Tag Archives: europe
Rate of city house price growth in UK starting to plateau
The rate of house price growth in key cities in the UK is starting to plateau after a strong first half of the year with London in particular likely to see slower growth ahead, according to the latest index data. Month on month the Hometrack Cities Index recorded growth of 6.9% in June and year on year growth is running at 10.2%, the same level as the previous month. The index report suggests that double digit year on year growth has been sustained by the surge of investor demand ahead of the stamp duty change in April while low mortgage rates and improving economic conditions have continued to attract households into the market against a backdrop of dwindling supply with the net result being continued upward pressure on prices. In June Bristol remained the fastest growing city with year on year price growth of 14.7% taking the average price to £253,400, followed by London with annual growth of 13.7% to £476,800 and then Cambridge up 11.5% to £411,800. The data also shows a strong uplift in price growth in large cities such as Glasgow, Manchester, Liverpool and Leeds where house prices are comparatively affordable and yields above average and attractive to investors. Month on month the highest growth was in Oxford at 9.6%, followed by Cambridge at 9.5%, London at 8.2% and Bristol at 7.8%. At the opposite Aberdeen has seen prices fall by 8.2% year on year but the city recorded a small uplift month on month of 0.3%. The report points out that any impact from the decision by the UK to leave the European Union will not be reflected in the index for two to three months. ‘That said, we have reported signs of slowing growth in some cities, particularly in southern England where affordability levels are close to record highs. The slowdown might have been more apparent by now had the stamp duty change not been introduced,’ it says. A new analysis looking at listings also shows that for selected cities new supply has grown faster in the last three months than the average increase in supply seen over the last 12 months. For all cities in England and Wales excluding London new supply has grown 10% faster than the 12 month average, this rises to over 15% in London. In contrast, the relative change in sales over the last three months has registered a relative fall of 8% in London meaning that 8% fewer homes sold in the last three months compared to the 12 month average. The relative change in Bristol is 0%, while in larger regional cities, where house price growth has been picking up momentum, the relative change is sales is positive at up to 7% in Manchester. 'This analysis shows how recent sales momentum in regional cities, and higher house price growth, appears to have held up over the referendum period. In contrast, the headwinds facing the London market ahead of the vote… Continue reading
Affordability for home buyers in Australia eases in second quarter of 2016
Affordability for home buyers in Australia eased back in second quarter of 2016 as price growth returned to the residential real estate market. Overall affordability fell by 3.7% and was 2.1% less than the same quarter of 2015, according to the latest report from the Housing Industry Association, the voice of Australia’s residential building industry. The capital city housing affordability index fell by 4.3% during the quarter, while the regional market index experienced a 1.9% improvement. ‘Home price growth moderated in the early part of the year and the index showed an improvement in affordability during the March 2016 quarter. However, in the June quarter dwelling price growth returned and the index reverted to the level we saw at the end of 2015,’ said Geordan Murray, HIA economist. ‘While there was a decline in the headline index tracking the national picture, there was substantial variation around the country with substantial differences between states, and also differences between capital city markets and regional markets,’ he pointed out. He explained that the geographic variation in affordability is most evident in the comparison between Melbourne and Perth. Over the last year, the median dwelling price in Perth has fallen by 4.7% while Melbourne’s has grown by 11.5%. This has seen the affordability index for Perth increase by 6.2% over the last year, while the index for Melbourne has fallen by 6.2%. ‘These differences in affordability align with the relative economic performance of these two states. The Western Australian economy is navigating the tail end of the mining boom which has seen conditions in the local labour market deteriorate and consequently the rate of population growth has fallen quite sharply,’ Murray said. ‘In contrast, Victoria has experienced a healthy level of growth in the labour force and continues to record the strongest rate of population growth in the country,’ he added. A breakdown of the figures show that during the June 2016 quarter, improvements in affordability were observed in three capital cities with the largest improvement in Perth with growth of 3.2%, Darwin up 2.9% and Hobart up 2.2%. Affordability worsened in the remaining five capital cities with the largest decline recorded in Melbourne with a decline of 7.4%, followed by Canberra down 5.7%, Sydney down 1.6%, Adelaide down 1.3% and Brisbane down 1%. Continue reading
BPF calls for policy measures to support commercial real estate post Brexit vote
The British Property Federation (BPF) has called in the UK Government to consider a raft of policy measures to support real estate, particularly the commercial sector. The calls comes following the publication of the latest report from the Royal Institute of Chartered Surveyors (RICS) which shows a significant decline in confidence, activity and investor interest in UK commercial real estate. The report, covering the second quarter of 2016, says that investment demand for commercial real estate has fallen sharply and that, although some immediate turbulence was to be expected following the European Union referendum, the sector may in fact face a far more significant downturn. The BPF is urging the Government to monitor the situation closely and consider introducing a package of support for the real estate sector, including accelerating its proposed reform of business rates to support activity in the broader business economy. It also wants it to delay the introduction of plans to restrict the tax deductibility of corporate interest expense for a year until 2018, to ensure that the rules are implemented in a way that doesn’t deter investment. And the BBP suggests the introduction of a range of tax reliefs for Build to Rent development, including CIL relief, relief for modular construction, and stamp duty relief for new build to rent developments on the condition that they will be let on tenancies of three years or longer with rent increases tied to inflation. It also wants an absolute and continued commitment to devolution and public infrastructure investment in the HS2 rail project, the East-West Rail Line, Crossrail 2, and an imperative decision on growing airport capacity. ‘This is not the time for knee jerk reactions, but commercial property and a number of the government’s priorities are interdependent,’ said Ian Fletcher, director of real estate policy at the BPF. ‘Ministers must closely monitor developments in the commercial property market and be ready to act in weeks, not months, if evidence continues of a slowdown in investment,’ he pointed out. ‘Commercial property investment is not always an obvious priority for governments because its social and economic impacts are indirect, but construction and development activity flow from it, ultimately impacting on jobs and economic growth,’ he added. ‘In scenarios like this the focus is often on construction, but you don’t get construction without an investment client, so it is essential that government monitors fluctuations in investment very closely,’ he concluded. Continue reading
