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Global property prices up 4.7% year on year led by Hong Kong, latest data shows
Global house prices have increased by a median of 4.7% year on year led by Hong Kong, Turkey, Ireland, Sweden and Australia, a new international report shows. Overall prices have increased in 21 of the 26 countries tracked by the Economist House Price Index but growth does vary from nation to nation. The growth is topped by Hong Kong with annual price growth of 20.8%, followed by Turkey with a rise of 18,8%, Ireland up 13.4%, Sweden up 10.3% and Australia up 7.5%. At the bottom end of the index the country with the biggest annual drop in property prices is Greece with a fall of 5.9%, Singapore down 3.7%, Italy down 3.3%, China down 2.4% and France down 2.3%. All other countries has seen annual price growth according to the index which measures national affordability by comparing prices to the long run average of their relationship with rents and income. In Hong Kong prices have now doubled in five years despite seven separate round of cooling measures being introduced but with little effect. The latest, in March this year, reduced the average loan to value ratio for new mortgages from 64% to just 52%. But the index report suggests that in practice it is China’s recent stock market crash is likely to be a bigger dampener on demand as mainland investors put off new purchases. Meanwhile, China’s own housing market, it is one of only five in the index where prices are falling, but the report points out that prices are falling at a slower rate than before. The government has been trying to boost the market over the past 10 months, cutting interest rates by 1.4% and relaxing rules on down payments. Prices are now rising on a monthly basis in many cities including Beijing and Shanghai. The report points out that in the United States annual growth of 4.7% shows the real estate market is well into recovery. Some cities are seeing strong growth such as San Francisco with prices up by 10% in the year to July and up by 75% since 2009. Other countries’ housing markets are already well above fair value and the report reckons that houses are more than 30% overvalued in six markets, including Canada and Australia, with the UK the most supply constrained of this group where demand is outstripping the number of properties coming to the market. It points out that in the UK although prices have risen by 35% since their trough in January 2009, house building is failing to respond. Just 140,000 homes were completed in the year to March 2014, some 25% below the long term norm. Continue reading
Sales of UK property priced over a million fell in first half of 2015
The number of property sales worth at least a million pounds in the UK has fallen in the first half of 2015, down by 11% compared to the same period in 2014. This is in stark contrast to the 46% increase seen in the first half of 2014 and is the first decline in sales since the first half of 2012 when the number of property transactions in this market segment fell by 7% over the corresponding period in 2011. However, since the first half of 2005 million pound home sales have grown by 264%, the data from the latest research report from Lloyds Bank also shows. It adds that whereas last year the top end of the market outperformed the rest, the decline in million pound home sales this year has tracked the rest of the market with sales of properties under £1 million also falling by 11%. Despite falling sales nationally, some areas continue to buck the trend. Virginia Water, Cobham and Beaconsfield are the most expensive towns, with an average house price of over £1 million. This is the first time the average property price has hit £1 million outside of London. Virginia Water, in the historic Borough of Runnymede, where the Magna Carta was signed 800 years ago, is Britain's most expensive town with an average house price of £1,168,992. To live amongst the celebrities of Cobham in Surrey will require paying, on average, £1,042,552 for a home, making it the second most expensive town. In third place is Beaconsfield where the average property price is £1,003,367. ‘The number of homes sold for over £1 million has fallen sharply over the past year, with a pronounced slowdown in the prime and central London market. This may be the effect of the new Stamp Duty rates introduced last December and uncertainty generated by the election in May,’ said Sarah Deaves, private banking director at Lloyds Bank. However, the regional picture is much more mixed and we’re seeing the emergence of towns where the average price is at least £1 million. Whilst there are several London neighbourhoods where prices are already at this elevated level, outside of the capital this is a first,’ she added. Overall there is a mixed regional picture, as sales fall in London but rise in Scotland. Sales of million pound homes in London fell by 15%, the largest decline in the capital since the first half of 2009 when transactions fell by 43% during the lowest point of the housing downturn. In the South East sales in this sector fell by 9% in the first half of 2015 compared to a year earlier. However, in Scotland the sale of million pound homes has more than doubled with a rise of 158%. The only other regions to have seen an increase in sales were Yorkshire and the Humber with growth of 10% and the East of England up 8%. In Wales transactions rose by 29%, albeit… Continue reading
Sales to first time buyers in UK jump almost 10% month on month
The number of sales made to first time buyers in the UK increased in September by 9% compared to the previous month, according to the latest data from the National Association of Estate Agents (NAEA). Buyers taking their first step on the housing ladder accounted for 29% of all sales compared to 20% in August, the highest since May this year when sales to the group made up 29% of total sales. ‘It’s obviously very positive to see that the number of sales being made to first time buyers has risen this month. We saw an average nine sales going through per branch in September, which means that for each branch, around three sales were made to the group,’ said Mark Hayward, NAEA managing director, . ‘We’re seeing a whole range of new competitive mortgage products coming on to the market, which is likely to be encouraging first steppers to take the plunge, as well as the fact that the ‘impending’ interest rate rise has now been pushed back to next year at the very earliest,’ he explained. ‘However, in order to ensure there is enough affordable housing on the market for first time buyers we need the issue of supply and demand to be addressed in a big way. Until substantial numbers of new houses are built, we won’t see every first time buyer reach the bottom rung of the ladder,’ he added. The NAEA monthly report also shows that the number of house hunters registered per estate agent branch dropped in September, following a period of high and unsustainable demand in July and August. On average, there were 342 prospective buyers registered at each NAEA member branch in September. This is a drop of 16% from the 408 recorded in August, and a 26% drop from July when demand reached an 11year high with average 462 house hunters per branch. The number of properties available to buy dropped marginally to 37 per member branch in September. This followed a huge fall in the availability of housing stock the month before, when the number of properties available fell from 55 in July to 38 in August, a decrease of 31%. ‘If we could just get supply and demand to meet in the middle, the housing market would be functional again as it’s a real issue across the market at the moment. Developers are struggling to secure planning permission and labour is in short supply. This means that the army of house hunters looking to buy has out-grown the number of housing available at a rapid rate, and it’s completely unsustainable,’ Hayward pointed out. He explained that the introduction of the Housing and Planning Bill announced last week is good news, however, it includes an extension of the Right to Buy to Housing Association properties, which should help to increase supply in the housing market as homes that are… Continue reading
