The average nominal value of medium-sized houses in South Africa increased 4.2% on a yearly basis in March, after rising by a revised 2.8% in February, a report from Absa Group showed Monday. This brought the average nominal value in this category of housing to around ZAR 965,300 in March.
Further, the report showed that cost of small houses moved up 9.6% annually, slower than the 7.3% growth in the previous month, while cost of large houses increased at a faster pace of 5.3%, following a 4.8% rise in February.
According to Absa, the South African economy is forecast to grow by a real 3.3% in 2010 on the back of the global economic recovery and steadily growing domestic demand. CPI inflation, currently at 5.7% annually is expected to average 5.3% in 2010.
Absa forecasts the residential property market to gather further momentum with the improvement in household sector finances in the course of 2010. Growth in the nominal value of houses is forecast to be 6%-7% higher in 2010 compared with last year.
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Monday, April 19, 2010
Clarendon Mews Parow, Cape town, Western Cape
Priced from R399,900 No transfer fees.
Deposit - Only R5, 000.00
Rent Subsidy from Completion Feb 2011 to Feb 2013!
This development is situated in a popular area with great rental demand and close to all amenities.
Parow Valley really is one of the most convenient suburbs to reside in. Parow Valley has great shopping centres such as the Parow Shopping Mall, Shoprite Park, top primary and secondary schools for your convenience, places of worship, entertainment and night life for the outgoing and very popular chain stores like Woolworths, Edgars and Foschini for the shopping fanatics. All of your shopping needs can be catered for and you will spend many hours simply strolling through the massive malls which inhabit this stunning area.
A unique investment opportunity as transfer/completion will only take place in early 2011 so you will start accumulating great capital growth from now until the development is completed in 2011, you only start paying your bond payments when the development is complete and registered in your name in 2011.
1 bedroom units selling at R399,900.00 with monthly rentals of R3250 plus R1000 a month rental subsidy from the developers for 24 months. R4250 monthly rental income.
2 bedroom duplex selling for R 499, 900.00 with monthly rentals of R4100 plus R1000 a month rental subsidy from the developers for 24 months. R5100 monthly income.
Excellent location, walking distance to Parow Shopping Centre and Shoprite Park - close to railway station, public transport and schools.
Deposit - Only R5, 000.00
Rent Subsidy from Completion Feb 2011 to Feb 2013!
This development is situated in a popular area with great rental demand and close to all amenities.
Parow Valley really is one of the most convenient suburbs to reside in. Parow Valley has great shopping centres such as the Parow Shopping Mall, Shoprite Park, top primary and secondary schools for your convenience, places of worship, entertainment and night life for the outgoing and very popular chain stores like Woolworths, Edgars and Foschini for the shopping fanatics. All of your shopping needs can be catered for and you will spend many hours simply strolling through the massive malls which inhabit this stunning area.
A unique investment opportunity as transfer/completion will only take place in early 2011 so you will start accumulating great capital growth from now until the development is completed in 2011, you only start paying your bond payments when the development is complete and registered in your name in 2011.
1 bedroom units selling at R399,900.00 with monthly rentals of R3250 plus R1000 a month rental subsidy from the developers for 24 months. R4250 monthly rental income.
2 bedroom duplex selling for R 499, 900.00 with monthly rentals of R4100 plus R1000 a month rental subsidy from the developers for 24 months. R5100 monthly income.
Excellent location, walking distance to Parow Shopping Centre and Shoprite Park - close to railway station, public transport and schools.
Low risks make it a great time to invest in property in Australia
* ECONOMIST: Frank Gelber
* From: The Australian
* April 15, 2010 12:00AM
DO I sound bullish about property to you? If not, you're missing the point. To me, this is an extraordinary time for property investment.
Most of the risk has gone. Non-residential prices have fallen dramatically. They're below replacement cost. Development has stalled. Demand is returning. And we can't build until rents rise.
Risk hasn't been this low, or investment decisions more clear cut, for 15 years. Certainly, across cities and sectors, prospects aren't uniform. But by and large, we're looking at strong positive returns over the next five years, with some internal rates of return above 20 per cent.
