TSI
Average property prices up 6.1% in Canada but sales fall
Average property prices across Canada have increased by 6.1% year on year but this figure is being affected upwards by growth in values in Vancouver and Toronto. Indeed the latest monthly property report from the Canadian Real Estate Association shows that excluding data from Greater Vancouver and Greater Toronto results in an annual average price increase of 2.9%. The report also shows that nationally sales fell by 2.1% month on month in September and transactions are up just 0.7% compared to September 2014. Sales were down in more than half of all local markets led by declined in Vancouver, Calgary and Toronto. Fewer homes are going on the market. The number of newly listed properties fell 2.1% from August to September but overall the housing market remains balanced, according to the report. ‘Sales are off the peak reached earlier this year but are still running strong, particularly in British Columbia and Ontario. That said, sales strength varies considerably among markets and price segments across Canada,’ said CREA president Pauline Aunger. CREA chief economist Gregory Klump pointed out that although national sales activity was not as strong in September as it was earlier this year, a lack of supply in some parts of the country is likely keeping a lid on transactions ‘Greater Toronto and Greater Vancouver made sizeable contributions to the monthly decline in national sales activity. They also rank among the tightest urban housing markets in the country due to a shortage of inventory and supply of land on which to build, which is why prices there continue to grow strongly,’ he explained. However, sales in September 2015 reached the second highest on record for the month, standing just 0.3% below the record set in September 2009. The data also shows that actual, not seasonally adjusted, sales were up from year ago levels in a little over half of all local markets, led by the Lower Mainland region of British Columbia. Calgary posted the largest year on year decline in activity compared to the record set last year. The national sales to new listings ratio was 56.8% in September. With sales and new listings having posted monthly declines of equal magnitude in September, the sales to new listings ratio held steady compared to August. A sales to new listings ratio between 40% and 60% is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets respectively. The ratio was within this range in half of local housing markets in September. Of the remainder, the majority breached the 60 per cent threshold in September and consisted almost entirely of markets in British Columbia and those in and around the Greater Toronto. The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity. There were 5.7 months of inventory on… Continue reading
Slow broadband can hamper rural commercial leasing, new report says
Slow broadband is a major constraint in the successful letting of commercial workspace in the countryside in the UK and has an impact on rents achievable according to new research. It is also becoming more of an issue in some locations for residential property available to rent, the latest analysis sector survey report from real estate firm Savills shows. The survey reveals that nearly 70% of respondents confirmed slow broadband is a constraint on letting residential property in rural areas and 80% confirmed slow broadband is a constraint on letting commercial workspace. The survey also showed that in many cases a poor speed deters potential tenants from even making an appointment for a viewing and where space is let, on average rents are 16% and 25% less respectively where the broadband speed is slow. ‘Broadband speed is now generally one of the first topics raised by perspective tenants who are looking to rent some commercial office space in a rural area,’ said Ben Knight, director of Savills Rural. ‘Where it is poor vacant periods are often longer and in some cases there is no demand for a building however good the space and other facilities are. And with more people choosing to work from home for at least part of the week it is becoming a more common question from perspective residential tenants,’ he explained. The report suggests that landlords looking to develop commercial space should assess the speed of broadband as part of the viability study and are in cases shelving a project if the speed is poor or taking matters into their hands and creating high speed networks using grant funding where applicable. While the start-up costs are significant around £20,000-£30,000 in the first year, annuity income from those using the broadband is a valuable new income stream and of course the likelihood of finding tenants for the commercial space greatly improves the report says. Two estates which have successfully developed their own broadband schemes are The Alscot Estate in Warwickshire and The Rushmore Estate in Dorset. The Alscot Estate near Stratford-upon-Avon established the network South Warwickshire Broadband in 2014 which has led to a diverse range of businesses occupying premises and a 100 per cent occupancy rate. The tenants all have access to upload and download speeds of up to 36Mb per second plus voice over internet protocol (VOIP) and cloud services. ‘The benefits to the estate of having full occupancy with happy tenants are extremely valuable. Increasingly estates are having to diversify away from agriculture as farm incomes are pressurized by weak commodity prices and former traditional farm buildings provide attractive offices once converted,’ said Knight. ‘At Alscot we were able to immediately connect a gaming business taking one of the serviced offices so that they were up and running within 24 hours, which created a great relationship with the tenant from the outset,’ he added. The Rushmore Estate in Dorset via Wessex Internet is now able to offer residential and commercial… Continue reading
UK residential rent growth slows to match pace of house price growth
Rent price rises in the UK have slowed to match the pace of house price growth in the country after nine months of sustained faster growth, the latest index figures show. It means that rent prices are now 8.5% higher than a year ago for the three months to September 2015 after six months of annual rises over 10%, according to the data from HomeLet. The average rent in the UK for new tenancies in the period was £995 per month but in Greater London it was £1,555 per month although rents dropped here on a month on month basis for the first time since February 2015. The index report suggests that deflation across the economy, and rising real incomes, mean the slowdown in rents could be temporary. A breakdown of the figures shows that nine out of 12 UK regions are still seeing rent prices rise on an annual basis, with the largest increases seen in Scotland at 8.4%, the East Midlands at 7.7% and Greater London at 6.6%. The figures also show three regions in negative annual price movement, with prices in the North West 4.6% lower than a year ago, 2.2% lower in East Anglia and 1.4% lower in Northern Ireland. Comparing September figures to the previous month, the index reveals that only three regions have seen rent prices rise since August. In the three months to September 2015 only Scotland, the East Midlands and West Midlands have seen prices rise by 1.2%, 1.4% and 1.4% respectively. Every other region of the UK has seen rent prices fall modestly in the three months to September 2015, with the largest price reductions seen in the South West, the North East and North West with a fall of 2.4%, 2.3% and 2.2% respectively. ‘The UK economy has dipped into negative inflation which is a boost to consumers' spending power and, ultimately, their real income. Affordability is an important factor in determining rents,’ said Martin Totty, chief executive of Barbon Insurance Group, owners of HomeLet. ‘Depending on what happens with inflation and real incomes over the coming months, could have a bearing on future rental price trends especially where, in certain areas of the country, the supply of rental properties is not keeping pace with demand from those wishing to be private sector renters,’ he added. Continue reading
