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NZ Call to limit foreigners' right to purchase houses

Property Here - Tuesday, July 09, 2013

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New Zealand should adopt Australia's more restrictive approach to foreigners buying houses, warns an economist.

Foreigners can build only new homes across the Ditch, not buy existing ones, says Tony Alexander of BNZ.

When it comes to a multi-unit complex like an apartment block, they can buy only 50 per cent.

New Zealand should mimic the system so new house supply rises while foreigners are deterred from driving up prices in already overheated places like Auckland, Mr Alexander says.

He has had strong feedback on the BNZ-REINZ survey that found Australians outstripped Chinese as the biggest foreign buyers in New Zealand.

"I have yet to find a single person in New Zealand who agrees with the survey results," he said.

"Everyone believes that the true level of Chinese house buying in Auckland in particular is much higher than my survey suggests. The issue is rarely mentioned with regard to any other part of New Zealand."

Mr Alexander said he was worried about an anti-foreign backlash.

"The social media has been ablaze over the issue of perceived massive house buying by Asians in Auckland."

But he noted how no one had professed an ability to distinguish Kiwi-Asians from true foreigners let alone one Asian type from another.

"Nonetheless, there is growing societal discord at the perception that mainland Chinese in particular are outbidding hard-working Kiwis in the Auckland housing market."

Fears appeared not to be based on facts, Mr Alexander said.

"Although I believe the level of Chinese house buying in New Zealand is not as high as the anecdotes suggest, the issue is causing societal discord and has potential to worsen in coming years and threaten the very good trade relationship between New Zealand and China.

"I advocate that the Government move quickly to introduce legislation influencing foreign house buying in New Zealand with that legislation applying equally to all foreigners."

Real information about Chinese buyers eludes and frustrates him.

"I do not know why Chinese buy houses. In fact, throughout the Western World there is very little information on what Chinese think about anything and getting Chinese people to make public statements is near impossible."

He said he had struggled to get any Chinese input into his monthly publication Growing With China, and had noted the lack of Chinese faces in his paper Sources of Western Apprehension About China.

Land Information Minister Maurice Williamson has no plans to establish a database or a register of foreign buyers. Those buying sensitive land or spending more than $100 million go before the Overseas Investment Office for approval.

But house purchases are not dealt with by the OIO because the land involved is usually too small.

Mr Alexander doesn't see his suggested law change being adopted.

"The Government has made no policy pronouncement regarding foreign house purchasing and I am not aware of any work being undertaken on development of any particular policy," he said.

"There is zero chance that if a policy were developed regarding foreign house buying in New Zealand that it would be targeted towards Chinese.

"It would apply equally to all groups, though may exclude Australians just as New Zealanders may freely purchase property in Australia to the best of my knowledge."

The Green Party has also called for anti-foreign-buying measures to be introduced.

"Continued speculation in the New Zealand property market by offshore buyers will help fuel another destructive housing bubble," said co-leader Russel Norman.

"New Zealand needs to follow the lead of Hong Kong and place restrictions on overseas buyers' ability to purchase real estate here."

The Campaign Against Foreign Control of Aotearoa, which has its headquarters in Christchurch, has long campaigned against foreigners buying businesses and property here.

They claim it is against our national interest and is doing damage to the economy.

NZ Property Report: Bursting bubble unlikely in New Zealand

Property Here - Monday, June 03, 2013

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Bubbles burst and people get hurt. That's what happened in Ireland, Spain and the United States through the global financial crisis when house prices fell by between 30 and 50 per cent.

But is a bubble forming in New Zealand - or, rather, Auckland - and, if it is, could the end result be ugly here?

For answers to those questions,Property Report talked to economist Rodney Dickens (pictured), an expert in residential real estate and a former ASB Bank head of research.

Dickens sees a bubble as "a somewhat vague concept".

"I think about it in terms of the yield on the asset," he says. "A sure sign of a bubble is when price increases result in really low rental yields that are not justified by other things.

"In this context a key factor is that [today] low interest rates are making low rental yield look reasonably okay, so to me it is not technically a bubble, certainly not compared to the relativity that existed between rental yields and interest rates in 2007."

However, Dickens says there are "considerable risks" if interest rates increase significantly at some stage. If that happens there's a real chance of prices falling as they did in 2008/09.

"But this would still be nothing like a fall of bubble bursting-scale, and a real bursting is extremely unlikely unless something really bad happens on the employment front, resulting in lots of forced sales."

More likely, he says, prices could be "eaten away over a number of years" if moderate progress is made in delivering more affordable new housing.

Because the current housing upturn isn't driven by the sort of investors that drove the apartment building and coastal property bubbles, there isn't the same risk of demand collapsing, he says. However, interest rate rises could result in "somewhat more than normal cyclical fall", exposing the underlying affordability problem.

Dickens says it's silly to compare New Zealand with the United States because the quality of lending was so poor before the bubble burst. Mortgages were given to people who couldn't afford to pay interest even at low interest rates and were therefore at huge risk when interest rates rose.

