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Top tips for house hunting in France

Lorenzo Joe Hamilton — Mon, 10 Jun 2024 09:02:01 +0000

Many people dream of moving to France, whether it is relocating full-time or buying a French holiday home to enjoy for part of the year.

But what do you need to think about before you embark on your property search?

The Connexion spoke to property experts to find out what potential movers should consider when looking to buy property in France.

Do your homework

Make sure you research France and its varied regions before you start house hunting, or better yet, take a trip to research possible locations.

“France is a huge country with massively varied countryside, architecture and climate. A holiday spent touring the part that you are drawn to is good research,” says Julie Savill, from estate agency Beaux Villages, which has local property experts across France.

“Take a map and start marking areas, towns or villages that you like. Narrow down your search area before you even start thinking about viewings!” she says.

How remote do you want to be?

Many people dream of moving to rural France and escaping the hustle and bustle of the city, but it is worth thinking carefully about just how rural you want to be and what the ramifications of a rural life could be.

“There are plenty of properties where you can be very rural, with no neighbours and a short or long drive to the nearest village. For some, this seems idyllic, however, you need to consider whether the novelty of seeing very few people and always having to drive to get your bread and provisions will wear off over a period of time,” says Natasha Alexander of Suzanne in France, a British-owned estate agency based in Normandy.

“We recommend you do some research into the nearest village and large town and decide how close you would like to be,” she says.

Create a wishlist

Writing down what you definitely want in your new house can be useful when it comes to starting your property search.

“How many bedrooms/bathrooms? Will you do renovation work or just decorating? Do you want the luxury (and the cost) of a pool? Would you be happiest in a village or do you want to be completely alone in the countryside?” says Ms Savill.

Also consider what kind of house you would ideally want to buy.

“Do you dream of a renovated farmhouse, a maison de maître, a pavilion style house – how do you wish to live? Is it preferable to live on one floor or do you require something that is a new-build where the energy efficiency is the best it can be,” says Ms Alexander.

And it is just as important to think about your red lines.

“Are neighbours an absolute no? What about modern properties?” says Ms Savill.

Research the French housing market

Get acquainted with France’s housing market, which could be very different from that in your home country.

“Researching the housing market is essential. Prices vary significantly depending on the region and may not be as cheap or expensive as expected, says Patrick Joseph from My French House, a UK-based company that helps house hunters find properties in France.

“Some buyers still harbour the dream of finding a chateau to renovate or a farm in Provence for the price of a terraced house in the UK, but this is usually unrealistic. The good news is that asking prices for resale properties have been reducing over the past few months as the national market cools,” he says.

Check transport links back to your home country

Those who plan to buy a second home or stay in their home country for part of the year should look into transport links.

“Have you looked at the various routes available and the costs involved in travelling back to your home country. Are there good links back? How long will it take?” says Ms Alexander.

“This may not be of great importance if you do not plan to do this regularly but if you are commuting between the two countries this may be a deciding factor as to where your house will be.”

Be realistic about your budget

It can be easy to ignore your budget when picturing yourself in that beautiful chateau, but it pays to be realistic.

“Consider currency exchange rates so you know just how much you have to work with,” says Ms Savill. “Estate agency fees are generally included in advertised prices and you will need to pay in the region of 8% notaire fees on top. This includes the equivalent of stamp duty/land registry in the UK.”

“Setting your budget is a fundamental step,” agrees Mr Joseph. “If you need financing, apply for a decision in principle from a French bank or broker as early as possible; the criteria for mortgages are very strict. If you need to sell a property elsewhere, try to coordinate the timing of listing your home with your visits to France,” he says.

Mr Joseph also recommends researching currency transfers and the buying process in France, for example, how exactly to make an offer and when to pay your deposit. “These will differ from your home country,” he says.

Beware of the land trap

It is not only your budget about which you should be realistic – while many people dream of buying a property with land – consider how much you will be able to look after.

“A lot of properties come with a lot of land. If this is to be a holiday home, think carefully about the work and cost of maintaining a big garden or even a field and woodland if you are only there occasionally,” says Ms Savill.

Natasha Alexander says Normandy, and its excellent value for money, is attractive to people who want to buy land, for example to run a business or have a smallholding.

“Consider how much land is too much. Don’t forget acres and acres need to be maintained and looked after. Do you want this burden, in particular, if you want a lock-and-leave holiday home?” she says.

Be prepared to change your mind

There is nothing wrong with changing your mind about what you want, says Julie Savill.

“Be prepared to change your mind once you start viewing. That cute old stone property might just feel very dark once you get inside and a complete lack of neighbours could turn out to leave you more isolated than you anticipated,” she says.

