The great western property price recovery

UK house prices posted their biggest year-on-year growth in more than two years in February as the market continued to improve according to Halifax, part of Lloyds Bank (parent of Ulster Bank).

Prices were 1.9% higher than a year earlier, the highest recorded since September 2010.

A number of UK studies have reported improvements to the housing market since the Government started the Funding for Lending Scheme.

Separately, a property price recovery in the US is even greater than that of the UK where home prices increased 9.7 percent in January from a year ago, up from an 8.3 percent increase in December and the biggest annual gain since April 2006.

Prices rose in all states except Delaware and Illinois and increased in 92 of the 100 largest metro areas, up from 87 in December.

Rising demand combined with fewer available homes is pushing up prices. Sales of previously owned homes ticked up in January after rising to their highest level in five years in 2012, according to the National Association of Realtors. At the same time, inventories of homes for sale fell to a 13-year low.

States with the biggest price gains were Arizona, where prices rose 20.1 percent, followed by Nevada, with 17.4 percent, and Idaho, with 14.9 percent. California and Hawaii rose 14.1 percent and 14 percent, respectively.

Cities with the biggest gains were Phoenix, Los Angeles, Riverside, Calif., New York, and Atlanta.

Across the US, home values are estimated to be down more than 26 percent from their peak in April 2006 through January. However, some states prices have recovered a lot of lost ground. In 15 states, home prices are estimated to be within 10 percent of their peak value.

Meanwhile, in Norway, authorities there are enacting new rules in attempt to dampen property price growth, which rose 8.5% in the last month alone. Concerned about a property price bubble and a repeat of a 1990’s collapse, where prices fell 40%, more stringent bank capital requirements are being put in place. Norway, along with Switzerland and Sweden are all battling property price growth, fuelled by record low borrowing costs.

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