In New Zealand, while rising interest rates carried the risk of a "mini-burst", it would take "some calamity" to produce more mortgagee sales than during 2008/09 and result in a large fall in average prices.

Rodney Dickens is managing director of Strategic Risk Analysis.

NZ Property Report: Hamilton leads the way but provinces stay subdued

Property Here - Monday, June 03, 2013

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Hamilton was the first provincial centre to get a lift after the Auckland boom, reporting a gentle upturn about nine months ago. File Photo / Herald on Sunday
Hamilton was the first provincial centre to get a lift after the Auckland boom, reporting a gentle upturn about nine months ago. File Photo / Herald on Sunday

Real estate agents and property owners in the provincial areas must look at the headlines on the latest Auckland property boom and wonder when decent good news is going to start flowing their way.

It did that in the 2002-2007 boom, when investors helped by loan-easy banks moved to the rural towns and provincial cities as Auckland's prices went beyond their reach. They invested in such numbers, in fact, that prices in many provincial centres rose by more, in percentage terms, than they did in Auckland.

But there was a price to pay: when the boom hit a brick wall and the country entered recession, the provincial property market endured four or five years of miserable sale levels and falling or flat prices.

Some rural towns are still in that mire, but the Auckland fireworks are starting to feed through to at least a couple of the big provincial cities. Hamilton was the first to get a lift, reporting the first signs of a gentle upturn about nine months ago, and now Tauranga is looking a little sunnier.

Prices elsewhere in the upper-North Island, though, are a problem:

• Whangarei (down 0.8 per cent for the year to March 31, and down 17.4 per cent from the 2007 peak);

• Hamilton (up 4.9 per cent for the year to March 31; down 6.2 per cent from the peak);

• Tauranga (up 0.8 per cent for the year to March 31; down 10.7 per cent from the peak);

• Rotorua (down 0.3 per cent for the year to March 31; down 13.5 per cent from the peak).

• Taupo (down 1.4 per cent for the year to March 31; down 14.8 per cent from the peak)

Richard Allen, a valuer with QV in Hamilton, says "things are ticking along quite nicely" with supply pretty much in balance with demand and investors starting to emerge.

"But nothing special is happening with prices," he says.

"People certainly aren't getting ridiculous money. It's incremental - steady as she goes."

Across the Kaimais in Tauranga, QV's Paul Thomas reports "a little bit more optimism... people seem a bit more confident and things are starting to look a bit better". He's noticed more inquiries from Aucklanders, but a lack of job prospects in Tauranga means the city won't be flooded by refugees from big city prices.

In Rotorua and Taupo, the same lack of work opportunity continues to restrain the local economy. QV's Susan Lock says properties are selling and agents want more listings but, unlike in Auckland, decent demand is not pushing prices. New-home buyers "want to get in at low prices, but not everyone is letting them go at that level".

In Northland, it is still hard going and QV's Jeff Robinson says he can't see any significant changes in the next couple of years. Demand has lifted a little in recent months, but prices have stayed flat.

While mortgages are lower in the provincial cities than they are in Auckland, the big question remains: if prices are struggling when interest rates are low, what happens when those rates start rising?

NZ Property Report: So you want to live in... Newmarket

Property Here - Monday, June 03, 2013

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Lumsden Green on the corner of Khyber Pass Rd and Broadway Newmarket. Photo / Ted Baghurst
Lumsden Green on the corner of Khyber Pass Rd and Broadway Newmarket. Photo / Ted Baghurst

Commerce was behind the establishment of Newmarket and that is still what drives it today. In the 1840s the area was farmland along with other businesses such as breweries and hotels. The suburb derives its name from the new cattle markets that were established there in 1850. Later on, market gardens were set up either side of Khyber Pass Rd.

While many of the suburb's historic buildings have fallen victim to the march of progress, some remain such as the historic homestead Highwic, on Gillies Ave, and the odd commercial building or hotel.

These days Newmarket is renowned for its shopping, particularly its fashion, but also has many bars and restaurants as well as two movie complexes and an Olympic pool. It's not a scene you would have envisaged back in the early 1980s when Broadway, the main thoroughfare, was pretty shabby. Revitalisation began with developments such as the 277 Newmarket mall on the corner of Broadway and Morrow St. Plans are afoot to double the size of the mall - at an estimated cost of $250 million - by developing land to the south and linking it with an airbridge over Mortimer Pass.

The revitalisation of the area has continued in recent years with the development of precincts such as Osborne St and Nuffield St, which have become boutique areas with fashion stores, cafes, bars and restaurants.

Ashley Church, the CEO of the Newmarket Business Association, says the latter developments have been helpful in "trying to broaden the focus away from just fashion to hospitality as well", something the association hopes will make Newmarket more of a destination.

