first of fall let us understand economic growth then we move to house price in the UK.
Economic growth is a rise in economic goods and services output relative to a period. It can be measured in terms of nominal and actual (inflation-adjusted). In terms of gross national product (GNP) or gross domestic product (GDP), aggregate economic growth is traditionally measured, although alternative metrics are sometimes used.
The property price coming to the market at this time of year usually experiences an autumn bounce, with an average increase of 1.6 percent over the last ten years in October. This year saw a slower monthly increase of just 0.6 percent (+ £ 1.942), the lowest since October 2008 at this time of year. With a slowdown in the number of properties coming to market, down by 13.5 percent compared to this time last year, there are strong indications that the combination of silent pricing power and short-term political uncertainty is dissuading many prospective sellers. Buyers, on the other hand, seem undeterred, with the number of sales agreed year-on-year being little changed, down by just 0.5%.
The weekly run-rate for property to be launched in October (the average number of new listings per week) is 24,539, the lowest total since October 2009 at this time of year. This is down on the same period a year ago by 13.5 percent. Potential buyers may be dissuaded by the lack of price momentum, with not only a modest monthly price increase of 0.6 percent but also an average new seller asking for 0.2 percent lower prices than last year this time. While the number of purchasers has so far held up well, the lack of new property listings that are now on the market may reduce the number of purchases due to under offer.
Key factors which affect property prices and how they are determined.
1. Supply and demand
Simply put, when demand for houses increases faster than supply, house prices will rise. The market needs to fall to lower house prices.
2. Interest rates
Typically, mortgage lenders increase the cost of adjustable mortgage payments as interest rates rise. In turn, these higher interest rates make home purchases less attractive. Since most homeowners have variable mortgages, even a small change in interest rates can have a major impact on house buying affordability.
3. Economic growth
As the economy is growing and wages are rising, more people can afford to buy a home, this rise in overall demand, which increases prices. Look at the number.
When migration levels rise, so does the population, and more people mean household demand. Changes in demographics are another factor; for instance, increasing divorce rates have increased the number of single people living alone, and our old friend’s demand is again a concern.
5. Location, location, location
It’s an obvious one. Homes closer to the beach, closer to the CBD or closer to transportation tend to sell at higher prices.
Australia is a vast and varied country, but if you look at any map you will see a high concentration of accommodation around the city centers. Many people want to live close to where they work, shop and go out to enjoy themselves, and this inevitably causes a higher demand for property prices in these areas.
6. Space to travel
Growth potential is a key issue in determining a property’s value. It applies to the possibility of adding to a second floor, increasing the number of apartments, or building space above a garage or garden. It will increase the value of the floor area. In determining house prices, this relates to the value of the location and land size.
7. A second bathroom
If in the same street there were two similar properties for sale, the one with the additional bathroom will sell for more. It’s easy. The bathroom value, however, is directly related to the number of rooms in the property. For example, it would be less attractive to have a second bathroom in a two-bedroom house than a five-bedroom house.
We also know that parking in our big cities is at a premium, so if a home has a parking lot or even a garage, this can increase a home’s value substantially.
9. Home improvements
Upgrading kitchens, replacing floors, repainting walls and adding landscaping may add to a home’s value. Nonetheless, homeowners still spend too much and once they sell the house, they don’t get the return on investment. Before making drastic changes to your house, be sure to talk to your real estate agent to make wise use of your resources on your property.