Property buyers' info

[MotherBear]

Double hit for home owners
09 December 2005
By JAMES WEIR

Homeowners are facing a double whammy of bad news with interest rates soaring to a seven-year high – and house prices tipped to fall. Reserve Bank governor Alan Bollard lifted official interest rates to 7.25 per cent yesterday – and banks are poised to lift floating mortgage rates to 9.5 per cent within days.

The increase would add $35 a month to repayments on the average new home loan of $200,000, taking repayments to almost $1750 a month. The Reserve Bank's latest interest rate increase – the second in less than two months – will hit 40 per cent of homeowners over the next year as current fixed rate mortgages come up for renewal.

On average, homeowners pay about 7.2 per cent on fixed rates, but when they renew it will be at 8.3 per cent or more. The Reserve Bank wants to cool down the housing market, with the aim of cutting back spending and inflation.

House prices are expected to flatten out next year, and fall about 5 per cent in 2007, the Reserve Bank says. The drop is similar to falls during New Zealand recessions in the early and late 1990s, when there were widespread job cuts and rising unemployment.

"We are not talking about a slump or a crash – we are talking about a correction after a huge period of increased house prices," Dr Bollard said.

House prices have risen about 60 per cent in the past three years. ANZ National Bank economist John McDermott said he expected a 5 per cent average price rise next year. "The days of 15 per cent to 20 per cent increases are well and truly gone."

Dr Bollard rejected suggestions that he was trying to knock out a big spend-up for Christmas: "Our message is a moderate one. This is not a message about Christmas."

Economists said yesterday's rate rise may be the last, and that fixed interest rates may not rise any more. Dr Bollard also said the New Zealand dollar was "exceptionally and unjustifiably high". His comments helped to pull the dollar down from its record highs earlier this week.

Farmers said they were being squeezed three ways by higher interest rates, an overpriced dollar and falling commodity prices. Exporters said they were the "frontline casualties" of the high dollar.

"All the growth of the past six years could be wiped out over the next 12 months," according to Employers and Manufacturers Association chief executive Alasdair Thompson, who said the Government and councils should control their own spending to hold down inflation, too.

Unions said rate rises were pushing up the dollar and would cost jobs.

Dr Bollard also warned of a risk of a "hard landing" for the economy. That is code for a recession, with the economy going backward for six months or more. That would mean job layoffs, rising unemployment and lower spending in shops.

Economists said the mention of a possible hard landing was enough to rule out the chance of fixed interest rates moving higher as well as floating rates. Interest rates may even start falling by late next year, and that could quickly pull floating mortgage rates back toward 7.5 per cent in 2007.

Real Estate Institute president Howard Morley said the latest interest rate rise was more likely to hurt small business, farmers and exporters than homeowners

[nattydread]

for them thats about to make the move that's not all bad news is it.

The falling house price part is certainly good news for people hoping to buy soon, and I guess if you've never paid a mortgage in nz before, then it doesn't really matter what the mortgage rate is.

[driver]

Oh good,

"Real Estate Institute president Howard Morley said the latest interest rate rise was more likely to hurt small business",

Just the right time for us to be setting up a business after waiting so long for the visa.
:icon_cry:

[MotherBear]

Those were the days, my friend.

Average house sale prices in New Zealand

(for the quarter year ending June 2003)

Area Price

Auckland - North Shore $361,145
Auckland - Waitakere $246,017
Auckland City $440,108
Auckland - Manukau $298,752
Auckland - Papakura $233,921
Hamilton $203,660
Tauranga $240,944
Rotorua $148,889
Napier $195,997
New Plymouth $152,556
Palmerston North $162,186
Wellington - Porirua $232,324
Wellington - Upper Hutt $185,481
Wellington - Lower Hutt $217,329
Wellington City $330,979
Nelson $265,789
Christchurch $166,508
Dunedin $122,890
Invercargill $73,324
Auckland area average $344,674
Wellington area average $267,320
New Zealand average $231,841

You could more than double those figures today.

[MotherBear]

The falling house price part is certainly good news

*:(

House prices soar as buyers refuse to cool off
17 December 2005 *
By ROELAND van den BERGH

House prices soared to a record national median value of $300,000 in November as buyers refused to heed warnings from the Reserve Bank to cool spending. The median price was up $5000 from October, according to the latest Real Estate Institute figures.

