Tag Archives: election
Residential building land prices rise in Australia
There is a growing divide between demand and available supply in vacant residential land in Australia as land price rise and detached house building peaks, according to a new report. The number of residential land sales fell by 11.8% over the year to the December 2014 quarter while in contrast, the weighted median residential land value increased by 2.8% and was up by 6.3% over the year. The data from the latest HIA-CoreLogic RP Data Residential Land Report provided by the Housing Industry Association, also shows that the increase in the weighted median value was driven primarily by Sydney, with significant growth also evident in Perth and Melbourne. ‘As with all aspects of this housing cycle, there are wide divergences in land market conditions around the country this is clearly evident across the six capital cities and 41 regional areas covered in the report,’ said HIA chief economist Harley Dale. ‘There is insufficient shovel-ready land in some markets and this is placing undue upward pressure on residential land values. Construction of detached houses looks to be peaking for the cycle, but there is unrealised demand out there because of that lack of readily available and affordable land,’ he explained. Overall the price of residential land per square metre increased in Sydney, Melbourne and Perth in the December 2014 quarter, with Sydney remaining the country’s most expensive land market by some margin. Across regional Australia, the most expensive residential land markets are the Gold Coast and the Sunshine Coast in Queensland, and the Richmond-Tweed region in New South Wales. The least expensive markets can be found in the South East region of South Australia, and the Mersey-Lyell and Southern regions of Tasmania. According to CoreLogic RP Data research director, Tim Lawless, the number of vacant residential land sales has been trending lower since the middle of 2013 and concurrently, median land prices have been rising to new record highs. ‘The opposing trends are a clear sign that demand is outweighing supply which is pushing land prices higher. Higher land prices ultimately lead to less affordable homes. It is the high cost of vacant land which significantly contributes to the increasing cost of housing. Ideally we should be seeing more land brought to the market and sold during this period of low borrowing costs,’ he added. Meanwhile, the latest Australian Bureau of Statistics housing finance figures show that the number of loans to owner occupiers (excluding refinancing) declined modestly in February although the number of loans to those purchasing and building new homes increased slightly. The number of loans to households building or purchasing new homes increased by 2% in February, a relatively positive result against a backdrop where lending to households purchasing existing homes eased back modestly. The number of loans to owner occupiers buying established homes, excluding refinancing, fell by 0.9% in February to a level 4.9% weaker compared with the same time a year ago,. According to… Continue reading
Major UK parties but housing at top of election agenda
Housing has become one of the major issues in the UK’s forthcoming general election with all the major parties making pledges to attract voters. The Conservative party said it will extend the Right to Buy scheme and the Liberal Democrats have announced plans to build 300,000 more homes a year and ensure everyone has a decent place to live. The Labour party says it will build at least 200,000 new homes a year by 2020 with first priority for local first time buyers and introduce three year housing tenancies with a ceiling on excessive rent rises. Prime Minister David Cameron said that the £18billion extension of Margaret Thatcher's Right to Buy scheme will be extended to 1.3million families living in housing association properties. It would be funded by requiring councils to sell off the most expensive social housing when it becomes vacant, replacing it on a one to one basis with more affordable property. The existing Right to Buy allows tenants living in council owned properties local authority tenants to buy houses and flats at a discount of as much as 70% up to a maximum of £102,700 in London and £77,000 across the rest of England. Around 500,000 housing association tenants currently have no purchase rights and 800,000 who qualify only for much less generous discounts of £16,000 or less. But the reaction has been mixed. The Conservative plans will not necessarily boost house building and could weaken the future capacity of the social renting sector to provide a safety net for those who cannot afford to house themselves via the private market, according to Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA). ‘The risk is that in this manifesto along with others we will get more short term initiatives and that politicians will continue to avoid owning up to the need for a fully formed housing strategy that balances support for people across all forms of housing tenure. Delaying the inevitable will only result in more difficulties in the long term,’ he explained. Adam Challis, head of residential research at JLL, described as good politics, but terrible policy. ‘This is exactly the kind of short termist thinking that the countries' 4.7 million households in social housing don’t need, not to mention the same number again of aspiring owners in private renting,’ he said. ‘Right to Buy benefits a select few while condemning the vast majority to longer waiting lists and fewer choices. At a time when we are building barely half the homes this country needs, we need a government that is interested in genuine solutions to the housing crisis rather than cheap vote winners,’ he added. Colleague Richard Petty, head of affordable housing at JLL, said that extending the Right to Buy to housing associations will seriously damage their ability to help the country build its way out of the housing crisis. ‘They rely on private finance to build now, not government grant. The… Continue reading
London emerging prime property proves robust ahead of election
Prices in emerging prime property areas in South West London have remained robust in the first quarter of 2015 despite the uncertainties presented by the election, according to a new index. The top performers in terms of capital growth in the first three months of 2015 was Clapham, up 5.5% after a weaker fourth quarter in 2014, followed by Southfields and Earlsfield, up 2.9% compared to last quarter. The emerging prime index from Douglas & Gordon also shows that investors have been attracted by the strong rental growth and some areas have become hotspots for young professionals and overseas investors and tenants who are drawn to upmarket developments. Investors are continuing to flock to smaller units, particularly flats, and this is due to attractive prices and high yields of 3.7% to 5% compared to 2.2% and 3.7% in prime areas. The index report points out that the Chancellor of the Exchequer’s clear signal in the Autumn Statement that properties under £900,000 would be free of political interference has meant that demand for properties under this threshold has remained strong. When it comes to properties over £2 million there has been little pick up from the second half of 2014 and the report says this is due to the fallout from the overhaul in stamp duty structure announced last year and uncertainties ahead of the election, particularly the potential introduction of a mansion tax if certain political parties come to power. Properties in Putney and Battersea, which saw spectacular growth in 2013 and 2014 thanks to well-heeled families seeking family houses, saw a standstill in prices in the first quarter of 2015. The report says this is because property prices in these areas, which generally have more large properties than flats, are now approaching the politically sensitive £2 million barrier, which is the threshold for the mansion tax if introduced. ‘This quarter’s index confirms that emerging prime has become the sweet spot of the professional private rental sector. One bed flats in the £300,000 price range are one of the best investments, given their protection from political interference and the demand from young professionals who increasingly feel more at home in places like Clapham than Central London,’ said the firm’s executive director Ed Mead. ‘It is very telling that for many buyers, both domestic and overseas, emerging prime areas are achieving a social cachet they’ve have never had. While the pre-election period is causing capital growth of larger properties to pause, we still think there is still some way to go on value,’ he pointed out. ‘For instance in Clapham we see demand continuing in the long term given the amount of undeveloped stock in the area. We anticipate the upward trend in prices to be reinstated if no mansion tax is introduced,’ he added. Continue reading
