Tag Archives: cities
Property price growth picks up pace across UK cities, latest index shows
Property price growth in key UK cities has picked up pace with annual growth running at 8.5%, up from 7.2%, according to the latest index from real estate analytics firm Hometrack. Growth over the last three months of 4.3% is at the fastest rate for 11 years, the data from the index, which covers 20 main cities, shows. The index report says that growing house price momentum is on the back of a 32% increase in sales volumes since April and a sustained catch-up in prices in cities outside southern England. There remains further upside for house prices in regional cities outside London, it adds, and city level price inflation remains on course to end the year at 10%. All cities with the exception of Aberdeen are registering house growth ahead of growth in average earnings which is currently 2.4%. The highest year on year growth is 10.9% in Cambridge followed by Oxford, London and Bristol. The lowest growth rate is in Aberdeen with a fall of 0.7% and the report suggests that the weakness in the oil price is impacting the local economy and demand for housing. Other cities with below average house price growth are Newcastle, Liverpool and Sheffield where annual growth is running between 2.5% and 4.5%. The report also says that there is room for further catch-up in house prices. Nine of the 20 cities still have average prices that are lower than 2007 levels although this gap is narrowing rapidly. The relative performance of house prices since 2007 remains wide and reflects different economic and demand side drivers of house prices. Average prices in London are 40% higher than in 2007 and 14% higher in Bristol. Cities such as Edinburgh and Glasgow have registered a resurgence in growth more recently post the Scottish referendum although average prices remain 2% and 11% below their peak. Looking ahead, the report says that low mortgage rates, economic growth and rising earnings will continue to stimulate demand and put an upward push on house prices across most cities. As an international city, London is out on its own setting new highs for prices and unaffordability. ‘How long this can be sustained is down to the prospects for the different segments of demand, specifically international buyers, domestic investors and domestic home owners,’ the report explains. ‘Overall we expect city level house price inflation to remain on course to end the year at 10% year on year,’ it concludes. Continue reading
Two tier house prices growth continues in Australia led by Sydney and Melbourne
The two tiered growth evident across Australia’s housing markets continued in July with Sydney and Melbourne driving home values higher, the latest monthly index shows. The CoreLogic RP Data Home Value Index increased by 2.8% month on month and 11.1% year on year and the total aggregated value of Australian housing increased by just over half a trillion dollars over the past 12 months to $6 trillion. Melbourne has traded places with Sydney to record the highest rate of capital gain, with values in the city up 6.1% over the three months ending in July, the highest rolling quarterly rate of growth since the three months ending August last year when values grew 6.4%. Growth in Sydney wasn’t quite as strong over the rolling quarter, up 5.4% but still the highest rate of growth since the March quarter this year when it was 5.8%. ‘To date, the capital cities have seen remarkable differences over the growth cycle which broadly commenced at the end of May 2012 and since that time dwelling values across our combined capitals index have increased by 30.4%,’ said Tim Lawless, CoreLogic RP Data’s head of research. Sydney values are 47.9% higher over the current cycle and Melbourne values are 32.1% higher while every other capital city has seen growth of less than 13% over the same period. Lawless explained that this highlights the extent to which the Sydney and Melbourne markets have outperformed other markets over the past three years. He pointed out that over the last year several cities have seen price corrections. Darwin has seen values falling the most, down by 5.3% while in Perth values also drifted lower over the year, down 0.3%. At the same time, the annual rate of capital gain in Sydney reached a new cyclical high with home values moving 18.4% higher over the year to the highest annual rate of growth for Sydney since the 12 months ending in December 2002. The strongest growth conditions outside of Sydney and Melbourne have been in Brisbane where dwelling values were 3.9% higher over the year. Based on the median dwelling price, Sydney prices are now 72% higher than Brisbane’s and Melbourne’s are 24% higher. Detached housing continued to outperform the unit sector, with house values substantially outperforming unit values over the past year apart from Hobart and Darwin. Detached home values are up 11.6% compared with a 7.2% increase in unit values over the past year. The differential is most pronounced in Melbourne where house values have surged 12.3% higher over the year compared with a 4.8% rise in unit values. ‘The higher growth rates for houses compared with units is likely to be supply related, with the underlying land component driving detached housing values higher at a time when new apartment supply has seen a substantial boost from new construction,’ Lawless said. While dwelling values continue to rise across most cities, the pace of rental growth has slipped to a new record low, which has… Continue reading
Average house prices in UK’s biggest cities up 6.4% in first half of 2015
House prices across the UK’s 20 largest cities increased by 6.4% in the first half of 2015, led by Oxford, London and Glasgow, the latest index data shows. Oxford was the fastest growing city with a ride of 8%, followed by London with house price growth of 6.6% and Glasgow with growth of 6.4%, according to the Hometrack UK Cities House Price Index. Aberdeen was the weakest performer with house prices flat in the first half of the year, while northern cities like Leeds, Manchester, Liverpool and Sheffield, while seeing growth, still have average prices below the peak of the market in 2007. The data also shows that on a quarterly basis prices in these top cities increased by 4.3% while Oxford and Cambridge continue to perform overall like direct extensions of the London market. On a year on year basis growth across all 20 cities covered by the index is 8.4% with an average price of £226,200. At a city level this ranges from 11.6% in Cambridge to 2.9% in Liverpool. Looking to the second half of the year, the index report suggests that the headline rate of growth across the 20 cities index looks set to move higher as continued growth in house prices pushes the year on year rate towards 10% as the recovery spreads and households continue to price low mortgage rates into house prices. The greatest risk on the horizon is an increase in interest rates, recently highlighted by the Bank of England Governor. The report points out that 57% of outstanding mortgage debt is on variable rates, which is lower than the 73% high registered in the middle of 2012. While a year’s worth of new buyers have been subject to tougher affordability tests, the majority of mortgagees have not, Hometrack director of research Richard Donnell pointed out. Donnell explained that many home owners have continued to pay off debt while rates have been low, so any increase in mortgage rates is likely to impact market sentiment which, given the shortage of supply, would result in a marked slowdown in the rate of house price growth. ‘Rising demand for property against a backdrop of low supply continues push city level house prices higher. At 8.4%, city level house price inflation is running higher than the overall UK rate. While house price growth might moderate slightly in the second half of the year, it looks increasingly likely that city level house price growth will return to double digits by the year end,’ said Donnell. ‘The greatest risk facing the housing market is an upward movement in interest rates which would check market sentiment, cool demand and result in a marked slowdown in house price growth,’ he added. Continue reading
