LONDON: The Brexit vote could cool London’s superheated property market, with some professionals already noting signs of a slowdown, though Gulf investors have signalled their interest is so far undimmed.
After a slump in 2008 during the global financial crisis, the sector recovered, first tentatively and then at full pelt, with average prices this year reaching 54 percent higher than their pre-crisis peak.
The growth was fueled by population pressure, a desire by Britain’s wealthier classes to put their savings into bricks and mortar, and the decision by magnates from the Gulf and Russia that London property was a safe place to park their fortunes.
But cracks were already starting to appear before Britain’s shock vote on June 23 to leave the European Union, and these are now being magnified by fears of the economic fall-out and uncertainty that follows.
“Housing market activity and prices now look to be at very serious risk of an extended, marked downturn following the UK’s vote to leave the EU,” said Howard Archer, chief UK and European economist at IHS Global Insight.
The process of Britain’s exit remains unclear, but Archer said the vote was likely to weigh down economic activity and consumer confidence. He also warned unemployment may rise in the coming months.
Given these factors, IHS predicts that British property prices will fall by five percent in the second half of the year, and by another five to seven percent in 2017.
Other analysts are more cautious, saying that the extent of any economic slowdown has yet to become clear, making it too early to predict the impact on the property market.
Monica Malik, chief economist at Abu Dhabi Commercial bank, said that with so much invested it would take more than the Brexit vote to shake Gulf confidence in the London property market.
“In the near term, there will be a sentiment of cautiousness but we do not expect a marked sell-off,” she said.
“A knee-jerk reaction or panic is unlikely,” she said.
“Property in the UK is very attractive and has been a well-performing asset class. The underlying foreign demand is expected to remain strong once the uncertainties subside.”
But some property professionals in London have already seen buyers hesitate in the stifling atmosphere that descended following the June 23 referendum.
“People are cautious to say the least. They will take more time, the market will be much quieter,” said Ibby Aziz, a partner at Unsworth Rose solicitors in the upmarket area of Primrose Hill, near Regent’s Park.
He has seen deals that had been agreed in principle before the referendum, only for the buyers to demand a 20 percent reduction in price afterwards. Many sellers would be unlikely to proceed in those circumstances, he told AFP.
Emphasising the uncertainty, a top Singapore bank, United Overseas Bank (UOB), said Thursday that it has suspended loans to anyone wanting to buy property in London.
“As the aftermath of the UK referendum is still unfolding and given the uncertainties, we need to ensure our customers are cautious with their London property investments,” it said.
Property development, notably the construction of so-called “iceberg” basements that add several new floors below traditional Victorian homes, is expected to be an early casualty of the market’s new fragility.
John Foldes has been planning a large extension on his house in Clapham, in southwest London, but said he was reconsidering his plans after the Brexit vote.
“We may decide to make one less bathroom and make the setting a little bit simpler,” he said, adding that he was trying to reduce the budget by 20 percent.
Foldes, who rents out the property, had been planning to increase the amount he charges following the works, but is now lowering his expectations.
In a sign of wider investors’ concerns, leading estate agents Foxton issued a profits warning and shares in major construction firms collapsed by 20 to 30 percent over the past week.
Brexit vote rattles London property market
Brexit vote rattles London property market
NEOM board of directors announces leadership change
- Head of Public Investment Fund’s Local Real Estate Division since 2018, Al-Mudaifer has a deep and strategic understanding of NEOM and its projects
NEOM: The NEOM Board of Directors on Tuesday announced the appointment of Aiman Al-Mudaifer as acting CEO of the company. Al-Mudaifer assumes leadership of NEOM, following Nadhmi Al-Nasr’s departure.
As NEOM enters a new phase of delivery, this new leadership will ensure operational continuity, agility and efficiency to match the overall vision and objectives of the project.
Al-Mudaifer takes the helm of the organization with the support of a strong leadership team across NEOM’s regions, sectors and departments.
Head of Public Investment Fund’s Local Real Estate Division since 2018, Al-Mudaifer has a deep and strategic understanding of NEOM and its projects.
In his role at PIF, Al-Mudaifer oversees all local real estate investments and infrastructure projects. He is also a board member of multiple prominent companies within the Kingdom.
