Slowing property market sees some Auckland suburbs fall out of $1m club
POSTED ON: June 11, 2019
More than one-in-three Auckland suburbs have defied the market slowdown and risen in value, partly thanks to resurgent first-home buyers, according to the latest OneRoof housing market figures.
But the city is also home to some of the country’s biggest house price drops, with some suburbs dipping out of the $1 million club.
And while historic low interest rates are helping buyers get a foot on the Auckland ladder, a property expert warns high prices still present a huge challenge for would-be homeowners.
Nine out of 10 of the nation’s biggest fallers in median house values are in Auckland, including the country’s wealthiest neighbourhood, Herne Bay, which slipped 12 per cent to $2.19m.
The OneRoof and Valocity figures, published in Tuesday’s OneRoof Property Report, show the Auckland market is still strong in Papakura and Rodney, where house values rose by more than 2 per cent in the last 12 months.
Values have fallen by more than 5 per cent in the North Shore.
Just under 20 per cent of Auckland suburbs experienced value drops of more than 5 per cent and seven suburbs – Kumeu, Whitford, Albany, Herne Bay, Pukekohe East, Ti Point and Sunnynook – suffered double-digit slumps.
Sunnynook also dropped out of the million-dollar median value club, as did fellow North Shore suburbs Northcross, Hillcrest, Rosedale and Torbay.
Sunnynook’s median value was $1.14 million a year ago, but is now $995,000. However, that’s still up from three years ago when the suburb’s value was $720,000.
Kumeu on the city’s north western fringe is New Zealand’s biggest faller, dropping 18 per cent on a year ago (from $1.455m to $1.195m), while Albany is down more than 12 per cent, off $140,000 from its high of $1.145m last year.
While Herne Bay has slipped from last year’s peak of $2.49m, it also clocked Auckland’s second highest sales price – $12m for a mansion on Marine Parade in November.
OneRoof editor Owen Vaughan said the swings in median values reflected the change in the sorts of properties now selling.
“Price is driving much of the house value growth in New Zealand. The six regions and towns that have experienced the biggest leaps in median house values in last year are Wairoa (29.1 per cent); Opotiki (25 per cent); Tararua (25 per cent); Kawerau (21.9 per cent); Hawke’s Bay (21.4 per cent); and Whanganui (20.4 per cent); and they all have median house values of less than $400,000.
“Price is also behind the big drops in Auckland. When we look into what is selling in the city, there is a greater share of lower priced stock than a year ago and lower price points are popular with first-home buyers, who now represent the largest share of new mortgage registrations in the city – more than 27 per cent.
“The impact of this on headline value movements for a suburb can sometimes be misleading as it may appear a suburb is declining or collapsing in value, when in fact there has simply been a bigger share of lower priced housing selling.”
James Wilson, head of valuation at OneRoof’s data partners Valocity, said the lack of activity in the higher price brackets reflected homeowners deciding not to sell until the market picked up or withdrawing if prices didn’t meet their expectations.
“Because the upper end of Auckland’s market is not as active as it once was and there’s more activity in the lower price brackets median values have dropped in some of the city’s wealthier suburbs.
Some of the suburbs that had taken a hit in the North Shore were some of the fastest rising in previous years, and particularly popular with overseas investors, he said.
“They had higher value because of that coastal influence, good housing stock and proximity to good schools, they grew faster and reached higher price points.
“But now there’s anecdotal evidence that in a generally less heated market, they’re also seeing the ‘double whammy’ of fewer foreign buyers.”
On the other side of the harbour, Lynfield, Three Kings and The Gardens, near Manurewa, also dropped below $1m but other parts of the south are growing. Manukau, Otara, Mangere all rose by about 5 per cent over the past year.
Wilson saw it as a switch in buyer types, with investors in those formerly landlord-attractive suburbs being replaced by more first-home buyers.
“These suburbs are still well priced – between $505,000 and $665,000 – so they’re attracting first-home buyers who are buying slightly better properties, at higher prices, because they want to live in these houses themselves.
“These median value rises and drops are just reflecting the composition of who is buying and selling.”
Loan Market mortgage broker Bruce Patten said they had seen a “big uplift” in first-home buyers entering the market.
“The market has been flat for a period of time, and we don’t think much will change for the next couple of years, so that has allowed incomes to catch up a little, whereas before if you waited a year prices might have gone up $100,000 to $200,000.”
Low interest rates, expected to stay low for a while, added to first-home buyer confidence, Patten said.
But Patten warned that buying a first home was still “tough”, especially in Auckland.
“The cheapest home is still going to cost $650,000, if you can find one – Kiwibuild was meant to fix those issues. So it is still a big mortgage to take.”
Anecdotally the prospect of a CGT was weighing on house market sentiment.
To that end it will be interesting to see if subsequent surveys, and indeed house sales figures, show any positive reaction from the move to ditch any CGT.
ASB chief economist Nick Tuffley and senior economist Jane Turner said the results in the latest quarterly survey implied that “most respondents expected a capital gains tax on residential
investment property would have a fairly material impact on the housing market”.
They said the net 12% of respondents expecting house prices to fall in Auckland, compared with a net 8% that expected higher house prices to rise just one quarter ago. “The results became increasingly pessimistic over the three-month survey period.”
Tuffley and Turner said the weak result in Auckland was unsurprising, given the Auckland housing market “clearly softened over these months and with the media drawing much attention to weak Auckland housing statistics”.
“Furthermore, since late last year many media commentators have drawn parallels between the Auckland and Australia’s housing markets, highlighting the sharp house price declines in Australia and implying declines can be expected in Auckland.
“Nonetheless, we are surprised by the extent of the weak results from the ASB survey. The Auckland housing market has softened, but the balance of indicators suggest the Auckland housing market is not (yet) in dire straits. The number of houses listed for sale in Auckland is only around historic average levels. Meanwhile, Auckland’s housing market is fundamentally undersupplied; a contrast to Sydney’s housing market.”
Tuffley and Turner said the other surprise from the survey results was that the fall in house price expectations was broad-based across New Zealand.
“House price expectations in the North Island excluding Auckland moderated to a net 25% expecting an increase (down from a net 32% in the previous survey). Meanwhile, South Island house price expectations moderated to just net 18% expecting a house price increase, down from a net 29%. This is despite most regional housing markets (with a few exceptions) being very tight and recording strong house price growth during the months the survey was conducted.”
For the country as a whole, a net 11% of survey respondents, down from 23% in the previous survey, expected house prices to rise in the next year.
Tuffley and Turner say they will be “keenly watching” the next quarter’s housing confidence survey to see how much (if any) of the fall in house price expectations is reversed following the Government’s decision to ditch any CGT.
The latest survey found that respondents were “broadly balanced” on whether now is a good time to buy, with sentiment continuing to gradually improve from recent years when respondents perceived it to be a bad time to buy a house.
When recently received data from the REINZ tells what real estate activity was like in March this year. For home-buyers the news is good but for real estate agents things are looking less rosy, with falling sales.
In March, sales in Auckland of just over 2000 dwellings represented a fall from March last year of 18 per cent, or 13 per cent if we smooth out volatility by looking at the three months to March versus a year ago. Annual sales for Auckland now sit at just over 21,000 from a peak of 33,000 late in 2015.
For the rest of New Zealand, sales in March were down 10 per cent from a year ago and 6 per cent for the quarter versus early-2018. Non-Auckland sales for the year to March of 53,000 were down from a 64,000 peak in mid-2016.
Are sales falling because there are not enough houses coming onto the market? No. The number of listings at the end of March in Auckland was ahead 14 per cent from a year ago and for the rest of NZ they were down by only a small 3 per cent.
So what do we expect to happen when we see falling sales and rising stocks? Easing prices, of course. In Auckland, the house price index for March was down 3 per cent from a year ago which was the price cycle’s peak. For the rest of New Zealand, prices in March were up by 7 per cent from March 2018 — but the pace of increase is slowing.
Although there is good support for the housing market from new record low mortgage rates and a strong jobs market, outside of some selected regions the feeling of buyers that they need to act now before prices go higher has gone. This means these are good times for first-home buyers.
Fresh buyers have time to peruse the available stock in a non-frenzied manner, figuring out what property will suit them best, and perhaps making some low-ish offers in the hope they can snare a bargain. That has become the dynamic in Auckland and will happen elsewhere around the country as regional markets slow down and prices flatten out in the coming year.
Will prices continue to fall in Auckland? Maybe, because even though turnover peaked a long time ago there are probably still some people wanting to leave the market because of worries about new rules affecting landlords. But will we see Auckland follow Sydney and Melbourne, where prices have fallen over 10 per cent from their peaks with more likely to come? Almost certainly not.
Banks in Australia have radically tightened lending rules, states have levied new purchase and annual taxes on foreign buyers and owners, and there has been excess construction of dwellings. These dynamics are not in play in New Zealand.
In fact, in Auckland, the fundamental shortage of property continues and will likely get worse. Dwelling consents issued in the year to February totalled almost 14,000, exceeding the previous peak of 13,000 in 2004.
But since 2004 Auckland’s population has grown by 34 per cent (versus 17 per cent for the rest of NZ). More than that, net migration inflows for the country remain very strong and Auckland receives about 60 per cent of the net flow. Then there’s the impact of the relaxation of LVRs and increased availability of low deposit loans for first-home buyers.
Not all consents being issued will result in dwellings actually being built — certainly not in a timely manner. Developers are also having trouble achieving sufficient unit presales to meet bank requirements before a construction loan will be advanced.
For the next two- to four-year period the chances are high that Auckland average prices will be relatively flat, with small ups and downs, that the regions will soon also flatten out, and that the scene will be set for a return of cyclical price rises. Only if population growth severely declines and/or construction miraculously booms is this period of price flattishness likely to extend beyond 2023.
• Tony Alexander is chief economist at Bank of New Zealand
Average Auckland house price drops $100,000 over three years
POSTED ON: May 2, 2019
House prices have cooled off significantly in Auckland but are yet to drop to a level where homeowners could find themselves saddled with more debt than their properties are worth.
It’s a buyer’s market in the city – figures show the average asking price is down almost $100,000 since a high three years ago.
It was a slow day in the auction room at one of Auckland’s busiest residential realtors, with homes passing in and sellers negotiating down asking prices. Only two of 12 homes sold under the hammer at Barfoot and Thompson’s auction today, with another two selling soon after.
Director Kiri Barfoot said more than half its homes going to auction were selling afterwards, but there was buyer interest in the housing market.
“The Auckland property market is steady with no wild variations. There’s definitely been a change since the last couple of years but we are still selling property and in fact the last couple of weeks before Easter we sold 5 percent more properties than we did in the same two weeks last year,” she said.
The latest figures from Quotable Value showed Auckland values alone were down 1.5 percent for the year to April, while many towns in the regions banked increases.
Figures from Realestate.co.nz also showed the mean asking price for a house in Auckland dropped $100,000 to below $900,000 in April, the lowest since 2016.
Property experts say Auckland’s houseprices are dipping due to restrictions on lending and fewer foreign speculators in the market.
CoreLogic senior property economist Kelvin Davidson said buyers were in no rush and had the luxury of choice.
“Listings are as high as they’ve ever been for the last 10 years in Auckland so you’ve got plenty of choice and it’s definitely a buyer’s market you can shop around and to some extend upgrade your location so I’d say it’s definitely a buyer’s market,” Mr Davidson said.
Mr Davidson said the risk of homeowners being left with loans bigger than their properties’ worth was far off, given banks now required a higher deposit and most people were employed.
Some buyers are playing a waiting game with vendors to get a good price.
First home buyer Anna Hardie has been looking for a home to buy in Auckland with her husband for the past two months, but they are in no hurry to buy.
“We put an offer on a house out west Auckland but it was out of our league so we’ve only put a backup offer on a property in Waiuku so far, we’re just waiting at the moment,” she said.
Meanwhile, with Capital Gains Tax off the table for now, Barfoot and Thompson said it had seen some investors return to the Auckland property market.
All eyes will be on their latest sales figures, released tomorrow.
Auckland a buyer’s market as stock of properties for sale builds up and asking prices ease on Realestate.co.nz
POSTED ON: April 18, 2019
Auckland’s housing market could be facing a long, cold winter, the latest figures from Realestate.co.nz suggest.
The property website had 11,026 Auckland residential properties available for sale at the end of March, up 15.2% compared to March last year.
Just as important, it was the most Auckland properties Realestate.co.nz has had available for sale in any month of the year since April 2012.
The website received 4363 new listings in March, which was up just 4.6% on March last year, which suggests that the rise in total stock has not been caused by a sudden rush of new listings, but by properties taking longer to sell and remaining listed for sale on the website for longer.
At the same time, the average asking price for Auckland properties listed on the website was down significantly.
The average price of Auckland properties listed on Realestate.co.nz in March was $952,749, down from $996,301 in February (-4.4%) and down 1.2% compared to March last year.
The combination of the rise in new listings, falling asking prices and a build-up of unsold stock does not bode well for the Auckland property market as the summer selling season comes to an end and it heads towards winter.
Realestate.co.nz spokesperson Vanessa Taylor said the figures suggested Auckland was becoming a buyer’s market.
“While these are classic indicators of a buyer’s market, it has potential upside for both buyers and sellers,” she said.
“That’s because sellers are also typically buyers looking for their next home.
“In the same market, buyers will be able to capitalise on lower prices for their next move, as the majority will be trading up.
“Falls in average asking prices could also possibly assist some first home buyers as these falls are across all price bands,” she said.
Across the rest of the country average asking prices in March were slightly lower than they were in February in most districts (Northland, Waikato, Bay of Plenty, Coromandel, Gisborne, Hawkes Bay, Wellington, Nelson Bays, West Coast, Otago, Central Otago/Lakes and Southland, while average prices in March were up compared to February in the Central North Island, Taranaki, Manawatu/Whanganui, Wairarapa and Canterbury.
Auction sales rates are lower in Auckland than the rest of the country
POSTED ON: April 1, 2019
Auction sales ratios are holding remarkably steady during the peak real estate season.
Interest.co.nz monitored 279 residential property auctions throughout the country in the week from 11-17 March.
Of those, sales were achieved on 107 properties, which gave a sales clearance rate of 38%.
That was exactly the same sales ratio as the previous week (4-10 March) when 320 auctions were monitored and the sales ratio was also 38%.
Of the 107 properties that were sold between 11 and 17 March, interest.co.nz was able to match up selling prices with rating valuations (RVs) for 90 of them.
Of those, 46 (54%) sold for more than their RV, 41 (46%) sold for less than their RV and three (3%) sold for the same as their RV.
That was a very slight improvement on the selling prices achieved in the previous week when 48% of properties that sold went for more than their RV, where a match was possible.
Auction activity continues to be dominated by Auckland, where interest.co.nz monitored 201 auctions between from 11-17 March, but the sales ratio was lower in Auckland, with sales recorded on 65 of those properties, giving a sales clearance rate of just under a third (32%).
Of those, selling prices were able to be matched with RVs for 53 properties that sold and of those, 20 (38%) sold for more than their RV, 32 (60%) sold for less and 1 (2%) sold for the same as its RV.
Auction sales activity has been remarkably steady through March
POSTED ON: March 30, 2019
A feeling of deja vu overcame us here at interest.co.nz as we looked at the numbers from the auction results we monitored during the week of 18 to 24 March.
We monitored 272 residential property auctions during that period, marginally lower than the 279 we monitored the previous week.
But the sales ratio was exactly same for both weeks at 38%.
In fact it was the third week in a row that the sales ratio has been 38%, and not only that, the sales ratio for the Auckland auctions from 18 to 24 March was within a hair’s breadth of the national figure at 37%.
So if we’d been inclined to buy a raffle ticket, we’d probably have looked for number 38.
Luck or coincidence aside, what the numbers suggest is that auction sales have been reasonably stable overall during what is traditionally the busiest month of the year for residential real estate. There’s no doubt, however, that sales people and auctioneers are having to work harder for their money than they were this time last year.
