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The Top Investment in Bristol

The number of students needing accommodation in Bristol is projected to grow to 44,000 by the 2018/19 academic year.

Growth can be attributed to the city’s two notable universities, the University of Bristol and the University of West of England, which has a combined total of just over 40,000 full-time students. These two institutions have driven Bristol’s continued demand for student accommodation, providing a prime opportunity for developers and investors.

The University of Bristol, in particular, is a member of the prestigious Russell Group of Universities, which represents 24 leading universities in the UK. Ranked 9th in the UK according to the Times Higher Education League Tables, the university has long experienced high student demand and seen a 20% increase in applications since 2012. The Universities and Colleges Admissions Service (UCAS) has named it the 6th most oversubscribed university n the UK — demand for places at the university exceeds even that of the world-famous King’s College London or Queen Mary University of  London!

Adding to the allure is the value a University of Bristol degree holds in the working world. A research by Savills has shown that British universities boasting high graduate salaries see a bigger increase in applications over the past five years, compared to the rest. The research reports that graduates from the University of Bristol  are most likely to go on to jobs that pay £2,700 above the average in the UK.

The University of Bristol is currently embarking on an ambitious expansion of its facilities, which includes plans for a brand-new £300m Temple Quarter Campus situated next to Bristol Temple Meads train station. Image credit: http://bit.ly/2Fsk1Zb
The University of Bristol is currently embarking on an ambitious expansion of its facilities, which includes plans for a brand-new £300m Temple Quarter Campus situated next to Bristol Temple Meads train station. Image credit: http://bit.ly/2Fsk1Zb

The University of Bristol is currently embarking on an ambitious expansion of its facilities, which includes plans for a brand-new campus right in the city. The £300m million Temple Quarter Campus will be situated next to Bristol Temple Meads train station,  in the centre of the Bristol Temple Quarter Enterprise Zone, one of the largest urban regeneration projects in the UK. Once completed, it will provide study places for 5,000 new students, which will starkly increase the city’s demand for student accommodation. The new campus is expected to open in time for the start of the 2021/22 academic year.

 

Savills: Bristol is Top 12 in PBSA investment

Currently there is a significant demand for student accommodation in the city.

Savills puts the city of Bristol in its first-class tier, or top 12 cities in the UK for investment in the commercial purpose-built student accommodation sector, based on the current and future projected supply of student property, demand, affordability and potential for rental growth.

Backing up Savills’ research is a study by Sellhousefast.uk, which places Bristol in the top 20 cities in the UK by demand for student accommodation, at a ratio of about 1 bed to every 2 students (1:1.93).

Investors who invest in Bristol student property can expect favourable returns on their investments. According to the Cushman & Wakefield Student Accommodation Tracker 2017/18, en-suite rents in Bristol went up by 4%, tying with Birmingham as the highest increase of all cities in the UK. En-suite bed spaces represent 56% of the student property market, whilst studios account for 12% of all beds.

James Pullan, head of student property at Knight Frank, says Bristol is structurally undersupplied.

“As is apparent from the figures, Bristol needs purpose-built accommodation. It doesn’t have enough. If you look at the university projections, it still needs more. The market would not be saturated if another 4,000 beds came to market,” he says.

 

And Much More

There’s much more to Bristol than top-notch universities, which makes it a great place to live and work in.

Bristol has been voted the best place to live in the UK by the Sunday Times in 2017. It was announced as the Green Capital of Europe for 2015 and has numerous eco-friendly projects, from fish farms and tidal generators to the infamous ‘poo bus’ — a bus powered by methane generated from the Bristol Sewage Treatment Works.

Bristol also has the reputation of being England’s first “cycling city”, with a report stating that 24,000 cars are kept off the streets everyday, thanks to cycling. 

Named the Green Capital of Europe for 2015, Bristol is also England's first "cycling city". Image credit: http://bit.ly/299HZdv
Named the Green Capital of Europe for 2015, Bristol is also England’s first “cycling city”. Image credit: http://bit.ly/299HZdv

Economy-wise, Bristol performed strongly in 2016, recording a 2.4% increase in YOY economic growth and moving into 10th place in a league table for city growth, according to a study by the Centre for Business & Economic Research (CEBR). The report projects Bristol’s economy to grow 15.7% by 2026.

Jobs are also being created in the city, and accessibility, increased.

