Posted on August 24, 2012 by Colin Wong Areinz (Waitakere Real Estate Mreinz REAA 2008)
The New Zealand economy is performing well compared to Europe, which is mired in a deepening recession and there is nothing on the horizon to change that picture.
Economic activity indicators are equal in importance to political developments in August as the former adds pressure to the latter.
With economic activity slowing globally, this trend is poised to reverse as soft commodities outperform hard commodities. Slowing global activity will mean less demand for the activity related commodities Australia produces, while a US drought boosts food prices.
Grain prices are an input into global food price indices and, given New Zealand producers are largely pasture-based exporters, they are isolated from input and stand to benefit from cost pressure affecting other producers.
Filed under: REAL ESTATE | Tagged under Real Estate | No Comments »
Posted on August 20, 2012 by Colin Wong Areinz (Waitakere Real Estate Mreinz REAA 2008)
It’s now much harder for single people on high incomes and middle-income couples to buy homes than it was ten years ago.
A study by the Productivity Commission and Treasury shows that by the end of the last property boom, only 31% of those who did not own a house could afford to, compared to 81% in 2004.
The study classified housing as unaffordable when its costs represented more than 30% of income.
Treasury’s David Law said: “If you are a couple with high income then it would take quite a substantial change in housing market conditions before you really are struggling to afford because you might have two very good incomes, for singles, on the other hand, you’ve only got one income to work with.”
Law said current low interest rates were improving affordability across the spectrum. But he said the study proved more needed to be done to help first-home buyers.
Filed under: REAL ESTATE | Tagged under Real Estate | No Comments »
Posted on August 15, 2012 by Colin Wong Areinz (Waitakere Real Estate Mreinz REAA 2008)
I have met many young couples and investors who are waiting for the market conditions to improve. Interest rates have never been more affordable and the potential for capital gain is still evident in the price comparisons from 2003.
Medium House Prices
2003 2012
Auckland $289,000 $500,000
Waikato/
BOP $176,000 $319,000
Manawatu/
Wanganui $107,000 $226,050
Wellington $220,000 $394,375
Nelson/
Marlborough $219,000 $344,000
Canterbury $159,900 $325,000
Otago $110,000 $232,000
Southland $85,000 $188,000
Filed under: REAL ESTATE | Tagged under Real Estate | No Comments »
Posted on August 15, 2012 by Colin Wong Areinz (Waitakere Real Estate Mreinz REAA 2008)
Sales are up once again for June, 17.3% year on year (REINZ), with record median prices of $372,000 up $3,000, a new record high with Auckland reaching $500,000 record median prices in June.
The prices for June have increased across the country, not just in the previously reported regions of Auckland and Christchurch. Central Otago Lakes have record highs for the month of 11.5% followed by Northland with 10.0% and Wellington with 6.9% (REINZ statistics).
Filed under: REAL ESTATE | Tagged under Real Estate | No Comments »
Posted on July 23, 2012 by Colin Wong Areinz (Waitakere Real Estate Mreinz REAA 2008)
Many banking economists believe that the RBNZ will leave the OCR unchanged for an extended period.
Borrowers continue to have time on their side, with interest rates expected to stay lower for longer. A recommended strategy is to cover risk by placing some funding with banks on fixed terms and leaving the flexibility of floating the remainder of your borrowing on homes or investment properties.
Filed under: REAL ESTATE | Tagged under Real Estate | No Comments »
Posted on July 16, 2012 by Colin Wong Areinz (Waitakere Real Estate Mreinz REAA 2008)
With no details yet emerging from the EU summit, markets remain wary. With Greece in its fifth year of recession and the unemployment rate at 23%, Greece has asked for some modifications to the austerity program. Elsewhere, EU leaders are focused on immediate help for Spain and Italy, which will help chart a path out of their financial crises.
The deteriorating global outlook is an unhelpful backdrop for NZ’s necessary economic rebalancing from spending to earning. Deleveraging still has a number of years to play out and will dampen growth trends, however, lower mortgage rates and the Christchurch rebuild will provide an offset.
