FREE iPad - Promotion

Thinking of Selling ?

List & Sell your property exclusively with Barry McKean Bayleys Palmerston North and receive a free iPad.

If you are considering selling, call me and I will discuss with you the best method of marketing your property to take advantage of current market conditions.

I am committed to maximising the value of my clients real estate assets.

For totally professional service, call or email me today to secure your iPad

Conditions: Promotion starts 27/10/10. Property must be exclusively listed with Barry McKean, before December 2010 and sold during the agency listing period. Customer will be provided with free ipad(16GB WiFi model) upon settlement of a sale of the listed property by Bayleys.

Start buying houses, says Kiwibank boss

New Kiwibank chief executive Paul Brock is urging potential first home buyers not to be spooked and to go out and buy, so long as they can afford to.

Brook told interest.co.nz that purchasing a first home was "almost a rite of passage for New Zealanders" and that potential buyers shouldn't be put off by concerns that house prices will fall, interest rates will rise or by a weak economy.

"I think at the end of the day there's no right or wrong time to get into the (housing) market," Brock said. 

"The key is actually whether customers themselves can actually afford it, afford the loan. And that should be the primary driver."

Brock, who recently replaced Sam Knowles as Kiwibank's CEO, said he would be concerned if people were being put off home ownership. He noted the overall housing market had slowed down "quite a lot" and, although he didn't have the data at his fingertips, there was a feeling that first home buyers might be stepping out of the market.

"That's a bit of a concern really for New Zealand . From my point of view home ownership is really good," said Brock. 

"It's one of those things that's both good for the individual to get started towards financial security, I think it's good for the country and it's also good for the community that people are owning their own homes."

"In a way it's almost that rite of passage for New Zealanders, the opportunity to get started and in many cases it is the first step towards financial security," Brock added.

"Making that step is really, really important. So I would be concerned if people are being put off by views on property prices, or views on interest rates."

The state owned bank's most recent General Disclosure Statement shows Kiwibank's mortgage book rose by about NZ$307 million to NZ$9.6 billion at June 30. The June quarter saw Kiwibank record its slowest mortgage growth since the June 2008 quarter when it wrote about NZ$261.7 million worth of new business.

But although Westpac's housing loans rose more in the June quarter, by NZ$365 million, Kiwibank's mortgage lending growth has been spectacular over the past two years as the bank has offered discounted fixed mortgage rates and variable rates, as it has outstripped mortgage book growth from the big four Australian owned banks ASB, ANZ, BNZ and Westpac. See all bank mortgage rates here.

Since the June 2008 quarter, Kiwibank's residential mortgage book has grown by about NZ$4.7 billion. However, Brock acknowledged growth had slowed in recent months saying it was a demand driven slowdown.

"The market has slowed down a bit and that's really driven by the economy," Brock said.

"But at the end of the day what Kiwibank is all about is, and we've been about this all the way through the global financial crisis, is continuing to stick to our principles and making sure that we do continue to lend. And we have continued to do that all the way through."

Kiwibank has continued to lend more than 80 per cent of a house purchase price to some customers' right through the global financial crisis, he said.

The most recent monthly figures from the Real Estate Institute of New Zealand (REINZ) showed 4,287 properties were sold in August, down on the record low July volumes of 4,411 and down 27 per cent from 5,878 in August 2009.

$500m pulled from NZ commercial property in two years

By Susie Nordqvist

Nearly half a billion dollars of overseas funds has left the investment property market in New Zealand since 2008 as foreign investors come under pressure to sell down assets during the recession.

Research from CB Richard Ellis shows property trusts and other managed funds have been the most prevalent sellers during the past two years.

The research covers office buildings, retail space and industrial space in the investment market.

Other managed funds made up 65 per cent of all properties sold in the first half of this year alone, largely due to the sale of assets by
Australia's Brookfield Multiplex, the report said.

CB Richard Ellis senior director Zoltan Moricz said the results were telling given the scale of foreign investment previously.

During 2006 and 2007 the net inflow of foreign funds into the investment market was nearly half a billion dollars.

