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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
Home sellers likely to benefit from new UK property tax rules as well as buyers
House sellers in the UK could be set to save £213 million a year to the tune of almost £7,500 each, according to research by property website Zoopla. The reform of the stamp duty property tax which took effect today will remove ‘dead zones’ that existed before each previous Stamp Duty band and see a more progressive approach adopted where buyers will only liable to the portion of the property’s value above each new level. In an analysis of property sales in the 12 months to May 2014, the firm reckons that 28,635 properties have been under priced in order to make them more appealing to buyers by avoiding steep jumps in stamp duty. Zoopla found that the number of property sales in the price bands immediately before an existing stamp duty threshold is significantly higher than expected, while the number of sales in the price band immediately after a threshold, the stamp duty dead zone, is considerably lower. ‘The new, graduated Stamp Duty system is a long overdue overhaul to what the Chancellor admitted was a poorly designed tax and represents a fairer system for the vast majority of home buyers,’ said Lawrence Hall of Zoopla. ‘It also means that those selling their home at certain levels are more likely to achieve the real value of their homes and won’t be forced to discount their properties to sneak under certain bands,’ he explained. ‘Unfortunately those buying property worth more than £937,000 may feel unduly penalised by the new reforms, but the new structure represents a more balanced system overall and a welcome alternative to the mansion tax plans that had been proposed,’ he added. As an example, a house purchased at £300,000 would have resulted in a £9,000 stamp duty bill. With the new system, a buyer will save £4,000 calculated as follows: 0% tax up to £125,000, 2% tax on £125,000 to £250,000 which is £2,500, 5% tax on the remaining £50,000, which is £2,500, leading to a total stamp duty bill of £5,000. Kevin Hollinrake, managing director of Hunters estate agents with 125 branches nationwide, said the firm has already had deals secured as a result of this change. ‘In our opinion, this is great news. For too long, stamp duty has distorted the market deterring sellers from marketing their homes and buyers from buying them in the dead zones above the key thresholds such as £250,000 and £500,000. This should mean more property coming onto the market, and therefore, more sales which is good for the housing market and the economy as a whole,’ he explained. There will be substantial savings for around three quarters of a million home buyers across England and Wales according to research from Savills as all buyers up to £937,000 will benefit. By contrast, around 17,000 transactions above a value of £937,000 will bear an increased stamp duty tax burden, undermining the case for any further taxation of high value property. ‘The change is likely to make the… 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