However prices still appear to be weaker in Auckland than they are in the rest of the country.
Where we were able to match up a property’s selling price with its Rating Valuation (RV), 43% nationally were above the RV and 57% were below. While in Auckland, yes you guessed it, it was our lucky number again, with 38% selling for more than their RV while 62% were below.
It’s the more expensive homes that are leading Auckland’s property market down, Greg Ninness discovers
POSTED ON: March 19, 2019
The Auckland housing market appears to be slowly easing from the top.
The Auckland market is softening and it appears to be the more expensive homes and suburbs in the upper end of the market that are leading the decline, in both price and volume.
The decline appears to have started late last year and continued into this year.
Sales figures from Auckland’s largest real estate agency Barfoot & Thompson, show that the agency sold 1631 residential properties over the three month period from December last year to February this year, down 15.6% compared to the same three month period a year earlier.
But the decline was much greater at the top end of the market, with the agency selling just 51 homes for more than $2 million from December last year to February this year, a 40.7% reduction in the number of $2 million-plus homes it sold in the same period 12 months earlier.
Over the same periods, sales over $1 million were down 23.7%, sales over $750,000 were down 15.9% and sales over $500,000 were down 12.9%.
Those figures all suggest that the decline in sales was greatest at the top end of the market.
The latest figures from Quotable Value paint a similar picture.
They show that the average value of residential properties in Auckland over the three month period to the end of February this year was $1,044,576, which was down 0.9% compared to the same three month period a year earlier.
But the decline in average values was greatest in the Gulf Islands, which is dominated by the millionaire’s playground of Waiheke, where average values were down 3.9%, and on the North Shore, where average values were down 2.0%.
And within the North Shore, the biggest decline was in the exclusive coastal suburbs where average values were down 3.1% on a year earlier, while in the more affordable Onewa district they were down just 0.5%.
Around the rest of Auckland, value falls were relatively modest, but in Franklin on the city’s southern rump, which has the lowest average property value in Auckland at $673,782, the average was unchanged from a year earlier.
Those figures also suggest property values are declining more at the top end of the market than they are at the bottom.
That trend could intensify over the next few months.
A decline in property prices and values is usually preceded by a drop in sales volumes, and because the QV figures are a lagging indicator of market activity, the decline in sales volumes suggested by the Barfoot figures are probably only just starting to show up in QV’s numbers, which could decline further over the next few months.
But why would the top end of the market be declining while the bottom end remains relatively stable?
The answer is probably due to human nature.
Many of the people buying or selling at the top of the market will be discretionary buyers/sellers.
They are more likely to already have a comfortable, if not luxurious home, but may have been planning to upgrade to the home of their dreams.
If they see uncertainty in the market, or think they won’t get as much for their existing home as they thought they would, many will just decide to put their plans on hold for a while and see what happens.
It’s a different story at the lower end of the market where first home buyers are much more active.
If they have been saving for a home for a while and find one that suits them and the bank is prepared to provide a mortgage, they are much more likely to buy it regardless of the market outlook.
The emotional pressure on them to buy is usually just too strong to resist.
This constant demand side pressure from first home buyers coupled with a significant undersupply of affordable homes in Auckland means prices for lower value homes are likely to fall more slowly than prices for homes at the top of the market.
So it could be an interesting time for the Auckland property market this autumn/winter, particularly for people thinking of buying or selling an upmarket property.
Auckland house sale prices hit lowest in three years
POSTED ON: February 19, 2019
Auckland house sale prices fell $20,000 between the end of December and the end of January, down 2.4 per cent from a median $820,000 to $800,000 – the lowest numbers for 35 months.
Real Estate Institute data out this morning showed that was the lowest median Auckland house price in three years.
“In Auckland, prices fell -2.4% to $800,000 down from $820,000 in January 2018 – the lowest median price for the region since February 2016,” REINZ said.
Bindi Norwell, REINZ chief executive, said agents recorded falls in house sales during January in Franklin, Rodney, North Shore and Papakura districts during the month ranging from -0.7 per cent to -13.2 per cent.
Yet prices rises were still being recorded in other areas such as Auckland City, Manukau City and Waitakere City which had median price increases ranging from 1.5 per cent and 9.5 per cent.
That showed there were pockets of growth occurring across the region, she said.
“December and January usually see prices decline and then pick up again in February and March, so we’ll be watching closely to see whether this is just the usual Christmas/New Year slowdown or whether this is the start of something wider,” Norwell said.
“What we can say, is that it’s too early to call this a trend and it’s too early to confirm whether the Auckland market has actually turned,” she said.
The city bucked a national trend for house prices to rise, up 5.8 per cent from $520,000 last January to $550,000 last month.
Prices for New Zealand, excluding Auckland, increased by 10.1 per cent to $473,300 up from $430,000 in January 2018.
Record median prices were recorded in:
• Waikato up 12.6 per cent to $550,000
• Manawatu/Whanganui up 21.7 per cent to $348,000
• Marlborough up 16.3 per cent to $477,000
• Otago up 6.4 per cent to $475,475
• Southland up 15.6 per cent to $277,500
OneRoof editor Owen Vaughan said: “The latest REINZ figures and data from OneRoof / Valocity released earlier this month suggest that the hesitation that was evident in the market early last year is starting to take hold.
“The reality is that Auckland’s market is soft and will continue to be until pressure for more housing reaches a point that triggers a new surge in values.
“It’s highly unlikely the country’s biggest housing market will suffer a house price collapse such as experienced Sydney and Melbourne. An undersupply of residential housing and strong demand support current values and future growth.
“Smaller urban centres continue to enjoy strong growth, but it is important to note that the lifts are from a comparatively low base, and that the actual dollar amount that represents is relatively small, although still a big deal for homeowners and buyers in those markets.”
Buyers’ market: Auckland house prices continue sliding
POSTED ON: February 8, 2019
The Auckland housing market continues to move in favour of buyers, with prices easing but sales numbers jumping to their highest January level in three years, said the city’s biggest realtor.
The median house price was $875,000, down 5.4 per cent on the month and 0.3 per cent on the year, according to Barfoot & Thompson. Sales numbers, however, were 653, up 29.6 per cent versus December and 10.1 per cent higher than they were a year earlier.
“It points to vendors accepting that the market has moved in favour of buyers, and they are trimming their expectations as to the price they will accept. However, there is certainly no indication that there is a major decline in prices,” said managing director Peter Thompson.
Ongoing population growth, low mortgage interest rates and the recent easing of loan-to-valuation restrictions are expected to keep a floor under demand in the Auckland housing market.
ASB Bank senior economist Jane Turner said some of the increase in sales volumes was catch-up from December when the level of transactions had been weak, due in part to “a holiday timing distortion” as there was quite a short run up to Christmas in terms of working days.
“According to our estimates, that has bounced right back in January,” she said.
Turner noted that inventory remains broadly steady: “I am seeing a housing market in Auckland that is broadly balanced between supply and demand. Prices remain flat, so there is no significant pressure up or down, so that is our expectation for the year.”
Barfoot also said it listed 981 properties in January, and at month end had 4,334 properties on its books, 3.4 per cent higher than in December but largely unchanged on the year.
“Market indications are that a significant number of new listings will hit the market in February further increasing the already strong level of buyer choice,” said Thompson.
Auckland housing sales drop as foreign buyer ban kicks in
POSTED ON: January 25, 2019
Auckland property sales have dropped by 20 percent in the wake of the Government’s ban on foreign buyers, an economist says.
In December, Auckland property sales were significantly lower after the ban came into effect in October, according to Westpac chief economist Dominick Stephens.
More than a third of traffic to realestate.co.nz in November came from overseas, with the site saying the ban had done little to dampen interest. But experts suspect foreign buyers may have flooded in to buy property before the ban came into effect.
In his January property market report, Mr Stephens pointed to Auckland’s drop in property sales as evidence the ban has had an impact on the city’s property market, where foreign buyers had previously been quite active.
“Housing market turnover shot higher in October (just before the ban came into force), but has subsequently tanked,” Mr Stephens wrote.
He said based on “seasonal adjustment, and taking into account that the Real Estate Institute initially understates the number of sales given in a month, property sales are now about 10 percent lower than they were a year ago”.
“The regional breakdown suggests that the foreign buyer ban’s fingerprints are all over this. The big drop in sales was concentrated in Auckland, where seasonally adjusted sales dropped 20 percent in December, and to a lesser extent in Wellington and Christchurch.”
It adds to the latest QV House Price Index data which showed Auckland property values have declined, as well as realestate.co.nz figures that showed the number of new listings in Auckland is down 17.7 percent compared with last year.
Whether the foreign buyer ban will have a direct impact on Auckland property prices is not clear. A drop in prices could be offset by low interest rates and loosening of mortgage lending restrictions on banks, Mr Stephens said.
There is a risk Auckland property prices could fall though, he added, since “a drop in house sales is usually a good indication that house prices are about to weaken, so there is a risk that Auckland house prices could start falling again”.
“Meanwhile, prices in the lower North Island, Otago and Southland continue to roar away.”
Spotlight on ‘high risk’ property deals with new anti-money laundering rules
POSTED ON: December 19, 2018
New rules to stop money laundering are about to hit the real estate industry, which is considered a high risk sector, according to the Justice Ministry.
Savills managing director in Christchurch Jonathan Lyttle said “it feels a little Orwellian” and some clients were unhappy about it.
The rules take effect from January 2019, and later next year will apply to companies selling jewellery and cars, to prevent criminals turning dirty money into clean money. A giveaway in the real estate sector might be when someone bought a property sight unseen, with cash, or in the name of someone else, a police document advises.
Suspicious scenarios include deposits containing counterfeit notes, cash with an unusual appearance or smell, large cash deposits using automatic teller machines, or drop boxes to avoid direct contact with bank staff.
Casino operators should watch for patrons wanting to exchange low denomination currency for higher valued notes, buying lots of gambling chips without gambling them before cashing up, notes with an unusual smell, and “patrons making verbal statements as to their involvement in criminal activity”, the police document said.
Suspicion will fall on people switching money in and out of several accounts, building up of large balances not consistent with the turnover of a customer’s business, and subsequent transfer to accounts held overseas.
Regular use of travellers cheques, early settlement of a loan with cash, or the use of shelf companies may also be suspicious.
Businesses can check the links on the police document to an official list of terrorist groups laundering money, ranging from Al-Shabaab, the IRA, ETA, Shining Path, and ISIL – the organisations may apply to the Prime Minister to be taken off the list.
Real estate firms have taken on extra staff or will use the services of third parties – one such company, AML Solutions, charges for an app and a subscription fee.
Businesses must provide formal verification of a client’s identity, and in some cases a detailed assessment of the transaction.
People using trusts must reveal specifically where the money for a purchase is coming from.
“Every time an agent represents a client in a transaction – no matter how well they know the client or how many times they have acted for them in the past – they must request documents confirming the client’s identity and, in some cases, verify that the source of their funds is legitimate,” Lyttle said.
“If the client can’t provide the documents, it’s likely that their agent won’t be able to act for them.
“Clients will need to be prepared for a much more stringent review of their assets, including the source of their funds,” Lyttle said.
Real estate agencies might have to overhaul their technology systems to deal with the additional requesting, processing and secure storing of confidential client information. They must appoint an AML compliance officer, report to the Department of Internal Affairs, and meet regular audits, Lyttle said.
Bayleys group general manager for legal and compliance, Caroline Williams, said clients will be required to show a passport, firearms licence, or driver licence along with another document such as a bank statement, plus a document showing their residential address – such as a local council rates bill or power bill.
Williams said Bayleys’ sales teams have received training outlining the intricacies of the new requirements so they can minimise delays.
According to the Ministry of Justice, every year about $1.35 billion from the proceeds of fraud and illegal drugs is laundered through New Zealand businesses.
Property riches: Auckland dominates top sales of past year
POSTED ON: December 12, 2018
New Zealanders bought and sold more than $50 billion worth of real estate in the last 12 months, but one couple was at the centre of the two biggest property sales of the year.
Property developer Simon Herbert and his wife Paula, a designer, paid $27.5 million for 15 Cremorne St, in Auckland’s Herne Bay – the highest residential sale price of the year.
They also sold the house with the second-highest sale price – 542 Remuera Rd – three months earlier to an overseas buyer, scooping $25.5m. But neither sale topped previous record residential property sales.
“Last year, a Takapuna beachfront house went for just under $29m,” OneRoof editor Owen Vaughan said.
New Zealand highest residential sale price still stands – $39m in 2013 for a home on Paratai Drive, which was developed by former Hanover boss Mark Hotchin.
Sales data provided by property analysts Valocity for the year to August 2018 reveal nine of the country’s 10 most expensive property sales were in just a handful of Auckland’s best suburbs, with just one house outside the city making the list.
That house, a luxury pad in Queenstown’s desirable Kelvin Heights, sold for $12.5m. The next highest sales in the South Island town came in at around $7m.
Notable sales outside of the top 10 include $6.3m for a waterfront property in Mount Maunganui, $6.1m for a modern house in the Christchurch suburb of Fendalton, and Wellington’s top seller was a six-bedroom home in the suburb of Northland which sold for $4.4m.
The Valocity data, to be published in tomorrow’s OneRoof Property Report, also shows a dip in the total value and number of residential sales in New Zealand.
Total sales for the year to August 2018 numbered 78,959, down 11.2 per cent on the 12 months before, while the total value of sales was down 7.4 per cent.
“The figures show the country’s biggest property markets are starting to plateau after successive years of growth,” Vaughan said.
“But turnover is still at a quite healthy level and the decision by the Reserve Bank to ease the tough lending rules should result in stronger sales for 2019.”
Valocity director of valuation innovation James Wilson said: “Nationwide levels of value growth have stalled significantly over the past 12 months fuelled mostly by the stalling of the Auckland market. However, at the higher end of the market well-presented properties are still transacting well, achieving strong prices.
“Buyers of such properties tend to not be so impacted by regulatory and finance constraints which are impacting other market participants.”
Auckland’s lowest sales came with a catch
In a year when top properties in Auckland went for more than $25m, there were still tiny glimmers of affordable properties – but they came with a catch.
Eight of the 10 properties that sold in Auckland this year for under $100,000 were all part of a leaky Westward Ho terraced complex in Glen Eden.
Remediation work – which took five years to get through the owners association – will be finished by April next year. But nearly a dozen owners flicked their properties rather than find the $250,000 contribution to re-roofing, new windows, exterior and new safety fire sprinkler system.
Also under $100,000 were studio flats in student accommodation towers in Beach Rd and Anzac Ave.
Between $180,000 and $235,000 would buy a studio in a managed hotel in Gulf Harbour or a tiny flat in need of complete refurbish in Panmure, Onehunga or Mount Wellington.
Older single family homes in Clendon Park, Clover Park and the edges of Manurewa/Weymouth sold this year for $265,000 to $280,000.
The auction sales rate is slightly lower for properties in Auckland than the rest of the country
POSTED ON: November 28, 2018
Sales were achieved on just over a third of the nationwide properties offered at auctions monitored by interest.co.nz last week (10-16 November).
They monitored the auctions of 301 residential properties last week and sales were achieved on 104 of them (35%).
They were able to match selling prices with the rating valuations (RVs) on 87 of the properties that sold, and this showed 64 sold for more than their RV, 22 sold for less than their RV and one sold for the same as its RV.
Auckland continues to dominate the auction market. They monitored 222 auctions within the region with sales achieved on 67 of those properties, giving a sales clearance rate of 30% for Auckland, just below the national average.
They were able to match up selling prices with RVs on 50 of the Auckland sales and of those, 33 sold for more than their RV, 16 sold for less than their RV and one was equal to its RV.
Overall this suggests the housing market remains relatively steady, although with plenty of listings available buyers are being very picky.
That means auctioneers and sales people often have their work cut out for them getting properties across the line at auctions.
It also means auctions are tending to take longer, with auctioneers often delaying dropping the hammer while negotiations take place between the highest bidder and the vendor, to try and secure a sale under the hammer.
