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Prices in Australian cities up 0.5% in February, but growth is moderating
Property prices in Australia’s capital cities increased by 0.5% in February and by 1.4% over the last three months, according to the latest index figures. However the trend in annual growth has slowed over the last seven months from 11.1% to 7.6%, the CoreLogic RP Data home value index also shows. Prices increased in all capital cities apart from Perth and Canberra were prices fell by 1.1% and 0.2% respectively and over the past three months they increased across all capitals except Sydney where they fell by 0.2%. An examination of the data shows that the largest monthly increases in home values were recorded in the cities that have been underperforming over the growth cycle to date. In Hobart values were 2.9% higher, Adelaide up 1.9% and Brisbane up 1.8%. The cities to record the greatest value rises over the past three months have been Hobart with growth of 8.5%, Melbourne up 3.8% and Brisbane up 2%. According to CoreLogic RP Data head of research Tim Lawless, even though home values have trended lower over the year in Perth and Darwin, they have recorded value rises of 0.2% and 0.3% respectively over the past three months. He also pointed out that while values are still increasing across most capital cities however, the results remain diverse. Sydney and Melbourne remain the strongest markets in trend terms, however, the gap is widening between the performances of Melbourne relative to Sydney. Over the past 12 months, combined capital city home values have increased by 7.6%, with the annual rate of growth down from a recent peak of 11.1% recorded in July last year. Melbourne has maintained its number one growth position, with annual capital gains of 11.1%. ‘Melbourne values appear to be holding reasonably firm since December last year with the annual rate of capital gain virtually level over the past three months,’ Lawless explained. Sydney’s annual rate of growth has continued to moderate, having almost halved from its cyclical peak of 18.4% recorded in July last year to reach 9.5% growth over the past 12 months. Lawless said that despite the slowing trend, Sydney remains the second best performing capital city over the past year but he pointed out that a few of the smaller cities where growth rates have recently accelerated may start to rival Sydney’s position over the coming months. ‘The trend in home value growth is showing signs of increasing in those markets that have previously underperformed. These include Brisbane, Adelaide, Hobart and Canberra. Affordability constraints aren’t as apparent in these cities and rental yields haven’t been compressed to the same extent as what they have in Melbourne or Sydney,’ Lawless said. ‘Home values increased in Brisbane by 5.5% over the past year, which is the fastest annual rate of value growth in a year. In Hobart, home values are 6.2% higher over the year, which is its fastest annual rate of home value growth since July 2010,’ he added. Continue reading
Homes in commuter locations in Peterborough and Milton Keynes sell fastest in UK
Properties in Peterborough and Milton Keynes are selling faster than anywhere else in the UK, taking a median average of just 13 days for a sale to be agreed, new research shows. A key factor is that both towns are considered an easy commute to London, as home buyers and property investors alike look to move out of the capital in search of better value, according to the research by Home.co.uk. Bristol is another area where property sells fast with city having five out of the top 10 postal districts in the firm’s property hotspot list of fastest selling location outside of Greater London. This includes the BS2 postcode area, which is next to the city centre's university, suggesting that the buy to let market for student accommodation is a strong motivator for buyers in Bristol. The continued interest in investing in student accommodation is also a factor in the Woodley area of Reading being named another property hotspot. In this area of the city, which is close to Reading University, it takes just 15 days to sell, in terms of the median average. Suburban Glasgow is another property hotspot. Clarkston and Giffnock, which are both affluent areas to the south of the city centre, take two top 10 spots in terms of median average time to sell outside of Greater London. Greater London's property hotspots are also dominated by suburban areas, showing heightened interest in commuter belt homes, the research report says. But while 10 areas outside of Greater London have a median average time to sell of 15 days or less, just two areas of the capital, Uxbridge and Sidcup, have such a quick turnaround. This research shows that properties in the UB7 area of Uxbridge, near to Heathrow Airport, and the DA15 area of Sidcup take only 15 days to sell. Sidcup takes one further Greater London top ten property hotspot place, with nearby Dartford claiming two places and Bexley, which is also near to Sidcup, another spot. The remaining top 10 places also show how popular such commuter belt districts are. Sutton has two postal code areas ranked among this elite group, while Romford and Kingston-upon-Thames claim the remaining places in terms of median average time on the market. ‘Our figures show that the really hot areas in the current property boom are now outside of the M25. These top sellers' markets are typically well to do districts where already premium prices are going through the roof, as buyers compete for the very limited supply of properties for sale,’ said Doug Shephard, the firm’s director. Continue reading
Economic uncertainty caused by Brexit vote could affect UK property sales temporarily
Rising economic uncertainty over the UK’s membership of the European Union in the run up to a referendum in June could affects sales of property, a new analysis suggests. It will be a lack of clarity that could impact transactions as happened in the run up to the referendum on Scotland remaining a part of the UK in 2014, says the report from international real estate firm Knight Frank but whatever happens the real estate market should be benign. It explains that both transaction volumes and development starts have seen healthy growth since David Cameron’s 2013 referendum pledge, and again following the Conservative Party victory in May last year. ‘Despite the resilience of the market to date, experience from the 2014 Scottish Referendum shows that we ought to expect a slowdown in housing market activity as we get closer to the poll date. The extent of this slowdown is, in reality, guesswork at the current time,’ the report state. ‘One issue we have seen develop in recent weeks is the weakening of the pound. This trend has potential implications for the central London market, where foreign home buyers are more active. If anything the weakening of the pound could provide a short-term boost to demand in the Capital,’ it adds. The analysis explains that there is no doubt that a clear ‘remain’ vote would remove immediate economic uncertainty and market activity might be expected to recover any lost ground relatively rapidly, this was certainly the experience in Scotland following their referendum. However, the prevailing assumption is that a ‘leave’ vote would necessarily require a period of negotiation to settle the UK’s new relationship with the EU. ‘During this period it would be fair to assume that uncertainty would continue to influence investment decisions for businesses and individuals, particularly if the question of Scottish independence is raised again,’ the report points out. ‘While the speed and terms on which this new settlement is made remain unclear, one factor suggests there will be some urgency in the process. With the Irish economy so closely linked with the UK’s the EU will be under pressure to ensure trade for Ireland is maintained. The UK’s bargaining position may also be bolstered by pressure from other organisations and countries like China, with whom the country has strengthening trade ties,’ it adds. But it concludes that it is safe to assume the impact on the UK housing market should be relatively benign whatever the outcome. ‘The mainstream UK housing market is primarily driven by domestic dynamics. An exit from the EU would not affect the demand/supply imbalance which is a key feature underpinning current housing market trends,’ the report says. ‘This imbalance is most noticeable in London and the South-East, where decades of undersupply contribute to the on-going need for a considerable uptick in construction activity,’ it adds. Continue reading
