Tag Archives: cookies
US housing market likely to see more pressure on prices
Housing starts in the United States rose in September, driven by the multifamily sector, but completions are not matching that hot pace, especially for lower end homes. With demand rising but supply in the form of completions slowing, there will be more pressure on home prices to rise, according to the latest analysis report from real estate firm CoreLogic. The implications are likely to be particularly felt at the low end of the property market due to the Federal Housing Administration’s decision in January to cut mortgage insurance premiums by 50 basis points, it points out. Overall starts are up 18% since last September, driven by multifamily, which saw strong growth of 29%, the data shows. Completions, though, the number of units actually delivered, rose by only 8% year on year, or less than half the jump in starts. Multifamily is the driver in this sector too, up 20% from September of last year. ‘The number that should give the market pause, though, is the completions on one-unit structures, both attached and detached. They are up only 3% and they are the most important segment to look at. They significantly lag the one unit structure starts number which were up 12% year on year,’ the report says. ‘Since it takes six months to deliver a house after ground breaking, completions is the actual new supply that is ready to be sold. What that means for home sales is definite upward pressure on home prices,’ it explained. The report also points out that since the FHA made its premium cut, the prices for lower end houses have jumped and the FHA is a big presence in the low end market where houses typically sold for 75% or less than the median. As of August, real prices for lower end houses have jumped 10.4% relative to a year ago. Prices for higher end homes have been up as well, but only half as high at 5.2%. The lower end prices, which had been up in a narrow range of around s7% the last half of last year, really took off starting in January. ‘The real trend to watch here is if one unit completions will rise to match what is a re-acceleration of demand on the low end. If demand for homes to buy outstrips supply, prices will inevitably rise even higher,’ the report concludes. Continue reading
UK property prices set to rise by almost 20% or average of £60,000 in next five years
Property prices in the UK are predicted to continue their upward trend, rising by nearly £60,000 over the next five years, according to new research. Prices are expected to rise by 3.5% in 2016 with further annual increases of around 4% in the four years that follow, says the latest analysis from the Centre for Economics and Business Research (Cebr). Indeed, the forecaster says that 2015 annual house price growth has been revised up from 4.7% in June to 5.6% this month and the average price of a UK property is set to stand at a record high of £263,000 this year. The research also shows that the price gap between a terraced house and a purpose built flat in London nearly quadrupled from £46,000 in 2000 to £176,000 in 2014. It points out that a lack of properties coming onto the market is one of the reasons behind the upward revision to the forecast. Households expect property values to keep rising so as such individuals want to sell at the top of the market, but at the moment few anticipate a downturn in prices. Yet overall home ownership has risen dramatically among older households since 1981, but has collapsed among younger households. With retired individuals less likely to move home, this is curbing the number of individuals putting property up for sale, the report explains. It also reveals a substantial increase in the cost of moving up the property ladder, especially in London. Moving up the property ladder has historically been a key reason to sell a home but for many this has become infeasible. The high cost of moving home, with stamp duty costs curbing house moves and the report says this is particularly the case at the prime end of the property market which saw a substantial increase in stamp duty rates in last December’s Autumn Statement. Low levels of housebuilding are also reducing the number of new builds being put up for sale in the UK. The Cebr suggests that the new Housing and Planning Bill will not go far enough in controlling rising home prices. It claims that reconsidering various other housing market features is also necessary. For example, the UK’s population is getting older and with retired individuals less likely to move home, added incentives are necessary to encourage ‘rightsizing’. For example, a stamp duty exemption or reduction for those looking to ‘rightsize’ would encourage pensioners to put larger properties on the market. ‘A reduction in the number of properties being put on the market has placed further upward pressure on house prices in some parts of the UK. This is a result of low levels of house building, but also other factors such as an ageing population and the rising cost of moving up the property ladder,’ said Nina Skero, Cebr economist and main author of the report,. ‘The price gap between a first time home and a larger family home has skyrocketed… Continue reading
Home owner confidence in UK housing market up 4% year on year
UK home owners’ confidence home owners in the property market has risen 4% year on year with expectations that prices will rise by more than 7% in the coming six months, new research shows. Some 92% are anticipating prices in their area to rise within the next six months, a steady increase from a year ago when only 88% were confident, according to the latest Zoopla Housing Market Sentiment Survey. The research also found that almost half of home owners, 41%, were planning to improve their property. In addition, 9% of respondents said they plan to refinance their house, a 3% increase from the end of 2014, as mortgage rates remain at historical lows. The proportion of respondents planning to sell property has risen to 19% having bottomed out at 15% last year as more home owners look to capitalise on rising prices. The East of England has the highest percentage of optimistic home owners, with 97% expecting the price of property in their area to rise over the next six months. Home owners in London and the South East are almost as confident, with 96% of respondents across those regions expecting price appreciation. Despite home owner confidence around house prices, sentiment around the accessibility of funding is more volatile. While the percentage of respondents declaring it harder to get a mortgage now than three months ago has almost halved from 49% to 26% since the Mortgage Market Review (MMR) was introduced in April 2014, the fact that more than a quarter of homeowners have noticed a recent increase in difficulty suggests that it isn’t all plain sailing, the report says. It also suggests that with ongoing speculation around when the Bank of England will raise interest rates and lenders maintaining a watching brief, it may well be that competitive products aren’t quite as freely available as they were in the earlier part of the summer and borrowers previously spoilt for choice are noticing the change. ‘As the end of the year approaches, homeowners are the most optimistic they have been in some time. With the brightening national economic outlook this bodes well for the property market in 2016,’ said Lawrence Hall of Zoopla. ‘While traditionally the estate agency market tends to take a break over Christmas in terms of completions and viewings, home owner confidence shows no sign of slowing down and many individuals use the end of the year as a landmark to evaluate how much their property has appreciated over the calendar year,’ he explained. ‘The only slight chink in the armour is the fact that a sizeable number of people still feel securing a mortgage is becoming more difficult, despite the fact that the MMR was implemented with consumers’ best interests at heart,’ he pointed out. ‘It could also be an indication that the supply of… Continue reading
