Posts Tagged ‘and’

Weakening affordability and lack of supply sees home sales fall in the US

March 26, 2017

Weakening affordability and lack of supply sees home sales fall in the US

After starting the year at the fastest pace in almost a decade, existing home sales in the United States fell in February but remained above year ago levels both nationally and in all major regions.

Total existing home sales fell by 3.7% to a seasonally adjusted annual rate of 5.48 million in February from 5.69 million in January. Despite last month’s decline, February’s sales are still 5.4% above a year ago, according to the data from the National Association of Realtors (NAR).

The data also shows that the median existing home price for all housing types in February was $228,400, up 7.7% year on year and the fastest since January 2016 and the 60th month in a row of year on year rises.

The decline in sales has been caused by not enough properties on the market and weakening affordability conditions across the country which is stifling buyers, according to Lawrence Yun, NAR chief economist.

He pointed out that while real estate agents are reporting stronger foot traffic from a year ago, low supply in the affordable price range continues to push up price growth and pressurise the budgets of prospective buyers.

‘Newly listed properties are being snatched up quickly so far this year and leaving behind minimal choices for buyers trying to reach the market. Until an increase in listings actually occurs, home prices will continue to move hastily,’ Yun said.

Total housing inventory at the end of February increased 4.2% to 1.75 million but is still 6.4% lower than a year ago and has fallen year on year for 21 consecutive months. Unsold inventory is at a 3.8 month supply at the current sales pace, up from 3.5 months in January.

First time buyers accounted for 32% of sales in February, down from 33% in January but up from 30% a year ago. NAR research shows that during 2016 it averaged 35%.

But investors are making up an above average share of the market and Yun said that affordability constraints are holding back potential first time buyer who are currently renting and that means demand for rental homes will remain solid and fuel the interest of property investors. He added that the ability of investors to pay cash means that they are in competition with first time buyers.

A breakdown of the figures show that single family home sales fell 3% in February and are now 5.8% above a year ago. The median existing single family home price was $229,900, up 7.6% from February 2016.

Existing condominium and co-op sales fell by 9.2% but are still 1% higher than a year ago and the median existing condo price was $216,100, up 8.2% above a year ago.

In February existing home sales in the Northeast fell 13.8% but are still 1.5% above a year ago. The median price in the Northeast was $250,200, up 4.1% from February 2016 while in the Midwest, existing home sales fell 7% but are still 2.6% above a year ago with a median price of $171,700, up 6.1% year on year.

Existing home sales in the South increased 1.3% and are 5.9% above February 2016 with a median price of $205,300, up 9.6% year on year and in the West sales decreased 3.1% but are 9.6% above a year ago with a median price of $339,900, up 9.6% year on year.

Sydney and Melbourne lead property price growth in Australia, official figures show

March 26, 2017

Sydney and Melbourne lead property price growth in Australia, official figures show

Residential property prices in Australia increased by 4.1% in the final quarter of 2016, the strongest quarterly growth recorded since June 2015, according to latest official figures to be published.

Melbourne recorded the largest increased through the year of all capital cities with a rise of 10.8% followed closely by Sydney with a rise of 10.3%, the data from the Australian Bureau of Statistics shows.

Sydney and Melbourne also recorded the strongest quarterly growth with values up 6.1% and 6% respectively in the fourth quarter of 2016, fuelling concerns that rising prices are creating affordability issues in these two cities.

Prices increased by 8.8% year on year in Tasmania, by 5.5% in the Australian Capital Territory and by 3.8% in Queensland. But prices fell by 4.1% in Western Australia and by 7% in the Northern Territory.

Property prices fell by 1.7% in Perth, by 1.3% in Brisbane and by 2.5% in Darwin while prices rose in all other capital cities, the data also shows.

The total value of Australia’s 9.8 million residential properties increased by $274.2 billion to $6.4 trillion while the mean price of a home is now $656,800.

The large divergence in growth rates between Australia’s eight capital cities should not be a surprise, according to Harley Dale, chief economist of the Housing Industry Association (HIA).

‘Sydney and Melbourne represent 40% of Australia’s population and some concern regarding the trajectory of house price growth in these two markets is warranted. Elsewhere, people still scratch their heads when it comes to a supposed housing price boom because that simply hasn’t been their experience this cycle, even allowing for some recovery in prices in recent times,’ he said.

Dale hit out at speculation that interest rate rises and tighter lending are needed to cool the housing market. ‘There has been speculation regarding some tension between members of Australia’s Council of Regulators, plus an (appropriate) questioning of banks’ out of cycle interest rate hikes,’ he said.

‘People can make of that what they will, but let’s not lose sight of the main goal. Yes, there is some need to tighten lending conditions for some Australian housing markets in terms of geographical areas and dwelling types,’ he pointed out.