The Bristol Temple Quarter Enterprise Zone, a 70-hectare enterprise zone in the city is expected to draw talent from the creative, high-tech and low-carbon industries. Since 2012, over 3,000 people have come to work in the Enterprise Zone. The target is 22,000 jobs over the lifespan of the project.

The Temple Meads railway station, which is being redeveloped by Network Rail to be a brand-new transport hub, will improve access to surrounding neighbourhoods and the city beyond.

In conclusion, there is a significant market for the commercial student property sector in Bristol, and investors can capitalize on that. The student population is set to increase over the next few years, and the current lack of supply of student beds gives great potential for growth in this sector. The residential property sector, meanwhile, looks to benefit from increasing jobs created in the city.

Article by Ian Choong

CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and commercial property including student accommodation and carehomes, in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc) and Australia (Melbourne, Perth, Brisbane). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence. 

Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260

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Construction Update – One Wolstenholme Square (Dec 2017)

On behalf of the developer, we bring you updates as at end Dec 2017 from the construction site of One Wolstenholme Square in Liverpool, UK. Kindly click on the image below to access and flip through the update.

FLASHBACK: The Epicentre of History & Culture

Imagine being at the centre of a quaint and cultural city bustling with life and steeped in history…Welcome to One Wolstenholme Square, the latest £40 million development in the most desirable postcode in Liverpool.

Located five minutes away from the city’s attractions and top university campuses, One Wolstenholme Square comprises a selection of studio and one-bedroom residential apartments with a panoramic view of the Liverpool skyline and the remarkable World Heritage Waterfront.

Liverpool is one largest economies in the UK, and home to half a million people, some of the UK’s top universities, football clubs (Liverpool FC & Everton FC), a staggering student population of over 53,000 and, of course, The Beatles!

CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and purpose-built student property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence. 

Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260

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Construction Update – The Residence (Dec 2017)

On behalf of the developer, we bring you updates as at end Dec 2017 from the construction site of The Residence in Manchester, UK. Kindly click on the viewer below to see and flip through the update.

FLASHBACK: The Residence

The Residence is only a few minutes’ walk from Manchester City Centre. It sits at the doorstep of Spinningfields (The Canary Wharf of the North), Manchester’s main shopping and commercial district and Deansgate, the financial district of the city. The Residence occupies a prominent position within the stunning new £400 million Greengate Masterplan Project and, upon completion, will be one of the tallest residential buildings in the city, making it highly desirable for tenants. The regeneration of Greengate is expected to unlock £400 million of investment over the next 15 years.

CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and purpose-built student property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence. 

Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260

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Construction Update – One Islington Plaza (Dec 2017)

On behalf of the developer, we present updates as at end December 2017 from the construction site of One Islington Plaza in Liverpool, UK. Kindly click on the image below to scroll through and read the update.

 

Flashback: One Islington Plaza

Living in the Knowledge Quarter

One Islington Plaza is the latest student development directly adjacent to Liverpool’s Knowledge Quarter, in the heart of Liverpool’s student district. One Islington Plaza will consist of 317 studio and ensuite clusters, with great facilities for student living such as communal lounges, entertainment and services. All ensuites have access to communal kitchens with appliances, including dishwashers, while all studios come with fully-fitted kitchens. The project is situated in an incredible location, within walking distance to major universities in Liverpool.

Investment Highlights

  • Prime Location
  • 8% rental returns assured 3 years
  • NO stamp duty
  • Fully-managed
  • Fully-furnished

Project Highlights

  • On-site concierge & front desk
  • Communal lounge with flat screens, video games, pool tables, ping pong & fuzzball
  • Cinema, media room & study areas
  • Laundry services
  • Bicycle storage
  • Fully-equipped gym
  • On-site Crosby Coffee shop & retail unit
  • TVs & high-speed broadband in all rooms
  • Hotel style access control systems & monitored CCTV system


CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and purpose-built student property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence. 

Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260

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Construction Update – Phoenix Place (Dec 2017)

On behalf of the developer, we present updates as at end December 2017 from the construction site of Phoenix Place in Liverpool, UK. Kindly click on the image below to scroll through and read the update.

FLASHBACK: Phoenix Place

Phoenix Place offers the ultimate in contemporary purpose built student accommodation in Liverpool. Sited on Iliad Street, these studio and en-suite apartments are within walking distance of all of main university establishments and Liverpool City Centre, built as part of ongoing regional development in the area. The amenities within the immediate vicinityof Phoenix Place offer everything students need to make the most of student life. These include a fully equipped sports centre, gymnasium and swimming pool, the historic Greatie market and a large Sainsbury’s supermarket (due to open in 2017).

