Property info thread - ctd.....

[MotherBear]

Govt plans will lower age limit for real estate agents
By DAN EATON - The Press | Wednesday, 30 May 2007

School leavers as young as 18 will be allowed to act as real estate agents under Government proposals to overhaul the industry.

The new rules, announced yesterday by Associate Justice Minister Clayton Cosgrove, are aimed at raising standards after a rash of high-profile cases of consumers falling victim to unscrupulous agents.

Asked how lowering the age from 20 would improve the system, Cosgrove said the move brought the industry into line with other sectors.

"These are our preferred options, so let's take the temperature on that. There are other occupations you can enter at 18 and do a heck of a lot of damage if you so desire. The issue is this, there are 18-year-olds with wonderful skills and 50-year-olds who are land sharks."

He said that at 18 youngsters could join other professions, including the army.

"You may say, `Well, hang on, do I want an 18-year-old selling me real estate?'

You probably don't at the moment, because there are no real sanctions if they do anything."

Cosgrove outlined a range of measures that included tougher training requirements, an independent licensing and complaints authority and mechanisms to compensate victims.

He said a six-week public consultation period would be observed before the Government began drawing up legislation.

The 64-page public consultation document on the revamp said age was not a reliable indicator of whether someone would be a good real estate agent.

The Government heralded most of the changes announced yesterday in March.

However, Cosgrove also outlined plans for a "public register of agents and salespeople" that would list any breaches of industry standards.

A new Real Estate Licensing Authority would have an investigations unit and range of sanctions at its disposal, including:
• Cancelling licences.
• Fines.
• Ordering agents to undertake further training.
• Ordering audits of real estate businesses.

Real Estate Institute of New Zealand (REINZ) chief Murray Cleland said he was still examining the Government's proposals.

"The institute has been seeking over many years to have the Real Estate Agents Act 1976 overhauled because it is badly out of date," he said.

However, Cosgrove said that statement rang hollow, given he had asked the industry to come up with its own reform plans which had been unsatisfactory.

Consumer's Institute head Sue Chetwin said it was high time the real estate industry was brought to account.

"The real estate industry has been a law unto itself for far too long," she said.

This month, Harcourts caused outrage by giving an award to a real estate agent who was recently found to have sold a couple a home without telling them an apartment block was to be built next door. The case was not referred to the Real Estate Licensing Board to consider.

In 2004, REINZ received 132 complaints, but none were referred to the board, and, in 2005, only seven of 163 complaints were referred.

In 2006, there were 212 complaints but again only two were referred to the board.

From here .

[MotherBear]

Residential building consents back on the rise
12:59PM Wednesday May 30, 2007

Dwelling unit approvals look to be trending back upwards in a move that could add to pressure on the Reserve Bank to lift interest rates at its review next Thursday.

Figures published today by Statistics New Zealand (SNZ) show building consents were issued for 1782 new housing units in April, compared to 1558 in April 2006 and 1617 in April 2005. April is typically the month when the lowest number of consents are issued.

SNZ said the trend for the number of new dwelling units appeared to be increasing, but it was too early to confirm any change in direction.

When it released the March figures, SNZ had said the trend was continuing a decline which started in September.

Late last month, the Reserve Bank lifted official interest rates a quarter of a percentage point to 7.75 per cent because of strengthening medium-term inflation pressures coming largely from a hot housing market.

That came after a similar 25 basis points lift early in March, which followed 15 months when rates were unchanged.

At 7.75 per cent the Official Cash Rate is the highest in the developed world.

In a Reuters poll this week, only two of 16 analysts polled by Reuters saw a more-than 50 per cent chance of a rate rise next week, with the median risk put at 35 per cent.

But Westpac Bank said it had changed its forecast and now expected a quarter percentage point rate rise next week, followed by a similar sized rise most likely in September.

More here .

[MotherBear]

How property measures up
Page 1 of 2 5:00AM Sunday June 10, 2007
By Ann Newbery

New Zealanders are well known for their love affair with property - but has it really been a romance that has delivered the best results?