Often the difference between the price buyers are prepared to pay and the price vendors are prepared to accept is just a few thousand dollars, so it is not uncommon for properties to be passed in and then sold shortly afterwards as post sale negotiations get down to the nitty gritty.
However in the current market properties that are not up to scratch are likely to be quite strongly discounted by buyers.
Capital gains shift out of Auckland, Real Estate Institute data shows
POSTED ON: November 15, 2018
If you wanted capital gains on your house over the past year, forget the big city – the best place to be was Manawatu/Whanganui.
The Real Estate Institute has released its latest data, which shows five regions hit record median prices last month.
Manawatu/Whanganui was up 20.2 per cent year-on-year from a median $286,250 this time last year, to $344,000.
Otago also hit a record with an 18.2 per cent price rise compared to October 2017. Hawke’s Bay recorded a 17.4 per cent increase, Taranaki lifted 8.6 per cent, and the usually stagnant Christchurch market was up 3.3 per cent. By contrast, Auckland’s median house price was only up 1.8 per cent year-on-year, or 0.4 per cent once seasonally adjusted, to $865,000.
But while the regions are where the activity is at present, that pattern will need to continue for some time to catch up with the gains handed to Auckland property owners in recent years.
In January 2013, Auckland’s median price was $510,000 compared to Manawatu’s $219,000.
Since then, Manawatu has added $125,000 to median prices. Auckland’s have grown $355,000.
ASB economists said they expected regional growth to slow.
“Over the medium term, we continue to expect house price growth to moderate as regional house price growth converges with a flat Auckland housing market. However, the recent fall in mortgage rates does point to the chance of a short-term lift in demand.”
There were 6791 properties sold nationwide in October, the highest in five months.
In Auckland, the number sold increased 15.2 per cent year-on-year to 1948. Sales were particularly strong in Northland, Gisborne and Wellington.
“Regionally, we saw increased sales volumes in 13 out of 16 regions with 10 of those 13 regions seeing double digit increases,” chief executive Bindi Norwell said.
“But the standout results belong to the South Island with the highest volume growth seen in the southern half of the country – particularly in Marlborough which saw a 46.2 per cent increase when compared to the same time last year, which is a significant increase.
“October also saw the introduction of the foreign buyer ban and while there have been pockets around the country of people talking about a rush ahead of the ban, with Statistics New Zealand’s September quarter figures showing the lowest level of foreign buyers since they began keeping records, we’re confident that most of October’s lift in volume is attributable to the spring lift rather than a rush of foreign buyers looking to get in ahead of the ban.”
Norwell said it seemed New Zealand was not following the example of a falling Australian mark.
“September was very quiet in terms of the number of properties sold and we predicted that with the increase in listings coming to the market that October’s sales would be much stronger than September’s.
“With strong sales this month, it’s our belief that in the current market that New Zealand is taking a different path to what we’re seeing across the Tasman at this point in time.”
It comes as data from CoreLogic shows property investors were active in October.
People who own more than one property were responsible for 38 per cent of property transactions in the month, the highest percentage recorded in 2018.
Analyst Kelvin Davidson said that continued despite the introduction of an increasing number of regulations for the sector, including moves to improve tenant rights, extending the brightline test for capital gains, looming ring-fencing of losses and Healthy Homes standards.
He said it could be because they had few alternatives, with term deposit rates so low.
“As BNZ chief economist Tony Alexander pointed out, the extra measures and costs don’t scupper an investment plan altogether, they just mean that the landlord will probably now have to hold on to properties for another year or two to achieve the return they wanted.”
Northland’s residential property owners gain over 24K in one year
POSTED ON: November 2, 2018
Property in three Northland suburbs earned more than the average Kiwi worker in the last 12 months, with the region as a whole registering average gains in residential property of more than $24,000.
The lift in median values across Northland comes on the back of increased interest in the region from Auckland and Australian buyers.
Analysis of more than 900 suburbs across New Zealand by OneRoof.co.nz and CoreLogic NZ shows just 7 per cent of suburbs enjoyed capital above the national median salary of $51,844. Northland’s median salary is $48,880.
The three top performing Northland suburbs were One Tree Point (up $61,900), Whangārei Heads (up $60,150) and Mangawhai (up $53,750).
Almost 90 per cent of suburbs in Northland registered gains in the 12 months to October 2018. In Kaipara, Dargaville topped the list with a gain of $40,950.
Just six suburbs suffered a slip in their median value, all in Far North District: Okaihau which fell by $14,050 to $297,900, Kaikohe $7700 ($175,600), Opononi $2650 ($322,450), Waipapa $2150 ($556,250), and Omapere $2150 ($383,300).
Kerikeri was the best performer in the Far North district, gaining $14,850 on average.
Whangārei Heads is one of the top performers in Northland in terms of residential house sales. Photo/Tania Whyte
The region’s most expensive suburb, Tamaterau, saw little in the way of capital gain, with the median value rising just $12,750 or 1.8 percent, down on the huge gain it made the year before — a staggering $87,000.
More affordable suburbs, such as Woodhill, Morningside, Avenues and Onerahi, saw rises of between $38,000 and $43,000, suggesting increased buyer activity at the lower end of the market in the city.
Bayleys real estate agent Kirsty McCorkindale sells properties in Whangārei Heads and said the area has become popular for many people in the last four years.
Its beautiful location, access to the beach, spectacular views and proximity to central Whangārei were the appealing factors to buyers, she said.
“A lot of people who have grown up here before moving elsewhere are now coming back to have families and they are in their 30s. Also, those who are from elsewhere in Whangārei are choosing to buy properties in Whangārei Heads.”
Houses in Whangārei Heads fetch more than $500,000 and she sold one in June for $2.11m.
OneRoof editor Owen Vaughan said the growth in values in parts of Northland was a good indicator of improved business confidence, better employment prospects and an increase in infrastructure spending.
“Growth in Kaipara and Whangārei districts reflect the area’s growing popularity among Auckland first-time buyers searching for more affordable housing and a lifestyle change.”
When tracking suburb values, he said we tended to focus on whether it has gone or down by “x” percent, not the dollar value that represented.
But by looking at both, Vaughan said one could see that even small percentage changes in high-value suburbs translated into significant dollar gains or losses.
“Thus, the top-earning suburb, One Tree Point, can still reap $60,000-plus gains even though not much has changed in its market in the last 12 months.
“Whereas a $48,600 increase in Maungaturoto’s median value represents a much bigger percentage change on the year before.”
Vaughan said while homeowners in high-value suburbs could take comfort their properties were still earning a decent chunk of money even in a relatively flat market, the flip side was the value of their homes could drop substantially if values dipped by just a few percentage points.
CoreLogic NZ senior researcher Kelvin Davidson said: “It’s important to note that the comparison of property capital gains has been made to national, individual earnings. Combined household incomes are much higher and will have beaten property gains in many areas.
“We also need to bear in mind that the value growth is only ‘on paper’ until the property is sold, and people often have to buy and sell in the same market, where everything has changed in value by similar amounts.”
This is what it takes to get on the property ladder in Auckland
POSTED ON: October 18, 2018
Buying a house in Auckland is difficult. With average property values of more than $1 million, getting on the ladder in our biggest city seems to be out of the reach of most ordinary people and even some reality TV stars and social media influencers.
Property values have stabilised in Auckland in 2018, but the average remains in seven figures, although there is variation in values across different parts of the city.
In the eastern suburbs the average is more like $1.5 million, while in Papakura and Franklin County, the southern-most parts of the city, prices of $700,000 and below are common.
How would a young couple earning about the average salary in Auckland fare when it comes to getting on the ladder?
Let’s assume they both earn the median salary for someone of their gender in Auckland, both contribute four per cent to Kiwisaver and that one of them (let’s say it’s the woman) pays off a student loan.
The median salary for a man in Auckland is about $63,000 and for a woman it is $53,000. Together they have a combined income of $116,000. After all the deductions they are left with about $1600 a week in take home pay.
Their four per cent Kiwisaver contributions, topped up with three per cent from their employers and the $521 annual tax credit from the Government mean they collectively add about $9000 a year to their Kiwisaver accounts, before any interest is earned.
In the best case scenario they are in the market for a house worth less than $650,000 as anything under this qualifies for a Welcome Home Loan in Auckland, which means you only need a 10 per cent rather than 20 per cent deposit.
(The other condition is that a couple earn less than $130,000, which our couple do).
Houses below this price fall in the bottom 25 per cent of values in Auckland and are likely to be further from the CBD.
To get into a $650,000 home they would need a $65,000 deposit with a Welcome Home Loan. Both should also qualify for Home Start grants of $5000 after five years in Kiwisaver, so would they actually need to save $55,000 themselves.
Just relying on their Kiwisaver it would take about five years to build up $55,000, assuming an interest rate of five per cent.
They could of course make this happen quicker by upping their contributions to eight per cent, or saving separately from Kiwisaver.
Getting a deposit together is only the first step – using a $65,000 deposit to buy a $650,000 home is going to leave them with a $585,000 mortgage.
Assuming an interest rate of five per cent and a repayment term of 25 years, they are facing weekly repayments of about $800, half their take home pay of $1600 per week. Throw rates and insurance on top of that and you are looking at close to 60 per cent of take home pay being spent on housing costs.
If interest rates go up to to six per cent, repayments would increase by $70 per week, or $3640 a year.
But the $650,000 home with a 10 per cent deposit constitutes the best case scenario for our couple. And even then their circumstances are precarious, with the mortgage repayments chewing up the majority of their take home pay.
How would they fare buying a property worth the median value in Auckland of $800,000?
This immediately disqualifies them from the 10 per cent Home Start deposit, so to get a foot in the door they will need to find $160,000.
What would it take for a couple on their joint income to do that in five years?
Upping their Kiwisaver payments to eight per cent would be a good start. Over five years at an average return of five per cent, our couple would have saved about $80,000, half of what they need for a deposit.
To get the rest within five years they would need to put away about $15,000 a year, or almost $300 a week.
How feasible this is is really going to depend on their circumstances: how much rent they pay, whether they have children, what their transport costs are like. By upping their Kiwisaver contributions to eight per cent they reduce their weekly take home pay from $1600 to $1450.
Take off average rent in Auckland for two-bedroom place of about $500, add in power and internet bills, transport costs and food and it’s not hard to see how most of that could be gone before you even think about savings.
But let’s assume they somehow manage to build a $160,000 deposit over five years, convince the bank to lend them the money despite their modest incomes and buy an $800,000 property in Auckland
Their $640,000 mortgage at five per cent over 25 years equates to about $860 per week. Put rates of $40 per week on top of that and they are left with $700 each week.
So yes, it is technically possible for our couple earning the median salary Auckland to get on the property ladder. The best way is to buy in the bottom end of the market under $650,000 where they can take advantage of the 10 per cent deposit, Welcome Home Loan scheme.
But the deposit is potentially the easy part, with repayments for a property in this price range taking up the majority of their take home income they are very vulnerable to an increase in interest rates or a loss of income.
And don’t forget that as this couple both earn the median wage, 50 per cent of fulltime Auckland workers earn less.
Getting into the Auckland market: a first home buyer’s story
POSTED ON: October 3, 2018
Nikki Green and her family are among a growing number of first-home buyers to have found their way into the property market after a decade of unaffordable prices.
Auckland’s skyrocketing prices had earlier left Green feeling like home ownership was a dream that would forever remain out of her reach.
However, with prices stagnating over the last 18 months and interest rates at near record lows, she was finally able last month to purchase a four-bedroom family home in Ranui in Auckland’s west.
Paying less than $650,000, Green also took advantage of loosening lending restrictions that allowed her to take out a mortgage with just a 10 per cent deposit on the home’s value.
“If the Auckland market had continued the way it was, we were always going to be behind because the amount you can save versus the amount house prices were increasing by meant you took one step forward and two steps back,” she said.
“So by the time you had saved $5000, house prices had increased by $10,000 or $15,000.”
But with market conditions improving and more than three years savings behind her, one of Green’s first steps into the market was to approach a mortgage broker for help finding the best loan.
Knowing she already had the bank’s backing allowed her to act quickly when favourable property’s came up.
This, together with more sellers being open to negotiation rather than simply putting their homes up for auction, meant Green was able to make a successful offer for her Ranui home.
“We were in a multi-bid situation and ended up offering the price the seller was asking for,” she said.
“But that price was a very good reflection of what the house was worth and so we were quite comfortable.”
She said her family had wanted to live in west Auckland – close to her three children’s schools and day care centre – and didn’t want to wait for the chance to enter a ballot for a KiwiBuild home.
“Out west is by far the best option for first home buyers in Auckland – there is the motorway upgrade, the schools, the amenities and the house prices are still achievable,” she said.
She also thought the competition for a KiwiBuild home would be fierce.
“There are so many families that haven’t been able to purchase for so long now that the dream of owning a home has become really unattainable – KiwiBuild gives them hope,” she said.
But it’s a dream that Green worries is fading for her own children unless she and her husband can find a way to help give them a leg up.
“I don’t think the next generation will be able to get into their own home without old money,” she said.
“So you need to look at using your own assets earlier to help your kids get a step up.”
Could the Auckland apartment market be about to catch a fresh head of steam?
It’s a suggestion from apartment specialists City Sales who say city limits on outward growth and growing congestion will see demand pick up again.
The real estate agency’s principal, Martin Dunn, said the two factors were precipitating a shift to inner-city living “not seen since the gentrification of the Ponsonby and Freemans Bay worker s cottages in the 1970s”.
But there would not be enough skilled tradespeople to cope with demand.
August sales figures out from the Real Estate Institute of New Zealand show early signs of spring in the Auckland market. Sales slipped a seasonally adjusted 1.5 per cent but the median price rose 1.4 per cent to $852,000.
Dunn’s comments are restricted to apartments but he said buyers were realising recent changes in property regulations were not as bad as feared.
Winter had seen sales volumes drop to a 21-year low due to a combination of foreign buyer restrictions, restricted lending, affordability caps and “most importantly” a predicted end of the apartment building cycle.
“People who want to sell have been holding back, people who want to buy have been waiting,” he said.
However, Dunn was convinced that demand was building in a market that had no way of meeting it.
The city needed 14,000 dwellings a year while in reality it was only building in the single-digit thousands. “Don’t be misled by the ‘thousands’ of new apartments coming to market. Many will never make it to construction”
“Our current prediction is that this pent-up demand is to be released over the New Zealand summer, and we’re seeing signs of this already.”
Gavin Lloyd, national director of residential projects at CBRE, said he couldn’t speak for the existing apartment market, but off the plans sales were showing early signs of recovery over the last two quarters.
He agreed with Dunn that some projects might not eventuate because “acute challenges” in the building and funding sector.
Well-funded developers would still get developments off the ground and well-heeled Australian developers were starting.to come into the market to fill the void.
But the fact was that even though apartment sales were down, there was sill underlying demand.
“The fact that some projects won’t be able to go ahead because they can’t be built or funded is just putting more strain on us producing more housing so it’s a bit of a vicious cycle.”
Statistics suggest Auckland and Canterbury to enter spring real estate market early
POSTED ON: September 6, 2018
The Auckland and Canterbury property markets are enjoying an early spring surge, new statistics suggest. From 8739 new listings on a propery website across the country in August, numbers show almost half of them were in the two regions.
“Spring appears to have come early for the Auckland and Canterbury regions,” realestate.co.nz spokeswoman Vanessa Taylor said.
“Canterbury has been an active market for some months, but it seems that the Auckland region has now sprung back to life with a surge of new listings.”
The figures come as OneRoof revealed yesterday the fastest-rising suburbs in the Auckland region. Seven of the 10 Auckland suburbs with the highest jump in house values between April 1 and July 31 had median prices above $1 million, the OneRoof Property Report showed. Yet it was the Auckland region’s cheapest town or suburb, Wellsford, with a median price of $536,600, that proved the pick of the bunch as its home values jumped 3.4 per cent. Taylor said Auckland registered a 6 per cent increase in August compared with the same time last year and Canterbury increased 7.2 per cent.