Filed under: REAL ESTATE | Tagged under Real Estate | No Comments »
Posted on July 14, 2012 by Colin Wong Areinz (Waitakere Real Estate Mreinz REAA 2008)
What is the impact of migration on the housing market? At the moment, migration is a drag on the normal state of affairs because the net flow in the year to May was a loss of 3,653 and because the average flow over the past ten years has been a gain of 15,000 p.a.
However, what will happen when the migration cycle switches back to a reasonable positive? Clearly we will then have another source of upward pressure on NZ house prices. This will add to the pressures from rising construction standards and costs, builder shortages, investor and first home buyer demand, and the stimulus from low interest rates.
So is the migration cycle turning? BNZ Weekly Overview believes that migration numbers may be turning. The annual loss in February was 4,068, so maybe the peak has been reached. Is there a sharp turnaround underway? In seasonally adjusted terms, the net flow over the three months to May was a loss of 390 people compared with 1,580 in the three months to February and 1,450 in the three months to November. There will be some interesting months ahead.
Filed under: REAL ESTATE | Tagged under Real Estate | No Comments »
Posted on July 10, 2012 by Colin Wong Areinz (Waitakere Real Estate Mreinz REAA 2008)
As many Baby Boomers are considering their options for retirement (and whether they have sufficient funding to protect and maintain their life style) they find themselves in exactly the same position as the previous generation, i.e. those approaching or already in retirement in the early 1990s.
Back then, inflation fell from an average of 11% to 2% in 1992 and bank term deposit rates naturally fell sharply as monetary policy was substantially eased. Reserve Bank records show that at the end of 1990, the average six month term deposit rate was 12%. In the middle of 1992 it was 6%.
What did people do? They chased yield. Where did they find it? Finance companies – we all know what happened to many of these high yield finance companies. Will this happen again? On the face of it, one would think not – one would assume that people have learnt their lessons.
What is your investment strategy? Think and plan for the future today!
Filed under: REAL ESTATE | Tagged under Real Estate | No Comments »
Posted on July 6, 2012 by Colin Wong Areinz (Waitakere Real Estate Mreinz REAA 2008)
The rental property shortage is heading to a crisis. It continues to be a National trend which is fuelled by lack of construction of new homes and investment by developers. The cost of new builds and the costs of consents (due to stringent council requirements because of the leaky home issue) are also contributing to the shortage. In some areas, landlords are not investing further due to the low return on their investment and the changes in tax depreciation rules. Contrary to this, Auckland has experience a surge of investors re-entering the market.
Tenants are choosing to live in affordable locations and spend more time travelling to their work place. The areas of the country where rents are still affordable often reflect the limited work opportunities within these regions. First National Property Managers are dealing with multiple applications for rental properties, particularly if these properties are of superior quality.
The shortage of rental properties will result in rent prices continuing to increase across many areas of the country – particularly, Auckland and Christchurch. The lack of affordability for first home buyers (with families) may result in many being unable to climb out of the rental cycle and into owning a home.
Filed under: REAL ESTATE | Tagged under Real Estate | No Comments »
Posted on July 4, 2012 by Colin Wong Areinz (Waitakere Real Estate Mreinz REAA 2008)
It is the sellers who hold the power as the market returns. For the first time in more than four years, the June BNZ-REINZ Residential Market Survey provides solid evidence that conditions are shifting more towards being a sellers’ market. A recorded net of 15% of those responding claim that buyers are now more motivated than sellers. Interestingly, 27% of respondents are observing more investors in the market. The results support an upturn in the residential property market in New Zealand.
The current sellers’ market is driven by the shortage of listings, with numbers of homes for sale having dropped to its lowest point since 2008. The inventory for homes having dropped to below 30 weeks is also at a four-year low.
The number of weeks to sell a home in Auckland is 18 weeks, Canterbury 16 weeks, Otago 24 weeks; however, the central North Island is still 84 weeks. This has heated up due to low interest rates, new home buyers entering the market and the lack of new construction.
Filed under: REAL ESTATE | Tagged under Real Estate | No Comments »