And be willing to see a few wild cards.

“Sometimes really good properties don’t come over so well in photographs. Be prepared to go and see a couple of places that challenge your wishlist,” Ms Savill says.

Check out the local schools

If you are moving with young children, make sure to research the local schools before deciding on a house.

“Do you have easy access to the local primary school? While it may seem very quaint and again idyllic to live in the countryside when the children are very young. Have you considered when they become older and wish to play with friends after school?” says Ms Alexander.

“A little planning ahead could mean that you are not spending a lot of time taxiing your children to and from various sports clubs and the school itself.”

Consider healthcare options

It is important to think about healthcare options, whether you are planning to stay in France into old age or perhaps have a current healthcare condition that will need regular attention once you move.

“None of us like to think of getting older or sick, but consider your local clinic for services and the closest hospital. How long will the journey be if you need regular treatment?” says Ms Alexander.

Check the Internet connection

Something that could easily slip your mind is checking the local internet speed of the house you are looking at.

“While many areas have fibre now you will need to check the speed of the internet connection, in particular, if you use the internet for your work,” says Ms Alexander.

Find an agent

A good agent can help you navigate the process of buying in France.

“Buying privately is absolutely possible if you feel informed and confident enough to deal with a negotiation and contracts, which will all be in French,” says Ms Savill.

“An agent will have excellent local knowledge and a great awareness of the correct pricing for your local area. Speak to a few people and find someone you connect with,” she says.

Source: The Connexion

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Javier Valdez — Sat, 08 Jun 2024 10:58:28 +0000

KUALA LUMPUR: Malaysia’s property market is poised to remain stable in 2024, followed by sustained growth in the next three years, bolstered by various initiatives of the Madani government under Budget 2024, said Housing and Local Government Minister Nga Kor Ming.

He said the property market has demonstrated significant growth and resilience, with individual property counters experiencing up to 600% growth in share price appreciation.

He said property counters in the stock market have been on the rise from January 2023 to June 2024, with 76 out of 100 on Bursa Malaysia experiencing an increase in share prices.

“(Meanwhile,) 22 counters showed a decrease in share prices, (and) two counters maintained their share prices despite fluctuations,” Nga said in a statement today.

He noted that among the top counters were DPS Resources Bhd, registering 600% growth in share price, UEM Sunrise Bhd, posting a 347% increase and WMG Holdings Bhd, which appreciated by 326% from January 2023 to June 2024.

“This positive trajectory is expected to continue into the second half of 2024. I firmly believe that under the leadership of Prime Minister Datuk Seri Anwar Ibrahim, our property market will have a bright future in the coming years.

“We must work together to enhance our industry’s reputation and increase the confidence level of investors to make the property market even more resilient,” said Nga.

According to the statement, Malaysia’s property market transactions were valued at RM42.31 billion, with more than 89,000 transactions recorded in the first quarter of 2023. In the first quarter of this year, the value of property market transactions hit RM56.53 billion, an increase of RM14.22 billion, with more than 104,000 deals.

“This significant growth indicates that Malaysia’s property market is recovering well and on the rise,” the statement added.

Source: The Sun

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Commercial property sector expects more flexible lease terms in future

Sean Potter — Sat, 06 Apr 2024 15:14:46 +0000

The Republic’s commercial real estate sector expects lease terms to become more flexible for both tenants in the future as the industry recalibrates to new post-pandemic realities.

A survey of some 250 commercial property professionals, conducted by business law firm Mason Hayes and Curran in late February, also indicates that the sector considers current rent review processes to be fair but ultimately wants better access to market data to level the playing field.

The Republic’s commercial property sector, particularly the office market, has come under pressure in the aftermath of the pandemic due to several interrelated factors. Hybrid working arrangements have eaten into demand for office take-up while many large employers — most notably in the global tech sector, which accounts for a significant proportion of office demand in Dublin — have reduced their headcount in response to shifting market dynamics.

Meanwhile, rising interest rates have made the cost of borrowing and servicing property-related debt more expensive for landlords and commercial property owners.

Headline rents are yet to decline substantially but close to half of survey respondents said they expect commercial leases to become more flexible for tenants and landlords soon.

However, a sizeable 46 per cent of respondents said they expect lease terms to become more tenant-friendly.

“Since Ireland legislated to end ‘upwards-only’ rent reviews in commercial leases in 2009, the rent review process has become more complex,” said Michael Doran, partner and co-head of real estate at Mason Hayes and Curran. “All parties must now agree an ‘open market rent’ that could be higher, lower or remain the same as the original amount. There are a number of factors that can affect rental value, from the strength of the market at the date of review to the assumed lease term.”