As he puts up interest rates to try to control the over-excited property market, Reserve Bank Governor Alan Bollard continues to decry the Kiwi obsession with bricks and mortar and our unwillingness to save. He insists that diversifying our investments is better both for the individual and the country.

So the Herald on Sunday has looked at how the homeowner would have fared had they invested in things other than residential property over the past decade.

We looked at the performance during this period of five residential properties currently on the market - two in Auckland, and one each in Whangarei, Tauranga and Wellington - and compared this to similar-sized investments in shares (New Zealand and international), term deposits, commercial property and managed funds. These are the results.

New Zealand shares

If the owner of a home in Alison Ave, Takapuna on Auckland's North Shore had instead put $200,000 (the property's 1996 CV) into a fund tracking New Zealand's top shares, it would have produced a 214 per cent return by 2007.

This means the $200,000 initial investment would have grown to $428,104, according to the NZX. This calculation encompasses the performance of the NZSE40 index from 1996 to 2003, and its successor the NZX50 from 2002 onwards. The return on shares does not meet the current asking price for the house of $569,000.

More here .

[MotherBear]

Panicking won't help pay the mortgage
5:00AM Sunday June 10, 2007
By Chris Daniels

Times are getting tougher for mortgage holders, but the experts are advising homeowners staring at interest rate rises to sit tight, go back to the family budget and not rush into hasty decisions.

Mortgage broker Mike Pero thinks the Reserve Bank's decision on Thursday to raise the official cash rate to 8 per cent might bring about a slow downturn in the property market. He said people should look closely at their spending, and at whether they could change the way they pay their mortgage.

"Refer to your budget, your household spending and look closely at money going out and money coming in - looking at prioritising your expenses and investments.

"Obviously, interest rates move, you've got no say in that. The next question would be: is your mortgage structured the best way possible?

"If you're tight on a monthly or weekly outgoing, then maybe restructuring your payments may be possible. Talk to a broker, and look at more innovative ways. It may be that they've got good equity in their home and higher repayments, maybe they can restructure payments in such a way that frees them up a bit."

Pero said talking to a banker or broker about it was the best way to start solving it. Asked if it would be better to move to more expensive floating rates rather than committing to a fixed term at an interest rate cycle peak, Pero said, "That's the million-dollar question".

More here .

[MotherBear]

Pero warns homeowners of mortgage peril
2:30PM Friday June 08, 2007

Mortgage broker Mike Pero is warning of a wave of home sales after the third interest rate hike this year.

Mr Pero, the founder of a mortgage broker franchise network, says New Zealand is poised to become a nation of renters after the official cash rate, on which mortgages are based, rose yesterday to 8 per cent.

"Kiwis are finding it hard enough to get a foot on the property ladder, and these continued hikes are possibly going to leave some homeowners with no choice but to sell if they can't service the new mortgage rates."

Mr Pero said on one hand the Government was trying to promote saving through KiwiSaver, and on the other it was failing to offer tax cuts to mitigate the effect of higher interest rates.

He said renting might well continue to be the way for many Kiwis while an increasing number of off-shore investors bought "prime New Zealand land".

Mr Pero suggested that homeowners with mortgages should review their mortgage structure and look for good fixed rates to "weather the storm of these effects over the next few years".

- NZPA

[MotherBear]

Housing market 'hot', show latest figures
7:20AM Monday June 11, 2007

Despite the Reserve Bank's best efforts to cool the property market, house values are still rising.

Quotable Value's monthly index rose at an annual rate of 11.1 per cent in May, up from 10.6 in April and 9.8 per cent in March. The average New Zealand sale price increased from $366,032 to $372,552.

QV spokesman Blue Hancock says the market is still strengthening, despite expectations property prices may level off. He says although immigration appears to be slowing, high levels of employment are driving the price increases.

Prices in the main regions showed strength with the capital rising 13.3 per cent. Christchurch was up 12.4 per cent on a year ago, Auckland rose 7.5 per cent, up from the 6.6 per cent growth marked in the April year.

