Daily Management Review

UK Home Prices Touch Record High while US Home Sale Drops


UK Home Prices Touch Record High while US Home Sale Drops
The average asking price of UK homes was up by 0.9% to reach £294,834 in the month of September noting a record high for the industry.  

This was noted in the Rightmove House Price Index released on Monday which attributed the demand to cheap borrowings even in the wake of limited supply created by some home-owners’ reluctance to move.
September prices beat the previous high of £294,542 which was noted in July of this year.
The record rise in prices of £2,550 between the months of August and September is the steepest rise since 2002 even as market analysts said that historically there should still be a holiday-season pause.
While owners of first-time-buyer properties have seen prices stall down by 1.1%, the September price hike has been driven by a price jump in family-home sectors - up by 1.2%.
The average asking price for house in the Greater London area in September was up by more than £11,000 since August this year. In September the average asking price was £620,003, up from £606,826 in August.
While City of Westminster is the second most expensive borough to buy in with an average price of £1,878,256, houses in Kensington and Chelsea are selling on average for £2,326,857
Surrey was the most expensive county to live in at an average of £545,841 while the second spot was bagged by Oxfordshire at £437,042.
While borrowing is historically cheap and positive sentiment is aided by the ongoing postponement of rate rises from these six-year lows, the prices are at an all-time high, Rightmove director and housing market analyst Miles Shipside said.
“Demand from those who can afford to buy remains high, and suitable supply remains tight, with the number of properties coming to market down 6% on the same period in 2014. The result is the biggest monthly price rise seen at this time of year for 13 years.”

Shipside said high demand, lack of suitable supply and increasingly stretched affordability are leading to some extremes in market forces in different sectors and parts of the country,” said Shipside.
“One of the effects is that those who own property that is in most demand, either by type or location, are seeing their values continue to rise. Their properties are rich in features and benefits that others want to buy, and as a consequence they are getting proportionately richer than either owners of less desirable homes or those who are not on the housing ladder at all,” he added.
On the other hand, while in recent time, the US housing market had looked to be on somewhat stronger footing, the U.S. home resales fell more than expected in August.

This is being viewed as a sign of caution by experts.

Existing home sales dropped 4.8 percent to an annual rate of 5.31 million units, said the National Association of Realtors on Monday.

The August decline could a fall out of rising prices shutting out potential buyers said Lawrence Yun, the NAR's chief economist is of the view that. He added that America's South and West areas which had recently seen the fastest price gains were the worst hit in terms of fall in home sales.

Even though the median home price for August was 4.7% more on a y-o-y basis, nationwide, it fell slightly to $228,700. In the Western part of the country however, the prices were up by 7.1 percent compared to prices a year earlier.

(Sources:www.reuters.com & www.digitallook.com)