While an overwhelming 81 per cent of real estate professionals said the current rent review processes are fair, almost half said they would like better access to market data, reflecting a “move towards a more informed and data-driven negotiation process”, said Mr Doran.

Meanwhile, 61 per cent of professionals said their main goal when entering rent review negotiations was to achieve market-aligned rates while just 20 per cent said they are chiefly concerned with securing long-term occupancy.

Source: The Irish Times

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Average house price-to-earnings ratios improved last year amid wage growth

Leon Clarke — Tue, 26 Mar 2024 14:59:32 +0000

House prices have become more affordable since 2021, but remain in line with pre-coronavirus pandemic trends, the Office for National Statistics said.

Housing affordability improved in three-quarters (75%) of local authorities across England and Wales in 2023, compared with the previous year, according to the Office for National Statistics (ONS).

Affordability worsened in just under a quarter (24%) of local authorities and remained the same in 1%, the ONS said.

Average house prices increased in just over two-thirds (69%) of areas compared with 2022 – but average earnings increased in a bigger proportion of areas, at 88%.

Kensington and Chelsea in London was the least affordable area last year, with an average house price-to-earnings ratio of 34.3.

(PA Graphics)

The most affordable was Burnley in Lancashire, with an average house price-to-earnings ratio of 3.7.

In 2023, 7% of areas typically had homes selling for less than five times the average earnings of workers. This was an improvement compared with 2022; however, in 1997, 88% of areas had this ratio.

The report said: “Therefore, affordability remains considerably worse than at the start of the series.”

Looking at England, in the 12 months to September 2023, the average home sold for £290,000, while average full-time earnings were £35,100.

This means that, in England, full-time employees could expect to spend 8.3 times their earnings on purchasing a home in their local authority area.

This represents an overall improvement in affordability compared with 2022, when the average home in England cost around 8.5 times the average wage.

In Wales, the average home sold for £196,500 in the 12 months to September, while the average workplace-based full-time wage was £32,400.

This gave an affordability ratio of 6.1, down from 6.4 in 2022.

House sales prices have become more affordable since 2021, but remain in line with pre-coronavirus pandemic trends, the ONS said.

The affordability ratio doubled in England from the start of the records in 1997 to 2007.

In 1997, a home in England was worth around three-and-a-half times the average wage, but by 2007 buyers faced paying just over seven times their salary typically to buy a home.

In Wales, affordability ratios doubled from 1997 to 2005 and peaked at 6.6 in 2007. Since then, they have remained between 5.5 and 6.5, with a less pronounced increase and decrease in the past three years than in England, the ONS said.

Mortgage rates have jumped amid increases in the Bank of England base rate, meaning that some existing homeowners could have a payment shock when their deal expires.

Recent signs that inflation is cooling have raised expectations around the potential for the Bank of England to start cutting the base rate in the months ahead.

Source: LBC

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Housebuilder secures housing site in Barns Green for 32 new energy efficient homes

Scott Mcdonald — Tue, 06 Feb 2024 11:39:28 +0000

Located off Chapel Road, the site – to be known as Sumners Fields – is situated in Barns Green’s largely rural community, surrounded by expanses of countryside. Designed by Worthing-based ECE Architecture, the 32 homes will include one-, two-, three- and four- bedroom apartments and houses. 12 of these properties are allocated for affordable housing, providing an above policy 37.5% allocation.

Hunter Developments Holdings Ltd and the Smith Family worked in close cooperation with Sigma Homes in developing the design proposal for the site.

Geoff Potton, Chief Executive of Sigma Homes, said: “We are delighted to have secured another prime site in such a highly sought-after village, which is less than 5 miles from Horsham. With so many development proposals in the district currently held up by planning and pre-construction delays caused by Natural England’s current advice on water neutrality, this will be one of the first schemes to be delivered within Horsham District which achieves a water neutrality solution. The plans sensitively respond to the site characteristics and will result in a high quality, sustainable addition to Barns Green.

“This mix of open market and affordable homes – suitable for first time buyers, families, and downsizers – are much-needed to meet local housing demand. As with all our developments, this scheme will be constructed utilising timber-frame technology and a range of other ‘green’ features including grey water recycling, to enable residents to significantly reduce their water usage, carbon footprint and energy bills.

