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UK asking price growth cooling but there is still momentum in some locations
Recent data is showing house price growth in the UK has been cooling but the latest index report suggests there is considerable momentum, especially in the South where demand remains high. However, prices are not rising as quickly as they were, according to Home.co.uk's latest Asking Price Index, and supply is rising. Asking prices increased in September by 0.6%, the ninth consecutive monthly rise, taking the average annual appreciation in England and Wales to 8.5%. But overall the market is cooling and vendors' expectations are being moderated outside of the current hotspots of London and the South East. The total number of properties on the market that have been reduced in price has risen in recent months to a two year high and now represents 13% of the total stock of property for sale. Moreover supply is growing across the UK as vendors are being encouraged by rising prices. Last month, 10% more properties entered the market than in September 2013. The rise in supply in London is much more extreme, up 49% by the same measure. A breakdown of the figures show that home prices rose across most of mainland UK over the last month but slipped in the North East, North West and Wales by 0.1%, 0.1% and 0.4% respectively. However the firm says that this is consistent with the normal seasonal price variations. Asking prices increased significantly in the more vigorous southern regions. Asking prices in East Anglia, where supply remains very tight, jumped 1.1% over the last month, and prices look set to keep rising as long as the shortage of property for sale continues as in this region the monthly rate of new instructions has fallen 70% over the last seven years. London prices also rose by 1.1% following the previous month’s dip and, for the time being, supply is historically low, down 67% compared with September 2007. However, the report points out that this situation is changing rapidly. The number of properties being put up for sale in the London region has soared by 49% over the last 12 months. Looking back further, the data shows that only five of England’s nine regions have prices that are nominally higher than they were in October 2007, whilst home prices in Scotland and Wales remain below those levels. If the effects of inflation are taken into account then only Greater London has shown any real price gains since October 2007. The data also shows that the average mix-adjusted 12 month change in asking prices for England and Wales reached a maximum in June of 9.6% and is steadily falling back. The year on year price trend confirms that average price increases are moderating overall. ‘We expect this trend to continue in 2015 as rising supply will tend to stifle further price rises, as already seen in Greater London,’ said Doug Shephard, Home.co.uk director. ‘Whilst much coverage is given to the best performing property locations, currently Stratford, Stepney, Mill Hill and Canning Town, it is equally important to… Continue reading
New home sales pick up in Australia, but peak of growth has passed
Sales of new homes in Australia increased in August following a weak July but an overall downward trend in total seasonally adjusted new home sales is still apparent, the latest data shows. There was an increase of 3.3% in August driven primarily by a strong increase in the usually volatile multi-unit sector, the new home sales report from the Housing Industry Association shows. However the report, which covers Australia’s largest volume builders, says that despite the August bounce, the HIA still believes that new home sales reached their peak for the cycle back in April this year.” ‘The result for August was driven primarily by a strong lift the multi units sector where sales increased by 19.8%, taking this component of sales to its second highest level this cycle,’ said HIA economist Diwa Hopkins. She pointed out that new detached house sales didn’t fare quite so well, up by only 0.5% although this slight rise stopped a decline which stretched to three consecutive months. ‘As leading indicators of new home construction activity, both HIA New Home Sales and ABS Building Approvals are displaying a moderate downward trend. Current levels remain elevated by a historical standard, which is consistent with still healthy levels of new home building throughout 2014/2015,’ she explained. ‘It is important for the new home building sector and the broader domestic economy that we continue to see evidence of historically high levels of building approvals and new home sales throughout 2014 and into next year, even if the peak for these indicators has passed,’ she added. A breakdown of the figures show that detached house sales increased by 11.1% in New South Wales and by 2% in Western Australia but fell by 6.8% in South Australia, by 6% in Victoria and by 0.7% in Queensland. Over the three months to August 2014 detached house sales decreased in each of the surveyed states, albeit to varying degrees, with the exception of New South Wales where sales increased by 0.4%. Sales fell by 9.8% in Victoria, by 4.6% in Western Australia, by 4.4% in South Australia, and by 3.2% in Queensland. Continue reading
New five year forecast predicts 30% rise in average house prices in England and Wales
Average house prices in England and Wales are set to increase by 30% in the next five years, with the national forecast reinforcing the north/south divide, new research suggests. While prices in London are set to rise by almost 33%, the real beneficiary of the recent London boom will be the South East, forecast to increase by 37% by 2019, says the latest report from Rightmove. The North West will be the slowest riser but will still go up by 24%, adds the new forecast comes from a collaboration between the property website Rightmove and economic forecaster Oxford Economics. It is described as the most comprehensive house price forecast of its kind ever created, based on property and economic data rather than opinion and short term market factors. It takes into account both asking and sold prices, surveyor valuations and analytics from the Oxford Economics’ Global, Industry and Regional forecasting models. The majority of fastest performing areas are all within easy commuting distance of London and include towns such as Southampton which is forecast to see price increases of 43%, Luton at 41% and Brighton also at 41%. The analysis also says that the Home Counties and outer boroughs are set to benefit from the ripple effect of a year of strongly rising prices in London, alongside the brighter economic picture. Prices in the capital itself are forecast to rise at a slower rate than the South East and East Anglia with prime central London having a period of much slower growth after the frenetic increases of 2014. West London is predicted to be caught in the prime London slowdown with a modest rise of 14%, bringing its potential for future growth in line with the slower northern cities of Carlisle with growth of 17% and Manchester with a price growth forecast of 19%. The forecast compares and contrasts the fortunes of neighbouring areas, and takes into account the effect of strong house price growth in one location spilling over into adjoining areas. Economic factors that are more significant in some markets than others are also considered, for example the exchange rate has a big effect on house prices in prime central London, but is of rather less direct importance in the wider suburban markets of the South East and further afield, where employment and population growth are key. ‘Alongside the publication of the Rightmove monthly House Price Index which is based on new seller asking prices, we have unique access to other sources of property data from surveyors and property transaction prices at a very local level. This has enabled us to work with Oxford Economics to create a unique forecast that can be used as a guide by a number of businesses,’ said Miles Shipside, Rightmove director and housing market analyst. ‘Understanding the path of future house price growth is a key element of UK economic strategy and decision making, and our data driven forecasts contain insight not previously available from other commentators or the Government’s own… Continue reading
