Tag Archives: lending
More foreign developers are entering the Australian apartment market
Foreign buyers are fuelling higher density development sites sales across major Australian cities, according to a new analysis report. As state governments have encouraged higher density living by re-zoning key sites around infrastructure hubs, opportunities for developers have been ample over recent years, according to the report from Knight Frank. With the outlook for the Australian Dollar lower than originally forecast, more foreign developers are now taking this opportunity to enter the Australian market, it adds. Sales of major sites likely for higher density residential development in the four major capital cities of Australia totalled $7.30 billion in the year ending August 2015, down 5.7% on the previous year’s volume. However, Greater Sydney is still experiencing upward growth in sales volume, although the prior steep upward trajectory achieved in the year to 31 August 2014 is flattening out. A total $4.61 billion sales were recorded over the year to August 2015, when almost 63%, by value, was sold to foreign purchasers. Across Greater Sydney, development sites sales with potential for higher density ranged from $60,000 to $400,000 per apartment, excluding the Central Business District, while the range extended out significantly in the CBD to $350,000 to $1,000,000 per apartment. Site sales volumes have fallen over the course of the past year for the remaining major capital cities after strong results over the two years to August 2014. Sales volume in Greater Melbourne totalled $1.79 billion in the year to August 2015. Site sales averaged $35,000 to $200,000 per apartment, excluding the CBD, where 47.6% of these sales, by value, were sold to foreign purchasers. The volume of site sales in Greater Brisbane at $685.85 million and Greater Perth at $213.36 million saw foreign investment, by value, at 58.6% and 64.6%, respectively. Both cities have a similar sales rate range when excluding the CBD starting from $30,000 to $110,000 per apartment for Greater Brisbane, while Greater Perth ranges slightly wider from $20,000 to $120,000 per apartment. Since January 2011 some 123,815 new apartments have been added to the major capital cities residential stock, led by Greater Sydney with 46,490 and Greater Melbourne with 41,045. In total across the major cities, there are currently 80,135 apartments under construction, with another 125,060 with DA approval which have the potential to be online by the end of 2018. The report suggests that apartment numbers could grow further when approval is granted for the additional 86,430 apartments currently submitted in these cities. ‘As determined by pre-sales, the market dictates when new apartment projects get underway, so for most local developers, there is a strong chance that these projects may be pushed beyond this timeframe, the report explains. Prices for new apartments can vary considerably, with the most disparity seen in Greater Sydney with a range from $9,000 to $22,000 per square meter for a standard finish up to $32,000 to $45,000 per square meter for prime. A standard finish apartment in Greater Melbourne will range from $6,500 to $13,500 per… Continue reading
Rising regulation seen as biggest challenge for UK mortgage brokers
Increasing regulatory and compliance demands top the list of challenges currently facing UK mortgage lenders, according to new research. Regulation and compliance demands were cited by 70% of respondents to a poll from EDM Mortgage Support Services (MSS), a provider of information and business process management technology and services to the UK mortgage market. Some 55% cited poor use of technology and or reliance on outdated technology, 50% said maintaining relationships with brokers, 46% the mortgage application and approval process and 38% a lack of transparency across the mortgage application and approval process. The vast majority, some 89% of respondents, said they thought that technology will be significant in improving the transparency of the audit chain and the ability to clearly track actions across the complete mortgage application process and only 3% said it will be insignificant. However, 73% believe that mortgage lenders face significant challenges in providing fully transparent and fully compliant data to key stakeholders such as regulators and 27% stated that they ‘absolutely’ believe this to be the case. The poll also shows that 75% said that since the introduction of the Mortgage Market Review in 2014, effective data management has become ‘significantly’ more important in the mortgage application and approval process to meet regulatory requirements while 3% thought it has become insignificant. ‘Mortgage lenders and firms across the mortgage industry are facing a raft of challenges, not just from increasingly strident regulators but also new competitors, outdated technology systems, increasing levels of fraud and the need for process transparency,’ said Joe Pepper, managing director of EDM Mortgage Support Services. ‘It is more crucial than ever that lenders and other stakeholders implement the right technological solutions that can effectively and efficiently help them manage all these challenges at the same time,’ he added. EDM Group expects the proportion of its revenue generated from the mortgage sector will significantly increase over the next few years because of the huge challenges facing lenders and intermediaries with regards to information management. Continue reading
UK mortgage market getting over slowdown of new regulation
Mortgage approvals for home buyers in the UK are improving with the latest figures from the Bank of England showing an 8.2% rise in the six months to August 2015. The number of loan approvals for house purchase was 71,030 in August, up from an average of 65,594 over the previous six months while approvals for remortgaging increased by 14.2%. Lending secured on dwellings increased by £3.4 billion in August compared to the average monthly increase of £2.4 billion over the previous six months. The three month annualised and 12 month growth rates were 2.9% and 2.1% respectively. David Whittaker, managing director of Mortgages for Business, pointed out that mortgage approvals as a whole are going from strength to strength but he warned that beneath this surface current, there are also deeper and more complicated flows. ‘There is an ongoing shift to different sorts of mortgage lending, and a booming remortgage market reflects that interest in new products. Even compared to extremely buoyant house purchase approvals, remortgaging has picked up more quickly, reflecting ongoing expectations of higher interest rates on the horizon, as well as a newfound love for the peace of mind of fixed rate deals,’ he said. ‘It isn’t boom times in every quarter though. Buy to let lending accounts for much of the trend to remortgaging specifically, and we are seeing strong interest from experienced landlords looking to take advantage of record low rates, even for fixed rate deals for five years or longer. But there is also a more muted tone to the buy to let industry now. Alongside an acceleration in overall mortgage lending, this could indicate a gradual correction in the proportion of mortgage lending to landlords,’ he added. He also explained that while buy to let lending accelerated through the first half of 2015 to reach nearly 20% of gross lending, it should now be time for that proportion to drop back again. ‘Fresh interest from the Government and Bank of England have not yet changed the fundamentals of the private rented sector or the long term business models of responsible and experienced landlords. But the real momentum may be turning back towards owner occupiers,’ he concluded. According to Adrian Gill, director of Your Move and Reeds Rains estate agents, the mortgage market has moved on past the slowdown caused by regulatory changes, in particular the MMR regulations introduced in April 2014. ‘It is not just first time buyers who are benefiting from these calmer waters. Remortgaging activity has been making considerable headway recently, as existing home owners secure the best possible deals before an interest rate rise. In the purchase market, buoyant demand is being met with a dried up pool of available homes, and this imbalance will propel property prices on throughout the autumn,’ he said. Peter Rollings, chief executive officer of Marsh & Parsons, pointed out that August was the third consecutive month on month increase in house purchase loan approvals…. Continue reading
