Tag Archives: real estate
New home lending remains steady in Australia
New home lending activity in Australia remained healthy at the start of the new financial year, according to the latest data from the Australian Bureau of Statistics. Although the number of loans to owner occupiers purchasing or constructing new homes slipped by 0.8% in July, over the three months to July the number of these loans continued their upward momentum with an increase of 1.9%. Also, compared with a year earlier, the number of loans in the latest three months is 8.8% higher. ‘In an encouraging sign for new home building, lending activity for much needed new housing appears to be consolidating the recovery of the previous financial year, said Diwa Hopkins, Housing Industry Association economist. ‘Lending to investors constructing new homes made a strong recovery throughout the 2013/2014 financial year and this data reinforces the strength of that improvement. The value of this investment lending component in the three months to July 2014 is 10.5% higher than in the same period in 2013,’ she explained. ‘The figures show that current credit conditions are having the desired impact on residential construction, with both investors and owner occupiers taking advantage of the favourable conditions to add to Australia’s stock of housing, which will aid housing affordability across the spectrum of the housing market,’ she added. She pointed out that policy makers at all levels of government must be acting and coordinating to address existing barriers to further growth in the new housing stock. Examples include excessive taxation, zoning and approvals delays. ‘These impediments need be addressed in order for new home building to gather a further leg of recovery in 2015,’ she said. A breakdown of the figures show a 9% rise in the number of owner occupier loans for new housing in New South Wales. But the number of new home loans fell by 2.8% in Victoria, by 2.9% in Queensland, by 4.2% in South Australia, by 7.6% in Western Australia, by 7.7% in Tasmania, by 14% in the Northern and by 8.4% in the Australian Capital Territory. Over the three months to July 2014, however, lending increased in six out of the eight jurisdictions. Continue reading
UK house prices still rising but could be affected by Scot vote and 2015 election
House prices continues to rise across the UK in August but the vote in Scotland on independence is likely to have an effect along with next year’s general election. Both could act as a dampener on growth, according to latest UK residential market update report from Knight Frank. It also points out that there are some conflicting signals emanating from the market. ‘Economic confidence is up across the country and this, coupled with more positive employment data and ultra-low interest rates is providing a sound underpinning for increasing transactions and values in many parts of the country,’ said Gráinne Gilmore, head of UK residential research at Knight Frank. She pointed out that the government’s Help to Buy scheme is also gaining momentum, with nearly 40,000 homes now purchased under the scheme. Around 85% of Help to Buy Equity Loans, the part of the scheme that allows buyers to purchase a new home even if they don’t have a 25% deposit, were taken out by first time buyers, signalling that the scheme is easing the bottleneck of pent-up demand. Yet there are some signs of headwinds in the market. ‘From a regulatory point of view, the new mortgage rules may be acting as a partial dampener on activity. While mortgage approvals for new house purchases remained steady in July after the dip seen after the MMR rules were introduced in April, they have not re-bounded to the pre-April highs,’ said Gilmore. ‘The data suggests that the rules, coupled with the new lending limits applied by the Bank of England, could be acting as a slight temporary brake on the market, especially for higher loan to income mortgages,’ she added. The report also points out that the Royal Institution of Chartered Surveyors reported that new buyer demand fell in August following a sustained period of month on month growth. ‘This could be due to the summer holidays, but it comes amid increasingly vocal hints of an interest rate rise from the Bank of England Governor. While the markets now anticipate a rate rise early next year, two members of the Bank’s rate setting committee voted for a rate rise in August, the first time this has happened since rates hit a record low,’ said Gilmore. ‘There is also a period of increasing political uncertainty looming. All eyes are on the Scottish Referendum this week. The debate over the result has already had an impact on equity markets as well as currency markets. If there is a yes vote, it is likely to be the uncertainty in the market as Scotland thrashes out its economic and fiscal policies ahead of 2016 that affect the Scottish housing market, rather than the fact that Scotland becomes independent,’ she explained. Continue reading
Number of London homes worth over a million set to rise by 47% by 2018
The number of London house sales breaking the £1 million price barrier is expected to rise by 47% by 2018, according to new analysis from international property adviser, Savills. It means a further expansion of a market that has grown by 165% in the past five years. In 2003, just 1,825 £1 million plus sales were recorded by the Land Registry, a figure that rose to 7,529 last year. By 2018, the annual total is expected to exceed 11,000, in response to forecast price rises and means that more locations in the Greater London area will qualify as prime property area. According to calculations from Savills, annual turnover in London’s £1 million plus market has risen by 312% over the past decade and is forecast to record a 505% increase in the 15 years from 2003 to 2018. During the same period, prime London house prices are expected to have risen by 160%, evidence both of the rising prosperity in the capital and the geographical expansion of the prime market. A decade ago just over half of sales worth £1 million or more were concentrated in just two central boroughs, Kensington and Chelsea and Westminster, with 569 and 370 sales respectively. Last year, while these two central boroughs still accounted for a third of this high value market place, four other boroughs of Wandsworth, Hammersmith and Fulham, Camden and Richmond upon Thames, each saw more than 500 £1 million plus sales recorded by the Land Registry. Only two of London’s 33 boroughs, Barking and Dagenham and Newham, did not see any £1 million plus sales recorded by the Land Registry in 2013. Three other boroughs, Croydon, Waltham Forest and Bexley, recorded fewer than 10 such sales at nine, three and two respectively. But even in the highest value areas of these five boroughs average values were between £275,000 and £390,000. ‘In the past five years, we have seen £1 million sales increasingly extend into areas such as Acton, Dalston, Herne Hill, Tooting Bec and Blackheath. In the next five years such sales are expected to become significantly more concentrated in emerging locations such as Streatham, Kingston, Borough and Northwood,’ said Lucian Cook, head of UK residential research at Savills. ‘The majority of locations where we expect to see the emergence of £1 million-plus sales in the next five years neighbour existing prime areas. Areas such as Earlsfield, Brixton and Wanstead should see a greater proliferation of the £1 million price tag, which is also expected to begin to appear in such locations as Crystal Palace to the south, Southgate to the north and Isleworth and Osterley to the west,’ he added. The Savills research also identifies the emergence of a third ‘wealth corridor’, running south east via Dulwich and Bromley, as wealth flows out from more central locations, boosting house prices along its route. ‘Much of the growth in £1 million-plus sales will be organic, driven… Continue reading
