Tag Archives: australia
Annual UK house price growth puts on a spurt, especially in Scotland
UK house price growth is increasing again with the latest figures from the Office of National Statistics showing an annual rise of 9.6% in the year to March 2015. This is up from annual growth of 7.4% in the year to February 2015 and some parts of the country have seen record increases. House price annual inflation was 9.4% in England, 5.7% in Wales, 14.6% in Scotland and 7.5% in Northern Ireland. This is the highest annual increase in Scotland since July 2007. Annual house price increases in England were driven by an annual increase in the East of 11.4%, London 11.2% and the South East 11.2%. Excluding London and the South East, UK house prices increased by 8.1% in the 12 months to March 2015. On a seasonally adjusted basis, average house prices increased by 1.1% between February and March 2015 and prices paid by first time buyers were 7.8% higher on average than in March 2014. For existing owners prices increased by 10.3% for the same period. But there are concerns that house price growth is so strong. ‘House prices are going up four times faster than people’s wages. No wonder mortgage approvals are falling and first time buyers are struggling to save a large enough deposit. And we all know that housing bubbles burst and cause economic chaos,’ said Frances O’Grady, general secretary of the Trades Union Council. ‘There is no sign the government yet understands the challenge of ending the housing crisis. Their headline policy is an incredibly unpopular plan to sell off social housing to the private market. This would reduce the supply of affordable homes when we should be adding to them as quickly as possible,’ added O’Grady. Peter Rollings, chief executive officer of Marsh & Parsons, pointed out that it is worth bearing in mind that these figures concentrate on March. ‘The country was still convinced that we had a close-run election on our hands and vendors and buyers in London were holding their breath about what impact mansion tax and other possible policies might have,’ he said. ‘Now the reality is far different, a frisson of excitement has returned to the high-end market,’ he added. Continue reading
New home building not meeting demand for housing in Australia
Despite a record level of home building activity in Australia, this is still falling short of the current demand for new homes, according to the Housing Industry Association, the voice of Australia’s residential building industry. The HIA Autumn 2015 National Outlook report shows new housing construction is at record levels and is single handedly propping up Australia’s domestic economy. But HIA chief economist, Harley Dale, said that on-going momentum in 2015 is narrowly driven compared to last year, in terms of both geographical area and dwelling type. ‘It is disappointing that despite record new housing supply, many Australians are being priced out of the market due to the excessive and inefficient taxation and regulation governments’ impose on the new housing sector,’ he pointed out. ‘Super low interest rates are doing their job, but there is a lack of complimentary policy reform. The detached house construction cycle had peaked well below its potential because households can’t pay the cost of waiting up to 14 months for titled land, or multiple months for a simple building approval, or borrow the additional amount required to cover government-imposed gold-plating of user pays infrastructure,’ he explained. ‘A lack of focus on housing policy reform is shutting Australians’ out of their new home at a time when they could borrow responsibly at attractive interest rates and be part of the great Australian dream,’ he added. New dwelling commencements are projected to see a third consecutive year of growth in 2014/205. An increase of 12.9% is forecast to bring commencements to an all-time high of 205,490. The ultra-low interest rate environment means that there is some upside risk to this forecast. The latest projections indicate that dwelling commencements will fall by 10.6% in 2015/2016, with a further reduction of 4.7% in 2016/2017. The bulk of the decline will be concentrated in the ‘multi-unit’ market segment. The further upward momentum to new home building in 2015 is confined to two states, New South Wales and Queensland. The report also says that detached house commencements have peaked for the cycle at a level of 112,232. There is unrealised demand for detached housing due to a lack of shovel-ready land and a plethora of other supply side obstacles. Detached house commencements would have increased further in 2015 without these barriers to supply. Across the distinct types of new dwellings constructed, the upward momentum in 2015 is most evident for units of four or more storeys. There is some upward momentum evident for semi-detached/townhouse product. Housing renovations continue to struggle, increasing by just 0.8% during 2014. For 2014/2015 as a whole, the report expects that the volume of renovations will fall by 4.1% to $27.4 billion. That will be the lowest value since 2001/2002. Continued low interest rates and an economic recovery will eventually start to lift the renovations market. During 2015/2016 growth of 2.3% is forecast followed by a slight increase of 0.5% during 2016/2017. A further rise of 2.5%… Continue reading
New Zealand sees strongest new home figures for almost a decade
New building consents in New Zealand have increased to the country’s strongest house building rate for nine years, according to the latest official figures. Housing supply is increasing particularly in Auckland and Christchurch, according to Building and Housing Minister Nick Smith, with 25,000 plus new consents per year nationally. The latest annual figure of 25,038 compares to the low of 13,236 following the global financial crisis. A breakdown of the figures shows there were 756 new building consents for Auckland in March, which compares to just 209 per month before and 7,940 building consents in the year to March 2015 in Auckland, the highest since 2006. ‘We are well on the way to recovering the 10,500 homes lost to the earthquakes in Canterbury, with another record set for building consents. The 588 consents issued last month confirms the Government's view that the Christchurch housing market will have supply and demand back in balance by 2017/2018,’ said Smith. ‘These positive signs follow a general pattern of strong growth that has continued for almost four years. They confirm the latest GDP data showing a $9.5 billion annual investment in residential construction – an all-time high. It shows that the Government's programme of measures to increase housing supply is working,’ he added. Smith also pointed out that there are now Housing Accords in place with six local councils to free up more land faster. ‘We have initiatives in place to constrain building materials costs, rein in development contributions, cut compliance costs and invest in improved sector productivity,’ he said. He explained that the new $435 million HomeStart support package, which came into effect 01 April, is projected to assist 90,000 people into home ownership. ‘This is good progress but with strong net migration data from fewer New Zealanders leaving, we need to keep doing more. The next steps in our programme include our planned second phase of reforms to the Resource Management Act and place based initiatives like those announced today at Tamaki. The Government remains committed to supporting more New Zealanders into their own home,’ he concluded. Continue reading
