Month: March 2018
The UK commercial property sector continued to deteriorate at an increasingly rapid rate last month, new research by Savills has shown.
Its Total Commercial Development Activity Index fell in November for the 13th month in a row, with the rate of decline slightly steeper than in October.
As the credit crunch began to bite, weakening occupier demand led to a new series-record decline in development activity.
Almost 58% of respondents to Savills commercial property survey reported a drop in activity, compared with just 7% signalling a rise.
The index showed a resulting net balance of -50.3% in November, down from -49.7% in October.
The fastest reduction of activity was in private new build. Office development was particularly hard hit. For the fifth time in 2008, however, the least marked fall in activity was shown by refurbishment.
November’s survey also found widespread pessimism about the three-month outlook for activity, with the degree of negative sentiment the lowest since the survey began in March 2003.
Commercial developers said they remained concerned over the extent to which lower central bank rates can alleviate the downturn in the sector over the near term as a result of continued lack of credit availability, and a reluctance of clients to commit to new projects.
Commenting on the November survey, Mat Oakley, head of Savills’ commercial research department, said the negative outlook was surprising: “This month’s survey was surprising in the fact that developers’ expectations for the future continued to slide.
“While the lack of debt available is clearly a dragging factor on the market, we expected that November’s 150bp cut in the base rate might give developers some confidence that the downturn in occupier demand would be shorter and less deep than it could have been,” he added.
Buying property in Australia has made headlines in the recent months as the markets are growing and the suburbs are being part of the coveted million-dollar club. Hence, property is being looked at as the best investment.
Melbourne Real Estate Values
2014 seems to be a good year as there appears to be an upbeat at least in the property scenario. The Melbourne market is showing signs of recovery and an upward trend is noticed in the coming months. Prices are rising gradually but not sharply. Melbourne property prices are said to climb further up and some analysts believe that the price growth would overtake established cities such as London and New York. However, after prices reached a peak in March 2014, there has been a fall in values for two months successively. This has shown buyers that a rapid price rise will not happen in early spring and the winter. The upswing phase started 2 years ago in May and currently it seems to be more moderate due to a better configuration between population growth and supply. Over the last two years, Melbourne home values have gone up by 13.1% and currently only 0.7% more than the peak price in October 2010.
Property Market Forces
Although, the Melbourne property market showed positive signs, in the last few weeks, the media was pessimistic. However, market analysts explain the phenomenon using statistics and history; it is said that the chief drivers of housing are interest rates as well as consumer confidence. When the rate of interest goes down, home values often increase. Conversely, when interest rate rises, home prices will keep decreasing. Therefore, it is not a chance that the growth in the property market that started in May/June 2012 was followed by the easing of the interest rates in May the same year. Now, that the interest rates are expected to be low throughout the current year and in 2015, there will be increased consumer confidence. This can bring about a slight increase in Melbourne property values or it may remain flat.
Why Invest in Melbourne
Melbourne is considered the best ever city in Australia. If you buy a property in Melbourne, you can be sure to receive returns. Being in the list of the top ten livable as well as sustainable cities in the world is enough reason why you should invest here. This is taking into consideration its economy, transportation, education, health and environment. A sustained growth in population is one important reason for the citys economic prosperity. The metro is well-designed with large gardens, good roads, public transport and affordable housing. With a pulsating culture, Melbourne also has cosmopolitan clubs, cafes and restaurants. This is why; you should think seriously of buying a home in this city.