TSI
Property sales unchanged in Canada in November and prices steady
Residential property sales in Canada were unchanged in November compared with the previous month and are 2.7% above a year ago, according to the latest data. But activity is much improved compared to the quiet start to the year and November sales strengthened in half of all local housing markets, the index from the Canadian Association of Realtors shows. The index also shows that price gains have held steady between 5% and 5.5% since the beginning of the year. However, year on year price growth decelerated among all property types tracked by the index in November compared to October. There were monthly sales increases in Montreal, Edmonton, Winnipeg, Hamilton-Burlington, Barrie, and Windsor-Essex but a monthly decline in the Greater Toronto Area. And sales were up from year ago levels in about half all local markets, led by Greater Vancouver and the Fraser Valley, Calgary, and Greater Toronto. Two storey single family homes continue to post the biggest year on year price gains with growth of 6.79%, followed by town houses at 5.63%. Price growth was comparatively more modest for one storey single family homes at 4.2% and apartments were up 3.18%. Price growth varied among housing markets tracked by the index. In Calgary prices were up 8.53%, in Greater Toronto they increased by 7.73% and Greater Vancouver was up 5.69%. These areas have continued to post the biggest year on year increases. By contrast, prices in Regina declined by 3.36%. Prices were up between 1.6% and 2.8% year on year in the Fraser Valley, Victoria, and Vancouver Island, by less than 1% in Saskatoon and Ottawa, flat in Greater Montreal and down by less than 1% in Greater Moncton. The MLS® Home Price Index provides a better gauge of price trends than is possible using averages because it is not affected by changes in the mix of sales activity the way that average price is. The actual (not seasonally adjusted) national average price for homes sold in November 2014 was $413,649, up 5.7% from the same month last year. The national average home price continues to be raised considerably by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s most active and expensive housing markets. Excluding these two markets from the calculation, the average price is a relatively more modest $331,743 and the year on year increase shrinks to 5%. ‘The Canadian housing market remains a story about how sales and prices are still running strong in some areas while others are seeing subdued levels of activity with slower price gains or modest price declines,’ said CREA president Beth Crosbie. The data also shows that the number of newly listed homes edged down 0.4% in November compared to October. Led by Greater Toronto, new supply was down in just over half of all local markets. The national sales to new listings ratio was 56%, marginally tighter compared to the previous three months in which it averaged 55.7% but CREA said that the… Continue reading
House prices to rise by 3% in 2015 and rents by 2% says RICS
House prices in the UK will see an average increase of 3% in 2015 bolstered by recent changes to Stamp Duty, continuing demand and lack of supply of property, it is predicted. Rents are set to grow by 2% and sales are expected to increase, according to the annual housing market forecast from the Royal Institution of Chartered Surveyors (RICS). Across the UK, RICS expect all parts of the country to see modest price rises during 2015 with the South West, Wales and London set to experience the lowest rises with prices increasing by 2% and 0% respectively. Having outperformed in the early stages of the recovery, chartered surveyors reported London's housing market was 'pausing for breath' both in terms of pricing and activity towards the end of 2014. This does however mask significantly different behaviour across different parts of the capital and is reflected in the RICS forecast with the eastern boroughs and some other non-prime areas still likely to see more buoyant market conditions persist through 2015. The growth in rental demand softened in the early part of 2014 as the sales market began to recover across the UK, and potential purchasers took advantage of the Help to Buy scheme, the report says. However, enquiries to rent property have begun to pick-up once again and comfortably outstrip new supply of rental property from landlords. As a result RICS expects rents to continue pushing upwards over the next 12 months. Chartered surveyors are suggesting that the strongest rises are likely to be recorded in the South West and the North East of England. Rents in the capital are likely to rise broadly in line with the national average. The number of sales transactions should see a further increase during 2015, moving up to 1.25 million from 1.22 million in 2014. Although there are some concerns about mortgage availability in the wake of the Mortgage Market Review, a firm economy and stamp duty reform should underpin activity levels. The report points out that although this figure represents an improvement on the past few years, to put this in context, in 2006 total transactions stood well above at 1.67 million. Lack of supply to the housing market remains a running trend, and one that cannot be addressed fast enough. However, there are increasing levels of house building projects underway, and as a result, RICS forecast housing starts to rise to 155,000 in England during the year. This is compared to 125,000 in 2013 and only around 100,000 in 2012. While this is an encouraging trend, it is still insufficient to address the more rapid growth in population and will leave significant shortfalls in all tenures. The number of houses taken into possession are expected to have fallen in 2014 to around 23,000, the lowest since 2006. Given the current macroeconomic picture, RICS anticipates that this could decline to below 20,000 over the course of the next 12 months, particularly as around 90% of new loans… Continue reading
Rents in England and Wales down for first time in eight months
Residential rents across England and Wales fell to a new average of £768 per month in November, down 0.2% month on month, the latest index shows. It is the first time in eight months that rents have fallen on a monthly basis, according to the buy to let index from the UK’s largest lettings agent networks, Your Move and Reeds Rains. However, despite the month on month fall rents are 2% higher than a year ago, or £15 higher than November 2013. Also, the East of England, the East Midlands and London have actually posted new all-time record rents. The firm says that the fall follows the usual seasonal trend as landlords keen not to have vacant property over the colder months reduce rents to attract tenants. A breakdown of the figures show that five out of 10 regions have seen lower rents in November than in October with the South East seeing rents fall by 2.1% drop, the North West down 1.2% and the North East down 0.6%. By contrast, the East Midlands has defied the overall trend, seeing rents increase by 1.7% between October and November. This monthly change is four times faster than experienced in both London and the neighbouring East of England, both of which saw rents rise 0.4% on a monthly basis. Despite monthly dips, rents in eight out of 10 regions remain higher than in November 2013, with one other region seeing no significant change. Far above the overall average, three neighbouring regions stand out on an annual basis. Rents in the East of England have grown by 6.7% since November 2013. This is followed by 5.5% in the East Midlands and 3.9% in the West Midlands. At the other end of the spectrum, rents in the South West are now 0.2% lower than in November 2013, the only region to see a fall while the North West has seen zero rental inflation over the last twelve months. The index also shows that the gross rental yield on a typical rental property in England and Wales now stands at 5.1% as of November, the same as in October 2014, but a 0.3% drop from last year, when yields in November 2013 stood at 5.4%. However, alongside this stability, total returns improved in November. Taking into account price growth and void periods between tenants, but before costs such as mortgage repayments or maintenance, total annual returns on an average rental property are 12.8% over the 12 months to November. This compares to 12.7% over the 12 months ending October 2014. In absolute terms this means the average landlord in England and Wales has seen a return, before deductions such as mortgage payments and maintenance, of £21,512 over the last twelve months. Within this figure rental income makes up £8,305 while the average capital gain amounts to £13,207. ‘Property prices have shifted to a more… Continue reading
