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Luxurious Living

23 Deans Drive, Wanaka

A modern take on the beloved gable shape, this home features a pulled apart gable, with two angular peaks casting the eye to a high centre point. Cleverly designed, this home finds the perfect balance of privacy and natural light, creating a secure haven of ultimate luxury.

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Mortgage lending was slashed to about half of normal levels last month due to Covid-19 restrictions but economists say the latest round of ‘rate wars’ should spark some renewed buyer and seller enthusiasm.

For those keen on picking up a sharp mortgage, record low wholesale rates have seen Kiwibank drop its one-year fixed rate to 2.65 per cent, with both ASB Bank and AIA/Sovereign offering two-year fixed loan to value ratio options at 2.69 per cent. HSBC’s premier two-year rate is as low as 2.60 per cent.

The lower-rate options could perk up a market, which in April counted only $2.7 billion worth of mortgage lending, down 55 per cent from $5.5b in April the year earlier across owner-occupiers and investors alike.

Corelogic senior property economist Kelvin Davidson said it was likely transfers from other lenders and new mortgages would have fallen more sharply than refinancing of existing loans, keeping in mind the 80 per cent slump in property sales for the month.

Reserve Bank numbers this week also showed a shift toward interest-only mortgages, as borrowers take advantage of lenders’ flexibility to reduce their household outgoings over the next few months.

Mortgage deferrals

This is supported by NZ Bankers’ Association figures showing more than 61,400 customers have opted to reduce repayments on loans worth about $20b – and another 54,200 borrowers have deferred payments altogether on loans of $19.1b.

Of that, about 3 per cent is personal consumer lending while the overall stock of mortgage debt is about $278b.

Davidson said a key test for the strength of the property market would be during August and September when deferral periods come to an end.

At the same time, the quantity of lending on high debt to income ratios had crept up in recent months, especially for first home buyers.

Cautious lending

“So banks are likely to stick to cautious lending policies, even if the RBNZ isn’t mandating that approach, given the general reduction in job and income security across the economy.”

Davidson said while April was clearly a subdued month for the property market and mortgage lending there has been encouraging signs for appraisals generated by real estate agents, across new listings and valuations. He is expecting mortgage and sales activity to have rebounded this month.

Source: NZHerald

The magic number you need to earn to buy a house in NZ.

It’s quite a lot in many cases, but there are pockets of positivity in the regions.

Home affordability continues to be the topic at the forefront of Kiwi minds and although the latest OneRoof Property Report figures point to a softening in many of the country’s biggest property markets, buyers still need to be bringing in big sums to secure a house.

A new report from Australia has identified mortgage stress as 30 percent or more of your pre-tax income going towards loan repayments, and with that in mind, OneRoof and YuDu ran the numbers to see what the salary you’d need to earn to buy a home without putting your finances at risk.

Using the latest median house values in the latest OneRoof Property Report, we worked out that buyers would need to be bringing in six-figures to avoid mortgage stress in half of the regions examined.

Unsurprisingly, Auckland leads the pack. The median value of a house there is now $1,243,037 and a household would need to be earning $241,200 – more than triple the city’s median income – to be able to comfortably cover the monthly repayments on a 30-year mortgage at 5.79 percent.

First-time buyers would also need to be able to save $248,607 for the 20 percent deposit.

As most buyers in the $1-million plus range in the city tend to be home-owners already – thus have some money in the bank in the form of capital gain – and earn more than the median income, the figures are not as alarming as they first seem. However, they do illustrate the challenges buyers in the city face and show that even those deemed to be comfortably off could be in danger of suffering mortgage stress.

Southland comes out tops when it comes to earnings and home affordability. The median income for the region is $56,784, enough to cover the monthly mortgage repayments without going into mortgage stress.

No other city or region has a median income that would cover the cost of home loan below the 30 percent stress threshold, putting single buyers at a disadvantage. However, buyers in Christchurch, Wellington, Waikato, Otago, Hawke’s Bay, Whanganui and Taranaki would be able to avoid mortgage stress if they were purchasing a house as a couple.

