Published 11 January 2012
Home values in Auckland’s eastern suburbs kept charging upward in December and continued to rise at a more sedate pace nationally, according to Quotable Value Ltd’s latest index report, out yesterday.
The big rises in the Auckland region were again in the old Auckland City and also in the Onewa area of the North Shore.
In the old Auckland City’s eastern suburbs, the average sale price over the past 3 months was up $40,000 on the 3 months to November and the value growth for the latest period was a rise of 6.1%. The central area was also up 6.1% and southern suburbs up 6.2%. For the whole of the old Auckland City, the rise in values in the latest period was 5.8%. In the Onewa area, values gained 4.1% in the 3 months to November and 5.6% in the period one month on.
QV’s national residential index rose 2.4% from a year ago (on the rolling 3-month basis) to be 3.5% below the late 2007 peak.
In Auckland, however, values over the whole region increased by 4.3% during 2011 and ended the year 1.4% above the 2007 peak. QV research director Jonno Ingerson assessed the rise this way: “The Auckland market in 2011 was generally characterised by a lack of new listings & quality stock. This led to increased demand for the good quality properties that did come to the market. The central suburbs performed particularly well and, consequently, the old Auckland City area increased 5.8% during the year and values are now 3.3% above the previous market peak.”
On the national scene, he said: “For the first few months of 2011 values across New Zealand were stable, with rising values in Auckland & Christchurch being balanced by falling values in many other areas. From April onwards, national values began to increase as most of the main centres, apart from Wellington, began to stabilise. By September, values were increasing in all the main centres, including Wellington, as well as in many of the provincial & rural towns, suggesting a nationwide improvement in the property market.
“The year ended with the first signs that this apparently nationwide recovery may be faltering. National values increased from November to December, as they continued to do in Auckland, Wellington, Christchurch & Dunedin. However, values flattened in Hamilton & Tauranga and dropped in several provincial towns that previously had been recovering, notably Gisborne & Rotorua.
“Despite national values moving upwards during the year, the property market continued to be characterised by lower than normal sales volumes. Sales numbers in 2011 were more than 20% below the long-term average and, while up a few percent on the sales volumes of 2008 & 2010, both of those years were the lowest since the early 1980s, so outside of those 2 years 2011 is the lowest for 20 years.”
Around the Auckland region (still using old council boundaries), growth in the 3 months to December compared to the same period last year, the annual change to November in brackets, and average sale price in the 3 months to December (and to November in brackets):
Rodney, 1.7% (0.6%), $508,107 ($486,238)
Rodney North, 3.9% (2.4%), $524,749 ($488,703)
Hibiscus Coast, 0.5% (-0.8%), $494,026 ($484,271)
North Shore, 3.8% (3.3%), $583,684 ($589,601)
Coastal, 3.0% (3.0%), $644,469 ($665,224)
Onewa, 5.6% (4.1%), $467,908 ($466,434)
North Harbour, 3.5% (3.5%), $647,208 ($640,074)
Waitakere, 3.2% (2.4%), $403,206 ($406,183)
Auckland, 5.8% (4.7%), $597,023 ($577,774)
Central, 6.1% (4.8%), $531,502 ($502,480)
East, 6.1% (4.6%), $745,691 ($705,354)
South, 6.2% (5.3%), $536,569 ($532,520)
Islands (low volume), -6.4% (-1.5%), $521,500 ($565,446)
Manukau, 2.5% (2.1%), $456,553 ($451,827)
East, 4.4% (4.2%), $557,979 ($556,189)
Central, 1.8% (1.0%), $354,472 ($353,303)
North-west, 0.5% (0.1%), $411,608 ($405,316)
Papakura, 2.1% (0.0%), $359,394 ($351,092)
Franklin, 2.1% (1.8%), $381,229 ($384,270).
Bob Dey Report
Barfoot and Thompson says December Auckland house sales volumes strongest in 5 years; Average price up 1% from November to NZ $573,071
Barfoot & Thompson, Auckland’s biggest real estate agent, says it sold more houses in December than it has in the final month of a year for five years.
The company said it made 714 sales in December, up 190, or 36%, from 524 in December 2010. It’s Barfoot & Thompson’s highest volume of December sales since it sold 781 properties in December 2006.
Its average December selling price was NZ$573,071, up 1%, or about NZ$5,500, from November. That was topped last year only by March’s NZ$581,190, and is up NZ$43,389, or 8%, from NZ$529,682 in December 2010.
“December was extremely active, and it has given early momentum to January’s market,” said Peter Thompson, Barfoot & Thompson’s managing director.
Read the rest here:
If more evidence was needed that the property market is recovering we have it here. What a difference from the past years when the gloom and doom merchants predicted a mega- crash and a flood of unsaleable houses.
