Tag Archives: real estate
Housing affordability improves in Australia and new starts at record high
Housing affordability across Australia experienced improvement during the first three months of 2016, according to the latest affordability report. Affordability improved by 2.7% quarter on quarter and was 0.4% more favourable than the same period a year earlier, the data from the report by the Housing Industry Association shows. Aggregate capital city housing affordability was 4.1% more favourable during the quarter, while regional markets experienced 0.1% improvement. ‘The national median dwelling price fell during the March 2016 quarter and this was the main factor behind the improvement in affordability during the first quarter of the year,’ said HIA senior economist, Shane Garrett. ‘Had it not been for the shock increase in variable mortgage interest rates late last year, the improvement in affordability would have been even better. Earnings growth has been held back by slack in the economy, and this situation has also worked against improving affordability,’ he explained. ‘At the end of the day, the most durable way of improving affordability lies in facilitating the supply of affordable new housing more effectively. Planning delays, land supply shortages and the heavy tax burden are all making the achievement of housing affordability much more difficult,’ he added. A breakdown of the figures show that the largest improvements in affordability were in Sydney with a rise of 8.9%, Perth up 4.9% and Darwin up 4.4%. Affordability also saw improvement in Hobart with a rise of 2.9% and Melbourne where it was up 2%. However, affordability worsened in Brisbane with a fall of 1.2%, was down 0.2% in Adelaide and down 0.3% in Canberra. Meanwhile, the latest data from the Australian Bureau of Statistics show that the number of dwellings approved rose 0.6% in March 2016, in trend terms, and has now risen for four months in a row. Approvals increased in the Australian Capital Territory by 18.9%, in Western Australia by 1.1%, in Queensland by 0.8% and in Victoria by 0.2% in trend terms. Dwelling approvals decreased in the Northern Territory by 18.1%, in Tasmania by 1.5%, in New South Wales by 0.3% and in South Australia by 0.1% in trend terms. In trend terms, approvals for private sector houses rose 0.3% in March. Private sector house approvals rose in Victoria by 1.7% but fell in South Australia by 0.8%, in Western Australia by 0.7% and in Queensland by 0.2% Private sector house approvals were flat in New South Wales. In seasonally adjusted terms, dwelling approvals increased 3.7% with private sector house approvals up 2.6% while private sector dwellings, excluding houses, rose 6.7%. The value of total building approved fell 0.9 per cent in March, in trend terms, and has fallen for eight months. The value of residential building rose 0.4% while non-residential building fell 3.9%. Final ABS results for 2015 confirm that last year was the strongest ever for new home building activity with over 220,000 new homes beginning construction, an 11% rise on 2014 with which the previous record for… Continue reading
Parts of prime property market in London hit by economic uncertainty
Some areas in London’s prime property market are experiencing falls in demand from international buyers for reasons of global economic uncertainly, according to a new analysis report. But this is making way for emerging markets in the capital city’s prime sector which are currently outperforming central London, according to the report from property buying agency Black Brick. This comes at a time when overall London’s housing market is set to see increased demand with the population forecast to grow to 10 million. The report suggests that continued local opposition to new developments and limited brownfield sites for new homes developers in London will struggle to meet building targets which will leave the rental sector to take up the slack. Prices currently vary considerably in the prime market with locations in Knightsbridge and South Kensington seeing prices fall but emerging prime areas such as Islington and the City and Fringe have performed strongly. The reason is straightforward, according to Camilla Dell, Black Brick managing partner. ‘Those areas dominated by international buyers have suffered from falls in demand as a result of global uncertainty around falling oil prices, sanctions on Russia, and the slowdown in the Chinese economy, among other factors,’ she said. ‘Conversely, those parts of London, where demand is driven by domestic buyers, have benefited from the perennial shortage of supply and the strong recent performance of the UK economy,’ she explained. ‘In addition, recent changes to taxation have reduced the appeal of more expensive properties; investors seeking attractive rental yields and the prospect of capital appreciation have been pushed towards properties below £2 million, which tends to lead them away from traditional prime areas in West London,’ she added. Dell also pointed out that this complex picture has two related implications for buyers; the first is that they need to cast their nets more widely when carrying out a search; and the second is that they need to consider areas of which they might not have much knowledge. ‘The upshot is that we’re seeing considerable interest from investors in parts of London they aren’t familiar with and they need a buying agent that not only offers broader geographical coverage, but also brings extensive knowledge of emerging prime locations,’ Dell said. ‘In a market that’s going up, it’s hard to make a bad decision, but in a market like this, good guidance is really important,’ she concluded. Continue reading
UK’s South East office market makes strong start to 2016
Office market in the South East of the UK has seen the strongest start to a year since 2008, according to new research. Overall take-up in the South East Office market increased by 30% in the first quarter of 2016, according to the latest M25 Offices report from Knight Frank. A total of 973,000 square feet of space was let or acquired during the quarter, 10% above the 10 year average. The high level of take-up ensured that overall supply remains historically low with availability across the South East markets 25% to 30% below the long term trend. The report says that following record investment volumes in 2015, the first quarter of this year has recorded £494 million of investment, which is consistent with the 10 year average. It points out that the £325 million acquisition of SEGRO’s 972,000 square foot office portfolio in Slough by AEW was significant representing, not only the largest transaction in the South East market for two years, but also further evidence of overseas purchasers becoming more active and widening their UK focus beyond Central London. With stock levels improving in the second quarter of 2016 Knight Frank predict an increase in transaction volumes from the middle of the year and expect investment volumes to be close to £2 billion by the end of the year. Emma Goodford, head of National Offices at Knight Frank, said that overall take-up in the first quarter has been encouraging, particularly set against increased market anxiety relating to the forthcoming referendum on the future of the UK in the European Union. ‘Although, some decision making will clearly be deferred until after the vote, we continue to see interest rise from diverse array of occupiers with active named demand topping 6.6 million square feet. With this in mind, we are predicting strong rental growth in key locations, particularly where new development is accompanied by infrastructure and amenity improvements,’ she explained. According to Tim Smither, head of National Offices Investment at Knight Frank, the weight of capital targeting opportunities in the South East remains robust. ‘Whilst some investors pause to await the outcome of the EU referendum, others are seeing opportunity. In particular, high yielding, asset management opportunities remain keenly sought after, supported by a strong rental growth outlook for the region,’ he said. Continue reading
