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Property prices and rental values expected to continue rising in Ireland in 2016
Property values increased across all regions in Ireland in 2015 and that trend is likely to continue in 2016 according to the annual residential property review and outlook report from the Society of Chartered Surveyors Ireland (SCSI). SCSI members expect the price of an average three bedroom semi-detached property to increase by between 4% and 8% in 2016 depending on location. According to the national survey of over 700 estate agents and chartered, property values are estimated to have risen by approximately 8.8% nationally in 2015 but to have moderated to 4.8% in Dublin. In 2014 Dublin property values rose by 19.5%. In Leinster values are estimated to have increased by 9.4% while in Munster and Connacht/Ulster they rose by 10.4% and 8.8% respectively. John O’Sullivan, chairman of the SCSI Residential Agency Professional Group said that the Central Bank’s lending rules had dampened price growth in Dublin and displaced it to neighbouring counties which have experienced an uplift in values over the past 12 months. ‘This happened because potential buyers were unable to justify the cost of buying in Dublin or were unable to access the necessary finance. According to our survey, 47% of Dublin based respondents believe that, in the absence of the Central Bank rules, values in Dublin would have grown by between 9.8% and 14.8%. That’s 5% to 10% more than the actual increase,’ he pointed out. ‘Most of the growth in values nationally accrued from the regions. The ongoing economic recovery is starting to spread across the country and further increases in property values in the regions can be expected in 2016 as incomes and expectations for the future continue to improve. The outlook remains fragile however and is dependent largely on the employment opportunities and investment for regional towns,’ he added. The report also shows that the private rental market experienced another year of continued growth with average rental values increasing by 12% nationally. The growth in rental prices is now outperforming the growth in property values across each of the regions. Respondents to the survey have attributed this trend to the shortage of supply in the sales market which is putting disproportionate pressure on the rental market. According to the survey SCSI members predict further increases in rental values in 2016, with the average rental value for a three bed semi-detached property expected to increase by a further 5% to 7% depending on location and two out of three said they believed that the new rent freeze legislation had increased the cost of renting for tenants. O’Sullivan noted that the rental increases have come about not just as a result of the broad undersupply of housing nationally, but also because of the difficulties that potential buyers are having accessing finance to purchase a house. ‘Allied to this, the collapse in construction output has resulted in virtually zero supply of social housing units to accommodate the growing social housing lists. Consequently, this cohort of tenants has had to seek accommodation… Continue reading
New home sales and lending in Australia ended 2015 strongly
Seasonally adjusted new home sales in Australia finished last year strongly, recording a 6% increase in December, according to the latest data from the Housing Industry Association. The growth has bee driven by both the detached house and multi-unit segments of the market. Data shows detached house sales increased by 2.2% while multi-unit sales were up by 21.1%. HIA chief economist Harley Dale said the current healthy national construction volumes are expected to continue throughout the first half of 2016 but there are likely to be very large differences in new housing conditions across States. ‘The updates we receive for leading indicators in coming months will be closely watched to determine the magnitude of any risk that the second half of 2016 is materially weaker for new home building than the first half of the year,’ he added. A breakdown of the figures show that detached house sales increased in three of the five mainland states, up 5.2% in Queensland, up 5% in Western Australia and up 1.1% in Victoria. Sales fell 2.1% in South Australia and by 0.1% in New South Wales. During the December 2015 quarter detached house sales increased in Queensland by 4.3% and by 0.3% in New South Wales. Sales fell 15.4% in Western Australia, 10.2% in South Australia and 4% in Victoria. Meanwhile, the latest figures from the Australian Bureau of Statistics show that the monthly volume of new home loans to owner occupiers hit a six year high during December 2015. That means that the pipeline of new home building is likely to remain strong during early 2016, according to HIA senior economist, Shane Garrett. He pointed out that the December data is the best since November 2009. ‘This time around, new home building is benefitting from record low official interest rates, strong demographic demand and resurgent labour markets in New South Wales and Victoria,’ he added. During December, the number of owner occupier loans for the construction of new homes increased by 1.8% with growth of 12.4% in loans for newly constructed homes. Compared with a year earlier, total owner occupier loans for the construction and purchase of new dwellings are 5.3% higher. ‘During November, the major banks unilaterally increased their variable mortgage interest rates. While the figures seem to suggest no immediate impact on new home lending, the risk remains that such tactics could undermine our industry’s ability to meet Australia’s long term housing needs,’ Garrett explained. A breakdown of the figures shows that the number of new home loans increased, in annual terms, most strongly in the Northern Territory with growth of 29.3%, up 21.7% in New South Wales and up 12.3% in Victoria. New home lending volumes also rose in Queensland by 4% but lending volumes fell in Tasmania by 29.6%, in Western Australia by 19.8% and in the Australian Capital Territory by 0.5%. Continue reading
UK property prices broadly stable with policy changes and a potential EU vote on horizon
Average UK house prices rose by 0.3% in January, and are up 4.4% year on year, remaining broadly stable, according to the latest analysis report. Prime central London prices rose by 0.1% last month to take annual growth to 1.2% while prime central London rents dipped by 0.3%, says the report from real estate firm Knight Frank. The data also shows that price growth for prime property in some regional hubs continues to outperform the wider prime country house market. The stability in UK property prices is likely to be underpinned by a further period of ultra-low interest rates and a solid, although slowing, economic recovery but the report warns that the political outlook is less clear as an European Union referendum draws closer. Grainne Gilmore, head of UK residential research at Knight Frank, pointed out that interest rates being left unchanged by the Bank of England for the 83rd consecutive month in February was not a surprise. ‘But the data released by the Bank when announcing its decision has led economists and markets to change their expectations about when rates may start to rise. Whereas many had forecast a rise around the middle of the year, the verdict is now that rates are on hold until the final quarter of the year, if not 2018,’ she said. ‘This change was prompted by the Bank’s forecasts, showing muted inflation and wage growth in the coming years as well as a downgrade in forecast GDP growth. The central bank now expects 2.2% GDP growth this year, instead of 2.5%. The slower growth is attributed to global economic conditions, not least the effect lower oil prices are having on many economies around the world,’ she explained. ‘However, senior bank officials were clear that the UK economy was still experiencing a solid recovery and that the fall in oil prices was a net good for UK consumers, helping boost consumption and therefore wage growth,’ she added. Households expect prices to continue rising this year according to the latest House Price Sentiment Index (HPSI) from Knight Frank and Markit Economics. Any reading above 50 on this index, which is a bellwether for house prices, suggests prices are rising, or are set to rise. The future index has now been above 50 for 35 consecutive months. However, Gilmore also said that the outlook for 2016 must take into account the policy changes and political decisions which will be made this year, not least another change to the stamp duty regime in April, the Mayoral Elections in London in May and a possible decision on whether the UK should stay in the European Union. ‘As seen following the stamp duty changes in December 2014, and last year’s General Election, the market can adjust to political and policy changes, but periods of uncertainty can take their own toll on market activity,’ she added. While prime central London property prices edged up by 0.1% in January, taking the annual increase to 1.2%, a breakdown… Continue reading