The report shows in the first half of this year alone $204 million worth of foreign funds left our shores, largely due to a pull-back from Australian investors.

"It's quite a significant feature of the market because overseas investors were prevalent then (2006 and 2007) and they were immediate drivers of the market in relation to liquidity and pricing," he said.

Moricz said institutions with listed property trusts and other managed funds had been heavy sellers because quite a few of them had been close to - or were breaching - their covenant ceilings.

New Zealand was seen as a peripheral market rather than a core market for many overseas investors, and therefore one which they were prepared to sell out of, Moricz said.

The pressure had not been as severe on private sellers because they were 'more transparent and flexible in some cases', Moricz said.

Private sellers made up 25 per cent of all sellers during the first six months of this year.

The proportion of mortgagee sales remained stable during the same period, making up about 5 per cent of total transactions.

However this number may increase as receivers work through the complexities of some larger holdings and portfolios, CBRE said.

Moricz said greater uncertainty and loss of sentiment around the economic outlook has contributed to a loss of momentum in the investment market.

However he expects the outlook to improve next year.

"By the second half of 2011 the recovery will be more sustained and more engrained."

"At the moment there are still some short-term issues to work through," he said.

Access to credit, pressure to sell, and a lack of confidence were all features of the current market, Moricz said.

However these were hiccups rather than a sign the economy was headed for a double dip recession, he said.

Building consents keep falling - down 9pc in August

The number of consents issued for new homes has fallen to its lowest level in more than a year, Statistics New Zealand (SNZ) said today.

The seasonally adjusted number of new housing units, excluding apartments, fell 8.9 per cent during August, well down on the 6 per cent fall recorded in the month prior.

SNZ said consents for 1193 new dwellings and 36 apartment units were authorised during the period.

When the volatile apartment category is included, the seasonally adjusted number of new housing units authorised fell 18 per cent, following a 2.4 percent rise in July.

Statistics New Zealand's business statistic manager Louise Holmes-Oliver said the trend for consents issued for new homes, excluding apartments, has been falling since March, following increases that began in April last year

The current level is 39 per cent lower than the most recent peak during June 2007.

The value of consents issued for residential buildings was $473 million in August 2010, up 7.6 percent compared with a year earlier.

In contrast, the value of non-residential buildings was $296 million, down 23 per cent.

ASB Bank economist Chris Tennent-Brown said that from September onwards building consent data would be significantly affected by the Canterbury earthquake.

"Beyond Canterbury, our forecasts for the overall economic recovery in New Zealand contain a weak outlook for the construction sector. Today's building consent data are consistent with this view, but further weakness in ex-Canterbury consent issuance would imply weaker overall housing construction than we are anticipating," said Tennent-Brown.

"With a low level of activity in the housing market, there is little in the way of a catalyst beyond the earthquake to stimulate a pick up in residential activity," he said.

The three regions which recorded the largest changes from year ago figures were: Auckland, up 105 units to 321, Canterbury, down 44 units to 191, Waikato, down 42 units to 158.

- NZ HERALD ONLINE

Manawatu still very affordable

By JIMMY ELLINGHAM - The Manawatu Standard
The Manawatu has remained the country's third most affordable area to buy a house, but early signs show that prices could be on the rise.

A Massey University report found the Manawatu/Whanganui region was one of the most affordable place to buy a house in New Zealand.

The region is usually classed as one of the more affordable in the quarterly report, which looks at prices and other factors like interest rates and wages across 13 regions.

Massey real estate unit head Professor Bob Hargreaves said low house prices in Whanganui "dragged Manawatu down" in the figures.

The wider region's third ranking behind Otago and Southland was "pretty consistent".

The report revealed the region's home affordability didn't improve as much as most parts of New Zealand, but Prof Hargreaves said this could be attributed to a rise in median sale prices for houses – an often volatile figure.

August's QV valuer Jason Hockly said it was still a buyers' market, although this could change as the weather fined up.

However, Harcourts Manawatu area manager Andy Stewart said in his 20 years in the real estate business, he had seen prices stabilise at the bottom of a plateau for two or three years at a time.

This consistency in pricing led to affordability, he said.