The key is risk. Some think high return means high risk. Too many people look at risk as statistical without trying to understand where it comes from. For them, risk is variation, everything that they're not sure of.
We can do better than that. We can specify sources of risk associated with specific events.
Let's focus on three specific cyclical property risks: overbuilding and its consequences, excessive gearing and overvaluation.
First, overbuilding. Before the global financial crisis hit, I was worried about overbuilding during the boom leading to oversupply and significant falls in rents and prices, a classic boom/bust cycle. Buoyed by the inflow of funds, building was rising to unsustainable levels. As it turned out, the GFC did us a favour, curtailing construction early, before we oversupplied markets.
The initial setback to development came from the funding squeeze. Now, the problem is making financial feasibilities work. Commercial and industrial commencements have halved in real terms since the peak and are struggling. During the boom the risk of overbuilding was high. Now, it has evaporated and there is the prospect of a shortage.
Second, gearing. This is not only an individual property investor risk but can also create market risk. The financial engineering boom put enormous pressure on corporate Australia to gear up. And the Real Estate Investment Trust sector, with relatively stable cash flows, was a prime candidate.
It was hard to resist. And the REITs didn't, gearing up from 14 to 40 per cent in the blink of an eye, with some more classic financially engineered operations heading above 90 per cent.
Gearing compounds returns in the good times, but multiplies losses when returns don't cover interest. Of course, the GFC triggered falls in property prices which, with gearing, compounded the fall in net assets.
Initially, shell-shocked investors did nothing. The REITs, without equity injections, were forced to try to sell assets. But, with few investors, markets didn't clear and prices fell. Only later were the less affected REITs able to raise equity, mainly through new rights issues, gradually reducing gearing to levels that are allowing them to resume normal operations and think about development and investment.
The third risk is overvaluation.
Increased gearing in the boom, plus additional equity, hugely boosted investable funds, all chasing a limited amount of property. Yields got away from us. Weight of money caused yield compression and caused prices to overshoot.
The risk was that yields would correct, that prices would fall. And they have. The risk of further price falls is low.
Contrary to the present heightened perception of risk, all three types of risk have receded. We're too cautious.
To me, it's safe to invest.
I worry more when I can't understand value. My benchmark is replacement cost -- we can't stay below it for long when we need to develop. This stage of the cycle presents an undervalued market with emerging demand and little new supply.
At BIS Shrapnel we're looking at internal rates of return in some sectors up to 20 per cent. Most risks are on the upside. What would you do? I know what I'll do.
Frank Gelber is chief economist for BIS Shrapnel fgelber@bis.com.au
* From: The Australian
* April 15, 2010 12:00AM
DO I sound bullish about property to you? If not, you're missing the point. To me, this is an extraordinary time for property investment.
Most of the risk has gone. Non-residential prices have fallen dramatically. They're below replacement cost. Development has stalled. Demand is returning. And we can't build until rents rise.
Risk hasn't been this low, or investment decisions more clear cut, for 15 years. Certainly, across cities and sectors, prospects aren't uniform. But by and large, we're looking at strong positive returns over the next five years, with some internal rates of return above 20 per cent.
The key is risk. Some think high return means high risk. Too many people look at risk as statistical without trying to understand where it comes from. For them, risk is variation, everything that they're not sure of.
We can do better than that. We can specify sources of risk associated with specific events.
Let's focus on three specific cyclical property risks: overbuilding and its consequences, excessive gearing and overvaluation.
First, overbuilding. Before the global financial crisis hit, I was worried about overbuilding during the boom leading to oversupply and significant falls in rents and prices, a classic boom/bust cycle. Buoyed by the inflow of funds, building was rising to unsustainable levels. As it turned out, the GFC did us a favour, curtailing construction early, before we oversupplied markets.
The initial setback to development came from the funding squeeze. Now, the problem is making financial feasibilities work. Commercial and industrial commencements have halved in real terms since the peak and are struggling. During the boom the risk of overbuilding was high. Now, it has evaporated and there is the prospect of a shortage.
