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Auckland sees unprecedented housing market activity
Unprecedented sales activity in March saw Auckland’s residential housing market establish new records for prices and sales numbers, according to the latest index for the New Zealand city. March is always the most active month for property sales, but there has never been a month’s trading to compare with the past month, according to Peter Thompson, managing director of Barfoot & Thompson. The average sales price increased by 3.9% compared with February, pushing the average sales price to an all-time high of $776,729. It is more than $17,000 higher than the previous record average price set in December last year. The median price at $711,000 increased by 1.1% over that for February and is 9% higher than the median in March 2014, the data also shows. ‘March has set a string of new records,’ said Thompson, adding that a quarter of all the homes sold in the month were for in excess of $1 million and the firm sold 1,597 homes in the month, the highest number ever in a calendar month. ‘Buyers were not put off by the record prices, and for the last two weeks of the month we sold more than 400 homes each week, the highest two weeks trading in the company’s history,’ he explained. ‘Buyers remain convinced that with a stable economy, low interest rates and restricted housing availability, that buying at current prices is manageable,’ he added. The data reveals that in the first quarter of this year, the average sales price has risen 6.1% over 2014’s average price for the year of $716,588, and March’s average price was 7% higher than it was 12 months’ previously. During the firm sold 420 homes for in excess of $1 million, 167 more than the 253 homes we sold in March last year, which until now was the highest number of $1 million homes sold in a month. At the same time it sold 300 homes for under $500,000, which represented 18.8% of sales. According to Thompson current high prices are encouraging more home owners to bring their property to market, and during March the firm listed 1,997 new properties, the highest number in the past 17 months. ‘At month’s end we had 3347 properties on our books for sale, the highest for 10 months. While sales activity in April is unlikely to match that for March, given the relatively good level of choice available trading can be expected to remain extremely active,’ he concluded. Continue reading
Property prices near London Crossrail stations set to outperform local markets
On average property prices within a 10 or 15 minute walk from the new Crossrail stations in and around London have already outperformed prices in the wider area by some 5%, new research shows. While there are pockets of sustained outperformance, especially in central London, average residential property prices around a few of the stations in the Eastern and Western sections of the line show a more mixed picture. Yet those areas where price growth has lagged the surrounding areas may offer significant opportunities for further price uplifts, especially where large scale regeneration and development is underway, according to the major analysis report from real estate firm Knight Frank. It points out that when fully complete in 2019, Crossrail will bring an additional 1.5 million people to within a 45 minute commute of the centre of London. ‘In many cases, it is not just the reduced travel times that have the potential to create value, but also large regeneration projects connected with Crossrail, which are not only improving the realms around stations, but providing a wider choice of higher level amenities as well as residential property options,’ said Grainne Gilmore, Knight Frank head of UK residential research. The firm has previously assessed how residential prices around central Crossrail stations performed between 2008, when Royal Assent for the project was granted, and 2012 and found that on average, prices within a 10 minute walk of the stations outperformed the wider prime central London market by 8%. Now it has taken its analysis further and also looked at how property prices around each of the stations from Shenfield to Maidenhead have moved over the last seven years, and comparing this with average price growth in the surrounding areas. In total, there are 2,976 residential units in schemes which have been started within a 10 minute walk of central Crossrail stations and a further 10,096 units with planning approved. ‘Some of these schemes may be phased, and take some years to deliver but the development potential of the areas surrounding the stations is clear,’ said Gilmore. ‘The research shows that prices around Canary Wharf Station have lagged the strong growth seen in prime outer London from 2008 to date, but the scale of development taking place in the area, and further East, make this an area to watch,’ she pointed out. Residential property prices within a 10 minute walk of the central stations have risen, on average, by 57% since 2008 compared to 43% growth in the prime central London market over the same period, according to Knight Frank’s own index. The biggest rises in residential prices have been seen within a 10 minute walk of Bond Street with an 82% uplift in prices in the area surrounding the station, which encompasses much of Mayfair. ‘While some of this increase has been underpinned by the buoyant central London market, it does not explain the full uplift. Prices in the wider Mayfair market were some 30% higher… Continue reading
Sydney soars ahead with strong price growth compared to other Australian cities
Home values in Australia’s capital cities increased by 1.4% in March with Sydney leading the way with strong growth of 3% while prices elsewhere were relatively flat, the latest index shows. On a quarterly basis prices increased by 3% in the first three months of 2015, the CoreLogic RP Data Home Value Index also shows. However, although value growth has started 2015 on a strong note, the annual rate of growth has moderated back to 7.4% which is the slowest annual growth rate since September 2013. On top of the 3% monthly price rise, values in Sydney are up 5.8% on a quarterly basis and 13.9% on an annual basis. With stronger housing market conditions over the first three months of the year, annual home value growth across the Sydney market has rebounded after slowing to 12.4%, according to head of research Tim Lawless. He pointed out that Sydney is the only housing market where dwelling value growth remains in double digits, with the next strongest performer, Melbourne, showing a much lower rate of annual capital gain at just 5.6%. Each of the remaining capital cities have recorded an annual rate of growth which is less than 3% with values having declined across Perth, Darwin and Hobart over the year. The index data also shows that since home values began their current growth phase in June 2012, prices across the combined capital cities have increased by 24.3%. ‘Most of this growth is emanating from Sydney. Over the current growth phase, Sydney dwelling values have increased by 38.8% with Melbourne second strongest at 23.6%. On the other hand, total dwelling value growth over the current cycle has been less than 10% in Adelaide, Hobart and Canberra,’ said Lawless. He also explained that while the overall quarterly rate of growth is strong it is important to note that it is lower than the 3.5% increase in home values over the first quarter of 2014. While dwelling values continue to rise across most cities, weekly rents are failing to keep pace. Across the combined capital cities dwelling rents have risen by just 1.7% over the past year which is a stark contrast to the 7.4% capital gain in dwelling values over the same period. Sydney is showing the highest increase in weekly rents over the year at 3.3% while Perth has shown the most substantial correction, with weekly rents down 4.1% over the past 12 months. The fact that dwelling values are moving higher at a much faster pace than rents is causing gross rental yields to consistently compress across each of the capital cities, the index report says. Since the middle of 2013 the average gross rental yield across Australia’s combined capital cities has reduced from 4.3% to 3.6%. Gross rental yields are now approaching record lows in both Melbourne and Sydney at 3.3% and 3.6% respectively. ‘Despite the headwinds of softer labour markets, very low rental yields, increased oversight on lending conditions and heightened economic uncertainty,… Continue reading
