Tag Archives: real-estate
US existing home sales fall after three months of growth
Following three straight months of gains, existing home sales in the United States dipped in August despite slowing price growth and a positive turnaround in the share of sales to first time buyers. Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co–ops, fell 4.8% to a seasonally adjusted annual rate of 5.31 million in August from a slight downward revision of 5.58 million in July. While none of the four major regions saw sales increase in August, the index report from the National Association of Realtors (NAR) says that sales have risen year on year for 11 consecutive months and are 6.2 % above a year ago. Lawrence Yun, NAR chief economist, explained that home sales in August lost some momentum to close out the summer. ‘Sales activity was down in many parts of the country last month, especially in the South and West, as the persistent summer theme of tight inventory levels likely deterred some buyers,’ he said. ‘The good news for the housing market is that price appreciation the last two months has started to moderate from the unhealthier rate of growth seen earlier this year,’ he added. The index also shows that the median existing home price for all housing types in August was $228,700, which is 4.7% above August 2014 when it was $218,400. The market has now seen 42 months in a row of year on year gains. The report also shows that total housing inventory at the end of August rose 1.3% to 2.29 million existing homes available for sale, but is 1.7% lower than a year ago. Unsold inventory is at a 5.2 month supply at the current sales pace, up from 4.9 months in July. ‘With sales and overall demand higher than a year ago and supply mostly unchanged, low inventories will likely continue to limit options for those looking to buy this fall even with the overall pool of buyers shrinking because of seasonal factors,’ said Yun. The percent share of first time buyers rebounded to 32% in August, up from 28% in July and matching the highest share of the year set in May. A year ago, first time buyers represented 29% of all buyers. Yun believe that when the Federal Reserve decides to lift short term rates, which is expected later this year, the impact on mortgage rates and overall housing demand will likely not be pronounced. ‘With job growth holding steady, prospective buyers can handle any gradual rise in mortgage rates, especially if today's stronger labour market finally leads to a boost in wages and homebuilding accelerates to alleviate supply shortages and slow price growth in some markets,’ he added. NAR released a study earlier this month that examined new home construction in relation to job gains. The findings revealed that home building activity is currently insufficient in a majority of metro areas and is contributing to the ongoing housing shortages and unhealthy… Continue reading
Scottish property market still seen as a good investment despite tax changes
The Scottish property market is still adjusting to political and taxation changes but overall remains an attractive place to invest in real estate, according to a new analysis report. Scotland remains comparatively good value for money, and this is the key driver in the majority of buying decisions but the introduction of Land and Buildings Transaction Tax (LBTT ) in April has had an impact. It has contributed to the growth of Scotland’s mainstream residential market, but delayed the recovery of the prime sector in the medium term, says the report from real estate firm Savills. However, Edinburgh is the exception to the rule, where the prime market is attracting buyers from London and overseas who remain cautious about investing outside the capital and the report says that one year on from the Referendum on Scottish Independence, there has been a notable transfer in balance within the residential property market north of the border, with a shift to bottom up growth. The report explains that during the summer of 2014, the Scottish property market was recovering from the economic downturn. The prime residential market was leading the way in the resurgence, with a growing demand for properties above £400,000, particularly in key property hotspots. Consumer confidence was beginning to ripple out, both to other locations and to lower price bands. However, the Referendum raised a number of difficult questions, and the resulting uncertainty stalled the property market. ‘This was felt acutely at the top end, the bracket that had long been boosted by the prevalence of London buyers. A year on, this key target group remains anxious about LBTT and the forthcoming Scottish Rate of Income Tax,’ said Faisal Choudhry, director of Scottish residential research at Savills. ‘In addition, both UK and Scottish Governments have introduced initiatives to support the lower value sector of the market in an attempt to revive both the house building industry and buyers on the early steps of the property ladder,’ he said. ‘Buyers of homes below £400,000 are now receiving further assistance in the form of favourable rates of LBTT. Meanwhile, buyers of more expensive homes are taking on the burden of the new progressive taxation in Scotland,’ he added. The report says that Scotland’s million pound market has felt the biggest brunt of the new taxation changes. The vast majority of sales in this bracket completed prior to 01 April, before LBTT was introduced. While there has been a slight uplift in activity in recent weeks, sales have mostly been focussed on the core locations of Edinburgh, East Lothian, East Renfrewshire and East Dunbartonshire and also in Aberdeen, which saw the most expensive sale since April this year at £2.78 million. ‘As the economy improves, and buyers from both sides of the border adjust to the new taxation structure, we expect this upward trend to continue. While the million pound market is beginning to recover in Scotland’s capital, buyer activity in more provincial locations remains subdued,’… Continue reading
Annual property price growth in England and Wales down to slowest for two years
The average property price in England and Wales increased 4.2% year on year and 0.5% month on month, according to the latest data from the Land Registry, the lowest annual growth for two years. This took the average property value to £184,682 with the growth led by London which had the largest monthly rise of 1.7% and annual growth of 6.6%, taking the average price to £493.026. On a regional basis the biggest annual price rise was in the East of England with growth of 8.4% and the North West saw the biggest monthly fall of 1.4%. The North West also has the lowest annual price rise of 0.2%. A breakdown of the data shows a considerable range of price movements in London. The borough with the highest annual price rise was Newham, up 15.5% while Barking and Dagenham experienced the highest monthly price increase, up 2.2%. Camden saw the largest annual fall of 1.7% and Kensington and Chelsea experienced the greatest monthly fall with average prices down 1.1%. The most up to date figures available show that the number of completed house sales in England and Wales decreased by 13% to 70,404 compared with 80,823 in June 2014 and the number of properties sold in England and Wales for over £1 million was down 1.7% to 1,031 from 1,237 a year earlier. The data also shows that repossessions in England and Wales decreased by 43% to 498 compared with 868 in June 2014 and the region with the greatest fall in the number of repossession sales was London. Rob Weaver, director of property at residential investment platform, Property Partner, believes that the stamp duty change is affecting the London market. ‘That prices in Kensington and Chelsea fell more than all other London boroughs in August underlines how the more punitive tax regime is having an impact at the higher end of the market,’ he said. He also pointed out that the North/South house price divide is still very much in evidence. ‘Annual growth in the North East and West is way off the pace compared to the South. The broader theme within the property market remains much the same, namely low transaction levels, rising prices and weak supply,’ he explained. ‘To achieve a sustainable and balanced property market, supply has to improve. To boost supply will require initiatives from all quarters, both private sector and Government. Resolving the supply crisis looks set to be the dominant narrative of the next decade and beyond,’ he added. The market in London appears to have got the ball rolling again, as buyers get used to the heavier taxation, and prices in the capital and surrounding regions are seeing a must faster pace than in the North West, North East, and Yorkshire, according to Adrian Gill, director of Your Move and Reeds Rains estate agents. He believes that while sales activity may look slightly subdued on an annual basis, transactions have actually been picking up speed solidly since… Continue reading
