Tag Archives: asia
Debt is not holding back graduates in the US buying a home, new research shows
Having a lot of student debt doesn't greatly reduce young people's chances of home ownership in the United States, as long as they graduate, a new analysis has found. The findings challenge a popular concern that giant student loan payments are holding back people from home ownership. As it turns out, graduates' debt loads don't materially hurt their chances of buying a home, especially if they get at least a four year degree. Overall student debt has only a small negative effect on the odds of home ownership for a person with a bachelor's degree or higher, according to the research from real estate firm Zillow. The chances of a married couple with no student debt owning a home are about 69.8% if at least one of them has a bachelor's degree. If the same couple has $30,000 in student debt, their homeownership chances drop slightly, to 67.7%. ‘The income advantage of getting a degree pays off in terms of being able to buy a home in the long run. Student debt isn't the evil-doer it's made out to be, at least not when it comes to homeownership,’ said Zillow chief economist Svenja Gudell. ‘As long as students stay in school and get a degree, student debt doesn't deter them from homeownership, although it is possible that student debt could delay home ownership. People in their 20s and 30s are renting longer because they're delaying marriage, paying a lot in rent, and struggling to qualify for a mortgage when they finally find an affordable home. Add to that list that they are paying off student debt,’ she explained. The research also found that the least likely to own homes are people who have student debt, but no degree. In fact, a couple who borrowed more than$30,000 for school but never graduated has a less than 40 percent chance of home ownership. Graduates with advanced degrees are the most likely to own a home, even if they racked up a lot of student debt. For example, if a couple owes $50,000 in student loans, but one of them has a master's degree, they have a 75% chance of home ownership. A similar household with just $10,000 in loans and only a bachelor's degree has just a 69% chance of home ownership. Student debt has the greatest impact on the home ownership rate of people with two year associate's degrees. A couple with AA degrees and no debt has a 70% chance of owning their home. That declines significantly as debt grows. If the same couple has $50,000 in student debt, they own their home only 57% of the time. Getting an associate's degree improves chances of home ownership until a person has borrowed $70,000. After that, their chances of home ownership would have been better without a degree and no student loan debt. Getting a bachelor's, master's or doctorate degree, regardless of debt, increases the chances that people will… Continue reading
Row breaks out over issue of retirees downsizing in the UK
Older home owners in the UK should not be forced to downsize just to let the younger generation onto the housing ladder. Saga, a services and advice provider for people aged over 50, has hit out at remarks attributed the Financial Conduct Authority, the UK’s financial watchdog, that retired people should not continue living in properties that are too big for them. Lynda Blackwell, head of mortgages at the FCA, is reported to have told Ministers that they need to address the situation in the UK where retired people continue living in the family home once their children have left. She explained that the current housing shortage could be addressed by these so called ‘last time buyer’ moving to smaller properties to free up homes for people lower down the housing ladder. But Saga believes it is a form of bullying. ‘If people have saved and paid for their house over their working lives, it's down to them if they want to fill it with family or live on their own,’ said Saga’s director of communications, Paul Green. ‘But setting the generations against each other or talking about tackling older home owners is not just unhelpful it's insulting,’ he added. He explained that recent research carried out by Saga in association with Wadswick Green retirement village clearly showed that two thirds of older home owners would like to consider moving home ready for retirement but are prevented from taking that step either because there aren't sufficient appropriate properties to move to, or the costs to move far outweigh any benefit from doing so. ‘One of the solutions Saga has researched is allowing one stamp duty free move for those rightsizing for retirement which, according to independent economists CEBR, would release 111,000 family homes onto the market,’ said Green. ‘This is a win for older home owners who want to downsize, but also for younger families that want to move up the ladder and also for the exchequer. The research shows that by giving this tax free move it would be counterbalanced by an estimated £461 million of stamp duty that would be generated by the house sales that might otherwise not have taken place,’ he explained. ‘If we want to tackle the housing crisis we need to do so holistically. First time buyer schemes for the young are a good start, but we need to consider incentives to help encourage those that would like to move, to take that step. The FCA are right, we definitely need to do more and do it better, but using divisive language will only alienate the very people we need to help and encourage,’ he added. Continue reading
European commercial property markets sees 30% growth year on year
The European commercial property investment market has continued to gain positive momentum, with transaction volumes reaching €104.9 billion in the first half of 2015. This was a 29% increase on the same period of 2014 and investment volumes for 2015 are forecast to reach €230 billion, which would make it comfortably the best year since the market peak of 2007. The data from the analysis report from international real estate firm Knight Frank shows that increased investment volumes were recorded in the first six months of the year across a wide range of markets, in both the core and the periphery of Europe. The continent’s two largest markets, the UK and Germany, performed strongly in the first half of the year, providing a significant boost to overall deal volumes. The UK is on course for a record breaking year for investment, while the German market has been buoyed the strong performances of Frankfurt and Berlin. The analysis report shows that the revival of activity in Europe’s peripheral countries has continued, as investors move up the risk curve and seek value in non-core markets. Spain and Ireland, which have led the peripheral market recovery over the last 18 months, continue to attract heightened levels of investment, but the most impressive increases in activity during the first half of the year came in Italy and Portugal. It also shows that the weight of money targeting commercial property has led to widespread yield compression, and prime office yields hardened in cities such as Amsterdam, Lisbon, Madrid, Milan and Paris during the second quarter of 2015. Knight Frank’s European weighted average prime office yield moved in to 4.9%, its lowest level since the third quarter of 2007. While investment activity is buoyant in the large majority of European markets, occupier market trends remain more varied. Rental growth was patchy in the second quarter with Dublin, Madrid and Vienna being among the small number of European markets to record increases in prime office rents. However, rental growth is anticipated to become more prevalent in the medium term, on the back of the improving European economy and falling availability levels, particularly for CBD offices. ‘Investment volumes continue to be driven upwards by the strong international demand for European commercial property, particularly from US investors, and by the increasing number of large portfolio deals,’ said Andrew Sim, head of European Capital Markets at Knight Frank. ‘These trends are expected to continue over the rest of the year, and we forecast that annual European investment in 2015 will be more than 20% up on 2014. European transaction volumes are approaching the levels seen at the market peak of 2007, and several countries may well set new records this year,’ he added. According to Matthew Colbourne, associate with the Knight Frank international research team, European occupier markets continue to see mixed trends, in contrast to the widespread buoyancy of investment markets. ‘Office take-up increased strongly in the key German and Spanish markets… Continue reading