And whilst there’s plenty to do and see nearby, for those who wish to travel further afield, there is also easy access to the main routes out of Liverpool via road and public transport. This includes the Lime Street Train Station and the National Bus Depot which are less than a mile away.

Phoenix Place Investment Highlights

  • 9% nett yield
  • 5 years rental assurance
  • Fully managed
  • Fully furnished studio & en-suite apartments
  • Walking & cycling distances to main universities, city centre & amenities

Phoenix Place Location Highlights

  • John Moores Byrom Street Campus – 9 mins walk
  • Liverpool Hope University Creative Campus – 11 mins walk
  • Lime Street Train Station – 16 mins walk
  • Sainsbury Supermarket (due to open in 2017) – 8 mins walk
  • University of Liverpool – 7 mins cycling
  • Liverpool Town Hall – 8 mins cycling
  • Royal Liverpool University Hospital – 7 mins cycling


CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and purpose-built student property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence. 

Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260

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Generation Rent & The Property Ladder

Does getting on the property ladder exist merely as an idea in the UK now, especially for young people such as the Gen-Y-ers or the Millenials? CSI Prop explores the notion of Generation Rent and how this is an opportunity for the rental market in Britain.

What most call the property “ladder” is the idea that homeowners will own different homes according to their needs during their lifetime.

A young couple early on in their careers would ideally buy a “starter home” and move on to a larger (and more expensive) property when they plan to have children. This has been possible in the past, because their household income would have increased through salary growth and career progression.

However, with wage stagnation, rising house prices and the squeeze on the cost of living today, this may be quite impossible for them, and many others like them.

The average UK house price is, at just over £200,000, almost 10 times the average wage, compared to just under four times the average wage at £31,000 in 1985. Home ownership in the UK has fallen to 63.8% (from 70.8% in 2003).

According to research by PwC, almost 60% of 20- to 39- year- olds in England will rent their homes by 2025, while just 26% will have got on the housing ladder.

 

Renting: the new normal?

Renting has become the new normal for millions of people in the UK. Rising house prices and a lack of new homes for first-time buyers takes home ownership out of reach of millennials, particularly in the southeast of England, where house prices have far outstripped salaries. And with the burden of debt from student loans (the an average debt is £32,220 for graduates in England), it’s easy to see why many think twice about taking on a mortgage.

A survey indicated that over three-quarters of British adults aged 18 to 30 don’t believe they will ever be able to afford to buy a home even though they have full-time jobs.

Philip, 26, from Yorkshire, said this of his experience so far: “By the time you have saved up an extra £1000 towards a deposit, the house values have gone up by £2k, £5k, £10k. It’s impossible.”

“It’s embarrassing to still live at home with your parents, even though I know increasing numbers of people in their 20s are doing so. It’s annoying that my life in that respect hasn’t turned out how it planned. I left uni at 23 telling myself that my move home would be for a few weeks at most, and I’m still there 3 years later,” he says.

Some, like Jamie, a Business Manager for a Health GP Company in Northumberland, have a slightly different view.

“I have no issues with (renting). There is, to a degree, temporised value; you can often live in a nicer area, nicer street etc. for a cheaper monthly payment than a mortgage payment. Some see renting as ‘throwing money down the drain’ but I see it differently. Renting allows you to become, in some odd regard, a more static member of the travelling community.” he says.

Other countries across the Channel don’t look as highly towards house ownership like the British. In France, just over 50% of the population live in their own properties. And in Paris, the figure is less than one in three. In Germany, house ownership is even more scarce. Only 39% of Germans own the homes that they live in, and in Berlin this figure dwindles down to just a mere 13% of the population owning their own home!

Could this be the future of house owners in the UK?

The decline of the “property ladder”, or house ownership means a large potential market for the buy-to-let investor in the UK. Even as the introduction of the stamp duty surcharge on additional property and changes to tax relief have eaten into landlords’ profits, the market continues to grow amid the high demand and low supply.

We see regional markets as the best option for investors looking to make high returns with low capital in the UK. The Government’s ongoing push for the Northern Powerhouse, which includes Liverpool, Manchester and Sheffield, is a good indicator of the potential for future property price growth and solid returns.

