Property info thread - ctd.....

[MotherBear]

Job security, migration push house prices higher
5:00AM Monday May 14, 2007
By Martha McKenzie-Minifie

Property values are continuing to rise, with new figures showing the average sale price in the Auckland region rose almost $9000 in the last month.

Quotable Value statistics released last night showed an average 10.6 per cent rise nationally in property values over the last year.

It was the first time since September the organisation recorded more than 10 per cent growth.

Values in the Auckland region grew more slowly than the national average at 8.2 per cent over the year. However, between March and April the average sale price in the region grew by $8770, the figures showed.

Hamilton was up 11.4 per cent in the year, Wellington City was up 13.4 per cent and Christchurch was up 11.8 per cent.

QV spokesman Blue Hancock credited low unemployment and stronger than expected migration with the continued rise.

He said the Reserve Bank rises in the official cash rate - which tend to lead to higher mortgage interest rates and slow property booms - had yet to make a mark on the statistics.

More here .

Higher interest rates to slow housing market.

[MotherBear]

Home-ownership dream starts to fade
By LIZ MCDONALD - The Press | Tuesday, 15 May 2007

More New Zealanders are delaying or abandoning their home-ownership dream as rising house prices and interest rates continue to bite.

A new survey has revealed that 17 per cent fewer New Zealanders intend to buy their own home in the next 12 months than were planning to a year ago.

The drop-off was strongest among those earning under $45,000 a year and for people outside main centres.

The survey, by researcher Roy Morgan New Zealand for mortgage provider Wizard Home Loans, was done in February as house prices hit a national high and reports showed the affordability gap continuing to widen.

The median dwelling price in the country is now $343,000 and house-price growth sits at 10 per cent after five years of fast-rising prices. Last year's Census showed that only two-thirds of New Zealanders own their own home, down from nearly three-quarters in the early 1990s.

Christchurch woman Amy Hyland, 26, is one of those who has delayed buying after realising what a first home would cost.

"We had a look around at a few places and I just got put off because what we could afford was just not what we wanted to buy. I've put the plan off for now, for probably at least a year," said Hyland, who is single and had intended to buy a house with her sister.

"It just seems too hard and I just want to see where the market will go with prices and interest rates."

Hyland said that as a young lawyer, still living at home and with no student loan, she was in a better position than many but still could not afford the first step on the property ladder. "You need to spend such a lot to get something, the mortgage was looking too scary," she said.

Wizard's national director of business, John Grant, said the study showed the impact of market conditions which made people take a hard look at whether buying their own slice of New Zealand was a possibility. The trend towards putting off buying a first home was accelerating, with the drop in the number of intending buyers doubling from 8 per cent the previous year.

But the decline was not across the board, with the home-buying plans of those earning under $45,000 down by 38 per cent, but higher earners' buying expectations were steady.

From here .

[MotherBear]

Building a house gets dearer
The Dominion Post | Thursday, 17 May 2007

The cost of building a house continues to rise, with figures showing an increase of 1 per cent in the March quarter and 5.1 per cent for the year as wages and material costs keep going up.

The price of timber has risen about 10 per cent recently, due to higher international demand. This has fed through into the cost of building a home. Higher wages are also playing a significant part in the rising costs, industry representatives say.

The wider construction industry is also facing higher costs, up 4.1 per cent in the past year because of rising costs in concrete work and steel and iron materials.

According to Statistics New Zealand figures, the capital goods index was up 0.4 per cent in the quarter and 3.7 per cent for the year because of the higher building costs.

Master Builders Federation chief executive Pieter Burghout said labour rates were rising as the industry struggled to attract enough workers to meet demand.

"Employers are competing for good skilled staff," he said. This shortage pushed up wages, in turn pushing up prices.

The shortage of skilled workers was the result of there being few apprenticeships in the 1990s, when the building sector slumped.

"We now have 10,000 apprentices in the system and though we have had labour shortages in the past five years, the people in training will help solve that problem in the next five to 10 years."

More here .

[MotherBear]

Home buyers cash in
By ROB STOCK - Sunday Star Times | Sunday, 20 May 2007

Under the eligibility rules, outlined in Treasury post-Budget notes, people who get the housing grants will be forced to buy a house with a value in the lowest 25% of homes in their town, area or city.