As well as funding public art works to the tune of $40,000 a year, the association runs various events such as a heritage festival and 30 Days of Fashion and Beauty to highlight what the suburb has to offer.

There are other major developments planned for the suburb including the release by the NZTA of land underneath the Newmarket viaduct that will probably become a mixture of retail, residential and office buildings with some public open space on land that is at present largely occupied by carparks and car sales yards.

But Ashley says the most exciting prospect is the University of Auckland's acquisition of the former Lion brewery site on Khyber Pass Rd. The university is to establish another campus on the 5.2ha site and the redevelopment should also see improvements to Khyber Pass Rd.

He says, "We estimate that on any given day 12,500 people live and work in Newmarket and we think that the campus development will probably double that figure so it's going to be massive for the area."

The arrival of the new campus will add another dimension to a suburb that has everything from intimate ethnic eateries - many of which are grouped around the bottom of Khyber Pass Rd - to big box retailers.

With land in the suburb so valuable, there are few standalone homes. Most dwellings are part of apartment or townhouse developments such as Broadway Park that appeal to either younger or much older buyers. While Newmarket is in zone for the desirable Epsom Girls' Grammar and Auckland Grammar, the style of homes tend to appeal more to Kiwis who have lived overseas in big cities or immigrants from Asia, Britain and the United States.

Transport links are also a big part of Newmarket's appeal, with easy access to the motorway, and good bus and train services.

Those people living in the new apartment blocks built around the redeveloped Newmarket train station have trains leaving from their doorstep. The new station and improved service has been a huge boost to the area although the square between the station and Broadway has become a cause for concern because of its poor design and limited access to the main street.

Ashley says the business association is considering starting up a farmers market in the square to breathe some life into the space.

One public space that does work well is the Auckland Domain, with its playing fields, walks, gardens and museum. Homes overlooking the domain are highly sought after.

PROPERTY PRICES

An entry-level property, typically an apartment, with one to three bedrooms costs between $300,000 and 500,000. An average apartment with two or three bedrooms usually sells for between $500,000 and $700,000, while larger, more luxurious apartments sell for $1 million-plus.

RECENT SALES

Barfoot & Thompson has three examples of sales across the price spectrum, including a two-bedroom, one-bathroom apartment at 8/118 Broadway that went for $510,000. A two-bedroom, two-bathroom apartment at 2A/36 James Cook Cres with garaging for two cars changed hands for $690,000. A two-bedroom terrace home with the domain across the road at 1E George St sold for $1.0605 million.

ON THE MARKET

Barfoot & Thompson has a number of properties available in Kings Square, a large apartment complex at 176 Broadway, that range in price from $450,000 to $1.1 million. Duncan Wu is marketing apartment 507 in this building and it is a freehold dwelling with two bedrooms, two bathrooms, a big balcony, a secure undercover car park and an asking price of $450,000.

RENTS

Being a primarily commercial and retail area, there are few standalone homes in Newmarket and hardly any for rent. One-bedroom apartments tend to cost $300-plus a week, while two-bedroom apartments or terrace homes can cost anywhere from $450 to $900 a week. Three-bedroom homes start at around $700 a week.

LOCAL ATTRACTIONS

Retail therapy
While Newmarket is renowned for its fashion stores - large and small - it also has boutique shops selling everything from jewellery and fabrics to homewares and gift items.

Auckland Domain
One of the best places in Auckland to stretch your legs, kick a ball or enjoy a picnic. While the redeveloped museum is a popular attraction, the Domain has some beautiful gardens (including the historic Wintergarden) and some lovely woodland walks.

Dinner and a movie
With two cinema multiplexes - Rialto and Event Cinemas - and a wealth of bars and eateries, Newmarket is a great spot to meet up for dinner and a movie. There are many Asian restaurants but other tastes are catered for - from modern bistro style to classic French.

BEST STREETS

George St, Almorah Pl, Maungawhau St, James Cook Cres, John Stokes Tce.

SCHOOLS IN THE AREA

Newmarket School, Auckland Normal Intermediate, St Peters College, Auckland Grammar and Epsom Girls' Grammar.

NZ houses overvalued by 25% - IMF

Property Here - Wednesday, May 15, 2013

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Photo / Herald on Sunday
Photo / Herald on Sunday

New Zealand housing is already overvalued by about 25 per cent and if it continues to rise may force the Reserve Bank to hike interest rates, according to the International Monetary Fund.

Property in New Zealand has become less affordable in the past two decades with the median house price at about 4 ½ times income, some 20 per cent higher than the average of the past 30 years, the IMF said in its annual report on the nation.Internal research by the Washington-based global institution suggests "overvaluation of about 25 per cent."

The IMF had previously seen New Zealand housing over-valued by between 10 per cent and 20 per cent.

Join us at noon today for a live chat with property commentator Alistair Helm.

