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GLOBAL PROPERTY REVIEW 29 April 2019

April 29, 2019

Norwich

Amid the news and big numbers coming out of the biggest cities in the midlands and north west, Norwich has been steadily generating a case for itself when it comes to internal investment, employment, lifestyle and connectivity.

Not bad timing if your football team has just got promoted to the globally-watched Premier League.

East England property prices rose 2.9 per cent over 2018, skewed to a degree by the strong popularity of Cambridge, as pointed out by Savills at the end of last year.

Whether city or countryside, your money certainly goes a longer way compared to Greater London, or even Cambridge. Price per square foot in prime Norwich is around GBP 240 at the end of last year, roughly a sixth of that of the capital.

Family houses have been the big winners. Data from home.co.uk show that the average detached house price in the city rose more than 70 per cent to GBP 327,600 between 2012 and January 2019.

This is still around GBP 100,000 less than the GBP 440,000 average house price in Cambridge, a centre for research and life sciences.

Mind you, Norwich is competing too - the Norwich Research Park has been a regional success, creating around 12,000 jobs.

Semi-detached houses are in the GBP 221,000 range, while apartments, which have risen more than 320 per cent in the last 25 years, sit around the GBP 140,853 mark.

While new-builds in the city have gathered apace in the last few years, the council is strict on maintaining the city’s character and heritage - thus keeping a lid on new supply.

 

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Canberra

The Australian property market at present is one of those curate’s eggs that’s still declining in price, but at a slower rate to before.

Home owners might therefore be through the worst after 16 consecutive months of decline, while those lower down the ladder still might have scope for that speculative low-ball offer.

Higher mortgage requirements for locals, a hike in taxes and fees for those buying from abroad, and electoral uncertainty have coalesced into a general slowdown.

Canberra has felt the effects to a more mild degree to the major cities. Its prices have risen 3.4 per cent for the year up to February 2019 - more than can be said for Sydney or Melbourne - yet is flat for the quarter and down -0.2 per cent against January, CoreLogic data show.

While higher priced properties tend to flatten out in such circumstances - that next house at a few million dollars more becoming less necessary - prices at the lower level also will suffer due to low wage growth.

CoreLogic pointed out to local press that supply is an issue in the national capital, with a broad range of new build developments getting approval and adding to the city’s property supply.

Nevertheless, that 3.4 per cent rise for the year includes a 4.1 per cent hike in houses, and around 1.1 per cent increase for apartments. Sales volumes also increased over 2018 compared to the previous year. A growing population should maintain a decent level of demand throughout 2019, but a city with a strong public sector workforce might also face unease to make any bold real estate moves.

Domain’s Property Price Forecast expects Canberra property to rise around 4 per cent this year.

 

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San Francisco

The world capital for innovation has seen some relatively traditional factors affecting its propertymarket in the last year.

The whole Bay Area saw sales fall 22 per cent in December against 12 months earlier, Compass data found, as higher interest rates and affordability has seen the market likely to have reached its peak for now. Economic uncertainty - partly due to tumult in Washington DC over various fiscal wrangles - was also cited by the research company to explain the reduced demand.

While median prices for a single family home retreated to around US$1.4 million, condos fell to an average of less than $1 million, the first time since 2015. An economist at the company also noted that the number of listed properties with price reductions had doubled by December 2018.

The news of price compromise will be welcome by many. The city has seen extraordinary house price growth, as the inflation of the tech industry - and the salaries of its executives - is a far cry from thousands of public sector jobs and other general employees struggling to put down deposits that would keep pace.

Local media are now even questioning if even the average software engineer can afford the prime city centre apartments or condos.

Yet this very sector may potentially boost the city’s property market this year - if various large scale IPOs go ahead. Uber, the car sharing service, is out in front, with a mooted $120 billion flotation this year. Lyst, Pinterest and AirBnB may also be public stock. It’s unlikely that the effect will be felt outside the prime market, however.

 

 

 

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