Hamilton and Dunedin also reported higher growth rates at 11.8 per cent and 8.7 per cent respectively. The trends are also reflected in the provincial cities.

Property values increased in Wanganui at 14.1 per cent, Nelson 12.3 per cent, New Plymouth 11.3 per cent and Tauranga 6.7 per cent.

- NEWSTALK ZB

From here .

[MotherBear]

Mortgage rates head into 9pc range
5:00AM Tuesday June 12, 2007
By Brian Fallow

The number nine is spreading like a rash through the retail mortgage rates on offer, after the Reserve Bank's trio of rises in the official cash rate and a sharp increase in longer-term wholesale rates.

"The magnitude of increases in interest rates over the past three months is massive," ANZ National bank chief economist Cameron Bagrie said.

"A two-year fixed mortgage is now likely to be 100 basis points higher than in February, similarly for a five-year rate."

For a typical first-home buyer looking to borrow $250,000, the increase over the past three months increased the weekly interest cost by almost $40.

The speed of the change might pierce the "bulletproof" sentiment of the housing market, Bagrie said.

House price inflation continues to accelerate. Quotable Value reports house prices nationwide rose 11.1 per cent in the year ended May, up from 10.6 per cent in the year to April and 9.8 per cent in the year to March.

But Governor Alan Bollard has a new ally as he battles to turn that around: world interest rates.

United States 10-year bond yields have jumped around 40 basis points over the past two weeks, and the New Zealand 10-year yield has risen 50 basis points over the same period.

New Zealand's five-year swap rate, an indicator of the cost of funding fixed-rate mortgages of the same duration, has also climbed 50 basis points in two weeks, most of it in the past week.

"There is nowhere to run," Bagrie said.

Before the latest series of OCR increases five-year mortgage rates were about 50 basis points lower than two-year rates, reflecting an inverted yield curve.

Borrowers often switched to long-term loans when their mortgage came up for renewal to minimise the impact on their cashflow.

ANZ expects the effective or average mortgage rate to continue rising to a peak of close to 8.4 per cent early next year.

More here .

[MotherBear]

Auckland house prices fall, growth slows elsewhere
12:00PM Friday June 15, 2007

The national median house price increased to a record $350,000 in May, but prices in Auckland fell, according to figures released today.

Prices in the influential Auckland market fell from $452,000 in April to $450,000 in May. Growth continued in the rest of the country but was slower than in previous months.

The Real Estate Institute said the national median house price rose $1000 last month.

Reinz president Murray Cleland said the $350,000 median price was "something of a milestone".

He noted despite higher prices in most regions, there were signs the surge in prices over the first half of this year was slowing.

"Whether it's the gathering interest rate clouds or the market anticipating the increase in the Official Cash Rate last week, the market is showing signs of taking a breather."

The Reserve Bank has hiked the Official Cash Rate three times this year to a record 8.0 per cent, mainly to try to quell inflation generated by rising house prices.

The median price is up 14.75 per cent for the year. It has risen sharply in the previous three months -- from $335,000 in February to $343,500 in March, then $349,000 in April.

The number of days to sell a house rose from 28 in April to 30 in May, indicative of a slowing market.

The metropolitan Auckland median price fell from $459,000 to $451,000, Auckland City fell from $510,000 to $492,000 and North Shore City fell from $540,000 to $535,000.

In Wellington, the median price rose 1.9 per cent to $385,000.

Wellington moved into the second spot in national year-on-year price growth figures with a 22.2 per cent increase.

Southland continued to lead the annual table with a 36.15 per cent increase, while Taranaki was now third with a 20.34 per cent year rise to $281,000.

Of the 12 real estate regions surveyed, seven experienced increases while five had falls.

Northland continued its recent strong performance with the median price up from $320,000 to $330,000.

Waikato and Bay of Plenty was a little stronger, up from $312,500 to $315,000, but Hawke's Bay eased back from $280,000 to $277,000.

Manawatu-Wanganui fell back after recent strong growth from $230,000 in April to $222,000 in May.

Nelson-Marlborough eased from $330,300 to $328,000 and Canterbury and Westland fell from $310,000 to $305,000.