But the number of new listing nationally is static, rising only 0.1 per cent compared with August last year. Statistics also call attention to a record high in asking prices for 11 regions and a record low of total stock numbers for nine regions. Central Otago/Lakes District led the nation’s increase in property asking prices with an average asking price of $1,019,094.
“This is the first region to ever reach the one-million-dollar asking price milestone in the 11 years of data collection history on realestate.co.nz,” Taylor said.
“Whether Central Otago-Lakes continues to outstrip Auckland as the most expensive region in terms of asking prices remains to be seen.”
First-home buyers faced the brunt of the stock numbers slowdown, with an all-time low registered in the number of homes since recording began in 2007.
The stock level of houses in August was 21,207, down 1.6 per cent on the same time last year.
A flattening of house prices is making home ownership more affordable
POSTED ON: August 27, 2018
Housing affordability is improving for first home buyers in most parts of the country but the improvements are so small most aspiring first home buyers probably wouldn’t notice the difference, according to interest.co.nz’s latest Home Loan Affordability Reports.
The reports track movements in dwelling prices, mortgage interest rates and incomes in 41 locations around the country to see how much of a typical first home buying couple’s weekly income would be eaten up by the mortgage payments on a lower quartile-priced home in each area.
Nationally house prices appear to have been relatively stable since the end of summer, with the REINZ’s lower quartile selling price staying within a very narrow band between $375,000 and $381,000 since March.
But while lower quartile prices have been more or less flat, mortgage interest rates have been steadily declining, with the average of the two year fixed rates offered by the major banks dropping from 4.84% in February last year to 4.63% in July this year.
And incomes have been slowly rising.
Interest.co.nz estimates the national median take home pay of typical first home buying couples (both aged 25-29 and working full time at the median pay rate for their age group) would have increased from $1598.89 a week (after tax) in March, to $1610.48 in July.
Over the same period, the REINZ’s national lower quartile selling price declined marginally from $381,000 in March, which was a record high, to $377,707 in July, while the average two year fixed mortgage rate also fell from 4.67% in March to 4.63% in July.
That meant that the amount that would need to be set aside each week for the mortgage payments on a lower quartile-priced home would have dropped from $366.66 in March to $360.20 in July.
When that’s combined with the small lift in incomes it would make typical first home buyers better off by $18.05 a week in July compared to March, and the proportion of their net pay that would be eaten up by mortgage payments would have dropped from 22.93% to 22.37% over the same period.
While the improvement in affordability is relatively small, it is at least a step in the right direction and the trend is evident in most parts of the country.
The end of a sustained period of rapid price growth and worsening affordability?
The flattening of house prices that has occurred appears to mark the end of a sustained period of rapid price growth and worsening affordability, with the REINZ’s national lower quartile house price increasing by 39.9% over the last five years, from $270,000 In July 2013 to $377,707 in July this year.
Tomorrow we will get a fresh update on the local housing market when REINZ releases it’s data for July. While winter is traditionally slow for the real estate sector, a slump across the Tasman has heightened concerns that we may see price falls here for the first time in several years. At a national level the average price will likely continue to rise as we see growth roll on in regions like Nelson and Wellington.
But in Auckland, where prices have been flatlining for more than a year, the prospects of prices slipping in to negative territory looks increasingly real. Even Reserve Bank Governor Adrian Orr has warned of the possibility.
“We’re within a wisp of that happening in Auckland housing prices at the moment,” Orr told TVNZ’s Q+A at the weekend.
On one level Orr has simply acknowledged that markets always rise and fall – something no investor should ever forget. He was careful to add that a slump is not forecast in the Reserve Bank’s current projections. Could we see Auckland prices follow the pattern they have in Sydney, where they are off by five per cent – with some economists predicting a fall of up to 15 per cent?
One would imagine that, with the shortage of housing in Auckland still acute and immigration still strong, the basics of supply demand would prevent a major slump. But as Orr also points out extended periods of stability in markets are more of an exception than a rule. And if history is any guide, where Auckland goes the rest of New Zealand soon follows. Orr has the luxury of some trump cards up his sleeve. If the market were to slump harder than expected the Reserve Bank could loosen the LVR (loan to value) rules currently making life tough for investors and some first home buyers.
It also has scope to cut interest rates. Stating in last week’s Monetary Policy Statement that rate rise was unlikely until 2020 has already helped to put downward pressure on mortgage rates. Regardless, the fact is that the Auckland housing market in 2018 looks very different to the one we have grown accustomed to. We need to brace ourselves for an economy that is no longer underpinned by the “wealth effect”. In other words consumers are no longer spending in the surety that their property values will rise by more than they can earn in a year. That has to be contributing to the slowdown in economic growth this year.
As an infrastructure report (released today) by Chapman Tripp points out, house price growth has outstripped income growth in this country every year since 2003, producing one of the worst house price to income ratios in the OECD. Many homeowners simply won’t remember a time when the market wasn’t a one way bet. The quiet market conditions should be welcomed by first home buyers. Slowly we’ll see more affordability returning to the market. This may be helpful for the Government’s social goals.
But the Coalition will need to keep a watchful eye on the data because, like it or not, we remain a nation of property owners and investors – with our fortunes tied to our homes.
So you’ve decided to sell your property. If you want to maximise your investment in your home, you need to think carefully about how you’re going to sell it. Most importantly, who will you choose for the task? Doing a bit of research before you sign an agent’s listing form can make a huge difference to your ultimate satisfaction.
Most people go to real estate agents because they offer professional service, have experience in the process and they know the market. There are many advantages to selling a home through a real estate professional. They’ll save you time, leaving you to get on with your own responsibilities. And they can take the stress out of navigating your way through the complexities of the various selling methods.
They know what’s happening in the marketplace. Agents track sales in your area and measure trends. They can counsel home owners on the best pricing and marketing strategies.
They know where to go to gather data such as title searches, land information reports, codes of compliance and easements that will facilitate the sale. And they also know how to interpret such documents. Many legal issues are involved in real estate transactions and real estate salespeople can help you manoeuvre safely through the process and refer you to legal assistance when required.
There’s over 7,000 square metres of commercial property for lease in New Zealand, according to realestate.co.nz data. Every inch of that space represents an opportunity for tenants to further their businesses, and for landlords to strengthen their investments.
However, this mutually beneficial relationship only works if you pick a quality tenant in the first place. Look for these hallmarks of an excellent commercial tenant when you’re choosing yours, and you’ll give your investment the best chance to grow.
1. They’re suitable for your property
If your property doesn’t have what your tenant needs then the relationship is unlikely to work out in the long term. That’s because they’ll likely move on quickly, or their business may suffer making it difficult to pay rent.
It’s ultimately the tenant’s responsibility to decide whether or not the property is right for them. However, it’s worth speaking to them to make sure.
Talk to your prospective tenants before deciding. Learn what exactly they need in a space, how much space they need, what they don’t like about your property, how fast they’re growing and what their plans for the future are. Check with the council that your property is zoned for their business activities. Ultimately you should aim to find a tenant whose business will genuinely benefit from the tenancy.
2. Their business is stable
If a tenant signs a lease and can’t afford it down the track it could cost you a lot of money and time. It’s a good idea to request their financial records and have your accountant inspect their contents to help make sure they can afford to pay the rent.
If they’re not willing to disclose this information, an informal conversation between their accountant and yours may suffice. Alternatively, requesting that they provide a bank guarantee of six months’ rent will ensure you don’t sustain losses if they default.
For an extra layer of protection you can also request that the company’s’ director provide a personal guarantee. This will mean that if the company becomes insolvent the director will be personally responsible for any money owed under the lease agreement.
3. They have good rental history and reputation
To make sure you’re picking a good commercial tenant, checking their rental history and their business’ reputation is a great idea. Speak to their current or past landlord if possible and ask how they were as tenants and if they paid rent on time.
If you want to know more you can ask the landlord if you can inspect their current premises to see how they keep the property. The more you can find out the better, as it will help you avoid any unfortunate surprises down the track.
If your tenant isn’t suitable for the area they may not stay for the long term.
4. Their business compliments the area
Most commercial premises do not exist in a vacuum. They’ll have neighbours, and possibly even other businesses operating above or below. The best tenants are those whose businesses fit in well with the surrounding area and improve it with their presence.
Companies with strong brands, whose businesses are similar or complementary to those around them are what you need. On the other hand, if their business is likely to cause a nuisance to other tenants through noise, mess or other issues they’re not the right choice. Putting a heavy manufacturing tenant next to a yoga studio is clearly a bad idea, for example.
If you take a little care when selecting your tenant your investment will thrive.
The top 5 most liked NZ homes on Instagram this autumn
POSTED ON: July 5, 2018
As we head into winter it’s time to round up the most loved houses of the autumn season. Whether it’s a classic Kiwi bungalow or a sleek modern masterpiece, these houses are the perfect inspiration for your future dream home.
Take a look inside our top 5 most liked Instagram photos this autumn.
5. The Lake House, 5 Refuge Lane, Jacks Point
Nestled among the mountains near Queenstown, this architecturally designed home was the perfect spot to keep warm this autumn. Views from every room and a hot tub looking out to the mountains – what’s not to love?
4. 356 Rockell Road, Whananaki
This beachfront sanctuary is the perfect escape from the city. Surrounded by native bush and wildlife, this home is a quiet paradise – and we couldn’t think of a better place to have an evening spa either…
3. 22 Bella Vista Road, Herne Bay
A classic villa with immaculate modern renovations, this Herne Bay home has all the bells and whistles. Picture perfect exterior, stunning modern interiors and that pool – it’s safe to say we’re in love.
2. 5 Wroxton Terrace, Fendalton
This Christchurch home exudes modern minimalism and style. With Scandinavian inspired interiors and light lofty ceilings, this is truly a designer dream home.
1. The Leaf House, 17 Loop Road, Kelvin Heights
We can’t say we’re surprised this home came out on top – this Queenstown home is like no other. Inspired by nature, The Leaf House has been architecturally designed to resemble three leaves from above, complete with stunning views across Lake Wakatipu.
After you’ve cleaned the inside and outside of your whole home in preparation for the big move, it’s probably time to destress, rest up and spend some quality time with your family. Here are our top tips to make the whole moving process a whole lot easier.
Set aside some family time
Set aside time each week to get a meal together or head out to the beach. It’s valuable to make sure the whole family is informed and kept happy during this process. Whilst the open homes are going on, your agents can often take care of everything which leaves great opportunity to spend some family time together. Quality time can be sparse during the whole selling and moving process so take advantage of this small time gap to keep everyone up to date with what’s happening.
Make a weekly plan
Formulate a plan of attack for the weeks leading up to your move. This can include a chronological list of jobs to tick off, each allocated to a week. Bit by bit, week by week, start decluttering, organising, cleaning and packing (if you’re not hiring someone for that). It’s amazing how much junk can accumulate in the garage or in the back of your children’s wardrobes and how much time you’ll need to spend on this – don’t leave everything until the last minute. Having a comprehensive list can take the stress off wondering what you’ve missed, or what you still have to do.
Prepare a moving day kit
If you’ve been successful in selling, now it’s the next big step of moving. Create a pack of ‘essentials’ for the day. This includes water and snacks to keep your energy and focus up, toiletries (so they don’t get packed up and are easily available in the new home for that first night) and a change of clothes – because who knows what could go wrong.
Keep kids entertained
If you have children young enough that need looking after, ask a friend or family member if they can hang out with them for a day here and there, it can be one less thing to worry about while getting your house ready. This same tip applies on moving day. However, if they are old enough to take care of themselves then get them helping out.
By taking the time to organise and prepare for the big move for both you and your family, it can make the whole process of selling your home that much easier.
Every house has its own character, a character that reflects its occupants’ tastes, needs, and desires. When you’re looking to build or renovate your home, a great place to start is to define what you want out of your home – what is important to you, items that reflect your values and your preferred way of living.
Use the checklists below to help you define what you want and need within your home.
Defining what you need
This is a definite list of things that are necessary for you to live in your home. How many bedrooms do you need? Would one bathroom be enough, or do you need to have two? Think about what you need right now, remembering you can always add more elements in the future.
Deciding what you want
This is the place for the things you’d love to have – maybe a spa, pool or energy efficient home takes your fancy. While this can be a list of ideals, it’s also a good place to refine what you want if plans go over budget.
Budget day: High earners eager for others to benefit
POSTED ON: May 22, 2018
Martin Cooper and Kim Van Hest live in Albany, Auckland, in a house they own themselves.
Between them they have six children and two grandchildren and are “financially comfortable”.
Cooper owns Cooper and Co Real Estate Ltd, a successful real estate company in Auckland and Van Hest, a former fashion designer, is retired.Both want to see the Government deliver on getting more first home buyers into their own homes.
“[Phil Twyford and Labour] campaigned on Kiwibuild and providing 100,000 homes. I’m hoping to see measures that would make this happen,” Cooper said.
He said the Government could “figure out where to get the money from” to make Kiwibuild a success, he just wanted them to do it.
Cooper also wanted to see a good chunk of money allocated for Auckland’s public transport system so the city could capitalise on its status as a big business hub in New Zealand.
“Most of the people that live in Auckland that don’t live and work in the same spot – if they want to get to the airport it’s a major issue, or get across town, or to a show or out on the weekend – it’s major congestion.
“I’d like to see a major focus on policy and funding to ease congestion,” he said.
“People in Albany don’t want to pay for trams down Dominion Rd – but it needs to be a holistic approach.”
He was interested in adequate funding in areas like police, healthcare and education to ensure a bright future for his children and grandchildren.
Van Hest also wanted help for first home buyers, saying it would be good to see some kind of one off payment introduced to help people buy their first home, like Australia has.
She also wanted funding for practical environmental projects, like machinery for a recycling scheme which returns cash in exchange for recycling, and more water fountains so people could fill their own reusable ones on the go.
Mainly though, she wanted better funding for the mental health sector.
“That’s a priority for me,” she said.
“For the amount of suicides we have, it’s tragic out there.”
Appearances play a huge part in first impressions, especially when it comes to viewing open homes. When preparing your house for an open home, it’s easy to forget what first impressions your home gives off, and to many potential home buyers this can be a make or break. To help, we’ve compiled our 5 top tips that will ensure the exterior of your house is ‘open-home’ ready.
Take a look at the condition of your deck. Is it looking in good shape for a potential buyer? Decks can easily suffer from overgrown moss and lichen, which will cause the surface of the deck to become unappealing. An easy solution is to water blast it or get a hard bristled broom and brush it down. Either will be ideal for slippery fungus and growth and will quickly remove it from your deck. If you want to go a step further, you could also add a new coat of stain or paint to ensure that it can endure the different conditions that will be thrown its way.
Make sure your roof is clean and tidy with no debris, to make it look presentable for your open home. You could also do further work like ensuring your roof is clear from sprouting plants, or replacing loose roof claddings for some long term maintenance that will appeal to potential buyers.
3. Exterior walls
The exterior of your home endures many seasons and likely will have gradually have built up a collection of who knows what on it. It’s the first part of the house a potential buyer will see, so taking care of it is important. Book a professional house washer from professionals and get your house looking brand new. You can also do it yourself if you have the equipment. If you can reach the main spots, get a soft bristled broom to brush it off. Checking the foundations, soffits and the fascia for discolouration, flaking, cracking or rotting is important too as this protects the integrity of your home.
During the colder months it’s natural to have some mould and mildew built up behind curtains. Making sure your windows and window sills are clean and clear is key when having an open home. By combining a good glass detergent and a soft cloth will easily eliminate anything unsightly.
By making sure your lawn is neat, mowed, with a well-kept, weeded and trimmed garden, potential buyers will see a different garden that you probably never saw. It makes a huge difference aesthetically and greatly improves your chances of selling. If you find there’s too much to take care of yourself, Professional gardeners are always ready to help out.
Taking the time to clean the exterior of your home will not only improve first impressions, but add value to your home in the long term. By keeping on top of your household maintenance you’ll ensure you don’t have too much work to do, come time to sell your home.
