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Auckland property sales up 17.7% month on month and new average price record set
The Auckland housing market was its most active for the past six months in November, with house sales numbers up 17.7% compared to the previous month. The latest data also shows that the average selling price set a new high of $756,909 and the median price also reaching its highest level ever at $691,500. ‘For the previous three months the uncertainty that always exists around general election time was influencing sales, but the market put that behind itself by November,’ said Peter Thompson, Managing Director of Barfoot & Thompson. ‘November is normally one of the strongest sales months of the year, and has proved to be again this year. Attendance at auctions was extremely high, there was keen buyer demand and new listings were strong,’ he explained. ‘It added up to a buoyant month’s trading that saw the average price increase by 2.8% over that for October and it was 10.6% higher than the average price in November last year,’ he said, adding that sales for the month were the highest since May. Sales were also 18.1% higher than the average number of sales the firm has achieved monthly over the previous three months. He pointed out that the current record sales prices are not proving a deterrent to buyers, with demand at the top end of the market being extremely strong. ‘We sold 225 homes for in excess of $1 million, only the second month we have ever sold more than 200 homes in a month in this price segment,’ said Thompson. ‘This year, we have sold a third more homes in the $1 million plus category that we did at the same point last year,’ he added. The data also shows that the number of new listings at 1,693 was the third highest for the year and this was 20.7% percent higher than the average number over the previous three months. ‘It provided greater choice than there has been since April. At month end we had 3,303 homes on our books. While this will contribute to an active month’s trading in December we anticipate sales numbers and prices to edge lower during the current month,’ Thompson continued. However, sales of homes in the under $500,000 price category at 225 made up only 20.4% of total sales, the lowest number of sales in this price category in any month this year. Thompson said this reflects the challenge those not already in the market face when trying to meet the LVR ratio. Continue reading
New UK property tax measures set to boost buy to let
The UK’s new property tax rules are set to provide a boost to both the sales market and buy to let market, it is claimed. The new rates will give the biggest savings to buyers at the lower and middle end of the market and according to Stephen Ludlow, chairman of lettings age Ludlow Thompson, as buy to let landlords usually invest in properties below £937,500 the changes will give almost all investors in this market a boost. ‘The changes in stamp duty will see the biggest increase in net returns for more modestly investments such as smaller properties in Zone three of London, city centre apartments, flats above shops, ex-local authority property and property in secondary locations,’ he said. ‘The reforms could encourage those who may have been delaying their purchase until after the election to reconsider. The new rates should also provide a boost to the sales market and result in an increased number of purchases in this usually quiet time for residential property deals,’ he added. Graham Davidson, managing director of Sequre Property Investment, also believes the change is a positive one for the buy to let market. For example, a buyer of a high end two bedroom Manchester city centre apartment at a price of £150,000 will now pay just £500 stamp duty, a saving of £1,000. ‘However the impacts on the £925,000 plus market will certainly be felt throughout the industry, in particular by the higher end London property market. We would expect to see this contribute to a further slowing of the market there,’ he added. Alison Platt, group chief executive of Countrywide, said the change is likely to attract more home buyers to the market. ‘So for those who are thinking of selling their property, there has never been a better time. Equally for buyers, a stable interest rate environment and the availability of a range of attractive mortgage products, means that now is an ideal time to purchase a home,’ she explained. But Jamie Lester, head of Haus Properties, thinks it send shockwaves through the London market, particularly in the £1.5 million to £2 million price range. ‘This market has been especially active with buyers sticking below the 7% stamp duty and proposed mansion tax thresholds. These buyers will now have to pay a significantly higher amount,’ he said. ‘For example, someone purchasing a £1.9 million property would have paid £95,000 under the old stamp duty rules, whereas under the reforms they will be paying almost £50,000 more at £141,750. However, those buying just above £2 million won't be quite so heavily hit, for example, someone purchasing at £2.1 million will now be paying £165,750, an increase of £18,750,’ he explained. Camilla Dell, managing partner of independent property buying agency, Black Brick, said there is no question that the old stamp duty bands were in desperate need of reform and overhaul. ‘For 98% of the UK population these changes are therefore clearly good news. But… Continue reading
CML says just 1.5% of mortgaged sales will pay more under new property tax rules
The Council of Mortgage Lenders has welcomed the stamp duty changes which have now come into place in the UK and revealed only a small number of mortgagees will be affected. CML director general Paul Smee said although there are losers as well as winners, the vast majority of mortgaged transactions will benefit from lower tax as a result of the change. CML data suggests that, among mortgaged transactions over the past year, 21.6% were for less than £125,000, 47.9% for £125,001 to £250,000, 29% for £250,001 to £925,000, 1.1% for £925,001 to £1.5 million, and 0.4% for over £1.5 million. The proportion of mortgaged transactions that would pay more tax under the new system is around 1.5%. He also talked about work that is being undertaken by the CML and consumer organisation Which? towards the creation of a new a set of measures that both organisations hope will aid transparency, understanding, and decision making for consumers when they are considering the overall costs of different mortgages. Smee explained that although the Financial Conduct Authority rules on the presentation and transparency of cost information are comprehensive, consumers do not always find the cost disclosure easy to understand. So this initiative is about looking at whether there are some practical steps, outside the scope of regulation, that can help. The CML and Which? have agreed to work together to consider practical steps on a number of issues including transparency and presentation of fees and charges to help improve consumer outcomes; standardisation of terminology around fees and charges; consumer education; and setting administrative charges so that they reflect the cost to the lender. The Treasury is taking an interest in this work. The CML and Which? have agreed to provide a progress report by the time of the Budget 2015. The overall project is expected to take up to six months to complete, and will produce a programme for future action, to be taken forward through industry guidance. ‘With the largest and most competitive mortgage market in Europe, UK customers are well-served for choice. We recognise that for this choice to bring the greatest benefit, consumers need to be able to understand and compare products confidently,’ said Smee. ‘We welcome the opportunity to work with Which? towards measures that can make this easier for them,’ he added. Continue reading
