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Property sales in Auckland, New Zealand, see steep fall at end of 2015
Property prices in Auckland, New Zealand, remained stable last month but there was a significant fall in the number of sales compared to those in November and a year ago. The average sales price for December at $869,492, down 0.8% on November's record average price while the median price rose to an all-time high of $800,000, up 0.6% on that for November, according to data from Barfoot and Thompson ‘From a price perspective, the market was rock steady but sales data for the final month of 2015 is sending mixed messages as to where the market will head in 2016,’ said Peter Thompson, the firm’s managing director. The data reveals that sales for the month at 796 were 19.3% lower than in November, and it was the lowest number of sales in a December for four years. December's sales were also the lowest in any month for the past 22 months. While in December new listings at 757 were down 555 on those in November, Thompson explained that this level of decline is quite normal and they were the highest in a December for four years. ‘The factor most likely to impact on January sales was the extremely low number of listings at the end of December which, at 2431, was down 25.2% on those in November, and the lowest number for any month for more than 20 years,’ he said. ‘With a growing population and the number of new builds failing to keep pace with demand, competition for properties is likely to remain strong in the first quarter of 2016. January's sales data is always influenced by the summer holiday period, and it is likely to be the middle of March, when February's sales data is available, that a clearer understanding of prospects for 2016 emerge,’ he pointed out. ‘What is clear, however, is that with so few properties on the market, now is an excellent time to list,’ he added. The figures also show that in December some 278 properties sold for in excess of $1 million and a further 202 for in excess of $750,000. Sales of properties in the under $500,000 price category at 44 made up 5.5% of all sales. In 2015, the average sale price of homes for the full year was $817,096, an increase of 14% on that for 2014 and 25.8% over 2013's average sales price. The median price for 2015 was $755,333, some 17.4% higher than 2014's median price and 30.5% higher than that for 2013. Continue reading
Record number of homes with planning permission not yet built in England
A record 475,647 homes in England which have been given permission to be built have yet to be built, a new study has found, but says that the planning system is not to blame. Figures released by the Local Government Association from research carried out by industry experts Glenigan, shows this bumper backlog has grown at a rapid pace over the past few years. In 2012/2013 the total of unimplemented planning permissions was 381,390 and in 2013/2014 it was 443,265. The LGA said that the figures underline the need for councils to be able to invest in building more homes and also for the skills shortage affecting the construction industry to be addressed. Council leaders also want powers to charge developers full council tax for every unbuilt development from the point that the original planning permission expires. The LGA, which represents more than 370 councils in England and Wales, also revealed that developers are taking longer to complete work on site. It now takes 32 months, on average, from sites receiving planning permission to building work being completed, some12 months longer than in 2007/2008. The number of planning applications being granted planning permission in 2014/2015 was 212,468, up from 187,605 in 2007/2008 and is higher than all previous years and the data shows that councils still approve nine in every 10 applications. The research also points out that while the construction industry's forecasted annual recruitment need is up 54% from 2013, there are 10,000 fewer construction qualifications being awarded by colleges, apprenticeships and universities. Indeed, there were 58% fewer completed construction apprenticeships last year than in 2009. ‘These figures conclusively prove that the planning system is not a barrier to house building. In fact the opposite is true, councils are approving almost half a million more houses than are being built, and this gap is increasing,’ said Peter Box, LGA housing spokesman. ‘While private developers have a key role in solving our chronic housing shortage, they cannot build the 230,000 needed each year on their own. To tackle the new homes backlog and to get Britain building again, councils must have the power to invest in building new homes and to force developers to build homes more quickly,’ he explained. ‘Skills is the greatest barrier to building, not planning. If we are to see the homes desperately needed across the country built and jobs and apprenticeships created, councils must be given a leading role to tackle our growing construction skills shortage, which the industry says is one of the greatest barriers to building,’ he pointed out. ‘Devolving careers advice, post age 16 and adult skills budgets and powers to local areas would allow councils, schools, colleges and employers to work together to help unemployed residents and young people develop the vital skills to build. New homes are badly needed and councils want to get… Continue reading
Buy to let landlords in UK well placed to cope with an interest rate rise
Buy to let landlords in the UK are financially resilient and are well placed to cope with expected higher borrowing costs, according to a new survey. Asked how they would deal with a 1.5% rise in Bank rate, three quarters foresaw no problems in paying their mortgage, says the data from the YouGov survey. More than 60% said their rental income would remain higher than their mortgage payments, and 40% said they already had enough money to cover higher borrowing costs. Meanwhile, according to data from the Council of Mortgage Lenders (CML) lenders have increased the average rate at which they stress test buy to let mortgages and after a strong first quarter, the CML expects buy to let purchases to decline in 2016 but buy to let remortgaging to remain robust. According to the transactional data collected by the CML from lenders accounting for about 90% of new lending, the typical stressed mortgage rate being used by the industry has increased by 50 basis points to between 5.6% and 5.7% over the past year. According to Bob Pannell, CML chief economist, while this is still some way from the rates implied for lending to home owners, a more forced pace of adjustment would risk destabilising the buy to let sector. He also pointed out that landlords identify a range of strategies for coping with higher mortgage costs, including the positive cash flow that rental payments currently provide and ready access to contingency funds. But he also pointed out that a number of tax measures have been announced in recent months, and these are likely to have a dampening effect on future growth prospects for buy to let and the private rented sector. ‘The reduction of tax reliefs available to private landlords from 2017/2018 onwards, announced by the chancellor in the summer 2015 Budget, will adversely affect the future cash flows for affected landlords,’ said Pannell. ‘Landlords should be able to mitigate the direct financial impact in a number of ways. Indeed, the YouGov research corroborates our view that the overall impact will be to lift rents higher and to narrow the availability of homes in the private rented sector,’ he explained. ‘The direct effects appear modest, but are likely to be reinforced by the stamp duty changes, announced in the chancellor’s autumn statement. The rapid succession of recent tax changes also risks having a significant indirect effect on investor sentiment, altering the direction of travel for buy to let lending and the further expansion of the private rented sector,’ he added. The CML’s latest market forecasts envisage house purchase activity by buy to let landlords falling away over 2016 and 2017. Given the significant lags in government housing initiatives stimulating additional housing supply, this raises a question about the future availability of rental accommodation in the face of ongoing demographic pressures. ‘In this context, macro-prudential intervention, if or when it is applied to buy to let lending, carries a significant risk of unintended consequences… Continue reading
