Tag Archives: real-estate
US home prices up 0.3% nationally in May
The median US home value increased 0.3% in May compared to the previous month but overall prices are still 8.8% below the peak of the market in April 2007. This takes the median price to $179,200, according to the latest Zillow Real Estate market report which tracks 514 areas around the country. The data shows that 64% or metropolitan areas saw prices rise month on month and 67.3% saw annual price rises. In May the four fastest growing markets among the nation’s 35 largest all experienced double digit annual home value appreciation; Denver, San Jose, Dallas-Fort Worth and San Francisco. In all four of these markets, home values have already surpassed their bubble-era peaks. The most sluggish large markets in May were Boston were prices increased by just 0.2% annually, New York where prices were down 0.1% and Baltimore down 0.3%. All three are in the north east of the country. According to Stan Humphries, Zillow chief economist, the market isn’t back to normal. ‘Low inventory, persistent negative equity and still low mortgage interest rates continue to distort the market in various ways,’ he said. ‘But the fact that local markets are once again largely rising and falling on their own merits and continuing to find some kind of equilibrium based on real market fundamentals like household formation rates and job and wage growth is encouraging. A truly normal national housing market is one in which local conditions rule,’ he added. Over the next year home value growth is expected to slow even further to 2.2%, according to the Zillow Home Value Forecast. This will be some way below 2014 when home values rose 4.9%. ‘The country by and large rode the same big roller coaster through the housing bubble, bust, and recovery. May’s report shows local markets diverging, with some chugging along, some stalled out and some continuing to accelerate amid rising prices and competition. This is a positive sign that the market is returning to full health,’ Humphries pointed out. ‘In general, as mortgage rates begin to rise and incomes and household formation rates slowly increase, the baton is being passed in housing from a stimulus driven market to one driven by fundamentals. This transition from housing recovery to a more normal market is a good thing long term, but we can expect some bumps along the way. In the end, increasing household formation and stronger income growth should overcome the headwind of rising mortgage rates,’ he concluded. Continue reading
UK commercial property sales reach highest level since the economic downturn
The number of UK commercial property transactions has reached its highest level since the credit crunch, with 115,400 sales in the last year, a 6% jump, according to the latest figures to be made available. Data from HMRC shows that the number of transactions is up 24% from a low of 92,900 in 2008/2009, but still significantly below 2007/2008 when there were 139,000 sales. An analysis of the figures by commercial law firm EMW, suggests that England is dominating the country’s market. There were 97,500 commercial property transactions in England last year, accounting for 85% of the UK total, this figure is also the highest since 2007/2008 when there were 115,700, 83% of the UK total. The report explains that the relatively high yields on property when compared to other investments, continues to attract both UK and, increasingly, overseas investors. ‘Commercial property assets are proving increasingly attractive to investors looking for higher yields in an environment with record low interest rates and this is driving activity towards pre-credit crunch levels,’ said Nick Marshall, principal at EMW. ‘There has also been a surge of interest from overseas investors, with the UK offering investor friendly lease terms. The relative shortage of vacant prime office space in central London is also making the market more attractive to investors,’ he explained. ‘Bank lending has also picked up which has led to more activity in the market and lenders are now happier to fund purchases at higher loan to value ratios. Without higher LTVs, many property investors were finding it hard to get the economics of their investments to work,’ he added. Meanwhile, according to the latest Commercial Market in Minutes report from Savills, downward pressure on prime yields is set to resume across six sectors of the market while income and rental growth will begin to drive the total return. Savills expects downward movements in prime yields to return across M25 offices, provincial offices, high street retail, shopping centres, industrial distribution and industrial multi-let, largely driven by a lack of new stock coming to the market. Also, West End and City office prime yields are at an all-time low at 3% and 4.25% respectively, compared to 3.25% and 4.25% in May of last year. However, unlike the early phase of the UK’s economic recovery which saw investors rely on an uptick in capital value to produce total returns, Savills says the market will have to focus more on income return and rental growth. The firm suggests this shift is a clear indicator that the market has moved on as the rate of capital value growth begins to slow from its peak of 12.95% in October 2014 compared to a current level of 11.04% for the year to the end of May 2015. ‘Rental growth is no longer just a London story and while office and retail in the Capital remain at the top, an outward ripple of recovery suggests strong… Continue reading
Property tax rules changing in New Zealand
A new Bill to strengthen the property tax rules for buyers and sellers in New Zealand is being introduced which will help the taxman enforce the rules around real estate. The Taxation (Land Information and Offshore Persons Information) Bill contains proposed amendments to the Land Transfer Act and the Tax Administration Act. Buyers and sellers of property will be required to provide their IRD numbers at the time of property transfer. Those who are tax residents in another country will also have to provide their Tax Identification Number from their home jurisdiction. However, there will be an exemption for New Zealand residents’ main home. And to ensure our anti-money laundering rules apply, there will be a requirement for overseas people to have a New Zealand bank account to get a New Zealand IRD number. This will also apply to New Zealanders who have been out of the country for three or more years. ‘These measures provide extra information which will help Inland Revenue detect people seeking to avoid their tax obligations. When people try to get out of paying tax, it’s unfair to all those people who do pay,’ said Revenue Minister Todd McClay. According to Land Information Minister Louise Upston the proposals will see Land Information New Zealand and Inland Revenue collaborating to ensure fairer taxation of people buying and selling residential property for profit. The bill is expected to be reported back to the Parliament House in time to be passed in late September and it will take effect from 01 October 2015. McClay intends to release a public consultation document later this month seeking views on the introduction of a ‘bright line’ test which would make gains from the sale of certain residential properties sold within two years of purchase taxable. ‘Under this test an exemption will apply when the property is the seller’s main home, is inherited from a deceased estate or is transferred as part of a relationship property settlement,’ he explained. ‘Most people in New Zealand do the right thing and pay their tax. Inland Revenue will help you get it right, but for those who try to avoid paying, we’re making it harder to get away with it,’ he added. Continue reading
