Tag Archives: markets
City apartments set to remain popular buys in Australia in 2015
Investor appetite for city apartments in Sydney and Melbourne will remain strong in 2015, as low interest rates attract first home buyers and investors, according to a new analysis. The outlook for interest rates is mixed but headline indicators such as unemployment, construction activity and GDP point to a period of weaker overall economic growth which will result in interest rates remaining steady in the short to medium term, says the latest property outlook report from Colliers International. ‘This is good news for the residential sector and points to continuing demand side momentum. The low interest rate environment is a key driver of residential activity in the current market, and we anticipate it will provide supportive conditions for strong investment activity in 2015,’ it explains. It predicts that Sydney, Melbourne and Brisbane residential markets will have the strongest residential growth, as weaker economic conditions in Western Australia will lead to a slowdown in development and investment activity in 2015. It also points out that developments in central locations with close proximity to public transport, work and retail amenities will be in higher demand. Consequently, this demand will see the number of apartment developments grow in Melbourne, Sydney and Brisbane throughout 2015. The Melbourne and Sydney CBDs have been the strongest performing markets, with the volume of apartments under construction in the next five years to reach and 18,000 and 6,000 respectively, buoyed by strong offshore demand, and a rapidly rising inner city population, a trend we anticipate will continue in 2015. Next year is set to see Australian property experience a continued increase in investment volumes, improved tenant demand and structural change across various sectors. The analysis also suggests there are two key themes for the year ahead that will see technology continue to change the property industry and investors continue to diversify from core assets to other markets and sectors. According to John Kenny, chief executive of Colliers International Australia and New Zealand, 2014 was the year that investment in property continued to accelerate, New South Wales returned as a growth economy and the market saw signs that leasing demand was on the return. ‘Ownership of Australian property continued to become concentrated amongst fewer owners. Strong flows of capital continued to enter the Australian property market both from offshore and overseas,’ he said. He pointed out that by the middle of November transaction volumes were well up on 2013 levels and although total volumes are still some way off the 2007 peak, some sectors such as the national industrial market and the Melbourne CBD office market have now exceeded volumes in that year. ‘The majority of sales are now to Australian investors. This is not surprising given that Australian investors are now recognised as the most confident in the world, according to our most recent Global Investor Sentiment Survey,’ he added. Offshore investors also continued to enter the market with new groups emerging, particularly from… Continue reading
US homes market experiencing a shortage of properties for sale at lower end
More higher priced homes in the US are being put up for sale but there is still a shortage of lower priced homes on the market, new research suggests. Buyers searching for homes will find more homes for sale overall, but supply of lower priced homes is growing more slowly than high priced homes in most of the country, according to the latest home value index from Zillow. Overall, median home values rose 6.4% from October 2013 and 0.4% from September. Both monthly and annual home value gains were well below the faster paces recorded earlier in the year. Rising inventory and slowing home value growth are two signs that the housing market is beginning to level off across the nation. As the market has cooled, buyers looking for less expensive homes did find some relief in the hottest metro areas, including San Diego, Los Angeles and the Bay Area. In San Francisco, the number of low priced homes on the market rose by 39% but there were fewer high priced homes on the market. While inventory was still tight there in October, the homes that were available spread evenly across the price spectrum. National rents were up 3.5% in October from a year ago. Month on month national rents were flat compared with September. Inventory of all homes nationwide rose by 15.8% year on year. A breakdown of the figures shows that in the bottom home price market it increased by 68.3% while in the top home price tier it rose 82.2%. In Denver, there were almost four times as many homes available for sale in the upper price tier, that is homes priced at $357,900 or more, than there were homes priced in the lowest price tier at less than $219,000. The same was true in many other markets. Dallas, Atlanta, Phoenix and Nashville had at least two times more homes for sale in the top tier than the bottom tier. In 25 of the 35 largest metros analysed there were more homes for sale this October than last October in all three price tiers. In 14 of those metros, the increase in number of homes for sale was in the double digits in all price tiers. ‘Depending on their finances, it's likely that individual buyers in the same market might be having completely different home buying experiences. Even as conditions improve for buyers overall, it remains a tough row to hoe for first time buyers and lower income buyers, especially compared to their more well off contemporaries,’ said Zillow chief economist Stan Humphries. Continue reading
UK house prices still rising but could be affected by Scot vote and 2015 election
House prices continues to rise across the UK in August but the vote in Scotland on independence is likely to have an effect along with next year’s general election. Both could act as a dampener on growth, according to latest UK residential market update report from Knight Frank. It also points out that there are some conflicting signals emanating from the market. ‘Economic confidence is up across the country and this, coupled with more positive employment data and ultra-low interest rates is providing a sound underpinning for increasing transactions and values in many parts of the country,’ said Gráinne Gilmore, head of UK residential research at Knight Frank. She pointed out that the government’s Help to Buy scheme is also gaining momentum, with nearly 40,000 homes now purchased under the scheme. Around 85% of Help to Buy Equity Loans, the part of the scheme that allows buyers to purchase a new home even if they don’t have a 25% deposit, were taken out by first time buyers, signalling that the scheme is easing the bottleneck of pent-up demand. Yet there are some signs of headwinds in the market. ‘From a regulatory point of view, the new mortgage rules may be acting as a partial dampener on activity. While mortgage approvals for new house purchases remained steady in July after the dip seen after the MMR rules were introduced in April, they have not re-bounded to the pre-April highs,’ said Gilmore. ‘The data suggests that the rules, coupled with the new lending limits applied by the Bank of England, could be acting as a slight temporary brake on the market, especially for higher loan to income mortgages,’ she added. The report also points out that the Royal Institution of Chartered Surveyors reported that new buyer demand fell in August following a sustained period of month on month growth. ‘This could be due to the summer holidays, but it comes amid increasingly vocal hints of an interest rate rise from the Bank of England Governor. While the markets now anticipate a rate rise early next year, two members of the Bank’s rate setting committee voted for a rate rise in August, the first time this has happened since rates hit a record low,’ said Gilmore. ‘There is also a period of increasing political uncertainty looming. All eyes are on the Scottish Referendum this week. The debate over the result has already had an impact on equity markets as well as currency markets. If there is a yes vote, it is likely to be the uncertainty in the market as Scotland thrashes out its economic and fiscal policies ahead of 2016 that affect the Scottish housing market, rather than the fact that Scotland becomes independent,’ she explained. Continue reading