In Auckland City or the North Shore, the Treasury notes say, that would be a home costing $400,000 or less, while in the Queenstown Lakes district, it would be a home worth $300,000 or less. The measure is designed to stop people in cheaper areas using KiwiSaver to buy bigger homes than the government thinks is reasonable.

Under the KiwiSaver scheme, to be introduced on July 1, there will be a first home ownership grant of $1000 a year for each year of saving. That is capped at $5000 per person, so a couple could get $10,000.

The first home deposit subsidies will be paid out in 2010 because only KiwiSavers who have been saving at least 4 per cent of their gross salary into KiwiSaver for three years will be eligible.

For households and families with three or more KiwiSavers clubbing together to buy, the income cap will be $140,000. The levels would be reviewed in 2009, and the property price caps would be reviewed annually.

Property investor Andrew King said the stipulation that homes be at the bottom end of the market appeared to be forcing relatively well-earning couples to downsize their aspirations with the intention of leaving them enough left over to save into KiwiSaver.

"I guess they are trying to reduce the quality of the houses we live in," said King.

"They feel the homes we live in are too grand and that we spend too much money buying them."

More here .

[MotherBear]

It takes two incomes to pay off standard mortgage - survey
11:25AM Sunday May 20, 2007

The latest batch of real estate figures makes bleak reading for potential homeowners.

Statistics compiled by the website interest.co.nz shows it now takes two average incomes to pay off a standard mortgage.

The survey tracks home affordability against a scale in which 40 per cent of total household income goes on paying the mortgage.

In April 2002, a couple needed 1.2 average incomes to stay on the 40 per cent ratio. By April last year it was 1.7 average incomes. Today it is a full two incomes.

The survey finds that home affordability is falling faster than ever. In the last three months people needed 8.6 per cent more income to avoid being worse off and in the past 12 months 16.3 per cent more income was needed.

The least affordable regions are currently Central Otago Lakes where 2.6 average incomes are required to meet mortgage payments, Auckland 2.5 and Northland 2.1.

The most affordable regions are Southland 1.0 average incomes needed, Otago 14 and Manawatu/Wanganui 1.5.

From here .

And the other side of the coin .

[MotherBear]

City council building fees hammer homes
Page 1 of 2 5:00AM Sunday May 27, 2007
By Jared Savage

Higher city council building fees are making it even more difficult for first-home buyers to enter the booming property market.

Councils across Auckland are proposing fee rises to cover the costs of the Government's new building regulations, designed to prevent another leaky homes fiasco like that in the late-1990s when many developments were given consent but not inspected thoroughly.

However, builders and property developers say increased building consent fees, number of inspections and infrastructure levies - up to $30,000 - are costs that are being passed on to buyers.

A property developer building a million-dollar home in the swanky Auckland suburb of St Heliers, who asked not to be named, has spent more than $30,000 on council fees - more than the survey, engineering, geotechnical and architectural fees combined.

He said Auckland City Council's proposed fee increase, 4.9 per cent on top of an 18 per cent rise two years ago, was bad enough but the sheer number of fees "just tally up".

"You can't get building consent for less than $10,000 when it used to be $1500 or $2000 a few years ago. There's no doubt it's pushing up house prices."

"In the old days", plans would be submitted to council officers, who would review the designs and visit the site before consent was given, he said.

From here .

Cost of home improvements. .

[MotherBear]

House prices set to drop, says analyst
Page 1 of 3 5:00AM Sunday May 27, 2007
By Miles Erwin

The property market's big boom is finally about to end, with a top investor analyst predicting price drops in Auckland within the year.

Kieran Trass, of Suburbwatch.co.nz, said his data forecasted a drop in three main indicator suburbs in Auckland - Manurewa, Forrest Hill and the northern bays of the North Shore.

"I would be surprised if in 12 months we don't see a decline in values in the North Shore and in other parts of Auckland. I haven't been as confident of a drop-off in Auckland in the past six years," Trass said.

"It's almost like the setting sun. It has not gone yet but it's obvious it's not going to be around much longer. You are not seeing blood on the streets and you are not going to, but it's certainly time for caution."

Even blue chip areas, such as Mission Bay and Kohimarama in central Auckland, are showing signs of a drop in growth. "East Coast Bays - even top-notch areas like St Heliers - the trends in those suburbs look like the growth is tailing off," he said. "Wellington, meanwhile, still looks great but Christchurch is looking very patchy."

