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Canadian property prices and sales both continue upwards, latest index shows
National home sales in Canada rose by 0.7% from September to October and prices were up 7.1% year on year, according to the latest data from the Canadian Real Estate Association. It is the sixth consecutive month of stronger resale housing activity compared to a quiet start to the year, and the strongest activity for the month of October since 2009. ‘Low interest rates continued to support sales in some of Canada’s more active and expensive urban housing markets and factored into the monthly increase for national sales,’ said CREA president Beth Crosbie. ‘Even so, sales did not increase in many local markets in Canada, which shows that national and local housing market trends can be very different,’ she added. According to Gregory Klump, CREA chief economist, while the strength of national sales activity is far from being a Canada-wide phenomenon, it extends beyond Vancouver, Calgary and Toronto. ‘Sales in a number of B.C. markets have started to recover from weaker demand over the past couple of years. They have also been improving across much of Alberta, where interprovincial migration and international immigration are reaching new heights,’ he explained. Actual (not seasonally adjusted) activity in October stood 7% above levels reported in the same month last year. October sales were up from year ago levels in about 70% of all local markets, led by Greater Vancouver and the Fraser Valley, Victoria, Calgary, and Greater Toronto. Combined sales in these five markets account for almost 40% of national sales activity, and nearly 60% of the year on year increase in national sales. Actual (not seasonally adjusted) sales activity for the year to date in October was 5.2% above levels in the first 10 months of 2013 and 2.5% above the 10 year average for the same period. The house price index increased by 5.51% year on year in October. Price gains have held steady between 5% and 5.5% since the beginning of the year. A breakdown of the data shows that year on year price growth accelerated for two storey single family homes, townhouse units and apartment units in October. By contrast, price momentum slowed further for one storey single family homes. Two storey single family homes continue to post the biggest year on year price gains at 6.94%, followed closely by townhouses at 5.83%, and one storey single family homes at 4.75%. Price growth for apartment units remains comparatively more modest at 3.51%. Price growth varied among housing markets tracked by the index. As in recent months, Calgary saw the biggest increase at 9.47%, Greater Toronto saw growth of 8.3% and Greater Vancouver was up 6.03%. Prices were up between 1% and 2.5% year on year in the Fraser Valley, Victoria, and Vancouver Island, flat in Saskatoon, Ottawa, Greater Montreal, and Greater Moncton, and down 3.4% in Regina. The actual (not seasonally adjusted) national average price for homes sold in October 2014 was $419,699, up 7.1% from the same month last year. The national average price continues to be pulled upward by sales… Continue reading
UK group suggests special help for oldies to downsize and free up family homes
A group of politians in the UK have called for older home owners to be given support to help them move home so that more properties can be made available for families. According to the All Parliamentary Group on Housing and Care for Older People a Help to Buy style equity loan scheme and stamp duty exemption would encourage older people to downsize. The claim follows an analysis revealing a third of over 60’s would downsize if it was easier, but up to half of older home owners are priced out of local retirement housing. Their report argues that a Help to Move equity loan would help older homeowners with lower value properties ‘bridge the gap’ between the value of their home and the purchase price of a new retirement property. It also said that many older people cannot easily access mainstream mortgage lending, even when they can afford the repayments. The report goes on to argue that exempting older people purchasing homes worth up to £250,000 from stamp duty would reduce their transaction costs, while leading to a net gain for the Treasury because of the consequent moves in the property market. It also points out that the ‘guidance guarantee’, to be brought in with new pensions freedoms next year, as well as a new duty on local authorities to provide care advice, should be wrapped into a comprehensive package together with housing advice, helping older people make decisions about where and how they live after retirement. The report cites analysis by the think-tank Demos revealing 58% of over 60s, equal to around eight million people currently living in seven million homes, are interested in moving. A third of over 60s specifically wanted to downsize, while a quarter said they were interested in buying a retirement property. If ‘Help to Move’ encouraged all those wanting to downsize to move home researchers calculate that 4.3 million family homes would be freed up, easing the pressure on the housing market. However, between 40 to 50% of older home owners aren’t able to afford to downsize in their local area as their family home is not worth as much as new retirement housing, making additional financial support crucial for many older people in lower value properties. The group points to land prices, an overall lack of supply, and limited availability of ‘shared ownership’ options as reasons why retirement housing is unaffordable for many older people. ‘More and more people in their extended middle age are thinking about downsizing. This can mean much reduced fuel bills and maintenance costs, perhaps the release of some capital, and can prevent a forced move in later life. But down-sizing is not easy,’ the group’s chair Lord Best. ‘Our report recommends a Help to Move package of Stamp Duty relief, financial advice and mortgage support like the Help to Buy assistance for younger purchasers to generate the demand that will get more high-quality homes built for this age group,’ he added. Claudia Wood, chief executive of the… Continue reading
October saw a further dip in property valuations in the UK, latest research shows
The UK housing market has now cooled following a pick-up in valuations activity in September with October seeing the total number of valuations fall by 20%, new data shows. However, on an annual basis, housing market activity decreased by 10%, an improvement from a slightly steeper fall of 12% over the 12 months to September 2014, according to the latest report from Connells Survey & Valuation. ‘While the housing market is now less animated than in September, the slowdown is broadly in line with seasonal expectations and is not an alarm bell. On average, we have seen a 16% drop from September to October every year since 2010,’ said the firm’s Corporate Services Director. But he pointed out that beyond seasonal factors, there are other things contributing to this slowdown. ‘The introduction of stricter policies designed to restrain uncontrolled growth and protect against a return to the property bubble of 2008 have tempered the housing market. For instance the recent loan to income cap which came into force in October seems to have had a considerable impact,’ he explained. ‘We may see a further seasonal lull in the housing market as we approach the holiday season. And looking further ahead, the General Election in May 2015 is also likely to bring increased caution with the prospect of policy uncertainty,’ he added. The research report also shows that buy to let performed the strongest with a noticeably small annual dip of 7% compared to the rest of the market. Even on a month on month basis this section of the housing market did better than the others with the smallest drop of 17% since September. ‘Buy to let was the strongest performing sector in a clear indication that lenders are focusing on low risk investors as a result of increased regulation. Policies like loan to income caps have introduced stricter lending rules but crucially do not apply to the buy to let sector. There are now an array of competitive rates out there, especially on low LTVs,’ said Bagshaw. First time buyer valuations made up almost a third of total activity in October but the number of valuations for first time buyers was still down 18% compared to the previous month, and 11% lower on an annual basis. Other owner occupiers moving home saw a month on month dip of 21%, as well as the biggest annual drop of 16% compared to October 2013. ‘While Help to Buy has supported many first time buyers to get on the property ladder, other new policies have introduced fresh limits to promote responsible lending. These new caps seem to have affected first time buyers and home movers the most,’ Bagshaw said. ‘The impact of Stamp Duty on buyers is also not to be ignored. Though it has been a permanent feature of the housing market for a while, the prospect of a hefty tax bill… Continue reading
