The next in our series of regional market round-ups comes from Caroline Vanner, Savills Head of Residential Development Sales in Cardiff, who looks at why the city is proving such an attractive prospect for developers.
Cardiff was the fastest growing of the ‘core cities’ in the last decade and is projected to grow by a further 26 % (or 91,000 people) over the next 20 years. A £1.2bn city deal, anchored by the principle developments at Central Square, Capital Quarter, Mount Stuart Square and Enterprise Zone boundaries will see Cardiff’s office based employment expect to grow by 5% over the next five years, equating to 3,000 jobs. This will therefore increase demand for further accommodation in key city areas.
Cardiff is leading the way in Wales for improving house prices, with the sale price of new build property more than 20 per cent above the Welsh average. It commands the highest urban houses prices in Wales and was the most resilient region in the downturn in terms of property values. In 2016, we have seen further evidence of this trend continuing.
Local Plan
The recently approved Local Development Plan is set to bring 20,000 new homes to the city in the next decade to accommodate the expected population growth. A number of key developments in both the city centre and in Cardiff Bay (from those in pre-planning to those under construction) are set to deliver over 4,900 units, but the city still has some way to go in meeting demand for housing, whether it is for sales or the rental sector.
The household type which is set to increase the most is cohabiting couples and one person households, a large proportion of whom are expected to be first time buyers. Help to Buy: Wales has proven a popular means of financial support and it has had almost 1,400 completions since launch in January 2014, 74% to first-time buyers.
Bespoke developments
Cardiff’s prime new build stock lies in bespoke developments that generate robust off-plan sales. Niche developments also tend to achieve higher per square foot values than volume developments, on average £30 psf more. Cardiff Bay continues to thrive with modern new builds and conversions of historic buildings that cater for the luxury and live/work market.
Over the coming years, these considerations will be key to driving the design, unit mix, price and location of residential development in Cardiff; whether it is catering for the needs and affordability of first time buyers or building rental stock with layouts which lend themselves to cohabiting.
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