Second, gearing. This is not only an individual property investor risk but can also create market risk. The financial engineering boom put enormous pressure on corporate Australia to gear up. And the Real Estate Investment Trust sector, with relatively stable cash flows, was a prime candidate.
It was hard to resist. And the REITs didn't, gearing up from 14 to 40 per cent in the blink of an eye, with some more classic financially engineered operations heading above 90 per cent.
Gearing compounds returns in the good times, but multiplies losses when returns don't cover interest. Of course, the GFC triggered falls in property prices which, with gearing, compounded the fall in net assets.
Initially, shell-shocked investors did nothing. The REITs, without equity injections, were forced to try to sell assets. But, with few investors, markets didn't clear and prices fell. Only later were the less affected REITs able to raise equity, mainly through new rights issues, gradually reducing gearing to levels that are allowing them to resume normal operations and think about development and investment.
The third risk is overvaluation.
Increased gearing in the boom, plus additional equity, hugely boosted investable funds, all chasing a limited amount of property. Yields got away from us. Weight of money caused yield compression and caused prices to overshoot.
The risk was that yields would correct, that prices would fall. And they have. The risk of further price falls is low.
Contrary to the present heightened perception of risk, all three types of risk have receded. We're too cautious.
To me, it's safe to invest.
I worry more when I can't understand value. My benchmark is replacement cost -- we can't stay below it for long when we need to develop. This stage of the cycle presents an undervalued market with emerging demand and little new supply.
At BIS Shrapnel we're looking at internal rates of return in some sectors up to 20 per cent. Most risks are on the upside. What would you do? I know what I'll do.
Frank Gelber is chief economist for BIS Shrapnel fgelber@bis.com.au
Lifting rates will not stem rising market in Australia
# Terry Ryder
# From: The Australian
SOMEWHERE amid the fuzzy logic that drives the Reserve Bank's interest rate policy is the notion we have a housing price bubble and that raising interest rates will deflate it.
Glenn Stevens and his cohorts are wrong on both points. There is no bubble and history shows that lifting rates does little to quell a rising market.
Of course, it's difficult to know what Stevens and his faceless friends on the RBA board are thinking. They meet, decide to increase the cost of our mortgages, issue a press release and then disappear into the city.
Stevens should be compelled to face a press conference after each decision and justify the increasing pain he is inflicting on families and businesses. The economy is recovering, no doubt, but it has not yet recovered. Many businesses are still doing it tough, especially retailers.
The RBA appears to be reacting to extremes: the massive numbers that express future export deals by resources companies and activity at the top end of the housing market, all of it magnified by the tabloid media.
It is overlooking the mainstream where most action happens: ordinary businesses that employ of the bulk of the workforce and the everyday property market where 95 per cent of deals happen. Neither of these spheres is going ballistic.
I haven't seen anyone define what the term housing bubble means, but I assume it describes a market inflating out of control with prices increasing in an extraordinary way. I'm convinced most journalists and commentators wouldn't have a clue what it means and don't care whether it's true or not.
James Packer spends $12 million buying houses next to his Vaucluse mansion so he can build a swimming pool and this is presented as evidence the market is out of control. A small number of Chinese investors buy at the top of the Sydney market and they're blamed for pushing prices beyond the reach of families.
We do not have prices rising exceptionally in the mainstream market. According to the usual research suspects, house prices across the nation rose an average of 11 or 12 per cent in the past year. This is being represented as extraordinary, when it is merely average based on the standards of the past decade.
We saw much larger price rises in the 2003-2004 up-cycle and again more recently.
In 2007, the houses price indexes from the Australian Bureau of Statistics showed prices rose 12.5 per cent in our capital cities, including 14 per cent in Canberra, 18 per cent in Melbourne, 20 per cent in Adelaide and 22 per cent in Brisbane.
Why, suddenly, is a rising real estate market a problem?
Why is Stevens so concerned about a recovering property market? And where did he get the idea that lifting interest rates will scuttle it? There's no evidence that lifting interest rates correlates with a fall in dwelling prices.
