TSI
Rebound in property prices in Sydney and Melbourne in first month of 2016
Property values across Australia’s capital cities were 0.9% higher in January driven partially by a rebound in Sydney and Melbourne, the latest real estate index data shows. The recent growth conditions have pushed the Melbourne property market into first place for annual growth with an 11% rise compared with Sydney where values were 10.5% higher over the past 12 months. The January 2016 CoreLogic RP Data Hedonic Home Value Index also shows that property values across Australia’s combined capital cities increased by 0.9% after recording no change in December and a 1.5% drop in November. Quarter on quarter values were 0.6% lower. Hobart led the monthly figures with a 4.7% jump in values, followed by Melbourne with a rise of 2.5% higher, Canberra up 2.8% and Sydney up 0.5%, while in the remaining four capital cities values were flat or down. Four of Australia’s eight capital cities recorded falling values over three months with Sydney down 2,1% over the rolling quarter, Darwin down 1.4%, Adelaide down 0.9% and Melbourne down 0.1%. The strongest growth in home values over the quarter was 3% in Hobart. Despite recording the largest annual decline in home values at 4.1%, Perth saw a rise of 1.7% over the three months to the end of January while they were up 0.8% in Brisbane and 1.2% in Canberra. While still a high rate of annual growth, Sydney’s annual rate of capital gain is now at a 29 month low and has been progressively softening since peaking at 18.4% in July last year. According to Tim Lawless, CoreLogic RP Data head of research, Melbourne’s housing market has been more resilient to slowing growth conditions which has propelled the annual growth rate to the highest of any capital city, with values 11% higher over the past 12 months. ‘Previously, during the height of the growth phase, there was a large separation between Sydney’s housing market, which was streaking ahead, and Melbourne’s, where the rate of capital gain was substantial but still well below the heights being recorded in Sydney. The latest data reveals Sydney’s housing market is now playing second fiddle to Melbourne’s, at least in annual growth terms,’ he said. ‘In fact, over the past six months, the performance gap between Sydney and Melbourne is stark. Sydney dwelling values have reduced by 0.6% between July last year and the end of January 2016, compared with a 3% rise across Melbourne,’ he explained. He also pointed out that in the last six months both Brisbane and Canberra have seen values rise by 2% while Hobart values are 1.3% higher and Adelaide dwelling values have been virtually flat with a 0.1% rise. The annual pace of growth across the Canberra market has been progressively improving, with values up 6% over the past 12 months, the strongest annual gain since November 2010. ‘The nation’s capital has benefitted from improved buyer confidence while rising demand has seen much of the housing oversupply absorbed, particularly across the detached… Continue reading
Mortgage approvals end 2015 on a strong footing, bank data shows
Approvals for home purchases in the UK increased towards the end of 2015 with December being a strong month, according to the latest figures from the Bank of England. The number of loan approvals for buying in December was 70,837 compared to an average of 69,462 over the previous six months while the number of approvals for remortgaging was 41,708, compared to the average of 39,540 over the previous six months But the next few months are likely to be very different, according to David Whittaker, managing director of Mortgages for Business. ‘The next wave of activity will be powered by landlords scrambling to complete transactions before they are hit with extra taxes. This is only just beginning,’ he said. ‘With 01 April marking the point at which Stamp Duty on buy to let properties bites, many investors have been rushing to get their mortgages completed and expand their portfolios before this date,’ he pointed out. ‘Expect this flurry of activity to continue into the first few months of 2016, as investors rush to apply for their buy to let mortgages and lenders do everything in their power to get the good applications completed before the April crunch point,’ he added. Peter Williams, executive director of Intermediary Mortgage Lenders Association, pointed out that December was the busiest month for remortgaging in over two years, with activity growing more than twice as fast as overall approvals. ‘The continued appetite for remortgaging was likely to be a sign of home owners eager to capitalise on market competition and lock into lower rates, especially with US raising interest rates for the time in nine years and expectations the UK would follow suit in the not too distant future,’ he explained. After the Autumn Statement extensions to Help to Buy, and the rock bottom base rate lasting out the year, first time buyers were feeling decisive, and this was mirrored by a clear upswing in house purchase approvals from November to December, according to Peter Rollings, chief executive officer of Marsh & Parsons. ‘This energy has definitely been carried over into 2016, and January has already seen an impressive influx of motivated buyers, eager to progress up the property ladder,’ he explained, adding that 2015 was also the year of remortgaging for many existing home owners and this momentum is showing no signs of dissipating while cheaper fixed rate mortgages remain available. ‘But in the coming months we can expect strong buy to let lending, as the April introduction of higher stamp duty for second homes gives a new sense of urgency for those looking to invest in property or expand their existing portfolio,’ he added. Continue reading
Consumer group blasts new second home property tax as dangerous and flawed
The new 3% surcharge on second homes in the UK is dangerously flawed and it could harm the very homeowner that the government wants to help, it is claimed. According to the Home Owners Alliance, a consumer group for home owners, said that while the surcharge is welcome in principle, the way it is going to work is not helpful due to a number of situations which have not been taken into account. In its response to the proposed change due to take effect from 01 April, the HOA says it is so overly complex and flawed that it will lead to massive unintended consequences. ‘It is great the government is trying to use stamp duty to help home owners, but they have made a real hash of it. The ridiculously complex way they are planning to introduce the scheme will end up harming many of the very home owners it is meant to help, and lead to widespread confusion among home buyers,’ said Paula Higgins, HOA chief executive. ‘We are already being contacted by distressed home owners who have worked out they will be caught by it, and not be able to buy the home they want to. Rather than push ahead with a well-intentioned but dangerously flawed scheme, it should go back to the drawing board and put it right,’ she added. In its consultation response, the HOA has suggested many remedies to iron out some of the worst problems with the proposals, but points out that almost none of the problems would exist if the government used the more simple system. ‘It is really simple, no one should pay the stamp duty surcharge if they are going to buy a home to live in, and home owners need confidence that will be the case. However, if you are buying a residential property for any other purpose, you should pay the surcharge,’ said Higgins. The HOA consulted widely with members and other stakeholders, and identified various problems. It pointed out that many ordinary buyers who are not buying a holiday home or one to let out will be hit by the 3% stamp duty surcharge at the last minute, forcing them to give up purchasing their new home. For example, a first time buyer will be charged the stamp duty surcharge if they jointly purchase their home with someone who already owns a property and they could pay more stamp duty than an existing home owner with a major property portfolio. Separating couples could be hit by the surcharge when one of them sets up a new family home and people moving to new build homes where the timetable is dictated by the developer will generally have to pay the stamp duty surcharge, only to reclaim it from the government later. This will particularly hit hard stretched pensioner downshifters moving into newly built retirement homes, says the document. Also, home owners who move for work and rent out their homes… Continue reading
