model is most evident, albeit on a smaller scale. Transaction volumes there have fallen in the past year, but prices have been relatively resilient, rising by about 5% in the 12 months to June 2015. As with Dubai, the rules on mortgage caps also apply to reduce the risk of bumpy cycles, the report points out.
Looking ahead, the report says that despite the rise of alternative regional markets for international buyers, Dubai and Abu Dhabi will remain the focus for most activity in the region. Investors, developers and governments are counting on the potential economic growth in both cities led by a forecasted 20% increase in the UAE population by 2030.
Positive economic factors are on the horizon including Dubai becoming an even bigger international airport hub, the port at Jebel Ali likely to become the world’s largest in the next 15 years, and Dubai emerging as China’s logistical hub for the Middle East and Africa.
There is also the Expo 2020 in Dubai and the massive economic activity linked to it, so demand is seen gathering momentum in a steady pace over the next seven years and beyond.
‘A more mature market, a better investment return, and a highly connected city all point to a positive future of the property sector in Dubai,’ the report concludes.