Whatever the commentators are cautioning, isn’t fazing home buyers who continue to vote with their cheque books
Should any moves be made to discourage buyers – as has been suggested may be in next weeks budget – you can be sure it will put yet more upward pressure on rents.
You can bet the house on it.
More than NZ$1 billion worth of mortgages approved
Strongest run since 2007May 17, 2012 – Gareth Vaughan
More than NZ$1 billion worth of mortgages were approved last week, according to the Reserve Bank meaning 12 of the last 13 weeks – with Easter the exception – have seen more than NZ$1 billion worth of approvals.
The last time the data, which the Reserve Bank has been tracking since October 2003, saw a run of NZ$1 billion plus weeks like this was in 2007 when 19 of 20 weeks from January to June saw at least NZ$1 billion worth of mortgages approved.
All up in the week ended May 11, 6,736 mortgages were approved valued at NZ$1.140 billion. That compares with 5,431 worth NZ$815 million in the week ended May 13 last year. The weekly volume was up 23.1% year-on-year based on a comparison of the most recent 13 weeks of data to the same 13 weeks last year, with value up 43.4% based on the same measure.
House price expectations rocket
Conor O’Brien | NBR Monday May 14, 2012 |
The latest ASB Bank housing confidence survey shows price expectations have rocketed in all regions and confidence remains steady nationwide.
In the three months to April, 69% of Christchurch respondents expect house prices will increase, the highest in the country.
In Auckland, 54% expect the cost of buying a house to rise.
The latest Real Institute of New Zealand house price data shows median sales prices are up 7.6% in Christchurch and 4.5% in Auckland.
Expectations that prices will rise are higher in the South Island, with 54% expecting increases in the “rest of South Island” compared to 34% in the “rest of North Island”.
The national total was 45%, compared to 27% in the three months to January. …
Read on at the National Business Review
A MESSAGE FROM OLLY NEWLAND
FNZIM, Dip Man, MPMI, Authorised Financial Advisor (FSP 29029):
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Considering where we are, and where we have come from, this is good news indeed.
Once the wheels start turning they tend to turn faster and faster.
The article below shows yet more evidence that New Zealand has come through the GFC in better shape than many other countries.
The news that banks are cutting their lending rates even further can only add to the momentum.
Have you taken advantage of the improving market? If not — why not?
Property back “in the money”
Chris Hutching | Friday 11 May 2012
National Business ReviewProperty returns overall are back in the black.
The Property Council provides an index measuring performance across office, retail and industrial property sectors.
The index measure income returns (rents) as well capital returns (rises or falls in value).For the first time in three years the index shows the first positive capital annual growth of 0.2%, although income returns have been positive for some time.
This mirrors the performance of listed property stocks which have shown stable or very small devaluations of their portfolios in recent months.The total return across all the sectors shows income returns of 8.2%, which, when added to the 0.2% capital return, provides a combined 8.4% annual return.
This is still shy of the average 10% total returns in the years leading up to 2008.
source: NBR
A mix of small industrial, commercial & retail sites attracted rapid-fire bidding and yields down to 4.1% at a Barfoot & Thompson auction yesterday.
The first property up for sale, a standalone retail offering in Mt Albert containing an ASB Bank branch & a real estate agency, set the tone when the yield went under 6%.
On the next one, a single-level building at the top of Parnell Rd containing 3 longstanding retail outlets, with rent of just over $118,000, bidding started at a cool $2 million and ended with a battle between an Asian investor and the owner of the neighbouring property, local investor & developer Paul Doole. It was Mr Doole who stayed the distance. The yield on current rent was 4.1%, but the property’s in an area where redevelopment has been occurring.
Surprisingly, given the strength of bidding on those 2 properties, the next one – a vacant industrial & office property in the Mackelvie St transition zone of Grey Lynn – was passed in at $1830/m² of land.
The second property to sell at a very low yield (4.2%) was a 2-storey brick building in a high-profile Manukau Rd position which could require a large spend to meet earthquake code compliance. Despite that, it attracted several potential buyers.
As one developer commented to me when the hammer dropped on that sale: “We’ll be down to 1% soon. You can’t make any money on this!”
It was hard to see investment sense winning over emotion at such a strong yield on a building needing work, but the redevelopment prospect for the Parnell property would give a different picture.
Published 11 May 2012
Bob Dey report
Olly Newland’s column May 2012
Almost on a daily basis websites are full of angry people accusing ‘speculators’ of ramping up the price of property — supposedly pushing it out of reach for ‘the poor’ and first home buyers.
'The Tax Gatherer' 1540 - Marinus Van Reymerswaele (click to enlarge)
‘Bring in a Capital Gains Tax!’ is the cry, or there are calls to ‘restrict’ lending for property purchases, or to ‘punish’ investors by removing tax advantages, or to flood the market with more undeveloped land. Some even want the government to tax gains that have not even been realised.
This cacophony of shrill envy aimed towards property investors is almost exclusively driven by those who cannot comprehend this market reality: where someone has actually taken the plunge, bought a property of some kind and then — whether immediately or over time — made a profit.
