TSI
City property values in Australia decreased gradually during 2014, latest index shows
Residential property values in Australian capital cities increased by 0.9% in December to take the annual increase to 7.9%, the latest index data shows. Values rose in all cities except for Darwin where they fell by 0.6% and Canberra where they were also down by 0.6% while values were unchanged in Sydney, according to the CoreLogic RP Data Home Value Index. Over the final quarter of 2014, capital city home values increased by 1.6% with Perth, Sydney and Brisbane recording the greatest quarterly gains at 2.8%, 2.3% and 1.8% respectively, while values fell in Darwin by 1.7% and in Canberra by 3.4%. However, despite the positive result across most cities, the annual rate of capital gain across Australia’s capital city housing market has continued to slow. The capital gain on houses compared to units was higher, with house values gaining 8.4% over the calendar year compared with a 5.1% increase in unit values. According to RP Data senior research analyst Cameron Kusher, detached housing remains in high demand despite the higher price point. ‘Based on the median price across the combined capital cities, houses are attracting a $100,000 premium over apartments,’ he said. He also pointed out that the slowing annual growth rate is further evidence that the housing market is losing some steam with combined capital city home values increasing by 9.8% over the 2013 calendar year compared to a more moderate 7.9% increase in 2014. Based on the December results, the annual rate of capital growth has continued its moderation which has been ongoing since April 2014. After the annual rate of combined capital city home value growth peaked at 11.5% over the 12 months to April 2014, the rate has now slowed to 7.9% in December 2014 which means that combined capital city home values have increased at their slowest annual pace since October 2013. At an individual capital city level, the annual rate of home value growth is now lower than its recent peak. Kusher said this would tend to suggest that peak value growth has now passed. ‘We would anticipate that the rate of growth will continue to slow through 2015 despite the low interest rate environment,’ he explained. Although home value growth has been recorded at 7.9% throughout the 2014 calendar year, the rate of growth has varied between a fall of 0.6% in Canberra to an increase of 12.4% in Sydney. While Canberra was the only city to record an annual fall in home values, Melbourne was the only city other than Sydney to have recorded annual value growth of more than 5% at 7.6%. Looking at the different segments of the market based on dwelling values, the broad middle 50% of capital city suburbs have recorded the greatest value rise over the past year. The most affordable 25% of capital city suburbs have recorded a gain of 7.7% compared to 8.5% across the middle 50% of suburbs and 7.8% across the most expensive 25%. The index… Continue reading
Scottish residential tenants are generally happy with the PRS property mark
Over 35% of tenants in Scotland have lived in their current home for longer than a year with 10% living longer than three years, a new survey has found. The poll by Lettingweb, described as the largest ever undertaken in Scotland, shows that 88% of tenants believed they had been treated fairly during their current tenancy. It also found that 86% reported that there had been no increase in rent during their tenancy, with over 90% believing the frequency of rent reviews being reasonable in their experience. Almost 95% had never been asked to leave a tenancy for an unexplained or unreasonable reason but tenants are concerned by the lack of supply of properties to let with only 42% being confident of finding another suitable home if they had to. The firm says that the overall picture is in stark contrast to moves in the Scottish Parliament to control rents. It indicates that tenants welcome the flexibility of the private rented sector (PRS), whilst appreciating that they have considerable security of tenure and are generally able to stay as long as they want. That accords with a long term growth in the Scottish PRS, which has doubled in size over the past decade, with significant increases in the numbers of prospective tenants looking for affordable, high quality property to let. ‘This is a myth buster report as it destroys many preconceptions of the sector. The overwhelming picture is that rents are unlikely to rise during leases and that landlords treat their tenants well. The private rented sector can be proud of their ability to supply good property at a price tenants are willing to pay, and increases have been less than inflation for a period of over eight years,’ said Dan Cookson, head of research at Lettingweb. ‘The stand out figure for me is that only 42% of tenants are confident of finding alternative rented accommodation if they had to. That’s a consequence of limited supply, and more needs to be done to bring greater investment into the sector to meet that demand, and widen confidence that alternatives are available,’ he explained. ‘Our market reports indicate that the time taken to re-let properties at the end of each lease are very short indeed. The market is demanding an expansion of the private rented sector. Government needs to respond by creating conditions for increased supply to come forward,’ he added. According to Malcolm Warrack, chairman of Letscotland, it is a significant survey and as the Scottish Government moves towards legislating for a new type of tenancy agreement for use in the private rented sector, they must listen to the voices of tenants, who are overwhelmingly well served by landlords and letting agents. ‘The challenge must be to implement change in a way which increases the supply of rented accommodation reaching the market. Any reforms brought forward must not lead to reductions… Continue reading
Report reveals key sites in London that could realise at least 100,000 new homes
At least 100,000 homes could be built on public land in London but sites will need co-ordinated planning to maximise delivery, a new analysis suggests. London needs tens of thousands of new homes to be built every year to cope with demand for both owners and tenants as steep population growth coupled with years of undersupply of new homes means that London is bearing the brunt of the UK’s housing crisis. With the city’s population expected to surpass its previous 1939 peak of 8.9 million early next year and continue climbing to 11.3 million by 2050, the need to make full use of public sector assets is pressing, according to the report from real estate firm Savills. It reveals that the process of identifying and co-ordinating the delivery of sites is more advanced in London than in other part of the country. ‘The position of the Greater London Authority (GLA) as a major landowner as well as Mayoral powers to facilitate land assembly are key to delivering more homes. Boroughs are also becoming more proactive at managing their assets and building more homes,’ said Susan Emmett, director of residential research at Savills. The firm’s analysis of the GLA’s asset database, which includes land belonging to Transport for London (TfL), London Legacy Development Corporations (LLDC), London Fire Brigade (LFB) and the Metropolitan Police Service (MPS), has identified enough public land for at least 100,000 new homes in London. Many of these sites are operational. However, this number also includes sites for the 40,000 new homes previously earmarked by the GLA when it acquired the London property assets of the Homes and Communities Agency (HCA) worth £365 million in 2012. Of the 635 hectare portfolio inherited at that time, 85% has been developed, committed for development, or is being marketed. Since April 2012 contractual commitments have been entered into for over 145 hectares of land, with an estimated gross development value in excess of £3.6 billion. The Mayor is committed to having an exit strategy in place for all of the GLA’s current landholdings by 2016 and the process is well advanced, the report explains. The analysis of GLA sites marked for disposal showed that many of the saleable sites are grouped in lower value areas to the east of Canary Wharf. ‘Lower value, post-industrial land with poor infrastructure links can be difficult to bring forward through traditional development routes. A co-ordinated approach with the Mayor at the centre is essential to open up new neighbourhoods,’ it adds. It points out that the GLA aims to assist in the regeneration of areas by investing in infrastructure and site decontamination and better transport links and investment in the public realm are also important to encourage development, especially in new areas. ‘There are some good examples of public land already being used in regeneration schemes to bring forward more homes. One major site delivering a substantial number of homes is Barking Riverside with plans for up to… Continue reading
