Tag Archives: australia
Rural homes in the UK £43,490 more expensive than those in urban areas
Property prices in the countryside in the UK are, on average, £43,490 or 22% higher than in urban areas, according to the latest annual Halifax Rural Housing Review. There is a rural premium in all regions with countryside homes typically commanding a significant price premium over urban areas, although there are large variations across the country. In rural areas of West Midlands the average house price of £252,927 is £84,610 or 50% higher than in the region's urban areas at £168,317, the largest difference in the index. In the East of England, the premium is £16,806 or 6%, the smallest difference. House prices in rural areas are less affordable than in urban areas, the research also shows. The average property price in rural areas is seven times average annual earnings compared with a ratio of 5.9 in urban areas. The least affordable rural local area district is Tandridge in Surrey where the average house price of £433,932 is 10.8 times local annual average earnings of £40,266. All 10 of the least affordable rural districts in Britain are in southern England, including East Dorset where the average house price of £329,056 is 9.6 times local annual average earnings. This is followed by Purbeck in Dorset at 9.4, Mid-Sussex, Cotswold and North Devon all at 9.2. The least affordable rural district outside the south are Hambleton at 8.2 and Ryedale at 8.1, both in the North York Moors. Copeland in West Cumbria is the most affordable rural district with an average house price of £140,364 that is 3.7 times local average annual earnings of £38,367 while Chiltern is the most expensive with an average house price of £465,970. The next most expensive rural districts are Waverley in Surrey at £462,145, Tandridge and South Oxfordshire at £396,287. The average house price in Chiltern is four times higher than in East Ayrshire at £115,394 which is the least expensive rural district. Despite the higher price for buying in the countryside the gap with urban prices is narrowing, and property prices have risen more slowly in rural areas during the past five years, according to the research. Between 2010 and 2015, the average price of a home in the countryside rose by 13% compared with an average increase of 23% in urban areas. Between 2014 and 2015, the average price of a home in the countryside has risen by 5% compared with an average 8% increase in urban areas, excluding Greater London. Overall, the rural/urban premium has narrowed from 34% or £52,279 over the last decade. First time buyers account for 42% of all mortgage financed purchases in rural areas. This is significantly lower than in urban areas where first time buyers account for 54% of such purchases. Affordability difficulties are the key factor behind the lower level of first time buyers in rural areas. Due to the high level of property prices, getting on the rural property ladder is at its most challenging for first time… Continue reading
American and Continental style Build to Rent set to take off in UK
American style Build to Rent developments are catching on in the UK with the first due to be complete later this year and more set to come on stream in the next 18 months. The Build to Rent concept, known as multifamily in the US, could potentially transform the private rental sector into a service industry in the UK, according to industry experts. A report from law firm Addleshaw Goddard and the British Property Federation says the growth of the sector is good news for the economy, investors and tenants. With nine million people renting in the UK, Build to Rent has the potential to improve standards and provide better value and greater transparency. These developments are converted offices or purpose built apartment blocks which are professionally managed by specialist companies and rented out to private tenants. They mark a big step away from the traditional renting scene in the UK and some countries on the continent, including France and Spain, where residential properties are largely privately held and development of apartments has failed to keep pace with demand. ‘What it means for your average tenant is probably a better quality of life. When for example, the toilet breaks, there are people to fix it right away. As a tenant you don’t spend time managing the property, you get someone else to do it for you and you get on with living your life,’ said Adam Challis, head of residential research at real estate services firm JLL. Indeed, good maintenance of properties is an area where many small private landlords currently fall short. ‘Build to Rent has the potential to vastly improve standards in housing and because companies invest for the long term, they are more open to innovative design and more creative approaches which keep customers happy,’ said Marnix Elsenaar, head of housing at Addleshaw Goddard. As a growing sector, Build to Rent is now attracting the interest of investors. ‘The London story, and the UK story generally, is pretty unique in that we don’t have an institutional quality residential asset class yet,’ Challis explained, adding that this is set to change if the build to rent sector in countries such as the UK, Spain and France follows in the footsteps of the US. Multifamily investment is big business in America. Popular among private equity and pension funds, it offers some of the best returns in American real estate and last year saw record breaking volumes of $110 billion, topping the 2007 peak. And European countries such as Germany and the Netherlands already built up a multifamily market which continues to grow. JLL figures show demand for development and new build investments in the major German cities remains robust with €340 million invested in the first quarter of 2015. Similarly in the Netherlands, residential investment volumes hit €710 million, which is a 189 percent increase year on year and Sweden’s residential sector also continues to perform well. This bodes well for development in the… Continue reading
New home sales down month on month in Australia
New home sales in Australia fell by 4% month on month in September, with the level of activity down from the April peak by 5.2%, the latest new data shows. Detached house sales declined in four out of the five the mainland states with only Victoria seeing growth at 3.1%, according to the New Home Sales report from the Housing Industry Association (HIA). They fell by 19.8% in South Australia, by 8.6% in Western Australia, by 5.9% in Queensland and by 0.5% in New South Wales. In Victoria detached house sales increased by 3.1%. ‘Following the peak level of sales that occurred in April this year, sales activity has trended lower only very modestly. This augers well for actual new home building activity in 2015/2016,’ said HIA economist, Diwa Hopkins. ‘A fresh record level of building activity during this financial year could have been achieved and could have been of strong benefit to the broader domestic economy but increasingly restrictive credit conditions are likely to curtail the boom in new home building,’ she pointed out. ‘The deterioration in credit conditions is likely to weigh more heavily on new home building activity beyond 2015/2016. We have therefore pared back our forecasts for activity over our forecast horizon beyond the end of the current financial year,’ she added. Meanwhile, separate research shows that offshore investment into Australia's commercial property market shows no signs of abating this year. Foreign investors accounted for 28% of transaction volumes by value in 2014 and already in the first half of 2015 the level is 27%. The Australian market is remaining attractive to offshore buyers, as commercial real estate assets continue to provide relatively high income returns in global context, according to the report from real estate firm JLL. It points out that Australian office assets are attractively priced for investors seeking high yielding, stabilised assets in a mature market, comparing well against major cities in Europe, Asia, and America. And even taking into account localised differences such as higher rent free incentive levels in Australia, yield spreads still favour the Australian market. ‘In Australia, yield compression has continued unabated, especially for prime grade assets, across all sectors and many markets. The weight of capital remains significant and the global portfolio tilt toward real estate continues,’ said Simon Storry, JLL's head of International Investments Australia. While 2014 was a record level of foreign investment into Australia, at the half year mark, 2015 levels are close to the record 28% of transaction volumes recorded in 2014. Storry said that the depreciation of the Australian Dollar has allowed offshore investors to be far more competitive and they seem to have a much greater desire to deploy substantial pools of capital in what they see as an undervalued market globally. Continue reading
