Market Insight - Abroad
Feb 26, 2015
AMERICA - Solid home price growth in the US in last quarter of 2014
Home prices in the United States posted solid gains in the fourth quarter of 2014, with the majority of metro areas seeing a slightly stronger price growth.
This growth was propelled by tight housing supplies, low interest rates, and a strengthening job market, according to the latest quarterly report from the National Association of Realtors. It means that the national median existing single family home price was $208,700 in the fourth quarter, up 6% year on year and the median existing single family home price rose in 150 out of the 175 metro markets tracked, some 86%.
That marks a stronger price gain compared to the third quarter when 73% of the metro areas had posted increases. The data also shows that 24 areas, or 14%, saw double digit increases in the fourth quarter.
‘Home prices in metro areas throughout the country continue to show solid price growth, up 25 percent over the past three years on average,’ said Lawrence Yun, NAR’s chief economist.
‘This is good news for current home owners, but remains a challenge for buyers who are seeing home prices continue to outpace their wages. Low interest rates helped preserve affordability last quarter, but it’ll take stronger income gains and more housing supply to help meet the pent-up demand for buying,’ he explained.
‘Despite affordable housing conditions in most of the country, an upward pressure on home prices still persists in some metro areas, particularly in the West, where the current supply of new and existing homes for sale is failing to keep pace with overall demand and growing populations,’ Yun pointed out.
‘Unless home builders significantly boost construction, housing supply shortages could develop and lead to further price acceleration this spring,’ he added.
The most expensive housing markets in the fourth quarter were San Jose, California, where the median existing single family home price reached $855,000, followed by San Francisco at $742,900, Honolulu at $701,300, Anaheim-Santa Ana, California at $688,500 and San Diego at $493,100.
A regional breakdown shows that in the Northeast total existing home sales increased 2.5% in the fourth quarter and are 4.1% below the fourth quarter of 2013. Median existing single family home price was $246,300, up 2.2% from a year ago.
In the Midwest existing home sales fell 4.7% in the fourth quarter and are 0.6% below a year ago. Median existing single family home prices reached $162,000, a 6.2% jump from a year ago.
In the South existing home sales rose 2.7% in the fourth quarter and are 5.8% above the fourth quarter of 2013. The median existing single family home price reached $183,500, some 6.2% above a year earlier.
In the West existing home sales fell 6% in the fourth quarter and are 0.9% below a year ago. Median existing single family home price was $299,500, up 4.8% year on year.
REPUBLIC OF IRELAND - Irish house prices expected to continue rising in 2015
New mortgage rules and the recently announced quantitative easing programme will have a game changing impact on investor demand for residential property in Ireland, according to a new analysis.
The Irish Central Bank’s new mortgage rules will channel demand into the rented sector leading to further rental growth, according to John McCartney, director of research at Savills Dublin. He pointed out that this, and falling deposit yields due to quantitative easing, will attract investors despite the expiry of Capital Gains Tax Incentives last December. ‘By increasing the down payment that is needed to qualify for a mortgage, the Central Bank rules will inevitably lead to first time buyers spending longer in rented accommodation,’ he said.
There is a new breed of more professional, yield driven landlords flooding into the market. In fact this new generation of investors appears one of the biggest single group of buyers last year.
‘Prices outside Dublin have been rising at an accelerating rate for the last nine months. This is set to continue as demand is attracted into the commuter counties by more affordable prices and a greater supply of traditional family housing,’ added McCartney.
Many buyers are expats living in the UK now looking to take advantage of the value in the market in anticipation for their return home. In most cases, they are looking for homes in locations near to where they grew up so they can be close to family and friends again.
Source: Property Wire