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Detached home approvals in Australia reach five year high
Detached house approvals in Australia hit a five year high during April, according to the latest report from the Housing Industry Association, the voice of Australia’s residential building industry. During April, detached house approvals rose by 4.7% in seasonally adjusted terms to reach 10,264, the highest monthly total for detached house approvals since February 2010. However, HIA senior economist Shane Garrett pointed out that a weaker month for the multi-unit segment of the market actually drove total new dwelling approvals lower during April. In the month the total number of new dwelling approvals fell by 4.4% to 18,715 in seasonally adjusted terms. The reduction was driven by the multi-unit segment, with a 13.6% fall. The data also shows that the detached house market saw a total of 214,331 approvals recorded in the year to April, the highest 12 monthly total on record. ‘Strengthening activity in detached house building is crucial to broadening the base of the new home building recovery which has been largely contained to the multi-unit market to date,’ said Garrett. ‘It is important that policy settings allow the expansion in detached house building to deliver on its full economic potential,’ he added. A breakdown of the figures show that seasonally adjusted new dwelling approvals only increased in Tasmania with growth of 29.8%. Approvals declined in all the other states, with the largest monthly reductions occurring in New South Wales with a fall of 14.6%, Queensland down 14.2% and South Australia down 10.3%. New dwelling approvals also declined in Western Australia by 3% and in Victoria by 2.2% while in trend terms, new dwelling approvals increased in the ACT during April by 8.4% and fell by 6.2% in the Northern Territory. Continue reading
Latest UK house price index shows a slowing of growth in the market
UK house prices in the three months to May were 2% higher than in the preceding three months but they fell 0.1% month on month, according to the latest index figures. The annual growth compared to May last year is 8.6%, taking the average price of a home to £196,067, the monthly index report from lender The Halifax shows. And an analysis of the data shows that the quarterly measure of the underlying rate of house price growth has eased for the second consecutive month, falling to its lowest since January. On top of this annual house price growth only increased marginally from the 8.5% recorded in April and continues to be in the narrow range of 8% to 9% where it has been throughout 2015 so far. ‘Housing supply remains extremely tight with the stock of properties available for sale currently at its lowest level for many years,’ said Martin Ellis, Halifax housing economist. ‘At the same time, ongoing economic recovery, increasing employment, real earnings growth and very low mortgage rates are all supporting housing demand. This combination has kept annual house price inflation well above earnings growth although activity levels are subdued,’ he pointed out. ‘The imbalance between supply and demand is likely to continue to push up house prices over the coming months. Looking further ahead, the increasing level of house prices in relation to earnings is expected to dampen house price growth,’ he added. The report also points out that figures from HMRC show that home sales fell by 3.4% between March and April to 97,020. Nonetheless, sales in the three months from February to April were marginally higher, up 1.3%, than in the preceding three months. Mortgage approvals continue to pick-up. The volume of mortgage approvals for house purchases, a leading indicator of completed house sales, increased by 9.9% in April. Whilst approvals in the three months to April were 6.6% higher than in the preceding three months, they were 4.3% lower than in the same three months a year ago, according to the latest available Bank of England, seasonally adjusted figures. And supply remains tight. The stock of homes available for sale fell further in April and is currently at its lowest level for many years. New instructions declined in April for the eighth month in the last nine, contributing to the very low levels of supply, data from the Royal Institution of Chartered Surveyors shows. But there has been an increase in those thinking it is a good time to buy. The latest Halifax Housing Market Confidence Tracker shows that the net proportion of consumers who believe the next 12 months will be a good time to buy increased from +21 in March to +26 in April. In contrast, the net proportion that thinks that the next year will be a good time to sell fell from +33 to +30. The headline House Price Outlook balance, i.e. the difference between the proportion of people across Britain that… Continue reading
Prime London rental values up but price growth remains muted
Rental values in prime central London continued to climb in May, and annual growth of 4.2% was the highest figure since December 2011, the latest published data shows. It compares to a decline of 1.4% in May 2014 and the positive upwards momentum over the last year has been driven by the recovering UK economy and the transfer of demand from the sales market ahead of last month’s general election, according to the report from Knight Frank. A mood of hesitation around the election, combined with the two bank holidays, meant activity in May was slower compared to last year in what was a stop start market, the report says. Indeed, the number of new prospective tenants was down 12% in May compared to the same month in 2014, while the number of viewings declined 18%. In spite of the recent dip, new prospective tenants and viewings in the 12 months to May 2015 are up by 12% and 7%, respectively, and activity is expected to increase over the summer as part of a seasonal trend among students, families and corporate tenants. Demand has remained strong in markets including Marylebone and Hyde Park, particularly in lower price brackets, suggesting companies and private renters are still cost conscious despite the improving economy. Prime gross rental yields edged upwards to 2.96% in May, their highest level since August 2013, widening the spread between the risk free rate on a 10 year government bond. Meanwhile, in the prime central London sales market annual growth is lower than at any time since the last general election in 2010. Although prices grew 0.3% in May, an annual increase of 2.3% is the lowest since November 2009. ‘This relatively low level of growth underlines the gap between the expected impact of the result and the reality of a property market still digesting a series of tax changes,’ said Tom Bill, head of London residential research at Knight Frank. Continue reading
