Property info thread - ctd.....

[MotherBear]

Home affordability deteriorates further
12:00PM Wednesday October 03, 2007

The bad news on home affordability continues and there is little light at the end of the tunnel for first home buyers, the latest quarterly report from Massey's University's Property Foundation shows today.

In the past five years home affordability has declined by 70 per cent, with affordability down 13.2 per cent in the year to August, the report shows.

In the quarter ending in August, affordability, which takes into account prices, incomes and mortgage interest rates, declined by an average 2.5 per cent.

The latest decline was mainly due to rising interest rates. The Reserve Bank has hiked interest rates four times this year and added pressure has come from the credit crisis.

More here .

[MotherBear]

Brakes go on - big dive in house sales
Page 1 of 2 ...... 5:00AM Friday October 05, 2007
By Anne Gibson

New Zealand's biggest housing market is in the grip of a slowdown.

Figures from Auckland's largest real estate agency show a big turnaround in sales.

Barfoot & Thompson, Auckland's biggest agency, said the average house sale price fell more than $14,000 last month, the number of unsold homes was rising, people were slower to buy and the number of sales was declining.

Another agency, Harcourts, said prices in its northern region - which included Auckland - had fallen.

Sales in the northern area were down 25 per cent in the 12 months, it reported.

More here .

[MotherBear]

Wellington home prices ease but stay ahead of the pack
By NICK CHURCHOUSE and JAMES WEIR - The Dominion Post | Monday, 8 October 2007

Wellington house prices are showing the first sign of slowing, but are still growing slightly faster than those in other main centres, according to Quotable Value figures.

However, one bank economist says house prices have been flat for the past five months and are expected to stay that way for the next 18 months at least.

Figures from Quotable Value out today show that for the year to September the average sale price for Wellington properties jumped $62,683 to $447,243, a 16.3 per cent increase, in the past 12 months, more than in other urban centres.

The next-strongest growth was in Auckland, where the average was $512,964, up 13.3 per cent or $60,216 over the year.

The national sales average increased 13.2 per cent over the year, slightly less than the 13.3 per cent calculated in the year to August.

The average New Zealand house price was $404,089.

Though the housing market is showing signs of cooling, some bank economists expect the Reserve Bank to lift official interest rates twice more next year, because of other inflation concerns.

Westpac Bank chief economist Brendan O'Donovan said the Reserve Bank would lift rates twice to battle "rampant inflation".

But the rate rises would be delayed as the Reserve Bank paused to assess the impact of a weak housing market.

In contrast to recent years, the housing market is expected to be the economic "laggard", with cities faring worse than the smaller centres.

Falling migration, higher interest rates and stretched valuations were all taking a toll on the housing market, Westpac said.

House prices had been "basically flat" for five months and were expected to stay that way for the next 18 months at least.

The good news was that if house prices remained flat, rapidly rising incomes would start to close the yawning affordability gap that had opened up in recent years.

However, Westpac said that in the end the inflation pressures would be too strong for the Reserve Bank, with demand outstripping supply across the economy, boosted by a flood of cash from the dairy sector, an expected government spend-up in election year and a strong labour market.

Despite predictions of rate rises, Westpac is forecasting a "golden era" for the economy, because of dramatic rises in food export prices. Food prices are rising because of population and income growth overseas, with world dairy prices up 120 per cent in a year.

"As a nation, we are going to do well," Mr O'Donovan said, with the economy forecast to grow 3.1 per cent this year and 3.4 per cent, next year- stronger than earlier forecasts.

Recent international credit market turmoil was a speed wobble for the world economy, not engine failure.

But the strong economy, supercharged commodity prices and higher interest rates were likely to push the exchange rate back above US80c again, and it could go as high as US85c.

Wellington's growth was slightly down on the 16.5 per cent recorded for the previous month.

Local QV Valuations spokesman Max Meyers said the lag between market dynamics and price shift was a risky situation for buyers. Wellington had not displayed typical increased sales after winter, which was a sign buyers were tending to be careful. "Most areas of Wellington are showing signs of easing back with a slight drop in the average sale price," Mr Meyers said. One exception was the Hutt Valley, where sales volumes were falling but prices seemed to be static, he said.

Auckland price growth was steady, but Christchurch showed a slight downturn, with the average house price growing 13.1 per cent to $364,357, compared with 14.1 per cent previously.