“2023 was a major milestone for Sigma Homes, as it marked our tenth year in business. With three other highly sustainable developments currently under construction across West Sussex, and with several more in the planning stage, we understand what our customers are looking for and the enviable lifestyle this county offers. The design, layout and build quality of our homes has been attracting discerning buyers for a decade now. We are immensely proud of the reputation for quality homes in prime locations that Sigma Homes have become synonymous with.”

The village of Barns Green is a highly sought after location and benefits from a range of local amenities, including a village shop, post office, primary school, sports club, and village hall. Regular public transport is available to nearby villages and towns, including Horsham. The site is a five-minute drive (2.2 miles) from Christs Hospital train station, which has services running to London Victoria in under 70 minutes. There is also a frequent 32-minute train service to Gatwick Airport. If future residents wish to have a day out or travel to the coast, there are also services running to the historic market town of Arundel (20 minutes) and the popular seaside resort of Bognor Regis (41 minutes).

The character of Barns Green is predominantly of a traditional style and material palette. Existing nearby properties include a combination of red brick and white painted window frames, timber-cladded rural homes, and more contemporary post-war dwellings. Due to the range of styles present within the village, Sigma Homes’ new development will follow a conventional yet modern style.

New landscaping, public open space, and ecological enhancements will be provided with most of the existing trees and hedgerows will be retained and enhanced. There will be sufficient parking available for each new home, as well as cycle storage. Electric Vehicle charging points will be provided to all houses with a garage and driveway, with further charging points allocated to the apartments.

Headquartered in the West Sussex town of Horsham, Sigma Homes was founded in 2013. The company has five live developments in premium locations across the south of England and is on track to deliver 200 homes per annum by 2026. All homes are constructed using timber frames, which improves efficiency, as well as delivering sustainability benefits. It was one of the first SMEs to be accepted onto the New Homes Quality Board, providing buyers with further peace of mind during the buying process, through the backing of this stringent new Code.

Source: Sussex World

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Capital Appreciation set to rise more than expected this year

Ross Collins — Fri, 26 Jan 2024 11:25:19 +0000

Investors relying on capital appreciation are in for a pleasant surprise in 2024 according to Knight Frank.

Tom Bill, head of the agency’s residential research team, says: “In October, financial markets were pricing in a single interest rate cut of 0.25 per cent by the end of 2024. [Now] they are expecting five. The main reason for this changing outlook is that inflation is falling faster than expected. As a result, mortgage lenders have dropped their rates fairly significantly in recent weeks, partly to win business in a low-volume market.

“The best five-year fixed-rate mortgage is now under 4.0 per cent, which was made possible after the five-year swap rate fell a full percentage point over the final quarter of 2023. As a result of this more positive backdrop, we have revised our UK house price forecasts from three months ago.”

On the sales side Knight Frank now expects UK mainstream prices to rise by 3.0 per cent in 2024, which compares to a decline of 4.0 per cent predicted in October. It expects cumulative growth of a meaty 20.5 per cent in the five years to 2028.

Bill states: “Data from Halifax and Nationwide certainly suggests a corner is being turned. While the former reported a 1.7 per cent increase in 2023 and the latter posted a fall of 1.8 per cent, that compares to a 5.0 per cent decline that both identified in August. With UK housing transactions a fifth below their five-year average, we waited until a clear pattern emerged showing prices were bottoming out, which we believe is now the case.

“As a result of stronger demand, the number of mortgage approvals was 10 per cent higher in November than the previous year and we expect a double-digit percentage increase in sales volumes this year compared to 2023.”

On the lettings side, Knight Frank says landlords have left the sector in recent years due to extra red tape and taxes, which has put strong upwards pressure on rental values.

However, supply is recovering as demand is gradually being absorbed and more sellers have become landlords in a sales market where price growth has been minimal.

Bill says: “New listings in Prime Central and Prime Outer London were only seven per cent below the five-year average in December, Rightmove data shows.

We have not altered our rental forecasts dramatically from October and forecast 5.5 per cent rental value growth this year in PCL, which would be lower than the 8.0 per cent registered in 2023. Meanwhile, we expect a 4.5 per cent increase in POL, down from 6.8 per cent in 2023.

“Rental value growth should be stronger in lower-value markets as the supply/demand distortions are greater. Property owners are typically more discretionary in higher-value markets and have been able to let while price growth has been flat.

“There were 4.3 new prospective tenants for every rental listing below £1,000 per week in PCL and POL in the final quarter of last year, Knight Frank data shows. Above £1,000 per week, the figure was 2.7.”

Source: PropertyInvestor

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What 1% deposit mortgages could mean for first-time buyers… and the housing market

Jonathan Barton — Tue, 23 Jan 2024 11:08:15 +0000

The Government is said to be considering introducing a scheme that would allow first-time buyers to get on the property ladder with just a 1 per cent deposit.

