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Home building in Australia reaches new record high
Home building approvals in Australia soared to a new record high in January 2015, up 5% on the previous monthly record of November 2014, the latest data shows. The figures from the Australian Bureau of Statistics also shows that the total number of new homes approved in January 2015 was 7.9% higher than in December 2014. Detached house approvals held steady in the month, down a marginal 0.4% and remain at similar levels compared with a year ago. In contrast, multi-unit approvals jumped by 17.5% in January 2015 to a level 24.3% higher than a year earlier. ‘Once again, the multi-unit sector continues to be the key driver of building approval results,’ said Housing Industry Association economist, Geordan Murray. He pointed out that a sharp spike in multi-unit approvals in Queensland in January has combined with solid levels of multiunit approvals in New South Wales and Victoria to lift the national total. ‘These three states typically account for around 80% of all multi-unit residential building and when you have all three performing strongly, it’s a recipe for a strong national result in this segment of the market,’ he explained. He also pointed out that January 2015 was only the second month on record when the total number of multi-unit dwellings approved eclipsed the number of detached houses approved. ‘But this is certainly no indictment on the performance of the detached house market which continues to maintain healthy approval numbers. Changing consumer preferences, demography, affordability challenges and aspects of the policy environment are all contributing to the current situation where a larger share of new homes are in the form of attached dwellings,’ he added. During January seasonally adjusted new dwelling approvals increased most strongly in Queensland with growth of 47.8% followed by South Australia at 22.3% and Victoria at 3%. Declines in new home approvals were recorded in New South Wales with a fall of 4.2%, Western Australia down 11.6% and Tasmania down 9.3%. In trend terms, new dwelling approvals fell in the Northern Territory by 10% and the Australian Capital Territory saw a decline of 5.7%. The HIA’s most recent national outlook report identifies 2014/2015 as the year when a record number of new homes will be built although it says that wide geographical divergences are still evident, trading conditions are more competitive than ever, and the renovations part of the market is still soft. ‘National new home building activity is the star of the housing show with a record level of 195,936 new dwelling commencements forecast for 2014/2015. That result would represent growth of 7.7% and cap a third year in a row where new home construction has headed higher,’ said HIA chief economist, Harley Dale. He pointed out that record building needs to continue to ensure that supply in coming years meets the requirements of a growing and ageing population. Continue reading
Help to Buy mortgage scheme helps over 40,000 onto the UK housing ladder
Since the launch of the UK government’s flagship Help to Buy mortgage guarantee scheme over 40,000 loans have been completed with the overwhelming majority going to first time buyers. One of the main aims of the scheme was to get people onto the housing ladder and the official figures show that 40,079 have taken a loan and of these 78% were purchases by first time buyers. The data also shows that the total value of mort gages supported by the scheme is £5.9 billion and the mean value of a property purchased or remortgaged through the scheme was £156,031, compared to a national average house price of £272,000. Compared to total mortgage completions in each region, the scheme is supporting a higher proportion of mortgages in the North West and the East, and a lower proportion in London and the South East. Under the scheme, which was launched in October 2013, the government offers lenders the option to purchase a guarantee on mortgage loans where the borrower has a deposit of between 5% and 20%. The scheme can be used for mortgages on both new build and existing homes, by first time buyers, home movers and those remortgaging. In order to qualify for a loan supported by the Help to Buy mortgage guarantee scheme, there are a number of eligibility criteria which are set out in the scheme rules. For example, the scheme is not available on buy to let mortgages or second homes, and the property value must be £600,000 or less. Meanwhile, new research shows that the number of first time buyers relying on the ‘Bank of Mum and Dad’ for support has dropped significantly. Clydesdale and Yorkshire Banks’ annual first time buyers survey shows that 46% of the nation’s first time buyers needed help in saving for their deposit in 2014 compared with 63% in 2013 and 78% in 2012. ‘It has been very encouraging to see the recovery of the property market with lending to first time buyers at the highest level for seven years. It is also positive that the number of first time buyers relying on the Bank of Mum and Dad to get on the property ladder has decreased significantly,’ said Steve Fletcher, head of Clydesdale and Yorkshire Banks Retail Network. ‘This reflects the increased availability of first time buyer mortgages with a low deposit as well as growing economic confidence particularly among house buyers,’ he added. However, the research also shows some stark regional first time buyer differences with 27% in Yorkshire receiving support from their parents compared to 57% in the South West. Continue reading
House prices in UK down 0.3% in February
UK house prices fell by 0.3% in February, taking the average price of a home to £192,372, according to the latest index from the Halifax. It means that annual prices growth is now 8.3% and on a quarterly basis from December to February home prices have increased by 2.6% compared to the previous three month period. The quarterly rate of change increased for the second successive month but it remains below the rates recorded between July and September 2014. The three monthly rate increased despite a small monthly fall in February due to robust rises in both December and January. Prices in the three months to February were 8.3% higher than in the same three months a year earlier. This was a little lower than January’s annual increase of 8.5% and significantly below the peak of 10.2% in July 2014. The decline between January and February, partly offset January’s 1.9% rise. Martin Ellis, Halifax housing economist, pointed out that annual price growth eased from 8.5% in January to 8.3%, and is comfortably below last July’s peak of 10.2%. ‘The firming in price growth shown by the recent pick up in the three month on three month comparison and indications of a modest rise in activity are likely to be due to a boost to housing demand as a result of increases in real earnings and spending power, further recent falls in mortgage rates and stamp duty changes,’ he explained. ‘The supply of both new and second hand homes available for sale remains low, another factor that is likely to be supporting house prices. Supply remains tight despite house building in England increasing for the second consecutive year in 2014 and a recent rise in the number of properties coming on to the market,’ he added. Continue reading