Liverpool postcodes dominate the top 25 areas of the buy-to-let yield list, with L7 – which covers the city centre, Edge Hill, Fairfield and Kensington – taking the top position with a huge average yield of 12.63%. This is based on a median rental value of £1,224, and a median asking price of £116,259. There is high rental demand in Liverpool as the city is home to three universities as well as a growing number of young professionals.

Other top performing Liverpool postcodes are L6 in second place with a 10.57% average yield, L15 in third place with a 10.29% yield, L1 in 10th place with an 8.61% yield, and L3 in 11th place with an 8.47% yield.

Manchester also makes a couple of appearances in the top 25, with M6 – which encompasses increasingly popular Salford – in 14th position with an average yield of 8.25%. The rental market in Manchester has been growing in strength in recent years, and its four universities provide ample opportunities for landlords who are willing to invest in student accommodation. Sheffield makes the cut for the top 25 as well, with its S2 postcode at 16th place, giving an average yield of 8.07%.

The Northern Powerhouse, ie, the British government’s attempt to rebalance the UK economy by pushing development upwards into the regions to bring it on par with that of the capital and southeast, can only be a good thing.

Article by Ian Choong

CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and commercial property including student accommodation and carehomes, in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc) and Australia (Melbourne, Perth, Brisbane). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence. 

Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260

 

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UK Property Outlook 2018

In 2017, low mortgage rates and healthy employment growth continued to support demand for property, whilst supply constraints provided support for house prices. However, this was offset by the looming Brexit and mounting pressure on household incomes, which exerted an increasing drag on confidence as the year progressed.

As we go into 2018 with no indication that a Brexit deal is about to be reached, some uncertainty still plagues the property markets. Nevertheless, investor confidence has returned, as can be seen from the recent price recovery. In this article CSI Prop analyses the current trends and predictions of the property market for the year.

CBRE’s 2018 Market Outlook forecasts continuing economic growth for the UK, despite the uncertainties caused by Brexit. The report states that those uncertainties are likely to peak this year.

Some sectors will weather the uncertainty well, including industrials and the so-called ‘beds’ sectors (build-to-rent, hotels, student accommodation and healthcare). This is because these sectors exhibit non-cyclical characteristics, or serious mismatches of supply and demand, or some form of structural change.

In its annual market housing forecast, the Royal Institution of Chartered Surveyors (RICS) said that house price growth in the UK would slow with the number of transactions falling slightly, driven by political and economic uncertainty surrounding Brexit and the lack of available stock.

However, despite these factors weighing on the market, the chronic undersupply of housing is likely to support prices, the organisation said. RICS expects prices to drift higher in some parts of the UK with the strongest gains in Northern Ireland, Scotland, Wales and the northwest of England, which includes cities such as Manchester, Sheffield, Liverpool and Newcastle. But, a slump in asking prices across London and the South East will drag down prices in the rest of the UK so that overall growth remains flat.

The Government recently announced its ambition of building 300,000 homes a year in the Autumn Budget alongside a tranche of policies aimed at increasing the housing supply. However, RICS said that as many of these measures won’t come into effect until the mid-2020s, they will do little to alleviate the immediate housing crisis.

 

Residential property to increase across UK

In 2018, the Office for Budget Responsibility expects a 3.1% increase of house prices across the UK, with prices bolstered by first-time buyers benefiting from the stamp duty cuts. Countrywide, the biggest agency in the UK, thinks prices across the country will go up by 2%. More conservatively, real estate firms Savills and JLL both predict a rise of 1%.

Of the two big lenders that operate well-known price indices, Nationwide said it expected property values to be broadly flat in 2018, with perhaps a marginal gain of around 1%. Halifax allowed itself some wiggle room, predicting UK growth from 0% to 3%.

However, in January 2018, the market has, so far, outperformed expectations. Rightmove stated that the average price of a property coming on to the market has gone up by nearly £2,000 compared with last month.

The Office for National Statistics (ONS) reports that the average house price in the UK as a whole was £226,000, up 5.1% YOY.

Average UK house prices from January 2005 to November 2017 (Souce & credit: ONS).
Average UK house prices from January 2005 to November 2017 (Souce & credit: ONS).

Russell Quirk, chief executive of online estate agent eMoov, is broadly optimistic about the market in 2018: “UK house prices are up 5% since last December and we predict that they will continue to increase at a similar rate in 2018 as the market has already begun to find its feet again.”