For many New Zealander’s, our homes face cold and damp conditions when winter sets in. Whether you’re building new or wanting to protect an existing home, it’s important to consider ways to a healthier drier home this winter. By ventilating your home you can combat a variety of issues that the winter months bring including issues with airtightness in new homes – here’s how ventilating could benefit you.
1. It helps prevent mould and mildew
As the weather cools over the winter months, cold damp conditions provide the ideal breeding ground for mould and mildew. These can be causes of common winter illnesses, so it’s important to keep your home as dry as possible – not just for your home’s sake but for your health.
It’s often expected that these issues may arise in older homes throughout New Zealand, but it’s also becoming increasingly more visible in new builds. The Building Research Association of New Zealand (BRANZ) found that mould was visible in nearly half (49%) of all properties surveyed in the 2015 House Condition Survey. This figure may rise over the next few years due to the building boom New Zealand is experiencing. Why? Because new homes are significantly more airtight than older homes, which means they’re more likely to trap all that mould and mildew in if not properly ventilated.
2. It protects you and your family against dust mites and fungal spores
Suffer from allergies? You’re not alone. Many New Zealander’s allergies arise from the presence of dust mites and fungal spores in their homes. They thrive in warm, humid places so one of the best ways to protect against this type of allergen is to make the home drier. A typical household will produce about 12 litres of water per day from cooking, showering and general living. It’s easy to see how excess moisture builds up easily – and that it takes more than the occasional opening of a few windows to dry a home out.
3. It reduces excess water vapour and moisture
Ventilation systems are the most effective way to reduce excess water vapour. They continuously push out the moisture-laden, stale air, replacing it with fresher, drier air. The air is filtered before it enters the home, significantly reducing exposure to dust, pollen, plant spores and other inhaled triggers.
By keeping excess moisture and condensation in a home to a minimum, you can significantly improve the environment for allergy and asthma sufferers in your home. A drier healthier home can relieve their symptoms and reduce the number of sick days’ your family experiences each year.
4. It keeps your air quality high
Good ventilation and home heating are essential for maintaining good air quality. In new, well-sealed and insulated homes, this is equally important. When building it’s easy to forget about ventilation amongst all the other decisions you have to make – like curtains, carpet and furniture. It’s easy to forget that mould would be an issue in a new home, but if you think smart when it comes to building you can easily combat these issues – keeping those beautiful interiors mould free.
5. You could save on the cost of heating
Ventilating your home can also save you money – particularly in the long run. A damp home is much harder to heat than a dry one, so by keeping your home well ventilated you’ll save on the cost of heating. A damp home can also deteriorate internal furnishings quicker, meaning that interiors like paint and wallpaper may need replacing earlier than usual. Ventilating your home properly removes the excess damp, moisture-filled air and improves the overall air quality inside the house, making it much healthier for you and your family. No one can afford to be sick or spend on unnecessary doctors’ bills, so investing in ventilation will not only keep your home healthier, but your family too.
New Zealand’s economy had an excellent 2017, according to the Treasury’s most recent economic update. Towards the latter half of the year businesses showed continued optimism, displaying positive employment and investment intentions, and population increases bolstered solid GDP growth.
With both global and local economies showing improvement, all signs point to this being another outstanding year for doing business in New Zealand. This strong growth, as well as large-scale infrastructure improvements and several other factors, could give rise to countless lucrative commercial property investment opportunities.
Here’s what we’re looking forward to for New Zealand’s major commercial property markets in 2018.
Auckland’s growth bolstered by infrastructure projects
In 2018, the New Zealand commercial property market will continue to provide good opportunity. In Auckland, the City Rail Link and Commercial Bay work will come closer to completion. Investors in the city should look closely, as these developments will strengthen demand in the area around Commercial Bay and along the rail lines when completed.
Office stock is also expected to remain in hot demand. Infometrics data shows that yields are low for commercial property here in Auckland, but that’s merely reflective of the low level of risk associated with the investment. Data from realestate.co.nz shows that there was just 56,347 sqm of office space for sale in the city towards the end of 2017 – demonstrating how strong demand is.
Wellington entering a period of prosperity
Wellington is entering a period of impressive growth coming into 2018. Stuff reported that the windy city has recently entered its largest ever period of retail property construction.
Data from realestate.co.nz data shows that there was 38,380 sqm of retail space available in Q3 2017 and by Q4 that number was just 2,025 sqm. The upcoming construction works should boost that number considerably over the next few years providing opportunity for investors.
Office space in Wellington is also seeing huge demand after a much of the stock was damaged in the earthquake creating a supply shortage. Vacancies in the city are near record lows at just 1%. This demand/supply imbalance could push rents up, boosting yields on office property in the city considerably over 2018.
The Amazon effect
Amazon accounted for almost 53% of online sales growth in the US in 2016, according to Slice Intelligence. The retail company also captured a whopping 43% of all online sales over the holiday period, casting an imposing shadow over all retailers.
In late 2017, Amazon Marketplace launched in Australia, and IBISWorld reports that Amazon plans to dominate the market early – undercutting competitors by 30% on price. The online giant may or may not open a New Zealand equivalent in the near future, however industry analysts forecast commercial property in New Zealand could still be affected.
2018 will be a period of impressive growth in New Zealand’s main commercial property markets. In comment to the New Zealand Herald, Bayley’s Managing Director Mike Bayley explained that Amazon’s entry could spur retailers to prioritise fulfillment and distribution. This may cause increased demand for industrial real estate in infill locations close to customers and infrastructure.
Investors should look out for such opportunities in main cities like Christchurch, Auckland, Tauranga, Wellington and Hamilton. This increasing demand driven by a changing market could see their values, and asking rents increase rapidly.
Scroll through any property website when searching for your dream home and you’ll spot a variety of sales methods. If you’re looking to buy, it’s smart to learn as much as you can about the most common methods of sale so you know what to do when the time comes to make an offer. Here’s what you need to know.
The most common methods of selling residential property in New Zealand are ‘by negotiation’ or ‘by advertised price’ and ‘deadline sale’. These all require you to sign a standard Sale and Purchase Agreement, which sets out the price and conditions. Properties can also be sold by auction or by tender.
Sale by negotiation or by advertised price
If you’re interested in a home that’s for sale by negotiation or by advertised price, it’s a good idea to prepare some questions for the real estate agent listing the property. If there is no price indicated, start by asking what the seller’s price expectations are and what other comparable homes have sold for recently. Ask how long the property has been on the market for and if the sellers have rejected any other offers.
Once you have decided on the price you are willing to pay and any conditions, the real estate agent will prepare a Sale and Purchase Agreement that sets out your offer. Seek advice from your lawyer before signing this legally binding contract.
The agent will also advise you if you’recompeting with any other buyers. If so, this turns this method into a multi-offer process.
Take the time to do your research – find out as much about the property as you can and ask your lawyer to help you understand any relevant documents.
Don’t tell the agent what your price limit is. Remember that although they are obliged to be open and honest with you, they work for the seller.
If you are unclear about anything during the negotiation process, talk to your lawyer.
If a property is being sold by deadline sale, the seller sets a date and buyers can make an offer at any time before that date. The seller may indicate the price and buyers can offer more or less than that price and negotiate the sale.
Take the time to do your research – find out as much about the property as you can and ask your lawyer to help you understand any relevant documents.
You must submit your offer by the deadline set by the seller. They can choose to accept an offer before the deadline.
If you are interested in the property, tell the agent (ideally in writing) that you want to be informed if another offer is going to be submitted prior to the deadline date.
Make sure your offer is as attractive as you can make it.
Buying a property by tender
When a property is for sale by tender, buyers give confidential written offers to the agent before a specified end date. If the property is advertised as ‘for sale by tender (unless sold prior)’, you can make an offer at any time before the tender deadline. The seller can accept an offer at any time. They don’t have to wait for the end date.
Take the time to do your research – find out as much about the property as you can and ask your lawyer to help you understand any relevant documents.
Register your interest with the agent if you intend to make an offer so they can let you know if another offer is received before the end date.
Your offer must be in writing on a tender document, which is a type of sale and purchase agreement. You can request the tender document from the agent or ask your lawyer or conveyancer to draw this up for you.
Think carefully about the price at which you would be willing to walk away. Once the tender has closed and the offers are on the table you may not get another chance.
What about multi-offers?
A multi-offer process happens when more than one buyer makes an offer on a property. A multi-offer process can also be used if a property has failed to sell at auction or in a tender or deadline sale process if a buyer has made an early offer. In these cases, an agent may initiate a multi-offer process where all interested parties are invited to submit their best offer. If you have registered an interest in a property that’s being sold by negotiation, deadline sale or advertised price, an agent may contact you to say that it is now a multi-offer situation.
Some real estate agencies will ask you to sign a form stating that you understand you have competition and may have no further chance to negotiate with the seller.
Your best chance of securing a property in this scenario is to make your terms and conditions (if any) the absolute best they can be. You will only get one chance.
Buying a property at auction
At an auction, the property is sold to the buyer with the highest bid after the seller’s reserve price is reached. Auctions are unconditional – you can’t change your mind if you win – so you need to learn as much as you can about the property before auction day and have all your finances approved. Auctions take place in the real estate company’s auction rooms or can be held on-site at the property.
Take the time to do your research – find out as much about the property as you can and ask your lawyer to help you understand any relevant documents.
You must register your interest in the property in writing to the agent. Make sure you ask the agent to tell you if the auction date is brought forward.
The agent will give you the auction contract, a guide on how the auction process works and supporting information about the property. Make sure you consult your lawyer or conveyancer and send all the information through to them for consideration.
Make the effort to go to other auctions held by the same company marketing the home you are keen on so you get a feel for how they are run.
If you are not happy with the terms and conditions set out in the sale and purchase agreement included with the auction documents, talk to your lawyer and the real estate agent marketing the property. The lawyer can help draw up a variation to the contract that will be presented to the seller for consideration before the auction.
Where to go for more information
Buying a home may be the biggest financial decision you’ll make, so it’s important to educate yourself on the risks and learn how to avoid any problems. Visit settled.govt.nz for more in-depth, independent and guidance information about buying and selling property.
4 facts to help with your first commercial property investment
POSTED ON: March 23, 2018
At the end of 2017 there was over 1.35 million square metres of commercial space for sale in cities around New Zealand, according to realestate.co.nz data. That’s more than 135 full-sized rugby fields worth of warehouses, offices, shops, carparks, hotels, showrooms and commercial land.
Commercial property is thriving, and all that space represents a massive opportunity for investment, for those savvy enough to take it.
However, these types of properties often scare off newer buyers. Investing in commercial property can be seen as confusing, intimidating, risky and expensive. Plus, we don’t typically have an innate understanding of how it works, like many New Zealanders do with residential property.
To help you better understand the commercial property market, we’ve put together 4 facts you need to know to make your first commercial property investment
Could you invest in commercial property in New Zealand?
1. Commercial properties may be higher risk, but there are methods to overcome this
A far smaller group of people need a commercial property, or are willing to invest in one, than residential. This makes commercial investments far less liquid. That’s why you need to choose wisely, to ensure that you’re not stuck with a commercial property that you can’t sell or lease.
Commercial property is also usually riskier than residential. Most of this risk is thanks to a higher chance of vacancies, and due to it being more difficult to find suitable tenants once a vacancy does occur however there are methods for minimising and overcoming these risks.
To lessen the chance of vacancies your best bet is to buy a property that already has a high-quality tenant in place on a long-term lease. Finding such an opportunity may take time, but it’s worth the effort to ensure long-term stability.
That’s because commercial leases are often on four year terms or longer, with the option to renew at the end of that period. That means you’ll have four years or more of guaranteed income with very little risk of vacancy. You also may have two yearly rent reviews written into your lease.
Government, solid business, or large corporation tenants are considered ‘blue chip’.
2. A quality lease and location is key
Another point to take into consideration to minimise your risks is the quality of the tenant. Government, solid business or large corporation tenants are considered ‘blue chip’ and may sign leases on a longer term. They are likely to stay put for decades, and having such a tenant in place on a quality lease can vastly increase the value of your property.
Furthermore, you’ll need to buy in a good location near infrastructure, amenities, other businesses, and transport. If the tenant leaves this will make it far easier to attract another high-quality tenant on another long-term lease.
3. A higher initial investment can lead to greater returns
Banks in New Zealand will generally only lend 65 – 70% of the value of any commercial property due to their higher risk. That means if you want to invest in a building worth $500,000 you may have to come up with as much as $150,000.
That high cost of entry is enough to scare off most new investors, but that shouldn’t put you off. Despite the large initial costs, the rewards and benefits can make it well worth the cost if you are in a position to gather the initial investment.
Commercial property in New Zealand offers great opportunities for those willing to take them.
4. Your tenant may cover outgoing costs and rental returns are far greater
With a residential property investment you’ll have to cover property maintenance, rates, insurance, repairs and more. With a commercial property, however, your tenant will generally cover all of those costs, meaning more cash flow for you.
What’s more your rental return will be far higher with a commercial property. In fact, Morgan Stanley Capital International estimated that on average commercial property in New Zealand has a 6%, net operation income yield. A 6% return on your money is impressive no matter how you look at it.
Buying a property is an exciting but sometimes daunting process. However, it can be made easier by making the most of the real estate agent. While an agent works for the seller not the buyer, they have to deal fairly and honestly with all parties and are an excellent resource for anyone looking to purchase. Here are some important questions to ask the agent throughout the buying process.
Making the decision to buy a home is exciting, but it can also seem like a daunting prospect. Throughout your search, a real estate agent can help make the journey easier by offering up inside knowledge of New Zealand real estate, local market trends and more; which is why it’s important to know the right questions to ask, at the right time.
With many factors to take into consideration when picking the perfect property, a real estate agent can offer advice and expertise to aid in what is likely to be one of the biggest financial decisions you’ll make. Though it’s important to remember you shouldn’t solely rely on an agent for advice — they ultimately work for the seller, not the buyer (unless they are a buyer’s agent) — their knowledge can still be invaluable.
To help you make the most of a real estate agent’s knowledge, here are a few questions to ask them on the journey to homeownership.
What to ask the agent at the open home
If you’re just starting out on the home buying journey, your first meeting with a real estate agent will probably be at an open home or viewing.
When checking out a prospective home, be sure to ask the agent about the area it’s located in. This could include the buying and selling trends of the area, current and upcoming changes to zoning and any restrictions, such as permits needed for on-street parking.
It’s also worth asking about the community — does it have the amenities you need, such as shops, schools or public parks? What are the transport links like, and are there any planned developments that could increase traffic noise or congestion? No question is too small when you’re making such a big commitment.
Whether you’ve found an agent to help you house-hunt, or are taking the more traditional route of identifying potential properties yourself and going to open homes, an experienced agent will be a wealth of information.
You’ve found a property – what’s next?
It can be easy to fall head over heels when you find a property that seems to tick all the boxes, but any property owner will tell you it’s important to keep a clear head.
All licensed agents are bound by the Code of Professional Conduct and Client Care to tell you about any known problems with properties, so make the most of this. Bear in mind though that this is no substitute for paying professionals to check the property before you make an offer. You can find a qualified property inspector through the New Zealand Institute of Building Surveyors and the Building Officials Institute of New Zealand.
Ask about the age and history of the property — when was it last renovated, how many owners has it had, and has anything unusual happened there? Enquiring about the condition of the wiring, roofing, piles and pipes is also a good idea, even if you plan on getting the property inspected before making an offer. Making queries about boundary limits can also be useful, as fences are not always a true indication of where a boundary actually lies. If you’re unsure about what would remain in the home when it’s sold, ask about the chattels. Ensure that any renovations or extensions were done with council consent as finding out that work was completed without council sign-off can cause issues later on, and will be your responsibility to fix.
Ask the agent if the property has had any weathertightness issues, especially if it was built between the late 1980s and early 2000s. It’s also worth asking if it has been impacted by any natural disasters, such as earthquakes or flooding. Remember that the agent must tell you if they think the property has any defects or potential problems that you should know about. This includes issues like whether it has been used for methamphetamine production or consumption.
