UK house prices fall nearly 2% in March

Posted on April 8, 2009 by peter 
Filed under UK Real Estate News · Tagged: ,

UK house prices fell by 1.9% in March compared with the previous month, according to data provided by the Halifax.

The Halifax (now part of Lloyds Banking Group) – said that conditions in the housing market would remain tough for the rest of the year.

The average UK home now costs £157,226, at least £30,000 less than a year ago.

The figures failed to echo the slight rise in prices in March reported by the Nationwide, with the Halifax saying that consumer confidence was still low.

house_pricesThe annual rate of decline eased slightly, with prices down 17.5% in March compared with a record drop of 17.7% in February.

This annual figure is based on a three-month by three-month comparison. When comparing the average price from March compared with March 2008, the drop was 17.6%.

“Conditions in the housing market are likely to be tough during the remainder of 2009 despite the improvements in affordability,” said Halifax housing economist Martin Ellis.

He said that rising unemployment, low consumer confidence and the squeeze on mortgage finance were all likely to exert “downward pressure” on the market over the coming months.

The month-on-month change is in contrast to the “surprise bounce” of 0.9% in March reported by the Nationwide Building Society.

But, on Thursday, the Nationwide warned against reading too much into its short-term price rise figure, saying that it was too early to suggest the bottom of the market had been reached.

The less volatile three-month on three-month measure by the Nationwide showed that the average UK property price dropped by 4.2% in the first three months of 2009 compared with the last quarter of 2008.

This was actually more gloomy for homeowners than the Halifax’s view, which suggested prices had fallen by 2.7% over the same period, a much smaller decrease than the 5% to 6% falls it recorded in each of the three previous quarters.

Mr Ellis said that, based on more mortgages being approved by banks and building societies recently, there were “tentative signs that activity may be beginning to stabilise”.

Homes were more affordable now that at any time since early 2003, having been at its toughest in July 2007, and existing mortgage-holders were benefitting from falling interest rates.

The amount that the average existing mortgage borrower was devoting to home loan repayments fell from a peak of 26.9% of household income in October 2008 to 22.6% in February 2009, he said.

David Smith, senior partner at Dreweatt Neate estate agents, said: “The March Halifax figures are proof positive that you can’t get carried away by a single set of figures from a single source.

“There is an inherent volatility to house prices right now and because of this a sideways-moving market, with the odd spike up or down, remains the most likely course for the rest of 2009.”

Interest rate cut not passed on in full by the big 4 banks

Posted on April 8, 2009 by peter 
Filed under Australia Mortgage and Finance News · Tagged: , ,

Australia: Following the reserve banks decision to cut the cash rate by25 basis points (0.25%) yesterday, the big 4 banks of Australia have decided not to pass on the full rate cut to borrowers – a decision which has angered federal and state governments, not to mention, consumers.

Westpac, along with the ANZ, has cut its standard variable home loan rate by 10 basis points (0.10%), in line with a similar move by the Commonwealth Bank of Australia.

interest_rateWestpac is the last of the Big Four banks to respond to the Reserve Bank’s rate reduction yesterday.

National Australia Bank, stands alone out of the big 4, with it’s decision to not pass on any of the cut to it’s borrowers – leaving its standard variable home loan rate unchanged.

From April 20th, Westpac will charge 5.81% on their standard variable loan. ANZ will have the same rate, effective from April 17.

”Westpac continues to manage the challenging funding conditions with careful consideration of the deteriorating economic environment and the impact on our customers,” Westpac Group Executive, Retail and Business Banking, Peter Hanlon said.

Yesterday, CBA said it would cut its standard variable mortgage rate by 10 basis points to 5.64%, effective April 17.

National Australian Bank has said it would not cut rates because of the high cost of wholesale funding. Its variable rate stays at 5.74%.

The big four have resisted calls from Treasurer Wayne Swan for them to pass the 25 basis-point cut on to customers. Banks that don’t pass on the interest rate cut need “a good kick up the bum”, according to Federal Treasurer – Wayne Swan.

Victoria State Premier John Brumby added his voice to calls for the big banks to pass on cuts in interest rates to borrowers today, saying, “The banks need to do this, there needs to be more competition in the market, and I’m quite disappointed these reductions haven’t been passed on,”.

Prime Minister Kevin Rudd also urged banks to reconsider their decisions.

Moving the lending rate from 5.91% to 5.81% knocks $21 off the average monthly repayment on a $350,000 mortgage over 25 years.

Financial confidence shores up property prices

Posted on April 4, 2009 by peter 
Filed under Australia Mortgage and Finance News · Tagged: ,

A G20-inspired wave of optimism has swept the world, boosting stock markets and reducing the chance of property prices dropping further.

World leaders agreed to inject $1.58 trillion into the global economy in a historic deal to kick-start growth and save jobs.

The leaders of the world’s top 20 economies, including Prime Minister Kevin Rudd, announced the deal at the end of their London summit.

The Real Estate Institute of Victoria welcomed the announcement, saying the spending would help put a floor under property prices. “The property market will benefit from any improvement in economic conditions, particularly if it results in economic growth,” chief executive Enzo Raimondo said.

Chief economist at AMP Capital Investors, Shane Oliver, said the G20 announcement had helped to push the stock market higher for a fourth week.

“While it’s too early to say shares have bottomed, there are certainly positive signs. Further gains are likely over the next few months,” he said.

Mr Rudd called it a concrete plan to beat the effects of the global recession set off by the collapse of banks in the US.

“It’s been prime ministers and presidents who have struck this deal, but it’s small businesses, tradies and young people who will benefit from it over time,” he said.

Mr Rudd said the G20 deal cracked down on “cowboys” who had brought global markets undone. Treasurer Wayne Swan added: “Any measure globally which supports growth and jobs assists the stimulus the Australian Government has put in place to support that.”

$173 million for new affordable housing in Victoria

Posted on April 4, 2009 by peter 
Filed under Australia Real Estate News · Tagged:

VICTORIA will get $173 million to build new affordable housing for families in need, the Federal Government announced today.

Federal Housing Minister Jenny Macklin said the investment was part of phase one of the $6.4 billion social housing component of the government’s Nation Building and Economic Stimulus Plan. Some $692 million has been distributed nationally.

“Working with the Victorian government, we have committed to deliver 667 new social housing dwellings across the state by July next year,” Ms Macklin said.

“Not only does this mean new homes for families, it will also support jobs in the construction industry, including apprenticeships.”

Victorian Housing Minister Richard Wynne said the new homes would deliver benefits to those Victorians in need.

“This boost from the stimulus package will help create or secure more than 3,000 new jobs as well as providing more affordable housing for the Victorian community,” he said.

“We’re looking to make housing more affordable for low and middle income earners by building new homes across metropolitan Melbourne and Victoria’s regional centres.”

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