The initiative could be announced in the Spring Budget on March 6 to help those struggling to build up enough savings to buy a home, according to a report in the Independent.

It could see the Government offer banks financial guarantees to encourage them to hand out mortgages covering 99 per cent of a home’s value.

Help: The Government is reportedly considering introducing a scheme that will allow first-time buyers to get on the property ladder with just a 1% deposit

This would be similar to the existing Mortgage Guarantee Scheme, which aims to help those buying homes with 5 per cent deposits.

If it is confirmed, the policy would no doubt be welcomed by some first-time buyers.

However, critics say that it could also push up house prices, and that struggling first-time buyers may not be able to afford the monthly repayments required on such a large mortgage, especially as rates remain relatively high.

How could it help first-time buyers?

There is little detail on the scheme, but in theory it should mean aspiring homeowners will be able to buy their first home with an even smaller deposit.

Someone buying a £300,000 property with a 5 per cent deposit needs to have built up savings of at least £15,000 to get a 95 per cent mortgage.

Under the new scheme, they may need as little as £3,000 – alongside the funds required for a solicitor, surveyor and potentially a mortgage broker.

David Hollingworth, associate director at L&C Mortgages says: ‘This would likely open up an alternative option for first time buyers struggling to build a deposit.

‘Requiring a smaller deposit could help accelerate the ability to buy, for those that can fund the remainder from mortgage borrowing.’

Path to ownership? Experts say that the rumoured mortgage scheme may be helpful – but only to borrowers who can afford the repayments

Mark Harris, chief executive of mortgage broker SPF Private Clients, adds: ‘The 99 per cent mortgages could be a good idea in the appropriate circumstances.

‘With added stamp duty costs, a 99 per cent mortgage can look identical to a 95 per cent mortgage for previous generations.

‘Add in the fact that saving for a deposit while renting is practically impossible, and this could be a solution.’

Will it make property more affordable?

Buyers are likely to find their ability to get a 1 per cent deposit mortgage is dependent on their earnings.

Many first-time buyers are not only priced out of the property market because of the deposit required, but because of how much they are able to borrow.

All mortgage lenders limit borrowers to a maximum loan-to-income ratio.

This is a cap on the amount banks will lend based on the borrower’s annual income. They are able to offer some loans above this level, but there are tight restrictions on how many.

If a single person was buying a £300,000 property with a 1 per cent deposit, they would typically need an annual income of at least £66,000

As a general rule of thumb, most first-time buyers will find themselves limited to a maximum of 4.5 times their annual income.

If a single person was buying a £300,000 property with a 1 per cent deposit, they would typically need an annual income of at least £66,000.

David Hollingworth adds: ‘There will still be reasons why this wouldn’t be an option for many, as they may also be limited by the mortgage amount that they can borrow, as well as the challenge of saving a bigger deposit.

‘Lenders will need to see that the mortgage amount is affordable based on income and outgoings and subject to certain income multiple limits.

‘That can see borrowers requiring an even bigger deposit to bridge the gap between the mortgage and the amount that they have to pay for the property.

‘That issue certainly doesn’t disappear at 99 per cent loan to value mortgage, so could affect the number that can take advantage.’

Would it be popular?

There are some doubts over whether many first-time buyers would actually sign up to a 99 per cent mortgage deal.

The average deposit put down by a first-time buyer last year was around 25 per cent, according to UK Finance.

Meanwhile, the average first-time buyer is borrowing at 3.36 times their annual income, which is significantly under the maximum they would typically be allowed to borrow at.

This suggests buyers are keen not to overstretch themselves when it comes to buying their first home.

Are similar mortgages already available?

Skipton Building Society made headlines last year when it launched a 100% mortgage for renters to enable them to get onto the property ladder without a deposit

Skipton Building Society made headlines last year when it launched a 100 per cent mortgage for renters to enable them to get onto the property ladder without a deposit.

Another product that allows first-time buyers to get on the ladder without a deposit is the Barclays Springboard mortgage, which uses equity in a guarantor’s (usually a family member’s) house as collateral.

However, it is thought that there has been limited uptake for these types of products.

Chris Sykes, technical director at mortgage broker, Private Finance, says: ‘My concern is this latest Government scheme is going to give false hope to many where the real ins and outs of the policy will not make it actually feasible.

‘It is worth mentioning that 100 per cent mortgages exist, from Skipton to other schemes where family members can act as guarantor.

