Tag Archives: markets
Sales and prices up in Canadian housing market, latest index shows
National home sales in Canada increased by 4.1% from February to March and the average sales price is also going up but slewed by growth in Vancouver and Toronto, the latest index report shows. But the data from the Canadian Real Estate Association (CREA) also shows that while the national average sale price rose 9.4% on a year on year basis in March, excluding Greater Vancouver and Greater Toronto, it increased by 2.4%. March sales were up from the previous month in nearly two thirds of all local markets, led by Greater Vancouver, Fraser Valley, Calgary and Edmonton. Despite the monthly rebound, Calgary and Edmonton sales came in below the 10 year average for the month of March. ‘Low mortgage interest rates are good news for affordability as we head into the spring home buying season. This spring should see buyers coming off the sidelines in places where winter was anything but mild,’ said CREA president Pauline Aunger. According to Gregory Klump, CREA’s chief economist, Greater Vancouver and the GTA are really the only two hot spots for home sales and prices in Canada at present. ‘Price gains in these two markets are being fuelled by a shortage of single family homes for sale in the face of strong demand. Meanwhile, supply and demand for homes is well balanced among the vast majority of housing markets elsewhere across Canada,’ he explained. Year on year price gains for single family homes in Greater Vancouver and Greater Toronto have exceeded those in other housing markets tracked by the MLS® HPI throughout the first quarter of 2015, the data reveals. Actual activity in March stood 9.5% above levels reported in March 2014 and slightly above the 10 year average for the month. March sales failed to lift activity recorded during the first quarter above its 10 year average. First quarter sales were below their 10 year average in most local housing markets. The number of newly listed homes rose 1.8% in March compared to February. The rebound in Greater Toronto more than offset the continuing pullback of new supply in Calgary, where it had climbed sharply toward the end of last year but now stands at a multiyear low. The national sales to new listings ratio was 53.9% in March, up from 52.7% in February and 50.4% in January. A sales to new listings ratio between 40 and 60% is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets respectively. The ratio was within this range in about 60% of all local housing markets in March. The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity. There were 6.1 months of inventory on a national basis at the end of February 2015, down from 6.3 months in February and… Continue reading
Positive medium outlook for prime UK property beyond London
Value offered in prime residential property markets beyond London suggests a positive medium term outlook despite some caution among buyers ahead of the UK general election next month. But there are differences on a regional basis, according to real estate firm Savills whose latest analysis report points out that it has become pretty much impossible to talk about the UK’s prime housing markets beyond London as a single entity. It explains that since the economic downturn of 2008, the markets have become increasingly stratified, reflecting not only their distance from the capital, but also the tier of the prime market in which they sit and whether they are in an urban, rural or coastal location. Wide price differentials now exist between London and its commuter zone, the remainder of England and Wales and, indeed Scotland. A property worth £1 million in 2007 would now be worth £1.34 million in London, £1.05 million in the commuter zone and £780,000 in Scotland. ‘Within each of these areas, the prime urban markets have generally been on the rise, while their rural counterparts have lagged behind to date. Although the medium term prospects remain positive, all of these submarkets face challenges in 2015,’ explained Lucian Cook, head of residential research at Savills. ‘Although the economic recovery has held firm and the outlook for interest rates remains relatively benign, political uncertainty in the run up to the general election has, for the moment at least, resulted in an air of caution among buyers,’ he said. ‘The mainstream markets, which impact on sentiment higher up the value chain, seem to have been similarly affected despite the best efforts of the Chancellor to stimulate a feel good factor with the recent long overdue reform of stamp duty. The reality is that the increased regulation of the mortgage market will have played a significant part in bringing a period of sobriety to the wider housing market following strong growth in the first half of 2014,’ he pointed out. ‘Despite lower levels of mortgage debt dependency, regulatory limits on the amount of borrowing a buyer can take on board will also have had an impact on those looking to work their way up the prime housing market. Meanwhile, a significant chunk of the prime market now finds itself with a larger stamp duty liability,’ he added. Cook also explained that taxation has been an even greater concern in the upper echelons of the prime market and the debate around a mansion tax has done nothing to engender a sense of urgency among buyers. ‘However unwelcome and unwarranted the proposal, owners of prime regional housing may take some solace from the fact that the main burden of the tax would be felt by owners of higher value properties in London,’ said Cook. ‘If a mansion tax is introduced it has the potential to make properties outside of the capital, that already look comparatively good value, appear even more attractive. Over time it could… Continue reading
Sydney soars ahead with strong price growth compared to other Australian cities
Home values in Australia’s capital cities increased by 1.4% in March with Sydney leading the way with strong growth of 3% while prices elsewhere were relatively flat, the latest index shows. On a quarterly basis prices increased by 3% in the first three months of 2015, the CoreLogic RP Data Home Value Index also shows. However, although value growth has started 2015 on a strong note, the annual rate of growth has moderated back to 7.4% which is the slowest annual growth rate since September 2013. On top of the 3% monthly price rise, values in Sydney are up 5.8% on a quarterly basis and 13.9% on an annual basis. With stronger housing market conditions over the first three months of the year, annual home value growth across the Sydney market has rebounded after slowing to 12.4%, according to head of research Tim Lawless. He pointed out that Sydney is the only housing market where dwelling value growth remains in double digits, with the next strongest performer, Melbourne, showing a much lower rate of annual capital gain at just 5.6%. Each of the remaining capital cities have recorded an annual rate of growth which is less than 3% with values having declined across Perth, Darwin and Hobart over the year. The index data also shows that since home values began their current growth phase in June 2012, prices across the combined capital cities have increased by 24.3%. ‘Most of this growth is emanating from Sydney. Over the current growth phase, Sydney dwelling values have increased by 38.8% with Melbourne second strongest at 23.6%. On the other hand, total dwelling value growth over the current cycle has been less than 10% in Adelaide, Hobart and Canberra,’ said Lawless. He also explained that while the overall quarterly rate of growth is strong it is important to note that it is lower than the 3.5% increase in home values over the first quarter of 2014. While dwelling values continue to rise across most cities, weekly rents are failing to keep pace. Across the combined capital cities dwelling rents have risen by just 1.7% over the past year which is a stark contrast to the 7.4% capital gain in dwelling values over the same period. Sydney is showing the highest increase in weekly rents over the year at 3.3% while Perth has shown the most substantial correction, with weekly rents down 4.1% over the past 12 months. The fact that dwelling values are moving higher at a much faster pace than rents is causing gross rental yields to consistently compress across each of the capital cities, the index report says. Since the middle of 2013 the average gross rental yield across Australia’s combined capital cities has reduced from 4.3% to 3.6%. Gross rental yields are now approaching record lows in both Melbourne and Sydney at 3.3% and 3.6% respectively. ‘Despite the headwinds of softer labour markets, very low rental yields, increased oversight on lending conditions and heightened economic uncertainty,… Continue reading
