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UK residential property prices showing steady growth, latest index shows
UK house prices increased by 3.3% in the second quarter of 2015 compared to the previous quarter taking the average price to £200,280, according to the latest property price index. It means that the quarterly rate of change has picked up following two successive falls and prices in the three months to June were 9.6% higher than in the same three months a year earlier, the data from the Halifax shows. This was higher than May’s 8.6% and the highest quarterly rise since September 2014 when it was 9.6%, and on a monthly basis prices increased 1.7% between May and June, the fourth consecutive monthly rise. The steady increase in prices comes as home sales remain steady. Data from HMRC shows UK home sales increased by 1% between April and May and sales in the three months from March to May were 0.5% higher than in the preceding three months, but were 4.2% lower than in the same period last year. According to Martin Ellis, Halifax housing economist, supply remains very tight with the stock of homes available for sale currently at record low levels. ‘This shortage has been a key factor maintaining house price growth at a robust pace so far in 2015,’ he explained. ‘Economic growth, higher employment, increasing real earnings growth and very low mortgage rates are all supporting housing demand with signs of a recent modest pick-up in demand,’ he added. Jonathan Samuels, chief executive officer of Dragonfly Property Finance, pointed out that there are a lot of mixed signals in the property market at the moment as the latest index from the Nationwide shows prices falling slightly. He also pointed out that while prices in London have slowed, house prices per square metre have risen by 45% since 2010, highlighting the extent of the growth in the capital in recent years. ‘With economic growth stronger than expected during the first quarter, a buoyant jobs market and people generally better off, you would expect the market to continue to improve throughout the rest of 2015, if at a more moderate rate compared to recent years,’ he said. There is also a potential effect from the current Euro crisis and how what happens in Greece could affect the UK property market. ‘We could see a flight away from equities into bricks and mortar, but at the same time if Europe as a whole is adversely affected then the UK economy will almost certainly suffer, too,’ he added. Thomas van Straubenzee of prime London prime property agency VanHan, is expecting to see an influx of enquiries from wealthy Europeans looking to move their assets off the Continent and into London as they seek to avoid the effects of the euro crisis. ‘We have seen interest from the Middle East and India pick up again, which is not surprising as we had noticed that these buyers were particularly affronted by the idea of a mansion tax. We do not see London… Continue reading
US sales to foreigners down but they are buying higher value real estate
Total property sales in the United States to international home buyers have decreased from last year, but in terms of price the sales dollar volume increased 13%, the latest data from estate agents shows. From April 2014 through March 2015 total international sales were estimated at $104 billion, compared to the previous year's estimate of $92.2 billion, according to the figures from the National Association of Realtors. In 2014 sales transaction to buyers outside of the US dropped 10%, possibly due to the strengthening of the US dollar in relation to international currencies and weakening foreign economies, according to NAR chief economist Lawrence Yun. ‘However, the amount of money spent has increased; this means international purchasers in the US have become an upscale group of buyers, spending more money on fewer homes,’ he explained. In 2014 five countries accounted for 51% of all purchases by international buyers. These were led by China, followed by Canada, Mexico, India and the United Kingdom, the data also shows. For the first time, buyers from China exceeded all other countries in terms of units purchased and dollar volume, purchasing an estimated $28.6 billion worth of property. Buyers from Canada followed with $11.2 billion in purchases, followed by India with $7.9 billion, Mexico with $4.9 billion and the UK with $3.8 billion. International buyers tend to purchase more expensive properties with the average purchase price being $499,600, compared to the overall US average house price of $255,600. Chinese buyers typically purchased the most expensive properties, at an average price of $831,800. Some 35% of real estate agents reported working with an international client in 2014, up from 28% in 2013 and 46% said international buyers were seeking main homes, 20% wanted buy to let and 26% was for investment rentals. Global buyers also purchased properties for commercial rentals and as residences for children studying in US educational institutions. Indian buyers were the most likely to purchase a primary residence with 79% doing so, while Canadian buyers were most likely to purchase property as a vacation home with 47% doing so. While international buyer clients purchased property across the nation, four states accounted for half of all international sales: Florida, California, Texas and Arizona. Florida remains the top destination for international buyers with 21% of all foreign purchases, followed by California at 16%, Texas at 8% and Arizona 5%. Chinese buyers tended to gravitate towards the West Coast, which provides ample education, business and trade opportunities, while Canadians seeking winter vacation opportunities focused on the Southwest and Florida. The majority of international purchases, some 55%, were all-cash, compared to about 25% of all purchases made by domestic buyers. Mortgage financing tends to be an issue for non-resident international clients because of a lack of a US based credit history or Social Security number, difficulties in documenting mortgage requirements, and financial profiles that can be different from those normally submitted to financial institutions by domestic residents. Continue reading
Falling property prices in Singapore expected to dive next year by up to 20%
Singapore's private residential property prices experienced steady declines in September, according the latest quarterly data from the Urban Redevelopment Authority. Both private and public home prices continued to slip in the third quarter of the year. Private home prices fell 0.6% and are now down 3.8% on an annual basis. This is the fourth straight decline, albeit a slight deceleration, after a fall 1.0% in the second quarter. But private home prices are still 56% above the last trough in 2009. Public housing continued to fall for the fifth straight quarter by 1.6% compared with 1.4% in the second quarter of the year and have now fallen 6.8% from the peak of the market. In August sales fell 15% month on month and 43% year on year. It is the lowest monthly figure since December 2013. But the outlook is pessimistic, according to a report from Barclays which says that prices are expected to plunge by 20% in 2015, with vacancy rates expected to hit a record high 10% in 2016. According to Barclay's, the drop is in view of market expectations of rising interest rates, and will coincide with peak supply as unsold inventory rises across both high and low end property sectors. ‘We expect both volumes and prices to slide given the ongoing government curbs, looming oversupply, and rising interest/mortgage rates in the second half of 2015. We maintain our negative stance on the Singapore residential sector,’ the report says. ‘We see an oversupply of private housing properties and we expect prices to fall 20% by 2015, in view of market expectations for interest rates to rise, coinciding with peak supply and our assumption that the vacancy rate could reach a record 10% by 2016,’ it adds. ‘We believe the government will only start unwinding measures when prices fall a cumulative steeper 10 to 15%, perhaps in the middle of 2015,’ it concludes. Continue reading
