City Res: Liverpool apartment market steadies
The apartment market in the city centre of Liverpool has stabilised and in some areas started to recover according to estate agent City Residential.
The firm's report for the second quarter of 2009 shows overall prices continued to fall but at a much slower rate than during the first quarter.
Falls over the quarter stood at -1.22% on the samples taken by the agency and annually were down -15.05%.
Alan Bevan, director of City Residential, said: "On a positive note we have also seen a much stronger market in the last quarter, especially during May and early June. As we have come from such a low base it is easy to get carried away with these increased activity levels hoping that they signal a return to the better times.
"Our conclusion is that whilst very welcome there had to come a point when activity levels would increase and some buyers decide that prices have fallen far enough."
The report said prices in the docklands had started to recover slightly as owner occupiers began buying discounted products. South Ferry Quay and City Quay have two-bed apartments with parking from £110,000.
However, the larger units in more central schemes are struggling to sell due to over-supply and lack of mortgage finance.
The rental market is also suffering from over-supply – rents were down 1% after sharp falls in quarter one – with many schemes now for rent that would have been for sale had the market not turned: Alexandra Tower, One Park West, Elysian Fields, West Tower, The Albany and Park Lane Plaza.
Investors buying distressed properties can expect gross yields of around 7.5%, down from 9% at the start of the year.
Bevan said the agency was surprised by the lack of repossession properties coming to the market and said "they are increasing but not at the rate we anticipated". Lower mortgage interest rates and deals with landlords were probably to thank, he said.
"There is no doubt that the effects of the recession have not yet been fully felt and that further job losses will have an impact on tenants affordability," Bevan added.
"In summary Q2 has certainly been more positive than Q1 across most areas. Although this was probably to be expected (seasonal influences) there is no doubt that the market is in slightly better shape than three months ago. There is a greater, more positive feeling out on the street although some of these can be attributed to the very low depths the market found itself in the latter part of 2008 and early part of 2009.
"Even though sales prices continue to fall (albeit at a slower rate) it is the level of transactions that has offered some encouragement. When you are talking to potential buyers from outside the city (or those that do not follow the market) and highlight that you can buy 1 beds from £65k and two beds from £80k in places, common sense suggests this may be a decent time to invest (if a medium/long term view is taken)."
