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Outlook for new home construction in Australia expected to be strong
The new homes market in Australia is expected to be healthy in the coming year with land sales up, especially in regional areas. Quarterly residential land sales held up at reasonably elevated levels throughout 2013/2014, with 10% growth, according to the latest HIA-RP Data Residential Land Report provided by the Housing Industry Association. HIA chief economist Harley Dale explained that the June quarter was particularly with residential land sales up by 8.4%. ‘Both capital city and regional land markets experienced higher turnover during the June 2014 quarter. Growth was stronger in the aggregate regional land markets, up 13% compared to a 5.5% rise for Australia’s six state capitals,’ he said. ‘Consistent with signals from other housing indicators, the geographical recovery in residential land sales is broadening. That is an encouraging sign for detached and semi-detached dwelling construction in 2014/2015,’ he added. However, he pointed out that there is still a wide variation in the trajectory of residential land values around Australia this cycle, within which growth in the weighted median price for capital cities well out-paces that for regional Australia. ‘Over the longer time frame of the past fifteen years there has been a substantial increase in residential land values, which cannot be repeated if the nation is to succeed in adequately housing its growing and ageing population. Land supply remains a policy area that requires much greater focus, and not just at a state level,’ Dale said. In the June 2014 quarter the weighted median price of residential land increased by 1.1% to $205,330, only the third time the value has exceeded the $200,000 threshold. Capital city land prices increased by 1.8% in the quarter to be up by 7.4% compared to the June 2013 quarter. Land prices in regional Australia were essentially flat in the June 2014 quarter, easing by 0.1% but up by 4.1% in annual terms. According to RP Data research director, Tim Lawless, the bounce back after a softer March quarter result suggests there may still be some life left in the residential land sector. ‘This is the strongest result since the June quarter of 2013 which is welcome news. A rise in land sales implies a rise in detached housing construction about six months down the track which in turn provides a substantial multiplier for the Australian economy; more jobs, more building materials, home furnishings, appliances and white good sales,’ said Lawless. ‘Whether this quarterly improvement can develop into a trend is yet to be seen. Despite the June quarter lift, the previous three quarters were showing a slowdown in the number of sales while vacant land prices continued to rise, a trend which may point to ongoing supply shortages of well-located vacant land,’ he added. Continue reading
UK estate agents see surge in home hunters as supply remains low
The number of house hunters recorded by estate agents in the UK is at the highest level in nearly 10 years as supply is at a 12 year low. The latest figures from the National Association of Estate Agents shows that in September its members reported an average of 405 house hunters per branch, the highest since October 2004 with each agent averaging 511 buyers. The September Housing Market report also reveals that 82% of homes sold for less than the original asking price, suggesting that sellers still need to be flexible when it comes to pricing. While supply of housing increased slightly from last month, from 49 houses available in August to 51 in September, this figure is seasonally low for September. The last time that supply levels were lower for September was in 2002, when 43 houses were available per NAEA member branch. The NAEA says that it is promising to see that first time buyers now account for 30% of all sales estate agents reported for the month of September, compared to 28% in August and 20% in July. ‘The report demonstrates to us that people are ready to get on or move up the housing ladder, but the supply levels do not match demand,’ said Mark Hayward, NAEA managing director. ‘September is a notoriously busy month in the housing market. The kids have gone back to school after the summer and people want to get sorted before Christmas, however it seems a lack of affordable and quality housing has been a problem this month. Now that the economy is picking up and Brits are in more comfortable financial situations, more people will want to buy and sell homes, but may be restricted,’ he explained. Despite high volumes of house hunters, the majority of houses are being sold for under the sellers’ original asking price. Only 4% of properties sold in September were sold for more than the original asking price, and a stark 82% were sold for less than asking price, some 16% more than in July, when this was last reported on. The report also shows that 70% of estate agents agreed that the impending interest rate rise set for 2015 is already effecting demand in the housing market, this is up by a quarter from September when only 39% thought that the rise was already effecting demand. ‘There’s still a visible gap in the number of house hunters, and the number of properties available and the impending base rate rise is likely to have an effect on this, with almost three quarters of agents reporting evidence of the rise affecting demand already,’ said Hayward. ‘All of our research does emphasise the need for the government to take action and ensure measures are in place for more homes to be built in order for supply to eventually meet the growing demand,’ he added. Continue reading
British appetite for overseas property remains strong, new figures suggest
British investors’ appetite for overseas property is still strong with one specialist reporting enquiries up by 37% so far this year compared with 2013. Spain continues to top the list of hot spots, accounting for more than half, 51%, of enquiries received from January to September, according to overseas mortgage firm Conti. The volume of enquiries for Spain has, in fact, increased by a massive 95% when compared with 2013. France, in second place, accounts for 29% of enquiries received so far this year, followed by Portugal with 12%. The data suggests that France appears to be making a comeback, overtaking Spain in the third quarter with 35% of enquiries, and 45% in September alone, compared with 32% and 18% for Spain respectively. According to Conti, there couldn’t be a better time to buy, with the strong pound shedding tens of thousands of pounds off property prices in the euro zone. Sterling exchange rates had a bit of a bumpy ride in the lead up to the Scottish referendum result in September, but the dust appears to have settled and the pound to euro exchange rate is hovering near €1.27 at the moment. Rewind to last summer when the pound fell to a low of €1.14, and the difference is pretty significant when you apply it to property prices. It means that a €200,000 property in Spain, for example, is now almost £18,000 cheaper, showing just how much difference the currency markets can make. ‘When you combine the strong pound with the low property prices to be found in many European property markets together with historically low mortgage rates, affordability is better than it has been in years,’ said Clare Nessling, director at Conti. ‘With buyers’ budgets stretching that much further, the purchase of that place in the sun could seem even more tempting, especially when you compare the cost with overheated parts of the UK market,’ she added. Conti says that it’s vitally important for buyers to seek the right advice. Bitter experience has taught many overseas property buyers that scrimping on independent legal advice can effectively cost them their holiday home. Buyers should always go through the same process that they would follow if they were buying a property in the UK. ‘There’s nothing to be gained, and everything to lose by cutting corners and failing to carry out due diligence,’ said Nessling. Advice from the firm includes never signing a contract that you don’t understand. If two versions are provided, i.e. English and local language, ask your solicitor to confirm the English version is a true translation, as you need to ensure it doesn’t contain errors, omissions or extras. Obtaining a mortgage ‘approval in principle’ will confirm you can obtain the necessary funds before signing on any dotted line and prove to sellers that you’re a serious buyer. And it costs nothing. Buyers should consider fluctuations in the exchange rate. It’s generally advisable for an overseas mortgage and the income used to service the… Continue reading