The report found that affordability in Manawatu/Whanganui had improved by 3.6 per cent in the last 12 months, down on the national average of 9.7 per cent.

There was only a small rise in the last quarter as all "affordability drivers", such as wages and interest rates, were subdued.

The median price in Palmerston North was $256,444. It was $230,000 in Feilding.

Figures from the Real Estate Institute of New Zealand released last month showed the number of houses sold in Palmerston North and Feilding had hit decade lows.

 __________________________________________________________________________________________

Demand remains high for good quality family homes - the city's larger employers Massey university & Mid central health  with staffing of  more than 3500 between them a keep the local real estate industry churning over.

Barry McKean 

                                                                                                                                                                                                            

Emotion a hindrance for sellers

By Emma Goodwin

When you're buying a home, you have a simple checklist of things to look for. But when you're selling, the procedure can be a little more complicated.

Selling a house can be a stressful experience, and there are things to consider to make the task easier.

First of all, think of the sale as a business transaction and try to disconnect your emotions. A decision to buy a property is often based on emotion. But when you sell real estate, you need to remove emotion from the equation. You need to think of your house as a marketable commodity.

The goal is to get others to see it as their potential home, not yours. If you don't keep this in mind, you could inadvertently create a situation in which it will take longer to sell your property.

One of the first things to do is remove most of your personal trinkets. Things that may remind you of your wonderful trip to Morocco in 1987 may look like a whole heap of clutter to potential buyers.

So tidy rooms and cupboards to remove clutter, and remove extra furniture so that rooms look more spacious. If necessary, rent a storage unit temporarily, or give away items you no longer use.

First impressions are important. Fix small defects such as peeling paint and cracked windows, and get the cleaning equipment out.

You need to have your house spotless. Take special care with the kitchen, bathrooms and windows, and look upwards. Many a first impression is spoiled by cobwebs hanging from the ceiling.

Go through the filing cabinet and get every piece of paperwork you have on your home. If necessary, go to your local council and get the file on your house, so that any questions about legality of boundaries, building work or anything else that could stand in the way of a quick sale are taken care of.

Put together pertinent information, such as the title documents, valuation documents, surveys, mortgage statements, information on upgrades and any plans for improvements.

Select a property sales agent by conducting a series of interviews - until you find the perfect one for the job.

Get a registered valuation of your property and ask any prospective agent for a market appraisal.

Then decide on a sale strategy with your agent. You can select from a range of different methods, including auction, tender and negotiation. The Real Estate Institute of New Zealand has a glossary of real estate terms that explains these methods.

You and your agent then need to set a realistic marketing price, so that you attract as many buyers as possible.

If your home is priced too high for current market conditions, you may deter buyers. They will look around, and conclude that other properties are of better value.

Valuing a Leaky Home

By Glenda Whitehead

How do we assess the market value of a home with un-resolved or un-quantified weather-tightness issues Does such a property have a different value to an owner who is going to repair it themselves, versus a purchaser?