‘My issue with these schemes is, just because you can afford rental payments at say £1,500 per month, doesn’t mean that you can afford a mortgage payment at £1,500 per month.

‘This is because home ownership has a number of other costs to consider: building insurance, the property repairs your landlord would have done, and so on.

‘If you were not able to save for a deposit while paying this rent, then can you afford the associated costs of having a property?’

How expensive will they be?

The other concern shared by some across the mortgage industry is the fact these products will likely come with higher rates, given there is greater risk for the lender.

The average five-year fixed rate mortgage rate for someone buying with a 40 per cent deposit is 4.74 per cent, compared to 5.41 per cent for someone with a 5 per cent deposit, according to Moneyfacts.

With virtually no deposit, the price of these mortgages will be reflected in the risk, i.e they will be very expensive Peter Stimson – MPowered Mortgages

That’s the difference between paying £1,139 a month and £1,217 a month, based on a £200,000 mortgage over 25 years.

The rates would probably be higher for those buying with a 1 per cent deposit.

Peter Stimson, head of product at MPowered Mortgages says: ‘We really don’t think 1 per cent deposit mortgages are a good idea. It’s just another gimmick initiative that is doomed to fail.

‘With virtually no deposit, the price of these mortgages will be reflected in the risk, i.e. they will be very expensive.

‘Instead, the Government should be focused on fixing the fundamental issue, which is a lack of housing stock and affordable housing.’

David Hollingworth of L&C Mortgages adds: ‘The guarantee will no doubt carry a cost and that will pull through into the pricing of the mortgage rates.

‘As you’d expect if we do see 99 per cent mortgages we’d expect that interest rates will be higher than for those with bigger deposits.

‘That then makes it a balance of whether the price is worth paying for the increased ability and timeline for buying. With rents so high that higher interest rate could still be worth taking on.’

Threat of negative equity

There are also concerns about the rumoured scheme resulting in more first-time buyers running the risk of falling into negative equity in the future, if house prices fall.

UK house prices recently recorded their fastest annual fall since 2011, according to the Office of National Statistics.

According to the data, the average sold price fell by 2.1 per cent in the 12 months to November 2023.

Negative equity is when a home becomes worth less than the remaining value of the mortgage.

If that happens, the owner may be left unable to remortgage, and in some cases be forced to sell their home to pay the bank.

Rising house prices

Government interventions such as these often appear to add fuel to house prices.

Stamp duty holidays, Help to Buy, Right to Buy and other schemes were also all meant to help more people on to the ladder.

But while many of those initiatives were successful, they also had the effect of pushing up house prices further for those that came after.

Hollingworth adds: ‘The potential downside is that if you boost the demand without improving the supply, you risk pushing prices even higher.

Chris Sykes agrees: ‘I think we’ll have to wait and see where they pitch the scheme, but it is somewhat avoiding the main issue of there not being enough houses.

Source: This Is Money

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S’Porean Buyers Lead Prime Property Sales as Foreign Demand Wanes Amid Stamp Duty Hike

Aaron Maxwell — Mon, 01 Jan 2024 01:18:53 +0000

SINGAPORE – The hike in the additional buyer’s stamp duty (ABSD) for property has resulted in a steep fall in demand from foreigners, with analysts expecting the dampening effect to persist for an extended period.

In January 2023, foreign buyers accounted for 5 per cent of non-landed private resale home transactions, before falling to 3.7 per cent in May after the ABSD for foreigners was increased from 30 per cent to 60 per cent on April 27, noted PropNex Research.

The figure fell further to 1.2 per cent in September, and, by October, had slipped to 1.1 per cent, or nine transactions.

PropNex head of research and content Wong Siew Ying said that of the nine transactions linked to foreigners, seven involved buyers from the United States, and one each from Switzerland and Oman.

Ms Wong expects Singaporean and Singapore permanent resident (PR) buyers to continue to dominate resale condo sales.

She said that according to Urban Redevelopment Authority (URA) Realis data, foreigners from non-exempted jurisdictions accounted for 104 out of 165 resale condo transactions by foreigners from January to April, compared with 42 transactions from May to Nov 24.

Under existing free trade agreements, buyers from the US, Iceland, Liechtenstein, Norway and Switzerland do not need to pay ABSD for their first residential home in Singapore.

They have to fork out the extra stamp duty for subsequent residential properties.

“Overall, we would expect the punitive ABSD rate for foreigners to weigh on the sales of high-end homes,” said Ms Wong.

However, she added that anecdotal feedback indicates that there will still be some big-ticket property purchases, “perhaps among foreigners holding a US passport”.

