TSI
Property price growth in Australian capital cities continues to fall
Home price growth in Australian capital cities fell in November with the slowdown recorded the previous month in Sydney and Melbourne in particular continuing, according to the latest CoreLogic RP Data index. Over the month, Melbourne values fell by 3.5% while Sydney values were down 1.4%. Hobart dwelling values dropped by 2.4%, Darwin values were down 1.3% and down 0.5% in Canberra. Values rose in the remaining three capital cities, with Adelaide showing the highest month on month growth rate at 0.7%, followed by Brisbane with growth of 0.6% and Perth up 0.3%. Overall the combined capitals housing index has seen dwelling values drop by 1.5% over November, taking the rolling quarterly rate of change to -0.5%. Head of research Tim Lawless pointed out that the latest results are now placing downwards pressure on the annual change in dwelling values. The annual rate of growth across the combined capitals index peaked at 11.5% back in April 2014, and has since reduced to 8.7%. Sydney maintained the highest annual growth rate at 12.8%, which is down from a peak rate of annual growth of 18.4% in July earlier this year, while Melbourne’s annual growth rate has reduced from a recent peak of 14.2% to 11.8% over the 12 months ending November this year. The only capital cities where values have declined over the past year are Darwin with a fall of 4.2% and Perth with a fall of 4.1%, where weaker economic conditions and a slowdown in population growth contributed to an early peak in housing market conditions in December last year. The equivalent peak in the cycle for Darwin was May 2014. Since that time, Perth values are down a cumulative 5.9% and Darwin values have fallen by a larger 6.8%. ‘The fact that mortgage rates have risen independently of the cash rate has, in all likelihood, become a contributor to the slowdown in housing market conditions, as well as tighter lending practices evidenced by a recent reduction in lender risk appetite for investment loans and high loan to valuation ratio mortgages. Tighter mortgage servicing criteria across the board and affordability constraints in the Sydney and Melbourne markets are also having an impact on market demand,’ said Lawless. As a consequence of the tighter lending environment for investors, as well as gross rental yields being at near record lows, participation in the housing market from investors has reduced from 54.1% of all new mortgages in May 2015 to 45.4% at the end of September, which is the lowest level since July 2013. The 1.5% decline in capital city dwelling values over the month, coupled with a 0.3% rise in weekly rents, has seen the average gross yield record a subtle improvement over the month. This follows a trend towards lower rental yields which commenced in May 2013, Lawless pointed out. Gross yields remain close to record lows for houses in Melbourne at an average of 3% while Sydney has overtaken Melbourne… Continue reading
UK’s first affordable rent to buy homes to be built in south west city
Plans have been announced for the UK’s first affordable rent to buy homes to be built on a development in the south west of England. Plymouth based housing companies Persimmon Homes and Rentplus have signed an agreement to develop 19 new affordable rent to buy homes in the city to help tackle the region’s housing shortage and help people into home ownership for the first time. The properties are part of a 139 home development built by Persimmon Homes at William Prance Road, Derriford, as part of Plymouth City Council’s Get Plymouth Building programme. ‘With average house prices in the South West now close to £230,000 and in some places more than £300,000 and average earnings in the region among the lowest in England, we have an unbelievable housing situation where many houses cost more than 10 times the average annual household income,’ said Rentplus chief executive, Richard Connolly. ‘Rentplus is designed to make housing accessible for all those who wish to own their own home and we look forward to working with partners in Plymouth and across the country to help tackle the housing crisis,’ he added. The first homes at Palmerston Heights are now complete and Rentplus is working with Tamar Housing Society to identify suitable tenants in need of an affordable rented home who aspire to buy their own home in the future. The Rentplus homes are available at affordable rents up to 80% of the local market rent for an agreed period of between five and 20 years. Once the rental tenancy has finished, residents are given the opportunity to buy their Rentplus home and will be given a 10% deposit by Rentplus to do so. Palmerston Heights is close to a historic 19th century fort and includes a mix of two, three and four bed houses and one and two bed flats available on the open market or through rent to buy and shared ownership schemes. An additional five social rented homes will be managed by local social landlord Tamar Housing Society. The Rentplus homes will be marketed and allocated to households by Tamar Housing Society through Devon Home Choice housing register which enables local households to be considered for affordable housing which becomes available in the area. Figures from the South West Housing Initiative show the region is the fastest-growing in the country, but has the nation's biggest regional housing crisis. A report from the National Housing Federation shows that private renters in the South West are spending 35% of their earnings on rent, the third highest rent to income ratio in the country. A study in June 2013 found there were more than 10,000 households on Plymouth’s housing register, underlining the importance of building new homes in the region. Julie Barnett, chief executive of Tamar Housing Society, believes it is vital to provide affordable housing to those… Continue reading
Court rulings in Spain create more uncertainty over illegal homes
Three rulings by Spain's Supreme Court have left the owners of more than 16,500 homes built in Marbella since 1986 in legal limbo by declaring planning regulations void. In a series of decisions, the country's highest court has declared null and void Marbella's urban planning regulations that were passed in 2010 and which legalised thousands of homes constructed since the previous town plans, dating back to 1986, were approved. In response to appeals against previous Supreme Court of Andalusia rulings, the rulings all arrived at the same conclusions, namely that the Town Council does not have power to retroactively declare legal properties that have been built illegally as that rests with the courts, nor to alter land classifications, nor legal liabilities. According to Adam Neal of real estate firm Terra Meridiana it means that individual property owners, even those who bought in good faith, will be held liable for illegal constructions, rather than passing the responsibility on to developers, as the 2010 plan sought to do. He explained that much of the problem arose during the three terms of the GIL (Grupo Independiente Liberal) government, from 1991 to 2003. The then mayor Jesús Gil is regarded as having run the council like a fiefdom, with claims of cash being funnelling under the table in exchange for carte blanche building licenses. ‘Subsequent administrations, under mayors Julián Muñoz, Marisol Yagüe, and Tomás Reñones, all sentenced to jail time for offences following the Caso Malaya scandal, were little better, leading to the suspension of the entire Town Council in 2006 by the central government, to make way for a team of auditors who tried to unravel Marbella's finances,’ he said. Neal believes that now all the paperwork for every property built within Marbella's municipal area since 1986 will need to be looked at very carefully indeed. ‘There are two possible outcomes: either a property is legal, because it was built on urban land as per the 1986 town plan, or it isn't, because it wasn't,’ he pointed out. According to Mark Stucklin of Spanish Property Insight it is bad news for the local property market, which was one of the few real estate bright spots in Spain until now. ‘It drags Marbella’s reputation back into the dirt by reminding people of its corrupt past, whilst the uncertainty will put off buyers and investors,’ he said. He pointed out that the decision could mean no more new building licences for the foreseeable future, plunging the residential construction business back into crisis just when it looked like recovering after more than a decade of downturn. Ricardo Arranz, president of the National Association of Urbanisation Developers, said the decision was right and expected. He explained that the industry welcomes the demise of the 2010 revised plan. ‘It was an unmanageable plan, absurd in every way and had started to scare off investors. It was done in a hurry by architects who knew absolutely nothing about the needs… Continue reading