In the smaller main centres prices still seem to have a bit of life, with Hamilton and Dunedin showing greater increases in the average sale price than last month.

QV national spokesperson Blue Hancock said the general picture showed the first real sign of a slowdown in price increases.

"Residential sales volumes have been easing for several months and that trend can only continue for so long before it starts to impact prices," he said.

The year to date had seen house prices increasing steadily, but the September figures broke that trend. "Although it's only a very minor slowdown, this is the first time since January 2007 that our statistics have shown the rate of growth in values to be slowing," Mr Hancock said.

From here .

[MotherBear]

Home ownership now out of reach
5:00AM Sunday October 14, 2007
By Julie Jacobson

The housing affordability crisis in New Zealand could see a generation of angry young Kiwis unable to ever afford a home, the author of a new survey says.

The survey shows homeowners in Auckland now need more than twice the average weekly wage to pay off their mortgages, with a mortgage on a median-priced house - $445,000 - now sucking up 93.7 per cent of an average Aucklander's weekly pay, up 16 per cent on the previous year.

That means a couple or family would need to earn at least $1748 in take-home pay to comfortably afford mortgage repayments.

David Chaston, publisher at JDJL, which compiled the research, said "affordability" equated to less than 40 per cent of weekly income going on house payments, something that just four years ago was the norm.

More here .

[MotherBear]

'Definite end' to housing boom
By JAMES WEIR - The Dominion Post | Tuesday, 23 October 2007

The housing market boom will come to a "definite end" next year and the Kiwi dollar may rise back to US81c because of higher interest rates, economists predict.

Independent economics group Infometrics' latest forecast picks the Reserve Bank to raise official interest rates twice, to 8.75 per cent, within the next six months to hold inflation under 3 per cent.

That would push fixed mortgage rates above 9 per cent and hit the housing market, which has already suffered a big slump in sales volumes and flat median prices in the past few months.

Most two-year fixed rates are just above 9 per cent already, and longer-term rates recently rose to just under 9 per cent.

Further rises would "constrain" the housing market, Infometrics says.

Falling house prices would limit growth in household spending from next year, with real private consumption spending expected to grow just 2.3 per cent in the two years to the start of 2010, almost half the rate this year.

In the next six months a strong labour market will keep consumer spending up.

But after that falling house prices and weak net migration will start to drag spending down, the forecast says.

And a new 24-year high in the Kiwi dollar is "eminently achievable" in the next year with higher interest rates and better prices for exports.

It could move to US81c "or beyond", the forecast says.

The Reserve Bank is likely to lift official rates twice from 8.25 per cent because it is "nervous" about the effect of the dairy price boom on domestic spending in the year to March 2009.

The payout of $6.40 a kilogram of milksolids for dairy farmers is boosting confidence in rural areas.

The effect will not be felt in the wider economy till the second half of next year, as dairy farmer bank balances soar, the forecast says.

Even with monetary conditions - the mix of interest rates and the currency - their tightest in 20 years, Infometrics expects economic growth to average 3 per cent a year over the next three years.

Though house sales and retail sales have been soft, "there is no feeling of impending doom hanging over the economy", it says.

But the building sector faces strong evidence of a housing market downturn since May.

Monthly house sales volumes are at their lowest since 2001.

The pricing power of building products firms, builders and other tradespeople will diminish, removing a big contributor to domestic inflation in the past few years, the forecast says.

With the housing market cooling down, the newest inflation threat is from food prices.

Milk prices are up 10 per cent, butter 23 per cent, and other dairy products are rising.

The next increases are expected in bread, up 20 per cent, eggs, up 5 per cent, and pork and bacon.

Poor harvests are one reason for higher grain costs.

From here .

[MotherBear]

Give NZers housing priority over immigrants - MP
12:40PM Wednesday October 24, 2007

A New Zealand First MP wants state housing prioritised for New Zealanders, leaving immigrants to wait their turn.

Pita Paraone is concerned there has been an increase of more than 20 per cent over the past six years in the number of state houses being granted to people who are not New Zealand citizens.

He said 7,000 state houses have been allocated to immigrants, while thousands of New Zealanders languish on Housing New Zealand waiting lists.

