Harcourts View Of The Market

Property Update April 2014

Northern Region MarketWatch (April 2014).
Regional Overview:


Residential data from New Zealand’s largest real estate group Harcourts shows there is still massive pressure on the housing market in Auckland and Northland, with the average sales price now sitting at a record high of $697,454.
This is up 12% on the same time last year and is a 9% jump on February’s figures.
It is very evident buyers are no longer hesitating about entering the market, despite LVR restrictions and rising interest rates.
There is an understanding that the market is likely to remain heated and prices will continue to rise for some time yet, as our growing population is not yet adequately catered for with new housing construction.
Across the Northern Region, and particularly in Auckland, there is fierce competition in the auction rooms. In Auckland almost half of all properties are now sold at auction and this figure is likely to keep rising. In a competitive environment vendors are well educated that letting the market decide on price is the best way to achieve top dollar.
CEO Hayden Duncan says Harcourts has always predicted the LVR restrictions would not have a tempering effect on prices in Auckland because of simple supply and demand.
“It’s the same thing we’ve been saying since the restrictions were announced back in August. There are more buyers than there are houses. The only way to slow prices in Auckland is the mass construction of new houses to meet the demand. While more construction is planned, we are a long way off achieving the numbers needed. Expect prices to continue to rise for some time yet.”
Harcourts is also experiencing a spike in the total number of listings. There has been a 38.6% jump in March as compared to the same time last year. This increase in activity is largely due to Harcourts’ growing market share.

A Capital Gains Will Tax More Than Just Property Speculators

Normally I avoid getting into politics but it can’t be ignored in the present market especially as the heat and light generated by a rising market has become a major topic of discussion.

This is election year and for better or for worse the next six months will be filled with rhetoric. accusations, promises, scandals and exaggerations.

This will have a destabilising effect on the market the closer the elections come so cool head are needed. I have been through at least 20 such elections as I recall and it’s always the same. Who ever gets into Parliament immediately becomes sober, serious and conservative and all the promises, threats and accusations drift away or are watered down.

So it will be business as usual for experienced investors and may indeed, create bargains for the canny as the naive panic and rush to the exists

The latest attempt to destabilise the market comes from the Left Wing naturally enough.

It seems hard to imagine that people of what ever political bent, would vote for more taxes but who knows?

Labour wants to apply a Capital gains tax not only if you trade in property ( which exists already) but also on the sale of your business, your farm, your share portfolio, the part of your house you use for business, your family inheritance and also your bach.
Be careful what you wish for.

Labour would slap capital gains tax on property speculators
Sunday April 13, 2014 ONE News

A Labour-led government would impose a capital gains tax of 15% on realised gains from investment property, party leader David Cunliffe has announced.
Mr Cunliffe told TVNZ’s Q A programme it’s ‘lunacy’ that property speculators get tax-free capital gain.
He says the family home would be exempt from the tax.
‘I’m comfortable with that because speculators are driving this market,” he said.

Link

http://tvnz.co.nz/politics-news/labour-would-slap-capital-gains-tax-property-speculators-5914997

 

Details here:

http://www.nbr.co.nz/article/labour-plans-39-top-tax-rate-capital-gains-tax-15-rh-97137

 

Auckland’s average house-sale price reaches a record $697,454

The proportion of first-home buyers in the market has declined in most centres.


First-home buyers may be squeezed out but property prices in Auckland remain high as one agency reports record average sale prices.
March residential data from Harcourts for Auckland and Northland shows its average sales price now sits at a record high of $697,454.

That is up 12 per cent on the same time last year and 9 per cent on February’s figures.
New analysis this week showed mortgage-lending restrictions have dampened demand from first-home buyers, and interest rates have also gone up.

But Harcourts chief executive Hayden Duncan said its figures showed overall demand was undented as “there are more buyers than there are houses”.
“The only way to slow prices in Auckland is the mass construction of new houses to meet the demand.
“While more construction is planned, we are a long way off achieving the numbers needed. Expect prices to continue to climb for some time yet.”

Link

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11236108



Putting The Fox In The Hen House

I question whether a bank who lends money for a profit should also be advising people how to put themselves into debt, even for family members. There are so many things that can go wrong even if it’s because of love of children or relatives.

By all means encourage the idea of assisting family members to get housed, but the advice should be from independent advisers,  and not from the source that will be doing the lending.

