Tag Archives: crisis
Third of new homes in London in next five years set to be in the east
Almost a third of all new homes planned for London over the next five years will be concentrated east of the city’s financial district, a new analysis shows. A total of over 55,000 homes will be built in just four boroughs, according to the report from international property adviser, Savills, which identifies a shift in the capital’s centre of gravity towards the east. It says that the boroughs of Newham, Tower Hamlets, Greenwich and Barking and Dagenham will account for 29% of all new homes planned for London in the five years to the end of 2018. ‘The Olympics played a hugely important role in opening up the area to investment and transport improvements are now driving occupier, investor and developer demand in previously overlooked east London postcodes,’ said Susan Emmett, Savills residential research director. ‘This is changing the shape of London and its property market, with a discernible pattern of emerging development hugging the East London Line portion of the new London Overground. The network extension to Barking Riverside and the completion of Crossrail with give a further boost,’ she added. The analysis report points out that lower average capital values in the east of London have provided developers with the opportunity to build much needed homes that are affordable for those living and working in London. However, while central boroughs such as Westminster and Kensington and Chelsea remain the most expensive, the biggest increases in value have been seen away from London’s core over the past year, particularly in cheaper locations to the east. But, not only have prices increased ahead of the Greater London average, transaction volumes have also received a dramatic boost. In Tower Hamlets, the number of homes changing hands is now double the pre-peak norm, while deals in Newham are up almost 50% year on year. Key emerging residential areas include Stratford with 6,500 new homes, including 2,800 in East Village, Canning Town and Royal Docks with 8,000 homes, Canary Wharf with 4,500 homes at Wood Wharf and 850 at Asda Crossharbour and Greenwich Peninsula with 10,000 new homes. Average prices currently range from £500 to £700 per square foot in Canning Town and Royal Docks and £550 to £750 in Stratford, accessible to households with an average income of over £70,000. In Canary Wharf, popular with financial sector employees both as owners and tenants, values range from £700 to £1,200 per square foot. Greenwich Peninsula is expected to achieve values in the £550 to £850 range. ‘It is this dynamic of rapidly rising prices, albeit from a low base, and the strength of demand that will present developers with their biggest challenge. Market strength has pushed the value of new build in Canary Wharf, the most established East of City location, to £700 to £1,200 per square foot, out of the reach of the… Continue reading
New home sales pick up in Australia, but peak of growth has passed
Sales of new homes in Australia increased in August following a weak July but an overall downward trend in total seasonally adjusted new home sales is still apparent, the latest data shows. There was an increase of 3.3% in August driven primarily by a strong increase in the usually volatile multi-unit sector, the new home sales report from the Housing Industry Association shows. However the report, which covers Australia’s largest volume builders, says that despite the August bounce, the HIA still believes that new home sales reached their peak for the cycle back in April this year.” ‘The result for August was driven primarily by a strong lift the multi units sector where sales increased by 19.8%, taking this component of sales to its second highest level this cycle,’ said HIA economist Diwa Hopkins. She pointed out that new detached house sales didn’t fare quite so well, up by only 0.5% although this slight rise stopped a decline which stretched to three consecutive months. ‘As leading indicators of new home construction activity, both HIA New Home Sales and ABS Building Approvals are displaying a moderate downward trend. Current levels remain elevated by a historical standard, which is consistent with still healthy levels of new home building throughout 2014/2015,’ she explained. ‘It is important for the new home building sector and the broader domestic economy that we continue to see evidence of historically high levels of building approvals and new home sales throughout 2014 and into next year, even if the peak for these indicators has passed,’ she added. A breakdown of the figures show that detached house sales increased by 11.1% in New South Wales and by 2% in Western Australia but fell by 6.8% in South Australia, by 6% in Victoria and by 0.7% in Queensland. Over the three months to August 2014 detached house sales decreased in each of the surveyed states, albeit to varying degrees, with the exception of New South Wales where sales increased by 0.4%. Sales fell by 9.8% in Victoria, by 4.6% in Western Australia, by 4.4% in South Australia, and by 3.2% in Queensland. Continue reading
New five year forecast predicts 30% rise in average house prices in England and Wales
Average house prices in England and Wales are set to increase by 30% in the next five years, with the national forecast reinforcing the north/south divide, new research suggests. While prices in London are set to rise by almost 33%, the real beneficiary of the recent London boom will be the South East, forecast to increase by 37% by 2019, says the latest report from Rightmove. The North West will be the slowest riser but will still go up by 24%, adds the new forecast comes from a collaboration between the property website Rightmove and economic forecaster Oxford Economics. It is described as the most comprehensive house price forecast of its kind ever created, based on property and economic data rather than opinion and short term market factors. It takes into account both asking and sold prices, surveyor valuations and analytics from the Oxford Economics’ Global, Industry and Regional forecasting models. The majority of fastest performing areas are all within easy commuting distance of London and include towns such as Southampton which is forecast to see price increases of 43%, Luton at 41% and Brighton also at 41%. The analysis also says that the Home Counties and outer boroughs are set to benefit from the ripple effect of a year of strongly rising prices in London, alongside the brighter economic picture. Prices in the capital itself are forecast to rise at a slower rate than the South East and East Anglia with prime central London having a period of much slower growth after the frenetic increases of 2014. West London is predicted to be caught in the prime London slowdown with a modest rise of 14%, bringing its potential for future growth in line with the slower northern cities of Carlisle with growth of 17% and Manchester with a price growth forecast of 19%. The forecast compares and contrasts the fortunes of neighbouring areas, and takes into account the effect of strong house price growth in one location spilling over into adjoining areas. Economic factors that are more significant in some markets than others are also considered, for example the exchange rate has a big effect on house prices in prime central London, but is of rather less direct importance in the wider suburban markets of the South East and further afield, where employment and population growth are key. ‘Alongside the publication of the Rightmove monthly House Price Index which is based on new seller asking prices, we have unique access to other sources of property data from surveyors and property transaction prices at a very local level. This has enabled us to work with Oxford Economics to create a unique forecast that can be used as a guide by a number of businesses,’ said Miles Shipside, Rightmove director and housing market analyst. ‘Understanding the path of future house price growth is a key element of UK economic strategy and decision making, and our data driven forecasts contain insight not previously available from other commentators or the Government’s own… Continue reading