Ask the real estate agent if there are any legal restrictions on the property, particularly if it is a unit title property or cross-lease. Talk to your lawyer about any information you receive as they will be able to give you independent guidance.
Even if your potential home looks in perfect condition, be sure to ask why the current owners are selling, not only is it good to know as the prospective resident, but it could help you when you go to put in an offer. In the same vein, if a property has been sitting on the market for some time, ask why — it could be useful when negotiating a price.
During the purchase process
If you’ve found a property you like and are considering buying it, it’s good to speak to the agent to get a feel for how the process should go. Don’t be afraid to ask what the sellers minimum price is, while agents obviously want to get the best price possible for the sellers, their answer also gives you a handy reference.
There are other questions to ask the agent that can help you decide what kind of offer to make. Don’t forget to ask if the sellers are under any time pressure, or if they can be flexible with settlement dates.
Where to go for more information
Visit settled.govt.nz for comprehensive, independent information about buying a property. There’s information about the risks of buying property and how they can impact you, and tips on how to avoid some of the major potential problems. From understanding LIMs to sale and purchase agreements, to when to contact a lawyer, settled.govt.nz explains what you need to know.
New real estate website to help Kiwis buy and sell property
POSTED ON: February 20, 2018
The real estate industry doesn’t have a great image, with only two out of five people surveyed being confident of its professionalism. The new settled.govt.nz website aims to not only help Kiwis with buying and selling, but also to raise the profile of the industry.
What should you really be looking for when you visit an open home? Can you spot a leaky home? How do tenders work, and can you afford it?
A new website launched today by industry regulator the Real Estate Authority (REA) spells it all out.
Settled.govt.nz answers all the questions you may want to ask before you buy or sell a house. And it has been welcomed by Consumer NZ deputy CEO Karen McDonald.
“Buying or selling a home is one of the biggest financial decisions many Kiwis will ever make, with the potential to hugely impact their life. An independent resource, such as settled.govt.nz goes a long way to help Kiwis make informed decisions, and help them avoid blunders that could cost them dearly in the long run.”
But the website also aims to raise the profile of the industry, which rated poorly in a recent survey by the REA.
The survey showed that just two out of five Kiwis are confident the real estate industry is professional. About one in five is confident it’s transparent.
In 2017, real estate agents providing incorrect or misleading information topped the issues raised in consumer complaints and inquiries to the REA. Failure to disclose defects or other important information about a property was the second most common issue raised. Advertising faux pas, poor customer service, and incorrect sale and purchase agreements rounded out the top five.
McDonald says a recent Consumer NZ survey shows how heavily decisions around home ownership affect people’s lives. “Three in five homeowners with a mortgage were just getting by or finding it difficult on their present income, and a third had cut back spending on essentials such as groceries or power.”
Settled.govt.nz provides five-step information modules on buying and also selling a home. These include detailed information about leaky homes and problem building materials, private sales, marketing, auctions, sale and purchase agreements and finances. There are extensive checklists of what to look for during a viewing, how to present your home for sale and how to deal with offers.
Much of the information is provided in quiz format, but the answers are immediate and accompanied by explanations.
Seven Reasons That You Should Invest In Real Estate
POSTED ON: February 9, 2018
If you have a lump sum of money, it can be hard to know what exactly to do with it. The stock markets seem impenetrable to anyone who’s never really been involved with finance, and although putting your money into a high interest account to gradually accumulate more might seem like a safe move, there are definitely other ways that you can make more money with what you already have. Property is probably the most reliable method of investment. Here are some reasons that you should consider investing in property today…
You Don’t Need Specialist Knowledge
First of all, unlike the stock market, you don’t need extremely specialist knowledge to invest in property. A lot of it simply is about deciding what you want and making your decisions based on common sense. Plus, most people already have some experience with property, whether that’s buying their own house or renting, which means that they’ll already have some basic knowledge on where to start and on what people require from their homes. A lot of people who have made their money from investing in property didn’t even intend to do that in the first place – they just noticed that their own houses were increasing in value and had the idea about what to do next from there. It’s definitely much easier to research investing in property and looking for a house for sale than it is other areas of finance and investment – and you also won’t have to rely on experts as much.
It’s Extremely Flexible
No matter what your budget is, if you have a significant lump sum of money then you will be able to find a property that you can invest in, whether that’s a tiny flat that you want to rent to a student or a large house that you want to rent to a big family. You’ll also be able to find a financial plan that suits you no matter what exactly your aims are – maybe you want to make some cash quickly or you’ve got a more long term plan in place. No matter which is is, property investment will work for you. Some people choose to invest in property so they can improve the house and put it back on the market for a higher price, while others choose to get a steady income every month by getting tenants to live in the house. Although having tenants means that you need to assume some responsibilities as their landlord, the steady income often makes up for that.
You Can Get Creative
If you have a creative streak then there’s no better way to indulge it with interior design. Whether you want to do the actual work yourself or not, you can still decide what exactly you want your investment property to look like. If you want to make some big changes like building extensions or adding new bathrooms or renovating the kitchen, you could always talk to an architect to get some ideas about how exactly you can go about doing that along with retaining the character of the house you bought. Sprucing up a property may be a little stressful as it can be hard to coordinate, but it can also be a lot of fun – remember that a lot of the difficulty in renovating your own property often comes from having to make different plans for your everyday life being interrupted, but if you’re renovating an investment property then that won’t be as much of an issue.
There’s Plenty Of Demand
The property market is almost always booming, and demand is very much exceeding supply at the moment. Although there are plenty of new builds being created, they won’t be right for everyone, plus a lot of young people – or ‘millennials’ as they’re referred to by the press! – often simply can’t afford to buy their own properties, which means that they’re focusing on renting instead. In many cities, housing is in short supply – which means that you can swoop in and make your move and make a good profit.
It Feels Real
For a lot of people, property is an extremely popular investment because it feels real. Let’s face it, you can’t see stocks and shares and you can’t hold the stock market in your hands – but you can walk around the outside of a house you’ve bought, you can run your hand along the windowsills and fireplaces, you can look out of the windows and lean against the door frames and wipe scuff marks off the floor. Being able to see concretely what you’ve done with your money feels great. You’ll feel both satisfied and reassured. Beside that, your property will always be an asset you can use if you ever get into other financial difficulties.
Your Tenants Will Subsidise Your Investment
Although you may have paid a pretty steep sum for the down payment on the house, you will probably have mortgage payments that you need to make every month. Luckily, if you have tenants, their rent will probably cover that, leaving some money over for you to pocket and make a profit from. You may also get some tax benefits from investing in property – all in all, property is absolutely one of the most affordable investments for anyone with some spare money.
It’s A Safe Investment
Finally, property investment is one of the safest things that you can put your money into. You can control it completely without having to rely on the fluctuations of the market or your broker. Although no market is ever completely stable, the property market tends to be much so than stocks and shares. It goes through some hills and troughs like any financial market, but overall it tends to be stable, which means that you get plenty of financial security. All you need to do is make sure that you’re smart about which property you choose to buy – pick an area that’s well populated and that features plenty of local amenities, particularly if you’re planning on renting to a family.
Ever experienced an issue in a rental home and wondered whether you should or shouldn’t call your property manager?
Here are some of the most common issues, and what you should do.
This advice is general and will not apply to all issues or circumstances. Exercise common sense at all times. If in doubt, call your property manager or landlord. In an emergency dial 111.
No hot water
Hot water may run out if there have been extra visitors and the tank is simply not big enough to cope with the demand.
It can also be caused by loss of the power/gas supply, or from a faulty cylinder/infinity system.
Electrical cylinder: the fault might be the result of a power cut, fuse failure or element failure. To rule out a power cut, check whether other electrical appliances in the home are working.
Gas cylinder/califont: the gas supply may have been cut, or the pilot light may have gone out due to wind or a power outage. Checking the pilot light is a good first step. Do not attempt to relight it if you smell gas or suspect a leak. If there are no smells, carefully attempt to relight the pilot.
If there continues to be no hot water, contact your property manager so they can arrange for a qualified tradesperson to visit the property.
Burst water pipe
A burst water pipe can occur at any time. The first thing you should do is cut the home’s water supply to prevent damage to the property.
Then, call your property manager so they can contact a plumber for you.
When you first move into a rental, it’s a great idea to ask the property manager where the water toby is located, so you’re prepared if you need to cut the water supply.
Tap won’t turn off
Taps can fail. Again, cut the water supply and then call your property manager.
Turn off the water supply to the toilet. Try and clear the toilet if you have a plunger (think about your health and safety – put on some gloves and safety glasses before plunging).
If you can’t unblock the toilet, it’s time to call your property manager.
Sewer pipes can corrode or become damaged over the years. They can burst and when they do, it can be a bit of a disaster.
It’s important to call your property manager immediately so they can arrange for a plumber to visit you.
Protect yourself and your family by not going anywhere near the sewage.
As simple as it sounds, a power outage can be caused by not paying a bill. Check you are up-to-date with your power account.
A power outage can also be caused by:
• A localised or wider outage due to a transformer issue or following a storm. Check whether there’s a power outage in your region.
• Winds or lightning damaging overhead power lines.
• Digging damaging underground power lines.
• A tripped fuse on the switchboard.
If you’ve run through this list and still can’t identify the issue, give your property manager a call.
Smoke out of switchboards
This is an emergency – it can occur if old wiring has caught on fire or the switchboard has become overloaded.
Turn the power mains off if possible and evacuate the property.
Call 111 for any smoke/fires.
Call your property manager as soon as it is safe to do so.
Smells of gas
This can be caused by a leaking gas appliance or damage to the home’s gas line.
If you can do so safely, open all windows and doors before evacuating.
Call your property manager immediately so they can contact a qualified gas fitter.
If you are still heading away on the weekends, or just back at work for the year… Here are some tips to keep your house secure while you aren’t there.
Burglaries and break ins can happen any time but can be avoided with sensible precautions
It certainly isn’t something that people like to think about but it doesn’t mean it doesn’t happen. However, with the right precautions and proper security measures you can stop burglars and opportunists. Here are some simple and effective tips from the team at AMI to help keep your home safe and secure.
Like owls and vampires, burglars like the darkness, so good lighting in and around the home is important. External lighting around the house will fill in the hidden dark spaces and put burglars off. You can get lights that are activated by motion sensors to flood dark spaces, this is great when you come home and you don’t want to fumble around for your key in the dark. It is always a good idea to leave a light on inside the house when you go out at night or if you are going away for a few days. You can also get timers for lights, meaning they can be set to turn on only during the evening.
Alerts, images and video footage can be sent straight to your smartphone or tablet so you can immediately see if something’s amiss at home
If you’re moving into a new home, change the locks, so you know you and your family are the only ones with keys. Don’t hide a spare key. Burglars know the usual places spare keys get hidden, that plant pot next to the front door or under the mat are the first places they will look. Ever leave home in a rush and get to work wondering if you locked up? There are now smart locks you can install and control remotely from your smartphone, saving you time, and worry.
A good, well maintained fence creates a solid barrier around your property and hinders access, which is added security. It also stops prying eyes seeing into your property to appraise what you have.
Explore the range – from high tech, fully installed and monitored to the more basic. There are a lot of options out there which are becoming more sophisticated as technology progresses. You can have sensors on doors, windows and motion sensors to detect movement within your home. A good option is to install video cameras inside and outside your home to capture footage. Alerts, images and video footage can be sent straight to your smartphone or tablet so you can immediately see if something’s amiss at home.
These locks are stronger than spring locks and they will make it more difficult to force entry into your property. Whilst more expensive, it’s important to try to have at least one deadbolt lock on your main door.
SECURE RANCH SLIDERS
One of the weakest entry points to your home can be sliding glass doors. A good way to prevent a burglar from forcing a ranchslider open is to put a metal bar along the bottom track of the door. You can do the same with sliding windows.
MEET THE NEIGHBOURS
If you have a good relationship with your neighbours, they can keep an eye on your house when you’re away or at work and of course you can do the same for them. Don’t know The Joneses next door? Try joining www.neighbourly.co.nz to help you get to know your neighbours. Neighbourly offers a crime prevention service for members within its communities. Members are kept informed of any suspicious activity and can also inform each other instantly of any urgent crime or safety updates via SMS.
It is easy to leave a window open, especially during the summer but an open window is an easy invitation to a burglar. Even if you are just going to pop out to the shops for 10 minutes, take a moment to walk round your home and close any open windows, even better, make sure they have locks.
BE SOCIAL SAVVY
Away on holiday and can’t resist posting a photo? We don’t blame you. However, try to be conscious of who can see your posts, especially if you’re away on a longer trip. You can easily share with the world that you’re not home. An easy way to combat this is to set all your post sharing to ‘private’ or ‘just friends’ rather than ‘public’.
COME UP WITH A PLAN
Make sure you and your family are on the same page with what would happen if you were ever burgled. Remind your children not to go near the burgled area and move away from the property and phone the police. Look for unusual signs like broken glass or an open window or door. If in doubt, get out and always call the police.
HAVE YOU EVER COME HOME TO ANYTHING UNEXPECTED?
A couch that’s been eaten by your dog? A cow inside your living room? A fire started by a glass vase?
AMI and Spark’s Morepork are looking to reward their two favourite tales with a Morepork Smart Home Security Starter kit and Smoke Alarm (worth $628). Plus the winners will receive a year’s free subscription, so you can keep an eye on your home and stay safe from the unexpected!
I hope that 2017 has been a successful year for you!
Thank you for taking the time to interact with me, I am very thankful!
Here’s to a happy and healthy 2018 for you and yours!
I look forward to working with you in 2018 🙂
Insurance warning over Auckland property valuations
POSTED ON: December 12, 2017
Insurers are urging people not to rely on the latest Auckland Council valuations when it comes to working out how much to insure their home for. Last month the council revealed valuation figures for the city’s 548,000 properties.
Three years on from the last valuation round, the average capital value has surged by 45 per cent to $1.076m. The valuations are made up of two parts – the land value and the improvements value, which typically refers to the house and anything built on the site.
But Amelia Macandrew, customer relations manager at AA Insurance, said the improvement value should not be relied on for deciding how much to insure a home for.
“This is an average value and doesn’t represent the actual cost of replacing your home, so you shouldn’t rely on it when deciding how much insurance you need.”
Macandrew said home insurance was designed to cover the cost of rebuilding your specific home if it was damaged.
“When deciding the rebuild, or sum insured, value for your home, consider all the things you would want reinstated – things that make your home special.”
“You should include any special materials and chattels like carpets, blinds, lighting, fittings and fixtures. You should also include improvements you’ve made like to your kitchen, bathroom, landscaping, or decking.”
“These are what matter for insurance purposes, not your CV.”
Richard Godman, manager technical underwriting, personal insurance at Vero, said rateable values did not affect insurance premiums because they were an estimate of the market value of the house and land together.
“Insurance premiums only reflect the amount of insurance you have in place to rebuild your house (your ‘sum insured’).”
Godman said the cost to rebuild a home would be similar no matter which part of the country a house was in but the value of the land meant the sale price could be vastly different.
“In some regions, like Auckland, council valuations will be significantly higher than the rebuild cost for a home, and using the rateable valuation for your sum insured could mean you are paying for much more cover than you will ever need.
“But in other regions, the rateable value of your property might actually be lower than the cost to rebuild it.”
Godman said using the rateable value as the sum insured amount might mean people did not have enough cover to rebuild a house if it was extensively damaged.
“Even relying on the ‘improvement value’ portion of a council valuation alone is not recommended.
“It’s often quite a rough estimate, and due to rising building costs, in many cases it wouldn’t be enough to replace your home if anything was to happen to it.”
Brendan McGillicuddy, national manager home portfolio at IAG, the parent company of State Insurance, NZI and Lumley, said it had received some calls from customers asking whether there would be any impact on their policies after the revaluations.
