Tag Archives: finance
Shortage of up supply pushing up UK house prices
House prices are continuing to rise across the UK driven by an ongoing shortage of new properties coming on to the market, according to the latest monthly survey report. The report from the Royal Institution of Chartered Surveyors also shows that prices are rising at the fastest pace in East Anglia, the South East and the East Midlands. However, in London the rate of price growth is slowing for the fourth consecutive month. Driving the rise in prices, the number of new properties coming on the market fell for the tenth consecutive month. In November 8% more respondents reported a decrease in new homes coming on to the market. The report points out that this is a trend that has persisted since the beginning of 2014. On average over the past six months buyer demand has outpaced supply across all regions. Indeed, the number of properties on surveyor’s books reached a new low in November. Anecdotal evidence suggests that the lack of stock is holding back transaction levels and agreed sales were flat in November across the UK as a whole. Last year’s stamp duty changes are also mentioned as holding back the prime market in some areas of the UK, most notably London and the South East. Although supply is currently holding back sales, respondents across the UK are positive on the outlook for the coming months, with 47% more chartered surveyors expecting to see a rise rather than a fall in activity, up from 34% in October and is the highest reading for nearly two years. ‘This is likely to be the result of new housing policies announced in this year’s Autumn Statement. New Help to Buy and Starter Homes initiatives, aimed at increasing access to home ownership, are likely to result in increased sales over the coming months,’ said Simon Rubinsohn, RICS chief economist. However, the view is still that price levels will continue to rise perhaps signalling the view from respondents that although new house building is expected to increase the belief is that this will not be enough to take the market back to more sustainable levels,’ he explained. ‘As other changes in the Autumn statement perhaps start to influence the market, although buyer demand increased on a national level at a subdued pace, London and East Anglia both saw a decline in demand with 5% more respondents seeing a fall rather than rise in the capital, and 16% more seeing a fall rather than rise in the East,’ he pointed out. He believes that this may suggest that the timing of Help to Buy may be causing some buyers to hold back and this is borne out by the sales expectations in London over the next three months, with 49% more chartered surveyors expecting a rise this is the strongest reading in the UK. ‘I can’t recall a set of comments in the residential survey which have so frequently drawn attention to lack of stock on the… Continue reading
Auckland sees unexpected property price surge
Average residential property prices in Auckland, New Zealand’s most populous city, increased by 4.2% in November month on month, the biggest rise since March 2014. This took the average price of a home to $876,075 and marks a substantial monthly rise compared to the more modest increases seen in the last seven months. The data from real estate agent Barfoot & Thompson also shows that the median home price increased by 1.9% in November compared to October to $795,000. ‘You have to go back 20 months to March 2014 to find a bigger monthly increase in the average price. For the past seven months, monthly increases have been modest, but last month buyers were as committed as ever to meeting vendor expectations,’ said Barfoot & Thompson director Kiri Barfoot. But she pointed out that while prices have ignored Government and Reserve Bank measures designed to cool prices, there has been a measurable decrease in market activity. In October market activity slowed, and that trend continued into November. The number of sales in November fell 7.7% month on month, the firm’s lowest in a month since February. New listings for the month at 1,683 were also down by 7.5% compared with October and the lowest number in the past seven months. ‘It remains to be seen if prices continue to ignore the tighter regulations, or whether November's prices are the last remnants of momentum that built in the lead up to the introduction of the tighter measures,’ said Barfoot. The data also shows that the price segment which experienced the largest decline in sales numbers in November compared to October was the $500,000 to $750,000 category. In November 286 homes were sold in this price category compared to 353 in October. It is a price category popular with investors with portfolios of less than three properties. The number of sales in November between $750,000 and $1 million, and those over $1 million were similar in number to those sold in October, as was the number of homes sold for under $500,000. Continue reading
Negative equity still preventing the full recovery of the US housing market
Despite improvements in the negative equity rate, underwater mortgages are holding back the housing market in the United States from full recovery, especially in hard hit areas, a new report suggests. The rate of negative equity among home owners dropped a full percentage point in the third quarter of 2015, from 14.4% to 13.4%, and down 16.9% from a year ago, according to the latest research from real estate firm Zillow. It said that declining negative equity will allow almost a million newly freed home owners who have not yet refinanced or have been waiting to sell to do so before mortgage rates rise, which will likely happen in coming weeks. It also pointed out that negative equity affects not just the home owners who are underwater, but entire markets where high rates of negative equity are slowing recovery. Negative equity is one of the most persistent reminders of the housing market crash. Home owners who owe more on their mortgage than their homes are worth cannot sell, which holds back markets from recovering. So, some eight years after the housing crash, it remains a major barrier to a full recovery in certain markets. In Las Vegas, for example, 22% of home owners remain underwater, and another 19% are effectively underwater, meaning they have less than 20% equity in their home and therefore can't cover the cost of selling their home and buying another. Las Vegas has had the highest negative equity rate in the country for the past four and a half years, and Kansas City and Cleveland, with 16.6% and 16.8% negative equity respectively, are not far behind. San Francisco and San Jose are the only large markets where less than 5% of home owners are underwater. Almost a million home owners were freed from negative equity in the third quarter of 2015. The improving rate means those people may be able to sell or refinance their homes before mortgage interest rates rise, as they are expected to do in the coming weeks. ‘Negative equity has become almost an afterthought in a handful of the nation's hottest markets, but is holding back the recovery in dozens of large markets nationwide,’ said Zillow chief economist Svenja Gudell. ‘Despite steady declines in negative equity, many cities are still facing tight inventory, especially among entry level homes. Those homes that are available are often not in demand and stay on the market for a long time. This can be extremely frustrating for buyers and sellers alike, as they come face to face with the difficult side effects of negative equity,’ she explained. She also pointed out that negative equity affects individual home owners, but markets with high negative equity rates tend to have fewer homes for sale, especially lower priced homes favoured by first time home buyers. In markets with a lot of negative equity, homes generally take longer to sell than in other places. The top five large metros with the smallest share of underwater… Continue reading