We started in 2007 with the official interest rate at 6.25 per cent, compared with 4.25 per cent today. In the next six months rates increased from 6.25 per cent to 7.25 per cent.
But dwelling prices kept rising. Indeed, the rate of price growth throughout 2007 and into the first half of 2008 kept accelerating. The more the RBA lifted rates, the faster the rate of price growth. It was only the onset of the global financial crisis that finally slowed the market.
Over the 18 months from the start of 2007 to the middle of 2008 Darwin's median price rose 15 per cent, Canberra's by 18 per cent and Adelaide's by 23 per cent.
The evidence goes back well beyond the past decade. In my research I found a Residex article written in 2000 which began with: "Do rising interest rates mean decreasing property prices? If history is any guide, not at all. In fact, analysis of our data reveals that interest rates have no effect on the capital growth of property at all."
The article presented data on periods of rising interest rates in the 70s and 80s which "were followed by accelerating or steady house price inflation".
My three decades of researching real estate tell me price trends correlate more with the level of public confidence than the level of interest rates. If anything, rising interest rates have a positive impact on confidence, because they are a sign of an improving economy.
Prices stopped rising in late 2008 because confidence fell as we faced a battering of negative news about the GFC, the impending Australian recession (which never arrived) and the prospect of high unemployment (which didn't happen either).
Confidence, and price growth, revived in the latter part of last year as the emphasis switched to news of recovery, falling rates of unemployment and a resurgent resources sector.
# From: The Australian
SOMEWHERE amid the fuzzy logic that drives the Reserve Bank's interest rate policy is the notion we have a housing price bubble and that raising interest rates will deflate it.
Glenn Stevens and his cohorts are wrong on both points. There is no bubble and history shows that lifting rates does little to quell a rising market.
Of course, it's difficult to know what Stevens and his faceless friends on the RBA board are thinking. They meet, decide to increase the cost of our mortgages, issue a press release and then disappear into the city.
Stevens should be compelled to face a press conference after each decision and justify the increasing pain he is inflicting on families and businesses. The economy is recovering, no doubt, but it has not yet recovered. Many businesses are still doing it tough, especially retailers.
The RBA appears to be reacting to extremes: the massive numbers that express future export deals by resources companies and activity at the top end of the housing market, all of it magnified by the tabloid media.
It is overlooking the mainstream where most action happens: ordinary businesses that employ of the bulk of the workforce and the everyday property market where 95 per cent of deals happen. Neither of these spheres is going ballistic.
I haven't seen anyone define what the term housing bubble means, but I assume it describes a market inflating out of control with prices increasing in an extraordinary way. I'm convinced most journalists and commentators wouldn't have a clue what it means and don't care whether it's true or not.
James Packer spends $12 million buying houses next to his Vaucluse mansion so he can build a swimming pool and this is presented as evidence the market is out of control. A small number of Chinese investors buy at the top of the Sydney market and they're blamed for pushing prices beyond the reach of families.
We do not have prices rising exceptionally in the mainstream market. According to the usual research suspects, house prices across the nation rose an average of 11 or 12 per cent in the past year. This is being represented as extraordinary, when it is merely average based on the standards of the past decade.
We saw much larger price rises in the 2003-2004 up-cycle and again more recently.
In 2007, the houses price indexes from the Australian Bureau of Statistics showed prices rose 12.5 per cent in our capital cities, including 14 per cent in Canberra, 18 per cent in Melbourne, 20 per cent in Adelaide and 22 per cent in Brisbane.
Why, suddenly, is a rising real estate market a problem?
Why is Stevens so concerned about a recovering property market? And where did he get the idea that lifting interest rates will scuttle it? There's no evidence that lifting interest rates correlates with a fall in dwelling prices.
We started in 2007 with the official interest rate at 6.25 per cent, compared with 4.25 per cent today. In the next six months rates increased from 6.25 per cent to 7.25 per cent.
But dwelling prices kept rising. Indeed, the rate of price growth throughout 2007 and into the first half of 2008 kept accelerating. The more the RBA lifted rates, the faster the rate of price growth. It was only the onset of the global financial crisis that finally slowed the market.
