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Australian city property prices up almost 10% year on year
Property prices in Australian cities increased by 2% in the second quarter of 2015 and are now 9.8% higher compared to a year ago, the latest index data shows. The figures from CoreLogic RP Data reveal that the growth has gained momentum as the year has progressed and the firm’s head of research, Tim Lawless, believes interest rates cuts in February and May have contributed in pushing capital gains higher. ‘Growth conditions had been moderating from April last year through to the end of January 2015. With the RBA cutting the cash rate in February, there was an instant buyer reaction across the Sydney and Melbourne housing markets where auction clearance rates surged back to levels not seen since 2009, capital gains once again accelerated,’ he explained. He pointed out that Sydney and Melbourne homes are selling in record time, some 26 days and 32 days respectively. But growth is not even. While Sydney and Melbourne have seen dwelling values increase by 16.2% and 10.2% over the financial year respectively, every other capital city has seen growth of less than 5% and values are down over the year in Darwin by 2.9% and Perth by 0.9%. According to Lawless, the current housing growth cycle clearly highlights a divergence in capital gains across the capital cities. Since values started rising in May 2012, Sydney homes have seen a 43.1% surge in values and Melbourne values are up by 25.9%. Despite softer market conditions in Perth, property values are currently up 12.8%, the third highest growth rate across the capitals. Simultaneously, Brisbane's property market has shown the fourth highest rate of growth at 12.4% followed by Adelaide at 10.4%, Hobart at 9.6%, Darwin at 8.9% and Canberra at 8.8%. ‘The three tiers of housing market performance can be best explained by economic and demographic factors where it's no coincidence that New South Wales and Victoria are recording the strongest economic conditions coupled with the strongest rates of migration which is fuelling housing demand. These states are more sheltered from the mining sector downturn and have benefited from the strong multiplier effect of housing construction as well as a vibrant financial services sector,’ said Lawless. ‘The Perth and Darwin markets are weakening in line with the downturn in the resources sector and an associated weakening in infrastructure investment and a marked slowdown in migration. Brisbane, Adelaide, Canberra and Hobart are seeing softer economic conditions and population growth compared with Sydney and Melbourne, however housing markets have shown some level of growth over the year,’ he added. Looking at the performance of detached housing versus apartments over the financial year, houses are clearly outperforming units in the capital gains stakes. Over the financial year, house values were 10.4% higher across the combined capitals index while unit values increased by a much lower 5.6%. The same trend where houses are showing a higher capital gain than units is evident across each of the capital cities except Hobart… Continue reading
Demand for homes in UK up by 9% in second quarter of 2015
Demand for homes in the UK has increased by 9% in the last three months with London commuter areas seeing a surge and some parts of the north also on the up. Locations including Watford, Reading, Aylesbury and Guildford now dominate the top 10 in demand spots, according to the second quarter data from online estate agent eMoov. While the north of the country has 60% of the coldest spots, some have seen demand rise, most notably North Tyneside up by 62%, Sunderland and Dudley both up by 32%, and South and North Lanarkshire in Scotland up by 29% and 26% respectively. The data also shows that Bristol is one of the hottest demand spots outside the south east with demand up 10% since the first quarter of the year. Durham at 12% has seen demand fall by 30% over the course of a year, making it the second coldest spot in the nation. Rochdale and Northumberland, both at 17%, have also continued to cool, moving both locations up the table of coldest spots in June. In Scotland as well as North and South Lanarkshire seeing a rise in demand, Fife is up 22% and Highland is also up 22% since the first three months of the year. Westminster in London has also continued to decline, dropping a further 10% in demand and two places, making it the third coolest whilst Ealing has witnessed the largest fall in the last three months, with demand down by 36%. Brent and Hounslow also fell by 4% and Oxford is the only commuter zone to see a decrease, as demand fell by 8%. Since the second quarter of Medway has seen the biggest increase with a rise of 70% in demand. Scotland has also performed strongly over the course of the year with Fife up 42%, South Lanarkshire up 22% and North Lanarkshire up 15%. The annual top 10 also includes Wiltshire up 48%, Sefton up 45%, Bedfordshire up 38%, Tameside up 25%, Bolton up 18% and Bradford up 16% while at the bottom are Calderdale and Westminster both with a fall of 58%, Ealing down 47% and Aberdeenshire down 40%. ‘The UK property market definitely seems to have experienced a post-election bounce. With demand up 9% nationally, people are clearly more confident about buying now that the next five years of government has been decided,’ said the firm’s chief executive officer Russell Quirk. ‘It’s interesting to see the demand for commuter zone property continuing to grow. With London demand falling, property owners wanting to see an increase in their property price, might want to sell up and head a few miles out of the capital,’ he added. Continue reading
Prime country house prices in Scotland affected by new land and building tax
Prime country house prices in Scotland increased by 0.2% between April and June taking annual growth to 1.4%, the latest index analysis report shows. But this is down from the recent high of 2.8% in June last year and the recently introduced Land and Building Transaction Tax (LBTT) seems to have had the greatest bearing on market performance. The analysis report from Knight Frank also suggests that the recent landslide SNP general election victory in Scotland on 07 May has had an impact, albeit a more modest one. Under LBTT those buying homes worth less than £333,000 now pay less tax for homes, but those purchasing property with a value above this threshold now pay more in purchase taxes. For example, a house in Scotland valued at £1.5 million would have attracted a stamp duty liability of £43,750 under the old system. Based on the new LBTT rates, that same property now attracts a bill of £78,350, a near 80% increase. As a result, buyers and vendors brought forward prime transactions prior to the introduction of LBTT in order to benefit from the lower stamp duty charges. There was a spike in activity during the first three months of 2015 with the number of sales completed by Knight Frank nearly 50% higher year on year. Since then, however, the prime market has been subdued, with the number of sales completed between April and June notably lower than the same period of 2014. There is likely to be an ongoing period of adjustment at the top end of the market as individuals factor in the increased cost of moving, according to Ran Morgan, head of Scotland residential sales at Knight Frank. He pointed out that there are still pockets of activity in Scotland’s prime market however, mostly in areas within commuting distance of large towns and cities. Prices in the central Scottish region, within an easy commute of Edinburgh and Glasgow, for example, rose by 0.4% between April and June and have risen by 2.8% on an annual basis. ‘In spite of higher levels of tax, Scottish property prices remain some way below their previous market peak. The market continues to offer good value, especially when compared with London and southern England,’ Morgan added. Continue reading
