Tag Archives: market
First time buyers in the US face higher prices, latest index shows
Entry level home values in the United States for properties popular with first time buyers have increased by 8% in the last year, twice as fast as top tier home prices, new research shows. It means that first time byers are facing stiff competition and buyers looking for more expensive homes have more choice, according to the data from the latest real estate market report from property firm Zillow. The data also shows that the number of expensive homes for sale has dropped slightly, but there are far fewer entry level homes on the market with supply in this sector down by 9% year on year. Nationally, home values rose 5.4% over the past year, to a median home value of $186,100 while rents increased by 2.9% to a Zillow Rent Index of $1,407. Home values for the most expensive homes on the market, which at one point in February 2014 were growing at an average of 7% annually, have stabilised. Those homes have been gaining value at about 4% each year since the beginning of 2015. According to the index report the stark differences between the top and bottom of the housing market shed light on the two very different experiences home buyers will face in most markets this summer. Buyers looking for the most expensive homes will find slashed prices, more options and less competition. It's a much different story for first time buyers, who will be up against rising prices, low inventory and tough competition, with homes selling over asking price in many of the nation's hottest housing markets. Over the past 18 months, the percent of listings with a price cut among the most expensive third of homes has slightly increased, while the percent of listings with a price cut among entry level homes have decreased. Indeed, since the beginning of 2015, top tier homes have had the most price cuts which the report says is another sign that top tier buyers are having an easier time shopping for homes in the current market. The rental market is also stabilizing at the high end. A recent Zillow analysis found that rents aren't rising as quickly for apartments in more expensive zip codes. ‘The top of the market is starting to stabilise, and people are beginning to take notice. Buyers looking for entry level homes are having bidding wars in many markets, while it's not uncommon for high priced homes to stay on the market a few months longer,’ said Zillow chief economist Svenja Gudell. ‘The housing market is much more forgiving for current homeowners looking to move into a bigger, more expensive home. These buyers can be a bit more selective, and may even get a good deal,’ she added. Buyers looking for a home at the top of the market will have more to choose from than those looking for a home in the bottom third of the market, which are often sought after by first time home buyers. The… Continue reading
Brexit uncertainty affects prime country houses in UK
Prime country house prices in the UK fell by 0.2% between April and June as uncertainty surrounding the outcome of the EU referendum filtered through to the market. On an annual basis, price growth over the year to the end of June 2016 eased to 1.3%, down from a recent high of 5.2% in 2014, according to the latest index from real estate firm Knight Frank. It is the first quarterly fall since late 2012 and prices for larger properties in the £2 million and above sector fell by even more, down 1.1%, the data also shows, taking the annual rate of growth to 0.7%. In contrast, properties priced at under £2 million recorded an average rate of growth of 0.4% over the quarter, taking the average rate of growth to 3.3%. The index reports that there was a softening in demand in the immediate run up to the vote, with potential purchasers awaiting the outcome of the referendum. The number of viewings conducted in June was 10% lower than the same month last year, and there was also a dip in new buyer enquiries. However, it points out that the EU referendum has not been the only factor at play in the market. ‘Higher purchase costs as a result of two stamp duty increases in the space of 18 months have also had an impact, weighing on price growth in some sectors of the market, most notably for homes valued in excess of £2 million,’ said Knight Frank associate Oliver Knight. The strongest markets continue to be in prime urban locations, where price growth has outperformed that in more rural locations, the report also points out. Looking ahead, the report explains that all eyes will now turn to the impact of the UK’s vote to leave the EU on the market. ‘There is likely to be a further period of uncertainty as the terms of the UK’s exit are worked out and this has the potential to affect some parts of the market as discretionary buyers weigh up the implications,’ said Knight. ‘However, the primary drivers of this market remain unchanged, with schools and key transport links remaining a draw for town and city markets. Prime prices are still 14% below their previous market peaks on average and, as such, there may be scope for outperformance in the short to medium term,’ he added. Continue reading
Average home buyer £4,500 better off in England and Wales since tax change
The average home buyer in England and Wales is £4,500 better off under the new progressive structure of stamp duty introduced a year ago but the Treasury is collecting a record amount of the tax. Since the change the typical home buyer has paid a total of £3,676 in stamp duty, based on the current average house price of £273,531. Under the previous flat structure, a buyer paying this price would have been subject to stamp duty payments of £8,205, a saving of £4,529. The research from the Halifax, a major UK lender, also shows that the ‘tipping point’ price is £938,000, when a buyer is worse off under the new stamp duty structure and sales above this level in the first six months of 2015 were 10% lower than in the first half of 2014. This decline was exactly in line with the market as a whole, with total sales also down by 10%. This is in contrast to both 2013 and 2014 when the prime end of the market was significantly outperforming the rest of the market. More significantly, sales above £1.5 million, which are more affected by the changes, have seen a bigger impact with a 20% decline, twice the market fall. The research also reveals that increased property prices and a higher number of residential property transactions boosted stamp duty revenues by 16% between 2013/2014 and 2014/2015 to a new record high of £7.5 billion. This comfortably exceeded the previous high of £6.68 billion at the peak of the last housing market boom in 2007/2008 and was more than 14 times as much as the £520 million raised by residential stamp duty 20 years ago in 1994/1995. London alone contributed 40% of all UK stamp duty revenues in 2014/2015 compared with 13% of all property transactions. London’s stamp duty share has risen from 28% in 2007/2008, with revenues raised in the capital increasing by 60% from £1.9 billion in 2007/2008 to £3 billion in 2014/2015. Some 80% of all home purchases in England and Wales between May 2015 and July 2015 were above the starting stamp duty threshold of £125,000 ranging from nearly all sales in London to 55-60% in northern England and Wales. This compares to 71% in 2006 when the starting threshold was initially raised to its current level. The starting threshold would now be £157,000, some £32,000 higher, if it were raised in line with house price inflation since 2006. Nationally, 32% of all purchases by first time buyers were below the £125,000 threshold at which stamp duty becomes payable during the three months from August 2015 to October 2015. ‘The changes made to stamp duty a year ago have been of significant benefit to many buyers. Only those purchasing the most expensive homes are worse off. There is some evidence that the top end of the market has been adversely affected by the changes with sales over £1.5 million falling by twice as much as the… Continue reading