Rising house prices were a primary issue for New Zealand and could "lead to an increase in debt-financed household spending which would put pressure on aggregate demand and increase the risk of an abrupt price correction." The Reserve Bank told IMF staff its flat interest rate outlook would be reviewed if a housing boom added to underlying inflation pressures.

"The current accommodative monetary policy stance is appropriate, but may need to change if house price and credit expansion begin to fuel excessive consumption spending and inflationary pressures," the IMF report said. "The RBNZ's credibility and the effective monetary transmission mechanism in New Zealand should allow for a nimble response should circumstances change."

Real Estate Institute figures this week showed the stratified median housing price index, which smoothes out peaks and troughs, rose an annual 9.8 per cent in the year ended April. Auckland's stratified housing price was up an annual 14 per cent and Christchurch's climbed 13 per cent.

The booming markets in Auckland and Christchurch, where limited supply is failing to meet growing demand, have accounted for about 92 per cent of recent gains in house sale prices, having traditionally made up about half.

That rising housing demand has seen a third of new mortgage lending at higher loan-to-value ratios, leaving the central bank uncomfortable and saying it is willing to use macro-prudential tools to limit low equity lending if it poses a "significant risk" to the country's financial stability.

The IMF raised its assessment of the potential for a sharp fall in house prices to "low to medium", from "low" previously. Such an event would have a medium to high impact on the economy by reducing household investment and increasing mortgage defaults.

New Zealand authorities told IMF staff the new tools wouldn't substitute for macro-economic and micro-prudential measures, the report said.

"They stressed their intention to use these tools judiciously, and as experience with such instruments is limited, with caution, with the primary objective of limiting the periodic build-up of system-wide risk," the report said.

The new tools could improve the central bank's "ability to guard against a loosening of bank lending standards" fuelling house price inflation, but because they are untested "there are questions about how effective they will be given possibilities of evasion and arbitrage."

BusinessDesk

NZ Continued property growth but questions over 2014

Property Here - Wednesday, March 06, 2013

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So where do we go to from here - more of the same, a levelling off or a dip? The Auckland house price recovery has started to filter out to the provinces in a muted way, but will it have enough momentum by the end of the year to hold its ground against the inevitability of rising mortage rates?

Interesting, and important, questions - not least for a Government worried about being caught up in an electionyear tangle over affordable housing and a Reserve Bank seeking a better-balanced economy.

Both will be looking at Auckland with increasing alarm: the first two months of the year have seen no easing in demand and prices have continued to move. Volumes have been up nearly 40 per cent on the lows of three or four years ago (though still down 25 per cent down on the boom peaks), but demand still far outweighs supply. It is a strong sellers' market and, so far, 2013 has not brought any sign of easing.

The upturn started in the central city suburbs a full two years ago and was slow to catch on when the world economy was really stuttering. But it has since spread along the motorways to the outer suburbs and now embraces even the most far-flung areas of the Supercity - although the greater the distance from Queen St, the more subdued the activity.

At the heart of the Auckland price revival is a lack of building since the Global Financial Crisis and a steadily growing population encouraged by opportunity and jobs. But had it not been for record low mortgage rates, it may not have come to much.

At the overall market peak at the end of 2007, New Zealand - and specifically Auckland - had some of the world's most expensive homes on a household income basis. The gap closed a little through the flat two or three years following but, with limited wage movement and racing prices, it is now back towards the top of the pile.

Logic would suggest limited upside from here until wages start to catch up, especially with interest rate rises probably less than a year away and renting looking comparatively cheap. But the banks are awash with term deposits and are chasing market share with enticing deals, looking to capture homeowners for the long term.

Investors, more optimistic now about capital gain, are also firmly back in play, especially in the more blue-collar suburbs - and, as they did in the boom years, are helping to drive up prices at the lower levels. Tax advantages mean an investor can buy at a price a new-home buyer would find too elevated, even when rental returns are poor.

For Auckland, back to that opening question: where to from here?

As confidence levels rise, many analysts are picking New Zealand prices will climb 7 or 8 per cent this year. With Auckland's weighting, that could translate to double-digit growth for some city suburbs.

It's the sort of figure the Reserve Bank may tolerate as it waits - one eye on the high-flying dollar - to react to inflationary pressures with the first of the projected interest rate rises late this year or early 2014. But it has long talked of its work on macro-prudential tools, such as loan-to-value ratio restrictions, and will reveal its hand with a public document late this month. If it adopts a plan of attack like that, some of the sting may be taken out of price rises, though in the shortterm will hardly make it easier for new-home buyers.

The Government? It could do plenty to quell the immediate heat and create better balance in the economy over time - like the suggestions of easing investor tax advantages, backed with a capital gains tax, or limiting ownership to permanent residents - though that is not its inclination. Increasingly, affordable housing and policies to keep a rein on prices are looming as key election issues.

While all the signs are that Auckland prices will continue to rise through 2013, there is no consensus on what will happen next year. Some economists and analysts are suggesting an increase of 3 per cent or so while others are predicting a flat market or even a small decline. It all depends how quickly rates climb and what other economic influences emerge.