The Reserve Bank lifted official interest rates to 7.25 per cent last week, prompting the main banks to raise floating mortgage rates to 9.55 per cent. The move was aimed at cooling the housing market and cutting back on spending and inflation.

House prices are expected to flatten out next year and fall about 5 per cent in 2007, according to the Reserve Bank. Deutsche Bank said the housing market remained "disappointingly active" with a continuing imbalance between demand and supply driving prices up.

Westpac senior economist Nick Tuffley said the housing figures showed the rate of growth in values was edging lower and should ease the Reserve Bank's fears that prices would accelerate. However, the central bank would look for further moderation before being comfortable that the market was cooling, he said.

Wellington and Auckland made the biggest gains among the seven regions to record rises and four falls. Values in the Wellington region gained nearly $11,000, taking the median price to $315,250 on a total of 1084 houses in November, up slightly on a year ago.

Hutt Valley median prices of $260,500 were up from $242,000 in November last year, but down $15,000 in October. Nelson-Marlborough fell $8300 to $265,500. *Year-on-year, Manawatu-Wanganui had the fastest growth in median prices of 25.5 per cent to $187,000.

[SteveyC]

Jeeez it's going exactly the same way as UK!!! Hope the rental market doesn't follow suit as it has to a certain extent here, certainly in my area anyway. Sorry all you resident Kiwis but the interests rates gotta keep rising if this is gonna slow down at all.

[MotherBear]

Might just get yourselves a bargain now.

Houses hit as buyers stay away
10.02.06
By Anne Gibson

High interest rates, two long holiday weekends, long school holidays and many weeks of hot weather have combined to drive buyers away from the housing market. Harcourts, the country's largest real estate agency, saw its sales volume drop 30 to 40 per cent last month and chief executive Bryan Thomson is blaming a combination of factors. He said many agencies were reporting an extremely slow start to the year.

Auckland's biggest agency, Barfoot & Thompson, reported the slowest January in five years, and blamed interest rate rises. Peter Thompson, a Barfoot director, also said two holiday weekends influenced the slow start to the year, with property marketing campaigns being delayed until later this month. Barfoots sold 797 houses last month, well down on the firm's usual monthly figures of about 1000 sales. Last month was the slowest for sales since January 2001, said Mr Thompson.

Listings, at 1262 last month, were also down, from 1485 in January 2001, 1598 in 2002, 1581 in 2003, 1851 in 2004 and 1275 in 2005. Prices fell from an average $492,882 in December to $428,385 last month. Prices dropped 9 per cent in the year to January and Mr Thompson said high-priced houses were hardest hit.

"Last year, 21.4 per cent of all properties we sold were for $750,000 or above, compared to 18 per cent in January. It's a similar picture with properties over $1 million. Last year, they represented 12.9 per cent of our sales but that figure was 10.7 per cent for the first month of this year," Mr Thompson said.

The market had clearly tightened and last year's round of interest rate rises was having an effect, he said, adding that the city had a choosier pool of buyers. But landlords appeared to be doing well out of the changing market conditions. Barfoots rented 766 houses last month for an average of $348 a week, up on the average $347 in December.

Real Estate Institute figures out last month also showed a slowdown. The national median price fell from a record $300,000 in November to $295,000 in December. The number of sales in the Auckland region dropped a third, from 3107 in November to 2123 in December. Tony Alexander, BNZ chief economist, said negative factors would dominate the housing sector in the second half of this year, including slower population growth, consumer worries about job losses, potential investors preferring term deposits and waiting for a house price correction, existing investors growing tired of waiting for rent rises and deciding to quit their stock, and a falling exchange rate.

Brian Guy, chief executive of Premium Real Estate at Takapuna, said his firm sold one $3 million property last month and a $2 million house in Sanders Ave near Takapuna Beach.

"The top end's a bit skinny, particularly for buyers in the $5 million range. There's a levelling-off at that really high end, which is not as good as we might have experienced in the last two or three years."

Nice to see estate agents blaming everything but themselves.. whats the saying about a bad workman?!

