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Hong Kong property sales fall amid call for help for young buyers
Residential property sales in Hong Kong decreased by 28.2% in March due to the introduction of a seventh round of market tightening measures, according to the latest analysis report. The move by the Hong Kong Monetary Authority is supressing the housing market amid calls for more housing to be built to measures put in place to help young first time buyers, says the report from international real estate firm Knight Frank. It also shows that mass residential sales below HK£10 million dropped almost 30% but prime residential sales above this price level saw a lower fall at 16.2%. The report points out that the tightening is being felt the most at HK$7 million and below. Despite the fall in sales, prices in the mass residential market increased by another 2.6% in March while luxury property prices remained stable. ‘To tackle the housing problem in Hong Kong, Knight Frank believes that the government should not focus on supressing housing demand, but effectively increase housing supply and provide assistance to first time home buyers,’ the report says. ‘The government should ease restrictions on mortgage lending for first time and young home buyers, perhaps by following the example of Singapore which has applied age conditions on housing mortgage loans,’ it explains. The report also shows that the office sales market was more active in March compared to February. Decentralised areas in particular saw some large transactions. It says that the latest initiatives launched by the Chinese government, including the establishment of the Asia Infrastructure Investment Bank and the proposed Shenzhen to Hong Kong through train will inevitably increase capital flow in the region. ‘Hong Kong being a global financial hub situated at the cross roads of Asia is set to benefit from this. We expect this to translate into increased commercial activity which will stimulate demand for office space from related industries taking the opportunity to expand their business in the city,’ the report points out. ‘As a result we remain optimistic about the office market in Hong Kong. Given the limited supply of office space and sustained demand from Chinese firms and certain industries, we expect Grade A office rents to rise by up to 5% during the year,’ it adds. Continue reading
House price growth in England and Wales at slowest since 2013
House price growth in England and Wales is at its slowest since 2013 but despite this average property prices set a new record of £275,123, the latest data shows. March saw the smallest annual change in house prices in 16 months at 5.6% or £14,620, according to the LSL England and Wales house price index. The slowdown was more prevalent in the south as London was hit by the threat of higher stamp duty charges and a potential mansion tax after the general election. Month on month prices were up 0.2% and the annual change when London is excluded from the calculation was slightly lower at 4.9% but the difference has narrowed considerably. While sales were up 11.6% in March this was only half of the typical monthly upswing expected to take place at this time of the year and sales in the first quarter of 2015 were down 5% year on year. Adrian Gill, director of Reeds Rains and Your Move estate agents, said that annual house price growth has now been waning for half a year, and hasn’t been this sluggish since November 2013. He also pointed out that this is far from typical as the general election next month means that cautious buyers are holding back to wait and see what happens with whoever forms the next government and property regulation is a hot topic in one of the most uncertain UK elections in a generation. ‘Examining the regional pattern of movement, it becomes apparent that we’re seeing less of a downturn than a convergence. The radical stamp duty overhaul has greatly boosted the prospects of buyers across the country, and injected new life into areas where prices have been stalled and the recovery yet to show its face,’ he explained. ‘But the small minority of those negatively affected by the restructuring of the old slab system are disproportionately concentrated in the more expensive, southern regions of England. Naturally, London has been the hardest hit at the sharp end of this reform, and also most directly threatened by future mansion tax, possessing the lion’s share of high-end property, and the clustering of properties in the million pound price bracket mirrors the locations where price rises have cooled most quickly,’ he added. He also pointed out that between January and February, the South West has seen annual house price rises fall back from 5.5% to 4.4%, the most marked slowdown across England and Wales, and closely followed by London and the South East, which both experienced falls of 0.9%. ‘While values in London and the South West are no longer at their peak, the East and West Midlands and East of England are instead among those setting new price records in February,’ said Gill. ‘For so long, London has been the workhorse dragging up overall measures of UK house price growth, but we’ve reached a new equilibrium. While house price growth is more measured than it was a year… Continue reading
Negative equity worse in some parts of US despite home values rising
Home prices are rising in the US but the rate of home owners who owe more on their mortgage than their homes are worth is stalled and even worsening in some places for the first time since the recession, according to a new report. Negative equity is going up in 21 of the largest 50 housing markets, indicating many underwater homes are not rising in value, says the latest review from real estate data firm Zillow. More than a quarter of mortgaged homes are underwater in some markets in Florida and the Midwest. The national negative equity rate is 16.9% yet home values rose 5.9% nationally last year. The report also shows that the at the lower end of the market homes are far more likely to be worth less than the balance of their mortgage and the analysis suggests that is because low end homes are losing value. At the peak of the real estate crisis, more than 15 million home owners owed more on their mortgages than their homes were worth, putting them in negative equity. Foreclosures, short sales and rapidly rising home values freed nearly half of those home owners, but now that trend has reversed in many metros. Indeed, three years into the recovery, home values overall continued to recover while owners of the lowest valued homes, those most likely to be stuck in negative equity, were left behind. ‘Higher negative equity rates have become the new normal. We've long been expecting the negative equity rate to fall more slowly as home value growth also slows, and unfortunately that's exactly what we're seeing,’ said Zillow chief economist Stan Humphries. ‘Compounding the problem is the fact that negative equity is decidedly not an equal opportunity predator, and looms larger over the bottom 10% of homes, where home owners are least prepared to withstand the assault,’ he added. In Atlanta some 49% of homes in the bottom third of home values are in negative equity, compared to 11% of mortgaged homes in the highest valued third. Among large metros, Virginia Beach at 28.3%, Jacksonville at 27%, Las Vegas at 24.4% and Atlanta at 26.1% had the highest rates of negative equity. Continue reading
