Tag Archives: housing
UK first time buyer market saw seasonal slowdown at end of 2015
First time buyer activity in the UK saw a seasonal slowdown at the end of 2015 despite price for this type of buyer falling, the latest property index shows. First time buyer numbers fell in December by 1,300 on a monthly basis, down 4.7%, as the traditional slowdown hit the UK property market but over the course of 2015, the longer term outlook remains healthy for first time buyers, with numbers up by 1.1% between December 2014 and December 2015. The data from the Your Move and Reed Rains first time buyer tracker report also shows that first time buyers find cheaper homes with smaller deposits and secure more affordable mortgages. Also, the average mortgage rate remains at a rock bottom level, with lenders buoyed by recent news that the Bank of England does not intend to raise interest rates for the foreseeable future. According to Adrian Gill, director of estate agents Your Move and Reeds Rains, first time buyers have been buoyed by a positive economic climate and a range of Government incentives such as the reduction of Stamp Duty on lower priced properties, designed to lessen at least the immediate costs of home ownership. ‘They increasingly came into their stride as 2015 has progressed. Some of the credit for this revival in activity should also go to first time buyers themselves. Over the course of the year they have toughened up their act and sought to get the best property they can at the best price and it’s a skill that will serve this group well as they head into 2016,’ said Gill. The cost of an average first time buyer home fell on a monthly basis in December from £153,275 to £152,470, a drop of 0.5%. However, over the course of the year, the average purchase price rose by 3.8%, representing an increase of £5,518 between December 2014 and December 2015. In addition, December saw a dip in the costs of getting on the property ladder. The average deposit put down by a first time buyer in December fell by 0.5% month on month to £25,292. This is indicative of a broader trend of deposit costs falling over the course of the year, with the average cost of a deposit dropping by £2,151 or 7.8% between December 2014 and December 2015. The decline in the burden of the average deposit on a first time buyer is reflected by the fact the proportion of an average first-time buyer’s income that is eaten up by the deposit fell from 64.6% in November to 64.3% in December. Between December 2014 and December 2015 the proportion fell by 6.8%. First time buyers in December also benefitted from a reduction in the regular burden placed on their finances by mortgage repayments. In November 19.3% of a first time buyer’s average income was consumed by monthly mortgage payments, by December this had fallen to 19%, the second lowest figure on record. Meanwhile, the average loan to… Continue reading
US pending homes sales more or less unchanged in December
Pending home sales in the United States were mostly unchanged in December, but inched forward slightly, fuelled by a large increase in the Northeast that outpaced declines in the other three major regions. The latest index from the National Association of Realtors increase by just 0.1% month on month and is now 4.2% above December 2014, the 16th month in a row that it has risen. ‘Warmer than average weather and more favourable inventory conditions compared to other parts of the country encouraged more households in the North east to make the decision to buy last month,’ said Lawrence Yun, NAR chief economist. ‘Overall, while sustained job creation is spurring more activity compared to a year ago, the ability to find available homes in affordable price ranges is difficult for buyers in many job creating areas. With home building still grossly inadequate, steady price appreciation and tight supply conditions aren't going away any time soon,’ he added. According to Yun, although healthy labour market conditions will persuade more households to buy, it's possible overall demand could be somewhat curtailed in coming months. The stock market's sizeable losses since the start of the year and the effect slowing manufacturing activity is having in some areas, especially in the energy sector, could cause some to hold off on buying. ‘The silver lining from the market turmoil in recent weeks is the fact that mortgage rates have slightly declined. Buyers looking to close on a home before the spring buying season begins may be rewarded with a mortgage rate at or below 4%,’ Yun explained. Existing homes sales this year are forecast to be around 5.34 million, an increase of 1.5% from 2015. The national median existing home price for all of this year is expected to increase between 4% and 5%, down from the 6.8% in 2015. Rents, which have far outpaced wages in recent years, are expected to slightly slow to 3.3% growth in 2016 from 3.6% a year ago. Multifamily housing starts are expected to reach 420,000 units this year, the highest level since 1987. A breakdown of the data shows that the data increased 6.1% in the North east in December, and is now 15.3% above a year ago. In the Midwest the index decreased 1.1% to 103.6 in December, but is still 3.6% above December 2014. Pending home sales in the South declined 0.5% to an index of 119.3 in December but are 1% higher than last December. The index in the West decreased 2.1% in December to 97.5, but remains 3.4% above a year ago. Continue reading
Irish property prices up 0.5% month on month, but fall in Dublin
Residential property prices in Ireland increased by 6.6% in 2015 with home values outside of Dublin recovering well, the latest data shows. The figures from the Central Statistics Office show that overall the strong growth experienced in 2014 slowed considerably last year. Prices increased by 16.3% year on year in December 2014. Month on month prices were up by 0.5% in the month of December compared to a decrease of 0.5% recorded in November. However, in Dublin residential property prices decreased by 0.5% in December but were 2.6% higher than a year ago. However, a breakdown of the figures show that house prices in the city decreased by 0.5% in December. But they are 2.1% higher compared to a year ago. Dublin apartment prices were 7.8% higher when compared with the same month of 2014. However, it should be noted that the sub-indices for apartments are based on low volumes of observed transactions and consequently suffer from greater volatility than other series. Prices in the rest of Ireland rose by 1.2% in December compared with a rise of 0.7% in December of last year. Prices were 10.2% higher than in December 2014. The slowdown in price growth towards the end of 2015 means that prices are still some way down from their peaks in 2007. House prices in Dublin are 34.2% lower than at their highest level and apartment prices are 40.6% lower, while overall prices are 36.1% lower. In the rest of Ireland pries are 35.4% lower than their highest level in September 2007 and overall, the national index is 33.5% lower than its highest level in 2007. Meanwhile, IPD/SCSI quarterly property index shows that total return for Irish property was 25% in 2015, down considerably from the record breaking 40% achieved in 2014. MSCI, a provider of indexes, portfolio risk and performance analytics, also revealed that total returns from investment property hit 25% year on year in the fourth quarter of 2015, and described it as another strong year for the Irish market. This outpaced the UK market return of 13.8% as per the IPD UK Monthly Property Index with the Irish index now including residential properties for the first time since the third quarter of 2015. The office sector continued to lead the market, returning 5.6% in the last quarter to close out 2015 with a 27.1% year on year total return. The retail sector returned 20.9% and the industrial sector 21.2% for the year. Rental value growth was the key driver in the Irish market during 2015 as market rents grew by 14.4%. The index report says that strong rental value growth indicates a clear sign of business confidence in the Irish economy but also endemic of the limited supply of office space in Dublin city centre. 2015 also proved to be the year in which the Irish recovery spread nationwide, with obvious improvements in the regional retail sector and a growing demand for modern… Continue reading