[MotherBear]

A bit more on the subject.

Golden weather cools for real estate
13.02.06
By Stuart Dye

Growth in house prices has increased according to latest figures, although there are warnings a slowdown is just around the corner. Statistics released today by Quotable Value will show that residential property prices rose by 16.8 per cent over the last 12 months. The growth for January is a rise from 15.8 per cent in the December figures.

However, QV spokesman Blue Hancock said anecdotal feedback and market activity suggested the market was beginning to level out. "If so, we would expect to see the Residential Price Movement ease through the second half of summer." Auckland's growth of 11.4 per cent showed a sharp increase on the December figures - up from 7.9 per cent.

Southern suburbs continue to have the highest growth rate at 12.7 per cent. Waitakere City (12.3 per cent), North Shore City (14 per cent) and Papakura (17.2 per cent) are all showing a similar level of growth to that reported last month, suggesting a stabilising of the market. However, in Manukau City, property values increased 14.6 per cent. Houses in the lower price bracket showed strong value growth, as first- time buyers seek to enter the market before being priced out.

Property values continued to rise sharply in the provincial centres with Whangarei at 32 per cent, Rotorua 31 per cent, Gisborne 27 per cent and Palmerston North 21.1 per cent over the 12-month period. Last week real estate agents said sales figures for January were well down on previous years, blaming high interest rates, two long holiday weekends, long school holidays and many weeks of hot weather.

Harcourts, the country's largest real estate agency, saw its sales volume drop 30 to 40 per cent last month while Auckland's biggest agency, Barfoot and Thompson, reported the slowest January in five years.

Tony Alexander, BNZ chief economist, said negative factors would dominate in the second half of this year, including slower population growth, worries about jobs, potential investors preferring term deposits, existing investors growing tired of waiting for rent rises and deciding to quit their stock, and a falling exchange rate.

SALES GROWTH

* Hamilton 26 per cent

* Christchurch 20.8 per cent

* Wellington 13.3 per cent

* Auckland 11.4 per cent

* Dunedin 10.4 per cent.

[MotherBear]

Should be plenty to go round by the time you get there. You'll be welcomed with open arms.

House sales at 5-year low
17.02.06
By Anne Gibson

House sales have fallen to their lowest ebb in five years, leaving an industry chief calling the market "sluggish" and economists saying the Reserve Bank would be pleased. Although the national median sales price last month recovered to the $300,000 it hit during November, Real Estate Institute figures out yesterday showed the most disappointing January since 2001.

"The market is definitely a lot more sluggish than at the end of last year," said institute president Howard Morley, blaming high interest rates and long holidays. People should look more to data for February and March to get a truer picture of where the market would head this year, he said.

On the national scene, prices fell in six regions and rose in five. Other data released in the last week also indicated an inert market. January was slow for both the country's largest agency, Harcourts, and Auckland's biggest, Barfoot & Thompson. Harcourts' sales volumes last month were down 30 to 40 per cent and its chief, Bryan Thomson, blamed high interest rates, two long holiday weekends for Aucklanders, long school holidays and weeks of hot weather as factors which drove buyers away.

Last month was Barfoot's slowest January since 2001. Sales volumes were down around 20 per cent. Quotable Value statistics released on Monday showed housing prices rose by 16.8 per cent in the 12 months to January. In the 12 months to December, the rise was 15.8 per cent. However, QV spokesman Blue Hancock said anecdotal feedback and market activity suggested the market was beginning to level out. BNZ chief economist Tony Alexander said the latest figures suggested prices were flattening out. Sales were down 10 per cent since January last year, which was nothing amazing, but an ongoing indication that the market was slowly declining, he said.

"Some of the heat is coming out of the market but things are still reasonably active. The market is easing off at a calm rate and I think the Reserve Bank will be pleased it's doing that, although I strongly believe the bank would like to see a more rapid easing," Mr Alexander said.

Darren Gibbs, chief economist at Deutsche Bank, said the Reserve Bank would want to see the slow decline in the housing market continue during the next six months. It is now taking on average 38 days to sell a house, compared to 27 days in the December sales data, but this is typical of sales activity during the holiday period, Mr Gibbs said.