|
Report from the UK |
|
House prices reach unseasonably strong levels
|
|
House prices were "unseasonably strong" in September
according to the Nationwide Building Society (NBS).
A NBS housing survey found prices rose 1.3% during
the month lifting the annual rate of growth to 8.2%.
The gain was the fastest annual growth rate since
February. Prices were 2.2% higher in the third
quarter of the year, compared with the previous
quarter.
Meanwhile, house builders Barratt Developments saw
its 14th year of growth despite a demanding first
half and increased competition in the marketplace.
Plumbing and building group Wolseley reported annual
profits up by 15.6%. Wolseley's UK revenues grew by
14.4% despite noticeable delays in government
spending on social housing. In contrast, furniture
group MFI sold its loss making retail business for a
nominal £1 and a £100 million as a dowry for the
group's name.
|
|
Window makers shift from PVCu to timber |
|
The TTJ reported an improving market for joinery
amid high energy costs and possibly higher interest
rates. The wooden window sector had seen an
improvement as a swing away from PVCu in favour of
timber became more apparent. However, selling prices
remained stubbornly level with little opportunity to
improve. The journal reported that the overall
consumption of hardwood in the
UK was £204 million while its imports reached
660,000 m3
in 2005.
The Confederation of British Industry (CBI) reported
a strong picture for manufacturing industry; with
companies' order books this month rising to their
highest level since December 2004 and export orders
also recovering. A balance of 14% of firms expected
that output would rise over the next three months,
but price expectations, which rose to their highest
level for 19 months in July, had edged lower. |
| |
| |
| |
|
|
Report from North America |
|
US housing sector shows mixed results |
|
Sales of existing homes fell less than expected in
August. Home re-sales slowed 0.5% to 6.3 million
units a year while the average price dropped 1.7% to
$225,000 from a year earlier, the biggest decline
since November 1990.
Privately-owned housing starts dropped 6% in August
to a seasonally adjusted annual rate of 1.77 million
units, according to the US Commerce Department. This
was 20% below the pace of a year ago. The decline
was due to a 5.9% reduction in the single-family
sector, which accounted for about 80% of the houses
built. The chart below shows that privately-owned
housing starts have plunged 27% since January this
year. Building permits (down 2.3% from July) and
housing completions (down 3.2%) also dropped in
August.
US housing starts (seasonally adjusted, 000 units) |
|
 |
|
In contrast, the sales of new homes unexpectedly
posted the biggest increase in five months, raising
hopes that the steep slide in the US housing
industry might be levelling off. Sales of new
single-family homes increased 4.1% to a seasonally
adjusted annual rate of 1.05 million units. However,
the average price fell to $237,000, down 1.3% from
August 2005. |
|
US expects levelling sales of existing homes |
|
According to the National Association of
Realtors, sales of existing homes in the USA
will level out in the months ahead, slowing the
frenzied pace earlier this year. The decline of
sales in the third quarter of 2006 was stronger than
expected and mirrored the slumping sales of new
houses. Surprisingly, this was not supported by the
still favourable economic fundamentals such as GDP
growth, job creation and interest rates. One
explanation could be found in the saturation of the
housing market due to the strong building boom in
2005 and the first half of 2006.
Psychological factors were also causing some US
buyers to remain on the sidelines, waiting for
prices to stabilize at a lower level. Furthermore,
consumer confidence was waning as it was generally
expected that the US economy would enter a less
favourable phase later this year and in 2007. |
| |
|
