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Vote on UK in the EU unlikely to have much impact on rental market
On the eve of the historic referendum in the UK on the future of the country in the European Union research shows that letting agents do not anticipate a major shift in the rental market. Whatever the outcome of the vote, lettings agents do not believe supply, demand, or rental costs will be significantly affected, according to the latest sector report from the Association of Residential Letting Agents (ARLA). Some 65% of ARLA agents expect supply to stay the same if the UK votes to leave the EU, compared to just a fifth 22% who predict it will fall as international landlords pull out of the market. The research also found that 31% see demand decreasing, as relocating to the UK becomes a less attractive prospect, but over half, 55%, think it will remain as high as it currently is. In London, however, almost half, 43%, of agents expect the number of prospective tenants per property to fall in the event of a ‘Brexit’, as international demand weakens. While 19% of agents expect a Brexit result will cause upward pressure on rent costs, the majority don’t imagine a massive change for tenants’ rents, should Britain leave the EU. ‘There is no avoiding the EU Referendum at the moment; and whatever the outcome, we are likely to feel the impact of the fallout of this debate in different ways,’ said David Cox, managing director of ARLA. ‘However, it’s important to put this into perspective and not get carried away in a zeitgeist. As outlined in our recent Brexit Report, the lettings market hosts a large number of non-UK born citizens and any change in migration policy is likely to have an impact down the line, especially in London. However, our monthly report clearly shows the sentiment amongst members is that the immediacy of this effect is likely to be minimal,’ he pointed out. The monthly report also looked at the issue of stamp duty reforms. Two months since the extra 3% was added to buy to let and second homes some 37% of agents reported a fall in supply of buy to let properties. This figures was much higher in Wales, where 80% of agents saw a dip in supply in May, as well as East Midlands and Yorkshire where 50% of ARLA agents have seen a decline. Looking forward, nearly half, 48%, of agents expect supply will continue to fall as more landlords walk away from the market as a result of the mortgage interest relief changes coming into force next year. The research shows that month on month supply is consistently lower than in 2015. The number of properties managed per branch dropped in May, with agents recording an average 171 properties on their books. Demand also fell marginally last month, as agents registered 33 prospective tenants per branch, compared to 34 in April. ‘The EU… Continue reading
New home lending in Australia recorded solid growth in April
New home lending to owner occupiers in Australia saw solid growth during April, up 4% month on month but still 5.9% lower than a year ago. The figures, published by the Australian Bureau of Statistics, also show that loans for building new homes increased by 4.4% and for buying new homes there was a 3.3% rise. The official figures confirm that demand for new home purchase across Australia remains very strong, according to Housing Industry Association, the voice of the residential building industry. ‘Even though the amount of new home lending for owner occupiers peaked over a year ago, current loan volumes remain elevated by historic standards. This means that activity on the ground over the remainder of 2016 will be healthy,’ said HIA senior economist Shane Garrett. He pointed out that May’s interest rate reduction is likely to provide some impetus to new home lending over the coming months. The HIA believes that 2016 will be another remarkably strong year overall. ‘Further easing on the interest rate front would augur even better for the short term outlook in residential building,’ added Garrett. Compared with a year earlier, the number of loans to owner occupiers constructing or purchasing new homes increased in four of the eight states during April 2016. A breakdown of the figures show that in the Australian Capital Territory there was a 30% rise, in South Australia and increased of 9.7%, in Victoria a rise of 4.5% and in New South Wales a rise of 1.1%. But there were declines over the same period in Western Australia with a fall of 18.9%, a fall of 15.2% in Tasmania, a fall of 2.2% in Queensland and a fall of 1.8% in the Northern Territory. Continue reading
Residential sales fall in Canada after previously setting all time monthly record
National home sales in Canada fell in May after setting an all-time monthly record the previous month with a decline of 2.8% recorded, the latest index data shows. The figures from the Canadian Real Estate Association (CREA) also show that the national average price has increased by 13.2% year on year but when Greater Toronto and Greater Vancouver are excluded this drops to 9.1%. Sales activity dropped in about 70% of all markets, led by those in British Columbia and Ontario where the number of homes listed for sale has fallen to multi-year or all-time lows. ‘National sales activity is still strong, even after coming off the record levels of the past couple of months. But, there are housing markets where sales continue to reflect a cautious mood among homebuyers and uncertainty about the local economy,’ said CREA president Cliff Iverson. According to CREA’s chief economist Gregory many of the housing markets in BC and Ontario that led the monthly decline in national sales are also places where months of inventory have fallen to all-time lows. ‘This suggests a lack of supply may be starting to rein in sales amid a continuation of strong housing demand,’ he explained. While nine of the 11 markets tracked by the index posted year on year price gains in May, price growth among housing markets continues to vary widely. Greater Vancouver recorded the biggest rise at 29.7% then the Fraser Valley at 31.7%. Next was Greater Toronto where prices rose by 15% year on year, while in Victoria they rose 13.9% and in Vancouver Island by 9.5%. By contrast, prices fell by 3.9% in Calgary and by 2.3% in Saskatoon. There were smaller year on year prices rises in other locations. In Regine they increased by 3.4%, in Ottawa by 1.3% and in Greater Montreal by 1.9%. Home prices in Greater Moncton recorded their tenth consecutive year on year gain, up 8.2%. The index report also points out that the national average price continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which remain two of Canada’s tightest, most active and expensive housing markets. The actual, not seasonally adjusted, national average price for homes sold in May 2016 was $509,460, up 13.2% year on year. However, if these two housing markets are excluded from calculations, the average price is a more modest $375,532 and the year on year gain is trimmed to 9.1%. But the report explains that even then, this reflects a tug of war between strong average price gains in housing markets around the GTA and in British Columbia versus flat or declining average prices elsewhere in Canada. Indeed, the average price for Canada net of sales in British Columbia and Ontario in May 2016 was down 0.7% year on year to $310,007. The index also shows that the number of newly listed homes fell by 3.2% month on month and new supply was down in about two thirds of all… Continue reading
