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Property sales and prices up in Spain in first half of 2016
Residential property sales in Spain increased by almost 20% in the first half of this year suggesting that the real estate market recovery is well underway. The latest figures from the General Council of Notaires shows that transactions were up by 19.6% in the first six months of 2016 to a total of 225,551 sales, and prices increased by 6.1% year on year. The data reveals that new home sales are not boosting the recovery and indeed falling. Sales of non-new homes increased by 19.29% year on year, accounting for 68.1% of all the homes sold but new homes sales fell 13.6%. This upward trend continued in June, when home sales grew by 7.1%, year on year, again driven by the transactions on second hand homes, which increased by 11.5% reaching a total of 29,052 units, while transactions on new housing registered a decline of 33.4%, with a total of just 2,751 sales. The price of an average home increased by 6.1% to €1,418 per square metre. But new homes cost more and this could explain why sales are falling. The average price of a new build was €1,886, some 12.7% more than second hand homes. The data also shows that in June some 44.7% of home sales were financed through a mortgage with the average capital loaned €128,480, a slight increase, of 0.4%, over last year. The cost of renting a home in Spain is also increasing, up by 2.4% in the second quarter of 2016 taking the average to €7.41 per square meter per month, according to figures from property portal Fotocasa. It means that after eight years of falling, residential rents have now been increasing since 2015. Beatriz Toribo, Fotocasa head of research, a growth in demand is boosting rental values which are now up by 4.8% year on year. A breakdown of the figures show that rents increased in 15 regions in the second quarter of the year compared to the previous quarter and in 16 regions year on year. The highest annual increase to data was recorded in May this year when rental prices increased by 5%. But the recovery still has some way to go as average rents are now 26.8% lower than they were at the peak of the market in May 2007 when they were €10.12 per square meter per month on average. But in three regions prices are down even more. Monthly rents are some 39.6% lower than peak in Aragon, 35.2% lower in Castilla La man cha and 33.7% down in Cantabria. The most expensive rents are in Madrid at €10.36 per square meter per month, followed by Catalonia at €10.24 and then the Basque Country at €10.16. The most affordable rental prices are in Extremadura at €4.56 and Castilla La Mancha at €4.69. Continue reading
New home lending rises in Australia as interest rates are cut
New home lending in Australia saw a healthy rise during June, up 2.3% and up 6.3% compared to the same month in 2015, the latest data from the Australian Bureau of Statistics shows. The Reserve Bank of Australia cut its interest rate at the beginning of May so June’s housing finance results are the first month’s data to fully capture the effect of cheaper mortgage costs. According to Shane Garrett, Housing Industry Association (HIA) senior economist, prospective home buyers seem to have taken advantage of the lower interest rate environment. ‘June was also dominated by the close federal election campaign which was the source of some uncertainty across the economy. This data indicates that the benefits of lower interest rates trumped any reluctance by buyers to enter the market during the tight election race. It’s therefore likely that the interest rate cut will help bolster activity on the new home building side,’ he explained. A breakdown of the figures shows that the strongest growth in new home lending over the year to June 2016 was in Victoria with an uptick of 19.1%, followed by New South Wales with growth of 10.8% while there was a more measured increase in Queensland of 4.3%. Over the same period, there were substantial reductions in other states, most notably a fall of 20.7% in Western Australian, a fall of 17.7% in the Northern Territory and a more modest fall of 3.5% in Tasmania. New home lending to owner occupiers in South Australia and the ACT during June 2016 was comparable with the level a year ago. Meanwhile, the HIA’s New Home Sales Report, a survey of Australia’s largest volume builders, shows that total new home sales ended 2015/2016 on a higher note. The overall trend is still one of modest decline for new home sales but a bounce of 8.2% in June 2016 highlights the resilience of the national new home building sector, according to HIA chief economist, Harley Dale. ‘The overall profile of HIA new home sales is signalling an orderly correction to national new home construction in the short term, as are other leading housing indicators. Below the national surface, the large geographical divergences between state housing markets have been a prominent feature of the current cycle and that will continue,’ he explained. Comparing the second quarter of 2016 with the same period last year shows that detached house sales were down sharply in South Australia by 21.4%, in Western Australia by 27.5% and in down by 7.3% in New South Wales but up by 17% in Victoria and by 7.1% in Queensland. Overall the sale of detached houses bounced back by 7.2% month on month in June 2016 while multi-unit’ sales continued their recent recovery, up by 11.5% after a lift of 4.9% in May. In the month of June 2016 detached house sales increased in all five mainland states with the largest increase in Queensland at 14.9% and up by 9.1% in Western… Continue reading
UK property prices up 0.2% month on month in July and annual growth slowed
Residential property prices in the UK increased by just 0.2% month on month in July and by 5.5% year on year to £293,318, according to the latest index data to be published. But there has been a gradual decline in annual growth since February when it was running at 8.9%, and excluding London and the South East year on year growth was 4.8%, the figures from the LSL Property Services/Acadata index shows. The index also shows that quarter on quarter sales were down 20% year on year compared with the second quarter of 2015 but the index report says it is too early to say if Brexit is impacting the market. The East of England was the top performing region with annual growth of 9.3%, up from 9.1% the previous month. This was followed by annual price growth of 7.2% in the South East and 6% in Greater London. According to Adrian Gill, director of Your Move and Reeds Rains estate agents, while the vote to leave has definitely resulted in uncertainty, there’s near unanimity among commentators that the impact is yet to show in the figures and for now, we’re left with mixed signals. He explained that on the one hand, house price inflation on an annual basis continues to slow year on year but last month saw the market continue its fight back following price falls in March to May with July recording a modest gain after June’s 0.5% rise, with average prices up 0.2% or £700. However, overall this means prices remain £3,386 below their February peak, but £15,422 above their July 2015 levels. The index report suggests that the fall in sales is less to do with the referendum vote than the surge in activity to beat the 3% stamp duty surcharge introduced in April on second homes and buy to let properties. It points out that the spike in sales in March was followed by a massive decline the following month, from which the market has since been recovering. It also points out that transaction volumes have grown every month since April and are now well above February levels. Moreover, the exceptional sales level in March 2016 more than compensates for the decline since. ‘Overall, for the first six months of each year, we estimate transactions in 2016 at some 4% higher than in 2015. Sales volumes continued to increase in July, but again this still tells us little about the referendum vote, since transactions recorded at the Land Registry for the month mostly relate to offers made by purchasers in June, or even earlier,’ Gill explained. He added that the April stamp duty change may also account for much of the apparent slowdown in prices as prices increased above trend from January to March after the announcement of the change in the Autumn Statement last year. Meanwhile, from April 2016, with the new tax in place, a reduction in the number of higher-valued properties… Continue reading
