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Sydney again leads home value growth in Australian capital cities
Property values in Australian capital cities increased 0.3% in August with Sydney seeing the highest growth at 1.1% compared with the previous month. The latest home value index from CoreLogic RP Data also shows that there were considerable variations in the performance of the housing market from city to city. Values increased by 0/7% in Adelaide and by 0.3% in Darwin but flat month on month in Melbourne and Brisbane. The remaining capital cities recorded a month on month fall in values. While the August results indicate a slowdown in the rate of appreciation in dwelling values, the quarterly figures highlight just how strong the housing market has been over the past three months with combined capital city dwelling values 5.3% higher over the three months to the end of August. Values across Melbourne were 8% higher over the rolling quarter, and Sydney values were up 7.4%. CoreLogic RP Data head of research, Tim Lawless, said that both cities have seen dwelling values trend substantially higher than other capitals, where the third highest growth rate over the three month period was Brisbane, which showed an increase in values of 2.2% While the three largest capital cities, together with Hobart, have all recorded growth in dwelling values over the past three months, half the nation’s capital cities have recorded a fall in values. Darwin recorded the most substantial decline in values with a fall of 3.2% over the three month period, while Perth values were down by 1.5%, Canberra values were 0.8% lower and Adelaide values lower by 0.1%. With the lower month on month growth rate, the annual rate of appreciation also slipped to 10.2% per annum, from 11.1% last month. According to Lawless, the annual rate of growth highlights how strong Sydney housing market conditions have been. Sydney dwelling values are 17.6% over the past year, and since the beginning of 2009, Australia’s largest capital city housing market has recorded a cumulative capital gain of 76%. Using the median house price from January 2009 as a base, the typical Sydney home owner has seen the value of their home increase by approximately $309,000 since the beginning of 2009. The only cities where dwelling values declined over the past 12 months have been Darwin with a fall of 4.6%, Perth down 1.8% and Canberra down 0.9%. ‘Darwin and Perth have certainly felt the brunt of the downturn in resources investment while conditions in Canberra have been improving but remain volatile. We expect the softer housing market conditions in Perth and Darwin are likely to persist over the coming year,’ Lawless explained. Unit values have recently shown a higher rate of growth city house and unit values than detached houses, with values rising 0.8% over the month compared with a 0.3% rise in house values. The rolling quarterly rate of growth was also higher for units at 6.7% compared with 5.1% across the detached sector. Lawless pointed out that it has generally been the case throughout… Continue reading
Prime London rental market affected by financial market jitters, says new report
Annual rental value growth in the prime central London property market fell to 2.5% in August as demand remained subdued over, probably due to financial market jitters, a new report suggests. The analysis from international real estate firm says that as a significant proportion of tenant demand in prime central London derives from companies, in particular financial services, it should be no surprise that volatile global stock markets continued to affect sentiment in August. Rental values rose 0.1% from July, however quarterly growth was 0.2%, the lowest three month change since April 2014. Prime gross rental yields edged back up to 2.96% from 2.95% in July. Tom Bill, head of London residential research at Knight Frank, pointed out that there is a correlation between rental values in prime central London and the performance of the FTSE 100 and the recent stock market dip has been due to concerns over the state of the Chinese economy, with weak manufacturing data and the recent devaluation of the Yuan increasing nerves. ‘Despite the recent volatility, the devaluation should be seen in its historical context and China has several levers it can pull in an attempt to calm stock market falls that aren’t necessarily a reflection of its underlying economic health. The result is more subdued corporate activity and fewer relocation agents currently active in prime central London,’ he explained. He also pointed out that new tenancies in recent weeks have been UK based families that are moving from one neighbourhood of London to another. In the three months to July this year, the number of new applicants fell by 15% compared to the same period in 2014, while viewing levels were down 12.6% and the number of tenancies agreed declined by 12.1%. Meanwhile, the rentals market is still affected by distortions in the sales market following the general election, Bill also pointed out. ‘Some vendors have delayed selling and are exploring the rental option as they wait for stronger house price growth to return after a stamp duty increase in December for properties worth more than £1.1 million dampened growth,’ he said. ‘The result is more rental stock on the market, which has led to prospective tenants making offers on multiple properties, meaning deals are harder to finalise,’ he added. Continue reading
Homes in England near top state schools sell at large premium, new study shows
Homes near England’s top state schools have an average price of £344,466 and parents face paying over £40,000 more to buy a home in their catchment areas, new research has found. Homes near Beaconsfield High School in Buckinghamshire have the highest premium of £636,132 or 186% compared to the average house price in neighbouring areas, according to the study from Lloyds Bank. Regionally the largest premium paid to live near the best state schools is in the North West, with discounts seen around schools in the East Midlands and the South West. Overall in 2015, house prices in the postal districts of the top 30 state schools in England, defined as those secondary schools that achieved the best GCSE results in 2014, were on average £40,728 or 13% higher than the neighbouring locations in their counties. House prices in the postal district of The Henrietta Barnett School in Barnet had a premium of £418,860 or 76%, the second highest, followed by St. Olave's and St. Saviour's Grammar School in Orpington with a premium of £180,447 and the Tiffin schools in Kingston upon Thames with a premium of £137,665. But over half, some 16, of England's top 30 state schools are in locations with an average property price below their neighbouring areas’ average. Properties in the postal district of Aylesbury High School, for example, sell at £122,506 or 36% less than the county average of £342,166. The next largest price discounts in cash terms at 119,485 are in Reading, where Reading School and Kendrick School are located. These schools are followed by Queen Elizabeth's School, Barnet at £95,681 and Westcliff High School for Boys Academy in Essex at £58,970. ‘In general, homes close to the nation's top performing state schools command a significant premium over neighbouring areas,’ said Andrew Mason, Lloyds Bank mortgages director . ‘The presence of a top performing state school appears to help support property values in many of these locations as parents compete with other buyers to land the property that gives their child the best possible chance to attend their chosen school,’ he added. The North West has the largest premium with average house prices in the postal districts of the top ten state schools in the region selling at £66,398 or 39% above the average house price in their county. This is followed by East Anglia at £48,642 or 20% and the South East at £45,871 or 15%. In contrast, homes in the East Midlands and the South West that are close to the best performing state schools are, on average, around £6,600 or 3% lower than in neighbouring locations. The average house price of £344,466 in the postal districts of the 30 best performing state schools is 9.2 times average gross annual earnings. This is significantly higher than the average across England at £267,956 or 7.7 times average gross annual earnings. The least affordable homes are those with a typical property price of £971,882 within the postal district of The… Continue reading
