News
New South Wales leads Australian new home building boom
New South Wales has become Australia’s top state for new home building with the state of Western Australia, dropping to second place and Victoria in third. The latest biannual house report from the Housing Industry Associations shows that New South Wales is seeing strong levels of multi-unit dwelling construction and detached homes. ‘The buoyant housing market has played a significant role in elevating New South Wales up the rankings,’ said HIA economist, Geordan Murray, but he warned that the rapid price growth has intensified affordability pressures. ‘Lending figures reaffirm the challenges facing first home buyers. First home buyer lending highlights this as the weak spot in the housing market, and ranked New South Wales as the third weakest jurisdiction on this indicator,’ he explained. The recovery in Queensland continued to gather momentum. The analysis shows the improvements can be attributed to a boost in multi-unit home building. The improvements lifted the state one place up the league table. ‘To maintain the positive momentum we’ll need to see the recovery broaden its base through improvements in detached house building and renovations activity,’ added Murray. He also pointed out that in the post mining boom era, the focus has been on shifting the drivers of economic growth, which would see eastern states gain prominence. The latest Housing Scorecard highlights that it has been residential building that has picked up the first baton and led the charge. Meanwhile, the HIA is warning that increasing the GST property tax on new housing to 15% will add tens of thousands of dollars to new home prices, crushing the dream of home ownership for many Australians. ‘New housing is already weighed down by the burden of tax. It is usually seen as an easy cash grab by governments Adding another 5% or more on top of the price of a new home will put housing out of reach of many people that are trying desperately to get into the market,’ said HIA chief executive for industry policy Graham Wolfe. He pointed out that a 5% increase on a typical house and land package in Sydney, for example, would increase the cost of a mortgage by around $60,000 over the life of the loan. ‘Independent research has demonstrated that the total combined taxes, levies and charges on a new home can be up to 44% of the price of a new house and land package in Sydney. GST currently applies to new housing but not Wolfe. ‘We need more housing stock to accommodate our growing and aging population. Lifting the GST on new housing will dampen new housing activity. Increasing the burden on home buyers should be a no-go area for governments if they are really concerned about housing affordability,’ he added. Continue reading
Average UK home values up almost 3% in first half of 2015
The average value of homes across Britain rose by 2.75% during the first six months of 2015, with all regions seeing price growth, according to new figures. At the start of July the average price stood at £270,674, up £6,974 on January’s figure of £263,699, the data from property website Zoopla shows. A breakdown of the data show that although there is general growth the rate of growth varies from region to region. Scotland experienced the highest rate of growth, with an average increase in property values of 6.6% or £11,382, taking the average home value in Scotland to £183,230. The next best performing regions were the North East and North West registering a 3.1% and 3% increase respectively. Wales was the worst performing region for property price increases over the first half of 2015 with an average rise of only 1% or £1,584. Among the 50 largest cities in Britain Edinburgh registered the largest growth in house prices since January 2015 of 8.2%, representing a £20,465 increase in the average home value in the city. Next was Colchester in Essex which saw property prices rise by 7.6% or £19,088, during the six month period, followed by Aberdeen with a 6.4% or £15,416 rise in values. London saw prices rise by only 2.5%, below the national average, but this amounted to a rise of £14,385 because of the higher price of property in the capital city. Yorkshire had three of the 10 worst performing cities for house price growth in the first half with Rotherham seeing a fall of 2.1% or £2,752. Wolverhampton, Newcastle upon Tyne and Middlesbrough also saw a modest drop in average houses over the period. ‘While national property price growth saw a slow start to the first half of the year, it recovered strongly towards the end of the period. The strong regional figures across the board indicate an economy which is returning to health, with a series of Government incentives designed to encourage home buying helping to boost demand for property in all parts of Britain,’ said Lawrence Hall of Zoopla. He explained that the surge in property values in Scotland can, in part, be explained as a post referendum bounce, as businesses and capital flood back to Scotland, after withholding investment during the volatile September referendum period in 2014. ‘A post general election feel good factor must not be discounted as more devolution promised has given property prices a bounce as Scots anticipate more jobs and investment coming their way,’ he added. Continue reading
Scottish residential rents up 3.1% in a year
Year on year residential rents in Scotland increased by 3.1% in June, up from the 2.7% recorded in the previous month, the latest index data shows. This rise takes average rents to a new peak of £549 a month and June’s figure represents the fastest year on year rise since April 2014, according to the buy to let index from lettings agent Your Move. Rents also increased month on month, up 0.8%, which was a slight slowdown from the 1% recorded in May. But in the preceding six months rents were climbing at a rate of only 0.1% per month. The index shows that rents are hitting all-time local records in the parts of Scotland that have traditionally been more affordable to live, where rental prices are usually lower. On an annual basis, rents have risen across all five regions of Scotland and as rent growth accelerates across the country, new price records have been set in the East, Highlands and Islands and the South. Glasgow & Clyde have seen the biggest boost in rents year on year, with typical rental rises up 4.6% since June 2014. Rents in the Highlands and Islands have jumped 4.3% in the past twelve months, taking the average monthly rent to a record high of £563. Similarly, rents in the East and South of Scotland have both reached a new peak following annual rent rises of 4% and 2.1% respectively. In contrast, Edinburgh and the Lothian’s has experienced the smallest yearly increase of only 0.8% but this marks an improvement from negative growth in the year to May 2015. Rents in all five regions of Scotland are also higher month on month. The average monthly rent in the Highlands and Islands has risen at the quickest pace since May, increasing by 2.4%. Compared to the previous month, Edinburgh and the Lothian’s have seen a 1.7% rise in June. This brings the average rent in the area to £604 as it continues to be the most expensive location in Scotland to rent. In Glasgow and Clyde rents are 0.6% higher since May, and the South has witnessed a 0.5% monthly climb in rental prices. The East of Scotland has seen a more modest 0.2% uplift in the month to June 2015, a considerable slowdown. ‘It’s not just the big urban centres of Edinburgh and Glasgow which are coming up against an urgent shortfall of housing. There is strong demand for homes to let the length and breadth of the nation, and that is underpinning this build-up in rental prices,’ said Brian Moran Your Move lettings director. The index also shows that as of June 2015, the average gross yield on a rental property in Scotland stands at 3.8%, on par with the previous month, but down on a year ago when gross yields were 4% in June 2014. Taking into account property price growth and void periods between tenants,… Continue reading