However let me tell you that it’s not ‘speculators’ who are driving up the price of property. Indeed, they are more likely driving *down* the price of property! For speculators can only really thrive by fierce haggling in order to buy at bargain prices.
A very mixed bag of results at this auction, but understandable as the offering were mediocre to say the least. At least 9 sold and some more will no doubt sell soon.
I think that good commercial properties are still tightly held, or sell quietly. All the more reason why investors have to be up to date as well as clued up.
Published 4 May 2012
Bayleys’ Great Auckland commercial auction went in fits & starts on Wednesday, ending with 4 sales under the hammer and another 5 sold leading up to auction day. Auction results:Opposite Quay Park, 121 Beach Rd, full-floor penthouse:
Features: 136m², 2 secure & covered parking spaces, mixed-use zoning
Outcome: passed in at $475,000Otahuhu, 20 Weka St:
Features: 5214m², 3 separate buildings, 10 tenants, dual access
Income: $341,398 + gst/year
Outcome: Top independent bid $2 million, passed in at vendor’s bid of $2.7 millionParnell, 1 Tika St:
Features: 247m² floor, 4 secure parking spaces, zoned mixed use
Income: vacant possession
Outcome: no bid
Grey Lynn, 422 Richmond Rd, unit A:
Features: 179m², ground-floor retail, first-floor office or apartment with separate access in new building in West Lynn shops
Income: retail rent $57,459 + gst/year, first floor vacant
Outcome: passed in at $950,000
(more…)
I don’t make up the headlines. They are what they are.
April sales by Barfoot’s fell during the month when we had Easter and the school holidays so it is to be expected that sales would slow.
Nevertheless prices are still very strong and it’s a sellers market. Last week I saw a crowd of buyers bidding for a standard brick and tile town house with the crowd so large that it was spilling onto the street and diverting the traffic.
I haven’t seen that in 30 years .
Auckland house prices sky high
03/05/2012
The number of houses sold in Auckland dropped last month, but the relatively meagre offerings on the market have kept prices sky-high.
New figures from Auckland real estate agency Barfoot & Thompson show the average sales price for Auckland homes was $568,018 in April, only $3000 below a bumper month in March.
”It shows that March’s big jump in prices over those for February was no one-off spike”, director Peter Thompson said.
”What did change between April and March was the number of homes sold.”
Only 750 sales were made, almost 40 per cent fewer than in March, but on par with the number sold in April last year.
New listings for the month also dipped slightly to 1,266, down 17.6 per cent from March.
”At month’s end we had only 4621 homes on our books throughout Auckland, the lowest number in four months and 17.2 per cent lower than at the same time last year,” Thompson said.
”This underlines the extent to which there is a lack of choice available to potential home buyers.”
Link:
http://www.stuff.co.nz/business/money/6854238/Auckland-house-prices-sky-high
There is no doubt that buyers from overseas are active in the market but their influence is not as great as it might appear. I attended several auctions lately and bidders where all from over the place.
Foreign buyers were certainly active but they has fierce competition from locals and the results were mixed.
But so what? Somebody paid for a property but somebody received the money so it gets spread around. I think we have a bit of xenophobia making the rounds.
Some of the Left Leaning Loony Lot think we will all end up in shacks or tents by the road side, while “The Foreigners” will own everything else.
What a lot of nonsense!
If you have been to an auction lately tell me what your experiences were.
Foreign buyers fuel house boom
By Anne Gibson
May 3, 2012
Wealthy foreign buyers are coming to New Zealand and paying top dollars for homes – fuelling fears they are contributing to skyrocketing property prices around the country.
Real estate agent Graham Wall said he had two deals to sell Mission Bay houses to Chinese and he is to travel to Shanghai at the end of the month to drum up further interest.
“Why we are getting record prices for Auckland, Hawkes Bay and Queenstown houses is that people outside New Zealand can see its worth,” he said.
Chinese buyers wanted luxury properties, could afford them and appreciated Auckland’s best suburbs with big waterfront views and proximity to the city, he said.
Link:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10803130
The Boom is back.
If the share market is to believed than maybe it is .
The share market is a barometer for the mood of the market. Because if its liquidity the share market reflects what investors think the future hold in the months ahead.
When the share market thrives the property market follows. Of course the “lag factor” kicks in because of the relative slowness of property as compared to shares.
All the signals are flashing and indicate that market sentiment has turned. Provided we have no further shocks we are heading into interesting times.
Caution as market rebounds to new high
JASON KRUPP
02/05/2012
The New Zealand share market has officially regained all the ground it lost during the global financial crisis, rocketing to a new high last seen in May 2008 – but analysts remain cautious.
The NZX50 index rose 1.05 per cent, or 37.65 points, to 3.614.97. Within the index, 32 stocks rose and 12 fell. TradeMe led gainers and Heartland New Zealand fell.
While the benchmark index came within a hairs breadth of a four year high, First NZ Capital head of institutional equities James Lee was wary of pinning it to underlying economic recovery.
“I think that’s more a reflection of cash flow in the market. What you’ve seen here is due to record low interest rates in New Zealand – and globally really – people moving to equity markets, and seeking out some higher return.”
link:
http://www.stuff.co.nz/business/market-data/6844219/Caution-as-market-rebounds-to-new-high
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