Over the 18 months from the start of 2007 to the middle of 2008 Darwin's median price rose 15 per cent, Canberra's by 18 per cent and Adelaide's by 23 per cent.
The evidence goes back well beyond the past decade. In my research I found a Residex article written in 2000 which began with: "Do rising interest rates mean decreasing property prices? If history is any guide, not at all. In fact, analysis of our data reveals that interest rates have no effect on the capital growth of property at all."
The article presented data on periods of rising interest rates in the 70s and 80s which "were followed by accelerating or steady house price inflation".
My three decades of researching real estate tell me price trends correlate more with the level of public confidence than the level of interest rates. If anything, rising interest rates have a positive impact on confidence, because they are a sign of an improving economy.
Prices stopped rising in late 2008 because confidence fell as we faced a battering of negative news about the GFC, the impending Australian recession (which never arrived) and the prospect of high unemployment (which didn't happen either).
Confidence, and price growth, revived in the latter part of last year as the emphasis switched to news of recovery, falling rates of unemployment and a resurgent resources sector.
Spotlight on London Prime Residential East of City market - April 2010
Savills residential research predicts the prime east of City market to outperform the mainstream markets of Greater London over the next five years, much in the way that it did in the early 1990s.
Please find attached our latest research paper: 'Spotlight on Prime Residential east of City markets'.
Download - Spotlight on east of City markets - April 2010
Key findings:
Values in prime residential markets of the Docklands and Canary Wharf increased by 4.6% in the second half of 2009 and by a further 3.3% in the first quarter of 2010.
Rental demand is increasing with rents up 3.6% in the last six months.
With a significant amount of residential development having already taken place in areas such as Canary Wharf, looking ahead Stratford will form a key part of future housing delivery in east London, much of which forms part of the Olympic legacy.
Please find attached our latest research paper: 'Spotlight on Prime Residential east of City markets'.
Download - Spotlight on east of City markets - April 2010
Key findings:
Values in prime residential markets of the Docklands and Canary Wharf increased by 4.6% in the second half of 2009 and by a further 3.3% in the first quarter of 2010.
Rental demand is increasing with rents up 3.6% in the last six months.
With a significant amount of residential development having already taken place in areas such as Canary Wharf, looking ahead Stratford will form a key part of future housing delivery in east London, much of which forms part of the Olympic legacy.
What is going to happen to South African Interest Rates?
By Cees Bruggemans, Chief Economist FNB
13 April 2010
With interest rates now at historic lows, prime reaching 10%, the lowest since 1981, the main questions are whether the rate cycle has reached its lowest point, how long it could be moving sideways, and when and by how much it could be moving higher.
There is a technical and non-technical side to these questions.
The visible technical focus falls on actual inflation, the inflation forecast and inflation expectations, the risks governing these and the state of the economy and its rate of improvement.
Non-technical considerations are political in nature, mostly deep background, yet also presumable important.
The SARB gives the impression of being forward-looking (taking into account forecasts) but not necessarily always forward-acting (apparently often responding to the present, given the nature of risks it faces).
The SARB inflation forecast projects inflation within the 3%-6% target zone these next two years. As we move forward, the SARB’s two-year horizon also moves forward.
Private inflation forecasts vary regarding cyclical bottom (4%-5%) and subsequent trajectory (5%-7%).
The main upside drivers are public tariffs and oil. Downside drivers include imported global goods prices, food (initially), the Rand (initially) and the local output gap (initially).
Given the balance of risks (at present), the inflation rate could still head lower than consensus forecasts (the reality for much of the past year) and should then at some point cyclically rebound. But when and by how much?
If the downside risks to inflation were to become outsized, with potential disappointment in closing the output gap (for instance through a further sizeable firming of the Rand, but not ignoring things like food price declines and disappointing job recovery), the SARB could still cut rates one more time by 0.5%, prime falling to 9.5%, possibly in May, thereby potentially also still fulfilling any non-technical considerations.
But if inflation risks remain balanced, the SARB may resist further rate cuts preferring to keep rates stable.
