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New home sales in Australia up every month so far this year
New homes sales in Australia have increased in each of the first four months of 2015, according to the latest survey of the country’s largest volume builders. However, the increase of 0.6% in April was the slowest growth pace of the four months, the new homes sales report from the Housing Industry Association shows. But HIA chief economist Harley Dale said that this is still a strong result off the back of a healthy March quarter. The April result for total seasonally adjusted new home sales comprised of two small gains, a 0.4% rise for detached house sales and 0.9% growth for multi-unit sales. ‘The profile for new home sales in 2015 is consistent with a new home building cycle where further upward momentum resides largely in the multi-unit sector and where the eastern seaboard states are driving the further growth,’ Dale explained. In terms of detached house sales, both New South Wales, Victoria and Western Australia posted monthly gains in April but Queensland recorded a disappointing decline, according to Dale. Sales in South Australia continued to weaken and are at an 18 month low. A breakdown of the figures show that in April 2015 private detached house sales increased by 7.2% in New South Wales, by 2.7% in Victoria, and by 0.9% in Western Australia. Private detached house sales dropped by 9% in Queensland and were down by 1.9% in South Australia. In the April 2015 quarter detached house sales increased in by 0.5% in New South Wales and by 7.4% in Victoria but declined by 4.7% in South Australia, by 4.4% in Queensland and by 1.6% in Western Australia. ‘This profile is broadly consistent with our forecasts for detached house commencements, with the exception of Queensland which is looking weaker than we were expecting,’ said Dale. Continue reading
British private rental sector producing good investment returns
British Landlords have seen total annual returns of £111.5 billion in the last year, as the private rented sector continued to grow, according to a new buy to let report. The sector grew by nearly 150,000 households in the year to March, with rented accommodation accounting for 77.4% of new households created across all tenures, says the report from Kent Reliance. This rapid growth has led the firm to forecast that on present trends, the sector will increase from 4.8 million households in Great Britain to 5.5 million by 2020. The expansion of the sector has supported the rise in its value. At the end of March, the total value of property owned by landlords in Great Britain stood at £990.7 billion, increasing by 11% in the last year. The sector’s value is now equivalent to 43.1% of the value of the UK’s Stock Market, up from just 12.2% 15 years ago. House price inflation also contributed towards the increase in the sector’s value, the report says. Although slower than its recent peak last year, annual inflation remains brisk at 7.5%. This is also supporting gross total annual returns. By the end of March, the average property generated return of £24,221 in rental income and capital gains, just £1,000 less than the average salary over the past 12 months, equivalent to 12.5%. Across the country as a whole, this meant that annual returns seen by property investors totalled £111.5 billion, some £67.2 billion in capital gains, and £44.3 billion in rents. In total, this figure was £5.8 billion higher than the £105.7 billion landlords saw in March 2014, although it represented a decline compared to the recent peak of £137.5 billion in September, when capital gains were at their highest in at least seven years. Andy Golding, chief executive of OneSavings Bank, which trades under the Kent Reliance and InterBay brands said it shows that buy to let has come of age, moving from a niche asset class to one big enough to rival the stock market. ‘Landlords are seeing the benefit of a structural change in Britain’s housing market, with tenant demand ever strengthening. Yes, house prices are showing signs of steadying somewhat, but growth remains brisk,’ he explained. ‘Long term price inflation is not in danger, given the gaping chasm between growing demand for housing and the number of houses being built each year. Combined with the dearth of high LTV lending to first time buyers, this will continue to buoy demand for rental accommodation, as well as landlords’ returns, and the sector will continue to expand,’ he pointed out. ‘Supporting the growth in the number of experienced landlords with growing portfolios is crucial to providing the investment necessary in the sector to match demand. The mortgage market is playing its part, with remortgaging vibrant, and an increasing array of second charge… Continue reading
Scottish rents 1.6% higher than a year ago, latest data shows
Rents in Scotland have increased 1.6% compared to last April, marking a step up in annual rent growth after a period of cooler price rises, according to the latest index. This is the fastest year on year increase in rents for five months, according to the Scotland buy to let index from Your Move, one of Scotland’s largest lettings agent networks. Coming back from a winter dip, the pace of rent growth has increased solidly from a 1.3% annual rise in March 2015, and 1.1% in February. As of April 2015, the average residential rent across Scotland stands at a record £539 per month, matching the peak set in November 2014. While rent growth is quickening on an annual basis, in the month to April, average Scottish rents rose just 0.1%, the data also shows. ‘Scottish rents have peaked at a new apex, as lethargic supply of rental homes fails to match up to towering demand for homes to let. After rental prices plateaued over the winter months, we’re seeing annual rent rises start to ascend again,’ said Brian Moran, area lettings director at Your Move. ‘Affordability in the private rented sector now rests on new housing becoming available to let, and more choice for tenants, to keep rents competitive and rent rises in check. Solid rent rises offer clear encouragement for those contemplating buy to let investment, but fears of prohibitive rent controls and additional tenancy legislation in Scotland may be off putting, which could choke off new supply of rented homes, and drive up prices for tenants,’ he explained. Compared to last year, rents are now higher in three of five regions of Scotland. Rents in Glasgow and Clyde have experienced the greatest year on year increase, with typical rents up 5% since April 2014. The East saw the second biggest annual rise in rental prices at 1.7%, setting a new record for the area in April 2015, with the average monthly rent now £531. In the South of Scotland, rents have climbed a more modest 0.7% in the past 12 months. In two regions of Scotland, rents are now cheaper than they were a year previously. Edinburgh and the Lothians has witnessed the biggest fall in rent prices year on year, down 0.8% in the 12 months to April 2015. In the Highlands and Islands, rents are now 0.6% lower than in April 2014. On a monthly basis, rents have risen across three of five regions in Scotland. In Glasgow and Clyde, the average rent has climbed 0.8% in the past month, to £563. In both the East and the Highlands and Islands, rents have risen 0.3% since March. Rents in the South of Scotland have remained static month on month, staying at £498, the lowest average rent price across the whole of Scotland while Edinburgh and the Lothians is only region in Scotland to witness… Continue reading