I have seen countless examples where people have provided cash, credit or guarantees to friends and family, only to find themselves dispossessed  of their homes and investments through no fault of their own.

Banks are wonderful friends most of the time, but they have big teeth and they will use them if and when the need arises

Seminars open doors to bank of Mum and Dad

Tuesday Apr 8, 2014
Anne Gibson NZ Herald

Many parents were now helping their children buy homes, particularly in Auckland and Christchurch. Photo / Thinkstock
Mortgage loan restrictions are making the “bank of Mum and Dad” so popular that one bank is running seminars on the best way for people to structure the deals.

New Zealand’s biggest home lender, ANZ, is running “Leaving the Nest” information evenings, beginning in Remuera tomorrow then moving to the North Shore.

ANZ’s Auckland retail and business banking general manager, Andrew Webster, said the seminars aimed to help parents give their offspring the 20 per cent deposit that many needed because of Reserve Bank restrictions on loan-to-value ratios.

link:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11233922

House Prices Up 8.8% -Time For A Breather?

What matters is that the statistics demonstrate that the market still has strength.

It is only natural that after the solid rises over the last 18 months or so, that there would need to be a “breather” but I doubt if the LVR rules have much to do with it.

The prices of anything in all free markets ( sort of) such as the property market, do not go up or down in straight lines, but in a series up and down steps.

Up, breather, up again, breather down, breather, up again, breather down etc etc.

It’s the trend that matters and it looks much like the trend is gently settling into a breather stage

which is good news.

Why?

Because it’s the best time to snap up those bargains ready for the next inevitable upward phase.

 



Property values up 8.8pc

Monday Apr 7, 2014

New Zealand property values increased at the slowest annual pace in six months in March as lower Christchurch valuations, high-debt lending restrictions and interest rate hikes weighed on the market.

House values rose at an 8.8 per cent annual pace in March, the slowest annual gain since September when values rose 8.4 per cent, according to state agency Quotable Value. Residential values rose 0.1 per cent in the past three months, down from a 1.8 per cent pace in the three months through February, as they were dented by a 1.5 per cent decline in Christchurch values.

Link:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11233729

 

Latest Commercial Sales

Mt Wellington
18 & 20 Hannigan Drive:
Features: 3630m² industrial complex comprising 10 fully leased 331-457m² high-stud warehouse & office units, each on its own unit title, on 5325m² site with 72 parking spaces
Rent: $313,855.50/year net + gst
Outcome: sold by tender for $4,876,500 at a 6.4% yield, with new owner intending to put the units, which have income growth potential, up for sale individually

Penrose
22A Greenpark Rd:
Features: 775m² warehouse unit, comprising 713m² high-stud, clearspan warehouse & a newly built 62m² office plus 15 parking spaces
Outcome: sold vacant for $930,000

Mt Albert
55 Sainsbury Rd:
Features: 82m² retail unit occupied by the fully licensed Crate Cafe for 3 years from 2012, with 2 3-year rights of renewal
Rental: $55,000/year
Outcome: sold post-auction for  $600,000 at a 9.2% yield

Warkworth
59 Woodcocks Rd:
Features: 2800m2 industrial building with factory, warehouse & offices on 1.3ha
Outcome: sold vacant for $2.35 million

Orewa
8 Moana Ave, unit N:
Features: 75m2 semi-retail unit in an established retail complex, leased on a 3-year term from March 2013 with one 3-year right of renewal to tattooist
Rent: $15,000/year net + gst
Outcome: sold for $200,000 at a 7.5% yield

Whangaparaoa
15 Karepiro Drive, unit 7:
Features: 82m2 corner unit in a retail convenience centre with 2-year lease to computer store from December 2013, plus 4 2-year rights of renewal
Rent: $24,000/year net + gst
Outcome: sold for $310,000 at a 7.75% yield

Bob Dey

Auckland House Prices At New High-Barfoot’s

Barfoot’s Sale Prices At New High For March

If you have been hesitating about getting into the market then consider the facts below.
12 months ago the gloom merchants were predicting  the end of the Bull Run.

Well here’s their answer.
Don’t sit around wondering what might have been.

We at Newland Burling are advising many people how to reap solid profits from a rising market while at the same time
ensuring that any steps taken are done so prudently and with care.

If you want to take advantage of the current market, then contact us  and together we will analyse and map out the best way forward for you to progress up the property ladder.

