Tag Archives: crisis
New home sales in Australia reach new peak
Total seasonally adjusted new home sales increased by 1.1% in Australia in February following a gain of 1.8% in January, according to the latest data. It means that sales volumes are now just above the previous peak of April 2014 and a breakdown of the figures show that apartments are selling more than detached homes with flat sales up 11.1% and houses down 1.3%. But there are considerable regional variations. Detached house sales are easing in New South Wales and Western Australia, previously key drivers of growth, and have fallen significantly in South Australia. According to Harley Dale, chief economist of the Housing Industry Association (HIA), the modest growth in new house sales in Queensland and Victoria is not enough to offset these declines. The data shows that in February detached house sales increased by 1.5% in Victoria and by 0.2% in Queensland. Detached house sales fell 4.8% in New South Wales, 2% in South Australia and 2.9% in Western Australia. The level of sales in the three months to February 2015 compared with the previous three months was down 6.9% in New South Wales, down 2.8% in South Australia, and down 1.3% in Western Australia. Sales increased by 3.8% in Victoria and by 9% in Queensland. ‘This is another very strong result for Australia’s national new home building sector. In January, new dwelling approvals reached their highest level on record and now in February that activity remains at exceptionally high levels, with a solid pipeline of activity set to remain in play over the coming months,’ said HIA senior economist, Shane Garrett. Data also shows that new home approvals in February were 3.2% lower than the previous month but still recorded their second highest level since figures began 32 years ago. Detached house approvals inched up by 0.2% while there was a 6.6% fall in multi-unit approvals and according to Garrett at a time of weak overall domestic demand, new residential construction is acting as a welcome pillar of support. ‘A steady pipeline of new homes represents the most effective solution to alleviating housing affordability pressures. Governments at all levels must work to ensure supply constraints do not impede the continuation of elevated levels of new home construction,’ he explained. A breakdown of the figures shows that new home approvals increased most strongly in Victoria with a rise of 20.5%, followed by New South Wales up 13.5%, and Tasmania up 4%. But they fell by 8% in Western Australia, were down by 30.6% in Queensland and by 41.4% in South Australia. Garrett said that action to turn around new home building conditions in South Australia are urgently required. New home approvals declined in trend terms in both the Northern Territory with a fall of 2.7% and the Australian Capital Territory with a decline of 16.2%. Continue reading
UK stamp duty changes set to save buyers an average of almost £1,600
Some 69% of home buyers across the UK are likely to benefit from the new Stamp Duty regime that was announced in December, according to new research. It is likely that 29% will experience no change and just 2% will pay more, overall in the UK, says data produced by the Nationwide Building Society, the mutual which campaigned for changes to be made. Based on 2013/2014 transactions data from the Land Registry, HMRC and the Council of Mortgage Lenders Regulated Mortgage Survey there will be an average saving of around £1,580 across a total of 647,000 sales. Overall home buyers in the UK could save £1 billion as a result of the Stamp Duty changes. For home buyers in England, Wales and Northern Ireland, the introduction of a progressive Stamp Duty Land Tax system came into force on 04 December 2014, while for Scottish buyers the Land and Buildings Transaction Tax changes are to be implemented on 01 April 2015. As a result, the average tax payable on the purchase of a home is likely to fall across the UK, with the average saving for each country, based on Nationwide’s analysis of Land Registry and Regulated Mortgage Survey data, is projected to total £912 million in England, £24 million in Wales, £82 million in Scotland and £6 million in Northern Ireland. ‘It’s gratifying to see the changes that Nationwide campaigned so long for, making such a substantial difference to the pockets of home buyers across the UK,’ said Graham Beale, Nationwide’s chief executive. ‘With the implementation of the new progressive approach in Scotland just around the corner, buyers across the UK will now only pay for the amount of their property value over each new threshold, a victory for fairness and another encouraging step for all those considering a move on to or further up the housing ladder,’ he added. For both England and Scotland, most likely to benefit from the changes are those looking to move up the housing ladder although duty payable on properties over £330,000 will be more expensive in Scotland than in England. It is expected that 2% in England will pay more, for 27% there will be no change and 72% will benefit. In Wales no one will pay more, 47% will see no change and 53% will be better off. In Scotland 5% will pay more, the highest in the country, 38% will see no change and 57% will benefit. While in Northern Ireland again none will pay more, 61% will see no change and just 39% will benefit. Continue reading
Edinburgh prime property market got boost ahead of new tax regime
Prime property prices in Edinburgh increased by 1.2% in the first three months of 2015 as buyers looked to complete deals ahead of a new property tax. The quarterly rise comes on top of a 0.5% increase in the final quarter of last year and on an annual basis prices are up by 4.1%, according to the latest market report from real estate firm Knight Frank. The new Land and Building Transaction Tax (LBTT) came into force today (Wednesday 01 April), and this led to a rise in buyer’s interest which in turn has boosted prices, says Knight Frank. The report also points out that, as was the case for much of last year, tax policy continued to play a defining role in the city’s prime property market during the first quarter. Under the new LBTT regime which replaces stamp duty, those buying homes worth less than £333,000 will pay less tax, however for homes above this threshold the upfront cost of moving will increase. The number of sales completed by Knight Frank between January and March was 47% higher than the first quarter of 2014 and 66% higher than the first quarter of 2013. Knight Frank expects that following the introduction of LBTT there may be a period of adjustment at the top end of the market as individuals factor in the increased cost of moving. Forecasts from the Office of Budget Responsibility (OBR) appear to confirm this, with the fiscal watchdog recently revising its forecasts for future stamp duty and LBTT tax revenues. The OBR said that the bringing forward of some higher priced transactions in Scotland before April will increase UK stamp duty receipts by £11 million in 2014/2015. The OBR subsequently reduced its forecast for LBTT receipts in 2015/2016 by £20 million. ‘Buyers have been taking advantage of the short window when purchase costs are lower. The buyer of a property valued at £1 million will pay nearly £35,000 more in purchase taxes,’ said Edward Douglas-Home, head of Edinburgh city sales at Knight Frank. ‘However, even with the new higher purchase taxes, the relative cost of property in Scotland compared to London and the South of England means there is still a large effective discount for buyers making the move north,’ he added. Indeed, the number of Londoners looking to buy property in Edinburgh in 2014 nearly doubled compared to the previous year, highlighting the city’s ongoing appeal. Douglas-Home added that despite the challenges facing homes at the top end of the market, there is a more positive outlook for the residential property market as a whole, with favourable market conditions with interest rates remaining at record low levels, economic growth steady and mortgage rates competitive. Continue reading
