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While our economy has only grown by 2% over the last year, this is a reasonable result when compared to many other economies. Our export commodity prices have risen, interest rates look to remain low and our government debt is low.

“Overall, during a time of major worries overseas, we are looking good” stated the BNZ Chief Economist in November.

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Tony Alexander provides his recommendations in relation to borrowing in the current market:

“I would fix for two years at 5.4% with some of my mortgage left at the floating rate of 5.74%.

I would do this because the two year fixed rate is nicely below the floating rate.

The chances of the floating rate falling near 0.4% in the next few months to reach the current two year rate are fairly slim – unless the world economy collapses or the NZD shoots soon to US 90 cents.”

– Tony Alexander, BNZ Chief Economist

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A simple dynamic for our continuing strong housing market is that we have a shortage of housing (largely Auckland). The shortage is exacerbated by lack of construction of new homes and funding for developers. At the moment, the buzz word is Auckland but with people trading stories of being out-bid at auctions, investors are looking outside Auckland.

As low yields from other investments continue, more investors are looking for property. We are in early days of this property cycle, but watch for the retirees cashing up in Auckland and retiring in Tauranga, Whangarei, Taupo and Hawkes Bay.

Expectations are higher among property investors that average rents will increase over the next five years by 6% to 10% therefore, most investors are looking to ‘hold’ their properties and grow their portfolios.
– Craig Moffat, ANZ Regional Manager

Many new investors are entering the market and looking outside central Auckland so they can obtain the yields the need, when they are highly leveraged, areas like Papakura, Rotorua, New Plymouth and Invercargill.

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The outlook by a leading economist is that there will be no change in interest rates until 2014. What influences our interest rates is a list too long to print, however, some of the key influencing factors are: how high the NZD goes, will it go higher?

Other factors influencing interest rates are the uncertainty whether the euro will hold together; America tightening fiscal policies, currently proposed that it will tighten GDP by 4% which will significantly slow their economic recovery. Other influences are our major trading partners’ economies; with the potential slowdown in China’s economic growth and Australian economic outlook appearing to flatten. These factors contributed to the Reserve Bank reviewing the official cash rate in September and it remains unchanged at 2.5%.

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New listings rose during September with an increase of 7.6% on August but up only 0.3 when compared to September last year. The early spring property market continues to show signs of confidence and heightened activity. Confidence amongst sellers bringing their properties onto the market stabilised in September, with the truncated mean asking price steadying at $429,312.

Asking prices expectations were strong across the country up 0.9% compared to a year ago.

Inventory levels across the country remain low, and the market remains a firm sellers’ market across 15 of NZ’s 19 regions, and overall stocks of unsold houses fell slightly to 30.5 weeks of inventory (long term average = 40 weeks). Auckland is the most affected by low inventory levels, with stocks of unsold houses falling to a new low of 17.4 weeks of inventory, well below the long-term average of 32 weeks. The national mean asking price expectation among sellers fell slightly in September by 0.3% to $429,312.

Regionally: In the main centres, both Wellington and Canterbury saw increases in September, with Wellington increasing 3% to $447,388. The asking price in Auckland witnessed a slight fall in September (down 1.8% to $574,798).

In total, ten regions reported asking price increases, and four regions saw rises greater than 5%. The most significant rises were seen in the Coromandel, Central North Island, Taranaki, West Coast and Nelson regions, with Nelson showing the largest increases, up 10% to $455,705.

Of the nine regions witnessing asking price falls on a seasonally adjusted basis, there was just one reporting a fall greater than 5% with Manawatu / Wanganui seeing a fall of 7.4%.

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The advantage of a ratelock is that it gives you the option to ‘lock in’ a fixed home loan interest rate for a period — typically up to 60 days — to protect you against interest rate increases.
To enter a ratelock agreement you will need to have a confirmed settlement date, the exact loan amount, and an agreed interest rate (floating rates by their nature are variable and cannot be locked in).
Over the past few months the media has been advising people to negotiate home loan interest rates with their lender. However, unless you have a ratelock agreement in place, your newly negotiated interest rate isn’t necessarily guaranteed to apply on settlement day (or home loan roll-over, for those with existing facilities). The interest rate applicable to your loan is subject to change and will be drawn down on the prevailing interest rate of the day, which could be higher or lower than the rate first discussed or documented.
In essence what you are likely to be negotiating is a discount on the interest rate. For example if the home loan interest rate is 5.75%pa for three years and you negotiate a discount of 0.2%, you may be thinking that your loan will draw down at 5.55%pa; however if interest rates move and the three-year rate increases to 5.85%pa your home loan will actually draw down on 5.65%pa.

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Listings for apartments in August were up 16.3% when compared to July, with 529 being brought to the market, on a year-on-year basis listings were down 15.9%. The truncated mean asking price of new listings slipped again to $349,192 in August from $356,762 in July, representing a decrease of 5.6% on the recent three month average.

The Auckland apartment market followed the national trend with 385 new listings coming onto the market, up 19.2% on July 2012 and down 16.7% when compared to August last year. The truncated mean asking price of new listings in Auckland fell to $334,150 from $344,479 in July representing a 9.2% fall on the prior three months.

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First National’s survey revealed the lack of listings throughout the country is driven by vendors waiting for spring. Another reason for the lack of listings is that vendors are unable to find a suitable replacement if they sell.

This lack of supply is driving some prices up, with many reports of multiple offers on properties. An average price increase of 0.3% across the country (seasonally adjusted) with the mean asking price now $430,443.

Across the 19 regions of the country, asking prices showed a significant range of variances. The star of the month was Auckland, reporting a 1.8% increase and hit a new record seasonally adjusted average asking price of $585,482. The asking price in the other main centres of Wellington & Canterbury witnessed a fall in August, with Canterbury showing the lowest asking price since January this year (down 4.8% to $374,732). In total, 12 regions reported asking price increases with Northland the largest riser, up 8.6% to $388,790. Of the seven regions witnessing asking price falls on a seasonally adjusted basis, there were 3 reporting falls greater than 5%, with the biggest falls seen in Taranaki (down 6.7% to $280,560) and the Central North Island (down 6.1% to $325,982).
(Realestate.co.nz)

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Whether it is around your home, boat, garage, car or caravan we can offer a fire safety solution to our clients. This gift contains an extinguisher, smoke alarm and fire blanket.

The First National network is very excited about this gift to our clients as it is a potential lifesaver and promotes putting our clients’ safety first.
(At participating offices only

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TIP

1. Prepare your children for the move by giving them lots of information about the reasons for moving and letting them know what they can expect in their new home.
2. It’s important to be positive and optimistic because your children’s attitude will largely mirror yours. Focus on the positive aspects of your new home, neighbourhood and community.

Remember; your local First National Real Estate consultant can provide information and contacts that will assist you to settle into your new area. Just ask.

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