UK advertised rental prices stable but London sees first rise for four months

London saw average advertised residential property rents increase for the first time in four months, up by 0.26% between week two and week four in April, new data shows. The average advertised rental price stands at around £2,182 per month in the capital with further improvements expected, says the report from Move with Us.

The firm says that increases in the London rental market are significant as it is a key determinant of the national average and has recently performed poorly. Average advertised rents in the UK currently stand at around £966 per month, following a 0.49% fall in April. However, the data shows that last month was the fourth month of relative stability in the rental market with rents changing by no more than 1% between December 2012 and April 2013. This stability is also reflected regionally with average advertised rents changing by less than 1% in all but two regions.

The North East and East Anglia saw advertised rents increase with East Anglia continuing on a steady path of price growth with an increase of 0.13%. The North East, on the other hand, appears to have recovered from a four month fall in rents with a 2.02% increase in the latter part of April. The total increase for the month in the region was 0.16%, as prices fell by 1.86% in the first two weeks.

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Most regions saw average rental prices fall this month though the majority of these decreases were less than 1%. Wales saw the most significant decline with the average price falling by £22 in April to £638 per month. Average advertised rents also reported falls of 1.51% in the East Midlands reaching a low of £623 per month. In both regions these decreases continue a sustained trend of falling prices that started in December 2012.

Overall, it appears that average advertised rents in Great Britain will continue to fall, though a possible recovery in the London rental market could push average rents up in the coming months. ‘Overall, average advertised rents have not changed by a large amount. However, there are several regions such as Greater London and East Anglia that could potentially see continued upward changes in advertised rental prices by the end of the quarter,’ said Robin King, director of Move with Us.

‘However, recent data has demonstrated that the residential sales market is improving and media reports show that mortgages are more readily available which is likely to be bolstered by the government’s new Help to Buy scheme. These factors mean it is likely we will see an adjustment in the rental market and a move away from renting as purchasing property becomes more accessible,’ he added.

Property sales edge up in Canada with prices steady

Residential property sales in Canada edged up last month while prices remained steady, according to statistics from the Canadian Real Estate Association. Sales increased by 0.6% in April, month on month and in more than half of all local markets led by gains in Greater Toronto, Winnipeg, Calgary, and Victoria.

Actual, not seasonally adjusted, activity came in 3.1% below levels reported in April 2012, with transactions down on a year on year basis in about 60% of local markets. That compares to a decline of more than 15% in March, with transactions down in more than 90% of all local markets. ‘The Easter holiday and an extra full weekend at the end of the month lowered March sales activity and the absence of these factors in April helped sales for the month,’ said Gregory Klump, CREA’s chief economist.

Since changes to mortgage rules made in 2012 took effect, national sales have been running 9 to 10% below levels posted in the first half of 2012 but they’ve been remarkably steady, according to the data. ‘April activity was on par with where it stood last August, and month to month changes since then have held to within a range of plus or minus 2%,’ added Klump. Monthly changes in national sales activity have held to within this narrow range over a nine month period only once before since CREA’s seasonally adjusted data began in 1988.

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The number of newly listed homes fell 0.9% month on month in April. New listings were down in about half of all local markets, led by Montreal and much of rural Quebec, as well as Ottawa and Greater Vancouver. With sales edging up and new listings edging down, the national sales to new listings ratio inched up to 50.4% in April compared to 49.7% in March. This measure has held fairly steady around this level for the past nine months.

The actual, not seasonally adjusted, national average price for homes sold in April 2013 was $380,588, representing an increase of 1.3% from the same month last year. CREA said that fewer sales compared to a year ago levels in Greater Vancouver and Greater Toronto continued to exert a gravitational pull on the national average sale price. The Aggregate Composite MLs House Price Index rose 2.2% on a year on year basis in April, the eleventh consecutive month in which the year on year gain diminished and the slowest growth rate in more than two years.

Year on year price gains decelerated for all benchmark property types tracked by the index with the exception of apartment units in April, with the latter rising by less than inflation. Price growth remained strongest for one storey single family homes, up 3.1% followed by two storey single family homes up 2.6%, town houses up 1.7% and apartments up 1%.

Australia proving popular in overseas property search charts

Australia is proving popular among British people searching online for overseas property, moving up to fourth place in the latest Rightmove Overseas chart. There has also been increased interest in property in Asia with India and Thailand also seeing increased activity but it is Istra in Croatia that is the month’s big news with search activity rising by 103.72%.

The monthly report from the firm also shows that despite property prices being at rock bottom, people are showing less interest in Cyprus, with searches dropping 21.22%, showing that the Mediterranean island’s banking crisis could be putting people off. However, another country that has been through the financial wringer, Ireland, is proving popular again and is now the seventh most popular overseas destination.

While Australia moved up two places to fourth place, both Italy and Portugal have seen less interest and dropped down the chart. Overall some 52.72% of locations experienced a rise in search activity in March while 47.2% of locations fell in search activity and 0.08% of locations stayed the same.

‘There has been a significant increase in searches for long haul destinations, particularly Australia, India and Thailand,’ said Shameem Golamy, head of Rightmove Overseas. ‘Whilst traditionally, people don’t tend to emigrate over the summer months, property prices further afield are attracting the buyers looking for a bargain. Cyprus has continued to drop and it’s likely this is due to the economic problems they continue to face,’ he explained. ‘Interestingly, Ireland has replaced Cyprus as the seventh most popular destination which suggests people are still swayed by the cheap flights and the cost of property,’ he added.

