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Residential rental market in Australia weakest since 1996
Rental growth rates in Australia continue to show their weakest performance since 1996 with a rise of just 0.3% in capital cities in February and no change year on year. The latest CoreLogic RP Data Rent Review report suggests that over the coming months rental rates could begin to fall on an annual basis due to additional new rental supply entering the market. A breakdown of the figures show that rental rates have increased over the year in Sydney by 1.5%, in Melbourne by 2.2%, in Canberra by 1.6% and were unchanged in Hobart. Rents fell 07% in Brisbane, by 0.4% in Adelaide, by 8.4% in Perth and by 13.3% in Darwin. This takes the current weekly rental rates to £488 for houses and $467 for apartments, the data also shows. Overall rental rates have been sitting at around $485 per week for the past year. In the last year rental rates had increased by 1.7% highlighting that the slowdown in rental conditions has been quite sharp over the year and Brisbane, Adelaide, Perth and Darwin are currently experiencing some of their largest annual falls on record. Indeed, all capital cities are experiencing annual rental changes which are well below their decade average levels. ‘With construction activity set to peak over the next 24 months, and with many new properties still to settle, there is a real possibility that rental rates will fall over the coming months,’ said research analyst Cameron Kusher. ‘Based on our expectations, landlords have little scope to lift rental rates while for renters, it potentially means more surety in securing accommodation and the potential to upgrade into a higher level of accommodation for a similar cost,’ he explained. ‘The cause of this current slowdown in rental growth is falling wages, excess rental supply in certain areas and lower rates of population growth and population mobility impacting on demand for rental accommodation,’ he added. Continue reading
Property markets in north of England will get boost from investment announcements
Property markets in the north of England are set to benefit from hundreds of millions of pounds of new investment in rail and road networks announced by the UK government. As part of a continuing policy to create what is known as ‘the northern powerhouse’ the Chancellor George Osborne has announced funding of £60 million for a HS3, a high speed rail link between Leeds and Manchester to cut journey times between the two cities. He also announced £75million to explore options for an 18 mile Trans-Pennine road tunnel between Sheffield and Manchester which would be the longest road tunnel in Europe. Both projects are in the early phases of development and if they go ahead billions more will be invested in the region in the coming decades. Experts believe that prices and demand for property will rise and while this will be good news for those selling it also means that first time buyers will find it harder to get on the housing ladder if values increase. There could be a large influx of foreign buyers to the region, according to Jan Crosby, head of housing at KPMG, as connectivity across the region and with the wider UK is a significant tick on their wish list. ‘While property investors from the likes of Asia and the Middle East have been interested in the Government’s narrative around the Northern Powerhouse, they have been waiting for the words to be backed with action and financial commitment to improve the region’s infrastructure before making large scale investments,’ she explained. ‘The issue for these investors has been end user demand for property across the North as the scale of appetite simply isn’t as high for housing or for commercial property as they are used to in London or the South, because the ecosystem of infrastructure hasn’t been there to create an environment which attracts the end user in significant numbers,’ she pointed out. ‘However, with HS3, improved road links and a trans-Pennine tunnel all garnering the Chancellor’s support, occupier demand for homes and business in the surrounding areas will rise, which we can expect to attract international property investors looking to place their money outside of the capital’s heated market,’ she added. Graham Davidson, managing director of buy to let specialist, Sequre Property Investment, believes that the job creation that will come with the infrastructure projects will result in increased demand for property, providing a positive outlook for buy to let investors who are chasing returns that have been squeezed out of London and the South East. ‘Since the Northern Powerhouse agenda was first touted two years ago, our own business has seen a circa 30% rise in interest in northern property at a granular level with many millions being invested further up the chain at a global level in residential and commercial projects. The message is more clear than ever; the north is open for business,’ he said. The new routes across the Pennines and between Manchester… Continue reading
Residential property sales in Scotland reach eight year high
The Scottish residential property market has recorded is highest January home sales in eight years and average prices also rose, according to the latest index figures. Sales in the first month of 2016 increased by 24% year on year with the biggest surge in Midlothian with a rise of 38% with flats and terraced houses driving the growth, the Your Move data shows. Average Scottish house prices increased by 0.8% in January to £171, 079, up from 0.3% the previous month. The strongest growth was in Stirling where property values have jumped 13.5% over the past year. Christine Campbell, Your Move managing director in Scotland, pointed out that transactions in Scotland easily outpaced sales south of the border, as England and Wales only saw a 1% rise over the same time period. She explained that the surge in Scottish home purchases has been propelled by second home and buy to let buyers eager to avoid paying the 3% Land and Buildings Transaction Tax (LBTT) surcharge which is being introduced from 01 April. She pointed out that as this tax hike was only announced in December’s Scottish Budget, January’s surge in sales may only be the tip of the iceberg. She also explained that the growth in Midlothian has been aided by the lower rate of LBTT on the purchase of cheaper properties, with flat and terraced house sales accounting for the largest rise. This trend can also be seen in Glasgow, which narrowly beat Edinburgh to become the area with the highest absolute increase in sales. The only areas in Scotland which have seen a decline in sales from November to January, compared to the previous three months are Aberdeen City and Aberdeenshire. In Aberdeen City sales have fallen by 11% in this time period, as a result of the oil crisis and the large proportion of expensive detached homes in city which are hit hardest by the LBBT. ‘January marks the sixth consecutive month of year-on-year growth in house prices, as the market finds a sturdy footing, putting the shaky start to 2015 behind it. The boost in property values has been driven by improving economic conditions, with employment in Scotland at an all-time high,’ said Campbell. ‘However, this stability may be under threat if the effects of the impending LBTT surcharge mirror those seen with the introduction of the original tax. There could soon be a swift peak in prices as investors rush to buy before the surcharge comes into force, followed by a dip in home values after the implementation of the surcharge,’ she warned. She reckons that the 13.5% or £24,508 year on year price growth in Stirling has been fuelled by Stirling Council’s programme to build 210 new properties in the area, with an additional investment of £9 million planned for 2016. ‘A further boost was provided by the recent sales of two million pound homes in the countryside close to the city, possibly as… Continue reading