‘However, a blanket tightening of lending conditions, as now seems to be emerging again, is the wrong policy and risks damaging Australia’s financial stability. That is the very opposite to the ideal outcome authorities want to achieve,’ he added.

Weakening affordability and lack of supply sees home sales fall in the US

March 26, 2017

Weakening affordability and lack of supply sees home sales fall in the US

After starting the year at the fastest pace in almost a decade, existing home sales in the United States fell in February but remained above year ago levels both nationally and in all major regions.

Total existing home sales fell by 3.7% to a seasonally adjusted annual rate of 5.48 million in February from 5.69 million in January. Despite last month’s decline, February’s sales are still 5.4% above a year ago, according to the data from the National Association of Realtors (NAR).

The data also shows that the median existing home price for all housing types in February was $228,400, up 7.7% year on year and the fastest since January 2016 and the 60th month in a row of year on year rises.

The decline in sales has been caused by not enough properties on the market and weakening affordability conditions across the country which is stifling buyers, according to Lawrence Yun, NAR chief economist.

He pointed out that while real estate agents are reporting stronger foot traffic from a year ago, low supply in the affordable price range continues to push up price growth and pressurise the budgets of prospective buyers.

‘Newly listed properties are being snatched up quickly so far this year and leaving behind minimal choices for buyers trying to reach the market. Until an increase in listings actually occurs, home prices will continue to move hastily,’ Yun said.

Total housing inventory at the end of February increased 4.2% to 1.75 million but is still 6.4% lower than a year ago and has fallen year on year for 21 consecutive months. Unsold inventory is at a 3.8 month supply at the current sales pace, up from 3.5 months in January.

First time buyers accounted for 32% of sales in February, down from 33% in January but up from 30% a year ago. NAR research shows that during 2016 it averaged 35%.

But investors are making up an above average share of the market and Yun said that affordability constraints are holding back potential first time buyer who are currently renting and that means demand for rental homes will remain solid and fuel the interest of property investors. He added that the ability of investors to pay cash means that they are in competition with first time buyers.

A breakdown of the figures show that single family home sales fell 3% in February and are now 5.8% above a year ago. The median existing single family home price was $229,900, up 7.6% from February 2016.

Existing condominium and co-op sales fell by 9.2% but are still 1% higher than a year ago and the median existing condo price was $216,100, up 8.2% above a year ago.

In February existing home sales in the Northeast fell 13.8% but are still 1.5% above a year ago. The median price in the Northeast was $250,200, up 4.1% from February 2016 while in the Midwest, existing home sales fell 7% but are still 2.6% above a year ago with a median price of $171,700, up 6.1% year on year.

Existing home sales in the South increased 1.3% and are 5.9% above February 2016 with a median price of $205,300, up 9.6% year on year and in the West sales decreased 3.1% but are 9.6% above a year ago with a median price of $339,900, up 9.6% year on year.

Sydney and Melbourne lead property price growth in Australia, official figures show

March 23, 2017

Sydney and Melbourne lead property price growth in Australia, official figures show

Residential property prices in Australia increased by 4.1% in the final quarter of 2016, the strongest quarterly growth recorded since June 2015, according to latest official figures to be published.

Melbourne recorded the largest increased through the year of all capital cities with a rise of 10.8% followed closely by Sydney with a rise of 10.3%, the data from the Australian Bureau of Statistics shows.

Sydney and Melbourne also recorded the strongest quarterly growth with values up 6.1% and 6% respectively in the fourth quarter of 2016, fuelling concerns that rising prices are creating affordability issues in these two cities.

Prices increased by 8.8% year on year in Tasmania, by 5.5% in the Australian Capital Territory and by 3.8% in Queensland. But prices fell by 4.1% in Western Australia and by 7% in the Northern Territory.

Property prices fell by 1.7% in Perth, by 1.3% in Brisbane and by 2.5% in Darwin while prices rose in all other capital cities, the data also shows.

The total value of Australia’s 9.8 million residential properties increased by $274.2 billion to $6.4 trillion while the mean price of a home is now $656,800.

The large divergence in growth rates between Australia’s eight capital cities should not be a surprise, according to Harley Dale, chief economist of the Housing Industry Association (HIA).

‘Sydney and Melbourne represent 40% of Australia’s population and some concern regarding the trajectory of house price growth in these two markets is warranted. Elsewhere, people still scratch their heads when it comes to a supposed housing price boom because that simply hasn’t been their experience this cycle, even allowing for some recovery in prices in recent times,’ he said.

Dale hit out at speculation that interest rate rises and tighter lending are needed to cool the housing market. ‘There has been speculation regarding some tension between members of Australia’s Council of Regulators, plus an (appropriate) questioning of banks’ out of cycle interest rate hikes,’ he said.

