Tag Archives: housing
Housing affordability improves in Australia and new starts at record high
Housing affordability across Australia experienced improvement during the first three months of 2016, according to the latest affordability report. Affordability improved by 2.7% quarter on quarter and was 0.4% more favourable than the same period a year earlier, the data from the report by the Housing Industry Association shows. Aggregate capital city housing affordability was 4.1% more favourable during the quarter, while regional markets experienced 0.1% improvement. ‘The national median dwelling price fell during the March 2016 quarter and this was the main factor behind the improvement in affordability during the first quarter of the year,’ said HIA senior economist, Shane Garrett. ‘Had it not been for the shock increase in variable mortgage interest rates late last year, the improvement in affordability would have been even better. Earnings growth has been held back by slack in the economy, and this situation has also worked against improving affordability,’ he explained. ‘At the end of the day, the most durable way of improving affordability lies in facilitating the supply of affordable new housing more effectively. Planning delays, land supply shortages and the heavy tax burden are all making the achievement of housing affordability much more difficult,’ he added. A breakdown of the figures show that the largest improvements in affordability were in Sydney with a rise of 8.9%, Perth up 4.9% and Darwin up 4.4%. Affordability also saw improvement in Hobart with a rise of 2.9% and Melbourne where it was up 2%. However, affordability worsened in Brisbane with a fall of 1.2%, was down 0.2% in Adelaide and down 0.3% in Canberra. Meanwhile, the latest data from the Australian Bureau of Statistics show that the number of dwellings approved rose 0.6% in March 2016, in trend terms, and has now risen for four months in a row. Approvals increased in the Australian Capital Territory by 18.9%, in Western Australia by 1.1%, in Queensland by 0.8% and in Victoria by 0.2% in trend terms. Dwelling approvals decreased in the Northern Territory by 18.1%, in Tasmania by 1.5%, in New South Wales by 0.3% and in South Australia by 0.1% in trend terms. In trend terms, approvals for private sector houses rose 0.3% in March. Private sector house approvals rose in Victoria by 1.7% but fell in South Australia by 0.8%, in Western Australia by 0.7% and in Queensland by 0.2% Private sector house approvals were flat in New South Wales. In seasonally adjusted terms, dwelling approvals increased 3.7% with private sector house approvals up 2.6% while private sector dwellings, excluding houses, rose 6.7%. The value of total building approved fell 0.9 per cent in March, in trend terms, and has fallen for eight months. The value of residential building rose 0.4% while non-residential building fell 3.9%. Final ABS results for 2015 confirm that last year was the strongest ever for new home building activity with over 220,000 new homes beginning construction, an 11% rise on 2014 with which the previous record for… Continue reading
Buy to let property returns up almost 10% year on year in England and Wales
Total returns for buy to let property in England and Wales rose to 9.57% in the 12 months to the end of March, according to the latest buy to let index to be published. Overall buy to let portfolios fell 0.31% month on month, were up by 2.31% quarter on quarter, and by 9.57% year on year, the data from the Property Partner residential market index shows. The growth over 12 months has been led by London where buy to let returns increased by 16.49%, followed by the East of England with a rise of 13.18%, the South East 12.1% and the East Midlands 8.59%. The North West was not far behind with a rise of 8.44% and the South West at 8.42%. The West Midlands saw a rise of 6.08%, Yorkshire and Humberside 4.51% and the North East 2.57%. According to Rob Weaver, Property Partner’s director of investment the strong growth in the year to March 2016 was probably affected by property investors rushing to beat April’s additional home stamp duty deadline. ‘This was especially true of London, where annual returns were in double digits, reaching an eye-watering 16.5%. The East was strong too, and from first hand experience the Northern Powerhouse regeneration plan is boosting investment activity in the North West and in particular Manchester,’ he said. He pointed out that monthly figures can be volatile. ‘What’s clear is that regional disparities in the housing market are widening, with Yorkshire and Humberside and the North East regions looking fragile,’ he explained. He also pointed out that property investors are showing caution ahead of the referendum in June on the future of the UK’s position in the European Union. ‘But the fundamentals of high employment, wage growth, cheap borrowing and the chronic shortage of supply remain in place and are positive,’ he added. The index is the first regular dataset to combine rental income and capital growth to show the total rate of return of residential property investments over time. It is based on research carried out by the property crowdfunding platform Property Partner of Land Registry and ONS data. Continue reading
Chancellor warns property prices will take a big hit if UK leaves EU
Leaving the European Union would hit the UK residential property market with prices likely to be hit significantly and make mortgages more expensive, according to the Chancellor of the Exchequer George Osborne. Speaking on national television, he warned that if there is a Brexit, the term used to describe the country leaving the EU, then the values of homes will fall. He also revealed that the Treasury is about to publish a major piece of research on how Brexit would affect that UK economy and that one major issue that emerges is the effect on real estate, ‘You will see the analysis we will do, but I’m pretty clear that there will be a significant hit to the value of people’s homes and to the costs of mortgages. That is one example of the kind of impact, economic impact, that we get from leaving the EU,’ he said on of ITV’s Peston on Sunday politics programme. He has spoken out as the campaigning ahead of the EU referendum on 23 June hots up. The polls have been neck and neck but at the beginning of May an ICM poll put the leave camp slightly ahead at 45% compared to 44% for remain. The warning from Osborne comes as prices have started to ease slightly. The latest Halifax index, just published, shows prices fell by 0.8% in April. The market has been looking healthy recently with data from HMRC showing that sales have risen dramatically from 116,930 in February to 165,480 in March, the highest monthly total since records began in April 2005. While sales in the first three months of 2016 were 32% higher than in the same period last year, much of both the monthly and annual increases is likely to be attributable to a rush to beat the new stamp duty tax rates for buy to let and second homes in April. On top of this the volume of mortgage approvals for house purchases, a leading indicator of completed house sales fell by 2.5% between February and March. This suggests that the number of new buyers seeking to complete ahead of the stamp-duty surcharge had already begun to ease. Approvals, however, were still 15% higher than in March 2015, according to Bank of England, seasonally adjusted figures. Meanwhile, supply remains historically low. New instructions by home sellers fell marginally in March following three consecutive monthly increases. Market conditions remain very tight with stock levels nearly 20% lower than a year ago, at a near historical low, the most up to date monthly report from the Royal Institution of Chartered Surveyors (RICS) shows. Continue reading