Trass analyses data from Land Transfer Authority sales and he said several Auckland suburbs had had a dramatic decline in price growth.

With an expected sales downturn in winter, the suburbs could see price drops in the next six months.

More here .

[MotherBear]

House prices set to drop, says analyst
Page 1 of 3 5:00AM Sunday May 27, 2007
By Miles Erwin

The property market's big boom is finally about to end, with a top investor analyst predicting price drops in Auckland within the year.

Kieran Trass, of Suburbwatch.co.nz, said his data forecasted a drop in three main indicator suburbs in Auckland - Manurewa, Forrest Hill and the northern bays of the North Shore.

"I would be surprised if in 12 months we don't see a decline in values in the North Shore and in other parts of Auckland. I haven't been as confident of a drop-off in Auckland in the past six years," Trass said.

"It's almost like the setting sun. It has not gone yet but it's obvious it's not going to be around much longer. You are not seeing blood on the streets and you are not going to, but it's certainly time for caution."

Even blue chip areas, such as Mission Bay and Kohimarama in central Auckland, are showing signs of a drop in growth. "East Coast Bays - even top-notch areas like St Heliers - the trends in those suburbs look like the growth is tailing off," he said. "Wellington, meanwhile, still looks great but Christchurch is looking very patchy."

Trass analyses data from Land Transfer Authority sales and he said several Auckland suburbs had had a dramatic decline in price growth.

With an expected sales downturn in winter, the suburbs could see price drops in the next six months.

More here .

[MotherBear]

The housing conundrum - what to do?
Page 1 of 2 5:00AM Tuesday May 29, 2007
By Brian Fallow

A housing boom that just won't quit has business leaders worried. By a ratio of two to one respondents to the Mood of the Boardroom survey say they are concerned about the affordability of housing.

Their concern is understandable. Five years of house-price rises have turbocharged consumer spending through the wealth effect, which has people borrowing and spending on the strength of their rising housing equity.

It is one of those good things you can have too much of. It has resulted in an economy seriously off balance, with spending growing faster than incomes and demand growing faster than the economy's ability to meet it.

The upshot is high interest rates and a sky-high dollar.

And with buying a first home out of reach for more people, they have one more reason to head for the airport departure lounge, compounding labour shortages.

Chief executives are split almost 50:50 on the merits of one measure mooted to cool the housing market - a capital gains tax on investment properties.

Gains people make by trading in investment properties are already taxable and, as a signal to the next commissioner of Inland Revenue and more active property investors, the Budget boosted funding for enforcing that provision.

Respondents were also split on the suggestion of getting rid of interest deductibility on investment properties. That would be a dramatic change to the tax laws.

But a milder option, dealing to negative gearing by ring-fencing operating losses from investment properties so that they cannot be offset against other income, is something officials have been looking at.

More here .

[MotherBear]

Real estate agents face tougher laws
10:22AM Tuesday May 29, 2007

An independent body with wide investigative powers and the ability to force rogue real estate agents to compensate clients is among Government proposals aimed at cleaning up the industry.

Associate Justice Minister Clayton Cosgrove today unveiled the Government's preferred options for a revamp of the industry.

He said he intended to strip the industry of its ability to regulate itself as the current system was not working well enough.

"Major concerns have been raised by the public and real estate agents themselves about how the industry deals with complaints and disciplinary matters," Mr Cosgrove said.

He said self-regulation had failed to protect customers from rogue agents.

The Government was proposing a new Real Estate Licensing Authority with the ability to investigate and resolve complaints.

It would have wide investigative powers and would be able to order a wide range of penalties including fines, compensation and the delicensing of agents.

The Government was also proposing a register of real estate agents and salespeople that would include any instances where they had breached industry standards alongside their names.

Mr Cosgrove said because the disciplinary function would be removed from the Real Estate Institute of New Zealand (REINZ) it would no longer be compulsory for agents to be members.

He said the changes would benefit consumers and agents.

"Consumers will be better protected by an independent disciplinary process," he said.

"Honest real estate agents will benefit from no longer being tarnished by the last land shark who ripped off a consumer and who brings the entire industry into disrepute."

Mr Cosgrove said he would hold a series of community meetings to consult on the proposed changes.

The public had until July 10 to make submissions on the proposals.

Legislation would be introduced this year with the aim of passing it into law by early next year.

- NZPA

From here