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NZ population has grown by 5.3% to 4,242,048 according to the NZ Statistics. Some regions had surprising gains while others reduced.

Auckland is the fastest growing region with a population in 2012 of 1,425,550, an increase of 110,592, since the last census in 2006.

Nelson took out second fastes growing region with a 8.35 increase to 46,437. Carteton and Wairarapa both recorded a 15% growth rate.

Other ares that attained between 7-14.9% growth are Waikato Distict (63,378), Hamilton City (141,615), Tauranga City (114,749), New Plymouth District (74,187) and the south Wairarapa. The largest losses were smaller districts, including Kawerau, Wairoa and Ruapehu.

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Business and consumer confidence is driving heightened activity this spring, which is already out performing previous years figures.

October saw a significant rise with 14 new property listings. This is a 27% increase from the previous month (September). And an increase of 8% compared to October last year.

The Central North Island recorded the biggest growth, up 39%. Followed closely by Nelson’s 34% increase, compared to last year.

NZ median house asking price is $482,063. The main centres continue to break house asking price records. Hawkes Bay and the Coromandel has also seen asking prices rise steadily.

The number of unsold homes on the market at the end of October is 38,577. This is an 11% decline compared to October 2012 with 43,410.

It is still firmly a seller’s market with 16 of 19 regions in NZ showing inventory levels lower than average. The amount of homes for sale remains at the equivalent of 24.2 weeks of stock.

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Unemployment dropped to 6.2% in the last quarter from 6.4%. Part of the drop could be attributed to more people reporting they are actively job hunting.

The number of jobs rose by 1.2% during September, which is an increase of 2.4% for the year. The job increases support evidence of renewed business confidence. Predictions are for labour market shortages and tightening in some sectors, as skilled workers demand wage increases, over the coming year.

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The Reserve Bank met expectations last week when they left the cash rate unchanged at 2.5%. The RB won’t now tighten monetary policy until mid-2014 rather than early in the year. So we have shifted our forecast timing for the first OCR increase to June from March. Then cahnge highlights the key point that predicting interest rates over the past three years is difficult. Therefore what borrowers need to focus on when considering how to manage their exposure to interest rate changes, spread one’s risk, one third floating, one third short term which is 18 months –2 years and another third on a longer term.

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Loan to value limits were introduced at the beginning of October by the Reserve Bank. All banks must now lend no more than 10% of their new home loans to people with deposits of less than 20%.

First national’s survey was released to the media on Friday, October 8. This reserch was commissioned by First national group to get an early indication of the impact since the loan to value ratio (LVR) retrictions came into force.

This survey revealed convincing evidence that the LVR implemented by the Resrve Bank is already impacting the number of first home buyer attendees at open homes. The report stated that “ther has been a vert noticeable drop off in first home buyers attending open homes. This buyer group isfrequently expressingtheir frustration at the new LVR rules, which most see as a government restriction. On average there are 27% less first home buyers attending open homes across the country.

The survey also found on average the number of unconditional contracts for first home buyers was halved last month compared to this time last year. While investor enquires has increased with LVR enhancing their position and options by reducing the number of first home buyers available to purchase.

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The National asking price hits a new high of $466,526; this is driven by the seller’s confidence. The market still favours the sellers in most regions of New Zealand. Marlborough recorded an 18% increase; Canterbury up 3.2% increases compared to the prior months asking prices. (Realestate.co.nz)
Record high asking prices were across 14 regions, Waikato and Coromandel recording the highest increases. The national asking price remains strong up 9% compared to a year ago. The first months of spring have seen a steady flow of listings, up 3% on August 2013, but still down when compared to this time last year.
Over the last months we have seen the inventory levels of properties for sale at record lows, this has improved to 24.2 weeks of stock but well down on 38 weeks which is considered the long term average. Market Favours Seller however, “there are signs of a slowdown in the rate of sales volume growth. In August last year sales growth was running at 12% per annum and peaked at 33 % per annum in April. Now it has eased back to 9% per annum and is trending down’ as stated by Helen O’Sullivan (REINZ).

