Tag Archives: real-estate
Capital city home values in Australia up 3.3% in first four months of 2016
Home values in Australian capital cities continued to rise in the first four months of 2016, up 3.3% compared to the same period in 2015, the latest index shows. In April, the pace of capital gains rebounded from the relatively flat numbers recorded in March, with dwelling values increasing by an average of 1.7%, according to the Corelogic April home value index. Across the country, housing market trends remain mixed, however, and CoreLogic research director Tim Lawless noted that the improvement in the rate of capital gains has been ‘broad based’ during 2016 with every capital city except Perth recording a lift in dwelling values over the calendar year to date. ‘The results show value growth moved at a faster pace compared with the final three months of 2015 when capital city dwelling values slid 1.4% lower off the back of weaker market conditions in Sydney and Melbourne,’ he explained. ‘While we’ve seen capital gains moderate substantially after peaking last year in Sydney and Melbourne, dwelling values continue to trend higher, just not as fast,’ he added. The data shows that the annual rate of growth in Sydney peaked at 18.4% in July last year and has since moderated back to slightly less than half the peak rate of growth, at 8.9% over the most recent 12 month period. Melbourne’s housing market continues to show a level of resilience to a slowing trend, however the annual growth rate has fallen from a recent peak of 14.2% to the current annual growth rate of 10.1% but Melbourne was the only capital city to see double digit growth over the past year. Perth and Darwin remain as the only two capital city markets to experience a decline in home values over the past 12 months, with Perth values down 2.1% and Darwin values 3.7% lower. ‘With recent month on month increases in home values in these two cities, the declining trend rate is now levelling. This may be an early sign that these markets are beginning to find their cyclical trough after more than a year of annual declines,’ said Lawless. Over the current growth cycle, which commenced broadly in June 2012, capital city dwelling values have moved 34.4% higher, led by a 52.7% rise in Sydney home values and a 37.1% lift in Melbourne values. Lawless pointed out that this highlights the two tiered nature of Australia’s housing market at present. Brisbane experienced the third highest rate of dwelling value growth over the growth cycle to date and dwelling values in the city are now up 18% and Lawless explained that Australia’s regional markets also exhibited a lift in house values over the year to date. He added that while house values across the non-capital city markets have generally underperformed compared with the capital city regions, regional house values moved 2.4% higher over the first quarter of the year. Continue reading
Demand for Spanish property facing a number of issues in the coming months
Demand for property on the Spanish Costas has increased from expats who are benefitting from good mortgage rates and there is a rise in construction activity with a number of new developments being started, according to a new report. It also explains that there are a number of other factors likely to affect the real estate market in the coming months including currency rates, the Spanish election and in Andalucía new rules regarding holiday lets. Expat demand is coming from the UK, Scandinavia, and Germany with other northern Europeans also active in the market, says the report from the Survey Spain network of chartered surveyors covering the first quarter of 2016. However, there is likely to be an increased nervousness in the market as the British referendum approaches on 23 June because of fears that the poll will support the UK leaving the European Union. The threat of a Brexit and currency exchange rates are just a couple of major issues that could affect the Spanish property market. The report says that doubt about the referendum result and it’s after effects are causing UK buyers and sellers to hesitate. In addition, the fall in the value of sterling, from the €1.40’s to €1.20’s in the last three months has made the relative costs of property in Spain much more expensive for UK buyers but of course better for those wanting to move back to the UK. ‘However, the latter will be concerned that there is more reduction in value to come and so may decide to hold onto euro asset until closer to the referendum in the UK on 23 June,’ the report says. It refers to a recent letter received from a client which says they are concerned that if the UK leaves the EU then property prices in Spain may fall considerably. There are also risks associated with a change of Government in Spain. The firm has found that more than one client has stated that they will sell and move if a left wing Government should be elected. ‘Again, the uncertainty could be causing buyers and sellers to pause until there is a result, which could be before the end of May or, with a new election, at whenever a new Government is established after the end of June,’ the report points out. The property market could also be affected by decisions made by Spanish banks who still own a lot of properties due to the economic downturn. The Spanish banks are obliged to update their valuation of assets practice to include regular annual or bi-annual valuations of each individual asset. The report explains that this has seen Sareb, the Spanish bank rescue bank, announce a write down of their portfolio by more than €2 billion in addition to a €968 million write down in the past two years. ‘It may be that many private banks will have to do the same, which may result in them lowering… Continue reading
UK property prices fall in April and could soften further ahead of EU vote
Property prices in the UK fell by 0.8% in April and annual house price growth eased to 9.2%, taking the average price to £212,321, the latest index data shows. The figures from lender, the Halifax, also show that house prices in the three months from February to April were 1.5% higher than the preceding three months. Martin Ellis, Halifax housing economist, pointed out that both the quarterly and annual price rates are at their lowest since November 2015. ‘Current market conditions remain very tight as the severe imbalance between supply and demand persists. This situation, combined with low interest rates and rising employment and real earnings, should continue to push house prices up over the coming months,’ he said. ‘Weakening sentiment regarding house price prospects and a dip in consumer confidence, however, suggest that annual house price growth may ease,’ he added. The 0.8% between March and April, combined with February’s 1.5% fall has offset March’s 2.2% gain. But according to Ellis monthly house price changes can be volatile and he pointed out that the quarter on quarter change is a more reliable indicator of the underlying trend. Confidence in the UK housing market is at its lowest level in over a year, according to the latest quarterly Halifax Housing Market Confidence Tracker. The latest fall continues the downward trend since a high point in May 2015, and comes as consumers feel increasingly uncertain about the wider economy. Nonetheless, a clear majority of 65% still believe that average UK property prices will be higher rather than lower 12 months from now, double the 32% found when the Tracker was launched five years ago in April 2011. Jonathan Hopper, managing director of the buying agents Garrington Property Finders, believes that double digit annual price rises are unlikely to return any time soon but the cooling of the market may mark an opportunity for buyers, as some sellers are being forced to reassess their overly ambitious asking prices. ‘For the first time in more than a year, we’re seeing many mid-range properties in the most desirable locations selling for below asking price, hinting that the power dynamic is shifting from a seller’s to a buyer’s market,’ he said. ‘But with demand still strong and supply still chronically low, the net effect is likely to be a gradual return to more normal rates of price growth rather than a serious slowdown. With the Halifax also finding that levels of confidence in the housing market have fallen to their lowest level in more than a year, sellers must think urgently about pricing competitively,’ he added. On top of the slightly cooling of the market there is also uncertainty over the referendum on the future of the UK on the European Union on 23 June. Mark Posniak, managing director at Dragonfly Property Finance, thinks prices are likely to edge down further. ‘People are starting to understand the magnitude of the Brexit vote and that will lead many to… Continue reading
