Sales of Family Homes in London are Recovering

According to the latest quarterly report from Winkworth estate agents, sales of family houses in London are undergoing something of a revival, as sales appraisal figures increased by 7% year on year during the first quarter of 2012, and more homeowners are becoming interested in testing the market. The number of new sales instructions increased 20% year-on-year during the first quarter of 2012 compared to last year, and the number of new buyers registering at Winkworth offices increased by 12% in the first quarter compared to the same period in 2011.

The average asking price has declined slightly due to an increased number of properties for sale, and the average asking price for a greater London home is now £625,888. The luxury end of the market has been affected by measures recently announced during the budget, and the ending of the stamp duty holiday is expected to affect first-time buyers. 

There's also a growing shortage of attractive mortgage deals, but in spite of this the market for family homes is showing increasing signs of revival. Most people looking for a house in this category already own a property and have at least 20% equity, but simply need more space for a growing family. It’s estimated prices will remain stable in this sector, and the number of transactions will increase by around 5% to 10% this year.

However there are signs that the rental market within Greater London may have peaked, and there were around a third more properties available to rent during the first quarter of 2012 compared to the same period in 2011. At the moment average rental prices are £2,721 a month, but a decline in demand may put downward pressure on rental values during the coming months.

Foreclosure Figures Fall in the US

Foreclosure figures in the United States have declined slightly, and this trend is expected to continue as the spring season picks up pace. According to figures from CoreLogic, there were 65,000 completed foreclosures in February compared to 66,000 in February last year, and 71,000 in January 2012.

Since the financial crisis began in September 2008 there have been around 3.4 million completed foreclosures, with 862,000 completed in the 12 months up to February. Around 1.4 million homes were in foreclosure in February this year, compared to 1.5 million in February last year.

This equates to around 3.4% of all homes that still have a mortgage. The number of borrowers in foreclosure fell by 115,000 in February compared to February 2011, which is a decline of 7.6%.

With sales of previously owned homes up in February, and with the beginning of the spring buying season, estate agents expect the inventory to decline further.

During February more than 60 markets in the US saw foreclosure rates decrease compared to a year earlier. The combination of new jobs growth and continued low interest rates show the housing market is finally improving.

During the last 12 months those states with the highest numbers of completed foreclosures include Californian with 154,000, Florida with 87,000, Michigan with 64,000, Arizona with 63,000, and Texas with 58,000. Between them they accounted for 49.4% of all completed foreclosures within the United States.

The states with the highest foreclosure rates include Florida with 12%, New Jersey at 6.6%, Illinois at 5.4%, Nevada and 5%, and New York at 4.9%. Those states with the lowest foreclosure rates include Wyoming, North Dakota, Nebraska, Montana, and Alaska. Montana had highest foreclosure rate at just 1.4% while all the others were 1% or lower.

British Virgin Islands Feel Little Impact from the Global Economic Crisis

The British Virgin Islands have seen little impact on property prices from the global economic crisis as prices of luxury property have remained largely unchanged in recent years and are expected to continue to hold up well.

This is partially due to the nature of the market, as the British Virgin Islands consists of around 50 islands and islets, and due to strict planning regulations, there is a distinct lack of high-density development.

Around 60% of luxury homes are bought by European buyers, and there are also a considerable number of US buyers. During the latter half of 2011, some owners of luxury property revised their selling prices downwards, resulting in renewed interest from purchasers.

The British Virgin Islands is relatively well insulated against fluctuations in the market as most of the purchases are lifestyle driven, and the small size of the market has helped to keep prices high.

Most of the residents are wealthy, and it's a rarity for anyone to be forced to sell. As such most are prepared to wait for more favourable conditions before putting their homes on the market. Compared to neighbouring islands, where high-density residential resorts have struggled to sell during the past four years, the British Virgin Islands have suffered only slight price falls.

The islands attract high net worth individuals as they have a reputation as being a low tax jurisdiction, and residents aren't liable for death duties, capital gains, corporation, income, or wealth taxes. As always, waterfront property is the most attractive, and homes with private moorings are particularly sought after.

Japan's Property Market Set for a Boost from Echo Boomers

The property market in Japan is set to be boosted by so-called echo boomers, who are the children of baby boomers, many of whom are taking out their very first mortgages. It's the ideal time to do so as mortgage rates are nearly at a three-year low, and it is estimated around 15% of the population, or 19.1 million people are aged between 35 to 39, or 40 to 44. When these two groups are combined they give a population size that is double the post-war baby boom generation.

