Tag Archives: housing
Home value growth rate in key Oz cities continues to moderate
Property values across Australia’s capital cities fell by 0.3% in November compared with the previous months as growth continues to slow, according to the latest index. Home values rose in Sydney by 1%, in Brisbane by 0.4%, in Perth by 0.9% and in Hobart by 0.2% but fell across the remaining capital cities, the data from the CoreLogic RP Home Value Index shows. Research analyst Cameron Kusher said this recent slowdown in the rate of capital growth is further highlighted by the fact that over the three months to November 2014, values rose by just 0.8% across the combined capitals. Over the three months, values increased in Sydney, Brisbane and Perth but fell across all other capital cities. The slowdown in capital growth is further evident when looking at annual growth rates. Although combined capital city home values increased by a healthy 8.5% over the 12 months to November 2014, the annual growth rate is now at its lowest level in the year. The data shows that the rate of annual home value growth across the combined capital cities continued to slow after peaking at 11.5% over the 12 months to April 2014. Excluding Hobart, across each capital city the annual rate of capital growth is now lower than its recent peak. Kusher said this suggests that most cities have now moved past their cyclical peak. ‘Importantly, this has become apparent in the two largest capital cities of Sydney and Melbourne, where annual value growth peaked at 16.7% in April 2014 and at 11.9% in January 2014 respectively,’ he explained. ‘Although Sydney and Melbourne appear to have moved through their peaks, capital growth these two cities have consistently been the main driver of value growth over the past 12 months,’ he added. A breakdown of the figures shows that over the past year, Sydney home values increased by 13.2% and Melbourne home values rose by 8.3%. Sydney has seen much stronger growth over the year than Melbourne. However, Melbourne’s growth remains quite higher than the third strongest performing city for capital growth, Brisbane. Brisbane home values increased by 6% over the past year while Hobart at 5.2% is the only other capital city to record annual value growth in excess of 5%. ‘Market indicators such as auction clearance rates remain quite strong, but also point to slightly weaker overall housing market conditions,’ Kusher said. Auction clearance rates reduced noticeably across the two largest auction markets, Sydney and Melbourne, over recent weeks while clearance rates were typically recorded at around the high 70% and mid 70% mark respectively at the start of Spring. Clearance rates are now sitting at a low 70% in Sydney and mid 60% in Melbourne. The number of new properties listed for sale across the combined capital cities continues to trend higher. Although this occurred throughout the last two months, Kusher pointed out it wasn’t until recently that the total number of property listings also started to trend higher. ‘This may indicate a slower rate of sale and is… Continue reading
Top end of luxury rental market in London booming, new analysis suggests
The top end of the luxury home rental market in London is booming with a lack of supply and concerns about next year’s general election driving the market, according to a new report. The ultra prime market where rents are £100,000 plus per annum and the super prime sector with rents of £1 million and over are currently booming, according to lettings specialist Beauchamp Estates. Its latest report in conjunction with market intelligence group Dataloft, looks at the top 5% of properties let in prime central London over the past five years in terms of rental price achieved. In order to live in luxury in one of the capital’s top 5% of lettings properties, a tenant now has to pay a minimum rent of £108,000 per annum or £9,000 per month, which is the highest entry level for this sector of the London lettings market ever recorded. In addition, there has been a 12.8% rise in the number of properties let at rental values of over £10,000 per week compared to the same period in 2013. The average weekly rent in London’s ultra prime lettings market is now £3,500 per week or £182,000 per annum, a 23% rise since 2009 when the equivalent average figure stood at £2,813 per week or £135,025 per annum. Outside of the capital, a household could purchase a property for this annual rent, since the latest Land Registry records show that the average price of a home in England and Wales is now £177,299. Over the last 12 months ultra prime rental levels have continued to rise. Across prime central London the average rent paid in the third quarter of 2014 was 6.5% higher than 12 months earlier, the highest rate of growth for more than three years. The research reveals that the super prime lettings market, properties to let for over £1million per annum, is also extremely buoyant. The findings show that the £1 million plus rentals market first emerged back in 2010. Initially, the £1 million plus super prime rentals market was confined to Mayfair and Knightsbridge, however during 2013 and 2014 the market has expanded significantly and Chelsea, South Kensington, Notting Hill, Regent’s Park, St John’s Wood and Holland Park have all seen properties let at rents equivalent to over £1 million per annum. The firm points out that the ultra prime lettings sector is highly lucrative and therefore, despite its small percentage size, in terms of rental income it is disproportionally large and is extremely important to the overall health of the capital’s lettings industry. The annual rent roll from ultra prime London rentals agreed in the first nine months of 2014 is equivalent to £102 million in annual rental income. This represents 21% of the total annual rental income of all lets agreed so far this year across prime central London. In other words, a twentieth of the deals make up a fifth of the income… Continue reading
Home sellers likely to benefit from new UK property tax rules as well as buyers
House sellers in the UK could be set to save £213 million a year to the tune of almost £7,500 each, according to research by property website Zoopla. The reform of the stamp duty property tax which took effect today will remove ‘dead zones’ that existed before each previous Stamp Duty band and see a more progressive approach adopted where buyers will only liable to the portion of the property’s value above each new level. In an analysis of property sales in the 12 months to May 2014, the firm reckons that 28,635 properties have been under priced in order to make them more appealing to buyers by avoiding steep jumps in stamp duty. Zoopla found that the number of property sales in the price bands immediately before an existing stamp duty threshold is significantly higher than expected, while the number of sales in the price band immediately after a threshold, the stamp duty dead zone, is considerably lower. ‘The new, graduated Stamp Duty system is a long overdue overhaul to what the Chancellor admitted was a poorly designed tax and represents a fairer system for the vast majority of home buyers,’ said Lawrence Hall of Zoopla. ‘It also means that those selling their home at certain levels are more likely to achieve the real value of their homes and won’t be forced to discount their properties to sneak under certain bands,’ he explained. ‘Unfortunately those buying property worth more than £937,000 may feel unduly penalised by the new reforms, but the new structure represents a more balanced system overall and a welcome alternative to the mansion tax plans that had been proposed,’ he added. As an example, a house purchased at £300,000 would have resulted in a £9,000 stamp duty bill. With the new system, a buyer will save £4,000 calculated as follows: 0% tax up to £125,000, 2% tax on £125,000 to £250,000 which is £2,500, 5% tax on the remaining £50,000, which is £2,500, leading to a total stamp duty bill of £5,000. Kevin Hollinrake, managing director of Hunters estate agents with 125 branches nationwide, said the firm has already had deals secured as a result of this change. ‘In our opinion, this is great news. For too long, stamp duty has distorted the market deterring sellers from marketing their homes and buyers from buying them in the dead zones above the key thresholds such as £250,000 and £500,000. This should mean more property coming onto the market, and therefore, more sales which is good for the housing market and the economy as a whole,’ he explained. There will be substantial savings for around three quarters of a million home buyers across England and Wales according to research from Savills as all buyers up to £937,000 will benefit. By contrast, around 17,000 transactions above a value of £937,000 will bear an increased stamp duty tax burden, undermining the case for any further taxation of high value property. ‘The change is likely to make the… Continue reading
