Tag Archives: finance
Home renovations sector in Australia seeing a slow recovery, says new report
The home renovations sector in Australia is being held up and frustrated by the hesitant pace of the current real estate market, according to a new report. The comprehensive review of the country’s renovations market from the Housing Industry Association shows that the current recovery has been slow since the slump in activity between 2011 and 2013. Indeed, the hesitant pace of the current recovery is mainly due to patchy consumer sentiment and challenging labour market conditions in several states, according to HIA senior economist Shane Garrett. . ‘Dwelling price growth is also pretty unspectacular in a number of important markets,’ he said, adding that there is considerable geographic variation. The report says that demand for renovations in New South Wales has been greatly boosted by the strength of prices. Many Sydney households that had been planning on moving house find that it is now much more affordable to undertake a major renovations job instead. ‘Australia’s home renovations market is a major strand of consumer spending and will be worth just under $30 billion this year. Its labour intensive nature means that it has substantially positive knock-on effects for employment,’ said Garrett. ‘Over the coming years, the modest recovery will continue. This will be spurred on by very favourable interest rate settings as well as improvements in economic growth and the labour market over the medium term. However, the recent tightening of mortgage credit conditions casts an unwelcome shadow,’ he explained. The Spring 2015 edition of the HIA’s Renovations Roundup projects that renovations activity will increase by 3.9% this year with a slight 0.4% increase forecast for 2016. The HIA is forecasting that activity will grow by 0. Continue reading
Existing sales fall in October in the United States
Existing home sales in the United States fell by 3.4% in October to a seasonally adjusted annual rate of 5.36 million from 5.55 million in September, the latest data shows. All four major regions of the country saw no gains in sales. However, despite the decline sales are still 3.9% above a year ago at 5.16 million, the figures from the National Association of Realtors also show. According to Lawrence Yun, NAR chief economist, the sales cooldown in October was likely given the pullback in contract signings in the previous couple of months. ‘New and existing home supply has struggled to improve so far this fall, leading to few choices for buyers and no easement of the ongoing affordability concerns still prevalent in some markets,’ he said. ‘Furthermore, the mixed signals of slowing economic growth and volatility in the financial markets slightly tempered demand and contributed to the decreasing pace of sales,’ he pointed out. ‘As long as solid job creation continues, a gradual easing of credit standards even with moderately higher mortgage rates should support steady demand and sales continuing to rise above a year ago,’ he added. The median existing home price for all housing types in October was $219,600, which is 5.8% above October 2014 when it was $207,500). October's price increase marks the 44th consecutive month of year on year gains. The data also shows that total housing inventory at the end of October decreased 2.3% to 2.14 million existing homes available for sale, and is now 4.5% lower than a year ago. Unsold inventory is at a 4.8 month supply at the current sales pace, up from 4.7 months in September. The share of first time buyers increased to 31% in October, up from 29% both in September and a year ago. NAR's annual Profile of Home Buyers and Sellers, released earlier this month, show that the annual share of first time buyers fell to its second lowest level since the survey began in 1981. All-cash sales were 24% of transactions in October which was unchanged from September and down from 27% a year ago. Individual investors, who account for many cash sales, purchased 13% of homes in October, unchanged from September but down from 15% a year ago. Some 62% of investors paid cash in October. Distressed sales, foreclosures and short sales, declined to 6% in October, which is the lowest since NAR began tracking them in October 2008 and own from 9% a year ago. Some 5% of October sales were foreclosures and 1% were short sales. Foreclosures sold for an average discount of 18% below market value in October, up from 17% in September, while short sales were discounted 8% compared to 19% in September. ‘All-cash and investor sales are still somewhat elevated historically despite the diminishing number of distressed properties. With supply already meagre at the lower end of the price range, competition from these buyers only adds to the list of obstacles in the… Continue reading
Property prices in Ireland now growing faster outside of Dublin, latest data shows
Residential property prices are increasing more than twice as fast outside Dublin than in the capital as people continue to be squeezed out of Ireland’s largest housing market, the latest index suggests. Indeed, prices in Dublin increased by 1% in October and are up 4.5% year on year but this is the lowest annual rate of inflation since the middle of 2013, according to the data from the Central Statistics Office. Outside of Dublin property prices were up 2.1% month on month and 10.7% year on year as the market catches up with that of the main city. It was the highest rise outside of Dublin since October 2014. A breakdown of the figures shows that Dublin house prices rose by 1% in October whilst Dublin apartment prices increased by 0.8%. However, it should be noted that the sub-indices for apartments are based on low volumes of observed transactions and consequently suffer from greater volatility than other series. It means that at a national level residential property prices were 33.5% lower than their peak level in 2007. Dublin house prices were 33% lower than their peak, Dublin apartment prices were 40.2% lower than their peak and Dublin residential property prices overall were 34.9% lower than their highest level. Outside of Dublin residential property prices were 36.3% lower than their highest level in 2007. Property consultants Savills said it is not surprised that house price growth in Dublin has slowed sharply. However John McCartney, director of Research at Savills, believes this is more due to a technical base effect than to any material slowdown in recent months. ‘In the month of October last year, Dublin prices rose by a staggering 3%. This feat would have to be repeated in October 2015 for the annual rate of price growth to hold at its current 6.5%. This is highly unlikely, and as a result, the annual growth rate will be dragged lower,’ he said. He warned against reading too much into the figures. ‘The slowdown will undoubtedly attract headlines. But it will really say more about what was happening in the market last year than what is going on today,’ he explained. ‘The frenzied activity we saw 12 months ago as buyers rushed to avail of tax breaks and more lenient lending practices has gone. But agents are reporting steady transactions and robust prices, particularly in the €400,000 to €650,000 price range where competition is hottest,’ he concluded, adding that Savills expects annual price growth by the end of the year in Dublin to be around 5%. Continue reading
