Posts Tagged ‘in’

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.

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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.

UK property industry disappointed that letting agents not included in money directive

March 26, 2017

UK property industry disappointed that letting agents not included in money directive

The UK property industry believes that a decision by the Government not to include letting agents in its proposals for legislation to meet the requirements of the fourth Money Laundering Directive is wrong.

There are several elements of the consultation on the directive that are likely to have an impact on the property sector and while estate agents will be expected to carry out customer due diligence (CDD), lettings agents will not.

It means that while buyers and sellers of properties will be checked by estate agents tenants and landlords will not.

‘We’re disappointed the Government has chosen not to include letting activity within the money laundering regulations 2017,’ said David Cox, ARLA Propertymark chief executive.

‘The risk with this is that money laundering activity will transfer from the sales sector due to the increased powers within the new regulation, into the lettings sector which remains unregulated,’ he pointed out.

‘However, within the context of the recently increased legislative burden on letting agents, coupled with the shock announcement to ban letting agent fees in the Autumn Statement, we understand why the Government has chosen not to impose these requirements at this critical juncture,’ he added.

According to Mark Hayward, NAEA Propertymark chief executive, it is good news that the consultation on money laundering has finally appeared and he said that when the legislation comes into force, it’s vital the property sector acts to implement the changes.

‘The Government has announced that purchasers are now included in the application of customer due diligence, so additional checks will need to be made by sales agents and auctioneers, which will be complicated by the fact that buyers are sometimes at arm’s length and there’s not necessarily a face to face relationship,’ he explained.

‘However, further clarity will be required as to at what point the purchaser becomes a purchaser, and this is an issue we will be seeking guidance on,’ he added.

The Royal Institute of Chartered Surveyors (RICS), said it will seek views from the industry before providing a response to the Government consultation. ‘We would welcome views on any elements of the Government’s proposals,’ said RICS associate director Jon Bowey.

There has been concerns that potentially corrupt overseas buyers have been using the London property market in particular to launder money. Recently the Homes Affairs Select Committee said in a report that current rules are inadequate.

‘Investment in London properties is a major route which tarnishes the image of the capital. Supervision of the property market is totally inadequate, and poor enforcement has laid out a welcome mat for launderers and organised criminals,’ said committee chairman Keith Vaz.

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.

Property market in Dubai stabilises but still declining in Abu Dhabi

March 23, 2017

Property market in Dubai stabilises but still declining in Abu Dhabi

The residential real estate market in Dubai is showing signs of having bottomed out with the latest sales and price figures moving into positive territory in February.

The Dubai residential property sales price index from ReidIn increased by 0.3 points, an increase of 0.10% month on month and prices are now 0.97% higher year on year.

Apartment prices rose by 0.12% month on month and 1.06% year on year while villa prices were up 0.06% month on month and 0.59% year on year.

But rents are still falling. The rental price index decreased by 0.8 points with rents down 0.9% month on month and down 3.69% compared to February 2016.

Apartment rents fell by 1.04% month on month and 2.89% year on year while villa rents were down 0.1% month on month and 7.86% year on year.

In neighbouring Abu Dhabi the property market is still declining. The ReidIn price index fell by 0.9 points with prices down 1.18% month on month and 6.23% year on year.

A breakdown of the figures show that in Abu Dhabi prices for apartments fell by 1.12% month on month and 5.86% year on year while villa prices decreased by 1.31% on a monthly basis and 7.39% annually.

In the lettings sector the rental index decreased by 0.7 points with rents down 1.16% in February compared to January 2017 and down 8.59% year on year.

Apartment rents fell by 1.3% month on month and 9.81% year on year while villa rents were down 0.82% month on month and 4.81% year on year.

Meanwhile, a new analysis shows that Dubai real estate assets have given a 120% return to investors in the 10 years since the global financial crisis. As a result of the crisis many projects in Dubai stalled or were cancelled.

But now the property market in the emirate is recovering having been boosted by a number of Government investments and the awarding of Expo 2020 to Dubai, says the ReidIn Global Capital Partners report.

The 120% return compares to 75% in London and 63% in New York and the report explains that the bulk of the returns in Dubai have been through rental increases.

‘Dubai has become a magnet for international investors for real estate, and monetary inflows have continued to increase steadily over the last decade,’ it concludes.

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.

Housing market confidence rises in the US, but is down on a year ago

March 23, 2017

Housing market confidence rises in the US, but is down on a year ago

Most households in the United States believe the spring season is a good time to buy a home but those in the rental sector are less confident, new research shows.

Some 80% of home owners are positive about the market, up from 78% in December 2016 but down from 82% a year ago, according to the research from the National Association of Realtors.

But just 56% of those who rent think it is a good time to buy, down slightly from 57% in in December 2016 and down from 62% a year ago.

Overall, younger households, renters and those living in the costlier West region where prices continue to rise, are the least optimistic, the study also found.

NAR chief economist Lawrence Yun pointed out that a lack of homes for sale, prices and rising mortgage rates are putting people off. ‘These factors are giving many renter households a pause about it being a good time to buy, even as their job prospects improve and wages grow,’ he said.

‘Unless there’s a significant boost in supply levels this spring, these constraints will unfortunately slow or delay some prospective buyers’ pursuit of purchasing a home,’ he added.

One promising trend that could alleviate supply shortages is a rise in the share of respondents this quarter who believe now is a good time to sell a home. Sone 69% of home owners think now is a good time to sell, up from 62% in the December quarter of last year and up from 56% in March 2016.

