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New home approvals recover in Australia after slow start to the year
New home approvals in Australia recovered in February after a decline in the first month of 2016, according to the latest data to be released. Home building approvals increased by 3.1% during February after beginning the year on a much slower note, says the new report from the Housing Industry Association (HIA). But there was a 1% fall in detached house approvals while the more volatile multi-unit segment achieved growth of 7.7% and over the year to February, new dwelling approvals totalled 232,194. According to HIA senior economist Shane Garrett the flow of data over recent months indicates that approvals may have hit their high point in the year to October 2015, with a record 239,250 approvals registered over that 12 month period. ‘The monthly lift in approvals activity during February is welcome but it seems increasingly likely that approvals peaked late last year and that the volume of new home building activity is set to ease as 2016 progresses,’ he said. ‘Our latest forecasts indicate that the about 200,000 new dwelling starts will take place during 2016, a reduction of 9.2%from last year. This would still represent a very high level of output by historic standards,’ he explained. ‘However, the risk remains that new home building output will fall below the levels required to meet long term demand. The onus remains on policy makers to tackle this problem, and confront issues like planning delays, land supply shortfalls and heavily inefficient taxes like conveyance stamp duty,’ he added. A breakdown of the figures shows that total seasonally adjusted new home building approvals saw the largest increase in Tasmania with growth of 24.5%, up 14.3% in New South Wales and up 9.5% in Queensland. Approvals declined in Victoria by 12.8%, in South Australia by 10.9% and in Western Australia by 7.6%. In trend terms, approvals saw a 9.2% fall in the Northern Territory but rose by 5% in the Australian Capital Territory. Continue reading
UK housing market boosted by April additional homes stamp duty deadline
The UK housing market received a fillip from increased activity among those looking to beat the April deadline for the new stamp duty charges on additional homes, a new report shows. The latest analysis from real estate firm Knight Frank points out that demand rose in many regions, with the Council for Mortgage Lenders reporting that gross mortgage lending in February hit the highest level since 2008. It says that activity may ease from April, but in the wider UK market the fundamentals of a lack of supply and low mortgage rates are underpinning the market. Also, in the London and South East markets the effect of uncertainty in the run-up to the European Union referendum is likely to be felt more keenly. ‘In the prime central London market, we expect differing levels of growth in the east and the west this year, underlining the very localised nature of the market,’ said Gráinne Gilmore head of UK residential research at Knight Frank. The report explains that property prices in prime central London fell by 0.1% in February, taking the annual change in values to 1% and the market remains highly localised with stronger performance in areas such as Islington, City and Fringe and South Bank. In comparison, price falls were seen in markets including Knightsbridge, South Kensington and Chelsea over the last year. ‘Overall, demand in prime central London was relatively subdued in the first two months of 2016 as a result of the higher levels of stamp duty and ongoing volatility in global financial markets,’ said Gilmore. ‘Further domestic uncertainty, in the shape of a London Mayoral election in May and an EU referendum in June, means this is likely to continue as buyers adopt a wait and see approach,’ she added. In the country market, prices rose by 3.1% in 2015 and the report says that the market is still being driven by prime properties in urban locations, with buyer demand concentrated on areas with effective transport links and good schools and amenities. In Scotland, prime country house prices ended the year up by 0.1%. Prime central London rents fell by 0.1% in February, the fifth consecutive monthly decline. As a result, the annual rental value growth in prime central London fell to -0.2%. ‘Uncertainty over taxation and slowing price growth in the sales market has resulted in relatively high supply levels, especially at above £1,500 per week. As a result, tenants feel little urgency to agree deals, putting pressure on rental values,’ Gilmore pointed out. The report adds that average UK rents rose by 2.6% in Great Britain over the 12 months to January 2016, according to latest figures from the Office of National Statistics. Continue reading
Research reveals how much home prices change in London commuter areas
Home owners who work in London can save £3,000 on a property for every minute of commuting outside of the UK’s capital city. New research from real estate firm Savills that looked at 100,000 house sales recorded around 314 stations on the outskirts of the capital found how prices rise as addresses edge closer to the city. It found that for each minute less spent on the train into central London, buyers should expect to pay a further £3,048 to secure the property. The average house price in inner London is £606,000, but by comparison, commuter locations within half an hour’s train ride from London have an average property price of £458,000. Further out the average price is just £337,000 for those with a journey time between 60 and 69 minutes. The most expensive place to buy at the furthest reasonable distance from the city, said to be 60 to 69 minutes commute, was close to Shelford station in Cambridge where the average house price is £622,451. In contrast, homes near Southend Central in Essex which is also just over an hour from London tended to sell for around £188,000, suggesting buyers pay not just for journey time but location too. Moving just 10 minutes closer to London results in a huge difference in price. In Sunningdale in Berkshire, for example, where the train takes 50 to 59 minutes, the average family home costs £930,000. Cutting another 10 minutes off the commute to work brings in Shiplake station in Oxfordshire where houses last year changed hands for around £1 million. The research report points out that house prices in London are currently 2.3 times the UK average, the largest differential since records began in 1973, according to data from the Nationwide. This has led many households currently living in the capital to face a choice of accepting a twice daily train journey, commuting costs and hassle in return for more affordable house prices and lifestyle benefits. Of course, any house price savings must be set against the cost of commuting. An annual rail and underground season ticket now costs from £2,400 to nearly £10,000, depending on length of journey and rail provider. Despite this, savings on house prices will more often than not outweigh the travel costs. An analysis of Savills buyers in the London commuter belt shows 30% of sales over the first quarter of 2016 were to those relocating from London compared to just 23% during the same period in 2015. The firm expects this trend to continue as the ripple effect continues to take hold. Continue reading