To some people, leaky homes have no value. They wouldn't even consider buying one. To others, the value is intrinsic because it is already their home. And yet to others, a leaky home may represent an opportunity to make a profit.
Let us start by considering what 'market value' actually is. The market value is, by definition, the amount a property would exchange for between a willing, well-informed buyer and a willing, well-informed vendor. The principal of market value also states that the situation is free of duress, such as financial stress or matrimonial circumstances. It does not however take into account any emotional stress the vendor may be under in a 'leaky home' scenario.
Often an existing owner will conduct remedial work themselves and will not expect to make a profit from the situation. In such cases the owner only sees the intrinsic value of their home and doesn't consider what the open market would pay for such a property. For many, the stigma attached to a leaky home means it won't even be considered for purchase.
Leaky homes do sell, and with various levels of unresolved issues. The cost to rectify each home can be quite disparate. Therefore, valuing leaky homes by lining them up against one-another is generally not a good approach.
However, I have valued a terrace house in a development where all the homes required similar levels of work (re-cladding). The process was being managed through the body corporate and the actual cost was known to each of the owners. There was also recent market evidence (sales) within the development reflecting the same circumstances as the property being valued. What we refer to as 'direct sales comparison' was possible and suitable on that occasion.
But how do we value a leaky home when there is no direct sales evidence?
This question cannot be answered until the likely cost of repair is known. That is, we must establish the building costs, associated Council costs, financing costs over the rebuild period, and all other costs associated with the rectification process. Building costs will often be provided to us by owners who have sought builder quotes after engineers have established the extent of the damage.
We must also allow for extra costs such as landscaping, which may be ruined during the rebuild process. Having these facts at hand, we can then start the valuation process.
The valuer begins by assessing the value of the property as if the home has been fixed and has no leaky issues. We also take into account what the material the home will be re-clad with, and any incidental upgrading work, or other alterations that will occur during the process. Examples include re-cladding with weatherboards, replacement of joinery, and re-aligned roof lines to ensure better water disbursement. Often during the upgrade process other components of the home will be upgraded or replaced out of necessity, these are also taken into consideration when assessing the market value 'as if complete'.
From this, we then start the cost deduction process. We deduct for Council costs, building costs, other site development work, the cost of financing the project over the planning and rebuild period, and finally but significantly, a profit and risk margin.
Why do we deduct for finance costs? Because we put ourselves in the position of a willing buyer, who will see finance as one of the costs they will incur in the process.
A profit and risk (P&R) margin is taken off because; why would a purchaser take on such a project if there was nothing in it for them? While the current owner may not want to make a profit but just want a sound and dry home, a prospective purchaser would know there are always risks attached to such work being done. If actual costs exceed those provided, it is the profit and risk margin that will be reduced. Some uncertainty typically remains around costs, so we include a contingency fund.
Ultimately, if the project is undertaken by a new owner, the P&R amount is their reward, or for the current owner undertaking the project themselves, it represents their salvaged equity on completion.
The bottom line of our assessment is what a willing, well informed market buyer should pay for that property, in order to cover the costs to rectify it, and obtain a reward (the profit and risk component) for taking on the task.
Example:

Indicated Value 'As if Complete' basis: Land value	$	400,000
Value of improvements	$	290,000
Market value on Completion (excluding chattels)	$	690,000
Added value of chattels	$	10,000
Market value (including chattels) 'As if Complete'	$	700,000
Less costs to rectify
Estimated building costs, including labour, materials, architectural fees, Council fees	$	170,000
Estimated finance cost over rebuild/re-sale period, allow: (say 6-9 months at applicable interest rates eg 7%)	$	21,000
Profit & risk allowance (typically a percentage of 'as if complete' value, 15-25%)	$	105,000
Indicated value 'As Is'	$	404,000
As the indicated value after deducting all likely costs is close to the assessed land value, we are of the opinion that the land value should be adopted as the present value. "As is" Market Value adopt $400,000

The above example, in which the Market Value is equivalent to the land value, is from our experience, not uncommon in the Auckland market. The owner then needs to ask themselves whether they should rectify the existing dwelling, or demolish and start again. The latter would incur further costs associated with demolition. Such a decision would depend on the size of the existing home and how well it makes use of the space the site offers. For an existing owner, rectifying the existing building may be the only viable option.
In our assessment, we have not considered that the owner may recoup costs from parties deemed to be responsible for the home having weather tightness issues. If some recovery is known and certain, it could be factored into the equation.
There is a definite stigma attached to properties that have monolithic, or plaster cladding, regardless of whether they have been proved to leak or not. We see this in sales evidence where values are discounted in comparison to, for example, a similar weatherboard home. We also know that saleability is reduced as some buyers won't even consider purchasing them. We have noted that these homes can take extensive time periods to sell. This can also be said for properties which have had leaky issues in the past, even if they have been re-clad. The stigma remains and is exacerbated in slow market conditions.
The value of any home can be significantly reduced if it is discovered to have weather-tightness issues. If you are purchasing a property and have any doubts about its construction, get a suitably qualified and registered person to look at it, and provide you with a written report. It could end up being the only leg you have to stand on.

Real estate as investment loses allure

By SUSAN PEPPERELL



The Kiwi love affair with property investment is over. New research shows a drastic decline in the number of people intending to buy real estate as a money-making strategy.

