Tag Archives: election
General election set to slow UK prime property market
The UK’s prime housing market is expected to slow in the run up to next year’s election and resume steady growth thereafter, but a mansion tax could change the outlook dramatically. According to international real estate adviser Savills in its five year forecast report a mansion tax could negatively impact five year growth by an average of five percentage points. The high value prime markets, that is the top five to 10% of homes by value, have already been impacted by increased stamp duty, the introduction of an annual tax on enveloped dwellings (ATED) and the closure of certain tax loopholes. The rate of price growth has begun to slow, particularly in London. After five and half years of price growth and having absorbed a number of tax rises, London looks fully valued, particularly given the uncertainties surrounding the mansion tax as election year approaches. On this basis, Savills has issued two forecast scenarios: a central scenario and a second based on its estimates of the number of properties in different price bands over £2 million and the scale of possible mansion tax charges given current Labour party proposals. ‘Two out of the main political parties still favour some form of mansion tax so owners and buyers will be rightly factoring it into their decisions as the election approaches,’ said Sophie Chick, senior research analyst as Savills. ‘It would take some time for the markets to accurately price in the impact of a mansion tax, but the threat of it has already slowed the market. If it becomes clear that a mansion tax is to be introduced after May 2015, we would expect an immediate price adjustment before the market more rationally finds its level,’ she added. Without a mansion tax the Savills central forecast would see average prime UK house prices slipping 0.5% in 2015, assuming no further increases in the taxation of high value properties. Growth would be expected to resume post election, averaging 22.7% over the next five years across all prime London markets. Regionally, the recovery is yet to become fully established and the market has capacity for price growth to continue through next year, albeit averaging just 1%, the report says. Five year growth is forecast to average 23.9% across the UK, outperforming prime London, with prime commuter and lead city locations expected to show the strongest growth. Savills believes that a mansion tax, if implemented in the form most recently discussed, would trigger average price falls of 5% across prime London in 2015 and a fall of 3% across the prime regions. In a worst case scenario, the value of prime London properties over £10 million could fall by 10% and homes worth over £3 million regionally would fall 7%. Homes below the mansion tax threshold would not escape its effect, but the proposed progressive structure of the tax would limit the trickledown effect, with small falls of 2% anticipated. By 2017, the top end… Continue reading
September real estate market moves on from election in New Zealand
There has been a notable increase in activity in the New Zealand residential real estate market with buyers and sellers putting the general election behind them. Sales in September increased by 7.8% compared with the previous month but are still 12% down on a year ago, according to the latest index from the Real Estate Institute of New Zealand (REINZ). The national median price was $420,000 for the month of September, an increase of $20,000 or 5% compared to September 2013, and steady from August 2014. The index also shows that days to sell improved by three days to 35 days compared to August, and eased four days compared to September 2013 ‘The real estate market appears to have moved on from the election, with a noticeable increase in activity over the last 10 days of the month,’ said REINZ chief executive Helen O’Sullivan. But she pointed out that despite stronger activity in the latter part of the month, sales volumes were again well down on the same time last year, meaning that sales volumes compared to last year have now fallen for 11 months in a row. Also, the pace of price increases has eased significantly, with the annual rate of price increase now only 5% compared to more than 10% in April. ‘A key theme reported by agents across the entire country is a lack of new listings. Unusually, listing levels are low even in Auckland where prices are at historically high levels, with the increased prices not tempting vendors into the market,’ said O’Sullivan. ‘There has been some pick up in listings in line with the start of spring, albeit not at the usual levels for this time of year. This may in part be a lag effect from the election. As with sales activity, listing interest is reported as having picked up in the last week of the September. We will be closely watching listing levels in October as a continued lack of choice is frustrating would be buyers,’ she added. Sales Volumes A breakdown of the figures shows that 10 regions recorded an increase in sales volume compared to August with Otago recording the largest percentage increase of 25.4%, followed by Northland with 19.1% and Hawkes Bay with 14.6%. Compared to September 2013 all 12 regions recorded a decrease in sales volume with Taranaki recording the largest fall of 31.5%, followed by Auckland and Nelson/Marlborough with a fall of 17.1%. While the total number of sales was down 12% compared to September 2013, the number of sales below $400,000 fell by 18.2%. This follows a fall in sales below $400,000 of 24.8% between August 2013 and August 2014. Nine regions recorded an increase in the median price and 68% of the increase in the national median price compared to September last year occurred in Auckland, with Canterbury/Westland contributing 20% of the increase and Waikato/Bay of Plenty contributing 5%. Together these three regions accounted for 92% of the increase in the… Continue reading
Million dollar sales push up Auckland’s average house price in September
The average price of homes sold in Auckland, New Zealand, reached a record high last month, according to the latest published figures. There are signs that prices and sales activity in the Auckland residential housing market will lift after the forthcoming general election, says agents Barfoot & Thompson. This comes as the average house sales price in the city reached £738,876, the highest on record, some $13,000 up on the previous highest average price established in March this year, and up 3.8% on the previous month’s average price. ‘The sales data shows the high average price was the result of a relatively modest number of homes being sold, of which a high number sold for in excess of $1 million. Of the 959 homes sold, 164 or 17.1% were for in excess of $1 million,’ said Peter Thompson, managing director of Barfoot & Thompson. ‘Properties in the higher price range are less affected by the uncertainties that exist during a run in to a general election, and with such a high number of sales at the high end, the average price has lifted more than might be the case in a normal month’s trading,’ he added. He pointed out that in contrast, September’s median price at $635,000, is up less than 1% on that for August, and is more in line with the median price over the past four months. ‘Without doubt, the election’s influence can be seen in September’s sales numbers. However, what can also be seen in the month’s figures is that housing activity was starting to lift during September, and normal spring trading can be expected now the election is behind us,’ said Thompson. The data also shows that new listings, at 1,314 for the month, were already starting to build and were up 16.4% on listings during August and only 5.9% down on July’s 1,396 new listings. ‘One factor which has the potential to put pressure on sales prices in the short term is the low number of listings at month end. At 3,075 listings, this is the lowest number this year and the lowest at the end of a September for more than a decade, and means that at the start of the month choice is extremely limited,’ explained Thompson. He said it may take another month for the new listing pipeline to build and added that sales of property for under $500,000 held up during September, accounting for 30.1% of all sales. Continue reading
