Monday, March 19, 2012

Housing rents to increase around the world: Savills

Rental values in the global residential property market are climbing fast, as demand from local and international corporate tenants’ rises rapidly, noted Savills, a London-based consultancy.
According to the Savills World Class Cities Index, the average rental increase in the second half of 2011 hit 2.3 percent, with Paris as the most expensive city for tenants.

Paris (pictured) tops the chart replacing London, with rents now more than three times compared to Mumbai and Shanghai. The star performer was New York, where rental values increased 6.5 percent in the first half and another 6.2 percent in the second half of last year.

“The majority of new world cities saw reduced rental growth in the second half of the year,” said the report.

“The notable exception was Singapore, where rental values rose by 4.4 percent in the first half of 2011 and a further 5.0 percent in the second half of the year.”

It noted that the introduction of the additional buyer’s stamp duty (ABSD) in December will further benefit the rental market.

By contrast, other new world cities, particularly Shanghai, Hong Kong and Moscow, saw rental growth declines in the second half of 2011.

Savills also analysed the cost of buying property in the world’s 10 leading global cities, and it showed that costs of buying and occupying properties in Shanghai and Mumbai are higher in relation to relatively low rents that they equate to over four years of rental costs.

In Singapore, the figure is around three years.

“Demand for owner-occupation in these markets is likely to fall at times when little or no capital growth is expected,” said Yolande Barnes, head of Savills Residential Research.

“The result will no doubt be that the oriental new economies will become low-yielding, high volatility markets where the challenge will be to meet tenant demand to investor appetite for bringing forward supply,” she added.

View the original article here

Soure From Property Guru

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