Tag Archives: outlook
Australian housing market weaker outside of larges cities, latest index suggests
Residential property values across Australia’s capital cities increased by 1% over the month of October, according to the latest RP Data CoreLogic index. The data highlights that despite a slowdown in growth in September, values continued to rise, increasing by 2.2% over the past three months. Although combined capital city home values were up by 1% not all cities saw increases. Only Sydney with an increase of 1.3%, Melbourne up 1.9% and Brisbane at 0.6% actually recorded value rises over the month. According to Tim Lawless, head of research, this result highlights weaker housing market conditions outside of Australia’s largest cities. Looking over the past three months Sydney, Melbourne, Brisbane and Adelaide, which happen to be four of the five largest capital cities, were the only capital cities to record an increase in home values. Sydney leads the growth with home values increasing at a rate of more than 1% a month, up 3.9% over the past three months. Lawless said that Perth and Canberra have clearly moved through the peak of their growth cycles. However, the greatest value falls over the last three months were recorded in Hobart with a decline of 2.8% and Canberra where values were down 2.4%. ‘Looking at the increase in home values over the 12 months to October, it is clear that the rate of capital growth is continuing to moderate. Despite the annual rate of value growth slowing, all capital cities have still recorded an increase in home values over the past year,’ said Lawless, He pointed out that home values across the combined capital cities have increased by 8.9% over the 12 months ending October 2014, which has slowed from a peak of 11.5% in April of this year. Sydney, and to a lesser degree Melbourne, continued to be the main drivers of the increase in home values. Over the past year, Sydney home values were 13.1% higher, while Melbourne values were up 8.9%. Brisbane was the third best performing capital city for value growth over the year with values up 5.6% followed by Darwin where values rose by 5%. Elsewhere, value growth was more subdued with increases of 3.4% in Perth, 4.3% in Adelaide, 4.4% in Hobart and 0.9% in Canberra. ‘Despite the fact that the annual increase in home values is slowing, other indicators remain strong,’ added Lawless. Auction clearance rates continued to hover around the 70% mark week to week while volumes across RP Data real estate agent and valuation platforms remained strong which is indicative of heightened levels of industry and mortgage market activity. The number of new properties listed for sale continues to rise as are total listing numbers. However, Lawless said that the fairly rapid rate of sale is resulting in a slower increase in total listings than new listings. Conditions across capital city rental markets remained subdued, with weekly rents rising by only 1.8% over the past 12 months, the lowest annual change in capital city rents since the year ending August 2003. According to Lawless, the consistent… Continue reading
Residential development land growth in England and Wales moderates
Residential development green field land prices in England and Wales rose by 0.2% in the third quarter of the year but the growth rate is moderating. According to the latest figures from Knight Frank the annual increase in the third quarter of the year was 3.7%, down from the 5.6% annual rate of growth in the second quarter of 2014. The firm says that while the appetite for the best sites is still strong, rising material costs and a shortage of skilled labour is starting to weigh on prices. Prices in London are still advancing faster than the rest of the country, the average annual rate of growth for sites in prime central London slowed from 18.9% to 18.7% in the third quarter. ‘While house price growth is starting to slow, there is still room for more growth in development land, especially in commuter zones around London and other key cities,’ said Grainne Gilmore, head of UK residential research at Knight Frank. ‘However the disparity between the best sites and those that are compromised may become more entrenched and competition for good development sites remains strong throughout the country. But there is no doubt that developers are becoming more selective about the sites they consider,’ she explained, adding that this has been reflected by a slight slowing in sales volumes in recent months. Mirroring the trend in house prices, there has been a ripple effect from central London, with sites in key commuter towns close to the capital proving the most alluring for developers. ‘While planning remains a thorny issue for developers and house builders, these concerns have been somewhat overshadowed of late by the rising cost of construction and the difficulties in sourcing workers with suitable skills to build out sites,’ said Gilmore. ‘Shortages of material have contributed to rising prices, and this, a well as the shortage of labour, can be dated back to the financial crisis, when construction activity all but ground to a halt,’ she pointed out. ‘The very moderate growth in house building in the years following the zenith of the financial crisis were not enough to power up the industry for the sharp rise in activity seen over the last 18 to 24 months. So the delivery of materials and a workforce with the necessary skills is now proving problematic,’ she added. The report also shows that there has been a sharp rise in the number of respondents to the RICS survey saying that labour shortages and rising material costs are limiting levels of construction activity. These factors are now starting to weigh on development land prices, with developers being cautious about future material and labour costs in such an environment. ‘While the rising cost of materials will directly impact margins, difficulties in accessing suitable labour could add to the length of time that elapses before units can be sold, which will also, in turn, push up costs,’ said Gilmore. ‘As a result, buyers are applying downward pressure to offers for development land…. Continue reading
Average asking prices in UK stabilise in third quarter of 2014
Average asking prices in the UK residential market stabilised in the third quarter of 2014 after nine months of consistent growth, according to the latest figures. The average asking price rose by just 0.85% in the quarter but despite this small increase, the average asking price was the highest on record at £265,545. Unusually, the Greater London market was subdued in the third quarter of the year as it tempered following the huge growth recorded in the first half of 2014, according to the data from Move with Us. The region, surprisingly, wasn’t the strongest performing in the third quarter, seeing the fourth largest percentage growth in Britain at just 1.03%. A moderate rise in the average asking price combined with lengthening selling times indicated average asking prices in the Capital may have settled at £466,147 for the time being. The East Midlands saw the highest percentage growth in the average asking price, which reached £192,787 in the third quarter. This rise is, however, still relatively small at 1.36%. The average asking price dipped in just two regions in a quarterly comparison, in the North East by 0.10% to £154,073 and in Scotland by 0.22% to £161,937. Despite this quarterly drop, the average asking price in both regions grew marginally in a yearly comparison demonstrating stability. ‘The last three months have signalled a shift from the first half of the year, with average asking prices stabilising in most British regions after months of consecutive growth.’ said Robin King, director, Move with Us. ‘However, this didn’t stop prices hitting the highest figure on record with an average asking price £265,545 for Great Britain. In the Capital the market experienced an uncharacteristic slowdown in the third quarter of 2014 and for the first time in years didn’t have the highest percentage increase in the average asking price,’ he added. A breakdown of the figures show that despite expectation of strong price increases expected for the Greater London market, the average asking price levelled in the third quarter for the first time since November 2012, finishing the quarter at £466,147. Year on year, however, the average asking price in the region has increased £87,636 or 18.8%. The average asking price in the South West peaked at a record high of £282,093 in July. It then adjusted downwards slightly and stabilised in August and September, sustaining the increases seen in the second quarter of 2014. By the end of the third quarter the average asking price in the region was £281,985, just £1,043 or 0.37% higher than the second quarter of 2014. In the South East, the market experienced a slight downward adjustment in August, despite a growth of £11,144 between April and July. This is not unexpected on the back of such strong price increases. By September, prices were rising once more albeit at a slower pace in the region and at the end of the third quarter the average asking price in the area was £344,414, the highest on record. This… Continue reading
