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Population growth is adding to hot property markets in Australian cities
A pick-up in population growth in Australia has added fuel to the already hot housing markets of Sydney and Melbourne, where house prices continue to surge, a new report suggests. Population growth is not only the key to Australia’s economic growth and output, but it also plays a central role in housing demand and price growth, according to the analysis from international real estate firm Knight Frank. In Sydney population trends have been a lead indicator towards house price growth. Despite easing over the past 12 months, overseas migrants have underpinned Australia’s recent population growth, accounting for approximately 58% of population gains over the past five years. The importance of overseas migration has become more apparent over the past decade as Australia’s immigration policies have been geared to meet the needs of the Australian labour market, with temporary visa programmes, predominately working holiday and temporary 457 visas, accounting for over half of all overseas visas issued in recent years. The report also points out that subsequently, population growth over the past decade has been a reflection of a pick-up in temporary migration as opposed to permanent migration. While recent population statistics published by the Australian Bureau of Statistics shows that population growth nationally has eased from its recent peak in 2009, to average 1.5% over the 12 months to September 2014, the report says that what is more of note is the rate of population growth by city. Indeed, despite remaining high by historical standards, population growth in the dominant resource capital cities of Brisbane and Perth has fallen sharply, particularly Perth were the annual rate fell from 3.6% to 2.5% in just 12 months in the year to June 2014. It also points out that the drop in population growth in Perth is now beginning to filter through to its property market, where over the six months to March 2015, house prices and sales volumes have dropped 2.6% and 2.8% respectively. On the other hand, population growth in Sydney and Melbourne increased over the 12 months to June 2014, supported by stronger economic prospects, underpinned by residential construction. The stronger economic environment within these cities led to an improvement in Net Interstate Migration, particularly to Melbourne and the state of Victoria, as people sought employment opportunities outside of their home state. The pick-up in population growth has been met with solid house price gains in these cities, where over the six months to March 2015, house prices in Sydney and Melbourne are up 8.2% and 2.8% respectively. Nationally, the recent easing of population growth can be partly attributed to the improving New Zealand economy. Australia has enjoyed strong population growth from New Zealand citizens for subclass 444 visa holders over the past five years as weak economic conditions in New Zealand provided the impetus to move to Australia. However over the past 12 months, the New Zealand economy has shown solid signs of improvement, with the unemployment rate now lower than Australia… Continue reading
New report reveals housing issues in parts of the UK
Parts of the UK are facing major housing challenges that include not enough smaller homes for young people or those wishing to downsize, according to a new national report. Among the other issues identified are mortgage debt, the cost of looking after a property, rising rents, being unable to sell in the current market and a higher cost of living in rural areas. The report from national charity Citizens Advice says there needs to be a wider debate about the housing challenges in England and Wales and it is calling for a debate beyond getting people onto the property ladder. Particular problems mentioned include the fact that 1950s and 1960s new town planning decisions in places like Crawley has resulted in not enough small homes for young people or those wanting to downsize and home owners in County Durham struggling to keep up mortgage payments and meet the costs of looking after their home. Young seasonal workers in Blackpool are trapped renting in crumbling bed and breakfasts, whilst owners are unable to sell and people in Conwy, Enfield and Dorchester face spiralling private rents, up-front costs of moving and sub-standard homes rented out by private landlords. Also the growing student population in Exeter has had a major impact on the local infrastructure and people are being driven out of towns in Pembrokeshire by poor housing standards and antisocial behaviour, but struggling with the higher costs of rural living. ‘People's housing challenges vary by where they live. Across the country too many people are living in homes that don't meet their needs from private renters in a damp property or home owners who can't afford to move. Housing is one of the top issues people turn to us for help with, but within this we see a huge range of different problems,’ said Gillian Guy, chief executive of Citizens Advice. ‘We need a broad-ranging debate about the different housing challenges facing the nation, one that moves beyond just trying to get people onto the property ladder. The new Government has the opportunity now to look at housing problems in the round and consider how best address the range of challenges faced by renters and home owners alike,’ she added. Continue reading
Canadian property sales up for fourth month in a row
Nationally home sales in Canada have increased for the fourth month in a row, up 3.1% from April to May and prices are up 8.1% year on year. Actual, not seasonally adjusted, activity is now 2.7% above May 2014 levels although the he number of newly listed homes was little changed from April to May, according to the latest index data from the Canadian Real Estate Association. CREA said that the Canadian housing market remains balanced overall put national figures are being skewed by exceptional prices in Greater Vancouver and Greater Toronto. If these are excluded than the year on year price increase is just 2.4%. The data shows that national sales activity is at its highest level in more than five years and transactions were up from the previous month in about 60% of all local markets, led by increases in the Greater Toronto Area, Calgary, Edmonton, Ottawa and Montreal. One factor that could be responsible for the sales growth, however, is that “mortgage default insurance premiums increased at the beginning of June and this may have encouraged buyers to complete in May top beat the rise. Year on year price growth accelerated in May in all home categories tracked by the index with the exception of one storey single family homes. Two storey single family homes continue to post the biggest year on year price gains with a rise of 7.18% while the price of one storey single family homes increased by 4.11%, townhouse/row units by 4.09% and apartments by 2.91%. Annual price growth varied among housing markets tracked by the index. Greater Vancouver saw the biggest rise at 9.41% followed by Greater Toronto at 8.9%. Fraser Valley, Victoria, and Vancouver Island all recorded year on year gains of about 4% in May. The data also shows that price gains in Calgary continued to slow, with a year on year increase of just 1.21% in May. This was the smallest gain in more than three years and the eleventh consecutive monthly slowdown in year on year price growth. Elsewhere, prices held steady in Saskatoon and Ottawa, rose slightly in Greater Montreal and fell by about 3% in Regina and Greater Moncton. CREA chief economist Gregory Klump pointed out that sales in and around the Greater Toronto area played a major role in the monthly increase in May sales. ‘At the same time, the rebound in sales over the past few months in Calgary and Edmonton suggests that heightened uncertainty among some home buyers in these housing markets may be easing,’ he said. The number of newly listed homes was virtually unchanged, down 0.2% in May compared to April. The CREA report says that this reflects an even split between housing markets where new listings rose and where they fell, with little monthly change for new listings in most of Canada’s largest and most active urban markets. The national sales to new listings ratio was 57.6% in May, up from a low… Continue reading
