Tag Archives: australia
British farm land prices more tightly pegged to local conditions
The British farmland market is becoming more finely balanced leading to a greater range in values achieved with sale prices more tightly pegged to local supply and the number of potential buyers. Overall values increased by 0.2% during the first six months of the year, a reduced rate, according to Savills most recent review of the GB farmland market. But this conceals some localised falls in prime arable values, where there is now evidence of more price sensitive demand coupled with reduced competition between farmer and non farmer/investor buyers. Indeed, average grade 3 grassland values, which in recent years lagged way behind arable values continue to strengthen with an average uplift of 1% during the half year. Meanwhile, 5% more land was publicly marketed in compared with the first half of 2014. Almost half of the acres advertised were arable compared with around 30% in the previous four years. ‘There is evidence of some farmers, especially those without successors taking the opportunity of current record values to exit the industry,’ said Alex Lawson director of Savills farms and estates. The report also shows that non-farmer buyers overtook farmers as the principal buyers of land and the proportion of farmers buyers is now at its lowest since 2003. However, of those continuing to buy land the proportion doing so in order to expand their existing businesses is rising and now accounts for the reason behind half of all purchases. ‘There are many entrepreneurs still growing their businesses, despite current commodity prices, reflecting the longer term view they take. It also reflects the fact that many farming businesses now produce significant non-farming income which helps spread business risk,’ said Ian Bailey of Savills rural research. A breakdown of the figures shows that 85,000 acres were publicly marketed in the first half of 2015 which is 5% more than in the same period in 2014 but 1% less than the average of the same period of the previous five years. In England 13% more land was publicly marketed in the first half of 2015 at 65,500 acres compared with 57,100 acres in the same period of 2014, which is 7% more than the five year average of 60,100 acres. Supply in Scotland fell by 7% to around 18,500 acres which was very similar to 2013. Here sellers and buyers continue to be affected by uncertainty surrounding land reform, the general election result and reform of the Common Agricultural Policy. Welsh land supply has dwindled most dramatically, with only 1,900 acres for sale so far in 2015. This is less than half the area marketed in 2014 and of the average area over the past five years. ‘Almost half of the acres advertised were arable compared with around 30% in the previous four years. This shift and the regional increases in supply are, to some degree, reflected in the pressures on the arable and regional value growth noted… Continue reading
Average residential rents in Australian capital cities falling
Residential rental rates in Australian capital cities fell by 0.2% last month, down to $487 per week, but are up 1.1% over the past 12 months. It is the slowest annual rise in capital city rents recorded by the CoreLogic RP Data monthly rental report since date was first gathered in December 1995. The firm’s research analyst Cameron Kusher said that the sluggish pace of rental appreciation continues to be attributed to the ongoing boom in home construction across Australia’s capital cities accompanied by record high participation in the housing market from investors. A breakdown of the figures shows that Sydney and Hobart have recorded the greatest increases in weekly rents and over the past three months rents are lower in all cities except for Sydney, Melbourne and Canberra. The report says that Sydney and Melbourne are recording relatively stronger rental growth despite a large surge in new supply and high levels of investment purchasing. Sydney and Hobart also recorded the greatest annual increases in weekly rents while rents in Perth, Darwin and Canberra continue to decline. With home values growing faster than rents, gross rental yields are at a record low level and continue to edge lower, the report adds. Continue reading
UK mortgage lending still down compared to a year ago
Home lending levels recovered in May compared to April, but were still down compared to a year ago, the latest figures from the Council of Mortgage Lenders show. First time buyers saw a decline in lending volumes compared to last year, but up slightly on the previous month while home mover lending saw a similar trend with volumes up slightly on April but down year on year. Home owner remortgage activity also declined compared to the previous month and compared to the same period last year. However, buy to let lending continues to grow year on year, mainly driven by remortgage activity and also saw a slight month on month increase due to higher buy to let house purchase lending activity. ‘House purchase lending in May was slightly up on the previous month, suggesting the market might be waking up after a subdued first quarter,’ said Paul Smee, director general of the CML. ‘Activity has broadly been down on last year but we expect it to rise in the summer months as, with historically low interest rates and a competitive lending environment, borrowing conditions are relatively favourable. But we cannot ignore the continuing affordability constraints caused by high house prices relative to earnings which will work in a contrary direction,’ he added. The CML report also shows that, as previously reported, gross lending in May was £15.9 billion, up from £15.8 billion in April but down from £16.8 billion in May last year. Under normal circumstances, a slight increase in the number of loans to first time buyers in May would be a sign that their prospects are on the rise this summer. But Patrick Bamford, director of mortgage insurance Europe for Genworth, pointed out that average deposits have risen significantly over the last year, not just because of rising house prices, but because the squeeze on affordability is disadvantaging buyers without a sizable amount of cash to put towards a house purchase. ‘For many would be home owners, especially those without the Bank of Mum and Dad to fall back on, saving more than 5% is simply not a realistic aim. Despite more high loan to value (LTV) products being available at lower rates, market pressures are preventing lenders from offering these products to those buyers who traditionally rely on this type of loan,’ he said. ‘In order to drive a genuine recovery of the high LTV market, the government needs to introduce a permanent system of private mortgage insurance to accompany its planning reforms. First time buyers will only be able to access affordable homes if we make affordable mortgages permanently available to them,’ he added. However, the CML figures also shows that competitive mortgage rates mean first time buyers are paying a record low proportion of their monthly income to service the capital and interest rate payments of their mortgage. This is the lowest level since the CML began tracking this in 2005. Continue reading