“Homeowners should be aware council valuations do not reflect the cost of rebuilding homes as factors such the cost of building materials and labour change each year.”
McGillicuddy said there were examples of homeowners who had insured their home based on market value or council valuation.
“Sadly, they may then find themselves underinsured if the home is destroyed by fire, flood or earthquake.
“We cannot stress enough the importance of checking your insurance policy and the information insurers provide. Most insurer websites have plenty of good information – if in doubt talk to your insurer.”
Insurers provide free online calculators to help people work out how much to insure their house for although people who want a more accurate assessment are urged to use a builder, architect, quantity surveyor or other building expert.
Council’s revaluations ‘frustrating’ and ‘inaccurate’ – North Shore real estate agent – Stuff
POSTED ON: November 30, 2017
Martin Cooper from Harcourts Cooper and Co says most people don’t pay much heed to council valuations when choosing a home.
A leading real estate agent says Auckland Council’s revaluation figures for homes across the region provides inaccurate information to buyers and sellers.
The council’s figures showed a 46 per cent average increase for the region’s homes, with the average dollar value of a residential property now $1,076,000.
But Harcourts Cooper & Co managing director Martin Cooper said those numbers, as well as those in the council’s value breakdown by suburb, should be taken with a grain of salt.
Auckland’s North Shore is known for its beach properties overlooking the Hauraki Gulf, some of which have high council valuations.
“Council’s valuation figures can be very frustrating to deal with for buyers and sellers because every property is unique in its location, aspect, views and quality of fit-out, so doing group valuations of streets or suburbs is not very accurate,” Cooper said.
“We find some buyers will want to know the RV [Rateable Value] as a guide to value but, in most cases, the buyer will buy the home because it feels right for them, not because of a high or lower RV.”
The council will use the new values to reassess how much each home owner will contribute in rates for the 2018 to 2019 year.
Council head of rates Debbie Acott said the exact impact of the revaluation would be revealed once the council agreed on the new budget next year.
But Cooper believed that system was unfair.
“Council’s services are the same to all Auckland residences … It does not seem right, because you live in an expensive home, you should have to pay more,” he said.
Are inspections before you purchase a property really needed? Well, imagine moving into your new home and then finding out two months down the track that portions of the electrical system are not compliant, you have serious water leaks and a major borer problem? Enough said.
If you are considering buying a new property, use this checklist for your own inspection before engaging a professional inspector. This might help you rule out a property before going too far through the purchase process:
Is the house insulated?
Do you see any leaks, water stains or suspicious new paint anywhere?
Do you see any cracks or bulges on walls (could be due to subsidence, moisture or condensation)?
Is there sufficient natural light in the house?
Is noise control within the house adequate?
Are the hot water cylinder and header tank securely fastened?
Are there any water pressure/plumbing problems (check by turning on several taps at once)?
Also, turn on the shower to make sure it has good pressure and is hot.
If the property is connected to gas, are gas pipes working properly (turn on several outlets at once and make sure the flame is strong and high)?
Do all fans and rangehoods vent to the outside?
Are all windows and doorframes in good condition?
Do any of the windows stick?
Do all doors close properly?
Is there any mould in wardrobes, cupboards or bathrooms?
Are toilets and cisterns in good condition?
Are there any signs of damp?
Are there any signs of borer?
Get on the roof and check for any signs of rust or cracked tiles.
Do the gutters show any signs of rust or cracking?
Are metal flashings over windows and doors rusted?
Is there rust or staining on the exterior walls?
If it is a property with a plaster finish, are there any cracks in the plaster, in particular around windows, doors and corners?
Is there any dampness around windows and doors?
Go under the house and check the piles. Are there any missing piles or any that are no longer supporting the house?
Are the piles solid or is there any sign of rot?
Look for any floor problems that may be hidden from above.
Check for gaps in the flooring, dampness and borer.
Are the fences in good condition?
Are there any protection orders over trees or buildings on the property?
What is the zoning for that property, as well as adjoining properties?
Is a LIM report available?
Is there, or has there been, a claim to the Weathertight Homes Resolution Service?
What is the government rating valuation for the property?
Have all building consents been obtained?
How much are the rates?
If the property has been rewired recently, is there an electrician’s Certificate of Compliance?
Is the property likely to flood in heavy rain?
Even if you are satisfied after completing your own inspection, it is still advisable to hire the services of an expert and independent building inspector to evaluate the structure of the house and provide feedback about other systems such as the roof, plumbing, electrical system, heating/air conditioning units, insulation, doors, windows and more. Some people do have a friend or family member who can perform an inspection, but make sure they have the required expertise to do a thorough evaluation of the property.
At an auction, the purchase price of a property is determined through competitive bidding. By doing this you can be sure you’re negotiation fairly and on the same terms as all other interested buyers.
Auctions are most popular in the Auckland property market. Of 12,077 residential properties listed for sale on realestate.co.nz on May 1, 9.7% of those were up for auction. This is down from 19% in December.
Just 3.4% of properties outside of Auckland were looking to be auctioned in May.
Before you start waving around that auction paddle, here are seven things to think about:
1. Do your homework
Start attending auctions as an observer – this will give you a better understanding of the auction process.
2. Ask questions
If you’re unsure about any steps in the auction process, ask your real estate agent for clarification or advice.
3. Make sure all the i’s are dotted and the t’s are crossed
Have your solicitor examine the Contract of Sale prior to the auction to ensure everything is in order. Also have any building, contamination and/or pest inspections carried out prior to auction day.
4. Get your finances in order
You should know exactly how much you can spend on auction day and, most importantly, you need to stick to your limit. If you’re the successful bidder, you will be required to pay a deposit on the spot, usually 10% of the purchase price – so make sure you have the funds available. Remember, once it is sold under the hammer the place is yours.
5. Register to bid
If you register with the company prior to auction day, the agent will be able to keep you informed of progress during the marketing phase leading up to the day.
6. Come prepared
On auction day arrive at the venue early, with a chequebook in hand. Position yourself so you are close to the auctioneer and have a clear view of other bidders. When you are ready to bid, do so with confidence. However, if you don’t feel confident about bidding, you can hire a buyers’ agent to do the job for you (ask your real estate agent for advice).
7. Going once, going twice
If yours is the successful final bid, congratulations! You will then be required to sign a contract and pay your deposit immediately. The balance of the purchase price will be paid on settlement.
If you are not successful this time around, keep in mind that there will always be other properties to choose from. If you really want a property but don’t want to bid at the auction, you can try to make a pre-auction offer through the selling agent. Some vendors will prefer to see the auction through, but others may be willing to negotiate.
Market and seasonal variations for property investors
POSTED ON: October 16, 2017
Having a portfolio of warm, safe and dry investment properties should be the aim for all investors. The rental market typically slows down in the winter months, with spring upon us, there is a build-up to the busier summer months of January, February and March.
A number of realestate.co.nz clients are now using Inspect Real Estate software to track the number of enquiries received when a house is available for rent and the numbers of potential tenants attending viewings. The software also allows tenants to record their feedback. Reports are then collated and sent by email and text to investor clients for transparency and information when a property is vacant.
Across our regions, our industry colleagues are reporting that some properties are remaining vacant a little longer than others (and longer than we are used to in the more buoyant months). We are now coming out of the flatness of winter and should see a pick up in activity.
If you are an investor whose property has been sitting for longer than usual, there may be a reason for it that isn’t usually an issue in the more buoyant summer months. This may include the location of the property, its access, or simply that it does not have a garage or off-street parking. It may be because it is not insulated (ceiling and floor) or that it doesn’t have a good heating system. It could also be because the rent is just a little out of reach in the current market and the cost for the tenant moving from their current home is just not worth the investment and hassle.
None of this is unusual. Your Property Manager should have things in hand for you and will support you to ensure that you’re able to make informed decisions when market forces are variable and seasonal.
Your Property Manager will also be able to use their contact list through Inspect Real Estate to match tenants with a property. Sometimes a property may not be suitable, but another vacant one in the Property Manager’s portfolio will be perfect. Your Property Manager can use these great tools to limit the vacancy of rental properties (where possible) for their investor clients.
Market forces can be unpredictable. Your great and hardworking Property Manager should ensure that the right tenant is found for your property and no shortcuts are taken when it has been sitting for a little while.
The housing crisis continues in New Zealand and attitudes on smaller abodes are evolving. Now there’s a new style of ‘apartment’ called a “micro-flat” and it’s all the rage in the UK and Europe. What are micro-flats and will they also be the housing of the future in our more populated cities like Auckland?
In an article on PropertyTalkBlogs the concept of micro-flats is explained in detail. A private sleeping quarter is complimented by shared facilities including: lounges, dining areas and laundry rooms. There are some micro flats that have their own reception room and may have as many as three bedrooms.
Micro-flats have been given a big boost from local Government in the UK. The deepening shortage of accomodation for renters in cities like London has recently seen the Mayor of London, Sadiq Khan commit £25 million to a developer of micro-flats to create more affordable living for first home buyers and renters. There’s a great article on the rise of micro-flats in London in The Big Issue.
So will micro-flats take off in New Zealand? Well, we’ve had the tiny apartments called ‘shoeboxes’ and they’ve had a mixed response over the years. An independent panel reviewing the unitary plan suggested the minimum size of apartments be scrapped however in August 2016 the Auckland Council voted 17-3 against reducing the minimum size of tiny apartments and so they must be at least 35 square metres.
A Google search did not produce any sign of micro-flats development in New Zealand. Auckland Councillors know about them and in an article on newshub.co.nz it quoted a Councillor mentioning the concept that’s taken off in London and Paris. “Councillor Quax said Auckland had a need for micro-apartments in the mold of those in major cities overseas. The minimum sized apartment in London is 19sqm – while in Paris, the smallest are just 9sqm.”
Twelve months later and there’s no move to adopt the micro-flat living in New Zealand but arguably with our housing crisis deepening this new concept of property and lifestyle will happen and interest first home buyers and investors. Just how it will be managed under a rental agreement will be interesting and this Auckland property management firm says they’re keeping a watchful eye on it’s success offshore and say there will be lessons learned from micro-flat renting that will make sure the it’s a success here when it eventually takes off.
Across New Zealand house price inflation appears to have slowed, as tighter lending conditions, loan-to-value restrictions, and the run up to elections continue to deter buyers. But economists predict a rebound post-election, and home owners are being told not to panic. If you are considering selling your property over the next few months, take a look at some of our helpful tips.
Auckland’s Unitary Plan ‘one of the main variables’ set to impact council CVs
POSTED ON: August 11, 2017
New intensification rules are likely to have a big impact on the next round of Auckland CVs, property experts say.
In November Auckland Council will issue a new lot of property capital values (CVs), which estimate the total value of a section, taking into account improvements, school zones, location, floor area and recent sales in the area.
The revaluation of all properties helps council work out everyone’s share of rates.
Spring is right around the corner, and for most home owners it’s an exciting time to get your home ready. In the winter time, many portions of your home are neglected or aren’t used as often because of home owners staying inside their homes. From the interiors of your home to the exterior, getting your home ready for spring will ensure you’ll be ready to enjoy the warmer weather once it hits.
PM English says govt’s targeted rates infrastructure experiment in Auckland seeking answer to question of whether land costs will fall more than infrastructure costs rise, hence making housing cheaper overall
POSTED ON: July 25, 2017
Lower land prices up front, but higher ongoing rates payments for essential infrastructure. Will that reduce the overall price of housing?
That’s the question Prime Minister Bill English says the government is looking for an answer to as it embarks on its targeted rates experiments to the North and South of Auckland.
Only two thirds of the new homes needed in Auckland are being built
POSTED ON: July 4, 2017
Consents for new dwellings rose 7% in seasonally adjusted terms in May, after a 7.4% drop in April. The April figures may have been affected by the timing of the Easter and Anzac Day holidays this year.
However, the rise in consents in May doesn’t fully make up for this shortfall. The fall in April and the rebound in May were both concentrated in Auckland, which in turn was driven by the…
Auckland property sales numbers fell to their lowest level in an April since the 2008 global financial crisis, but lower turnover had a limited impact on sales values.
“Sales numbers in April were down by about a third compared with the average for the previous three months, yet given this significant fall the average and median prices held steady.” “The median sales price at $850,000 for the month was down only $5,500 on the average median price for the previous three months.” “The same trend was there around the average price, which at $917,079 was down only $25,000 on the average for the previous three months.
So, the Official Cash Rate (OCR) is on hold until at least September 2019, perhaps as late as March 2020.
Right then. Nothing to see here. Run along now. Even Peter Dunne’s election manifesto will be more exciting than the outlook for short term interest rates.
If you’re thinking that, I don’t blame you. But just hold on. What if I said there’s an alternative world where the OCR is hiked by the end of this year, and is heading towards 2.5% in three years’ time.
For that world might exist. We might be closer to it than we think.
National to build 34,000 houses in Auckland over next decade…
POSTED ON: May 17, 2017
The National-led government has outlined plans to build 34,000 new houses on Crown land in Auckland over the next decade.
The net addition to Auckland’s housing stock will be just under 26,000 new houses. The Minister responsible for Social Housing and Housing New Zealand, Amy Adams, said the properties would be built on land currently with 8,300 state houses on.
That’s what home-owning Kiwis do when they want to buy consumer goods that they can’t really, truthfully afford. Most of us love the latest model phone, flash laptops, TVs, newer cars, designer kitchens and bathrooms and lots of bling.
What’s changed over the past 25 years for the average red-blooded Kiwi is that we’re using our homes like ATM machines, says Mark Lister head of private wealth research at Craigs Investment Partners. We roll our consumer spending into the mortgage beca…
Most Kiwis are expecting property prices to continue their skyward climb with Wellington residents and millennials most likely to predict rising house prices – with many seeing foreign investment as the largest influence on the market.
The Property Institute of New Zealand commissioned a poll, taken in February, which found most continue to expect market prices to go up – albeit slightly fewer held this view compared to November last year.
The finding followed Real Estate Institute of New Zealand data out today that showed the median…
Economist: Pay rises won’t be enough to cover interest rate rise
POSTED ON: March 8, 2017
Pressure on employers to boost workers’ wages is not going to be enough to cover the rising cost of mortgage rates, warns an economist.
Daniel Snowden, who analyses retail and consumer economic data for the ASB bank, said mortgage rates were roughly back to where they were a year ago but in about 18 months time were likely to be higher.
“In 18 months time it will be particularly unpleasant for people rolling off two-year rates,” Snowden said. Banks began lifting longer-term fixed mortgage rates at the end of last year and that has been followed by a flurry of increases in January.
Record migration means property market decline unlikely
POSTED ON: February 23, 2017
By Chris Kennedy CEO, Harcourts NZ
Figures released in January by Statistics New Zealand showed there was record migration in 2016 – with our population increasing by a massive 70,600. Juxtapose this information with talk of the property market going into decline, and the two do not marry up. As I’ve said before, the key forces that have fuelled the market so far – high levels of immigration and low interest rates – remain unchanged.
Immigration is particularly key when you look at the Auckland market. Approximately 60% of migrants stay in Auckland when they arrive in New Zealand. That’s about 42,000 people requiring houses. What that translates to is a need for 14,000 houses a year for an average household occupancy of three. That’s on top of an estimated existing shortage of about 20,000 houses. At current levels of construction there are no indications that supply will begin to meet that demand, and no sign from the government that immigration will begin to tail off. It’s important to reiterate it’s not purely immigration fuelling the market around the country. Our economy has grown 17% since 2007 and continues to grow. That in itself generates confidence and activity.
However, we have seen a fall in the number of property investors in the wake of the tougher loan to value ratio (LVR) restrictions introduced in November. With investment dropping away a little, will the market remain at the same speeds that we have seen in 2015-16? It has felt like that for much of 2016 market commentators and observers were willing the strong, highly active market to fall over dramatically, particularly in Auckland. At this point, however, that seems unlikely to happen any time soon.
