Tag Archives: housing
Lower end US housing market set to be the best performer in 2015
The lower end of the residential real estate market in the United States is set to outperform other property sectors in 2015. Most housing markets will see declining gains at a national and regional level, but the low tier segment of the market nationally is forecasted to grow at around 3%, according to the latest property report from Clear Capital. The index report shows that in December the low tier segment, that is homes selling for under $95,000, saw double digit gains of 10.4% nationally. But that too is set to slow. The report says the low tier of the Midwest could see growth of 7%, which is more than double that of the national forecast for this segment, and more than 5% ahead of the West at 1.7%. Price growth in the Midwest is expected to outpace the nation on all tiers by 1.6%, nearly double that of the country as a whole in 2015. A cluster of metro areas that are projected to see some of the highest price growth over the next year are also located in the Midwest. Ohio leads the pack with the highest number of metros at the top of the firm’s forecast with predicted price growth in Columbus, Dayton, Cleveland and Cincinnati ranging from 2.2% to 4.5% in 2015. Dayton ended 2014 with gains in median home prices of 16.5% over the year. This is a drastic increase for a metro market that saw a price decrease of 2.3% just a year ago. Cincinnati also showed strong signs of growth at the end of 2014, with median sales price increasing by 9.1% in December, and an increase of 17.2% from 2013. Double digit gains are set to cease. While the West continued to outshine the other three regions with 8.7% growth at the end of 2014, this is more than a 10% drop from where the region ended 2013 with 18.9% growth. T The Midwest followed close behind with 7.7% price growth over the year in December 2014, down just 2.3% from 10.1% a year ago. The South and Northeast finished 2014 with 6% and 2.9% price growth, respectively, with these regions also seeing moderation to price gains from 2013. At the national level, December home price growth ends 2014 at 6.4%, down from 10.9% a year ago, with continued moderation in quarter over quarter gains throughout 2014, ending 2014 at 0.9%. The firm is predicting another wait and see year and expects continued moderation for 2015. ‘A year ago, we forecasted the start of a more mature recovery with year-end gains between 3% to 5% for the nation, and with price appreciation moderation one of the only consistent trends in 2014,’ said Alex Villacorta, vice president of research and analytics at Clear Capital. ‘In 2015, we will see the natural progression of the housing market regressing back to normal rates of growth. Current price trajectories suggest that price growth at the national level will continue to moderate… Continue reading
UK property markets set to see slowing of growth in 2015 says CBRE
UK property sectors are set to continue to expand, in 2015 but the overall trend will be a slowing of growth to more sustainable levels, a new analysis suggests. Prime London markets will continue to grow in 2015, but confidence and investor interest will encourage growth in prime regional markets and secondary housing markets will fare better than in recent years, according to real estate advisor CBRE. It points out that in 2014, total returns to property averaged nearly 20% and in 2015, there will be a slowing of growth rates with average returns just under 13%. The general election in May will bring some uncertainty into property decision making but year on year there is expected to be significant rental growth for most sectors but a further improvement in yields as investment inflows continue into the UK market. Prospects for retail properties remain among the most uncertain, with few sure signs just yet that stable growth is returning to consumer spending, and cost pressures and distractions across the sector, particularly in grocery retailing, although in 2015 as in 2014, prime retail destinations will remain a safe bet, the report explains. Industrial property will continue to be attractive for investors due to a dearth of quality supply but price growth in the housing market will ease in 2015 to around 6% with transaction levels having peaked for the time being. ‘This has been a year of extraordinary expansion across the property sector and while this will continue into 2015, overall there will be a return to more sustainable levels of growth,’ said Miles Gibson, head of UK research, CBRE. ‘Rental growth will continue in all sectors and we expect investment yields to continue to improve as levels of capital flows into the UK market remain high. In terms of where growth, we forecast a ripple effect next year as property investors shift from London out to the regions,’ he explained. ‘Global economic factors, most notably the falling price of crude oil, in 2015 will benefit the UK. The likely effects of pushing down inflation and boosting consumer spending, means we should expect to see a knock on benefit for retailers which in turn could stimulate growth in the retail property sector,’ he added. ‘Although there positive signals for the property market, we recognise that there will be uncertainty caused by the imminent general election. The combination of these trends makes 2015 an intriguing prospect for property markets,’ he concluded. Continue reading
Number of first time buyers in UK rises for third year
The number of first time buyers in the UK increased by more than a fifth in 2014, the third successive annual rise, new data shows. The 22% rise was similar to the 23% rise recorded in 2013, according to the annual Halifax First Time Buyer Review. There were an estimated 326,500 first time buyers in 2014, up from 268,500 in 2013, the highest annual total since 2007 and was 70% higher than in 2008. The data also shows that first time buyers increased their share of all house purchases made with a mortgage, accounting for 46%1 in 2014, up from 44% in 2013. Mortgage affordability has improved significantly in recent years. The proportion of disposable earnings devoted to mortgage payments by a first time buyer stood at 32% in the third quarter of 2014, a substantial improvement compared with the summer of 2007 when this figure reached a peak of 50%. Record low mortgage rates have been a major contributing behind this improvement, the Halifax says. There has been a fall in the size of the average deposit needed by first time buyers to £29,218, some 7% lower than in 2013 when it was £31,582. It says that this decline was primarily due to the greater availability of loans requiring a relatively small deposit during the past year. Nonetheless, the average deposit is still £11,718 or 67% higher than in 2007 when it was £17,499. ‘First time buyers are vital for a properly functioning housing market. Improving economic conditions and rising employment levels have boosted confidence among those thinking about getting on to the housing ladder for the first time, contributing to the significant increase in the number of first time buyers in the past two years,’ said Craig McKinlay, mortgages director at the Halifax. ‘Record low mortgage rates and Government schemes such as Help to Buy have improved affordability, enabling more first-time buyers to buy their own property,’ he added. The research also shows that nearly six in 10 first time buyer purchases are now above the £125,000 Stamp Duty threshold. The proportion exempt from paying stamp duty fell to 41% in 2014 from 45% in 2013. Almost half, 47%, of properties bought by first time buyers were priced between £125,000 and £250,000. Nationally, only 13% of first time purchases were above £250,000 in 2014. There were, however, considerable regional differences with more than half of first time buyers in Greater London, 56%, paying more than £250,000. The recent changes to the stamp duty system have saved the average first time buyer £781, reducing the tax bill for the average priced property of £171,870 from £1,718 to £937. Larne in Northern Ireland is named as the most affordable local authority district in the UK with an average property price of £80,793, some 2.8 times local average gross annual earnings. East Ayrshire and Inverclyde are the next most affordable also 2.8 and seven of the 10 most affordable authorities for first time buyers… Continue reading