Call 0800 34 24 12 right away to make a no obligation appointment
or use the “contact”  tab on our website.

So get off the couch, turn off the TV and make some money while you still have the chance.


March 2014     sold 1392 properties                     total $1,010,185,619
March 2013     sold 1430 properties                     total  $   923,677,919
12 months to March 2014 sold 13,088 properties total  $8,678,371,357
12 months to March 2013 sold 12,159 properties total  $7,365,846,194

An exceptional month for sales across Auckland
March was a busy month for residential sales across Auckland.
The month traditionally yields the highest sales figures for a calendar year, and this month continued the trend with 1392 residential sales, an 80 per cent increase from February sales and the second busiest March since 2007.

Auckland residential property prices saw a seven per cent increase during March, compared to February’s prices, with average house prices reaching $725,708. The median sales price for the month was $652,000.

Barfoot & Thompson Chief Executive Officer, Wendy Alexander, said March activity has been consistent with seasonal property trends.

March is traditionally the busiest month in the property calendar, so it is no surprise that we saw a significant increase in residential sales when compared to the previous month.
Demand for property across the wider Auckland region remains strong, and will continue to do so for the foreseeable future,” she says.

“New listings for the month were the highest in any March for six years, and there is a wide range of properties coming through on our listings.
While there remains a large number of buyers coming into the market, there was also more choice.
Properties are selling quickly because they are priced sensibly to meet the market.”

Sales of homes over $1 million continued to grow with homes in this price bracket accounting for 35 per cent of total residential sales for March, this represents the largest number of premium properties sold during a single month since 2008.

At the other end of the spectrum, 19 per cent of homes sold in March were under $500,000.

Ms Alexander said the activity at both ends of the housing market demonstrated the diversity and wide-range of properties on offer throughout the Auckland region.

link:

http://www.barfoot.co.nz/Market-reports/2014/March/Market-update.aspx

Houses Prices Still Rising

Average newly listed houses asking price hits record high
By: Carla Penman
Thursday April 3 2014

A record rise in the asking price of newly listed houses throughout the country in March.

The latest NZ Property Report has quoted the national average asking price at just over $480,000.

Realestate.co.nz marketing manager, Paul McKenzie, says it’s largely been driven by the renewed seller confidence in Auckland, Wellington and Waikato.

He says it definitely looks as if it will continue to rise, particularly in Auckland.

“Auckland had quite good levels of recovery. But it’s still, in terms of the total stock in Auckland, still very low.”

Mr McKenzie says although there was a slight decrease across much of the South Island, things are looking more positive in Canterbury.

“That was close on four percent higher than last month and four percent higher than last year.”

Link’

http://www.newstalkzb.co.nz/auckland/news/nbnat/112077101-average-newly-listed-houses-asking-price-hits-record-high

“Mini Crash ” in Cheaper Suburbs?

Lending rules spur “mini-crash”
By Susan Edmunds

Sunday Mar 30, 2014

Photo / Doug Sherring

(Maybe using the cheap Homesell method isn’t the best way to move a sticky property. See photo.)

 

Andy Morrison hopes for inquiries at $579,000 or more.
Tough new mortgage lending rules have seen house prices dip in suburbs that usually appeal to first-time buyers. But that means bargain prices for investors and those with big deposits.
Property consultant Matthew Gilligan said there had been a “mini crash” in South Auckland, and other cheaper areas would also be affected.
CoreLogic statistics show that since the introduction of new loan-to-value-ratio lending rules in October, first-home buyers have dropped out of many parts of Auckland where they used to dominate.

link:

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11228863

Best Place To Buy For Capital Gains

NZ’s top places for property gains
CATHERINE HARRIS
27/03/201


Auckland is the undisputed winner when it comes to capital gains but Dunedin is proving one of the most profitable places for property investors long-term, a new report says.
The report by Westpac identifies the best suburbs for gross yields and capital gains in seven New Zealand centres.
Auckland’s red hot property market made it the best place for investors to make a gain on their capital, with the value of three-bedroom homes jumping between 14 per cent and nearly 19 per cent last year.

However, Dunedin proved to be the pick for long-term landlords, producing seven of the top 10 suburbs for gross yields.
Dunedin’s Forbury was the best performer with a yield of 8.3 per cent.

link:

http://www.stuff.co.nz/business/money/9870980/NZs-top-places-for-property-gains