Continuing the trend over the past year, those in the West continue to be the most likely to think now is a good time to sell with 77% saying so and they are also the least likely to think it’s a good time to buy at 61%.

‘Demand far outpaces supply in many parts of the country right now, which means home owners will likely sell their home much quicker than the time it takes to buy another,’ said NAR president William Brown.

Total mortgage lending in UK still affected by weakness in buy to let

March 23, 2017

Total mortgage lending in UK still affected by weakness in buy to let

Gross mortgage lending in the UK reached £18.2 billion in February, down 8% on January’s lending total of £19.8 billion but not far from the £18.1 billion lent in February last year.

The figures from the latest market report from the Council of Mortgage Lenders, which represents the vast majority of home lenders in the country, suggest that current weaknesses are likely to continue.

‘Mortgage lending is holding up well, but under the surface buyers face mixed fortunes. First time buyers and customers who are remortgaging are driving total lending, while home movers and buy to let remain weak,’ said CML senior economist Mohammad Jamei.

‘The weakness in home movers means few properties are coming onto the market for sale, which is aggravating a supply demand imbalance that has characterised the market since late 2013. This looks set to continue at least over the next few months, posing an obstacle for would-be borrowers,’ he added.

Henry Woodcock, principal mortgage consultant at IRESS, expects the market to pick up a bit in March, traditionally the start of the busy spring buying season. ‘There was no stimulus to housing provided in the Spring Budget, and forecasts by estate agents indicate that the number of home transactions completed will fall % this year,’ he said.

‘However, I still expect March gross lending to be slightly higher than February, although it will not reach the heady height of 2016 which was driven to a great extent by impending buy to let changes,’ he explained.

‘Of course, one thing could change this. The recent jump in inflation to 2.3% is the first above target rise since November 2013. No doubt this will put some pressure on the Bank of England’s Monetary Policy Committee (MPC) to start considering interest rate rises,’ he pointed out.

‘If that were to happen it would obviously mean higher monthly payments for people on tracker and variable mortgages, and lenders would react quickly to pull some of the very cheap mortgage deals. It wouldn’t surprise me if we see an unusually higher spike in mortgage activity over the coming months as people look to secure the best deals while they’re still available,’ he added.

John Eastgate, sales and marketing director of OneSavings Bank, pointed out that a nine year high for gross mortgage lending in January proved that mortgage demand is effervescent. ‘But given the record highs, some moderation was to be expected and is arguably welcomed. The Brexit effect and the base rate cut have driven mortgage rates to all-time lows, supporting mortgage activity, most prominently in remortgaging,’ he said.

‘While buy to let purchases have seen a dip since the changes to stamp duty costs last year, the sector has also seen a surge in demand from landlords refinancing to take advantage of low rates to reduce their costs. We should expect to see remortgage activity continue to drive lending levels in 2017 as a lack of supply and stretched affordability, will continue to subdue the purchase market,’ he added.

Total mortgage lending in UK still affected by weakness in buy to let

March 23, 2017

Total mortgage lending in UK still affected by weakness in buy to let

Gross mortgage lending in the UK reached £18.2 billion in February, down 8% on January’s lending total of £19.8 billion but not far from the £18.1 billion lent in February last year.

The figures from the latest market report from the Council of Mortgage Lenders, which represents the vast majority of home lenders in the country, suggest that current weaknesses are likely to continue.

‘Mortgage lending is holding up well, but under the surface buyers face mixed fortunes. First time buyers and customers who are remortgaging are driving total lending, while home movers and buy to let remain weak,’ said CML senior economist Mohammad Jamei.

‘The weakness in home movers means few properties are coming onto the market for sale, which is aggravating a supply demand imbalance that has characterised the market since late 2013. This looks set to continue at least over the next few months, posing an obstacle for would-be borrowers,’ he added.

Henry Woodcock, principal mortgage consultant at IRESS, expects the market to pick up a bit in March, traditionally the start of the busy spring buying season. ‘There was no stimulus to housing provided in the Spring Budget, and forecasts by estate agents indicate that the number of home transactions completed will fall % this year,’ he said.

‘However, I still expect March gross lending to be slightly higher than February, although it will not reach the heady height of 2016 which was driven to a great extent by impending buy to let changes,’ he explained.

‘Of course, one thing could change this. The recent jump in inflation to 2.3% is the first above target rise since November 2013. No doubt this will put some pressure on the Bank of England’s Monetary Policy Committee (MPC) to start considering interest rate rises,’ he pointed out.

‘If that were to happen it would obviously mean higher monthly payments for people on tracker and variable mortgages, and lenders would react quickly to pull some of the very cheap mortgage deals. It wouldn’t surprise me if we see an unusually higher spike in mortgage activity over the coming months as people look to secure the best deals while they’re still available,’ he added.

John Eastgate, sales and marketing director of OneSavings Bank, pointed out that a nine year high for gross mortgage lending in January proved that mortgage demand is effervescent. ‘But given the record highs, some moderation was to be expected and is arguably welcomed. The Brexit effect and the base rate cut have driven mortgage rates to all-time lows, supporting mortgage activity, most prominently in remortgaging,’ he said.

‘While buy to let purchases have seen a dip since the changes to stamp duty costs last year, the sector has also seen a surge in demand from landlords refinancing to take advantage of low rates to reduce their costs. We should expect to see remortgage activity continue to drive lending levels in 2017 as a lack of supply and stretched affordability, will continue to subdue the purchase market,’ he added.
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