House prices and jumping about as the local market re-adjusts to changes in supply and demand and the evolving finance market. This week here’s a brief snapshot of a selection of international markets: New Zealand, United Kingdom, Hong Kong, Singapore, Canada and the USA. Some of the trends look familiar however, markets do so some varied price movements. (Note: all values are local currency).
New Zealand prices recently set a new national price record of $562,000*, up 5% annually, driven by strong growth in areas like Tasman, where prices shot up 16.2% to hit $600,000 for the first time. However, Auckland prices continue to fall, down 1.3% from $862,800 to $852,000 in the year to May, sales volumes have also fallen. The NZ Real Estate Institute reports Northland sale prices up 6.7%, giving a median of $475,000, and Tasman up 16.2% to $612,000. Partly in response to high prices a ban has been placed on foreign residents buying homes in New Zealand hopefully to help arrest housing inflation and growing vacancy rates. These new rules are roughly in line with Australia’s which, prevent overseas residents from buying existing residential property.
United Kingdom (London)
House prices across Britain fell at their sharpest pace for six years in August. Nationwide, according to one of the UK’s biggest mortgage providers, prices fell by 0.5% between July and August, the biggest monthly fall since July 2012, with the average price was down to £214,745 in August. Annual price growth slowed, rising by 2% in the year to August, down from 2.5 % in July. The rate of house price growth has slowed since the summer of 2016. According to June figures from the Land Registry, London prices are falling at the fastest pace since 2009.
In Hong Kong house prices among major housing estates recorded a 5% decline in the current quarter, reversing a trend of double digits growth in the first half of 2018. The downward trend comes amid growing economic and financial headwinds across the region. Hong Kong prices have risen about 12.2% in the first half of the year and may have peaked for the immediate future. With prices cooling there has been a rush by developers to sell new apartments with prices matching the secondary market. Local banks are also expected to come under pressure to increase their prime lending rates next month, which may further dampen demand, while the growing fallout from the trade dispute between the US and China is also a worry for the market.
Singapore private residential house prices rose by 3.4% quarter-on-quarter in the June quarter, this follow a near eight-year high of 3.9% positive gain. Prices of non-landed properties (apartments) increased at a softer 3.2% rom 4.4% in the March quarter. The rices of landed property (detached homes and town houses) rose by 4.1%, compared to a 1.9% rise in the first quarter. Singapore based analysts are expecting a new peak in private home prices by the end of 2018 as developers deliver new projects built on land that was acquired at significantly higher prices.
Like Australia there are new and familiar headwinds facing Canada's homebuyers. These include tough new mortgage ‘stress tests’ and heavy foreign buyers' taxes, to rising interest rates. However, unlike local conditions here this haven't stopped house prices from returning to growth. The latest edition of a local Canadian house price index shows home prices have recovered from a slump that began in the middle of 2017, prices are now 2.9% higher than they were a year ago. Ten of the 11 cities measured by the index showed a rise in prices in June. However, prices are not expected to run-away as seasonally adjusted this would be the third-smallest June price rise in the past 14 years.
The median USA house value is currently $218,000 and values have gone up 8.0% over the past 12 months and they are predicted rise a further 6.8% within the next year. It’s also interesting to note that the median rent in the USA is $1,695/month. There is currently an acute shortage of affordable housing that is expected to continue over the next 12-months. After losing over a third of their value a decade ago, leading to the GFC, local US house prices have regained those losses. Robust labour markets have driven a pickup in economic activity and housing demand however, supply has not been able to keep pace, reducing affordability.