“Foreigners who are looking at long-term residency in Singapore may also consider buying for their own use,” she said.

The higher ABSD was introduced as part of cooling measures to promote a sustainable property market, the Government said in April.

Ms Wong said fewer resale units were sold to foreigners in the core central region (CCR) and outside central region after the ABSD hike.

The number of units sold to foreigners in the rest of central region ticked up slightly.

Ms Tricia Song, CBRE head of research for Singapore and South-east Asia, said: “The largest impact obviously was in the CCR segment, given that traditionally it has the highest foreigner ratio.”

The number of foreign buyers in the CCR fell from 162 units in the first three months of 2023, to 39 units from July to September.

Six luxury apartments with quantums of $10 million and above, from developments such as Nassim Park Residences and Ardmore Park, were transacted between July and September.

This compares with 19 luxury apartments sold in the previous three months, said Ms Song, who expects the dampening effect on the luxury residential sector to persist in the first half of 2024.

Sculptura Ardmore at 8 Ardmore Park. PHOTO: SC GLOBAL

She said that besides the impact of the property cooling measures, other factors like macroeconomic uncertainties and elevated interest rates could also impact sales in the luxury sector.

“Activity could pick up in the second half of 2024 when the economy picks up more confidently and interest rates stabilise.

“Prices are unlikely to fall significantly, with limited new supply. In the longer term, Singapore remains an attractive safe haven for most investors,” added Ms Song.

Market observers said Singaporean buyers are poised to take centre stage in prime markets, as seen in the preview sale of Watten House in Bukit Timah on Nov 18.

More than half of its 180 units were snapped up, at an average price of $3,230 per square foot.

Artist’s impression of Watten House. PHOTO: COURTESY OF WATTEN HOUSE

Based on transactions done by PropNex agents, the majority were Singaporean buyers and Singapore permanent resident buyers, with only one non-PR foreign buyer from the US, said Mr Dominic Lee, head of luxury team at PropNex.

Singapore citizens buying their second residential property currently have to pay 20 per cent ABSD, and 30 per cent for their third and subsequent property.

PRs pay 5 per cent ABSD for their first residential property, 30 per cent for their second, and 35 per cent ABSD for third and subsequent properties.

Mr Lee said the transacted prices at Watten House ranged from $3.06 million to about $14.5 million, according to URA Realis data.

The purchases at the development showed local buyers have the liquidity to pick up prime, luxury units, he added.

“In 2024, we expect Singaporean buyers and Singapore permanent residents to continue to account for the majority of home sales, across the different sub-markets,” said Mr Lee.

Impact of ABSD

Ms Wong said foreigners accounted for 22.9 per cent of purchases of new sales and resale non-landed properties in December 2011, but the figure fell sharply to 7.3 per cent in January 2012, after the ABSD was first introduced on Dec 8, 2011.

She added that for the rest of 2012, the proportion of foreign buyers stayed below 10 per cent.

PropNex’s Mr Lee said the ABSD has been effective in bringing down the number of homes sold to foreigners.

He noted that between October and December 2011, foreigners purchased 1,236 non-landed new and resale private homes.

The highest number of such sales to foreigners in a single quarter was 634 transactions, between April and June 2012.

Mr Lee said foreign buyers used to return to the market a few months after each ABSD revision.

But with the soaring property prices seen in recent years, many foreign buyers have been hesitant to pay the 60 per cent rate.

Still, sales and buying interest will depend on the specifics of a project and whether it is priced sensitively, Mr Lee said.

If the project is good and well located, and the pricing is right, then it should still do well, he added.

Source : TheStraitsTimes

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UAE-Based Aldar Properties Acquires London Square

Garrett Townsend — Sat, 16 Dec 2023 11:18:37 +0000

UAE-based real estate developer, investor and manager – Aldar Properties – has acquired London-based developer, London Square, signalling its first international acquisition beyond the MENA region. The acquisition represents a value of £230m.

London Square operates several segments in its business including London Square Living, the company’s Build to Rent division. Its notable development projects include the Nine Elms development, strategically located close to the iconic Battersea Power Station. The scheme will deliver over 750 luxury homes, affordable housing, Build to Rent apartments, and 21,500 sq ft of commercial and retail space at the heart of central London’s largest regeneration area.

“This is an outstanding outcome for London Square. Aldar is an exemplary company with an unrivalled reputation and their strength and breadth of knowledge and experience will enable London Square to flourish and extend its presence across Greater London and the Southeast.

“Since establishing London Square in 2010, the company has enjoyed significant organic growth, with the support of Ares Management funds for the past nine years. We would like to thank Ares Management for their contribution to the success of London Square.