At some point in 2010-2011, the focus would shift to the upside risk potential, especially regarding oil and food, but also the Rand and the rate at which the output gap keeps narrowing as growth proceeds.
With actual inflation passing its lowest cyclical point later in 2010, by how much will it lift through 2011-2012 and how will this shape inflation expectation?
Though GDP growth may average 3% through 2012, this won’t be enough to close the output gap. Indeed outside of the public sector, job growth may remain disappointingly low and productivity gains high.
For as long as inflation is not seen as decisively breaking the 6% upper target boundary, this real sector condition may keep the SARB from raising rates early, indeed perhaps preferring to see the Rand weaken as global policy actions in 2011 start to strengthen the Dollar (but not necessarily as yet Euro and Sterling for structural reasons).
Any shock developments (pushing oil and food prices higher, Rand weaker) could push the SARB into pre-emptive mode, starting the tightening cycle. Once activated, inflation could disappoint by up to 2% (from target midpoint), potentially making SARB willing to match this with two to four 0.5% tightening moves during 2011-2012.
Given global policy projections (Fed starting tightening by 2H2011), commodity, Rand, domestic output and formal employment projections, SARB could remain on hold through mid-2011 or longer, but not certainly forever.
Shock developments would presumably prompt early responsiveness, possibly by early 2011.
All these considerations will be up for review every two months. Much is bound to happen between now and mid-2011 making the interest rate forecast a volatile and rapidly moving target.
Cees Bruggemans is Chief Economist of First National Bank. Register for his free e-mail articles on www.fnb.co.za/economics
13 April 2010
With interest rates now at historic lows, prime reaching 10%, the lowest since 1981, the main questions are whether the rate cycle has reached its lowest point, how long it could be moving sideways, and when and by how much it could be moving higher.
There is a technical and non-technical side to these questions.
The visible technical focus falls on actual inflation, the inflation forecast and inflation expectations, the risks governing these and the state of the economy and its rate of improvement.
Non-technical considerations are political in nature, mostly deep background, yet also presumable important.
The SARB gives the impression of being forward-looking (taking into account forecasts) but not necessarily always forward-acting (apparently often responding to the present, given the nature of risks it faces).
The SARB inflation forecast projects inflation within the 3%-6% target zone these next two years. As we move forward, the SARB’s two-year horizon also moves forward.
Private inflation forecasts vary regarding cyclical bottom (4%-5%) and subsequent trajectory (5%-7%).
The main upside drivers are public tariffs and oil. Downside drivers include imported global goods prices, food (initially), the Rand (initially) and the local output gap (initially).
Given the balance of risks (at present), the inflation rate could still head lower than consensus forecasts (the reality for much of the past year) and should then at some point cyclically rebound. But when and by how much?
If the downside risks to inflation were to become outsized, with potential disappointment in closing the output gap (for instance through a further sizeable firming of the Rand, but not ignoring things like food price declines and disappointing job recovery), the SARB could still cut rates one more time by 0.5%, prime falling to 9.5%, possibly in May, thereby potentially also still fulfilling any non-technical considerations.
But if inflation risks remain balanced, the SARB may resist further rate cuts preferring to keep rates stable.
At some point in 2010-2011, the focus would shift to the upside risk potential, especially regarding oil and food, but also the Rand and the rate at which the output gap keeps narrowing as growth proceeds.
With actual inflation passing its lowest cyclical point later in 2010, by how much will it lift through 2011-2012 and how will this shape inflation expectation?
Though GDP growth may average 3% through 2012, this won’t be enough to close the output gap. Indeed outside of the public sector, job growth may remain disappointingly low and productivity gains high.
For as long as inflation is not seen as decisively breaking the 6% upper target boundary, this real sector condition may keep the SARB from raising rates early, indeed perhaps preferring to see the Rand weaken as global policy actions in 2011 start to strengthen the Dollar (but not necessarily as yet Euro and Sterling for structural reasons).
