Tag Archives: sales

Prime central London annual price growth at lowest since 2009

Annual price growth in prime central London fell to 2.8% in April, the lowest rate since November 2009 and is unlikely to change much this year, according to a new market analysis. Growth has been on a downwards trajectory in recent months ahead of the general election, but the Conservative Party victory suggests April is likely to mark the low point in the cycle, says the analysis report from Knight Frank. According to Tom Bill, head of London residential research at the firm, the principal effect on the prime London property market is that the election result has removed the prospect of a mansion tax on properties worth more than £2 million. ‘We believe this will lift transaction levels but the extent of any short term boost to prices is less clear cut. It will also be significant to note to what degree the opposition Labour Party moderates its policies around wealth creation and taxation and whether this reduces the rhetoric of the wider economic debate,’ said Bill. He believes that following the Conservative Party general election victory, several short term outcomes are likely. ‘First, numerous transactions put on hold pending the outcome of the vote will proceed as the risk of further property taxation appears less of an immediate threat. Other sales will progress simply because the election is over and a deeper sense of political uncertainty has receded,’ he explained. ‘As the logjam unblocks, it is likely to be accompanied by a hardening of expectations on the part of vendors over asking prices and some will expect prices to immediately rise as a direct consequence of the election result,’ said Bill. ‘In the short term, the impact on pricing is likely to be less marked than some expect due to the quantity of properties coming onto the market. Many vendors lined up sales for Monday 11 May, irrespective of the outcome of the election. Also this short term increase in supply is likely to exceed any uptick in demand. Activity in the prime London market has dampened in recent months as buyers and sellers factor in political risks but also as they digest measures like the stamp duty increase,’ he explained. ‘The market is in the final stages of absorbing these changes, meaning some buyers will still proceed with care. Furthermore, some prospective buyers will have signed rental contracts as they hedged their bets on the outcome of the election, meaning they are unable to act for several months,’ he added. Bill also pointed out that there is likely to be a short delay before a supply/demand equilibrium returns and a likely ‘expectation gap’ between asking prices and the prices that new and newly active buyers are prepared to pay. ‘However, price growth is likely to return more quickly in markets that have underperformed the prime central London average, including areas in Kensington and Chelsea where there has been low single digit annual growth in recent years,’ he said. Bill explained… Continue reading

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Sales of new homes in Australia at their highest since 2010

The new homes sector in Australia has seen strong growth in March 2015, taking sales volumes to their highest level since early 2010, according to the latest survey. Overall new home sales were up 4.4%. There was an 11.3% rise in multi-unit sales and a 2.6% rise in detached home sales in March, according to the latest new home sales report covering the largest volume builders by the Housing Industry Association. ‘The monthly rise in both the detached and multi-unit segments of the market is an encouraging result. However, the broader trend is that growth over the past year has been driven by multi-unit sales, while detached house sales have tracked sideways,’ said HIA economist Diwa Hopkins. ‘The residential construction sector continues to be the main bright spot in the broader domestic economy, with updates to the sector showing its ongoing strength. Lower lending rates will provide added support to residential construction activity, which is emerging as a key area of growth mitigating the effects of the downturn in mining investment and construction,’ she added. A breakdown of the figures show that detached house sales increased by 5.9% in Victoria, 4.2% in New South Wales and also 4.2% in Western Australia. They declined by 5.8% in South Australia and by 2.3% in Queensland. In the March 2015 quarter, detached house sales increased by 5.2% in Victoria and by 4.3% in Queensland. In Western Australia they fell by 6.4%, in New South Wales by 3.6% and in South Australia by 1.4%. However, the latest renovations report from the HIA shows that this sector of the property market is struggling. Over the past three years the volume of renovations activity has fallen by 15%. The performance of South Australia typified the national trend. Over the 2012/2013 period, renovations activity the state declined from $2.10 billion to $1.78 billion, a drop of 15.1%. ‘The importance of the home renovations market is often underestimated. Valued at $29.66 billion during 2014, the renovations sector accounts for over one third of all residential construction activity and about 2% of GDP,’ said HIA senior economist Shane Garrett. ‘Big ticket expenditure items like home renovation jobs tend to suffer disproportionately at times when economic growth is slow and when unemployment is drifting upwards. The deceleration of wages growth to its lowest rate in almost two decades has also challenged the renovations sector,’ he explained. The report envisages a further decline of 2.8% in renovations activity during 2015. However, activity will experience an 8.2% uplift between 2015 and 2018, as a result of low interest rates and the gradual recovery of economic activity. Continue reading

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US pending home sales up 1.1% in March, but with regional variations

Pending home sales in the United States continued upwards in March and reached their highest level since June 2013, according to the latest index figures. The Pending Home Sales Index, a forward looking indicator based on contracts signed, from the National Association of Realtors climbed 1.1% to 108.6 in March from an upward revision of 107.4 in February and is now 11.1% above March 2014. The index has now increased year on year for seven consecutive months and is at its highest level since June 2013. NAR chief economist Lawrence Yun said that contract signings picked up in March as more buyers than usual entered this year's competitive spring market. ‘Demand appears to be stronger in several parts of the country, especially in metro areas that have seen solid job gains and firmer economic growth over the past year, While contract activity being up convincingly compared to a year ago is certainly good news, the increased number of traditional buyers who appear to be replacing investors paying in cash is even better news. It indicates this year's activity is being driven by more long term home owners,’ he explained. Yun expects a gradual improvement in home sales in the months ahead but says insufficient supply and accelerating prices could be a drawback to sales reaching their full potential. ‘Demand in many markets is far exceeding supply, and properties in March sold at a faster rate than any month since last summer. This in turn has pushed home prices to unhealthy levels, nearly four or more times above the pace of wage growth in some parts of the country. Simply put, housing inventory for new and existing homes needs to improve measurably to improve affordability,’ he added. A breakdown of the figures shows there is considerable regional variation. The index fell 1.5% in the Northeast fell, the fourth month in a row it has done so but is still 0.6% above a year ago. In the Midwest the index fell 2.5% but is 11.3% above March 2014. Pending home sales in the South increased 4% and are 12.4% above last March while the index in the West rose 1.7% in March and is now 15.6% above a year ago. Continue reading

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