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US sees fall in overseas buyers due to stronger dollar, analysis suggests
Fewer overseas buyers are purchasing property in the United States with currency exchange playing its part in the drop off, a new analysis report suggests. In general home sales during the first four months of 2015 have been the best in eight years with year on year growth of 9% helped by a drop in fixed mortgage rates of almost 0.5%. But the National Association of Realtors reports that the number of international buyers dropped to 2% during the first four months of 2015 from 2.5% a year earlier, a 19% decline. About three fourths of real estate agents who work with international clients report that changes in foreign exchange rates have a moderate to very significant effect on foreign buying. Indeed, the US dollar has strengthened against currencies used by many foreigners who buy homes in the country. For example, from the beginning of 2014 o April 2015, the US dollar appreciated 10% relative to the UK pound, 13% relative to the Canadian dollar and 26% relative to the euro. Notable exceptions to these large swings in foreign exchange values were the Chinese yuan and Hong Kong dollar, which have closely tracked the value of the US dollar. A new analysis report from real estate firm CoreLogic points out that a stronger US dollar makes property more expensive for foreign buyers whose currencies have weakened. Consequently, purchases by foreign buyers have dropped, especially for those whose currency was most affected by the foreign exchange swing. Between the first four months of 2014 and the same four months of 2015, the number of homes sold to foreign buyers drastically declined. Foreign purchases were down between one quarter to one third during this period for buyers whose currencies depreciated significantly relative to the US dollar, even though domestic purchases rose. ‘In addition to the shock caused by the stronger US dollar, the markets where foreigners tend to buy have had strong home price appreciation in the last few years. For example, many Canadians, Europeans and South Americans prefer to buy along the Southeast coast of the US for the beaches, cultural amenities, warm winter temperatures and accessibility,’ the report says. Canadians made roughly two thirds of their US home purchases during the first four months of both 2014 and 2015 in Florida. Of these purchases in 2015, nearly a half were located in the Miami-Fort Lauderdale-Palm Beach area where home prices rose about 8% from April 2014 to April 2015. ‘Couple that with the effect of a stronger US currency, and the average Canadian considering a home purchase in south Florida saw a jump in purchase cost of 20% to 25% in the past year,’ it explains. The report suggests that foreign buying could continue to decline, level off or increase in 2016 depending on the value of the US dollar relative to most foreign currencies, but the uncertainties surrounding how the Eurozone will resolve the debt crisis in Greece has made it… Continue reading
More than half a million British properties now worth over £1 million
The number of home owners in Britain whose property is worth £1 million or more has exceeded half a million for the first time, according to new research. The number of so called property millionaires now stands at 524,306, an increase of 8.3% on last year’s figure and almost 11,000 streets now have an average property value above £1 million, the data from Zoopla shows. Of the 10,958 streets with average property prices over £1 million some 43% are located in London. Areas outside the capital with the highest proportion of £1 million plus streets are all in Surrey, with Guildford, Leatherhead and Richmond housing 158, 154 and 144 respectively. At the very top end of the market, the data shows there are now 13 streets in Britain where the average house price is over £10 million, all of which are in London. Kensington Palace Gardens in W8 ranked as the country’s most expensive street overall, with homes there worth £42,591,972 on average, over 150 times the average national property value. The Boltons in SW10, where a nine bedroom detached house sold for £51 million in April, takes second place, with average property values standing at £30,288,586. Grosvenor Crescent in the exclusive suburb of SW1 rounds out the top three, with an average property price of £22,752,425. While exclusive London boroughs boast most of Britain’s priciest properties, certain areas of Surrey and Buckinghamshire have also acquired a reputation for very high property values. Virginia Water and Cobham, both in Surrey, top the towns table, with average property prices of £1,208,638 and £1,037,825 respectively. Beaconsfield in Buckinghamshire, where the average property value amounts to £982,660, comes in third. In terms of postcodes, W8 in Kensington, remains top of the heap, boasting average property prices of £2.77 million. Neighbouring SW7 in Knightsbridge is the next most expensive area in the capital with average values of £2.43 million, while property values in third placed SW3 in Chelsea stand at £2.24 million. ‘London continues to be the epicentre of the million pound property market in Britain but there are a number of high value property areas outside the capital, particularly in Surrey and Buckinghamshire, that are very attractive to professionals seeking to live outside yet within easy reach of the city and enjoy low crime rates coupled with good schools,’ said Lawrence Hall of Zoopla. Continue reading
UK govt announces changes to shake up house planning and get more homes built
A series of planning reforms announced today by the UK government aimed at boosting house building have been widely welcomed by the property and construction industries Under the changes planning permission will be granted automatically for homes on brownfield sites, even over ruling wishes of local authorities in England. But experts warned that councils will not like the move although they have been heavily criticised for not creating local plans and taking too long to make decisions. Ministers will also get powers to seize disused land which is suitable for houses and major housing projects are set to be fast tracked through the planning system. There will be penalties for local authorities that make 50% or fewer planning decisions on time in a bid to inject some speed into the planning process. The rules on extensions in London are to be relaxed in terms of building upwards to match neighbouring levels and the Mayors of London and Manchester are to get power over planning in their cities. The British Property Federation (BPF) said the changes have the potential to be an enormous boon to housing supply but it warned that some of the new measures will only work if the government addresses the severe shortage of funds within local authority planning departments. The BPF also urged the government not to over focus on providing new homes for sale and pointed out that there is also a need for more purpose built rental accommodation in order to combat the housing shortage and deliver a more balanced housing market. Melanie Leech, chief executive of the BPF, British Property Federation, called for a dialogue with both the public and private sectors on how to address the severe shortage of funds which is afflicting local planning departments. ‘The private sector will need to play a part in helping to address this funds shortage, and this needs to be explored fully if we want these new measures to work. We would also have liked to have seen some commitment to growing the purpose built rental sector, which has an important part to play in solving the housing crisis and creating a balanced housing market,’ she said. ‘We warmly welcome the government’s recognition of how a functioning and efficient planning system can contribute to the UK’s growth by creating not just new homes, but also the infrastructure that supports great places,’ she added. Leech explained that a lack of dynamism among local authorities on Local Plans should be addressed by the government being able to intervene. ‘Local Plans are fundamental to growth, and we are firm believers in a plan led system. There are still areas, however, without a Local Plan in place, and so we are pleased to see that government is taking steps to ensure that plans are delivered in a timely fashion,’ she said. ‘A number of recalcitrant local authorities have been dragging their feet and producing bloated local plans that are overly long and simply… Continue reading