Public confidence in the market has risen beyond initial forecasts, and we think that the outlook for the market, as a whole, is positive.

 

London property charts weak growth

Homes in the capital sold for an average of £482,000, an increase of 2.4% (£11,000) in 2017, according to the latest figures from Land Registry and ONS.

London’s house prices remain the highest in the country but the capital continues to experience the weakest price growth as buyers continue to be held back by affordability constraints.

Richard Snook, senior economist at PwC commented: “Continuing the recent regional trend, London is the weakest performer. House prices have now declined for four consecutive months, from the high of £490,000 in July to £482,000 in November.

“But due to growth earlier in the year, prices are still 2.3% higher than 12 months ago,” he said.

 

Regional markets

The strong 5% (£11,300) increase in house prices was thanks, in part, to strong annual growth in the regional markets.

This increase was led by the West Midlands region, where the average sold price was £192,000, which is 7.2% higher than a year before.

Manchester had one of the highest price growths, up 12.7% with an average sale price of £175,312, whilst Liverpool gained 10.8% (£131,707). Sheffield was up 8.1% (£160,974) with Birmingham at 7.8% (£177,728). London was a drag on overall growth, with the central city having a drop of 10.9% (£729,134).

Annual Price Change by local authority, year to Nov 2017
Annual Price Change by local authority, year to Nov 2017

The figures also showed rises in lending to home movers and remortgaging, despite the Bank of England’s decision to raise the base rate to 0.5% last November.

“The data shows housing market activity remains buoyant, despite November’s rise in the base rate,” said Paul Smee, Head of Mortgages at UK Finance.

“Steady increases in lending for house purchases together with increases in homeowner remortgages reflect a keenness among consumers to benefit from still historically low interest rates, and a highly competitive marketplace,” he said.

Meanwhile, the B16 postcode — Ladywood, in Birmingham, named last year as having the highest levels of child poverty in the UK — has seen the sharpest rise in property prices, according to Barclays Mortgages. They rose by 17% in 2017, as buyers snapped up cheap homes. The Office for National Statistics says Brum lured 6,510 Londoners last year, with 5,280 going back to the capital, thanks to employers such as HSBC and HS2 expanding in the city.

Hometrack says that in Glasgow, Liverpool and Newcastle, the current house-price-to-earnings ratio is lower than the 15-year average, which makes them good value ahead of likely increases in the longer term.

Savills identifies Birmingham, Manchester and the overall Northwest as the top places for buy-to-let investors, with the highest comparative returns. Image credit: propertyreporter.co.uk
Savills identifies Birmingham, Manchester and the overall Northwest as the top places for buy-to-let investors, with the highest  comparative returns. Image credit: propertyreporter.co.uk

Rental yields

The buy-to-let market has faced tougher taxes and mortgage affordability criteria over the last year. The introduction of the stamp duty surcharge on additional property, changes to tax relief and tighter lending criteria have cut into landlords’ pockets.

According to UK Finance, the number of buy-to-let mortgages granted for purchasing a property was 75,300 in the year to the end of August 2017 – 47% lower than in the year to March 2016. The growth in the number of outstanding buy-to-let mortgages is lower still, at just 24,800, and there is evidence that some investors are shedding stock.

However, irrespective of the support provided by the Bank of Mum and Dad and Help to Buy, little has changed for the deposit-constrained first-time buyer and the demand for rental stock will continue to grow.

Savills identifies Birmingham, Manchester and the overall Northwest as the top places for buy-to-let investors, with the highest comparative returns. They predict a 4.5% average annual return for Birmingham and Manchester, and 4.1% for the Northwest.

Net rental yields in 2017 once mortgage costs are taken into account (Source: Private Finance)
Nett rental yields in 2017 once mortgage costs are taken into account (Source: Private Finance)

Comparatively, mortgage brokers Private Finance place Liverpool at the top for nett rental yields in 2017 once mortgage costs are taken into account, at a whopping 8%. Manchester here is in fourth place at 4.3%.

With lower supply, and increasing demand as house prices continue to be out of reach for the majority of first-time buyers, the buy-to-let market remains lucrative for investors.

We see the property market as a whole on recovery from Brexit in 2018, and investors can get the best returns from investments in the regional markets.

Article by Ian Choong

CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and commercial property including student accommodation and carehomes, in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc) and Australia (Melbourne, Perth, Brisbane). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence. 

Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260

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Australia Property Outlook 2018

Subdued, Yet Still Robust

It has been said that housing is, by far, one of Australia’s largest assets and the foundation of its household wealth, financial system and economy. Little wonder, that: as of Dec 2017, the total value of the nation’s 10 million residential dwellings stands at $6.8 trillion according to latest official estimates by the Australian Bureau of Statistics (ABS).

Over the last 5 years, house prices in Sydney and Melbourne — two of Australia’s biggest property markets — had increased 75% and 59%, respectively.

Just 3 months ago (Oct 2017), a report by the Swiss-based Bank of International Settlements (BIS) pegged Australia as having the 6th highest rise in annual property prices in the world over the last 5 decades, with house prices surging 6556% since the 1960s at an average increase of 8.1% per year.

Be that as it may, Australia’s housing market saw substantial moderation in 2017 (particularly the second half) led largely by Sydney, and, to a lesser extent, Melbourne, due to stricter lending measures which have affected investor appetite. What, then, would the outlook be like in 2018?

The Bank of International Settlements (BIS) pegged Australia as having the 6th highest rise in annual property prices in the world over the last 5 decades, with house prices surging 6556% since the 1960s at an average increase of 8.1% per year. Image credit: http://bit.ly/2ri0BEl

The Bank of International Settlements (BIS) pegged Australia as having the 6th highest rise in annual property prices in the world over the last 5 decades, with house prices surging 6556% since the 1960s at an average increase of 8.1% per year. Image credit: http://bit.ly/2ri0BEl

The property market will continue to see growth in 2018, albeit at fairly modest levels as tightened regulatory and lending criteria for investors remain in place. The moderation of house values across Australia will be driven by Sydney, which had already begun experiencing a drop in price levels in Nov 2017.

Yes, it does appear that the Sydney boom is over, but while we agree with the common perception that prices in Sydney may fall in 2018, we don’t think the prices will drop drastically within the year.

In Melbourne, price growth will also ease though not at Sydney’s rates, given that property is more affordable. Speculators are pulling back but serious investors know that the city is backed by strong population growth. Again, in both cities, we don’t see anything that suggests widespread declines in prices.

Perth will be a city to watch as we think the housing market has finally reached its bottom. Market experts predict that Perth property prices will be flat in 2018, but that interest levels and, consequently, demand will eventually pick up. A recent ANZ-Property Council Survey reveals that confidence levels in Western Australia are rising to similar levels seen in Australia’s eastern states.

Experts are also predicting modest growth to continue in Adelaide and Brisbane, slowing at more moderate levels in Canberra. Hobart, Australia’s stand-out performer last year, will continue to have strong growth levels, albeit slower than its double-digit surge in 2017.

The value of the property market next year will depend largely on whether the Bank of Australia (RBA) will increase interest rates, or if there will be further tightening on lending criteria. That said, it looks unlikely that interest rates will budge from the 1.5% level that it is at currently.

SILVER LINING

Australia’s housing market has remained vibrant due to active investor activity and strong population growth.

The latest Foreign Investment Review Board (FIRB) Annual Report 2015-2016 found that residential real estate applications had increased by 19% to to $72.4bn in 2015-2016 compared to $60.8bn in the previous year. The total number of applications approved for residential real estate had also jumped from 36,841 to 40,149 during this period. It is interesting to note that residential property approvals comprised 96.9% of all foreign investment approvals.

FIRB's largest residential approvals were in Victoria (44%), followed by New South Wales (32%), Queensland (17%) and Western Australia (4%). Image & source credit: FIRB
FIRB’s largest residential approvals were in Victoria (44%), followed by New South Wales (32%), Queensland (17%) and Western Australia (4%). Image & source credit: FIRB

The largest residential approvals were in Victoria (44%), followed by New South Wales (32%), Queensland (17%) and Western Australia (4%). Meanwhile, the top 10 countries that dominate real estate in Australia include China (highest at $31.9m), US, Singapore, Malaysia and Japan.

It must be noted that Chinese investments has levelled off over the past year due to tightened investment regulations in China. Charles Pittar, CEO of international property site, Juwai.com, said, “Over the past year we have seen growth in Chinese investment level off, from 90% growth in Chinese buyer enquiries via Juwai.com in 2015 to 28% in 2016.”

 

STRONG POPULATION GROWTH

Tightened regulations will continue to moderate investor sentiment, but not too substantially, as the housing market remains underpinned by strong population growth. This will translate to increased demand for housing.

