Tag Archives: real-estate
US property market set to continue steadily upwards in 2016
Steady job growth, affordable home prices, attractive mortgage interest rates and pent-up demand will help the US housing market continue on a gradual upward trajectory in the year ahead, it is claimed. However, supply side headwinds led by a shortage of construction lots and labour, along with tight access to acquisition, construction and development loans, continue to hamper a more robust recovery, according to economists who participated the National Association of Home Builders (NAHB) Spring Construction Forecast event. ‘Builders remain cautiously optimistic about market conditions. This should be the first year since the recession in which the growth rate for single family production exceeds that of multifamily. And we see single-family growth accelerating in 2017 as the supply chain mends and we can expand production,’ said NAHB chief economist Robert Dietz. The event heard that steady job growth has bolstered consumer confidence and rekindled housing demand. Nationally, payroll employment has surpassed its pre-recession peak by a modest margin; only a small number of states still lag behind those levels. Looking ahead, single family production is expected to post a 14% gain in 2016 to 812,000 units and rise an additional 19% to 964,000 units in 2017. Using the 2000/2003 period as a healthy benchmark, when single family starts averaged 1.3 million units on an annual basis, single family production currently stands at 58% of normal activity. The NAHB projects that single family production will rise to 64% of normal by the fourth quarter of this year and climb to 77% of normal by the end of 2017. On the multifamily side, production ran at 395,000 units last year, above the 331,000 rate that is considered a normal level of production. Multifamily starts are expected to decline 4% to 379,000 units this year, and rise 6% to 402,000 units in 2017. Residential remodelling activity is expected to increase 3.3% in 2016 over last year, and rise an additional 1.3% in 2017. Len Kiefer, deputy chief economist at Freddie Mac, cited several factors that should make this year’s home sales the best in a decade including fewer household formations than normal and data showing that more owners are current on their mortgages, with fewer defaults and less foreclosures along with solid job gains include rising salaries and wages. He pointed out that house prices are rising about 6% annually and appear to be in line with incomes and rents while demographic tailwinds are helping to propel the housing market forward. Freddie Mac is projecting 5.9 million total home sales this year, the highest level since 2006, and 6.2 million in 2017 and regionally, Kiefer said that house price growth is the strongest in the South and West, with Nevada, Oregon, Washington, Colorado and Florida all posting double digit state-wide house price appreciation between December 2014 and December 2015. NAHB senior economist Robert Denk said that housing market conditions are improving across the nation, but the pace of the recovery continues to vary by state and region. ‘A common… Continue reading
London house prices break through the £600,000 barrier
Average house prices in London have broken through the £600,000 barrier having doubled over the last seven years, according to the latest residential index to be published. Overall in England and Wales home values reached record levels in April in nine out of 10 regions with average prices no approaching £300,000. The index from Your Move and Reeds Rains estate agents also shows that house price growth is now at its fastest level 8.9% year on year. The data also shows that prices increased 1% compared to the previous month but there were fewer sales than usual. Transactions were down 20,000 but this may have been due to the buy to let rush in the months leading to the new stamp duty charges for additional homes introduced on 01 April. It means that the price of a typical home in England and Wales is now worth £24,280 more than a year ago while prices in London are up 11% or £59,605 year on year. ‘This acceleration in home values comes when many had expected house prices to dip due to a natural decline in demand from buy to let and second home buyers. However, after an exceptional March, there is now a severe shortage of properties on the market, with fierce competition between buyers for each available property,’ said Adrian Gill, director of Your Move and Reeds Rains estate agents. ‘Clearly, the Government’s offensive against landlords has not eased the way for other buyers, as property prices continue to pick up pace, growing by nearly 50% over the past seven years, with prices rising from £204,875 in April 2009 up to £298,030,’ he pointed out. ‘With the maximum value of the government’s flagship starter homes capped at £250,000, first time buyers may soon see a lot less property for their money. Chancellor George Osborne needs to increase incentives to sell and relax planning restrictions if he truly wants to fulfil the home ownership dreams of young people,’ he added. He also pointed out that rapid growth in means the average house price in London has almost doubled over the past seven years. For example, in Waltham Forest the average house price has soared by 113% over this time period, more than any other London borough. He added that across London, it’s been the more affordable areas which have seen some of the steepest increases in house prices annually, as the capital’s residents seek out cheaper properties. Also, while London may have seen the biggest boost in house prices this month, property values have hit new records in nine of the 10 regions in England and Wales, as growth ripples out from the capital. ‘This is the first time nine regions have broken records in the same month since October 2007 at the height of the boom as the market has now fully recovered from the crash. For those looking for houses to buy, the North East offers the… Continue reading
UK residential property market saw strong start to the year, report confirms
The UK property market started 2016 at breakneck speed with even stronger and more buoyant activity than the positive sentiment seen during the final quarter of 2015, according to a new report. The number of active buyers entering the residential property market reached new heights, partly driven by the continuation of positive economic trends, such as low interest rates, says the analysis from Connells Group. This has tempted those on the fence to make their first move onto the property ladder sooner rather than later, according to David Livesey, group chief executive. But he pointed out that with the current level of available stock at historic lows, the additional demand from these new buyers combined with increased buy to let activity from investors looking to extend their portfolios before the higher stamp duty changes came into effect on 01 April, many of these first time buyers faced restricted choice and additional competition as they sought to find their ideal property. However he explained that the ratio of applicants to new instructions has evened out in the short term, while property price growth has not been as rapid as it has been in previous quarters, making climbing up or onto the housing ladder a less daunting feat for many. ‘This slight cooling has by no means turned into a chill, with property remaining a valuable asset that will continue to increase in value for the foreseeable future. Supply side initiatives, driven by the Government’s attempts to stimulate housebuilding in particular, may need further support if they are to have any meaningful impact on the level of available stock in the short term,’ said Livesey. The report shows that landlords and tenants have also enjoyed a positive and productive start to the year. It says that activity from renters has grown at a healthy pace, as this group often uses the start of the New Year as an opportunity to move into new accommodation. Despite the fresh demand from new applicants entering the lettings market in the first quarter of the year, the ratio of registered applicants to new instructions is by no means as high as it was during the first quarter of 2015 and average agreed rents have broadly stabilised across England, in the short term at least, the report points out. Livesey said that an increased supply of rental stock is easing pressure on the sector, as buy to let landlords purchase less expensive properties, some of these new build. ‘This may not be what the Government had in mind when it aided the construction of such properties, but it has given tenants respite nonetheless. In addition, tenants are also driving harder bargains, securing longer leases at a cheaper monthly rate meaning they need to return to the market less often, which is also attractive to landlords,’ he explained. ‘The mortgage market has also sprung back to life this quarter, largely propelled by high activity levels in the residential and… Continue reading
