JANUARY 2012 |
www.opp.org.uk
2012 OUTLOOK
of stock for lettings due to high rental yields and increasing levels of buy-to-let funding made available by lenders.” UK. Martin Ellis, housing economist at The Halifax:
“2012 prices are likely to end the year at levels close to where they begin with the market continuing to lack any real direction. The prospect of an exceptionally low Bank of England Bank Rate over the foreseeable future is likely to continue to support the market. Typical mortgage payments for a new borrowers in the UK have fallen from a peak of 48% of average disposable earnings in the middle of 2007 to 26% in the third quarter of 2011. This is signifi cantly below the average of 37% over the past 25 years and is at its lowest point since 1997. Prices are likely to be strongest in London and the South East.” MENA. Elaine Jones, CEO of Asteco, the largest property services company in the United Arab Emirates, founded in 1985:
“Abu Dhabi’s residential property sector stabilised in the fourth quarter as project handover delays limited the delivery of new supply. Leasing activity, up signifi cantly in 2011 versus 2010, is expected to remain strong in 2012. And, following a sustained period of rental declines, we have seen some stabilisation over the last 3 months. Some tenants are chosing to renew leases in existing premises at lower rents and wait for new projects to become available later. However, the delay in handover this year will only exacerbate the volume of new supply delivered in 2012, and consequently, rents will again come under further downward pressure. In terms of new supply, some 6,680 apartments and 3,600 villas were handed over in Dubai this year, far below forecasts due to the continued handover delays within the major projects. The average yearly rent for a one-bedroom apartment on the Corniche in the fourth quarter was AED95,000 while a two-bedroom apartment cost AED152,500. Rents for one and two-bedroom apartments at Al Raha Beach were AED112,500 and AED152,500 respectively. Sales prices for apartments and villas remained stagnant throughout 2011 due to limited supply ready for immediate occupation. Unaffordable prices have limited and discouraged demand from existing residents and potential buyers. A four- bedroom villa in Al Raha Gardens in
the fourth quarter cost between AED1.9 million and AED2.6 million while a four-bedroom villa in Al Reef Villas cost between AED 1.5 million and AED1.6 million.” Singapore. Dr Chua Yang Liang, Head of research, Jones Lang LaSalle: The Singapore private residential property market was hit with two rounds of cooling measures in 2011 and a slowdown in the global economy. Buying decisions may stall in 2012 forcing developers in Singapore to roll out more incentives to prop up sales. But, despite this, analysts expected new private homes sales to hit 16,000 in 2011 versus 16,300 in 2010. Volumes for 2012 look likely to dip to less than 14,000 units. If the transaction volumes were to decline to this level in 2012, prices will be affected. From our forecasts, we think that there could be a 10% to 15% downside. And many analysts say there is no chance of recovery for high-end property next year, with prices likely to slide 20%. The sale of high-end units was already lacklustre before the government imposed an Additional Buyers’ Stamp duty in December, which will further dampen demand from foreign buyers.” Singapore. Chia Siew Chuin, Director of research & advisory, Colliers International:
“Developers may have to align their prices or look at incentives to make sales. They may even have to look at incentives, soft sale kind of measures, probably extending rebates in the sense of discounts or even absorbing stamp duty on behalf of buyers or extending other kinds of incentives not only to help buyers but also to encourage agents. Suburban areas out the outskirts of Singapore will become more popular.” Singapore. Donald Han, Vice Chairman, Cushman & Wakefi ed: “We will continue to see more launches coming up for mass market in Singapore, mainly because the government sales of sites that have been launched in the last 24 months ... a record number of more than 20 sites will have to come into the market. They (the developers) have to do it now as these are on 99-year leases, unlike the high-end or mid-end projects which are traditionally freehold projects having a longer tenure life. Developers will also be more measured in their land bids next year, and prices for sites that are less attractive could dip by 10% to 12%.” Global. Property Frontiers founders
Developer profi le
NEWS EXTRA | 25
Interlinked | The global economic picture is aff ecting every market in the world
David Cox and Ray Withers: “While there is an air of uncertainty surrounding the UK property market, investors should focus their attention on high-yielding properties where excellent incomes can be generated from the areas of student accommodation, care homes and hotel room investments. Certain parts of the EU could also provide opportunities despite the debt crisis and economic turmoil set to continue next year within the Eurozone. There are opportunities for those who want to invest in second homes in southern Europe, which will become even cheaper as the Euro falls. Investors should focus more on value rather than growth and countries such as Poland are ones to watch in 2012. Also, the USA remains one of our favourites from a value perspective thanks to low prices and good yields. In terms of emerging markets next year, wealth will continue to move east with many Eastern European nations offering young working populations. Istanbul, for instance, will offer good investment potential next year because it still has strong fundamentals and strong growth. And fi nally, the alternative investment sector, with its strong fundamentals and good track record will continue to be an innovative and accessible opportunity for investors in 2012. Property Frontiers generated around 50% of its sales revenue from Bamboo investments alone this year.” Global luxury. John Hitchcox, Chairman of yoo:,
“I foresee that in 2012 London will continue to be reliant on investors from the big international economies, particularly Russia, China and India, while the rest of the UK will be quiet with
volumes down. The British government will more than likely introduce strategies that will stimulate housing and regeneration, which should begin to have an impact in 2013 onwards. At the same time, I anticipate the economic / banking situation will start to resolve itself. History tells us that the US market is normally ahead of the UK but with so much trouble I doubt there will much activity outside New York City and Miami until 2013. Miami has had a great run off the back of South America, particularly in Brazil, and I don’t see this changing. As the excess supply has been signifi cantly depleted, developers are starting to build again. South America, however, in my opinion, is an untapped resource, and countries to watch are Columbia and Chile – with Bogata and Santiago showing strong growth potential. Brazil is also in reasonably good shape showing little slowdown after a very strong recent few years. In my estimation, growth in China will slow a little due to the government’s desire to control the bubble. This will encourage Chinese investors to travel, looking for new property deals. And let’s not forget the scale of China - there are still 50,000 new skyscrapers needed over the next few years. India is seeing an explosion in demand for design-led units. In the past year alone, we have signed or launched a total of fi ve projects collectively valued at almost US$ 1 billion, this is more than we’ve signed in any other country within a year. Although international investment is limited in the country as Indian nationality is a requirement to purchase, I forecast continued strong growth.
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