The latest report by the Australian Bureau of Statistics (ABS) shows that Australia’s population grew by 388,100 people with Victoria being the fastest-growing state or territory, with a population increase of 2.3%.

The latest report by the Australian Bureau of Statistics (ABS) shows that Australia’s population grew by 388,100 people and Nett Overseas Migration at a 27% increase. Source & image credit: Australian Bureau of Statistics
The latest report by the Australian Bureau of Statistics (ABS) shows that Australia’s population grew by 388,100 people and Nett Overseas Migration at a 27% increase.  Victoria charted the highest population increase in Australia. Source & image credit: Australian Bureau of Statistics

Nett overseas migration (NOM) was recorded at 245,400 in 2017 — an increase of 27% from the previous 12 months. New South Wales (NSW) was the most popular destination with NOM of 98,600 followed by Victoria with 86,900, Queensland (31,100) and Western Australia (13,100).

“NOM in NSW and Victoria increased by 31% and 23%, respectively. This growth has seen both states surpass their previous recorded high in 2008-09,” said ABS Demography Director Beidar Cho.

 

CONTINUED INVESTMENT POTENTIAL

Despite the cooling in price growths in the mainstream markets, Australia will continue to attract migrants, says Virata Thaivasigamony of CSI Prop.

“There is a strong desire to live in Australia, and this will cause demand for property to increase,” he says. “Naturally, investors will question whether property will remain a good investment, but it is the strategic investors who will view property with a long term outlook. This period of slower growth is a buying opportunity for long term appreciation.”

Movements in some of the main cities in Australia projected from 2017 – 2020. Image source & credit: QBE Housing Outlook 2017-2020

For whatever it’s worth, the current ANZ-Property Council of Australia Confidence Index (March quarter) came in at 137.7 in their latest survey, just below the all-time high of 139.5 in the final quarter of 2017. That’s a lot of confidence in the market!

Article by Vivienne Pal

CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and commercial property including student accommodation and carehomes, in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc) and Australia (Melbourne, Perth, Brisbane). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence. 

Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260

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Malaysian Property Market to Decline in 2018

Despite positive economic growth, the year 2017 saw Malaysia struggling to shrug off a severely weakened currency, international infamy due to the 1MDB scandal, and a declining property market.

While the ringgit has rallied, bursting through the start of 2018 at a high, the outlook continues to look bleak for the local property sector.

The Malaysian Reserve reports that high- and low-end properties are not expected to see any immediate rebound as affordability, excess stock, and economic and political concerns cast a dark shadow on what was once a vibrant sector.

That there is a glut in the market is now a clear understatement. Data by the National Property Information Centre (Napic) revealed that there were 130,690 unsold residential properties in the country during the first quarter of 2017 — the highest in 10 years!

The total unsold units in Napic’s findings include overhang (completed, but unsold) units, unsold under construction units, as well as SoHo (small office/home office) units and serviced apartments.

Data by the National Property Information Centre (Napic) revealed that there were 130,690 unsold residential properties in the country during the first quarter of 2017 — the highest in 10 years! Source: Napic; Image credit: http://bit.ly/2CtnTIm
Data by the National Property Information Centre (Napic) revealed that there were 130,690 unsold residential properties in the country during the first quarter of 2017 — the highest in 10 years! Source: Napic; Image credit: http://bit.ly/2CtnTIm

83% of the unsold units constitutes the above-RM250,000 category and 61% of the total unsold units comprise high-rise properties, of which 89% were priced above RM250,000. The value of unsold and unutilised properties comes to an estimated RM35.5 billion.

And, with the impending general elections, consumers are exercising more caution in big-ticket long-term purchases.

Affin Hwang Investment Bank Bhd analyst Loong Chee Wei told The Malaysian Reserve that the property market is far from seeing any recovery due to the rising cost of living and the disconnect between society’s income and affordability level.

Local property investors looking to gain from property appreciation and hefty returns from the sale of properties, need to manage expectations as this year looks to be a buyers market (and a renters market). Property sales will not be as attractive as it used to be.

More’s the pity, then, given the rosy Malaysian economic outlook for 2018 and the steady ringgit growth. Public Investment Bank Bhd’s research arm reports that Malaysia is slated to become the second fastest growing economy in Asean.

