Tag Archives: middle-east
Pending home sales in US reach highest level for over a decade
Pending home sales in the US rose for the third consecutive month in April and reached their highest level in over a decade, according to the latest index data to be published. All major regions saw gains in contract activity last month except for the Midwest, which saw a meagre decline, the pending homes index from the National Association of Realtors shows. The index, a forward looking indicator based on contract signings, increased by 5.1% to 116.3 in April from an upwardly revised 110.7 in March and is now 4.6% above April 2015 when it was 111.2. After last month's gain, the index has now increased year on year for 20 consecutive months and Lawrence Yun, NAR chief economist, said that vast gains in the South and West propelled pending sales in April to their highest level since February 2006. ‘The ability to sign a contract on a home is slightly exceeding expectations this spring even with the affordability stresses and inventory squeezes affecting buyers in a number of markets,’ he explained. ‘The building momentum from the over 14 million jobs created since 2010 and the prospect of facing higher rents and mortgage rates down the road appear to be bringing more interested buyers into the market,’ he added. On the topic of mortgage rates, which have remained below 4% in 16 of the past 17 months. Yun pointed out that it remains to be seen how long they will stay this low. Along with rent growth, rising gas price and the fading effects of last year's cheap oil on consumer prices could edge up inflation and push rates higher. For now, he foresees mortgage rates continuing to hover around 4% in coming months, but inflation could potentially surprise the market and cause rates to increase suddenly. ‘Even if rates rise soon, sales have legs for further expansion this summer if housing supply increases enough to give buyers an adequate number of affordable choices during their search,’ he added. Following the housing market's best first quarter of existing sales since 2007, Yun expects sales this year to climb above earlier estimates and be around 5.41 million, a 3% boost from 2015. After accelerating to 6.8% a year ago, national median existing home price growth is forecast to slightly moderate to between 4% and 5%. A breakdown of the figures show that in the Northeast it climbed 1.2% to 98.2 in April, and is now 10.1% above a year ago. In the Midwest the index declined slightly by 0.6% to 112.9 in April, but is still 2% above April 2015. Pending home sales in the South jumped 6.8% to an index of 133.9 in April and are 5.1% higher than last April. The index in the West rose 11.4% in April to 106.2 and is now 2.8% above a year ago. Continue reading
Latest mortgage research shows shift in investors’ choice of property type in UK
Real estate investors in the UK looking to expand their property portfolios are looking to do so with the purchase of more complex property types, new research has found. In particular 28% of those looking to expand said they were considering purchasing HMOs, up from just 10% six months ago, according to the latest report from Mortgages for Business. Commercial and semi-commercial property are also interesting of investors but those looking to purchase vanilla property has fallen slightly to 79% from 83% in November. David Whittaker, managing director at Mortgages for Business, pointed out that with higher yields it is no surprise that there has been a sizeable shift towards the more complex property types. ‘The interest in commercial and semi-commercial property may have also grown as these asset classes do not incur the Stamp Duty Surcharge imposed on residential property,’ he explained. The report also shows that the number of investors looking to expand their portfolio has dipped slightly to 41% from 46% in November 2015, probably due to the tax change announcement and the introduction of the 3% stamp duty surcharge. However, the good news is that an even smaller proportion, some 14%, plan to shrink their portfolios, down from 18% in November 2015. Despite an increase in investors keeping their portfolio size as it is now, 39% still plan to remortgage some of their properties in the next six months. ‘It is positive to see that fewer landlords are looking to sell property and shrink their portfolios and that a large proportion are still seeing the benefits of remortgaging,’ said Whittaker. ‘After the government’s tax crackdown on private landlords I can understand why investors are being more cautious about expansion. It will be interesting to see how long this cautious approach will last,’ he added. The research also shows that 30% of respondents said they owned a property in a limited company vehicle up from just 22% a year before. ‘We expect this figure to continue to rise in light of the pending tax changes which will peg relief on finance costs, including mortgage interest, to the basic rate of 20% to individual tax payers. Since the tax relief announcement we have seen a notable rise in limited company applications, which doesn’t show any sign of slowing down,’ Whittaker said. The survey found that 59% of those looking to expand their portfolios will need to refinance to raise the necessary funds, up marginally from 58% in November 2015. There was also a fall in the number of respondents who felt that lenders were not doing enough to support investors. The most common gripes felt by landlords were extremely similar to the responses given in November’s survey including wanting more lending options for limited companies, wanting the removal of upper age restrictions and wanting more of a human/common sense approach to underwriting. Continue reading
Miami property market normalising after years of record growth
After eight years of record or near record residential sales, the Miami real estate market is normalising with steady growth, according to various prominent local market experts. The fast sales growth of Miami middle market properties, the continued high percentage of all cash buyers, preconstruction condo inventory in the rapidly-growing Downtown Miami area and South Florida’s overall population and job increases are boosting the market, they told the recent Real State of the Miami Market event. According to Anthony Graziano, senior managing director of Integra Realty Resources, 2013 and 2014 were extremely strong for the Miami market for fundamental reasons, including pent-up demand. ‘When we look at our numbers today, we are getting back to normal. It’s okay that our market is not growing 15 to 20% every year. In fact, it’s a good thing. I want to grow 5% a year because at some point our wage growth can’t keep up,’ he told the meeting. The event hears that single family homes priced between $200,000 and $600,000 saw a 5.8% year in year increase in April, with the sector representing 63% of total Miami single family home sales. Existing condos priced between $150,000 and $300,000 saw a 2.7% rise in sales in April, representing 39.2% of total existing Miami condo home sales in April 2016. The audience also heard that Miami offers bargain prices compared to other world class cities and the lack of available land are also key factors in today’s market. For example, a 120 square meter condo in Miami-Fort Lauderdale-Miami Beach cost $149,900 on average, according to the National Association of Realtors NAR. Prices for the same condo in London would be $960,840, in Hong Kong $776,280 and in New York $1.6 million. It was also pointed out that the lack of Miami-Dade County available land means the value of local single family homes will rise and more residents will purchase multifamily units. Most Miami preconstruction condo developers require a 50% cash deposit on new units, one of the highest in the United States and significantly higher than the 20% required during the last real estate cycle. However, the experts said that the large all-cash deposits are a strong sign home buyers are committed and invested in the Miami market. The majority of new construction is happening in Downtown Miami, and developers are being cautious not to overbuild. About 85% of condos under construction in Downtown Miami are sold, according to Integra Realty Resources and the Miami Downtown Development Authority. Downtown Miami has about 7,200 units under construction, a 61.2% smaller inventory than the 18,500 units under construction in 2006. ‘The reason downtown Miami is important is because it is what is leading Miami in the marketplace. It’s our urban core. Downtown is the poster child of what is happening in the market,’ said Graziano. While noting preconstruction sales have normalised compared to the previous record activity, Graziano believes developers are taking a break and doing site plans before announcing future… Continue reading
