Tag Archives: investments
New home building set for record year but will decline in next couple of years
This year looks like being a record for new home building in Australia but the outlook for 2017 is not buoyant with predictions that it could be very different as new homes sales are falling. The monthly survey of Australia’s largest volume builders by the Housing Industry Association (HIA) reveals that total seasonally adjusted new home sales fell by 9.7% in July 2016 following an increase of 8.2% the previous month. HIA chief economist Harley Dale said that the overall trend decline in new home sales is accelerating, signalling a relatively sharp drop from a record high in new dwelling commencements from 2017. ‘New home construction has been the kingmaker of the Australia economy, but the cycle has peaked. In all likelihood we will experience sharper falls in new home construction in both 2017 and 2018,’ he explained. ‘The magnitude of decline in new home construction in coming years will of course be exaggerated by where we are coming from and that is record levels of medium/high density construction and historically healthy levels of detached/semi-detached dwelling construction,’ he pointed out. ‘There will no doubt be a tendency to sensationalise any negative results for new housing as the trajectory of the down cycle unfolds. We would do well to remember that this down cycle is following a record high that is some 24% higher than the previous peak in 1994 and that there is an unprecedented degree of uncertainty this time around as to how the next few years of new home building unfold,’ he added. A breakdown of the figures shows that detached house sales fell in all five mainland states in July after rising everywhere in June. Sales dropped by 12.6% in South Australia and were down by 8.7% in Queensland, by 8.2% in Western Australia, by 6.2% in New South Wales, and by 6% in Victoria. Dale also explained that the current new home building boom is unlike any other that has come before it. It is the longest and largest in Australia’s history but he added that it is marked by substantial regional divergences in the levels of activity in various markets around the country and the mix of dwelling types being built has changed dramatically. ‘As the down cycle in new home building unfolds, the record pipeline of medium/high density dwellings in particular creates considerable uncertainty as to the timing and magnitude of the decline in construction,’ he concluded. HIA’s forecasts are for a peak of over 232,500 new dwelling commencements to have been reached in 2015/2016, which will be followed by three consecutive years of decline. New dwelling commencements are forecast to bottom out at a level of around 166,500 in 2018/2019. Continue reading
Third of UK tenants fund energy improvements instead of landlords
A new report reveals that a third of tenants in the UK have paid for energy efficiency improvements despite recent Government legislation that requires landlords to do so. Currently landlords are required to bring their property up to the minimum Energy Performance Certificate (EPC) rating E. Under the legislation, which came into force on 01 April 2016, if a tenant requests a more efficient home and the landlord fails to comply, the landlord could ultimately be forced to pay a penalty notice. However, the study conducted by online letting agent PropertyLetByUs, shows that one in six tenants have paid for roof insulation, 7% have paid for double glazing and 92% have paid for draft excluders for windows and doors. A further 71% have paid for their boiler to be repaired. The research also shows that 88% of tenants want their landlord to install a more fuel efficient boiler, while 78% want their draughty front door replaced, 72% want more loft insurance and 48% want double glazed windows fitted. Properties with EPC ratings of F and G will be progressively banned from the market, starting with rental homes with new tenancies. That will become the legal minimum for private rented properties when new regulations come into force in England and Wales from 2018. The Residential Landlords Association estimates that a total of 330,000 rental homes in England and Wales are likely to be affected. Though Government officials have estimated it could cost landlords between £1,800 and £5,000 to bring energy-inefficient properties up to an E rating, according to PropertyLetByUs it could be tenants that have to fund the improvements. ‘Our research shows that is falling on tenants to pay for energy improvements to their rented properties which is simply unacceptable. Many tenants are finding that their landlords are refusing to make improvements to the property, leaving tenants no choice but to dip into their own pockets,’ said a spokesman. ‘Tenants should not have to pay for roof insulation and repairs to old boilers, when it is the landlord’s responsibility. Landlords should comply with the current legislation that requires them to make energy efficiency improvements and they also should start improving their properties, if they have an EPC rating of F or G, so they are brought up to the required standard by 2018,’ the spokesman added. The Government has recently given guidelines on the costs with a typical package of measures for a small semidetached house. Gas central heating and low energy lighting is estimated at £4,000, loft insulation at £300 and cavity wall insulation at about £500. The firm also pointed out that the Government will need to put measures in place to ensure that landlords are compliant or it fears that the financial burden on tenants could be even greater. Continue reading
Conveyancing activity in UK saw ups and downs in second quarter of 2016
Conveyancing activity in the UK residential housing market increased in the second quarter of 2016 with changes to stamp duty pushing up transactions by 24% year on year, the latest data shows. Sales jumped from 230,430 to 286,425 as completions were registered following the rush to beat the Stamp Duty Land Tax (SDLT) changes for buy to let properties and second homes in April 2016, according to the latest edition of the Conveyancing Market Tracker from Search Acumen, the search provider. Completions recorded in the second quarter of 2016 were some 30% higher than two years ago and 59% higher than three years previously and compared with the first quarter of 2016 the three months preceding the SDLT reform there was a rise of 4% as conveyancers dealt with the reverberations across the housing market and the rush of transactions were logged as completed by Land Registry. The tracker report, which uses Land Registry data to examine competitive pressures in the conveyancing market, shows the top five firms led the way in terms of growth compared to the rest of the market, with completed activity rising 17% over the quarter and 41% over the year to reach an average of 3,523 transactions per firm over the three month period. However, outside the top five, the most significant quarterly growth was seen among those firms ranked 501 or lower. In the second quarter their average volume of transactions rose by 5% from the previous quarter. Year on year, those firms ranked 501 to 1,000 experienced 23% growth while those outside the top 1,000 recorded 19% growth. A combination of the SDLT aftershock and pre-Brexit activity meant that conveyancers experienced a rollercoaster ride from month to month during the second quarter. April saw the largest number of businesses responsible for completed transactions at Land Registry in any month since September 2014. The total of 4,374 was 4% higher than a year earlier, when 4,201 firms were active, and suggests the stamp duty rush brought more occasional players back to the market. Volumes of completed conveyancing transactions were also at their highest in April since monthly records began five years earlier in April 2011. Over the month, activity jumped 26% to 114,425 in April from 90,476 in March. Despite an inevitable slowdown the following month, both May and June also saw year on year rises of 14% with firms completing 81,583 and 90,477 transactions respectively, as activity picked up again despite the uncertainty ahead of the UK’s referendum on its EU membership. ‘Few sectors have been left untouched by the tumultuous events of the past few months, and the impact of the EU referendum on the political and economic landscape. Our analysis shows the conveyancing industry has been tried and tested in recent months, and the pressure shows no sign of easing as our country begins to work out what… Continue reading