A recent survey of 4000 New Zealanders by Kantar TNS for NZME job site YUDU.co.nz revealed that certain professions — those in primary industries, accounting, healthcare, human resources and aviation — can all expect better pay in the regions. And for those in other professions, cheaper house prices make up for the mover’s drop in salary.

Barfoot and Thompson managing director Peter Thompson told OneRoof that Aucklanders considering heading to the regions for more affordable housing needed to test out the market and ensure the jobs market was strong enough to support them.

“Don’t rush out and buy something as soon as you move. Rent for the first six months so you are able to experience a summer and winter in the region you have moved to and ensure you like it. It’s a big drop to come back to Auckland if it doesn’t work out,” he says.

Source: Yudu

The average asking price in Auckland has fallen below $900,000 for the first time in 10 months, good news for house hunters and a sign of retreat in New Zealand’s key market, Trade Me says.

Auckland’s decline to $895,500 also drove the national average price down, to $632,800  – a 1.4 per cent dip compared with Auckland’s 1.6 per cent drop.

“It can be unsettling for homeowners to see the value of their biggest asset shrink, but this is all part of a dynamic property market,” said Nigel Jeffries, head of Trade Me Property. “Auckland’s growth in the last five years couldn’t continue indefinitely. We think we’ll see a bit of a stagnant period continuing in the next few months.”

The fall in Auckland's average asking price drove down the national price last month, to $632,800.

PETER MEECHAMSTUFF

The fall in Auckland’s average asking price drove down the national price last month, to $632,800. However, the price of Auckland apartments hit a new high of $661,700 in July, up 7.7 per cent on last year, as they were a more affordable option.

“While the Auckland market has slowed, we’re still seeing huge demand for properties which make a great first step onto the property ladder or a good investment.” Contributing to the overall price fall was a 7 per cent rise in new listings in the Auckland region.

SUPPLIED – The five-year trend in Trade Me’s Auckland property price index.

While prices fell in the Auckland region, Nelson/Tasman had a new record asking price of $595,500 – up 12 per cent on last year – while in Hawke’s Bay the price was up 23 per cent to $545,100.

In Wellington, the average asking price was $581,500. Central Wellington had the most popular property on Trade Me last month – a one-bedroom apartment which received 158 enquiries.

“The Wellington property market is showing no sign of slowing down, even at this time of year when we expect prices to dip. “The coming six months will be an interesting time for the capital and we could see average asking prices crack $600,000 for the first time,” Jeffries said.​

 Source – Stuff

New Zealand’s Real Estate Institute says the government should regulate property managers, not focus on banning letting fees, if it wants to help renters.

Submissions close on Wednesday on the proposal to stop landlords charging letting fees to tenants who want to secure a property.

These fees are often equal to a week’s rent, plus GST.

But Real Estate Institute chief executive Bindi Norwell said while a ban on letting fees might help renters initially, a better long-term impact would be achieved by introducing appropriate standards for property managers and better consumer protections.

“If the minister wants to deliver fairness and affordability in the rental market a more effective way of doing this would be to regulate the property management industry,” she said.

“Whilst a proposed ban on letting fees would reduce upfront fees for tenants, it is highly likely that those fees may simply be charged to landlords and then recuperated through increased rent. This would contradict the purpose of the ban which is to reduce cost and increase fairness for tenants.”

There are no rules for how rent payments should be handled and no professional standards for property managers.

“There are some fantastic property managers out there who have high ethical standards and adhere to the REINZ Code of Agency Practice, but this is unfortunately undermined by others who do not have the same standards of ethics,” Norwell said.

“At the moment anyone can become a property manager meaning there is no consistent accountability and protections in place across the industry such as holding money in a trust account, having the appropriate insurance in place to operate in the industry, having a dispute resolution process in place or regulatory compliance being adhered to. This means that renters – who include some of our more vulnerable members of society – could be taken advantage of and their money isn’t protected the way it should be.

