Tag Archives: finance
Australian capital city rents see slowest annual growth ever
Weekly rental rates in Australian capital cities were unchanged in September but in the last three months have risen at their slowest annual pace ever. Indeed, the latest CoreLogic RP data report shows that the annual pace of rental growth across all capital cities is at a new record low of 0.5% in the year to September. Despite recording the strongest growth, Melbourne rents rose just 2.1% over the year and rents have fallen over the year in Perth and Darwin. They have increased by just 0.3% over the first three quarter of the year. Overall the combined capital city rental rates are recorded at $487 per week for houses and $462 per week for apartment units and the firm says that it is anticipated that the rate of rental growth will continue to slow over the coming months due to increased supply of housing and rental stock and slower migration rates. The report points to an ongoing softening of rental growth and explains that the construction boom across the capital cities coupled with slowing population growth, low mortgage rates and the heightened level of activity from investors are the major contributing factors to the slowing rental growth. Three of the cities which have seen the largest growth in new housing supply and investor activity over recent years; Sydney, Melbourne and Brisbane, have continued to record rental rises over the past year however, each city is seeing a slowing in the pace of rental growth. ‘It is clear that the increase in investment stock is providing landlords with little scope to lift rental rates while the low mortgage rate environment provides little incentive to push yields higher,’ the report says. Looking across the individual capital cities, over the past year, Sydney and Melbourne have recorded the greatest increases in weekly rents however, their rates of growth have slowed relative to a year ago. Over the past month, weekly rents have moved lower across every capital city except Sydney where they were unchanged and in Melbourne and Hobart where they rose. Continue reading
UK property sales up to 16 month high, says RICS report
Property sales in the UK have picked up across the country, reaching a 16 month high, according to the latest index report from the Royal Institution of Chartered Surveyors (RICS). There were also further price increases nationwide in September, a modest improvement in mortgage availability but no improvement in the supply situation with new buyer demand continuing to outweigh instructions to sell. Across the UK, agreed sales rose at the quickest pace since May 2014, with 14% more chartered surveyors seeing a rise. This is a 16 month high and the fifth consecutive month that sales have increased. The North, East Anglia and Scotland posted the sharpest rises in activity over the month with the East Midlands the only region to see a material drop in sales albeit following an increase in the region in August. The report says that the stronger sales trend in the UK is broadly reflective of an upturn in demand which has been visible in the data since the early spring. Indeed, the number of new buyer enquiries rose for a sixth consecutive month across the country with 18% more chartered surveyors reporting a rise in demand. The pattern being seen by chartered surveyors echoes recent lending data including that highlighted by the Bank of England, showing mortgage approvals at an 18 month high and up 12% compared to a year ago. As the availability of mortgage finance appears to be improving, the average ‘perceived’ LTV ratio captured by respondents to our survey edged up to 79.3% with first time buyers seeing credit conditions relax most noticeably over the month, the report also reveals. Although activity is picking up, the ongoing lack of new instructions and the resulting limited stock on the market continue to be an issue for the sustainability of the market. The number of new instructions has fallen in 13 of the last 14 months. RICS says that it is significant that 40% of respondents feel the biggest factor behind the negative trend in new instructions is the lack of stock already for sale which is deterring would be movers as they struggle to find a suitable property to move on to. The next most cited influence was economic uncertainty, followed by stretched affordability. As a result of the persistent supply demand imbalance, the national house price indicator continues to rise strongly which is likely to be reflected in key house price indices over coming months and into the first half of 2016, according to the report. In the lettings market, tenant demand increased once more continuing the pattern seen by respondents since December 2014, and while new landlord instructions increased slightly for the third month in a row, they were still significantly outstripped by tenant demand. Indeed, over the next 12 months, chartered surveyors are forecasting rents to rise by 3% at the headline level. ‘Activity is now picking up which is encouraging, but unless the stock being sold is replenished… Continue reading
UK mortgage sector competition to be examined
The UK’s financial watchdog has launched a consultation process on competition in the mortgage sector to seek input from interested parties to identify both good points and potential areas for improvement. ‘For millions of consumers a mortgage is one of the biggest, if not the biggest, financial transaction they will enter into in their lifetime. The mortgage sector also plays a vital role in the financial services industry and many areas of the economy,’ said Christopher Woolard, director of strategy and competition at the Financial Conduct Authority (FCA). He explained that competition can play a key role in ensuring that the sector works well, delivering consumer benefits through lower prices, better customer service, and more product choice. ‘We are seeking stakeholders’ views on competition in the mortgage sector. These views, together with evidence from the FCA’s wider programme of work on mortgages, will help inform any future FCA work on this key sector of the economy, including any future competition market study,’ he added. The FCA is interested in the range of factors that might affect competition in the provision of loans secured against a property, whether regulated or unregulated, including as a result of changes introduced following the Mortgage Market Review and any other barriers to entry, expansion or innovation. It also wants to examine consumers’ ability to effectively access, assess and act on information about mortgage products and services and firms’ conduct and relationships and the deadline for input is 18 December 2015 with feedback scheduled for the first quarter of 2016. The Council of Mortgage Lenders welcomed the announcement and described it is an excellent opportunity for the regulator to review the effect of regulation, as well as market practice, on lenders as well as their customers. ‘The FCA's role in promoting competitive markets is the part of regulation that best helps foster creativity, innovation and a sharp focus on what drives customers,’ said CML director general Paul Smee. ‘It's also essential in delivering the kind of environment in which reputable lenders of all shapes and sizes can thrive. We will be working with all our members to ensure that their perspectives are fully reflected as we work with the FCA on this vital issue,’ he added. Continue reading