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Overseas buyers continue to experience challenges when it comes to currency exchange when buying abroad and Charles Purdy, managing director of Smart Currency Exchange said that sterling has benefited recently. He said that it is not a great surprise that searches for Cyprus have fallen given the extent of the problems the country is facing but the firm still has clients who are completing on their properties on the island.

‘The key seems to be to keep your surplus cash in the UK until matters become more certain, and I am sure there will be some great bargains to be had in the coming months,’ he added. ‘A lot of clients have taken advantage of a strengthening sterling with it pushing above €1.18/£1 and US$1.55/£1. In less than a month and for each £100,000 you were spending you could have been £2,500 better off. This just highlights how important managing your currency exchange is in these difficult times,’ he explained.

Why are foreign investors flocking to the Miami property market?

Strong demand and limited supply continue to strengthen the residential property market in Miami which is one of the most popular locations in the United States for overseas buyers. Affordable prices coupled with the sunshine lifestyle and local amenities are adding to the attraction for buyers from around the country and abroad, according to Natascha Tello, chairman of the board of the Miami Association of Realtors.

‘The Miami real estate market is experiencing significant strengthening as we continue to see greater demand than supply. While this trend continues to fuel double digit price appreciation, countywide prices remain at 2003 levels, which makes our properties affordable compared to many markets in the US and even to other world class cities on a global level,’ she said. ‘Miami prices coupled with the local lifestyle and amenities are attracting both US and international buyers and investors,’ added Tello.

The Miami-Dade County residential real estate market again experienced significant strengthening in the first quarter of 2013 with prices and sales continuing to rise. The median sales price for condominiums in Miami-Dade County was $162,000, an increase of 24.6% year on year and a 4.5% rise month on month. The median sales price for single family homes rose 17.5% to $205,650 in the first quarter compared to the first quarter of 2012. Year on year, the average sales prices for single family homes and condominiums increased 14.8% to $364,991 and 20.2% to $307,934, respectively.

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When the price is right properties are selling rapidly. ‘The Miami real estate market is increasingly becoming more attractive for sellers. Strong demand is resulting in multiple offers even above the asking price, and we are seeing greater increases for sales in the higher price points, while inventory in the lower price points has greatly declined. This reflects the fact that limited supply is hampering sales for more affordable properties,’ said Fernando Martinez, residential president of the Miami Association of Realtors.

The latest data also shows that total housing inventory in Miami-Dade County decreased another 5% year on year – first quarter active listings totalled 13,067. At the current sales pace, this reflects 5.1 months of inventory for single family homes and 5.9 for condominiums. Following two consecutive record breaking years, sales in Miami continue to increase despite an inventory shortage. They increased overall by 4.6% in the first three months of 2013 compared to a year earlier. In the first quarter, Miami sales of existing single family homes increased 10% compared to a year earlier. The sales of existing condominiums increased 2% compared to the first quarter of 2012.

In the first quarter, 65% of all closed sales were all cash compared to 66% a year ago. All cash sales were 47.9% of single family home closings and 76.9% of all condominium sales. Since nearly 90% of foreign buyers pay cash, this reflects Miami’s position as a top market for foreign buyers, according to the Association.

Australian house price growth falls in many capital cities in first quarter of 2013

House price growth in Australia’s capital cities stagnated in the first quarter of 2013, up 0.1% overall but prices fell in eight cities, according to figures from the Housing Industry Association (HIA). Across capital cities the established house price index rose by 0.2% in Melbourne, 1.2% in Perth, 1.9% in Darwin and 0.2% in Canberra. Prices fell by 0.3% in Brisbane, by 0.1% in Adelaide and by 0.3% in Hobart. Established house prices in Sydney were unchanged over the March 2013 quarter.

The price of new homes is also falling. The new house price index fell by 1% in Sydney, by 5.2% in Melbourne, by 1.3% in Perth, by 0.1% in Hobart, by 1.3% in Darwin and by 0.1% in Canberra. Project house prices fell by 0.6% in Brisbane and by 0.1% in Adelaide. ‘These figures present a weak update for the housing industry. It confirms our long held position that any recovery that is underway in the housing market is a delicate one,’ said HIA senior economist, Shane Garrett.

‘The robust price growth we saw at the end of 2012 has petered out and once again the market will have to struggle to regain momentum. Mortgage lenders as well as the Reserve Bank need to step up to the plate in terms of interest rates at this time,’ he explained. ‘Rising house prices, providing they occur at a manageable pace, play a key role in bolstering household confidence. A sustained return to manageable price growth will lead to a multitude of knock on benefits across the wider economy. The importance of a strong housing market should not be underestimated,’ he added.

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The HIS is also highlighting that not enough homes are being built in Australia. ‘We are currently building 25,000 homes less than we were 10 years ago, and last year built around 10% under average over the past decade. With the population exceeding 23 million in recent weeks, the logical question is where will the growing population live?,’ said HIA managing director Shane Goodwin.

‘There has been significant policy focus on health and education as part of the election debate, and this is a good thing, but basic shelter is the bedrock on which all other aspects of our lives are built. Housing must be given a higher priority by the major parties to reflect the social and economic importance it has in our lives,’ he added.

The HIIA argues that new home building is being choked by red tape, an inflexible industrial relations system and a disproportionate level of taxation. ‘We are therefore encouraging anyone with an interest in improving housing affordability and protecting the one million plus jobs in building construction to join us in urging the future government to make housing policy a priority,’ said Goodwin.