As have been saying for months now a housing crisis is building up and the likelihood of further price rises is becoming more certain by the day.
Big drop in houses for sale in centres
01/01/2012
Big cities may be heading for a shortage of homes for sale.
Just 8732 new listings came on the property market in December, down by a third on the previous month, according to Realestate.co.nz.
The drop in listings was greatest in Auckland, Wellington and Christchurch.
In the Wellington region there were just 571 new listings in December, down 52 per cent on November.
December is usually a quieter period for new listings.
http://www.stuff.co.nz/business/money/6206391/Big-drop-in-houses-for-sale-in-centres
To all my clients and to those of you who read this website, I wish you all the best for the coming year. Hopefully it will be better than the last few years. Also let us not forget those so badly affected in Christchurch (again) and all those who lost so much in the finance company debacle.
At least the signs are very good for the property market in the coming year, with continuing low interest rates and a build up of the housing shortage in the main centres.
To those of you who want to learn all about property investment or who have investments already and want to grow, down size or need general advice please note that I am available during the holiday period and can be contacted any time by phone or email. ( see the contact form on this site).
A word of caution. The heating up of the property market will bring back the con- artists and get-rich-quick merchants promising instant wealth and “all you need to know” in just one evening for $36 plus tea and biscuits. All of them are just fronts to sell you properties that they have an interest in one way or the other. You will never get bargains that way, but you will get a lot of headaches.
Also don’t be fooled by those who want to sell you “huge deals” in other countries, especially Queensland and the USA. If these deals were really so good why aren’t the locals buying them?
Ponzi schemes are alive and well and in a recent case in the USA
Read the story:
NORFOLK USA
A federal jury on Friday found Troy A. Titus guilty of 33 felony counts of mail and wire fraud, money laundering and conspiracy in what prosecutors said was a $7 million real estate Ponzi scam.
Titus, 43, of Virginia Beach, faces a maximum of 20 years in prison on each of the most serious mail and wire fraud charges. His total prison time could add up to hundreds of years. U.S. District Judge Raymond A. Jackson set sentencing for April 15.
After a one-month trial and four days of deliberations, the jury returned around 11:30 a.m. Friday, finding Titus guilty of 33 of the 49 counts he faced. The jury found him not guilty of eight related charges and could not reach a verdict on six counts. The government had earlier dropped two counts.
Read the rest here:
http://hamptonroads.com/2009/12/jury-finds-titus-guilty-33-counts-ponzi-scheme
And back home we had this article appear and
if this is true ( and I stress IF true) then it is a disgrace:
Fine Print Oversight Cost women Her Home
An Invercargill woman’s Christmas has been ruined: her home of 22 years is to be auctioned from under her today after a finance company lifted a $22,000 loan to $71,000 for missed payments.
Jeanette Brandon borrowed $22,000 in three instalments between August 2007 and March 2008 without realising the implications of a 29 per cent default, which would be imposed if she did not meet her payments on time.
However, the information was written in the contract she had signed it.
read the full article here:
http://www.stuff.co.nz/national/6182035/Fine-print-oversight-has-cost-woman-home
The finance company involved is Askufinance Ltd and the directors ( according to the company office website) are Justin & Vaughan Hyde of Stevens Ave Woolston Christchurch.
I you ever need a better loan company I can recommend a few.
Happy new year to you all and all the best in health and happiness for 2012.
Olly Newland
24.12.11
Another report on the chronc state of housing has been produced, no doubt at huge cost to the tax payer.
Full of good intentions, I doubt if a single idea it suggests will ever be implemented.
The chronic and worsening shortage of affordable houses will continue to lurch from one crisis to another until some real issues are addressed such I suggested in my interview with Interest.co. ( see below) .
One good thing the report said was that a capital gain tax would be of little use to which I would add that any such tax would be the final nail in the coffin of ever getting affordable houses.
It can also be noted that on “Trademe” at present there are over 800 houses for sale for under $300,000. Is there an affordability crisis or are buyers wanting to live beyond their means ? Goodness knows how many more are available in this price bracket throughout the country.
Urgent changes’ needed for housing
CATHERINE HARRIS AND DANYA LEVY
16/12/2011
The Productivity Commission has urged the Government to free up more land for affordable housing, especially in urban areas.
The commission, who has just released a draft report on housing affordability, noted that sections were now on average about 40 to 60 per cent of the cost of a house, particularly in Auckland.
“That means new homes tend to be at the top-end of the market. No one is going to put a $150,000 home on a $300,000 section,” said commission chair Murray Sherwin.
He said it was “abundantly clear” that there was a missing step on the property ladder for younger people and those on lower incomes.