Total unsold residential properties by state in Malaysia as of 1Q 2017. Source: Napic; Image credit: Data by the National Property Information Centre (Napic) revealed that there were 130,690 unsold residential properties in the country during the first quarter of 2017 — the highest in 10 years! Source: Napic; Image credit: http://bit.ly/2CtnTIm
Total unsold residential properties by state in Malaysia as of 1Q 2017. Source: Napic; Image credit: Data by the National Property Information Centre (Napic) revealed that there were 130,690 unsold residential properties in the country during the first quarter of 2017 — the highest in 10 years! Source: Napic; Image credit: http://bit.ly/2CtnTIm

With the local property market at an uncertainty, some investors bide their time and jump at the opportunity to invest when the price is right (e.g. offered at fire sale prices), and then hold until the property market cycle goes into an upward trend, before they sell for a profit. 

Others diversify their investments into high-yielding, growing markets overseas, such as Australia and the UK, where the currency is stronger, hence rental returns and appreciation are at a higher value than the ringgit. 

Unlike Malaysia, these countries are facing critical undersupply in housing  due to population growth as a result of migration, jobs creation and educational opportunities.

“The UK and Australia have strong growth potential. The population and its demand for housing have grown faster than supply, causing property prices to keep appreciating. It is also because of this, that there is a strong rental market,” says property expert Virata Thaivasigamony of CSI Prop.

“With the current and forecasted performance of the ringgit, alongside the weakened pound and Australian dollar, investors now have the opportunity to invest from a position of strength. Diversifying investments is key to hedging against uncertainties both locally and globally.”

CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and purpose-built student property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence. 

Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260

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Melbourne’s New Metro Tunnel Boosts Housing Demand

The Metro Tunnel, Melbourne’s state-of-the-art underground project is set to boost efficiency and ease congestion in the city’s transport system, while boosting property prices within the vicinity of its stations. 

Good news for Melbourne dwellers: the $11 billion Metro Tunnel project in Melbourne will start construction next year.

Due for completion in 2026, the twin nine-kilometre tunnels will deliver a new dedicated pathway through the heart of the city. This will free up Melbourne’s biggest bottleneck by running three of the busiest train lines through the tunnel, creating space for more trains to run more often across Melbourne’s rail network. Those three lines are each among the worst in Melbourne for peak-hour overcrowding, with multiple trains per day that breach Public Transport Victoria’s load standard of 900 passengers per train.

The Metro Tunnel is the first step towards a ‘metro style’ rail network for Melbourne with ‘turn-up-and-go’ train services that are the hallmark of the world’s great cities such as London, New York, Hong Kong and Singapore. Currently, commuters using Melbourne’s rail network have to rely on a timetable detailing what time trains will arrive, and plan their journeys around that.

Premier Daniel Andrews says commuters will be able to throw away the timetable after the Metro Tunnel project is complete.

“This project is all about turn-up-and-go, no-timetable-required public transport,” he told reporters in Melbourne.

The new train tunnel will rival the underground networks of Paris and Hong Kong, with state-of-the-art signalling technology that can run trains every three minutes.

The Metro Tunnel will create a new end-to-end rail line from Sunbury in the west to Cranbourne/Pakenham in the south-east, with high capacity trains and five new underground stations located at Arden, Parkville, the CBD and Domain.

The five new underground stations are at North Melbourne, Parkville, State Library at the northern end of Swanston Street, Town Hall at the southern end of Swanston Street, and Anzac on St Kilda Road.

The two stations under Swanston Street will be directly connected to the City Loop at Melbourne Central and Flinders Street stations.

By creating a new dedicated pathway through the inner core for Sunbury, Cranbourne and Pakenham services, more trains will be able to run more often on five other lines across the metropolitan rail network. The Craigieburn, Upfield, Frankston, Sandringham and Werribee lines will all benefit from this unlocked capacity.

As a result, capacity will be created on the network to enable 39,000 more passengers to use the rail system during each peak period. This will mean a less crowded and more reliable train network. More trains also means fewer cars on the roads, helping to tackle congestion in the suburbs.

The construction and operation of the Metro Tunnel is expected to create about 7000 jobs, and increase Victoria’s Gross State Product by at least $7 billion. It will go a long way towards maintaining Melbourne’s status as one of the world’s most liveable cities. This is expected to support the price growth of property in the area, benefiting property investors in Melbourne.

By Ian Choong

CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and purpose-built student property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence. 

Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260