NEOM is a fundamental pillar of Saudi Vision 2030 and progress continues on all operations as planned, as we deliver the next phase of our vast portfolio of projects including THE LINE, Oxagon, Trojena, Magna and The Islands of NEOM.
Through these projects, NEOM seeks to achieve harmony between livability, business and nature, and to create a better future for current and future generations.
Maldives, Bulgaria push for greater climate action, financing
RIYADH: Insufficient financing continues to be a significant barrier preventing many countries, especially underdeveloped nations, from meeting their climate goals, according to the President of the Maldives.
Speaking on the second day of COP29, held in Azerbaijan from Nov. 11-22, Mohamed Muizzu emphasized that small island developing states require trillions, not billions, of dollars in climate finance.
“It is the lack of finance that inhibits our ambitions, which is why this COP, the finance COP, we need to deliver the new climate finance goal. This must reflect the true scale of the climate crisis. The need is in trillions, not billions,” Muizzu said.
He added, “It must consider the special circumstances of small island developing states — it must include adaptation, mitigation, and loss and damage.”
Muizzu also reiterated the importance of the environment for his country, stating: “You have called for stronger climate action. Our call has not changed. Our cause has not strayed because, for us, the environment and the ocean are more than resources. They are our cultural identity.”
In a similar vein, Bulgarian President Rumen Radev addressed the global impact of climate-related disasters, emphasizing that no region is immune to the deadly and costly consequences of climate change.
“Bulgaria is committed not only to being part of regional and energy cooperation initiatives across Central and Eastern Europe, the Balkans, and the Black Sea region but also beyond, by strengthening the links between the European Union and non-EU countries who share our priorities on climate neutrality, just energy transition, energy security, and low-carbon technological innovation,” Radev said.
He further called for broader action, stating, “All parties should undertake greater efforts to integrate climate change adaptation and resilience into all policies and strategies.”
Closing Bell: Saudi main index slips to 12,048
RIYADH: Saudi Arabia’s Tadawul All Share Index fell on Tuesday, losing 58.74 points to close at 12,047.67.
The total trading turnover of the benchmark index was SR5.75 billion ($1.53 billion), with 70 stocks advancing and 152 declining.
Saudi Arabia’s parallel market saw a drop, losing 50.59 points to close at 29,110.41. The MSCI Tadawul Index also declined, shedding 5.06 points to end at 1,516.14.
The best-performing stock on the main market was Al Jouf Cement Co., with a 4.75 percent increase to SR10.58. Other top gainers included Malath Cooperative Insurance Co. and Elm Co., with shares rising by 4.40 percent to SR15.66 and 3.87 percent to SR1,101.1, respectively.
The worst performer on the main index was Fawaz Abdulaziz Alhokair Co., whose share price dropped by 4.42 percent to SR12.12.
National Environmental Recycling Co., also known as Tadweer, announced it had signed a memorandum of understanding with Re Sustainability Middle East Co. to explore the potential for establishing smelters and recycling units in the Kingdom. According to a statement on Tadawul, the deal is valid for one year and carries no immediate financial impact.
The company’s share price declined by 0.45 percent to SR13.4.
Purity for Information Technology Co. announced it has secured a contract valued at SR10.7 million from Saudi Comprehensive Technical and Security Control Co. to supply technology equipment. The company stated that the financial impact of the contract will be reflected in the first quarter of next year.
Its share price dropped by 0.73 percent to SR8.33.
Red Sea International Co. reported a narrowed net loss of SR2.18 million for the first nine months of this year, compared to a SR54.7 million loss in the same period in 2023. According to a statement on Tadawul, the improvement was driven by a 515.78 percent year-on-year increase in sales revenue. However, Red Sea International’s share price declined by 4.05 percent to SR71.
Lazurde Co. for Jewelry reported a 42.98 percent decline in net profit for the first nine months, totaling SR24.8 million, compared to the same period last year. The company attributed this drop to a 6.61 percent year-on-year decrease in operating profit over the nine-month period. Lazurde’s share price dropped by 2.05 percent to SR13.36.
