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Housing lending falls overall in Australia but up slightly for new homes
The number of loans to owner occupiers, excluding refinancing, declined modestly in February in Australia, according to the latest figures from the Australian Bureau of Statistics. However, the number of loans to those purchasing and building new homes increased by 2% which the Housing Industry Association, the voice of the residential building industry, said is encouraging. ‘This is a relatively positive result against a backdrop where lending to households purchasing existing homes eased back modestly,’ said Geordan Murray, HIA economist. Overall the number of loans to owner occupiers buying established homes, excluding refinancing, fell by 0.9% in February to a level 4.9% weaker compared with the same time a year ago. ‘Lending figures indicate that the investor market eased by around 3.4% during February, but remained around 9.9% higher than the same period a year ago. The majority of the growth in investor lending has been to those purchasing existing homes. In February over 90% of lending to investors went into the existing home market,’ explained Murray. He pointed out that lending activity in the first home buyer market remained quite weak. The number of loans to first home buyers in the three months to February 2015 was around 8.2% lower than the corresponding period a year earlier,’ he added. A breakdown of the figures shows that the total number of owner occupier loans for new housing in February 2015 compared with February 2014 shows that only Victoria and Tasmania recorded growth at 3.2% and 71.7% respectively. Elsewhere, there were declines with a fall of 0.4% in New South Wales, Queensland down 1.7%, South Australia down 17.4% and Western Australia down 12.8%. Continue reading
South West London likely to see 165,000 new homes with 36,000 by 2020
Nearly 60% of new housing supply in south west London will be concentrated in Wandsworth, Lambeth and Hammersmith and Fulham local authority areas, according to new research. An estimated 165,000 new homes could be delivered in south west London with 36,000 being delivered to the market in the next five years, the report from Savills Research says, with these three borough providing 60% of this supply. The new housing will be in clusters at Nine Elms, White City, Earls Court and Wandsworth Town. The borough of Wandsworth is anticipated to supply the market with the largest quantum of units at almost 8,000 over five years. Taking south west London as a whole, 45% of the five year supply pipeline is anticipated to be priced above £1,000 per square foot, 43% is between £450 per square foot and £1,000 per square foot, with the remaining 12% priced under £450 per square foot. Much of the anticipated development will be built along the river, with the highest values in the study area found along the river at the South Bank, Nine Elms and Fulham. The report breaks the possibilities into sectors. In White City the five year new housing pipeline amounts to 2,300 private units with three schemes greater than 1,000. The average new build values are expected to be £900 per square foot to £1,200 per square foot. The area is likely to be popular due to significant investment from institutions such as the BBC and Imperial College London, the report explains and the scale of development is underpinned by the fact that White City is an Opportunity Area consisting of 110 hectares, with potential for 4,500 new homes. No schemes have been brought to the market yet but BBC Television Centre is due to launch in 2015/2016. In Putney the five year sales pipeline amounts to 470 units ranging from small to medium sized developments of 20 to 155 homes. The average new build values are predicted to be £800 per square foot to £1,050 per square foot. Demand is likely from a wide pool of people including investors, young professionals and second home owners which have already has helped drive development along the Upper Richmond Road. Many new developments are replacing post-war office blocks by developers such as Crest Nicholson, London Realty and Art Estates. London Square’s development has helped mitigate loss of commercial space by also providing adaptable office premises, the report points out. In Vauxhall Town the five year pipeline amounts to 1,750 units with average new build values of £900 per square foot to £1,250 per square foot, ranging from 40 to 700 units. The report says that significant investment into infrastructure is helping drive development including the transformation of Vauxhall gyratory. The Northern Line extension will help to reduce traffic through Vauxhall station. In Ealing Town the five year pipeline amounts to 200 private units with an average values of £700 per square foot to £1,000 per… Continue reading
Positive medium outlook for prime UK property beyond London
Value offered in prime residential property markets beyond London suggests a positive medium term outlook despite some caution among buyers ahead of the UK general election next month. But there are differences on a regional basis, according to real estate firm Savills whose latest analysis report points out that it has become pretty much impossible to talk about the UK’s prime housing markets beyond London as a single entity. It explains that since the economic downturn of 2008, the markets have become increasingly stratified, reflecting not only their distance from the capital, but also the tier of the prime market in which they sit and whether they are in an urban, rural or coastal location. Wide price differentials now exist between London and its commuter zone, the remainder of England and Wales and, indeed Scotland. A property worth £1 million in 2007 would now be worth £1.34 million in London, £1.05 million in the commuter zone and £780,000 in Scotland. ‘Within each of these areas, the prime urban markets have generally been on the rise, while their rural counterparts have lagged behind to date. Although the medium term prospects remain positive, all of these submarkets face challenges in 2015,’ explained Lucian Cook, head of residential research at Savills. ‘Although the economic recovery has held firm and the outlook for interest rates remains relatively benign, political uncertainty in the run up to the general election has, for the moment at least, resulted in an air of caution among buyers,’ he said. ‘The mainstream markets, which impact on sentiment higher up the value chain, seem to have been similarly affected despite the best efforts of the Chancellor to stimulate a feel good factor with the recent long overdue reform of stamp duty. The reality is that the increased regulation of the mortgage market will have played a significant part in bringing a period of sobriety to the wider housing market following strong growth in the first half of 2014,’ he pointed out. ‘Despite lower levels of mortgage debt dependency, regulatory limits on the amount of borrowing a buyer can take on board will also have had an impact on those looking to work their way up the prime housing market. Meanwhile, a significant chunk of the prime market now finds itself with a larger stamp duty liability,’ he added. Cook also explained that taxation has been an even greater concern in the upper echelons of the prime market and the debate around a mansion tax has done nothing to engender a sense of urgency among buyers. ‘However unwelcome and unwarranted the proposal, owners of prime regional housing may take some solace from the fact that the main burden of the tax would be felt by owners of higher value properties in London,’ said Cook. ‘If a mansion tax is introduced it has the potential to make properties outside of the capital, that already look comparatively good value, appear even more attractive. Over time it could… Continue reading
