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Home sales fell almost 6% in December, latest CREA index shows
Nationally home sales in Canada fell in December compared with the previous month, recording a fall of 5.8%, the latest index shows. However, actual (not seasonally adjusted) activity stood 7.9% above December 2013 levels, according to the data from the Canadian Real Estate Association (CREA). The number of newly listed homes rose 1.1% from November to December and the Home Price Index (HPI) rose 5.4% year on year in December while the national average sale price rose 3.8% on a year on year. The number of home sales processed through Canadian real estate Boards and Associations fell 5.8% in December 2014 compared to November and remained above year ago levels. December sales were down from the previous month in almost two thirds of all local housing markets, led by declines of about 25% in both Calgary and Edmonton. Activity also slipped by about 5% in the Greater Toronto Area. ‘Home sales activity remained above year ago levels in most local housing markets. Sales were also stronger in December than they were the previous month in about one third of all local markets in Canada,’ said CREA president Beth Crosbie. December sales were down from the previous month in a number of Canada’s largest and most active housing markets, indicating a broadly based cooling off for Canadian home sales as 2014 came to an end, according to CREA chief economist Gregory Klump. ‘Even so, sales remain above year-ago levels in many of the same markets. Given the uncertain outlook for oil prices, it’s no surprise consumer confidence in Alberta softened and moved some home buyers to the side lines,’ he explained. ‘With regards to slower activity in Calgary and Edmonton, sales in these two markets had been running strong all year before they returned to levels that are entirely average for the month of December,’ he added. The number of newly listed homes rose 1.1% in December compared to November. Led by Calgary, Regina and Ottawa, new supply was up in just over half of all local markets. The national sales to new listings ratio was 51.8% in December, down from the mid 55% range in the previous four months. A sales to new listings ratio between 40% and 60% is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets respectively. The ratio was within this range in just over two thirds of all local markets in November. More than half of the British Columbia, Alberta and Southern Ontario markets that had been in seller’s market territory in November returned to balanced market territory in December. This list included Greater Vancouver, Calgary, Edmonton, and the Greater Toronto Area. The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity. There were 6.2 months of inventory nationally at the end of… Continue reading
New Scottish property tax rates being reviewed
The new property tax rates due to replace stamp duty in Scotland in April are being reviewed amid concerns that families buying in areas like Edinburgh face unfair bills. Finance Secretary John Swinney is currently examining the rates for the proposed Land and Business Transactions Tax (LBTT) and will announce his conclusions to the Scottish Parliament on Wednesday when MSPs are due to debate the Scottish Budget Bill. The LBTT rates were announced last year before the UK Chancellor George Osborne changed the stamp duty system nationwide. It raised the threshold for paying tax on a home from £125,000 to £135,000 but increased the amount to 10% on homes above £250,000 and up to £1 million. However, Osborne has now replaced the slab style stamp duty bands with a graduated rate which means some purchasers benefit more under the stamp duty system. Swinney said his proposals were designed for the Scottish market, not London house prices, with 90% of home buyers better or no worse off and 5,000 homes would be taken out of taxation all together. ‘The Chancellor's decision to introduce a new stamp duty system overnight, without warning and consultation, means that while 80% of home owners continue to pay less tax or no tax at all under the Scottish system we now have the opportunity to review the rates and ensure they are right for Scotland,’ he explained. The Conservatives have proposed that no tax be levied on house sales under £140,000, and that the 10% tax on homes between £250,000 and £500,000 be halved. ‘The eye watering 10% tax rate has caused concern in many parts of Scotland and is having a distortion on the housing market,’ said Conservative party finance spokesman Gavin Brown. Property industry experts have welcomed the move, saying that the original bands were too skewed towards extracting funds from the top end of the market. John Boyle, director of research and strategy at Rettie and Co, said that it was important that the Scottish government listened to people working in the industry and took their views on board. ‘We argued that the 80% Who would save money through what was proposed would save what amounted to a few hundred pounds, while the 20% who would pay more would be unfairly hit,’ he pointed out. ‘People in Edinburgh, Aberdeen and parts of Glasgow would all have been affected and it would have been a bit punitive on buyers in these areas. Trying to buy a family property in these cities for less than £250,000 is pretty difficult, and very few family homes sell for less than this,’ he added. One of the major complaints with the tax was the proposed jump from 2% on properties sold between £135,000 and £250,000 and a 10% rate on purchases above £250,000 and up to £1 million. ‘It would be reasonable to have a 5% or 7% bracket before you get to the 10% level, and we would expect this to be brought… Continue reading
Lettings annual review reveals UK rental hotspots
Leicester, Southall and Cambridge have been identified as UK lettings hotspots with average rents in 2014 some 45%, 38% and 24% higher, respectively, than 2013. By contrast, rent prices have fallen by the greatest amount in Colchester, Croydon and Brighton compared to 2013, with rents on new rental agreements 24%, 23% and 18% lower respectively in 2014. The HomeLet Rental Index annual review also shows that on average, rents across the UK in 2014 were 6.6% higher than in the previous year with the average monthly rent in the UK now standing at £867. However, when analysed on a regional and local basis, the data reveals some marked differences in rental market performance. Year on year rents have increased 9% in Scotland but fallen 4.6% in the North West. In Wales average rents have fallen 3.7% year on year and were down 1.4% month on month in December. East Anglia has also seen an annual and monthly fall, down 2.7% and 2.9% respectively. While Greater London has seen a 12% annual rise in average rents, they fell 11% in December, indicating that rental prices are falling considerably in the capital city to an average of £1,393 a month. If London is taken out of the equation then the annual rise is just 1.6%. On a monthly basis the UK wide figure fell by 0.8% in December 2014. Just four regions saw a monthly rise, led by the North East at 5.1%, then the North West up 1.6%, the South West 0.5% and the South East 0.2%. Spokesman Martin Totty said that 2014 was predominantly a year for growth in the rental market. ‘With property prices continuing to grow, and mortgage criteria tightening, the rental market represents a much more accessible option for house hunters than the property ladder,’ he claimed. ‘The demand for rental property is increasing, and we expect it to continue doing so in 2015 as large numbers of people are priced out of buying. As a result, we expect to see continued growth in rental prices across the UK as the new year progresses, particularly as real incomes are starting to rise,’ he explained. However, he pointed out that the data also points to some big differences in rental market performance in 2014 from town to town and city to city. ‘The causative factor behind these differences is as simple as supply and demand. In, locations such as Leicester and Cambridge, demand for rental property is outstripping supply. By contrast, Croydon and some parts of Essex are benefitting from a relative boom in new property building, easing the pressure on the local rental market and this is reflected by a drop in rental prices,’ he added. There appears to have been a typical end of year seasonal adjustment in the market, the figures also suggest. Totty pointed out that while rental prices fell in many regions of the UK in December, the… Continue reading
