By Sakina Hassanali - Head of Marketing & Research
- Developers and sellers pushed up asking prices in Q3.
- Early in the quarter, buying activity had dropped to 2-year lows.
- September marked a sharp rise in enquiries, viewings and completions.
- Town house sales, where asking prices rose by 1.2 per cent in the quarter, performed better in September.
- But so did stand alone houses, where prices rose by 3.4 per cent.
- However, apartment prices recorded the sharpest rise, at 3.6 per cent.
- Asking rents also rose sharply, by 4.2 per cent for apartments.
- Activity in the rentals market also dipped, with fewer viewings and closures, but the drop was more marginal.
- The rentals market appeared to have been able to sustain the rent rises rolled out in the three months.
With all eyes on tumbling mortgage rates in the third quarter, property asking prices jumped in the last three months on hopes of renewed activity, reported HassConsult, as it unveiled its third quarter property indices and drew on new “activity” indicators based on levels of real estate enquiries, viewings and completions.
In a further expansion of the consultancy's real estate data collection offering new insights into market reactions and uptake, Hass reported that the rental market largely absorbed the price increases of the third quarter, while properties for sale recovered from their lowest levels in two years driven by a renewed uptake of standalone houses during
Overall, sales asking prices rose by 5.1 per cent, with the sharpest rise in apartments, up 3.6 per cent on the previous quarter, followed by stand alone houses, up by 3.4 per cent. Price rises were more moderate for town houses, with sales picking up sharply in September.
“We believe it is a correct analysis that as mortgages become more affordable and available, pent-up demand for property buying will bring higher levels of sales activity. However, with property so fully priced in this market, sellers seeking higher returns ahead of that surge in demand deterred some buyers in July and August rather than securing
greater revenues,” said Ms Sakina Hassanali, Head of Marketing and Research at HassConsult.
"September, however, saw a renewed appetite for buying, and comfort with the new price levels, offering relief for developers, many of whom were becoming seriously stretched. The return to more normal levels of buying has come as a return to life for the sector."
Meanwhile, in the rentals market, the overall rise in asking rents was 4.5 per cent in the third quarter, with the steepest rise in apartment rents, up 4.2 per cent, followed by standalone houses, up 3.6 per cent. Town house asking rents also rose 2.8 per cent over the previous three months.
With much of this re-pricing absorbed into the market, the returns for landlords recovered significantly across the quarter, to a combined 13.81 per cent, across both rental yields and house price appreciation.
“The swelling in demand for rentals as those who would have been first-time buyers have stayed in the rental pool, even as new entrants arrive, is fueling some continuing rent rises, although we do see signs of some slowing in viewing and completions,” said Ms Hassanali.
“This rental correction was overdue for many landlords, after some years of stagnating rents, and is now closing the gap in returns for mortgage-financed landlords that appeared after the mortgage rate rises.”