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New home building in Australia saw strongest ever year in 2015
New home building approvals in Australia recorded their strongest ever year during 2015, up 13.7% compared to 2014, according to the latest data from the Australian Bureau of Statistics. But they fell towards the end of the year, down by 4% in the final quarter of the year, although there was variation according to housing type. In 2015 as a whole approval for flats increased by 30.2% but for detached houses they fell by 1%. Shane Garrett, senior economist for the Housing Industry Association pointed out that last year a total of 232,078 new homes received approval for construction, well above every calendar year on record. ‘New home building has been a crucial support to economic growth over the past two years, particularly in light of the mining investment downturn. The challenge during 2016 will be manage the transition to lower volumes of new home building in an orderly fashion,’ he said. The ABS data shows that approvals decreased in December in the Australian Capital Territory by 21.9%, by 3.1% in Western Australia, by 0.8% in Tasmania, by 0.4% in New South Wales and by 0.4% in South Australia. They but increased by 1.8% in the Northern Territory, by 1.6% in Victoria and by 1.1% in Queensland in trend terms. In trend terms, approvals for private sector dwellings excluding houses fell 0.1% in December. In contrast, approvals for private sector houses rose 0.1%. Private sector house approvals rose in Queensland by 0.8%, in Victoria by 0.7% and South Australia by 0.5% but fell in Western Australia by 1.8% and in New South Wales by 0.2%. The seasonally adjusted estimate for dwelling approvals rose 9.2% in December following a 12.4% fall in November. The rise in December was driven by apartments. The value of total building approved rose 0.2% in December, in trend terms, after falling for four consecutive months. The value of residential building rose 0.1% while non-residential building rose 0.4%.The volume of new home construction in Australia has fallen for the third month in a row with data for November 2015 also showing that new homes sales are falling. The new home sales report from the Housing Industry Association (HIA) says that a confluence of factors is driving a decline in leading indicators of new home construction. ‘The lagged effect of slowing population growth, an up-tick in variable mortgage costs, over reach on the part of APRA’s credit controls, and an easing in property price growth in Sydney and Melbourne are all in play,’ said HIA chief economist Harley Dale. Continue reading
CML warns of negative impact of new 3% tax on second homes on UK housing market
The UK property market is facing a slowdown in buy to let activity due to tax changes for private landlords, says a submission to the Treasury over the extra surcharge on second properties. The Council of Mortgage Lenders is urging reform of the plans to charge an extra 3% for buy to let landlords and second home buyers from April this year to mitigate potentially negative impacts on the housing market as a whole. It says in its submission that even without the new surcharge, the forthcoming adverse tax changes for private landlords and the potential macro prudential interventions in the buy to let market will result in a slowdown. It points out that there is a risk of overkill in dampening investor sentiment to the extent that the flow of available private rented property could be disrupted, without any necessarily corresponding increase in the ability of households to become home owners. In addition, with around a fifth of households currently renting in the private sector, there is the perverse risk that the stamp duty increase could cause landlords to charge higher rents, and so actually make it harder for tenants who want to buy to save the deposit needed to do so. Under current proposals, some people will be caught by the requirement to pay the 3% surcharge even when they are buying their main residence, for example, if they have a short term overlap between owning their previous home and acquiring their new one, perhaps as a result of problems in the housing chain, the CML points out. ‘It would be better to allow people to defer their payment of stamp duty for 18 months subject to conditions, rather than require them to pay it upfront and then potentially reclaim it in the form of a rebate. This would be both fairer and more efficient,’ the submission says. ‘The government should clarify whether its policy intention is to favour institutions facilitating new build activity, or new build activity more generally. If the policy focus is on the perceived benefit arising from the economic activity, then the proposal should recognise the potential for even small scale and individual investors to contribute to this through off-plan purchases, and should not discriminate against them,’ it adds. Director general Paul Smee said that the CML’s longstanding view is that stamp duty is a blunt policy lever. ‘Given the complexity of the proposals, we also suspect that in practical terms the surcharge could cause more problems than it solves,’ he pointed out. ‘We urge the government at least to move away from a position where people will have to pay and then potentially claim back to one where payment is deferred, and only triggered if the buyer genuinely falls into the intended target category,’ he explained. ‘If the surcharge proposal is designed to promote home ownership, we think that there should be better evidence as to why this requires a reversal of growth in the private rented sector,’… Continue reading
Half of UK home owners think their property value will rise in value in 2016
Half of home owners in the UK expect the value of their property to increase in 2016 and only 2% are concerned that prices will fall, a new survey shows. There is a continued confidence in the UK property market, according to the annual house buyers research report from Clydesdale and Yorkshire Banks. Figures shows that house price confidence has doubled since 2013 and is only slightly less than it was in 2015 which the report says underlines the stability and levelling out of the property market. The new findings show that overall only 2% of the population are concerned that their home will decrease in value while 48% anticipate no change. Back in 2013 9% thought prices would decrease, 66% thought they would stay the same and just 25% thought they would increase. ‘There have been great changes within our property market and our latest research shows a sustained level of confidence in property values over the past three years,’ said Steve Fletcher, director of retail banking at Clydesdale and Yorkshire Banks. The research reveals that London remains the key property hot spot with 73% of those surveyed confident in escalating prices in the capital and none predicting a downturn in property prices. In contrast just 33% of respondents in the North West believe their property will increase in value in 2016, with 65% believing there will be no change and 2% fearing a decrease. In Scotland 43% said they think prices will increase, 51% think they will stay the same and 6% believes there will be a decrease, while in Wales it is just 36% who think prices will rise, 64% think they will stay the same and none think they will fall. ‘There are a number of different factors which have played their part in the ongoing recovery of the property market. The Bank of England base rate has remained low and there has been steady growth in property prices and this has been reflected with sustained confidence of UK home owners,’ said Fletcher. Continue reading