Out in the regional areas, some of the statistics suggest things are on the move. But it's hard to pin down much to get excited about.

PropertyIQ's housing index showed that while Auckland prices rose on average by 10.2 per cent over 2012 and (at December 31) were up 12.4 per cent from the 2007 peak), the rest of the North Island looked fairly anaemic:

• Hamilton was up by 3.7 per cent for the year and down 7.7 per cent from the peak
• Taupo: +0.8 per cent and -13.9 per cent
• Rotorua: +1.7 per cent and -14 per cent
• Tauranga: -1 per cent and -11.8 per cent
• Whangarei: -0.1 per cent and -17.5 per cent
• Hastings: +1.4 per cent and -6.6 per cent
• Napier: +0.5 per cent and -6.7 per cent
• New Plymouth: +3.2 per cent and -2.7 per cent
• Palmerston North: +3.8 per cent and -5.5 per cent
• Wanganui: +1.5 per cent and -13.3 per cent
• Wellington City: +2.1 per cent and -4.5 per cent

Of the upper-North Island cities, Hamilton is doing best.

After four years of relative stagnation, buyers and sellers started to come into balance last year and houses are now moving relatively briskly.

Prices are inching their way up in response to the greater demand, and entry-level buyers are spending up to $330,000 or $340,000. Sections at a new sub-division in the north-east of the city are selling at around $250,000, a decent shift from the $160,000-$170,000 levels of three and four years ago, though the developments will place a lid on further price lifts. The city seems likely to enjoy the same sort of gentle appreciation in the year ahead that it found through 2012.

In Rotorua, Tauranga and Whangarei, meanwhile, progress is sluggish. Volumes are edging up, but prices are static as real estate agents look for some signs that the ripple running out of Auckland will reach their boundaries. While it is unlikely prices will go backwards this year, it is hard to see rises much beyond the rate of inflation - not much of a springboard for 2014 when interest rates move.

Out in the provincial towns, jobs and dwindling populations are a problem and only a supreme optimist would be betting on real term growth in 2013.

Those towns - from Kaitaia and Dargaville in the north to Kawerau, Tokoroa, Turangi and Taumarunui further south - tend to rise in value only after vigorous growth in the provincial cities. When the cities are generally restrained - and when, in a low mortgage rate environment, demand has been insipid - the provincial towns continue to face difficult times, falling further behind. If prices cannot grow when interest rates are low, what chance for a catch-up when they rise?

Those provincial eyes must look despairingly at the Auckland suburban statistics as the gap continues to widen between city and country.

At the top of the list of the Auckland suburbs surging ahead last quarter (shown in the table accompanying this article, and laid out in the centre data display) is Ponsonby, which PropertyIQ's E-Valuer shows had an 8.9 per cent advance in average price in the three months to December 31. That seems extravagant and no doubt will be pulled more into line over time, but the interesting point in our "top 10 quarter climbers" is the wide spread of suburbs - geographically and by value.

Ponsonby (with an average value at December 31 of $1,165,389), Mairangi Bay ($814,444) and Half Moon Bay ($702,000) are joined in the table by suburbs like Manurewa East ($326,444), Bayview ($493,556) and Beach Haven ($507,778).

It clearly shows the extent of price rises across the Supercity, flowing on from the central old Auckland City Council suburbs which started to move ahead of the pack around two years ago.

Another strong indicator of price movement over that time is the advance on the July 2011 rating capital values.

PropertyIQ measures actual sales against individual CVs and, if the number of sales is high enough, that detail can give a strong guide to overall prices within a suburb.

A close look at that data (10th column from the left in our central spread of statistics) reveals that some of the more modest suburbs are now making the greatest strides. Areas such as Glen Innes (where sales last quarter were up 31.9 per cent on average above their 2011 CVs), New Windsor (up 32.5 per cent) and Bayswater (up 29.6 per cent) lead the Aucklandwide list - and a pile of lower-valued suburbs were up more than 20 per cent.

Meanwhile, some of the fancier suburbs (Takapuna up 4.3 per cent; Mission Bay up 6.3 per cent; and Herne Bay up 6.6 per cent) aren't going quite so strongly, though big percentage gains are more difficult to achieve from a $1 million-plus base.

The data gives support to the anecdotal evidence that prices in the upper levels - above $2 million, say - are not racing away.

Of the 153 suburbs and towns in the new city with enough sales to track performance, only four - Omaha, Snells Beach, Oneroa and Clarks Beach - produced overall average sale prices last quarter that fell below the 2011 capital valuations and even then the declines were minor. It is no great surprise to find those centres at the tail of the Auckland field because all of them are at least partially driven by the influence of the discretionary "bach" market that has still to turn the corner.

While competitive bidding from buyers frustrated at continually missing out may be pushing some Auckland homes above rational value, there are fewer signs today of the frenetic activity which produced premium prices for mediocre homes during the 2002-2007 boom.