“The chances of them ever purchasing their first home are decreasing.”
However, the Greens say the Commission lost an opportunity by not advocating for a capital gains tax on property which excludes the family home.
Read the rest here:
http://www.stuff.co.nz/business/money/6151210/Urgent-changes-needed-for-housing
14.12.11
Two Precinct apartments were sold under the hammer, 2 Viaduct & Princes Wharf leasehold units were passed in and a floor in Shangri-La attracted just one bid at Barfoot & Thompson auctions on Wednesday.
The Precinct units were taken to auction by the mortgagee but still attracted strong prices. Auction results:
Shangri-La, Herne Bay, 97 Jervois Rd, unit 14 on 280m² floor below the penthouse, 3-bedroom full-floor apartment, 2 bathrooms, 2 parking spaces, passed in at $1.5 million (Brian Parish & Carl Madsen)
Precinct, 6 Lorne St, unit 2301, 44m², one bedroom plus study, small balcony, sold for $255,000 (Tom Wang)
Precinct, 6 Lorne St, unit 2201, 44m², one bedroom plus study, small balcony, sold for $263,500 (Tom Wang)
Princes Wharf, 147 Quay St, shed 22, unit 24, leasehold, 2 bedrooms, 2 bathrooms, deck, no bids (Tom Wang)
Viaduct Point, 125 Customs St West, unit 203, leasehold, one bedroom, balcony, parking space, passed in (Tom Wang)
Bob Dey report
With mortgage interest rates stubbornly sticking to historic lows, is now the time to invest in property? Olly Newland says ‘yes — prudently’.
Olly Newland returns to the interest.co.nz studio to share his views of the outlook for property — interview by Bernard Hickey.
In response to his December column, Olly Newland was invited to give his market analysis on Radio New Zealand National’s news and current affairs flagship Morning Report today. Listen here:
Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.
Link to MP3 file for non-flash users.
Olly Newland’s column December 2011
Once again there are headlines that suggest the housing market is stirring and that prices are rising. Auckland is, as usual, the leader of the pack, but by a process of osmosis the rest of the country will catch up over the next year or two.
With all the modesty I can muster, let me point out I have been predicting this for a long time now.
Why is this happening?
What is driving the improving market when the headlines are still lurching from one crisis to another ?
Low interest rates are one key factor. Now borrowers can service up to twice as much debt as they could a few years earlier … but at the same cost.
Another key factor is that many savers are tired of getting measly returns (less tax) and are again finding the idea of investing in the property market a more attractive idea.
As for the Global Financial Crisis, people are thoroughly sick of that as well. There seems to be one crisis after another but the world keeps turning. It’s human nature to become immune to an endless, ongoing stream of ‘crisis’ talk – much like the desensitisation practice of tying a horse up to a fence by the road so they get used to traffic.
People cannot fail to notice that cars still fill the streets, that restaurants are full, exports are solid and that rents are slowly but surely rising.
Now that the “looney left” with their capital gains tax ideas have been well and truly routed at the polls, New Zealanders can get on with their plans — which including investing, buying and selling with the freedom they have always enjoyed.
All in all, these and other factors and we end up with an (un)holy mixture which could result in an even bigger boom that the last one.
Is property a gilt-edged investment? Like this? (click to enlarge)
However I believe there is a risk of some considerable danger so I give this warning:
If we do have another boom, – and the chances of that are increasing daily- encouraged by continuing low interest rates, plus earthquake rebuilding, leaky home renovation etc then the risk of the bubble bursting followed by a nasty crash seems far more likely than ever before.
So my advice is to tread carefully.
By all means enjoy any such boom. Do all the profitable deals you can find. Make money with both hands but be ready to press the ‘dump button’ at any time. In other words do not get involved in long term speculative projects.
In my view the next boom (when it happens) will be shorter, sharper and could have a very nasty bite at the end.
Coincidently, this report surfaced in the last few days: (more…)
“First home buyers return
1:20PM Wednesday December 07, 2011 Source: Fairfax
First home buyers appear to be the driving force behind the residential real estate market in New Zealand, according to new research released this morning by BNZ.
The survey, conducted by BNZ Banking Group with the Real Estate Institute of New Zealand, canvassed more than 10,000 licensed real estate agents.
Some 29% of real estate agents reporting first home buyers are prevalent in the market.
BNZ chief economist Tony Alexander said first home buyers nationwide were probably responding to the lower level of interest rates at the moment.
“Since we went into recession in 2008, a lot of young people who may have left home and gone out on their own otherwise have not done so. Maybe they have been living at home, have now built up a deposit and are certainly sick of living with their parents,” Alexander said”.
http://tvnz.co.nz/business-news/first-home-buyers-return-4610397
