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Property price growth continuing to cool nationally

Property price growth has slowed nationally – with Dublin showing the most significant cooling off, new figures show.

The latest report from MyHome.ie found that annual asking price inflation fell to 2.4% nationally in the second quarter of the year – the lowest level it has been in five years.

In Dublin, that figure entered negative territory for the first time since 2013. It is down to -0.6%.

Despite the downward trend in the annual inflation rate, the report – which is published in association with Davy – found asking prices are continuing to rise, albeit at lower rates.

Asking prices nationally rose by 2.1% in the second quarter of this year when compared with the previous quarter.

In Dublin, prices rose by 0.5% in the same period, the weakest second-quarter gain since 2012.

Overall, the median asking price for new sales nationally was 276,000 euro, up 5,000 euro on the previous quarter, while the median asking price in Dublin was 382,000 euro, an increase of 2,000 euro.

Outside of Dublin, there was stronger growth, with prices increasing by 7,000 euro in the quarter to 231,000 euro.

Newly-listed properties are seen as the most reliable indicator of future price movements.

The author of the report, Conall MacCoille – chief economist at Davy, said that while the price falls may fuel fears of a more damaging downturn, the reason for the price falls this time round were as a result of increased regulation.

The Central Bank of Ireland tightened its mortgage lending rules last year.

“The current slowdown in price inflation is largely due to the Central Bank’s lending rules and stretched affordability,” he said.

“These factors are preventing the latent housing demand from translating into rampant house price inflation fuelled by rising leverage on mortgage loans.

“Ireland’s economy continues to perform well and the property market will continue to be underpinned by high employment and wage growth.

“While the economy has been driven by strong foreign direct investment, export growth and a slow rebound among indigenous companies, the recovery in home building is still in its infancy.”

Angela Keegan, managing director of MyHome.ie, said the fact that we are seeing more transactions, more properties on the market and more sustainable price increases were all positives for prospective buyers.

“The environment for buyers is becoming much more favourable, with 22,600 homes listed for sale in June 2019 on MyHome, up 4.5% on the same period of 2018,” Ms Keegan said.

“The improvement is especially marked in Dublin, with 5,400 homes listed for sale on MyHome – up 9% on last year.”

Source: iTV

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UK property market “resilient” as Brexit deadline nears

Property price growth, particularly in the north west of England, remains strong, highlighting the continued strength of the UK’s real estate sector even during times of wider economic changes.

Summary:

  • A shortage of supply continues to drive price growth in the UK property market, even as the country’s Brexit deadline nears
  • Average property prices in the UK have risen on a monthly, quarterly and annual basis for the first time since October 2018, with growth and demand from buyers highest in regions such as north west England
  • The performance underlines the enduring strength of the country’s real estate sector for both domestic and international investors

UK property continues to remain “resilient” in the face of wider economic developments relating to Brexit.

That’s the message from some of the country’s leading experts and agents, who point to rising prices and a supply to demand imbalance as proof of the sector’s enduring strength.

Nationally, the average property price in the UK rose by 2.8% in the 12 months to February 2019, according to the latest figures from Halifax. Prices also increased 5.9% month on month and 1.8% based on the previous quarter. This is the first-time average values have grown on a monthly, quarterly and annual basis for the first time since October 2018.

Commenting on the performance Russell Galley, Managing Director of Halifax, believes the growth is a result of a significant lack of supply of property across the country.

He also added: “People are still facing challenges in raising a deposit which means we continue to expect subdued price growth for the time being. However, the number of sales in January was right on the five-year average and, at over 100,000 for the fifth consecutive month, the overall resilience of the market is still evident.”

Analysts have noticed a trend among some domestic home buyers of adopting a ‘wait and see’ approach with regards to buying a property before the Brexit deadline on 29th March. But Dilpreet Bhagrath, Mortgage Expert at Trussle, advised buyers not to be put off, reminding them that “there are still good offers to be had in some areas of the country”.

Furthermore, Sam Mitchell, Chief Executive Officer of HouseSimple, reminded investors that regardless of the external considerations of Brexit, the UK property is an investment sector renowned for its stability, particularly during times of wider economic change.

He said: “Even with an acceptable exit deal in place, house prices are likely to face some heavy turbulence. But it’s nothing the property market can’t take in its stride.”

Mr Mitchell also advised investors not to focus their attention on London’s property market, pointing out that sales activity continues to be highest in key regions such as north-west England, home to cities such as Manchester.

“Far too much has been made of stalling price growth in the capital and the part Brexit has played, when in fact London was already showing signs of running out of steam. The danger is that stuttering house price growth in London sets the tone for the whole country,” he said.

 “And the strength of regional property markets in the north, buoyed by strong first-time buyer and investor numbers, is an encouraging sign that the performance of the UK’s housing market is not determined by what’s happening within the M25.”
Recent figures published by Savills showed that, between 2004 and 2018, it was those that bought UK property in 2009, in the immediate aftermath of the global financial recession, that made the highest returns when selling their properties last year.

With some investors hesitating, and with further fluctuations in the value of the pound expected in the coming weeks whilst the UK negotiates its withdrawal from the EU, those that make a move in the market now could achieve some of the highest returns on their investment in the coming years.

Source: Select Property

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Savings rates beat property price growth

Investing your money in a top savings account over the last year will have earned you more money in returns than the property market, new research has found.

Mutual insurer, Royal London, has discovered the best-buy interest rates were now higher than the annual average property price growth in England.

It came to the conclusion after analysing Land Registry figures, which showed the average home in England grew in value by 2.6% in the past 12 months to £247,430. Meanwhile, the best fixed-rate savings bond, as highlighted by analysts at Moneyfacts, was a seven year deal paying out 2.75% interest.

It means the best savings rate has performed better than the average UK property. Even the best easy access savings account, which currently pays 1.42%, would be enough to beat house price rises in the slowest regions of London and the South East, some areas of which have seen price declines.

Becky O’Connor, personal finance specialist at Royal London, said: “Savings rates have been offputtingly low over recent years, as a result of the rock bottom Bank of England base rate. However they have risen slightly as the base rate has increased.

“Coupled with a decline in the rate of house price growth, this trend has resulted in the most competitive savings accounts now paying more interest annually than property owners typically earned in the last 12 months.

“While it is still difficult to beat inflation with most savings rates on offer, if you live in London or the South East, it is now easy enough to beat the current rate of house price inflation with a savings account.”

Royal London pointed out its research was based on savings accounts with the very best rate on the market. It said the rate and term of a savings account could make a difference to returns you end up with.

Indeed, the returns on individual properties could also depend on a number of factors, including its location and whether it’s a main home or a buy-to-let.

Tax advantages

Royal London is urging savers and investors to remember the tax advantages of pensions and ISAs when planning where to place their cash for the long-term.

O’Connor added: “It’s important to remember that property or savings accounts are not the only things you can do with your money for long term financial returns. Saving into a pension comes with significant tax advantages and over the long term, the performance of stocks and shares investments tend to outperform cash.

“Money that goes into a pension benefits from tax breaks whilst money withdrawn from an ISA is tax free.”

Source: The Money Pages