CBRE announces its predictions for what 2015 will bring for the property sector. Year on year, the sector will continue to expand, but the overall trend will be a slowing of growth to more sustainable levels.
· While prime London markets will continue to grow, confidence and investor interest will encourage growth in UK regional markets; and we expect secondary housing markets to fare better than in recent years.
· In 2014, total returns to property averaged nearly 20%. In 2015, there will be a slowing of growth rates across the sector, with average returns just under 13%
· Year on year significant rental growth for most sectors but a further improvement in yields as investment inflows continue into the UK market.
· Industrial property will continue to be attractive for investors due to a dearth of quality supply which is likely to lead to new speculative development in the South.
· Price growth in the housing market will ease in 2015 to around 6% with transaction levels having peaked for the time being.
James Brounger, Regional Managing Director CBRE South Central, commented:
“2014 was a year of extraordinary expansion across the property sector and while this will continue into 2015, overall there will be a return to more sustainable levels of growth. Rental growth will continue in all sectors and we expect investment yields to continue to improve as levels of capital flows into the UK market remain high. In terms of where growth, we forecast a ripple effect as property investors shift from London out to the regions.
“Global economic factors – most notably the falling price of crude – in 2015 will benefit the UK. The likely effects of pushing down inflation and boosting consumer spending, means we should expect to see a knock on benefit for retailers which in turn could stimulate growth in the retail property sector. The combination of these trends makes 2015 an intriguing prospect for the sector.”