Simon Damerell, co-principal of Ray White Ponsonby, saw "rubbish" drawing big prices in the boom, but says buyers are more discerning today.

"There is no doubt that the market is very, very healthy," he says, "but there is also caution among buyers. They are not just being irresponsibly rash. On the one hand, they may look at a property and say, 'that is a classic home of quality and I need to pay serious money to own it'. But on the other hand, if a property is, say, in a gully, the wrong style for the area or constructed in monolithic cladding, then buyers are expecting the price to be discounted to reflect that."

Damerell lists four attributes which, combined, will result in a good price on his patch covering the country's most expensive real estate: location, style, quality and elevation.

"If four out of four are right, then people will compete for the right to buy, and the price will reflect that competition," he says. "But if one or two of those are missing, then there will be more caution and people will not pay a premium."

However, chasing the same four attributes out in the country will hardly close the gap on city values. The average price in Herne Bay is close to $2 million - enough to buy 20 properties in Kaikohe or Kawerau. All the rural style, quality and elevation available will have no impact on the real estate feature that really translates into dollars: location.

NZ Hamilton housing market - a boom start to 2013

Property Here - Tuesday, February 12, 2013

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Tuesday 12 February 2013, 8:36PM
By HMC Communications 
225 views


HAMILTON

  • Hamilton market sales were 180 homes in Jan 2013; compared with 190 in Dec 2012 and 131 in January 2012
  • Hamilton city median house price for Jan 2013 was $320,000; down on $329,000 in Jan 2012
  • Median time to sell a Hamilton home in January was 41 days; compared with 34 days in December 2012 and 45 in January 2012

 

 

The number of homes sold within Hamilton city during January 2013 was 180, as reported by the Real Estate Institute of NZ (REINZ) today.

This month’s sales compared to 190 homes sold in the city during December 2012 and 131 one year ago during January 2012.

Jeremy O’Rourke, Managing Director of Lodge Real Estate in Hamilton, the city’s largest real estate agency by volume, says, “Normally, January sales in any given year are around 50-65% of the previous December sales.  This January was 95% of December 2012 sales, with volumes up significantly on January 2012.

“Overall, total house sales for January are reflecting the recovery the city market is going through.  It is just a bit slower than previous months due to low numbers of homes being listed on the market.”

The suburbs of Hillcrest and Hamilton East experienced higher than usual sales activity.

“Normally sales in these two suburbs represent around 8% and 6% of the city’s total sales, respectively.  This month, sales in those sections of the city were higher at 10% in Hillcrest and 8% in Hamilton East.

“These two areas are traditionally strong markets for first home buyers and investors – both of which are quite active in the market at the moment,” explains Jeremy.

Conversely, Mr O’Rourke said sales in the northern suburb of Rototuna were down, representing just 12% of the city’s sales in January.   Rototuna house sales usually represent around 16% of the city’s total sales in any given month.

“The dip in Rototuna sales is primarily due to the lack of availability of homes for sale in this suburb.  It didn’t take long for buyers to snap up quality homes in Rototuna during January as there weren’t many listed over the month.”

Mr O’Rourke said there was also a lack of availability of houses being listed in the central city, which resulted in lower than normal sales in that suburb as well.

The lack of quality stock on the market led to more homes being sold at the lower end of the price range throughout Hamilton.  This was the key factor leading to a dip in the median house price for Hamilton city, which was $320,000 for January.  This compares to $337,500 in December 2012 and $329,000 in January 2012.

Mr O’Rourke said there is keen interest right through the Hamilton market.  “At the start of February, we’ve already seen more stock coming onto the market.

“Our team is performing a lot more appraisals than we have in the past several months.  Plus, there are more buyers in the market now that people are back from holiday and settled into normal routines.  So, we expect the market to pick up and to see even stronger sales within the next three to four months.”

NZ Demand pushes property values NZ's biggest cities to new high

Property Here - Monday, November 05, 2012

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High demand for homes in Auckland in New Zealand is helping prices to soar with new figures showing that values are hitting new records.

The latest property report from realestate.co.nz shows the average asking price for the region's homes in October was $611,864, a 9% increase on last year.

And data from Barfoot & Thompson shows that the average price of a home in the city reached $618,707 in October, up 5.6% from the previous month.

The realestate.co.nz data also shows that the national average price also reached a new high of $445,529, with Canterbury also showing strength with an average house asking price of $414,070, an increase of 13% compared with a year ago.

As the two largest property markets in New Zealand, it is notable to see the price cross this psychological threshold in Auckland and Canterbury. Clearly this reflects high seller confidence that exists in these markets,ђ said Paul McKenzie, marketing manager for realestate.co.nz.

Southland, for example, had the lowest average asking price of $248,977. The only regions to see a drop in the average asking price from September were the West Coast, down 6.8% to $285,657, Taranaki down 4.6% to $286,297, Hawkes Bay down 2.1% to $348,344 and Nelson down 1.3% to $449,858.