First, it’s important to remember that a market cooling, isn’t the same as saying a bubble is bursting. It’s just merely returning to the healthy activity levels of prior to 2014-15. What we should be left with through this year is a more balanced market across the country that still allows room for growth, but perhaps doesn’t move so far so fast, shutting some out altogether. 2015 was an unusual year and coming back a little from those levels of sales and inflated prices does not mean disaster.
Interest rates are the unknown quantity. Banks are beginning to raise rates and we’re likely to see the Reserve Bank adjust the OCR. Will it be enough of offset the thirst for property still in the market? That is highly doubtful given our net migration levels and resulting demand.
Big increase in new dwelling consents issued in Auckland in November
POSTED ON: February 7, 2017
There was a big jump in the number of new dwelling consents issued in Auckland in November, according to the latest figures from Statistics NZ.
These show that consents were issued for 1156 new homes in Auckland during November, well up on the 792 issued in October and the 966 issued in November 2015.
That helped push the total number of new dwelling consents issued throughout the country in November to 2973, which was an 11 year high.
Building Auckland – Who’ll come up with the money?
POSTED ON: January 27, 2017
There’s no shortage of cranes on Auckland’s skyline. What is in short supply is enough new homes for the growing city.
Latest statistics show that more than 10,000 dwellings were consented in Auckland last year – but that’s still some way from the 13,000 a year believed to be required to keep up with the city’s demand.
Experts are urging people to plan ahead for increasing mortgage rates and their potential flow on effect to rents.
Rates for three, four and five year fixed terms began to rise at the end of last year and more increases are predicted as banks face rising costs from borrowing more money on the international money market.
Mortgage broker Bruce Patten expects longer term fixed rates to move up into the early to late 5 per cent-range next year.
Although the weather’s nice and the sun is shining, summer often presents some unique messes. From grass stains to dollops of melted ice cream, summer can be challenging — unless you know the tricks of the trade. Use these five tips to keep your house clean and organized throughout the hot season.
1. Bathroom Whether it’s washing off the dirt from a day in the garden or sweat from your kids’ sports game, your shower is likely to see more use during the summers. Be sure to remind everyone to keep a window open or the fan on during every shower to prevent humidity (which is the perfect environment for mold).
Christmas Calm: Ten Tips for a Stress-Free Holiday Season
POSTED ON: November 28, 2016
Sure, you love the holiday season–but just not so much of it! This year, you’re hoping to cut the crazy out of Christmas: to trim the celebration back to one that is sustainable and calm.
Question is, just how do you do less–and enjoy it more–during the Christmas holiday season?
If you’re aiming to simplify Christmas, take time to ponder ways to cut stress, save money and tame over-the-top traditions. Setting simplicity strategies in place early will keep you from being swept up in holiday madness.
Get armed! Try these ten simple strategies to calm holiday chaos and rein in the seasonal overkill this year.
Auckland real estate market draws its breath: REINZ
POSTED ON: October 17, 2016
At a time when the Auckland housing market appears to be taking a wet winter breather, the national median price has risen to a new record of $515,000, prices outside Auckland have hit a record median high of $400,000 and six regions of New Zealand have hit new record high median sale prices, according to data released by REINZ for September 2016.
According to the latest figures released today by REINZ, source of the most recent, complete and accurate real estate data in New Zealand, new record median sale prices were…
Sellers wait for a premium while buyers take their time: Realestate.co.nz
POSTED ON: October 4, 2016
New Zealand buyers may have lost some of their “must buy now at all costs” mentality.
Realestate.co.nz spokeswoman Vanessa Taylor said some of the urgency had come out of the housing market, as she released her site’s statistics for September.
“Typically we can see trends around what happens during the different phases of a year, such as a slow-down in the winter months and a resurgence in spring, but 2016 is The Year of Unpredictability,” she said.
Harcourts launches mentoring network for women in real estate
POSTED ON: August 15, 2016
Encouraging more women to embrace public speaking and mentoring them to succeed in their chosen fields are the ultimate goals of a new organisation recently launched by Harcourts.
Harcourts Inspirational Women, which holds its first New Zealand gathering on 29 August in Auckland, is the brainchild of Irene Green, Head of Harcourts International Academy. She says she wanted to create a support network for women, not just within Harcourts, but for all women in real estate.
“I believe that women in our industry represent a vast, relatively untapped pool of knowledge and talent. This group is hopefully a way for those women to come together to share their experiences as well as support each other,” Irene says.
For the fourth consecutive year Harcourts has been voted New Zealand’s Most Trusted real estate brand.
Reader’s Digest today announced its most trusted brands for 2016. It is the fourth time the real estate category has been voted on, and the fourth time Harcourts, New Zealand’s largest real estate group, has come out on top.
Harcourts CEO Chris Kennedy says it is extremely humbling to see the faith and support New Zealanders place in the group.
Winter puts the chill on Auckland property listings
POSTED ON: July 19, 2016
As if low interest rates and record immigration numbers were not enough, now winter is biting into Auckland’s stretched housing markets.
Chris Kennedy, chief executive of New Zealand’s largest real estate agency network Harcourts, has expressed concern about extremely low Auckland and Northland listing volumes, down 17.6 per cent on the same period last year.
Mandatory P-testing for home buyers splits property experts
POSTED ON: June 21, 2016
A top real estate agency figure wants the Government to make meth testing mandatory for house buyers.
But a leading landlord group is not so sure.
Chris Kennedy, chief executive of Harcourts, said Sunday’s record-breaking bust of 448 kilograms of methamphetamine in Northland was a reminder of how important it was to test for meth, or “P” as it is also known, and to bring in standards around that testing.
Real Estate NZ: Shrinking house stock, high prices make it a house seller’s market
POSTED ON: June 7, 2016
The number of new houses up for sale in Auckland has fallen by a “significant” amount as high prices and low stock fuel a seller’s market.
Auckland’s housing stock for May fell 9.2 per cent compared to the same time last year, data from Realestate.co.nz showed.
Property commentator Olly Newland said it was a significant number for Auckland because of how tight the market already was.”Anything that goes up for sale today in Auckland, even leaky places, it’s a guaranteed sale,” he said.
A “frightening” number of people are racing to buy Auckland homes without doing proper due diligence, a property expert says.
Homeowners and Buyers Association president John Gray says there has been a growing trend of people buying unconditionally in the inflated market without proper checks.
His comments come after QV statistics revealed Auckland residential values had risen 16.5 per cent in 12 months, although figures from the country’s largest real estate agency showed property sales had eased.
Chinese buyers’ interest in New Zealand properties rose dramatically last month and Auckland is by far the most popular city.
Sam Yin, chief executive of real estate portal Hougarden.com, said traffic was up 22 per cent last month, following a 13.7 per cent increase in February.
New Zealand remained extremely popular with Chinese property browsers who are mainly from Beijing and mostly browsing Auckland residential properties, the data showed.
Auckland was most popular with China-based searchers, followed by Christchurch, Hamilton, Wellington, Tauranga, Dunedin, Lower Hutt, Palmerston North, Queenstown and Rotorua, the Hougarden analysis showed.
Autumn is a great season for spending time out in the garden getting your hands dirty. It’s all about preparing your lawns and garden beds so they’re ready for winter and set to bloom in spring.
Clean Your Gutters and Drains
As the leaves start falling, it’s a good idea to keep an eye on your gutters. Clean your gutters out so they don’t overflow in early autumn showers, which can lead to water damage inside or outside your home.
If your drainpipe is blocked, stick your garden hose down the pipe and turn it on to flush it out.
Walk around your home and check that your drains aren’t covered with leaves or rubbish. If they are, you can have fun scooping it out. Adding 100mls of neat bleach helps unclog your drains.
Birkenhead, Totara Vale, Mt Roskill, Mangere Bridge and Northcross – these are the Auckland suburbs which may provide the biggest future rewards in the country’s hottest property market.
That’s according to new research commissioned by HSBC which attempts to identify the “next big things” in Auckland real estate hot spots.
The research, undertaken by Data Insight, identified the top 20 suburbs of Auckland that showed the largest price increases from 2014 to 2015 – and then sought alternatives close to those areas with the highest potential for growth.
The Block 2016: The ‘secret’ location is out
POSTED ON: March 1, 2016
According to an Auckland real estate agent behind a top-secret sale, TV3 The Block NZ’s 2016 site is a done deal.
Occupying number 95-97 St Johns Road in the leafy Auckland suburb of Meadowbank, the property was purchased by Warner Brothers late last year.
“The whole lot sold for $5.5 million dollars,” the Kohimarama agent confirmed on Monday afternoon.
“I don’t think I was allowed to say at the time, but I’m fairly sure it’s all public knowledge now. The properties sold to Warner Brothers. There are five townhouses on the site, all very similar, they’re not going to be demolishing them. The plan is to renovate them, as they’ve done in series before,” he said.
There is more evidence that the Auckland housing market is slowing, with prices returning to levels seen seven months ago.
Data from the Real Estate Institute shows house sales nationally in January were 4.3 per cent higher than the previous year and median prices were up 5.2 per cent to $448,000.
Prices in Auckland were up 9.1 per cent on a year ago and sales were up 13.5 per cent, but compared to December prices fell 6.5 per cent and sales were down almost by a third.
Real Estate Institute of New Zealand (REINZ) chief executive Colleen Milne said January was an unusual month for real estate data due to the summer holiday break, so comparisons with December were always difficult.
Auckland buyers forced out as prices soar ahead of incomes
POSTED ON: February 5, 2016
Auckland first-home buyers’ wages are nowhere near keeping up with the increase in the city’s house prices.
A new report into housing affordability shows that cheaper houses in almost all regions of New Zealand are affordable for couples in the prime first-house buying age bracket.
The only place they are not is Auckland.
Interest.co.nz’s Home Loan Affordability Report tracks the Real Estate Institute of New Zealand’s (REINZ) lower-quartile selling price in each region of the country and compares that with the median after-tax pay of couples aged 25-29, who are in full-time employment, based on Statistics NZ data.
Brand Refresh for NZ’s Largest Real Estate Company
POSTED ON: January 19, 2016
Real estate agency Harcourts has undergone a makeover, with a new look aiming to give the brand a more user-friendly and up-to-date appeal for the mobile, digital era.
The company was founded in Wellington in 1888 and NZ CEO Chris Kennedy says the new look is designed to reflect Harcourts’ place in the modern New Zealand real estate landscape.
“We wanted our brand to not only reflect our commitment to innovation and the exciting changes we are experiencing in the industry, but, in practical terms, it also needed to work across multiple platforms and be able to be adapted for use by all the businesses in our large franchise group,” Kennedy says.
“The new look is still recognisably Harcourts with all the history and respect that garners, while reflecting the progressive, forward thinking company we are. It is an incredibly exciting way to start the New Year.”
Property Report: Power shifts from sellers to buyers
POSTED ON: December 8, 2015
It’s been a rollercoaster year for real estate with the market going into a frenzy of higher and higher prices driven by cashed-up foreign buyers, high immigration, strong local demand, a lack of housing, and low interest rates (which are set to go even lower).
Then the market spluttered, lurched and wheezed as a bundle of measures at home and in China caused the market to stall.
The Chinese Government turned the screws on its banking sector, putting it on notice that its hitherto laissez faire attitude to clients moving illegal amounts of cash out of the country needed to end — or else. On top of that the Chinese stock market suffered a mini meltdown that ate into people’s life savings.
Real Estate Listings Website for NZ Sees Surge in Newly Listed Commercial Properties
POSTED ON: December 3, 2015
Auckland commercial properties are becoming more and more inviting to investors as Realestate.co.nz receives a huge number of new listings for commercial properties.
According to interest.com, Realestate.co.nz has seen a sudden surge in commercial property listing this October. The biggest surge in terms of units listed was in the listing of small retail buildings, with 122 new retail assets on an average asking price of $1.64 million, listed on the website. That puts more than $200 million new retail supply in the Auckland commercial property market.
Harcourts Real Estate wins elite Apple recognition
POSTED ON: November 24, 2015
Apps designed to improve Harcourts Real Estate agents productivity – and the customer experience – have won recognition from Apple.
The technology giant has produced a video and business case study about Harcourts’ iPad and iPhone app – an accolade reserved for companies developing ‘the most cutting edge business solutions’ using Apple technology. The case study is running on Apple’s global website.
Harcourts says it is the first ANZ based global company, and the first real estate business, to receive the Apple recognition.
What’s the deal with house prices?
POSTED ON: November 10, 2015
Housing Minister Nick Smith has warned it is far too early to tell exactly what was going on in Auckland’s pressure-cooked housing market after property data yesterday showed rising values but falling asking prices.
Realestate.co.nz yesterday morning said the average Auckland residential asking price had fallen more than $18,000 from $851,531 in September to $832,713 last month.
Then at midday, Quotable Value issued its monthly house value index showing “massive” rises across the region which pushed the average up 24.4 per cent annually to a new high of $918,153.
“There are mixed views about what’s happing in the Auckland housing market,” Dr Smith told the Herald.
Harcourts, New Zealand’s largest and most trusted real estate group, has appointed Chris Kennedy as its new chief executive officer.
Mr Kennedy has been with Harcourts for 23 years, starting as a sales consultant before moving into franchise ownership. He was later appointed business development manager for Harcourts in Christchurch. Most recently he has been the company’s national auction manager and is also a highly regarded, accomplished auctioneer.
He says he is excited and honoured to be taking on the role of CEO for Harcourts NZ.
“It is humbling to be asked to lead a company that has such a high standing in the industry, both here and overseas,” he says.
A big rise in new property listings on Realestate.co.nz – Auckland listings up by a third compared to last year
POSTED ON: October 6, 2015The recent surge in properties coming onto the market looks set to continue through spring with property website Realestate.co.nz reporting a big jump in new listings in September.Realestate.co.nz received 11,983 new residential sale listings in September, up 15.2% compared to September last year.
And the Auckland market is likely to be particularly busy, with 4338 new Auckland listings coming on to the website in September, up 33.6% compared to September last year.
There were also very strong rises in the number of properties listed for sale in the Waikato and Bay of Plenty.
There were 1039 Waikato homes newly listed for sale on the website in September, up 34.5% compared with September last year, and 978 Bay of Plenty homes listed for sale in September, up 40.5% compared with September last year.
Bidding war pushes 1950s bungalow $830,000 above its 2014 CV
POSTED ON: September 14, 2015
A 1950s Auckland bungalow, home for more than 60 years to the man who built it, sold for $830,000 more than its 2014 valuation.
The two-bedroom brick and tile house in Betts Ave in Mt Roskill sold at auction on September 2 for $1.8 million – 86 per cent above its $970,000 CV.
A real estate expert says the price reflects demand for big sections with development potential under the Auckland Council’s proposed Unitary Plan. Advertised as a “dream come true” for builders and developers, the small house is nestled among primroses, garden gnomes, freesias and fruit trees on a 1409sq m triangle of land at the end of a suburban cul-de-sac.
The sellers were two women who had grown up in the house, estate agent George Imo said.
The listed owners are Sharon Lesley Moore and Robyn Denise Quartly, according to QV.
A bidding war between four would-be buyers at the LJ Hooker Ponsonby office was watched by members of the Mt Roskill community, including worshippers from mosque next to the house.
New Zealand has the world’s fifth fastest rising house prices.
The Knight Frank Global House Price Index released today ranked the country only behind Hong Kong, Turkey, Estonia and Luxembourg for annual house price rises.
New Zealand house prices were listed as rising 10.9 per cent annually, well below Hong Kong’s 20.7 per cent rise.
Countries with fast-paced residential price rises bucked international trends.
“Global house prices shifted marginally in the year to June 2015 rising by only 0.1%,” Knight Frank said. “Lingering concerns over the Eurozone economy, jitters in global stock markets and discussions of when, not if, a US rate rise occurs is impinging on growth. New Zealand also ranked ahead of Hungary, Norway, Mexico, India, Indonesia, Germany, Denmark and South Africa where prices have also risen steeply lately.
The index tracked house price changes in 56 “mainstream residential markets” and said Hong Kong continued to defy policymakers’ cooling measures due to its prices up 20.7 per cent year-on-year.