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Pending home sales in the United States up solidly in February
Pending home sales in the United States rose solidly in February to their highest level in seven months and remain higher than a year ago, according to the National Association of Realtors. Led by a sizeable increase in the Midwest, all major regions except for the Northeast saw an increase in contract activity in February, the date from the forward looking index based on contract signings show. Overall the index rose 3.5% to 109.1 in February from a downwardly revised 105.4 in January and is now 0.7% above February 2015. Although the index has now increased year on year for 18 consecutive months, last month's annual gain was the smallest. ‘After some volatility this winter, the latest data is encouraging in that a decent number of buyers signed contracts last month, lured by mortgage rates dipping to their lowest levels in nearly a year1 and a modest, seasonal uptick in inventory,’ said Lawrence Yun, NAR economist. ‘Looking ahead, the key for sustained momentum and more sales than last spring is a continuous stream of new listings quickly replacing what's being scooped up by a growing pool of buyers. Without adequate supply, sales will likely plateau,’ he added. According to Yun, the one silver lining from last month's noticeable slump in existing home sales was that price appreciation lessened to 4.4% which is still above wage growth but certainly more favourable than the 8.1% annual increase in January. ‘Any further moderation in prices would be a welcome development this spring. Particularly in the West, where it appears a segment of would be buyers are becoming wary of high asking prices and stiff competition,’ Yun pointed out. Existing homes sales this year are forecast to be around 5.38 million, an increase of 2.4% from 2015. The national median existing home price for all of this year is expected to increase between 4% and 5%. In 2015, existing home sales increased 6.3% and prices rose 6.8%. A breakdown of the figures show that the index in the Northeast declined 0.2% to 94 in February but is still 12.6% above a year ago. In the Midwest the index shot up 11.4% to 112.6 in February and is now 2.5% above February 2015. Pending home sales in the South increased 2.1% to an index of 122.4 in February but are 0.4% lower than last February. The index in the West climbed 0.7% in February to 96.4, but is now 6.2% below a year ago. Continue reading
Property price growth eases in Australian capital cities
The rate of residential property price growth in capital cities in Australia eased during the final quarter of 2015, according to the latest data from the Australian Bureau of Statistics. The annual growth rate of home prices across Australia’s eight capital cities eased to 8.7% in the final quarter of 2015, driven in part by a deceleration of Sydney dwelling price growth. A breakdown of the data shows that year on year price growth remained strongest in Sydney with prices up 13.9%, followed by Melbourne with growth of 9.6% and Canberra with prices up 6%. In Brisbane prices increased by 4.2%, by 3.5% in Hobart and by 3.3% in Adelaide but prices fell by 3.2% in Darwin and were down by 2.9% in Perth. ‘From an affordability perspective, the slowdown in dwelling price growth to a more sustainable pace is a welcome development,’ said Shane Garrett, senior economist for the Housing Industry Association. He also pointed out that the quarter saw a narrowing of the gap between the capital cities in terms of price growth whereas in previous quarters, the divergence in the pace of price growth from city to city was very large. ‘During 2015, a record 220,000 new dwellings commenced construction across Australia. The additional supply is playing an important role in containing the severe price pressures in markets like Sydney and Melbourne,’ Garrett explained. ‘Ensuring an adequate supply of new housing in the future requires root and branch reform in areas like planning, land supply and the taxation burden on residential building,’ he added. Continue reading
Research reveals few homes for sale in London under UK average
Affordability is a major issue for Londoners with new research showing that more than a quarter of boroughs don’t have a single home for sale less than the country average of £191,812. Indeed, average London property prices currently stand at around £530,409 and in nine out of 32 London boroughs, 28%, it is impossible to find a property with an asking price under the Land Registry average. The figures from online estate agents House Simple show that Bexley is the only borough where you can buy a property for less than £100,000, with a studio flat currently on the market for just £94,995 while in Tower Hamlets there are no properties on the market for less than £250,000. The research also found that just four or 12.5% London boroughs have property where the buyer would not pay stamp duty with the threshold kicking in at £125,000. In almost half of the boroughs, the most affordable property for sale today is a studio flat, which are typically just 100 to 110 square feet in size compared to the average UK one bed flat which measures 495 square feet. ‘These figures reveal how desperate the plight is for ordinary Londoners on average salaries, hoping to buy their first property. How can they feasibly afford to buy when average property prices in the Capital are over £530,000?’ said Alex Gosling, House Simple’s chief executive officer. ‘Although this research reveals there are properties for sale below the UK’s average house price, the pickings are extremely slim and you’re getting very little square footage for your money. It’s a studio or nothing in many boroughs,’ he pointed out. ‘It’s not surprising that more and more people are starting to move out of London for value. Why pay £200,000 for a studio flat when you can buy a house for the same money just an hour commute away. It’s likely in the future we will see less and less people putting their first foot on the property ladder in London,’ he added. Continue reading