October was one of the most active selling months we have ever experienced. It was a month when buyer demand finally broke through the constraints buyers were imposing on themselves that had seen the average price move in a $10,000 band between $582,000 and $592,000 for five months,ђ said Wendy Alexander, chief executive officer of Barfoot & Thompson.

We experienced extremely competitive bidding at auctions, and a very high success rate under the auction hammer. It was a case of demand far out stripping the number of properties up for sale,ђ she explained.

Sales for the month at 1,081 were up 11.6% on those for September and up 48.7% on those for the same month last year.
Even though we listed 1645 new homes during the month, our highest number of new listings in 31 months, and the highest in an October for three years, it was insufficient to meet buyer demand, particularly at the top end of the market,ђ explained Alexander.

Sales values in excess of $1 million were a feature of Octoberђs activity, and we sold 119 homes in this price category. This was the highest number of million dollar homes we have ever sold in one month, she added.

The firm also reports that business is booming at the higher end of the market. ґFor the first 10 months of the year we have sold 763 homes for more than $1 million, which is 64.4% higher than for the same period last year, said Alexander.
ґThe only time we have ever sold more than 100 homes for in excess of one million dollars in a month previously was at the height of 2007s sales activity, and at that time the average monthly selling price was $564,000,Ғ she pointed out.

At the end of the month we had 3835 properties on our books, our third lowest number in more than a decade,ђ she added.

NZ- Graffiti magnet in heritage battle

Sean Wang - Wednesday, July 18, 2012

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A building that has been an Auckland graffiti magnet for years could be given heritage status - despite the owner wanting to knock it down.

Stuart Galloway, a director of several companies that own three buildings, including the old Yates building at 9-11 Albert St, yesterday began arguing in the Environment Court for less stringent Auckland Council protection measures.

For years, the Golden Kiwi lottery winner has tried to redevelop his land.

But the Auckland Society for Amenity Protection wants the existing measures strengthened to ensure the buildings are recognised for their historic merits.

Both parties are taking a case against the Auckland Council. The hearing started yesterday and is to run for three days.

The Yates building and the two on Wolfe St built between 1911 and 1928 are at the centre of the proceedings.

An outcry from residents and the Stamford Plaza Hotel just before the Rugby World Cup resulted in the graffiti-bombed buildings being cleaned and painted by the council.

Mr Galloway hopes to bring international hotel chain Carlson to New Zealand to a new tower he wants built there.

But in 2004, protection society representative Allan Matson applied to have the buildings scheduled A, the highest rating.

The council's lawyer, Bill Loutit, said yesterday nearly all heritage witnesses agreed the buildings would score category A together.

All three should be scored as a group, preventing substantial or total demolition, Mr Loutit said.

But Mr Galloway wanted two buildings scored as category B, which Mr Loutit said "would not provide the same protection to the historic heritage fabric".

A wide range of activities could be carried out in the Yates building if it was renovated, Mr Loutit said.

Mr Galloway appealed against the council's decision to schedule the Yates building as a category B because it would render it unable to be put to reasonable use and would place an unfair and unreasonable burden on him, Mr Loutit said.

Scoring it a B would mean it could be partially demolished but an A score would prohibit substantial demolition.

"The protection of historic heritage is a matter of national significance. Scheduling the buildings as a category A will ensure that they cannot be demolished substantially or in their entirety," Mr Loutit argued.

"The council considers that category A scheduling will still enable a comprehensive development of the wider block to occur while at the same time protecting the important heritage fabric of the buildings."

The case is continuing.

NZ - Floods can wreak havoc on properties

Sean Wang - Saturday, July 14, 2012

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Flash floods can wreak havoc on your property. Just ask the hundreds of Auckland property-owners who woke last week to find floodwaters lapping at their homes.

It pays to be well insured before this happens and to know what you're covered for. The "it won't happen to me" belief won't save you in the event of a flash flood.

Such floods have resulted in millions of dollars of claims in the past few years. The Nelson floods in December 2011 caused $16.8 million of damage. The Southland floods of the previous year resulted in $43.9 million of insurance claims.

Floods can cause some quite unexpected damage. During last week's deluge Dairy Flat resident Steve Jennings watched $4000 worth of gravel on his driveway wash away before his eyes in a "torrent of water". The driveway looked like a 2m-wide river and the gravel ended up in a pond at the bottom of the valley, Jennings says.

He has lodged a claim with State Insurance, which will most likely be paid. Fortunately Jennings has receipts for the gravel, which was laid two years ago. By coincidence he also has photographs of the driveway from late last year when friends were visiting.

Although not commenting on Jennings' claim directly, Denise Bailey, corporate communications manager at State Insurance, explained that land damage is excluded under home insurance policies. "If a driveway was damaged by flood, State would pay that part of the repair cost for replacing the surface materials whilst EQC would pay for the loss of land below the driveway surface."