UN climate chief urges aggressive action as emissions hit GDP
- UN official warned that worsening climate impacts will ‘put inflation on steroids’ unless every country takes bolder climate action
- Simon Stiell called on governments to leave COP29 with a clear global climate finance plan
RIYADH: The global climate crisis is rapidly evolving into an economic threat, with the impact of emissions reducing the gross domestic product of several countries by up to 5 percent, a UN official said.
Speaking at the high-level segment for heads of state and government at the COP29 in Baku, Simon Stiell, executive secretary of the UN Framework Convention on Climate Change, emphasized the urgent need for more aggressive climate actions to address economic challenges, including rising inflation.
“We used to talk about climate action as being mostly about saving future generations. But there has been a seismic shift in the global climate crisis, as the climate crisis is fast becoming an economy killer,” said Stiell.
He added, “In this political cycle, climate impacts are curving up to 5 percent off GDP in many countries. The climate crisis is a cost-of-living crisis, as climate disasters are driving up costs for households and businesses.”
Stiell’s comments came shortly after a report by finance consultancy Oxera, which revealed that climate-related extreme weather events have cost the global economy more than $2 trillion over the past decade, with the US being the most affected.
The UN official warned that worsening climate impacts will “put inflation on steroids” unless every country takes bolder climate action.
Stiell urged the world to learn from the COVID-19 pandemic, highlighting the economic suffering caused by slow and ineffective collective action on supply chain issues.
Describing climate finance as “global inflation insurance,” he warned that failing to address the economic toll of climate change would lead to disaster.
“Letting this issue languish halfway down cabinet agendas is a recipe for disaster,” he said.
However, Stiell remained optimistic, asserting that effective climate action could save economies and create new economic opportunities. He pointed to the growth of renewable energy as a potential driver of stronger financial states for nations.
“This isn’t just about saving your economies and people,” he said. “Bolder climate action can drive economic opportunity. Cheap, clean energy can be the bedrock of your economies. It means more jobs, growth, less pollution choking cities, healthier citizens, and stronger businesses.”
Stiell called on governments to leave COP29 with a clear global climate finance plan and urged international cooperation as the key to combating global warming and ensuring humanity’s survival.
“We need your direct engagement on new national climate targets and plans — NDCs — so that all of you can benefit from the boom in clean energy and climate resilience,” said Stiell.
He added: “These are not easy times, but despair is not a strategy, nor is it warranted. Our process is strong, and it will endure. After all, international cooperation is the only way humanity can survive global warming.”
OPEC revises down global oil demand growth forecasts for 2024, 2025
- OPEC revised its 2024 global oil demand growth estimate to 1.82 million barrels per day, down from 1.93 million bpd forecast last month
LONDON: The Organization of the Petroleum Exporting Countries has again downgraded its global oil demand growth projections for both 2024 and 2025, marking the fourth consecutive reduction.
The revision, announced on Tuesday, underscores weaker demand expectations for key regions such as China, India, and other parts of the world.
The updated forecast highlights the ongoing challenges faced by OPEC+, the broader alliance that includes OPEC members and partners like Russia. Earlier this month, OPEC+ delayed plans to increase oil output starting in December, citing concerns over falling oil prices.
In its latest monthly report, OPEC revised its 2024 global oil demand growth estimate to 1.82 million barrels per day, down from 1.93 million bpd forecast last month. This marks the first revision to the outlook since it was initially set in July 2023.
China was the primary driver of the downward revision. OPEC reduced its forecast for Chinese oil demand growth to 450,000 bpd, down from 580,000 bpd, noting that diesel consumption in September dropped year on year for the seventh consecutive month. OPEC attributed this decline to a slowdown in construction and weak manufacturing activity, as well as the rising use of LNG-fueled trucks in China.
The weaker outlook weighed on oil prices, with Brent crude trading below $73 per barrel following the release of the report.
The demand outlook for 2024 remains uncertain, with significant differences among forecasters regarding the strength of global demand growth, particularly concerning China’s recovery and the pace at which the world transitions to cleaner fuels.
In addition to the 2024 revision, OPEC also lowered its forecast for global oil demand growth in 2025 to 1.54 million bpd, down from the previous estimate of 1.64 million bpd.