‘People can make of that what they will, but let’s not lose sight of the main goal. Yes, there is some need to tighten lending conditions for some Australian housing markets in terms of geographical areas and dwelling types,’ he pointed out.

‘However, a blanket tightening of lending conditions, as now seems to be emerging again, is the wrong policy and risks damaging Australia’s financial stability. That is the very opposite to the ideal outcome authorities want to achieve,’ he added.

Global office property markets resilient despite economic and political uncertainty

March 23, 2017

Global office property markets resilient despite economic and political uncertainty

The fundamentals of the global office market are resilient with leasing volumes at their highest level for 2016 in the final quarter of the year with growth of 6%, the latest analysis shows.

For the full year, leasing volumes were down modestly by only 3% on the robust levels of 2015, according to the report from international real estate firm JLL, which adds that this is a positive outcome in the face of political and economic uncertainty.

Full year 2016 take-up in the region reached 12.1 million square metres, a marginal 2% decrease on 2015, but in line with expectations. ‘We forecast European take-up to be around 11.7 million square metres in 2017, broadly flat on 2016 levels as expansionary drive on the continent keeps demand levels above the 10 year average,’ the report adds.

Asia Pacific finished the year on a strong note with gross leasing activity up by 23% year on year in the fourth quarter of 2016, leaving full year volumes down just 2% on 2015 levels. Financials and tech firms remained the most active sectors although demand trends were mixed across many Asian markets.

With lingering uncertainty surrounding the economic and political backdrop, JLL expects that 2017 gross leasing volumes in Asia Pacific to be relatively in line with 2016 with a modest downside of up to 5%. Although aggregate conditions are likely to be generally stable, the performance will continue to be varied as local market drivers diverge, the report says.

Overall at the end of 2016 the global office vacancy rate fell below 12% to 11.9% for the first time in this cycle, reaching its lowest level since the third quarter of 2008. Vacancies continued their downward trend in the Americas to 14.5%, but we also saw surprise falls in Europe, down 20 to 8.1%, and in Asia Pacific down to 10.9%.

Nonetheless, the report says that global office vacancies are set to trend slowly upwards during 2017 to reach 12.3% by the end of the year as new deliveries accelerate. Office completions are expected to be 37% higher in 2017 than in 2016, with this year marking the peak in the development cycle. About one third of completions slated for 2017 have already been pre-leased and new development completions are projected to tail off during 2018 and 2019.

Annual rental growth for prime offices across 26 major markets slowed to 2.5% in the final quarter, with a further softening anticipated in 2017 to about 2% on average. Leasing conditions are expected to become more balanced in 2017 as many markets seek to absorb a greater volume of new deliveries and occupiers keep an eye on costs.

Even so, the bulk of major office markets are projected to remain in positive territory in 2017, with only Shanghai, Beijing, London, Mexico City, Sao Paulo and Singapore likely to see a correction in prime rents over the next 12 months. Sydney is predicted to be the top performer, with growth of 10% to 15% this year on top of the 22.5% seen in 2016.

Asia Pacific and Europe had their strongest quarter of 2016, and leasing volumes in both regions finished the year just 2% below the levels of 2015. Meanwhile, the United States saw a disappointing final quarter due to the lack of ‘mega leasing’ deals and its full year volumes were down by 5% year on year.

Looking ahead JLL forecasts global leasing volumes in 2017 will be broadly stable on 2016 levels and the US offers the greatest upside potential of up to 5%. But due to lingering economic and political uncertainty, it also predicts gross leasing volumes in Europe and Asia Pacific to be generally in line with 2016, with a modest downside risk of up to 5% in Asia Pacific

A combination of a 7% fall in leasing volumes in the United States and a lower number of mega leasing deals in the fourth quarter of 2016 resulted in the lowest level of occupancy growth in the US office market in two years.

The report explains that near full employment and a shortage of skilled talent has restricted expansion activity in several major technology hubs, while political uncertainty associated with the November Presidential election caused some tenants to adopt a wait and see mentality.

Looking to the year ahead in the US it says that a shift in public policy that favours deregulation and lower taxation may serve as a catalyst for growth in select industries that have faced increased regulatory pressures over the past eight years and for the US financial markets in general.

It concludes that in the US although a rising interest rate environment will create both challenges and opportunities, overall macro-economic conditions support solid growth in 2017.

Strong occupier demand continued across most of Europe during the fourth quarter, with take-up reaching 3.4 million square metres and while this was down 9% on the fourth quarter of 2015, JLL says that annual comparisons with that particularly robust quarter which was the strongest the end of 2006 were always going to be unflattering.