Tag Archives: crisis
Western Australia has strongest residential property market in the country
Western Australia has the strongest residential building market in the country by a healthy margin, ahead of the Northern Territory and New South Wales, new data shows. The Australian Capital Territory took a tumble down the league table sliding from fourth to sixth and a recovery in Queensland is continuing, according to the latest bi-annual housing report from the Housing Industry Association. ‘Lower levels of activity in multi-unit segment drove the ACT decline, although there were also emerging signs of weakness in the ACT’s detached house building market,’ said Geordan Murray, HIA economist. ‘The recovery in Queensland continues to gather momentum. The analysis shows the improvements can be attributed to a boost in multi-unit home building. While Queensland still ranks as the second weakest jurisdiction nationally, the margin to the states sitting mid-table has narrowed markedly,’ he added. Overall, the report shows that Western Australia and New South Wales have caught up to Victoria in terms of historically high levels of new home building activity. However, activity in these states no longer appears to be rising. Murray said at this point in time, future growth hinges on the capacity of the Queensland market to sustain the recovery. Meanwhile, preliminary figures from the Australian Bureau of Statistic provide further evidence that the new home building upturn may have peaked earlier in 2014. During the September 2014 quarter, a total of $13.4 billion worth of work was done in the residential construction sector, a 1.6% decrease on the previous quarter, although it was 8.6% higher than a year earlier. Total work done on new dwelling construction fell by 1.8% during the quarter, but was still some 9.5% higher than the same period of the previous year. Renovations work done was unchanged during the September 2014 quarter and was 2.8% higher than a year earlier. ‘These figures provide further evidence that the upturn in new home building activity may have peaked during 2014. Australia needs to build about 180,000 homes per year over the longer term to meet its requirements,’ said HIA senior economist Shane Garrett. ‘We have only recently reached this threshold, and the fact that we are moving below it again bodes poorly for the country’s housing prospects. We also concerned to see that the renovations market has not made any headway over the most recent quarter. This is an area of residential construction that has endured a slump over the past few years,’ he explained. ‘We are in danger of falling behind in the quest to provide enough housing for future generations of Australians. Several factors act as major obstacles to the ensuring sufficient levels of new home building. It is vital that issues like land supply bottlenecks, planning delays and excessive taxation are dealt with as a matter of urgency,’ he added. Looking ahead, the ABS housing finance figures provide a positive signal for new home building activity in early 2015. While total lending to owner occupiers, excluding refinancing, eased by 1.4% in… Continue reading
England and Wales house prices showing strongest annual growth since 2005
House prices in England and Wales increased by 0.8% in November with values climbing across all regions taking the average price to £280,733. The LSL Property Services/Acadata index also shows that annual growth accelerated to 11.3% but it points out that strong growth is buoyed by London and the South East. Excluding them takes the annual growth to 5.7%. But it does mean that the average house price has now exceeded £280,000 for the first time and annual growth is the strongest it has been for almost a decade. However, completed house sales have been squeezed by slow supply. ‘Annual house price growth across England and Wales has more than doubled over the last 12 months, accelerating from 5.4% in November 2013, to 11.3% during the past year,’ said David Newnes, director of Reeds Rains and Your Move estate agents. ‘These figures are spurred on by London and the South East, where the housing recovery has been fast tracked. When these regions are removed from the calculations, a calmer 5.7% annual rise in house prices materialises, the largest divergence on record,’ he explained. ‘After a temporary hiatus at the highest tiers of the property market, growth has rallied again in the capital with values in prime spots such as Kensington and Chelsea, and Hammersmith and Fulham surging 5.3% over the course of the month, hitting new price records along the way,’ he added. He also pointed out that overall, average house prices in London are now 1.9% higher than September, rebounding back from a more moderate 0.8% increase the previous month, and driving annual price rises to 19.7% in the year to October 2014. However, after a solid advance in activity throughout 2014 to date, completed house sales withdrew last month, from a particularly busy October. House sale completions in November also dipped below the level witnessed a year previously. ‘This doesn’t undermine the strength and stability of the growth in activity experienced over the year as a whole in some locations. For instance, completions have jumped 58% in Slough in the last year, propelling an 18.5% increase in average house prices in the area over this time,’ said Newnes. He also explained that the changes to Stamp Duty should also allow activity to build further at the bottom rungs of the ladder, facilitating hefty savings. ‘This should help erode the upfront barriers of purchasing a home for the significant majority of buyers and sellers may feel the benefit of weightier demand, as well as being able to price their homes more realistically, without having to tactically negotiate threshold barriers,’ Newnes said. ‘Meanwhile, the impact on the top end of the market isn’t as black and white as it may seem at first glance with properties ranging between £1 million and £1,125,000 liable for less stamp duty than before although above that there are no winners,’ he added. ‘In the year to September 2014, some 69% of completed house sales on properties worth £1,125,000 or more were in London, and a… Continue reading
UK house price growth falls in UK for sixth month in a row
UK house price growth in November dipped for the sixth consecutive month but changes to the Stamp Duty property tax is expected to boost sales, according to the latest report from the Royal Institution of Chartered Surveyors (RICS). The tax changes announced last week in the Chancellor’s Autumn Statement could result in a sales boost of between 2% and 5%, according to the RICS Residential Market Survey. Despite 15% more surveyors reporting a decline in new buyer enquiries and a fourth consecutive fall in supply to the market, surveyors are expecting more house sales in response to the reforms, although expectations in the capital were more muted. As speculation continues over how much the new changes will encourage existing property owners to put properties on the market, the reforms come in a month that saw house price growth fall to its slowest pace since May 2013, a 13% net balance, and the number of houses for sale per branch fall back to its second lowest reading of 56. It was also clear from member comments that uncertainty surrounding the outcome of the forthcoming general election is providing potential purchasers with a reason to sit on their hands and new buyer enquiries have now declined for five consecutive months. Across the UK, price growth was strongest in Scotland and the South West, both with a net balance of 37%, and weakest in the North of England and London. Meanwhile in the rental market, tenant demand was steady in November, but landlord instructions declined for the eighth successive month and member' forecasts for rent over the next 12 months now stand at 2%. ‘The Stamp Duty reform could reverse the softer trend in buyer enquiries that has been visible in recent months but a critical issue in terms of how it plays out with prices is whether it also encourages more vendors to consider putting their properties back onto the market,’ said Simon Rubinsohn, RICS chief economist. ‘The expectation from members that transactions could increase by up to 5% over the next year on the back of this measure suggests that there is a belief that supply will indeed respond to the tax change. This is all the more important given that the latest RICS data suggests that the average level of inventory on surveyors' books is close to a historic low,’ he added. According to Jeremy Blackburn, head of policy at RICS, it is no surprise that surveyors are expecting an uplift in the market in response to the long overdue reforms to the stamp duty tax system. ‘Removing the dead zones will reduce the distortion in the market and ensure that those at the top end of the market will now contribute fairly, while those at the bottom will be given a fairer chance to get on the ladder,’ he explained. Continue reading
