Tag Archives: real-estate
French market not affected so far by Brexit vote
The decision by the UK to leave the European Union does not seem to have dented the French real estate sector with mortgage rates still low and currency differences still positive. Indeed, the vote coincided with a further drop for French mortgage rates to all time historic lows. These ultra-low long term fixed rates have in effect nullified the changes in exchange rates for British buyers and offer the opportunity to lock in long term value, according to John Luke Busby, private clients director at French Private Finance. He pointed out that a French repayment mortgage can now be found in the region of 2.15% fixed for 20 years nationally and perhaps down to 1.55% in Paris for some profiles. ‘This means that over a 20 year fixed rate mortgage period British buyers are now still ahead versus the highs of the pound against the euro last year,’ Busby said. ‘It is important to note that we have not had any withdrawals or cancellations on the basis of the referendum result from any of our ongoing applications. Whilst there will clearly be reflection around making new investment decisions in the French market for some UK buyers, investors from around the world are continuing with their purchases in France,’ he explained. ‘This trend is particularly noticeable in Paris where prices are starting to increase again, after a lull, and for investors earning in Dollars the euro is substantially cheaper. US dollar holders can now benefit from the double whammy of a strong currency and ultra-low interest rates,’ he added. Busby believes that overall there seems to be a quiet confidence emerging around the future of the UK economy whatever the result of the negotiations in Brussels or the UK Parliament. ‘There is confidence that, as of today, we remain in the EU so to all intents and purposes it is business as usual,’ he said. He also pointed out that all of the tax treaties relating to property are independent of EU membership for the British, who remain the largest non-resident buyers of French Property. Many regions in France are now starting to see growth in property prices, which herald larger gains once the EU economy can get going again,’ Busby added. ‘The mixture of the romance of French property ownership combined with soft property prices and ultra-low interest rates still conjure a compelling purchase proposition which is hard to ignore over the long term,’ he concluded. Meanwhile, one of the largest sellers of French property to British buyers has reported a 21% rise in sales in the first six months of 2016. Leggett Immobilier also says that since the referendum result enquiries have remained high with over 1,000 enquiries coming into the sales support team in the past seven days. Coupled with this Leggett Immobilier have had 34 offers accepted in the past week, a figure which is well above the weekly average. The firm’s figures show a 21% rise… Continue reading
New home sales in Australia fall for second month in a row
Total new home sales in Australia fell for a second consecutive month in May 2016 but experts say it is cyclical downturn and nothing to worry about. Total seasonally adjusted new home sales declined by 4.4% following a 4.7% fall in April 2016. The sale of detached houses fell by 6.7% but apartments were up by 4.9%. The data also shows that detached house sales declined in three of the five mainland states with a fall of 11.5% in New South Wales, a fall of 8.2% in Victoria and a fall of 11% in Queensland. But detached house sales increased by 3.8% in South Australia and by 5.4% in Western Australia. The figures should not cause alarm, according to the Housing Industry Association. ‘There is a cyclical downturn ahead for new residential construction activity, as new home sales signal, but the early pull-back will be mild by historical standards,’ said HIA chief economist Harley Dale. ‘We remain of the view that a decline in new dwelling commencements will gather momentum in 2016/2017 and 2017/2018, following four years of growth which has delivered enormous benefits to the broader Australian economy,’ he explained. ‘This economic benefit delivered by new home construction in recent years is unprecedented. It creates a platform for the Federal government to provide leadership on the key issues of new housing supply, affordability and home ownership, which will in turn benefit Australia’s economic growth and future standard of living,’ he added. Meanwhile the HIA’s regular review of Australia’s $30 billion home renovations market show that the sector is very much in recovery mode with 2015 marking the second consecutive year of growth. This followed a deep slump during the early years of the decade. The Renovations Roundup report projects that renovations activity will increase by 2.5% this year with growth of 1.7% forecast for 2017. The HIA also projects that activity will grow by 2.8% in 2018 followed by a 2% increase in 2019, bringing the total volume of renovations activity to $33.30 billion. According to Shane Garrett, HIA senior economist, the recovery in renovations activity is being supported by the environment of remarkably low interest rates and very strong dwelling price growth in key markets. ‘In this context, many home owners have decided to shelve plans to move house and instead conduct major renovations work on their existing homes. The large pool of available home equity has made this possible,’ he explained. ‘However, the pace is growth is being held back by the weakness of earnings growth in the economy and the fragile condition of consumer sentiment. The importance of home renovations activity is often underestimated and it accounted for about 35% of total residential construction during 2015,’ he said. ‘With new home building set to decline over the coming years, the expansion of the renovations market means that its importance will only increase. The revival in renovations activity will provide a welcome offset to the more challenging situation emerging on the new… Continue reading
Demand for homes in UK falls to three year low, according to estate agents
Uncertainty created by the UK’s decision to leave the European Union has triggered demand for property to fall to the lowest level seen in three years, according to a new report. The number of house sales agreed in May dropped in the run up to the referendum and the majority of estate agents believe that demand will fall further in the short term, according to the latest housing report from the National Association of Estate Agents (NAEA). Estate agents recorded an average of 304 house hunters registered per member branch in May, as uncertainty in the lead up to the referendum stalled buyers. This was down 6% from April, and the lowest recorded since November 2013 when 292 buyers were registered per branch. The data also shows that compared to May 2015 when 383 house hunters were recorded, demand has decreased by 21% year on year. In line with falling demand in May, the supply of houses available to buyers increased marginally from 35 properties available to buy per branch in April to 37 in May. The number of sales agreed in May decreased to an average of eight per branch, a drop from nine in April falling to the same level seen during the seasonal slowdown in January. In May some 41% of agents predicted that house prices will fall and 30% expect demand will also decrease as a result of a the referendum result. Although the number of house hunters registered per branch and sales agreed fell in May, sales to first time buyers increased marginally. Some 27% of the total sales completed last month were to first time buyers, an increase of one percentage point from April. ‘The EU referendum without doubt meant that May was a month of uncertainty for potential house buyers and demand dropped significantly and is currently at the lowest level we have seen in the last three years,’ said Mark Hayward, NAEA managing director. ‘As a result of the vote for a Brexit, we expect international investors to look a lot harder at the UK as a potential market to buy in and this will have a knock on effect on the house building sector, as investments may be delayed or put off completely,’ he pointed out. ‘Although in the short term, we believe that house prices will remain stable, we cannot be certain about the next quarter as political uncertainty and market unrest could affect the housing market,’ he explained. He also pointed out that the supply of available housing is still extremely low compared to this time last year, which is particularly worrying. ‘As we continue to say, there are simply not a sufficient number of homes available in this country to cater for everyone’s needs and a Brexit could impact the skills required to drive property developments in the UK,’ said Hayward. ‘This means that… Continue reading
