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Value of US housing stock in 2015 down from overall growth the previous year
The value of all homes nationwide in the United States grew $1.1 trillion in 2015 and is expected to end the year at $28.5 trillion total. However, the value of the entire housing stock grew 4.1% in 2015, slower than the 6% growth in 2014, according to the data from real estate firm Zillow. The total value of all homes has regained $5.3 trillion since hitting its lowest point during the housing bust in December 2011, but is still $782 billion below the bubble peak value of $29.2 trillion, reached in October 2006. The dollar amount itself underscores the significance of housing to the US economy. In the third quarter of 2015, the US gross domestic product was $18.1 trillion, $10 trillion less than the total value of the housing stock. ‘This reminds us of the large role housing plays in the overall economy. Total home value growth slowed this year, but there was still a significant increase in overall value, and many markets are more valuable than they've ever been,’ said Zillow chief economist Svenja Gudell. ‘At the same time, more renter households and rising rents combined to set new records in rental spending in 2015. Americans are spending a lot of money on housing, and that will make affordability an important issue next year,’ she added. The research data shows that housing value isn't distributed equally across the country. California is home to about 12% of the population but the state accounts for nearly a quarter of the country's total home value, driven by highly valued markets like Los Angeles and San Francisco. Zillow data also shows that Americans shelled out nearly $20 billion more in rent in 2015 than in 2014 as people around the country set up 1.8 million new renter households and median monthly rents rose at a record pace. In all, renters spent $535 billion on rent in 2015, nearly as much as the total budget of the Department of Defence ($575 billion), according to a new Zillow rentals analysis. In 2014, they spent $516 billion. Renters of single family homes and apartments spent about the same amount on rent this year, with apartment renters paying $239 billion and single family home renters paying $245 billion. Renters in the New York/Northern New Jersey metro area spent the most on rent in 2015 at about $56 billion. Los Angeles area renters spent nearly $35 billion, and San Francisco renters spent $17 billion. About two thirds of the total rent paid in 2015 was spent in the 50 largest metros. Home values rose 3.9% annually in November to a Zillow Home Value Index of $183,000, according to Zillow's November Real Estate Market Reports. Denver home values grew fastest for the tenth consecutive month at 15.5% annual appreciation. Miami joined Dallas, San Francisco, San Jose, and Portland as other metros seeing double digit growth. Rents also continued their steady climb, growing 3.8% annually to a Zillow Rent Index of $1,382. The pace of rental… Continue reading
Fewer Chinese and Russians buyers likely for prime central London market in 2016
There is likely to be fewer Chinese and Russian buyers in the prime central London property market in 2016 but a rise in interest from the Middle East, particularly Iran, is forecast. Overall there is unlikely to be much growth in this market which has been hit by increased property tax charges with more set for second home and buy to let buyers in April. ‘We are cautiously optimistic about 2016, however the market is unsettled and liquidity is down. We don’t expect much growth in the central London market as a whole, except for the very best stock which we believe will keep increasing in value,’ said Rory Penn of property agents VanHan. ‘Prices at the top end of the market may adjust to compensate for increased tax costs. We expect there to be fewer Russian and Chinese buyers in the market than in previous years; the strength of the pound means that London is not currently considered to be such good value for money,’ he explained. ‘It is expected that sanctions against Iran will be lifted next year, and we are already seeing interest from wealthy Iranians looking to buy property in central London but we expect to see a drop in demand for some new build developments, such as Battersea Power Station, as the market is becoming over saturated,’ he added. One area where the firm does expect to see continued demand is Mayfair. ‘There is a lot of development going on and a high level of interest from foreign buyers who are still attracted to the social aspect,’ said Penn. Sales were better than expected for the firm in 2015 with seven residential sales in the £10 million to £50 million with an average transaction size of £16 million which included a £50 million house in central London, one of the largest residential transactions in the area. But it also points out that it remains to be seen what effect property tax will have in the coming months. ‘The slowdown in the prime residential markets last summer had less to do with the election and more to do with the changes in taxes relating to buying and holding residential real estate, although this has had less impact at the very top end of the market,’ said Penn. ‘As the luxury market has become more saturated, discerning buyers are increasingly looking for a boutique, bespoke service. Sellers are increasingly looking to sell properties off-market,’ he added. Continue reading
Average prices in England and Wales up 6.6% year on year
Average house prices in England and Wales increased by 6.6% year on year to an average of £292,077, according to the latest index figures to be published. This means that the average house prices has increased by £17,963 since December 2014 but property values in central London fell by 8.7% on average during 2015, dragged down by higher stamp duty, the index report from Your Move and Reeds Rains shows. The annual price growth figures falls to 4.7% of London and the South East are excluded from the calculation and month on month prices increased by 0.6%. Outside of these top five central Boroughs, London prices increased by 11%, the biggest increase, followed by the East Midlands, driven by a 10.6% annual rise in Nottingham’s house prices. Where sales are concerned it was the strongest December for since 2006, with transactions up 7.1% year on year as buyers compete for fewer homes on the market. Richard Sexton, director of e.surv chartered surveyors, believes that the highest year on year house price growth for 10 months may prompt existing home owners to move up to the next rung of the property ladder in 2016, freeing up homes at the bottom for first time buyers. ‘The rise in property prices has been propelled so far by a sinking supply of houses coming onto the market, compared with increasing enquiries from potential buyers eager to clamber aboard the property ladder,’ he said. ‘If the current speed of house price growth continues into 2016, the value of the average home may soon pass the £300,000 watermark, having reached £250,000 in December 2013. Property price rises have certainly left the recession in their wake, with house prices passing the £200,000 milestone only in October 2005,’ he added. He also pointed out that prices are probably set to rise further during the first quarter of 2016 before the Government’s new house building programmes have a chance to boost the supply of property on the market. The data shows that in Kensington and Chelsea, London’s most expensive borough, prices fell by 14.2% year on year and Sexton explained that the tax changes announced in 2014’s Autumn Statement increasing the rate of stamp duty on homes worth over £1.5 million to 12% has had an effect. ‘While price increases in the central boroughs used to keep England and Wales’ house price growth afloat, since January they have been anchoring down the average price increases in London and the country overall,’ he said. ‘The reality is that there has been an undercurrent of growth in the rest of London, with values outside these top end boroughs rising by 11% year on year. The increase has been strongest in the cheaper boroughs, with Newham seeing 23.8% annual growth. But the overall price rise across the capital has been submerged by the top end, with the annual change in London standing at just 5.6%, below the UK average,’ he added. He also explained that the 8.1%… Continue reading
