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Rental prices in Spain fall for 34th month in a row
Rental values in Spain are continuing to fall with the latest figures showing that average rents fell by 0.4% in January compared to the same month of 2015, the 34th month in a row of declines. The data from the National Statistics Institute (INE) shows that rents fell in all regions except in Galicia where they increased by 0.3%, the Balearic Islands and Catalonia both up 0.1%, ad were static in Murcia and Navarra. The most significant fall in rental prices were in La Rioja where they were down by 2% while in Castilla y Leónand Castilla-La Mancha rents fell by 0.9%, were down 0.8% in Madrid and Extremadura and down 0.7% in Asturias and Valencia. The regions of Andalucía and Aragón registered the same rate of decline as the national average at 0.4%, while in Cantabria rents fell by 0.3% and the Canary Islands, the Basque Country and Ceuta all recorded declines of 0.2%. But in the buying and selling market the news is more positive with the INE data showing that the Spanish housing market grew by 11% last year after bottoming out in 2014. There were 318,055 home sales last year, the first time sales have risen above 300,000 a year, and following 260,000 in 2012 and 2013. But sales are still considerably below the 700,000 recorded before the global economic downturn in 2007. In terms of percentage growth, the housing market expanded by 11% last year, after rising 4% in 2014, and according to Mark Stucklin of Spanish Property Insight this suggests that the market has finally turned around. The crash in sales started back in 2008, and declined in five of the six years between 2008 and 2013, with dramatic double digit falls in most of those years. However, looking just at December, sales were up 8% year on year, meaning the market expanded every month in 2015, the first year that has happened since the crisis began. There were 77,865 new home sales registered last year, and 276,267 resales, meaning that resales were 78% of the market, down from parity as recently as 2013. ‘The new homes market has failed to recover as quickly as resales in part due to a lack of new developments on offer, though sales may start to recovery this year as more new projects come on stream,’ Stucklin explained. Of the selected regions most of interest to foreign buyers, Barcelona’s property market increased the most last year, up by 20%, but new home sales fell 20% while resales were up 32%. This was followed by Cadiz province, Las Palmas in the Canaries and the Balearics all up 15%. Indeed, all regions were positive with the exception of Huelva, home to the North Western end of the Costa de la Luz, also known as the Spanish Algarve, where they fell by 2%. ‘The Spanish property market now looks to be on a growth path after years in crisis. Sales growth was particularly… Continue reading
High property land prices in Australian capital cities bringing sales down
There is strong evidence of intensifying supply constraints in the residential land market in Australia, especially in the country’s state capital cities. The number of residential lot sales fell by 2.7% in the third quarter of 2015 while median lot prices rose by 4.2%, according to the report from the Housing Industry Association and real estate analytics company CoreLogic RP Data. The index report explains that the tightening of market conditions was concentrated in the capital cities, where prices increased by 5.4% but the number of lots transacted actually fell by 4.5%. According to Shane Garrett, HIA senior economist, with the Australian population now over 24 million for the first time, the report provides a sobering indictment of how land supply policy is not keeping pace with the housing needs of a growing population. ‘The combination of strong land price growth yet declining transaction volumes are hallmarks of a market constrained by supply bottlenecks. Ineffective land supply policy will limit Australia’s long term growth potential and erode competitiveness by forcing costs up,’ he explained. ‘The key supply side issues like planning delays, efficient infrastructure provision and the mammoth taxation burden on new housing need urgent attention. Otherwise, living standards for Australia’s 24 million residents will never reach their full potential,’ he added. According to CoreLogic RP Data research director Tim Lawless, the number of vacant land sales has been trending lower since reaching a recent peak over the June quarter of 2014, with the median land price continuing to push higher despite lower volumes. ‘Buyer demand across the vacant land market has remained strong, which is why prices are rising on lower sales, however, as land prices rise it is likely block sizes will have to reduce in order to maintain an affordable price point for buyers,’ he said. He pointed out that median lot prices have risen across every capital city over the past 12 months except for Adelaide where they fell by 1%. The tight supply of land across Sydney has seen median land prices rise by the most of any capital city over the past year, up 22.8% compared with a weighted average across the capitals of 10.7% growth. ‘Despite having the most expensive housing and vacant land, Sydney is currently showing the second largest median lot size amongst the capital cities at 537 square metres. Somewhat counterintuitively, the median land area has historically been the smallest in Adelaide, with the September quarter data showing a median lot size of just 375 square metres,’ Lawless said. Continue reading
Home owners in London more confident about house price increases than rest of UK
Households across the UK believe that the value of their home increased this month with people in London more so than the rest of the country, says the latest house price sentiment index. Households in all of the 11 regions covered by the index reported that prices rose in February, led by households in London at 68.1 and the East of England at 62.3. Households in Scotland reported the most modest rate of growth at 51.7 followed by the North East at 53. The data from the Knight Frank/Markit index also shows that households expect house prices to rise over the next 12 months, with the strongest growth expected by households in the South East. However, the rate of growth expected over the next year eased compared to January and while 23.2% of the 1,500 households surveyed said that the value of their home had risen some 4.1% said that prices had fallen. This resulted in a HPSI reading of 59.6, the 35th month in a row that the reading has been above 50. Any figure over 50 indicates that prices are rising, and the higher the figure, the stronger the increase. Any figure below 50 indicates that prices are falling. Indeed, February’s reading was the highest recorded by the index since October 2014, indicating that households perceive that the value of their home rose at its strongest rate since then. However, February’s reading remains well below the peak of 63.2 reached in May 2014, reflecting the easing in average UK house price growth seen since then. The future House Price Sentiment Index (HPSI), which measures what households think will happen to the value of their property over the next year, fell in February to 69.8, from 70.5 in January. While still indicating that households across the UK expect the value of their home to rise over the next 12 months, the future HPSI remains below its peak of 75.1 reached in May 2014. There remains a clear north-south divide in terms of the outlook for house prices, with households in Southern England more confident about future growth over the coming 12 months. Indeed, households in the South East were the most confident that prices will rise at 78.7, followed by Londoners at 77.8 and those in the South West at 74.1. In Scotland, the North East and Wales expectations for future price growth remain positive, but are more subdued at 62, 60.6 and 62.5 respectively and the data also show that those who own their home outright are the most confident that prices will rise over the next year at 75.4, followed by mortgage borrowers at 75.2. ‘The HPSI indicates that house prices are set to continue to tick up modestly in the coming months. The market is being underpinned by the solid economic recovery and ultra-low interest rates which now look as if they will stay put for some time to come,’ said Gráinne Gilmore, head of UK residential research at… Continue reading