Any shock developments (pushing oil and food prices higher, Rand weaker) could push the SARB into pre-emptive mode, starting the tightening cycle. Once activated, inflation could disappoint by up to 2% (from target midpoint), potentially making SARB willing to match this with two to four 0.5% tightening moves during 2011-2012.
Given global policy projections (Fed starting tightening by 2H2011), commodity, Rand, domestic output and formal employment projections, SARB could remain on hold through mid-2011 or longer, but not certainly forever.
Shock developments would presumably prompt early responsiveness, possibly by early 2011.
All these considerations will be up for review every two months. Much is bound to happen between now and mid-2011 making the interest rate forecast a volatile and rapidly moving target.
Cees Bruggemans is Chief Economist of First National Bank. Register for his free e-mail articles on www.fnb.co.za/economics
Tuesday, April 13, 2010
UK House prices in February rose by 1.9%
- House prices in February rose by 1.9% Page 4
The average price of all residential property transactions completed in England & Wales in February 2010 was 1.9% higher than in January. This is the tenth month in succession in which AcadHPI has increased on a monthly basis. This figure is at odds with other indices which show a fall, a point we explore later.
- Annual price increase is 9.7% Page 4
On an annual basis, in February, the average price of all residential property transactions in England & Wales was 9.7% higher than a year ago - a significant market recovery. It is the fourth consecutive month in which the annual rate of change in house prices is positive.
- January housing transactions fall by more than 50% from December levels Page 3
The housing market in England & Wales got off to a very slow start in January 2010 with an estimated 36,000 transactions in total. This is a fall of 52% from the December 2009 level of activity and is the second lowest level of sales in January in the last 16 years.
Dr Peter Williams, Chairman of Acadametrics, said
“The average price of a home rose again in February 2010 and, at £222,008, is back to where it was in April 2007, three years ago. The increase of 1.9% is the tenth in succession and a further step up from the previous month of January at 1.4%. Given that the two lender mortgage approval based indices for February showed falls of -1.0% and -1.5%, we have a clear tension as to what is really happening in the market. The AcadHPI for the latest month is forecast on a mix of data but, as prior months show, when more data becomes available is impressively stable and reliable. In seeking answers to the current divergence we would stress AcadHPI is a completion based measure, it covers England and Wales rather than the UK and it includes all properties sold including cash purchases and homes sold for over £1 million. All of these will be factors in explaining the difference.”
Click below to download the full document...
http://www.ipsinvest.com/News_196_UK_Property_Report_Grew_by_19_in_Feb_10.aspx
The average price of all residential property transactions completed in England & Wales in February 2010 was 1.9% higher than in January. This is the tenth month in succession in which AcadHPI has increased on a monthly basis. This figure is at odds with other indices which show a fall, a point we explore later.
- Annual price increase is 9.7% Page 4
On an annual basis, in February, the average price of all residential property transactions in England & Wales was 9.7% higher than a year ago - a significant market recovery. It is the fourth consecutive month in which the annual rate of change in house prices is positive.
- January housing transactions fall by more than 50% from December levels Page 3
The housing market in England & Wales got off to a very slow start in January 2010 with an estimated 36,000 transactions in total. This is a fall of 52% from the December 2009 level of activity and is the second lowest level of sales in January in the last 16 years.
Dr Peter Williams, Chairman of Acadametrics, said
“The average price of a home rose again in February 2010 and, at £222,008, is back to where it was in April 2007, three years ago. The increase of 1.9% is the tenth in succession and a further step up from the previous month of January at 1.4%. Given that the two lender mortgage approval based indices for February showed falls of -1.0% and -1.5%, we have a clear tension as to what is really happening in the market. The AcadHPI for the latest month is forecast on a mix of data but, as prior months show, when more data becomes available is impressively stable and reliable. In seeking answers to the current divergence we would stress AcadHPI is a completion based measure, it covers England and Wales rather than the UK and it includes all properties sold including cash purchases and homes sold for over £1 million. All of these will be factors in explaining the difference.”
Click below to download the full document...
http://www.ipsinvest.com/News_196_UK_Property_Report_Grew_by_19_in_Feb_10.aspx
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