“Therefore, if the government really wants to protect tenants, it should take the opportunity while reviewing the wider Residential Tenancies Amendment Act and include regulation of property managers as part of that.”

 Source – Stuff

 

New Zealand’s biggest home loan lender signals a more aggressive market position with two lower rate ‘specials’.  

ANZ is shifting two key fixed mortgage rates lower. And BNZ changed one of their fixed mortgage rates down as well. The BNZ change is to their three year fixed rate, taking it under 5% and more in line with the market. ANZ has cut -10 bps from its one year rate, taking its ‘special’ down to 4.45%. And it has trimmed -4 bps from its two year ‘special’ fixed rate to 4.65%.

This two year pricing matches Kiwibank and gives it a small edge over all its rivals except HSBC. Their one year rate has fallen -10 bps to 4.45% but it still lags ASB who has a 4.39% rate for that term. HSBC has an even lower offer.

These changes come just before the REINZ releases its October data on Wednesday and that is expected to show low transaction volumes in the middle of what is usually a busy Spring selling season. Data for both Barfoots in Auckland and Harcourts nationally have already signaled restrained activity. As a consequence, banks are facing lower opportunities to win market share among the churn in house selling.

In a recent interview with interest.co.nz,  ANZ CEO David Hisco said ANZ is ‘back in the game’ for mortgage lending, suggesting a more aggressive drive is coming from New Zealand’s largest home loan lender.

See all banks’ carded, or advertised, home loan interest rates here.

BNZ has a fixed seven year rate which is 6.15%. And TSB still has a ten year fixed rate of 6.20%.

Source – David Chaston

Proposed rule changes for residential visitor accommodation will be notified tomorrow, changing the landscape of short and long-term accommodation in the Queenstown-Lakes district.

In Wanaka, well-known for its large quantity of empty houses, people involved in the industry are not sure what impact it will have. The new rules will have the most effect on absentee owners wanting to rent out their property for long periods. The proposed rules only allow up to 28 days short-term rental a year, with no more than three separate lettings. Anyone wanting to rent their property for more than 28 days will now need a resource consent to do so.

Statistics taken from the 2013 Census showed over a third of dwellings in Wanaka and Hawea were unoccupied. Yet, long-term rental accommodation is extremely competitive in the area.

Home & Co director Colleen Topping said the shortage was very noticeable. “We would have eight to 10-plus applications per house we advertise so each time there are plenty of disappointed tenants.” Ms Topping said other property managers in the Queenstown Lakes District were also experiencing the same shortage of rentals for tenants. While she applauded the efforts to increase the number of long-term properties available, she said she was unsure what significant impact this change would make on the rentals market.

Harcourts Wanaka sales manager Grant Parker believed the owners of these empty homes often used their properties only for holiday periods or seasons throughout the year. They were financing the expenses of the property through short-term rentals. “They utilise these short-term and holiday rental opportunities to relieve some of the expenses relating to ownership of holiday homes eg. rates, insurances, maintenance. “Some may consider applying for consent and others may just revert back to leaving the homes empty for the time they are away from the property.” Mr Parker said he also had his doubts about whether the proposed changes would relieve the available long-term rental shortage.

Real Estate Institute of New Zealand chief Bindi Norwell said many property owners in Wanaka did not like being dictated to and were left feeling frustrated by the changes. She also believed there could be severe ramifications for the town. “The very likely impact is that the changes may reduce the number of short-term rentals available in the market as people will simply make their properties unavailable to the rental market. “This could have ramifications for the local tourism industry,” she said.

However, president of the Wanaka B&B Association Liz Webster believed the council taking action was positive news. “Some people are a bit naive about what renting out their property on online travel sites such as Airbnb involves. There are regulations and taxes that have to be met, and many people do not realise that. It will have a positive effect on everyone,” she said.

