Tag Archives: real-estate
US existing home sales jump to highest pace for almost six years
Existing home sales in the United States increased by 5.1% in May year on year to their highest pace in nearly six years, partly fuelled by an increase in first time buyers. The latest data from the National Association of Realtors shows that all regions, led by the North East, saw sales increase. They have risen year on year for eight consecutive months and are 9.2% above a year ago. The median existing home price for all housing types in May was $228,700, which is 7.9% above May 2014, the 39th consecutive month of year on year price gains. According to NAR chief economist Lawrence Yun May home sales rebounded strongly following April's decline and are now at their highest pace since November 2009. ‘Solid sales gains were seen throughout the country in May as more home owners listed their home for sale and therefore provided greater choices for buyers,’ he said but added that overall supply still remains tight. ‘Homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation. Without solid gains in new home construction, prices will likely stay elevated even with higher mortgage rates above 4%,’ he explained. The data also shows that total housing inventory at the end of May increased 3.2% to 2.29 million existing homes available for sale, and is 1.8% higher than a year ago. Unsold inventory is at a 5.1 month supply at the current sales pace, down from 5.2 months in April. The percent share of first time buyers rose to 32% in May, up from 30% in April and matching the highest share since September 2012. A year ago, first time buyers represented 27% of all buyers. ‘The return of first time buyers in May is an encouraging sign and is the result of multiple factors, including strong job gains among young adults, less expensive mortgage insurance and lenders offering low down payment programmes,’ said Yun. ‘More first time buyers are expected to enter the market in coming months, but the overall share climbing higher will depend on how fast rates and prices rise,’ Yun added. With demand continuing to far exceed supply, properties typically stayed on the market for 40 days in May, up from 39 days in April but the third shortest time since NAR began tracking in May 2011. Short sales were on the market the longest at a median of 131 days in May, while foreclosures sold in 56 days and non-distressed homes took 38 days. Some 45% of homes sold in May were on the market for less than a month. All cash sales were 24% of transactions in May for the third straight month and are down considerably from a year ago when they were 32%. Individual investors, who account for many cash sales, purchased 14% of homes in May, unchanged from last month and down from 16% in May 2014. Some 67% of investors paid cash in May. Distressed sales, that… Continue reading
Residential rents in Australian cities grow at slowest pace on record
Over the past month residential rental rates in Australian cities have increased at their slowest pace on record, the latest data shows. Sydney and Hobart have seen the strongest rental growth over the past year, according to the data from the May CoreLogic RP Data index report which, according to the firm indicates a disconnect between demand and supply. The data also shows that rents in Perth, Darwin and Canberra have dropped by 4.5%, 5.5% and 0.6% respectively and overall combined capital city rental rates increased by just 0.1% in May. Combined capital city rental rates are recorded at $488 per week and on a quarterly basis they have increased by 0.6% and by 1.5% over the past 12 months, down from and annual increase of 2.2% a year ago. The report also shows that with home values growing faster than rents, gross rental yields continue to edge lower. ‘Sydney stands out as seeing strong population growth which is creating more demand for accommodation in the city,’ said index report author Cameron Kusher. Although Sydney and Melbourne recorded low rental yields, Kusher said that investors in these two cities are clearly not targeting rental returns. ‘It appears to be purely a capital growth play and likely to remain this way, at least for the time being,’ he added. For a more balanced approach to property investment he recommends investors look to markets like Brisbane or Adelaide which currently appear to be more financially attractive, however buyers should not expect value growth to match that of Sydney or Melbourne any time soon. According to Kusher, the annual rate of rental growth is now the slowest on record. He said the sluggish rental appreciation can likely be attributed to the ongoing boom in dwelling construction across Australia's capital cities accompanied by record high participation in the housing market from investors. Continue reading
Population growth is adding to hot property markets in Australian cities
A pick-up in population growth in Australia has added fuel to the already hot housing markets of Sydney and Melbourne, where house prices continue to surge, a new report suggests. Population growth is not only the key to Australia’s economic growth and output, but it also plays a central role in housing demand and price growth, according to the analysis from international real estate firm Knight Frank. In Sydney population trends have been a lead indicator towards house price growth. Despite easing over the past 12 months, overseas migrants have underpinned Australia’s recent population growth, accounting for approximately 58% of population gains over the past five years. The importance of overseas migration has become more apparent over the past decade as Australia’s immigration policies have been geared to meet the needs of the Australian labour market, with temporary visa programmes, predominately working holiday and temporary 457 visas, accounting for over half of all overseas visas issued in recent years. The report also points out that subsequently, population growth over the past decade has been a reflection of a pick-up in temporary migration as opposed to permanent migration. While recent population statistics published by the Australian Bureau of Statistics shows that population growth nationally has eased from its recent peak in 2009, to average 1.5% over the 12 months to September 2014, the report says that what is more of note is the rate of population growth by city. Indeed, despite remaining high by historical standards, population growth in the dominant resource capital cities of Brisbane and Perth has fallen sharply, particularly Perth were the annual rate fell from 3.6% to 2.5% in just 12 months in the year to June 2014. It also points out that the drop in population growth in Perth is now beginning to filter through to its property market, where over the six months to March 2015, house prices and sales volumes have dropped 2.6% and 2.8% respectively. On the other hand, population growth in Sydney and Melbourne increased over the 12 months to June 2014, supported by stronger economic prospects, underpinned by residential construction. The stronger economic environment within these cities led to an improvement in Net Interstate Migration, particularly to Melbourne and the state of Victoria, as people sought employment opportunities outside of their home state. The pick-up in population growth has been met with solid house price gains in these cities, where over the six months to March 2015, house prices in Sydney and Melbourne are up 8.2% and 2.8% respectively. Nationally, the recent easing of population growth can be partly attributed to the improving New Zealand economy. Australia has enjoyed strong population growth from New Zealand citizens for subclass 444 visa holders over the past five years as weak economic conditions in New Zealand provided the impetus to move to Australia. However over the past 12 months, the New Zealand economy has shown solid signs of improvement, with the unemployment rate now lower than Australia… Continue reading
