Tag Archives: outlook
UK house price optimism rebounds, latest index suggests
House price optimism in the UK rebounded in February as inflation continued to fall and the expectation of an interest rate rise receded further. According to the Halifax Housing Market Confidence Tracker report last month saw a rallying of house price optimism among consumers, from an 18 month low of +52 at the start of the year to +60 in February. It was +62 December 2014. This optimism is reflected in the outlook for both buyers and sellers, with buying sentiment up to its highest level since the Confidence Tracker launched in 2011 at net +35. At the same time selling sentiment has reached an all-time high and now stands at +27. However, this still this doesn’t tell the whole story as the underlying picture is a cautious one, with 57% predicting flat or modest house price increases of less than 5% at best over the next 12 months. And despite inflation falling to 0% in February and various MPC members saying the next interest rate move is as likely to be down as it is up, 43% of consumers believe mortgage interest rates will be higher than they are now in a year’s time. ‘With inflation now at its lowest level since records began and the chances of the next interest rates change reportedly just as likely to be down as up, consumers are feeling more optimistic about the housing market again,’ said Craig McKinlay, mortgages director at the Halifax. ‘The traditional slow start to the year for the housing market has already begun to give way to increased activity, but consumers remain relatively cautious. For sustainable long term growth we need a period of stable growth and a more comprehensive house building programme,’ he added. Continue reading
European commercial property investment market seen as attractive
The European commercial property investment market enjoyed a strong end to 2014, according to the latest quarterly report from Knight Frank. It says that the outlook for 2015 has been boosted by the European Central Bank’s (ECB) announcement in January of a programme of quantitative easing which will help to maintain the attractive yield premiums offered by property over government bonds. Overall a total of €57.9 billion was invested in European commercial property in the fourth quarter of 2014, making this the strongest quarter since the second quarter of 2007 and investment volumes for the whole of 2014 came to €177.6 billion, 21% up on 2013. The firm says that investors have continued to show an increased appetite for risk, targeting a wide variety of non-core locations and sectors. Investment volumes increased strongly in Spain, Ireland, the Netherlands and the UK regions throughout 2014, while the Portuguese investment market finally revived in the final quarter of the year, having been one of the last of the peripheral markets to show signs of recovery. The report explains that the current strength of the investment market comes in spite of more modest and varied trends in European occupier markets. In 2014, office take up increased in markets such as London, Paris and Berlin, but fell in Frankfurt, Vienna and Moscow. However, the Knight Frank European Prime Office Rental Index rose by a modest 0.8% in the fourth quarter with London, Dublin and Lisbon being the only major markets to record increases in prime office rents. ‘The European investment market has continued to gain remarkable momentum. We expect 2015 to be another strong year, bolstered by the ECB’s QE programme,’ said Matthew Colbourne, international research associate at Knight Frank. ‘By leading to falls in European government bond yields, the QE announcement has further widened the spreads between property and bond yields. It will help to preserve the attractiveness of property as an asset class in 2015 and beyond,’ he added. Continue reading
Canadian property prices up an average of 6.3%, led by Toronto and Vancouver
Residential property sales in Canada edged upwards 1% month on month in February while sales are now up 6.3% year on year, according to the latest data from the Canadian Real Estate Association. The monthly sales increase was led by Greater Vancouver, the Okanagan region, and Greater Toronto. Gains there offset sales declines elsewhere, with more than half of all local markets having posted weaker sales in February compared to January. Year on year price growth decelerated in February for all housing types tracked by the index except two storey single family homes, which again posted the biggest year on year price gain at 6.63%. This was followed by terraced homes with growth of 4.4%, and single storey single family homes at 4.34%. Price growth remained more modest for apartment units at 2.77%. Price gains varied among housing markets tracked by the index. Greater Toronto saw growth of 7.84%, Greater Vancouver 6.38%, and Calgary with 5.96% posted the biggest year on year increases. Even so, the increase in Calgary was far smaller than gains posted last year and the smallest since December 2012. In other markets from West to East, prices were up compared to year ago levels by between 2% and 2.5% in the Fraser Valley, Victoria, and Vancouver Island, while holding steady in Saskatoon, Ottawa, and Greater Montreal, and falling in Regina and Greater Moncton. The CREA index report points out that the national average home price remains skewed by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s most active and expensive housing markets. Excluding these two markets from the calculation, the average price is a relatively more modest $326,910 and the year on year gain shrinks to just 1.5%. ‘A number of buyers across the Prairies stayed on the side lines in February. That’s likely to remain an important part of the national housing story until the outlook for oil prices starts improving. Meanwhile, home sales in British Columbia and much of Ontario are improving,’ said CREA president Beth Crosbie. Actual, not seasonally adjusted, activity in February stood 2.7% above levels reported in the same month last year, but remained 5% below the 10 year average for the month of February, the data also shows. ‘Sales came in below the 10 year average for the month of February in two-thirds of all local markets. That said, the opposite was true in a few large urban markets in British Columbia and Ontario despite a shortage of listings there, which is fuelling prices higher,’ explained Gregory Klump, CREA’s chief economist. The number of newly listed homes fell 2.5% in February compared to January, led by Greater Vancouver, the Okanagan region, and Calgary. New listings in Calgary have retreated in recent months after having climbed sharply toward the end of last year. The national sales to new listings ratio was 52.2% in February. With sales up and new listings down, this marked an increase from 50.4% in January. A… Continue reading
