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Property growth sluggish in the US, latest index data suggests
National property growth in the United States increased by a moderate 0.6% quarter on quarter but values are barely rising with variations according to location. The home data index from Clear Capital shows that in the Northeast and Midwest regional quarterly growth rates were sluggish at only 0.2% while the South saw a 0.7% rise. These rates come with little to no change from the previously reported quarterly growth rates, all within 0.1% of the figures from the previous month. The firm believes that the current picture is being led by the West where sales have increased 0.3% from 0.9% to 1.2% in a month and it says that this momentum shift is setting the pattern for another strong summer growth season as the region begins to dominate regional performance once again. The continued dominance of the West is easy to see on the firm’s list of Highest Performing Major Metro Markets, where nine of the current top 15 are in the West. Seattle continues to lead the nation with 2% growth over the last quarter, an increase of 0.2% since the previous index, while quarterly growth in Sacramento increased 0.3% to 1.5% quarter on quarter and the rest of the Western top markets all reported at least 1.2% growth over the last quarter. However, the condition of each individual market in the region is varied. Portland, San Jose, and Denver have all surpassed their previous peak market values from before the crash, with Seattle fast approaching its own benchmark. However, homes in Las Vegas are fetching just over half of peak market values from 10 years ago. The index report also points out that the current distressed property saturation rates in cities like Sacramento and San Diego have improved by 50% or more, illustrating a drastic improvement in the overall health of the market, and yet both markets have quite a way to go to recovering all market value lost during the crash. ‘Real estate market headlines have repeatedly documented the strong, potentially bubble like recovery of the West over the past couple years, and this continued trend of performance doesn’t appear to be going away just yet,’ said Alex Villacorta, vice president for research and analytics at Clear Capital. ‘However, it’s important to remember just how varied the standing of each of these Western metro’s recoveries remains. While the West as a whole has seen incredible performance since the lows of 2011, comparisons between individual markets like Denver and Las Vegas can be a sobering reminder of the devastating effects of the crash and that some markets still have a long way to go in terms of regaining lost value,’ he explained. ‘Conversely, those markets that are reaching new market highs are worth keeping a close eye on since the speed at which those recoveries have occurred is clearly unsustainable in the long term,’ he added. Continue reading
Brexit vote creating lethargy in prime central London property market
There are signs of lethargy in the prime property market in central London ahead of the vote on the future of the UK in the European Union, according to a new research report. But beyond the distraction of the EU referendum there are signs that demand is strengthening, according to the research from international real estate firm Knight Frank. Overall annual growth in the prime central London property market slowed to 0.1% in May, the lowest since October 2009 and the Brexit effect means demand is subdued even where asking prices have fallen 10% or more. On top of this the number of active buyers to available properties has halved over the last year and Tom Bill, head of London residential research at Knight Frank, described it as a price sensitive market. ‘Demand remains relatively subdued but in a change from recent months, the primary cause in May was the Brexit vote rather than new rates of stamp duty. Indeed, there are overlapping layers of uncertainty affecting supply and demand that are difficult to differentiate but which produce a cumulative impact,’ Bill explained. ‘There has been a discernible Brexit effect on the UK economy as decisions are delayed and the London property market is no exception. Buyers and sellers are postponing decisions because of the prospect of entering unchartered economic and political territory,’ he said. ‘The market has become price-sensitive due to higher levels of stamp duty, but an indication of the Brexit effect is that demand in May has remained subdued even for properties where asking prices have fallen by 10% or more,’ he pointed out. He also pointed out that demand was already more restrained as a result of the impact of two stamp duty increases in the space of 18 months and the ratio of active buyers per available property in prime central London has fallen to 4.8 from 10 over the last year. However, despite the looming referendum, there are signs underlying demand is strengthening, according to Bill as buyers drop asking prices to reflect higher transaction costs. The number of transactions between January and the middle of May was flat this year compared to 2015. Meanwhile, viewings increased 31% between January and April versus last year, suggesting a degree of pent-up demand. Overall, prices have grown 2.4% over the last two years and it has been three and a half years since annual growth was last above 10% in October 2012. A breakdown of the figures show that in the 12 months to May 2016 prices have increased 7.4% in Islington, by 6.3% in the City, by 1.9% in Mayfair, by 1,7% in Kensington, by 1.3% in Tower Bridge and by 0.3% in Riverside. Prices remained unchanged in St John’s Wood and Marylebone but fell by 7.5% in Knightsbridge, by 4.8% in Hyde Park, by 4.6% in South Kensington, by 3.5% in Chelsea, by 1.7% in Kensington, by 1.5% in Notting Hill, and by 0.2% in Belgravia. The report also points out… Continue reading
Rental supply in the UK continues to fall, latest analysis report shows
The supply of residential rental properties in the UK has continued to fall but this comes at a time when rental costs are expected to rise. Overall the number of rental properties managed per lettings agents branch increased by 8% in April to the highest level this year but is down from April 2015, according to the data from the Association of Residential Lettings Agents (ARLA). The jump from March this year follows a rush from buy to let landlords pushing to complete sales ahead of the April stamp duty increase deadline, the ARLA report says. But supply still stands at 5% lower than in April last year and continues to fall year on year. In April 2015, the average number of properties managed per branch was 193, this year it stands at 183. Demand is also falling year on year: In April, the number of prospective tenants per branch was 34, down from 33 the previous month and down from 36 April of last year. Meanwhile, rent costs expected to rise following buy to let stamp duty rise. Some 66% of ARLA agents predicted that the stamp duty reforms will push rent costs up for tenants down the line. ARLA agents also reported an increase in the number of landlords selling their buy to let properties. An average of four, up from three in March, are pulling out of the market, showing an increase for the first time in a year. ‘It’s likely that this increase in supply is only temporary. At the end of April we saw a flurry of landlords seizing the last few moments before the stamp duty rise to complete sales, triggering an increase in the supply of empty rental homes to be filled this month,’ said David Cox, ARLA managing director. ‘However, we expect that fewer investors will be taking on buy to let properties over the next six months, following the price hikes, meaning that once these properties are filled we’ll see supply nose dive once again,’ he added. Continue reading
