Tag Archives: housing
Majority of home owners in Australia concerned about property values
More than two thirds of Australians are concerned that Australia’s housing is vulnerable to a significant correction in values, according to the latest housing sentiment survey. Some 68% of respondents to the September CoreLogic RP Data TEG survey said they believe the housing market is vulnerable to a significant correction in values. However, the findings are a reduction from the previous quarter results where 75% of respondents indicated they were concerned about a significant downturn, but despite the apparent improvement in consumer perceptions, a significant proportion of the community are wary of substantial value falls across the nation’s largest and most important asset class, which according to CoreLogic RP Data is worth an estimated $6.2 trillion. ‘While we don’t envisage dwelling values will fall substantially, the probability of declines in Sydney, and to a lesser extent in Melbourne, after such a strong run of capital gains isn’t unlikely,’ said CoreLogic RP Data head of research Tim Lawless. ‘Home values are already trending lower in Darwin and Perth. It was less than three and a half years ago that capital city dwelling values fell by 7.4% between October 2010 and May 2012,’ he pointed out. Additionally, 95% of survey respondents believe that foreign demand is pushing property values higher, with 19% indicating that foreign buyers were responsible for placing ‘extreme’ upwards pressure on home values. Only 5% of survey respondents thought foreign buying activity wasn’t pushing home values higher. According to Lawless, the results are a stark reminder that the true extent of foreign buying of residential properties across Australia continues to lack transparency, despite the House Economics Committee Report on Foreign Investment in Residential Real Estate being handed down almost a year ago. He added that the latest statistics haven’t been updated since the 2013/14 financial year. Some 55% of survey respondents thought that the current housing market conditions represented a good time to buy a property, down from 60% in June. Respondents based in Sydney, where housing market conditions have been running the hottest, were the most pessimistic about buying conditions, however 29.7% of respondents still thought that now was a good time to be getting into the market. Alternatively, more than 70% of survey respondents thought buying conditions were ripe in the Australian Capital Territory, Adelaide, regional Queensland and Perth. The proportion of survey respondents who thought property values will rise over the coming six months has been trending lower, with respondents who thought home values will rise over the next six months dropping from 49% in March and 48% in June to just 40% of all respondents in September. Continue reading
Fewer young people likely to be able to buy their own home in the future
Even if the current plan to build 220,000 new homes in England each year until 2031 is fulfilled young people aged 25 to 34 will still be less able to live in their own home that they did in 2011, according to new research. An analysis report from the Town and Country Planning Association says that currently only 54% of the number of homes needed are being built, putting pressure on prices and rents, and the housing crisis is worse in London and the wider south east where 55% of the homes required need to be located. Even if the homes required are actually built the latest government household projections suggest that young people across the country are struggling more than ever to live independently because of the cost of housing. The research says that the housing requirement to meet projected household formation until 2031 is actually lower than previously anticipated but this is because younger people are already finding they cannot afford to form independent households. Housing shortages and the resultant high prices and rents mean that young people are living with parents or in house shares for longer, rather than forming a household of their own. Rising student debt levels and potential future welfare reform are likely to make their position even more difficult. ‘This research shows that, while it looks as if the projected number of needed homes has dropped, this is because many people now can't afford their own home either to rent or buy and are living with parents or other people longer than they would like to,’ said Kate Henderson, TCPA chief executive. ‘The government needs to see this as a wakeup call. It has already fallen behind on their targets for house building, and this is now having a devastating effect on young people. More needs to be done to build the necessary number of high quality, affordable homes for people who need them,’ she added. Starting in 2011, a minimum of 220,000 homes are needed each year to 2031 if house building is to keep up with projected household growth and even this is not enough to enable couples aged between 25 and 34 to have the same chance of living in their own home as their counterparts in 2011. Of the new homes needed, over half, 55%, are needed in London and the surrounding area. In contrast, in the north east, the number of new households is expected to only rise by 11% over 20 years. Professor Christine Whitehead co-author of the research and Emeritus Professor at the London School of Economics it is a major concern that young people are likely to be less well housed in 2031 than their counterparts in 2011. ‘If house building cannot be increased at least to the projected levels other household groups will find themselves in the same boat,’ she added. The research also shows that the government is already falling short… Continue reading
Call for more support for equity release in UK housing market
Housing wealth in the UK should be used to better support an ageing population by making equity release more accessible and allowing it to develop further, it is claimed. The Equity Release Council has released key recommendations in a White Paper calling on the Treasury to take a lead on coordinating relevant policy to benefit consumers. It examines how people's housing wealth can provide people with an additional source of finance in later life and help the Government to better support the UK's ageing population. The Council proposes that the Treasury's oversight of other relevant departments, including the Department for Work and Pensions, the Department for Communities and Local Government and the Department of Health, combined with its responsibility for financial services, makes it the natural choice to coordinate policy on equity release. The report also identifies where Government policy could do more to consider equity release as a way of meeting people's retirement needs, and where regulation is providing direct challenges to the development of the sector. It argues that a cohesive approach across departments is necessary to avoid unforeseen consequences and ensure the maximum benefit for consumers and Government. The White Paper includes specific recommendations, including that the Government should consider the role of equity release as part of its strategy for addressing the challenges of an ageing society, ensuring that people are able to utilise housing wealth to improve their income and wellbeing in retirement where appropriate. It also suggest an expansion of the scope of the Pension Wise service to enable users to understand how accessing housing wealth may provide solutions to satisfy their objectives and a consideration of how equity release can be utilised to help people pay for home care, providing financial resources which can help people retain ownership of their home and stay living in it for longer. In conjunction with local authorities and other stakeholders, it says it is possible to develop clear pathways for local authorities to use to help people who are seeking support on financing care services understand when they should access regulated financial advice and how they should go about doing so. It also calls for the development of a range of case studies to illustrate best practice on referral to financial advice on care funding and using the Financial Advice Market Review as an opportunity to ensure that people nearing retirement are able to access independent financial advice, which allows them to consider the full range of relevant issues including retirement funding, paying for care, home adaptations and leaving money to children and grandchildren. It wants the Financial Conduct Authority's (FCA) review of the equity release market is wide ranging and considers the impact of the regulatory framework on the equity release market, as well as other potential barriers to increasing the size of the market. ‘The equity release sector is growing fast, and is likely to become even more popular in the next few years. This growth is driven by a… Continue reading
