New Housing Drop
New Housing Drop
Unfortunately we have to bring some depressing news (on the eve of budget day which could be a depressing day all round). In a report released this week by the Glenigan Index it has been reported that new construction projects have fallen by 41% in the three months to February 2011. The new results compare with the same period 12 months ago which is not great news for the housing market.
Spend some time whilst your online to Compare Home Insurance prices. See how much you can save when you view prices from over 100 companies.
Whilst the number does seem large it does include construction in all different categories. This includes industrial and commercial which may not be too much of a surprise. This news will not be happy reading to the many construction companies and construction workers alike who have suffered badly over the past few years.
Whilst the drop in commercial and industrial building construction may not be too much of a surprise many will be shocked by the residential slump. Firstly many companies are putting off building new commercial developments since the demand for property fell. This is also coupled with the recent change in how rates are paid on commercial buildings. Historically when building were empty landlords did not have to pay rates on their buildings, this was then changed so that rates were paid whether the building had a tenant or not.
This change hit large commercial landlords hard especially as companies started to downsize and in the worst cases went into liquidation. In many cases where an industrial building had been vacant for a period of time some landlords took the decision that it was cheaper to destroy the building rather than leave it erect.
As for residential property the drop is more of a shock, this because demand for housing is still high. Whilst construction stalls the market enters into another period of uncertainty. Potentially the fact that the majority of demand is for starter housing, returns in this sector may be much lower than producing high end developments.
The report also stated that civil engineering projects have fallen by two per cent which is in line with the reduction in house building. All other major builds such as hotel, and retail developments also saw a dip which is potentially for the same reasons as industrial and commercial.
It is clear that there is still a lack of confidence in the housing market, what is not clear is what the effect of this slump in building will have on the current housing market. IN a period where demand is high and supply is low prices would usually rise. However as many people are losing their jobs and many work in the construction sector, people cannot pay the prices that the properties demand.
Coupled with this it is still hard to obtain mortgages and with inflation rising there is much uncertainty where interest rates will be this time next year. Whilst there are some amazing mortgage deals on the market currently they are in the 75% loan to valuation market which cuts out nearly all first time buyers.
The effects of today's budget could also affect the house building over the next twelve months and it is not thought there will be many breaks in this report. Whilst its depressing news on the construction front make sure you are not paying to much and Compare Home Insurance prices.
Dummies' Guide to NYC Low Income Housing Dealing With Housing on Short Stays Importance and types of senior housing facilities Is Cohousing an Option for You? Who Says There is a Shortage in Housing Demand in the United States? Executive Temporary Housing needs to have an Excellent and a Purposeful Look Modern Benefits of Modern Housings Modern Benefits of Different Modern Housings Low-Income Housing Lost Short-term Housing: Which Consumers For Short Phrase Rentals? Modern Housings for the Average Filipino Fulfillment warehousing, response handling Federal Housing Authority (FHA)