Mr Paraone wants a rule requiring immigrants to have the resources to buy their own homes when they come to New Zealand.

He said the government must act urgently to ensure needy New Zealanders get priority over newcomers.

New Zealand First has also recently attacked immigrants' influence on the property market, saying foreigners are driving up prices and keeping New Zealanders out of the market.

- NEWSTALK ZB

From here .

[KiwiHopeful]

I love it when politicians shoot their mouths off about stuff they have no real knowledge of--it makes me feel like I'm back home in the states.

Seriously, there's so much wrong with his complaint that it is laughable:

1. the average immigrant has a higher income than the average kiwi
2. a 20% increase over six years means about a 3% increase annually--that's hardly earth-shattering growth
3. as near as I can figure, less than 10% of state housing is taken by immigrants
4. mandating that immigrants have enough money to buy their own homes is contrary to sound immigration policy, which favors a balance of youth and experience

That said, I'm sure that if he actually looked into the specifics of the 7K immigrants, I'm sure that in many cases he'd find good reason for them to have state housing.

[MotherBear]

Homes could see mandatory energy reviews - watchdog
NZPA | Friday, 9 November 2007

Homes could soon be subject to compulsory energy efficiency testing that might see some houses decrease in value, Consumer Magazine says.

A government scheme to come into force next month will see a team of assessors use a star rating system to measure energy performance of residential houses under plans by the Energy Efficiency Conservation Authority (EECA).

The aim of the residential home energy rating scheme (Hers) was to lift the energy performance of homes.

But Consumer warned in that potentially the lower the rating the lower the house value would be.

The scheme would start off being voluntary, but the EECA said on its website they recommended that after three to five years a mandatory Hers programme would be introduced for properties that were up for sale.

"Later this Hers programme could be extended to include rental property," the website said.

The scheme would operate by assessors entering details into a computer, such as orientation of the sun on the house, size and arrangement of rooms, and types of insulation, which would result in an efficiency rating calculation.

A zero-star rating has no energy-saving features at all and the top rating would be given to homes that require no external energy apart from the sun.

The Government has spent about $3 million developing the programme and a compulsory scheme would cost about $5 million a year, the Consumer report said.

It added that the computer modelling system was flawed because there would be too many energy factors in different homes for it to take into account.

It could result in homes receiving an "unfairly low rating", which would reduce the value of the property.

Consumer said they agreed with the goal of improving energy performances in houses, but Hers was heavy-handed and could be used to build up a "big-brother" style data base of New Zealand homes.

"A compulsory Hers would require homeowners to have a rating done before the house is sold or leased.

"Renovations done with a building consent could also need a rating done after the work has been completed."

EECA said the decision on whether the voluntary scheme would become mandatory would not be made for some time and was dependant on an assessment process.

"Hers will be a series of pilot/voluntary schemes to test the very issues raised in (Consumer's) article."

EECA said Hers was designed to enable buyers to make informed decisions and for owners to make decisions about improving the quality of their homes.

Public consultation into whether Hers should be expanded from a voluntary to compulsory scheme was due to begin in April next year.

From here

[MotherBear]

Cheaper housing bait suggested to bring Kiwis home
5:00AM Thursday November 29, 2007

New Zealanders might return from Australia if housing gets cheaper here, an Australian analyst company says.

Macquarie Research said the slowdown in net migration to New Zealand this year had coincided with increased departures, particularly to Australia.

"Relative housing affordability between the two countries appears to be an important piece of the puzzle in explaining why so many are moving across the Tasman."

But with the gap between interest rates in the two countries narrowing, and the New Zealand housing market slowing down, the flow might start to reverse, Macquarie analysts said.

More here .

[MotherBear]

Rents set to rise as housing market softens
9:00AM Tuesday December 04, 2007

Rents could rise 6 per cent a year, creating a new source of inflation, Westpac economists suggest.

Westpac said rents had been subdued for years, rising at an average rate of just 2.2 per cent a year over the past four years.

It expected rents would accelerate rapidly by 6 per cent per annum and would stay that high for five years, creating inflationary pressure.

One of the reasons for this was increased demand for rental housing.

"High interest rates will reduce supply," it noted. "With mortgage rates above 9 per cent, rental yields at 4 per cent and little prospect of capital gain, the numbers just do not stack up for landlords."

More here