EQC insures land for natural disasters such as earthquake and flood. Home insurance policies cover the building of the dwelling together with garages, other outbuildings, fences, garden walls, driveways, paths, patios and paving, Bailey added.

Most claims for natural flooding are paid with little drama. Insurance & Savings Ombdusman Karen Stevens says her organisation received just one complaint from 10,000 insurance claims after the 2004 Manawatu floods.

New Zealand insurance policies usually cover home owners for accidental damage from unforeseen circumstances, says Phil Snookes of Insurance Brokers Association of New Zealand (Ibanz). That is a wide catch-all definition, unlike policies in Australia and the United Kingdom, which might specifically exclude the peril of flood.

Prevention is always better than cure. Owners of properties susceptible to flooding or water damage can find ways to mitigate the risk of flood. That could involve improving drainage or even installing a pump, if appropriate.

A landlord I once interviewed made a point of finding the lowest point in the floors of laundries and bathrooms and installing a small drain. If a tenant overflowed the sinks or bath, the water escaped, averting the need to claim.

Checking water pipes for damage from time to time isn't a bad idea. More than one homeowner has suffered an internal flood thanks to rats chewing the pipes.

Another good prevention method is to avoid buying properties that are at risk of flooding. Property lawyer Tony Steindle of Steindle Williams says such natural hazard risks will show up either in a council Land Information Memorandum (LIM) or on the title of the property.

"Something you might see in a LIM report is a 100-year flood report," says Steindle. Councils also have flood plain maps available. These will give an indication if the home of your dreams is at risk of flooding. If your house is in a flood-prone area such as Thames or Kaeo, getting insurance cover may be difficult.

Flood hazards may show up on a property's title. The Building Act 2004 requires councils to advise the Registrar General of Land if a consent is granted for building works on land subject to natural hazard. An entry is then noted on the certificate of title. This can happen either at the time of subdivision or when seeking building consent, says Steindle.

Where purchasers could be tripped up is in buying a property in the hope of either extending it or converting an outbuilding into an extra room, says Steindle. Building consent may not be forthcoming - especially on an outbuilding which is in a location at greater risk of flooding than the main house.

Another issue is that the owners of properties with Section 74 notices on the title may not be able to get house insurance or EQC cover. "If your property contains a notice of this type, you are obliged to disclose this to your insurer," the Insurance Council of New Zealand says. If not, you risk having claims declined.

Insurance companies can and do put individual exclusions on policies when they become aware of a problem. This could be as a result of a claim or claims. It could simply be that something in the proposal form alerts the company to the risk.

Floods aren't just a result of natural causes. All too often "flood" claims are for gradual damage such as rot, which has occurred over a long period of time. This has been a real bugbear between the public and insurers for years and these days most household insurance policies offer a few thousand dollars of gradual damage cover.

There are policies that don't. So don't assume your policy covers gradual damage if you haven't read it. Budget policies such as NZI's basic Essence house policy often don't cover gradual damage. Yet comprehensive policies such as NZI's Echelon Home policy do cover it.

Tenanted properties may not have gradual damage cover. State's Landlord Policy, for example, excludes gradual damage. Some general house insurance policies exclude gradual damage for tenanted properties, but cover owner-occupied properties. The irony of this is that an owner-occupier is more likely to do something about a gradual leak than a tenant is and the landlord may not be aware that there is a problem.

It's worth noting that in most cases gradual damage must be caused by water that has escaped from internal pipes or a hot water cylinder. In the case of AA Insurance's HouseCover policy, which is typical, the claim will only be paid if the property owner couldn't have discovered the damage immediately and it was not "visible, noticeable or obvious". So damage caused by water seeping in from outside or over the side of a pot plant may not be covered.

Even if a claim is accepted, the insurance company may not cover repair of pipes. It might only pay to reinstate the damage.

Nor will insurance policies pay for preventative work. In a case heard by the Insurance & Savings Ombudsman last year an insurance company was found to be correct in refusing to pay for drainage work around a sleep-out following a flood. "The policy did not cover the cost of rectifying the drainage, because it was a preventative measure and not a "sudden accidental loss", Karen Stevens said in her decision.

Another policy exclusion is settling or subsidence of land, even if it is caused by flood. One homeowner whose house piles sank following heavy rain and "flooding" had her claim declined. The damage included extreme sinking, uneven gaps beneath doors and a sloping floor, but the claim was declined because subsidence was excluded on the basis that there had not been any direct damage to the house by the flood water.

People do try it on with insurance companies.

One homeowner stored house contents in a shipping container and then claimed that damage from rain entering through a rust hole was caused by a "flood".

Her claim was declined and the ombudsman agreed with the insurer's decision.

Settling claims is not always straightforward. A common problem with flood claims is where only a section of carpet is damaged. The insurer is not bound to replace the entire carpet, says Snookes. This can upset policyholders who want uniform carpet throughout the house.