Queenstown Lakes District Mayor Jim Boult said the changes were not an attempt to remove visitor accommodation from the district, but aimed at increasing the available housing stock for longer-term rentals. “We are regularly hearing that people feel uncomfortable with their suburbs housing more and more short-term guests. “They are effectively living next to a hotel and are concerned that their residential areas are turning into de facto commercial zones,” Mayor Boult said.       –Sean Nugent

Source – ODT

Auckland led house prices up in the current boom – but experts are divided on whether it will lead them down again.
Until 2015, Auckland prices shot ahead while the rest of the country advanced more slowly. But now Real Estate Institute figures show Auckland’s median price is up just 2.5 per cent, year-on-year, while the rest of the country has advanced 11.4 per cent. Auckland prices dropped 0.8 per cent between May and June. In July 2015, Auckland house prices were increasing at a rate of 27.1 per cent. But Institute chief executive Bindi Norwell said most other regions had double-digit growth. There were record median prices in Bay of Plenty, at $555,000, Manawatu/Wanganui, at $280,000 and Tasman, $581,000. She said it was normal for the regions to lag behind Auckland on the “growth curve”. Other areas took off later and may take longer to slow.

Sales volumes across the country have continued to decline – in Auckland they are down 33.2 per cent for the year to June and nationally they are down 24.7 per cent for the same period. “We know that it’s winter and the election is just two months away now which typically impacts the number of properties sold in the market. The number of properties sold across the country is the lowest we’ve seen in the month of June for three years now – particularly in the $500,000-and-under property price bracket,” Norwell said. “This slow-down in transactional activity, but stabilising price trend highlights the underlying dynamics between housing demand and housing supply, with population growth continuing to rise faster than building consents and dwelling supply.” She said loan-to-value restrictions, which limit the amount of lending banks can do to owner-occupiers with less than 20 per cent deposit, and investors under 40 per cent, had made a significant difference. “The major trading banks are being more cautious with their approach to lending particularly their view of how highly leveraged Kiwis are when it comes to properties.” But she said talk of falling prices could be premature. Even in Auckland, they only looked steady, she said.

“The data also shows an emerging trend of section sales in Auckland occurring more quickly than dwelling sales, highlighting that demand for sections is still rising in Auckland while demand for dwellings is easing.” Infometrics chief forecaster Gareth Kiernan said whether other regions followed Auckland’s slowdown would depend on several factors. He said a significant drop-off in population growth combined with an economic downturn could slow the housing market across the country. But Auckland was more susceptible to the impact of interest rate rises, because of the house prices there.  If interest rates rose higher or sooner than expected, prices in the rest of the country could hold up better than Auckland’s, he said. But on the flipside, Auckland still had a significant undersupply of housing, which limits the extent to which house prices can fall. Other regions do not have this supporting factor.

Analyst Rodney Dickens said some parts of the country were still in catch-up mode and would be for some time. He said it was to be expected that the parts of the country that performed most strongly in one boom tended to underperform in the next boom. Dickens said, when prices next tool off, Auckland might have less room to increase because houses there would already be relatively expensive.

Meanwhile, Trade Me data shows that the average asking price of the typical New Zealand property dropped 1.2 per cent in June to $632,850 – and that drops seems to be more widespread. But Nigel Jeffries, head of Trade Me Property, said homeowners had no reason to panic. “The average asking price is still up 7.1 per cent on this time last year, but the rate of increase is down from 12 per cent at the start of the year. “It means the significant capital gains of recent years are slowing down but if you’re looking to buy it will be welcome news that the deposit you require isn’t surging at the insane rates we’ve been seeing.” In Auckland, the average asking price dipped for the second month in a row, down 0.9 per cent in June to $911,000, the same level as in November 2016. Even the regions, which have been very strong over the last year, slipped back in June. But Jeffries said that behind the national figures several regions continued to perform strongly. “The ‘halo’ regions are still powering on as the Auckland effect continues to ripple out, and Otago has emerged as a powerhouse with the average asking price jumping 50 per cent in the last five years.”

 Source – Stuff