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Auckland sees unexpected property price surge
Average residential property prices in Auckland, New Zealand’s most populous city, increased by 4.2% in November month on month, the biggest rise since March 2014. This took the average price of a home to $876,075 and marks a substantial monthly rise compared to the more modest increases seen in the last seven months. The data from real estate agent Barfoot & Thompson also shows that the median home price increased by 1.9% in November compared to October to $795,000. ‘You have to go back 20 months to March 2014 to find a bigger monthly increase in the average price. For the past seven months, monthly increases have been modest, but last month buyers were as committed as ever to meeting vendor expectations,’ said Barfoot & Thompson director Kiri Barfoot. But she pointed out that while prices have ignored Government and Reserve Bank measures designed to cool prices, there has been a measurable decrease in market activity. In October market activity slowed, and that trend continued into November. The number of sales in November fell 7.7% month on month, the firm’s lowest in a month since February. New listings for the month at 1,683 were also down by 7.5% compared with October and the lowest number in the past seven months. ‘It remains to be seen if prices continue to ignore the tighter regulations, or whether November's prices are the last remnants of momentum that built in the lead up to the introduction of the tighter measures,’ said Barfoot. The data also shows that the price segment which experienced the largest decline in sales numbers in November compared to October was the $500,000 to $750,000 category. In November 286 homes were sold in this price category compared to 353 in October. It is a price category popular with investors with portfolios of less than three properties. The number of sales in November between $750,000 and $1 million, and those over $1 million were similar in number to those sold in October, as was the number of homes sold for under $500,000. Continue reading
Help to Buy helps over 130,000 home buyers in UK
The UK government’s flagship Help to Buy scheme has helped over 130,000 people achieve their aspiration of buying their own home since it was launched, the latest official figures reveal. Some 80% of scheme completions have been made by first time buyers, with more expected following the launch of the government’s Help to Buy ISA scheme at the beginning of this month. Help to Buy was created in 2013 to ensure that working people who saving for a deposit could achieve their aspiration of buying their own home through government support. Home ownership is a key part of the government’s long term plan to provide economic security for working people across the UK. The scheme continues to benefit first time buyers overwhelmingly, with the vast majority of sales outside of London and at prices well below the national average. According to officials Help to Buy is also ensuring the long term health of the housing market by increasing housing supply and stimulating home building. Almost half of the homes bought through Help to Buy are new build properties, helping to contribute to the 38% rise in private house building since the launch of Help to Buy. First time buyers will have a further boost from the Help to Buy: ISA, which banks and building societies across the UK are offering as of last week. Under this scheme, first time buyers can save up to £200 a month towards their first home and the government will boost their savings by 25%, or £50 for every £200, up to a £3,000 bonus. Some 14 banks and building societies have already signed up to offer Help to Buy: ISAs. These lenders are: Aldermore, Bank of Scotland, Barclays, Clydesdale Bank, Halifax, HSBC, Lloyds Bank, Nationwide, NatWest, Newcastle Building Society, Santander, Ulster Bank, Virgin Money and Yorkshire Bank. With almost all completions outside London, the highest number of homes through the mortgage guarantee scheme have been in the North West region. The equity loan, a scheme for new build properties, is particularly prevalent in the South East region. Figures for the mortgage guarantee scheme also show completions have been least concentrated in regions where house price growth is highest. In London the scheme makes up just 1% of all mortgage lending compared to an average of 3% across the country. The average house price for both parts of the scheme, at £185,972 at £155,573 for the mortgage guarantee and £217,999 for the equity loan scheme, remains significantly below the national average house price of £286,000. ‘This government is committed to helping people achieve the aspiration of buying their own home, and our Help to Buy schemes have now helped 130,000 across the UK do just that,’ said Chancellor of the Exchequer, George Osborne. He also pointed out that the stronger economy and financial system means that the government now expect banks to start to exit the Help to Buy Mortgage Guarantee scheme, which was introduced in times of financial distress… Continue reading
England and Wales house prices break new record, even as monthly growth falters
House prices in England and Wales increase £16,446 annually to £290,640, a 6% increase on November last year, according to the latest index figures. But the monthly rate of house price growth fell to 0.6%, slower than the 0.9% monthly uplift seen in October, the data from the Your Move index also shows. Excluding London and the South East, the annual rate of change drops to 4.4% but the capital is not seeing the strongest growth. While the South East overtook East Anglia as the region with the fastest growth in house prices, London dropped to fourth. The index also shows that home sales fell 15% in November, with completed sales for the year still 3.4% behind the same point in 2014. It is predicted that the Stamp Duty 3% surcharge on second homes and buy to let buyers may cause a late winter surge as these kind of buyers hurry to beat the April 2016 deadline for the new higher rate. Adrian Gill, director of Reeds Rains and Your Move estate agents, pointed out that despite being within grasping distance of the £300,000 mark, it may be a few months yet before average prices reach this symbolic level. He also pointed out that house prices in the South East have risen by an average of 7.1% this month, with values increasing in every local authority in the area. ‘It appears that the double digit price rises first seen in the prime London market, then the other London boroughs, are now rippling out even further to London’s commuter towns, with house prices in Reading rising by 18.3% and Luton increasing 17.3%,’ he explained. He believes that the housing market will need a Christmas boost to sales to beat last year’s figures. And the Chancellor’s changes could be the gift required. ‘House prices soared in the five months following Nigel Lawson’s withdrawal of the multiple mortgage tax relief in 1988,’ said Gill. ‘More recently in Scotland, after the Land and Buildings Transaction Tax was announced there was also a surge in the sales of high end properties to beat the deadline. England and Wales may now feel the same forces, as there will be a growth in demand from both first time buyers with extra financial support and buy to let landlords hoping to invest before the tax changes come into force,’ he explained. ‘While the Chancellor has planned to increase the number of houses being built, none of these will be completed in the next few months. As the number of houses on the market is at an historically low level, those rushing for the April deadline will be fighting for a decreasing number of properties. So we could see a spike in both house prices and sales over the normally frosty winter period,’ he added. He said that this potential surge in demand could be most obvious in places like Salcombe, Devon. The town has the highest percentage of second homes in England. In… Continue reading
