Tag Archives: economy
Bottom end of US housing market rebounds
Many home owners in the US at the bottom third of their markets are finally in a position to sell, according to the latest index data. Owners of the country's lowest valued homes emerged from 2014 in a stronger position than previous years, with home values up 6.8% year on year, the latest quarterly report from Zillow shows. Properties in the lower third of home values bottomed out in January 2012 with a median value of $84,100 but by December 2014 they had bounced back to a median value of $101,400. While home owners in the bottom price tier are still 17% below their pre-recession peak values, this is a distinct improvement from the 31% value loss they suffered when home values hit rock bottom in January 2012. Returning value means many with lower valued homes who had been in negative equity are now able to sell or refinance, boosting low end inventory, which has been tight for the past few years. Going into the home buying season in 2015, buyers can expect to find more homes on the market and less competition from all cash bidders, the report also points out. Metros with the biggest jump over last year in low end inventory are Las Vegas, with 66.% more low end homes on the market in December 2014 than December 2013, Riverside, with 47.3% more and Washington D.C. with 45.7% more. Homeowners of lower valued homes are emerging from negative equity and are able to sell just as many in the millennial generation prepare to buy homes, pushed into the housing market by rising rents and abysmal rental affordability. ‘In many ways, for the housing market to fully normalize, it has to start at the bottom. More lower end home sellers will help meet demand from entry level buyers, and these sellers in turn will re-enter the market in search of a slightly pricier home, which will entice more middle and upper tier sellers to list their homes,’ said Zillow chief economist Stan Humphries. ‘As the economy gets stronger, we expect more young adults to strike out on their own, moving out of friends' and parents' homes. This will create strong demand in coming months, especially for less expensive homes,’ he added. Rents continued to rise, and at the end of December the Zillow Rent Index had increased 3.3% year on year, to $1,345. Continue reading
New home approvals in Australia reach highest level on record
New home building approvals reached their highest ever monthly level during November, the latest official data from the Australian Bureau of Statistics show. Approvals for new homes totalled 18,245 in seasonally adjusted terms during November 2014, almost 3% higher than the previous record which was set in August 1994. Overall approvals in November rose by 7.6% on the previous month and were 10.1% higher than 12 months earlier. A breakdown of the figures show that seasonally adjusted new dwelling approvals increased most strongly in Victoria at 19.7%, followed by Tasmania at 8.2. They were up 5.7% in Queensland and 1.2% in Western Australia. A fall of 1.4% in new home approvals was recorded in New South Wales, while approvals were down 16.3% in South Australia. In trend terms, new dwelling approvals increased in the ACT by 3.3% and in the Northern Territory by 2.9%. The Housing Industry Association, the voice of Australia’s residential building industry, pointed out that growth has been concentrated in the multi-unit segment of new home building, which rose by 18% in November year on year. Detached house approvals saw growth of 3.6% over the same period. ‘Residential construction was the economy’s good news story during 2014, and today’s figures indicate that we can look forward to another positive year for the industry,’ said HIA senior economist, Shane Garrett. ‘The fact that approvals hit an all-time high during November augers very well for the pipeline of residential construction work in 2015. With weaknesses in several areas of the Australian economy, new home building has come to life at an opportune time,’ he explained. ‘Residential construction is now a central pillar of support for domestic demand in Australia. It is important that policy reform continues in the areas of planning, land supply and removing the taxation burden on new home building. This will form an important part of achieving the necessary rebalancing of the economy,’ he added. Continue reading
Tenant finances getting worse in the UK private rented sector
Tenants in the UK have felt a financial setback with the number falling into serious rental arrears rising on an annual basis for the first time since 2012, according to the latest tenant arrears tracker report. The data from the estate agency chains Your Move and Reeds Rains, part of LSL Property Services, shows that in the fourth quarter of 2014 there were 68,100 tenants in severe rent arrears of more than two months, an annual rise of 7.2%. However, on a quarterly basis the setback is less severe, with 1,700 more cases of severe arrears in the quarter compared with the last quarter of 2013, a quarterly increase of 2.6%. Despite this recent deterioration, the longer term trend for tenant arrears remains positive, the report suggests as improvements seen in 2013 and at the start of 2014 remain overwhelmingly large in comparison. As a result, since reaching a peak of 116,600 tenancies in the third quarter of 2012 the number in severe arrears has dropped by 48,500 as of the fourth quarter of 2014, an improvement of 42%. In terms of the proportion of all tenants now in severe arrears, there was no significant setback in the last quarter. As a percentage of all tenants, 1.4% owed rent arrears of more than two months in the fourth quarter, the same as in the third quarter of 2014 and the fourth quarter of 2013. This leaves a remaining 98.6% of tenants who have consistently avoided serious rental arrears. A slight deterioration in the most serious rental arrears is consistent with figures for overall levels of late rent including shorter lapses on payments. According to the latest Buy to Let Index from Your Move and Reeds Rains, overall tenant arrears of any duration stand at 7.5% as of November, up from 6.6% of rent late in November 2013. However, as with severe arrears, even after November’s slight deterioration, rent arrears remain considerably lower than in previous years, since peaking at 14.6% in February 2010. ‘Escaping the worst deprivations of the financial crisis has taken half a decade and even now, for so many households every month is still a difficult month,’ said Adrian Gill, director of estate agents Your Move and Reeds Rains. ‘But just as the occasional setback is inevitable, the long term trend is increasingly clear. Since the sharpest pinnacle of tenant difficulties in 2010 the number in serious rent arrears has practically halved,’ he pointed out. ‘As rising wages start to combine with much lower levels of unemployment, the fundamentals of the economy have started to turn in favour of tenants. If that can continue, then so can the trend away from arrears, as renting becomes more affordable,’ he added. The report also shows that eviction rates have improved. In the third quarter of 2014 some 28,400 tenants faced a court… Continue reading