“Becoming part of Aldar is the beginning of an exciting new chapter for the future of London Square. We look forward to playing a leading role in tackling the housing shortage by providing more much-needed homes in the capital and surrounding areas where there is a continuing lack of supply.”

Adam Lawrence, Founder and Chief Executive, London Square

This acquisition aligns with Aldar’s strategic vision of expanding into key and mature international markets. The move is aimed at accelerating growth, diversifying revenue streams, unlocking synergies, and driving cross-selling opportunities.

By acquiring the London based developer, Aldar will gain a meaningful foothold in the diverse and dynamic London property market, which appeals to both local and international investors.

With a shared vision and approach to creating world-class developments anchored in high quality design, sustainability and customer service excellence, the acquisition represents a new phase of growth for both companies. It will also provide two-way benefits, delivering a positive impact for communities and bringing new opportunities to the customers each company serves.

“Our recently announced international expansion strategy centres on exploring opportunities to acquire or partner with established operating platforms in our target markets. The acquisition of London Square represents our first market entry outside of the region, and is a testament to the company’s management team, governance framework, and business model which has consistently delivered strong performance.

“The transaction, which is synergistic in nature, gives us the ability to leverage our mutual strengths, shared values, and common approach to homebuilding to scale London Square while bringing the best of Aldar to bear in the UK’s property market, as we continue to build our foothold outside of the region.”

Talal Al Dhiyebi, Group Chief Executive Officer, Aldar Properties

London Square has successfully created a development pipeline worth over £2bn. The developer has currently completed over 3,500 homes and has a pipeline of 930 homes under construction, valued at £425m.

Source : BTRNews

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Hines Acquires and Leases New Logistics Property in Queensland, Australia

Aaron Maxwell — Mon, 11 Dec 2023 10:47:02 +0000

(Melbourne) – Hines, a global real estate investment, development, and property manager, today announced the acquisition of two logistics warehouses from Dexus Industria REIT, a listed Australian real estate investment trust. Hines has also simultaneously entered into a 15-year lease agreement for part of the property with PWR Performance Products Pty Ltd (“PWR”), a Gold Coast-based provider of high-tech cooling solutions, to commence in July 2025.

Located at 16-28 Quarry Road in Stapylton, Queensland, the 40,983 square meter asset comprises of two modern, highly functional logistics buildings and is currently 100 per cent leased to three major tenants. The clear span warehouses offer quick access to the M1 motorway, providing great connectivity between Brisbane, Gold Coast, and regional Queensland. This location appeals to a broad cross-section of high-caliber tenants such as PWR.

“We are thrilled about securing this site for our headquarters and working with Hines to build a facility that will accelerate our growth into the aerospace and renewable energy sectors right here on the Gold Coast,” said Kees Weel, Managing Director of PWR. “The building will give us room to streamline the factory layout and expand our capabilities to meet customer demands.”

PWR plans to invest AU$21.9 million in facility upgrades and new equipment over three years to increase its production capacity by 114 per cent and add up to 488 new jobs over the next 10 years. PWR has also been successful in receiving a government grant from the ‘Invested in Queensland’ program to support its expansion.

“The strategic location, the strong tenant base, and the potential for growth make these warehouses an attractive investment,” said David Warneford, country head of Australia and New Zealand at Hines. “We are pleased to partner with PWR to deliver their new Queensland base, as we continue to bring strategic benefits to our portfolio, partners, and tenants in Australia.”

Since 2020, Hines has secured 14 industrial assets in Asia Pacific totaling around 550,000 square metres (six million square feet) across five markets in Australia, China, Japan, South Korea, and Singapore. The deal marks Hines’ eighth industrial and logistics acquisition in Australia and aims to illustrate the firm’s commitment to creating value for both tenants and investors.

In line with Hines’ commitment to sustainability and meeting the ESG needs of today’s tenants, Hines plans to add solar power generation and upgrade various building systems to elevate the asset’s ESG standards.

About Hines

Hines is a global real estate investment, development and property manager. The firm was founded by Gerald D. Hines in 1957 and now operates in 30 countries. We manage nearly $94.6B¹ in high-performing assets across residential, logistics, retail, office, and mixed-use strategies. Our local teams serve 790 properties totaling over 269 million square feet globally. We are committed to a net zero carbon target by 2040 without buying offsets. To learn more about Hines, visit www.hines.com and follow @Hines on social media.

¹Includes both the global Hines organization as well as RIA AUM as of June 30, 2023.

Source : Hines

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