The boost to the economy can't come too soon, as the housing market accounts for around 15% of Japan's GDP, and the country is still struggling to recover from last year's earthquake. Unemployment is rising, as some companies are posting worse than expected results. Japanese buyers have some of the lowest financing costs in the world, as the Bank of Japan has held rates at near zero for the past 17 years.

Japan's housing starts rose 2.6% last year to reach 834,117 units and this has boosted mortgage sales for the first time since 2007. Mortgage sales increased 44% to reach ¥2.61 trillion last year, after the government introduced fixed rate mortgages.

New housing starts reached their third highest level in Japanese history in 1987 when baby boomers first became old enough to buy their homes. Homebuyers aged between 35 and their mid-40s represent a 44% share of the market, and the Japanese really are a nation of homeowners, as around 86% own their own home.

New Zealand Government Introduces New Bill to Ban Foreign Companies from Buying Rural Land

The New Zealand government is looking at introducing a new bill into Parliament which would prevent foreign companies from buying up rural land, and is due to controversy over Chinese companies trying to purchase lucrative dairy farms on the North Island.

The Chinese company, Shanghai Pengxin had put in a bid to purchase 16 dairy farms in Crafar on the North Island, and this bid had already received approval from the government before being overturned in the High Court. The bid was overturned as the High Court felt any potential benefits must be measured against an alternative buyer.

Labour leader David Shearer wants the law to be changed so governments reject any foreign bids to purchase New Zealand farms unless the bid would result in more exports, and more new jobs being formed than from a New Zealand bid.

Such a law would mean most bids to buy New Zealand land would be turned down, and only those implementing new technologies or introducing new products would be allowed. Although the government already has the power to turn down sales of farms to overseas buyers the Labour leader doesn't think it is being properly implemented, and that most sales result in profits flowing out of the country.

Selling farms to overseas buyers is also likely to raise the price out of reach of native farmers which would be very detrimental to the country.

At the moment any decision by the Overseas Investment Office to sell property to foreigners has to be approved by two government ministers who are able to decide which factors are relevant to the sale. If the new bill is made law it will be much stricter.

New Report Finds Nearly One Quarter of US Homes Are in Negative Equity

A new report from CoreLogic says that 22.8%, or 11.1 million homes in the US were in negative equity by the end of the fourth quarter last year. This is an increase on the third quarter when 22.1%, or 10.7 million homes were in negative equity. Another 2.5 million homeowners had less than 5% equity during the fourth quarter, which is known as near negative equity.

This means the total percentage of homes in negative or near negative equity was 27.8% during the fourth quarter, up from 27.1% in the third quarter of 2011. The total debt for these properties in negative or near negative equity rose from $2.7 trillion in the third quarter to reach $2.8 trillion by the end of the fourth quarter.

The report found that Nevada had the highest percentage of homeowners in negative equity, with 61% of all mortgage properties falling into this category. The second worst state was Arizona with 48% of properties in negative equity, followed by Florida with 44%, Michigan with 35%, and Georgia with 33%.

When combined these five states have an average negative equity percentage of 44.3%, while the combined average of the remaining states is just 15.3%. The majority of homes in negative equity are at the lower end of the market and are valued at less than $200,000. Although these figures are affected by seasonal declines, it's expected this situation will take quite some time to improve. If the economic recovery falters it could mean an increase in the number of foreclosures.

Property Prices in the East End Have Increased by £800 a Month since July 2005

In July 2005 London was awarded the Olympic Games, and now with just five months ago Lloyds TSB has revealed that house prices in the area around the main site have increased by around 30% since London's successful bid.

The average home cost £268,884 last November which is an increase of £62,739 since July 2005, equating to a very nice average monthly rise of £815. In comparison homes in England and Wales have risen by 25% during the same period, which equates to a monthly increase of £611.

Prices in eight out of the 14 postal districts closest to the Olympic Park have increased by at least 20% since July 2005, with Dalston and Homerton seeing the fastest price growth as each have recorded average increases of around 55% for that time period. Shoreditch came a close second with properties increasing by an average of 47% while in comparison Stratford which is the closest to Olympic construction activity has seen prices increased by just 13%, to reach an average of £227,893.

Prices in London have increased by an average of 5.4% during the last 12 months, and just two of the postal districts closest to the Olympic sites have exceeded this increase. Prices in Dalston increased by 10.3%, while prices in Clapton rose by 7.1%, but prices in Bethnal Green fell by an average of 5.2%. In spite of the massive increases seen over the last few years the typical house price in postal areas closest to the Olympic sites is still 22% below the London average of £342,551.

The most affordable homes can be found in Plaistow where the average house costs £188,760, which is 45% below the average London price. In contrast homes in Dalston cost £359,436, and it is the most expensive site closest to the Olympics.