Prices in Central Otago Lakes jumped from $430,000 to $485,000, largely as a result of relatively high values and lower volumes.

Otago prices rose from $227,000 to $240,000 and Southland from $164,500 to $177,000.

National sales recovered from the Easter holiday-influenced figure of 8194 in April to 9285 in May, but were down on the 9642 in May 2006.

- NZPA, NZ HERALD STAFF

[MotherBear]

Fresh bid for capital gains tax
By IRENE CHAPPLE - Sunday Star Times | Sunday, 17 June 2007

The Reserve Bank has plunged into the housing affordability debate by promoting controversial policies such as a capital gains tax on investment properties and limiting immigration.

Just days after Reserve Bank governor Alan Bollard's unexpected intervention in the currency markets, the bank has taken the unusual step of offering detailed suggestions on how government policy could dampen the overheated property market.

In a submission to the commerce select committee's housing affordability inquiry, the bank said government might want to consider introducing a capital gains tax on rental properties, and better controls on immigration.

Government policy on encouraging immigration to stem labour skill shortages may have to be tempered because of its impact in sustaining house prices, the submission said.

The bank's comments come after unprecedented growth in the housing market, which has left New Zealanders with some of the most unaffordable homes in the developed world.

Despite Bollard's repeated warnings, prices have continued to rise and a study last month showed Aucklanders must spend 100 per cent of their take-home pay to repay a standard mortgage on a median-priced house. Homeowners' outlay has also risen rapidly in almost all of New Zealand.

Figures out last week show Auckland's median house prices have dropped $2000 in the past month - but pundits say it is too early to predict a slump.
In its submission, the bank raised the spectre of rising mortgagee sales undermining economic stability. It says New Zealand tax policy "appears to be favourably disposed toward rental property, compared to other countries" and suggests further tax measures such as ring-fencing operating losses on investment properties may be appropriate.

The bank's advisers suggest further "consideration might also be given as to whether taxation policies could be more in line with those in Australia, where realised capital gains on rental properties are taxed, but at half the normal tax rate".

National and Labour have both ruled out any capital gains tax on property.

Despite Labour's hints that it wants to reconsider rules around tax losses on property, it does not have enough support in parliament.

Westpac economist Dominick Stephens described the bank's suggestions on tax as making sense in the current environment.

"Tax arrangements regarding housing really are a big factor in increasing house prices. When a Kiwi gets a bit of money, the first thing they do is go and buy a rental property... if they go and start a business they would be employing people."

Tax threshold changes six years ago immediately bumped up the value of rental investments by about 17 per cent because of the owner's ability to write off losses.

"It encouraged those on the top tax rates to purchase rental properties, which effectively locks out first home buyers."

A spokesman said Finance Minister Michael Cullen would wait until the committee had finished its inquiry in about six months before commenting.

But National's finance spokesman Bill English said the bank should focus on controlling inflation and leave policy to government.

"They've got tools, with the interest rates and foreign exchange intervention, and they should focus on using those tools rather than trying to climb into debate where they do not have a role."

From here .

[MotherBear]

Housing now a tenant's market
5:00AM Sunday June 17, 2007
By Rebecca Lewis

Rents are failing to keep pace with surging Auckland property prices, creating fears of both rent rises and of landlords not bothering to invest in rental properties.

While property prices in the city increased 17 per cent in the 12 months to April, Crockers' latest market research shows rents for two- and three-bedroom Auckland properties rose only 4 per cent in the same period.

"The yields are decreasing - it is a serious problem," Crockers marketing manager Karen Coleman said. "More and more people are needing to rent, but there are fewer people who are able to buy in order to rent - at some point, rents may have to dramatically increase."

Serial investor and property guru Olly Newland said investors had less of an incentive to buy rental properties.

"You would only be getting about a 3 per cent return on value, which is just unacceptable.

"If people could pay double the amount of rent, it would be worth it for everyone, but of course, most people can't afford to do that."

Experts say it is unrealistic to expect rental values to keep up with property prices.

More here .