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The banks are moving to limit lending to people with less than 10% and have the ability to limit their risk to borrowers with 20% and above deposit. The Reserve Bank’s limit on LVR (high–loan–to-value) lending has affected some purchasers in the bigger cities, (some real estate agents are reporting), where 20% deposits are very difficult for first home buyers.

Currently the major banks write loans at LVR levels are at 29% of their lending; this will now reduce by one third. ASB’s move to cancel preapprovals for borrowers has had a chilling effect on some first home buyers as reported by the media. While many of the banks are reviewing who they will lend to, some bank’s lending criteria are strongly favouring the first home buyer as preference, other will lend only to existing customers, so it is time to shop around.

There is a mixed reaction from the loan markets as to the effect of the LVR, most believe that it will not affect the volume of sales within the residential real estate market, as investors will step in to pick up the slack. Other market influences are the slowly rising fixed interest rates in the past months; however, these have not yet had an effect on reducing house prices.

So while the Reserve Banks intention for the LVR is to have an effect on limiting house value increased, particularly in Auckland, the predictions are this will apply influence over a period of time, except in some markets such as Auckland and Christchurch whereby, supply and demand will still be the drivers on prices.

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What do they do for you?
A rental appraisal which covers potential rent, recommend changes when required
Initial inspection and photos of your property documented and detailed notes
Arrange tenancy insurance, connections or other services if required
Organise the marketing of your property
Field all calls from potential tenants, show tenants the property, take applications and vetting tenants.
Complete paper work for tenancy agreement and bond lodgement
Monitor rent payments and follow up any arrears immediately
Conduct regular inspections, follow up damage and organise repairs
Taking tenants to the tribunal if necessary and represent you at the hearing
Conduct final inspections, assess damage and manage bond refunds

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The banks will be restricted to having no more than 10% of the value of their new home mortgages lending at loan to value ratios above 80%. The question has been whether this will have the desired effect of slowing the rising house prices.

The LVR will definitely slow down first home buyers and investors who usually require loans of more than 80% of the property value. Although a recent BNZ/REINZ survey reveals that many first home buyers will seek ways around the LVR, using equity from parents and other assets where possible to reach the threshold now required by the banks.

However, it is well recognised that Auckland and Canterbury are still driving the national increase in value, with other main cities seeing limited growth. We have seen provincial New Zealand with little growth in sale prices, although this is slowly changing.

Auckland and Christchurch markets still continue to be driven by supply and demand situations within these regions. The lack of housing will become considerably worse as migration figures show a potential boom in people returning to Auckland and less leaving NZ for Australia due to the current uncertainty of their economic growth.

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Confirmed house sales price lifts, are reported to have eased. Median prices in Otago; Auckland and Canterbury have lessened. The median fell back $9,000 compared to June to $385,000.

However, house sales have surged through July to achieve a six year high for the month of REINZ data for the real estate market in New Zealand shows 6,777 sales in July, up 14% on July last year. The seasonally adjusted national asking prices were at a record high in July at $465,191, up 8% on last year.

First National Offices across the country are reporting a very active winter in residential sales. The continual lack of listings is making it difficult for buyers. However July listings are up 9% on the June figures. Reports from agents across the country would indicate that first home buyers are moving quickly to secure their properties. This is ahead of any Reserve Bank move to restrict lending through increasing the deposits required to purchase their first home.

The days to sell a house took one day longer in July, now at 35 days. Central Otago has seen the largest improvement in days to sell improved by 15 days.

As we head out of winter and into spring we are waiting to see the usual season lift in listings & sales activity. The Kiwi-saver first-home buyers, with increased levels of income and purchasing, will also be entering the market and those who wish to buy prior to the loan-to-value constraints take full effect. All factors will result in an interesting and positive spring for those wanting to take advantage of a sellers’ market.

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