Property experts say tax changes announced in the Budget, rumours of a capital gains tax and a lack of confidence due to the recession are contributing to investor reticence.

Nielsen's annual Real Estate Market Report shows a 40% drop in the number of people intending to buy an investment property compared to the same time last year.

Last year one in four people surveyed said they would buy residential property for investment, but that figure is now down to one in seven – the lowest in the five years the survey has been conducted.

Alistair Helm, chief executive of website realestate.co.nz, says the decline began last year and the May Budget announcements removing tax claims for depreciation had simply continued the trend.

"The reality is that people's appetites have changed."

The Budget measures were introduced to dampen Kiwi enthusiasm for property investment and encourage investment diversification. Massey University's director of banking studies, David Tripe, said they appeared to be working, which was "not a bad thing".

"If we go back, there has long been a hysteria among Kiwis for investing in property because they saw it as a way to make lots and lots of money. Now we're getting a slightly more realistic view."

Helm said that a lot of property investment was based on the potential capital gains rather than yield from rents. Uncertainty and increased risk because of the economic environment had stopped people being so acquisitive.

However, there had not been a flood of investment properties coming on to the market either. "If there is, it tends to be at the lower end of the market."

The Nielsen survey also showed a corresponding 42% decline in the intention of property investment owners to sell.

And there have also been predictions of a price drop of up to 5% in the next few months based on tax changes taking effect in October, the new depreciation rules and a struggling market which had flatlined in the past 9-10 months.

According to Inland Revenue, the total amount of taxable losses claimed from residential property investments in 2008 was about $2 billion, compared with about $1.5b in taxable income declared by investors who made a profit on their properties.

The trends meant the real estate market was a lot quieter.

"The property market mirrors consumer confidence and confidence in the economy, which can't find its feet at the moment," Helm said.

Tripe said New Zealanders traditionally borrowed internationally and they did not invest in anything but property, which was not a good base for the economy.

Meanwhile, New Zealand Property Investors Federation president Martin Evans says membership of his organisation, an umbrella body for about 20 property investor associations, has slowed as a result of the reluctance to invest in property.
"The bottom lines are not as good as before and interest rates are going up.

"People looking for properties as a rental proposition used to do so to realise the capital gain, but there will be no capital gain in the foreseeable future."

Evans said that at the bottom of the market some properties were being sold for less than the original purchase price, and he predicted there will be more sales in that category.

Speculation about a capital gains tax was contributing to the depressed market and landlords were reluctant to raise rents, especially those managing their own properties who knew their tenants personally.

Private sales losing their appeal

By Susie Nordqvist

Private selling may well be losing some of its lustre, as increasing numbers of people say they would turn to an agent to drive a sale in the current market.

The results feature in the latest Nielsen Real Estate Market Report for realestate.co.nz, which show just 11 per cent of people said they would definitely list their property privately, down from 17 per cent at the height of the market three years ago.

At the same time just under half (47 per cent) of those surveyed said they would definitely use a real estate agent to sell their home, up from 35 per cent three years ago.

Realestate.co.nz's Alistair Helm said the "euphoria" associated with listing a property on Trade Me and selling it the next day had gone.

"Today, three years later nearly half of the respondents are recognising that agents can be trusted in such uncertain times, with another third still unsure, but probably going to rely on an agent," Helm said.

The pendulum was continuing to swing back towards using agents as the complexity, litigation and current market, left people wondering why they would want to take on the role of "self employed agent" next to their day job, he said.

Property investment also took a big hit in the survey, with just one in seven people saying they intended buying residential property as a future investment.

This is down from one in four when the survey was conducted last year.

The survey also showed a 42 per cent fall in the intention of landlords to sell.

..................................................................................................................................................................

This trend has been echoed throughout the Palmerston North residential housing market. Private sales are at the lowest level I have seen in 18months.

Barry McKean

Listening to clients and remembering the basics are usually a guarantee for success…

by Bayleys Lower North Island residential manager Joanna Vink

Our Rookie of the Year, Barry McKean, decided to door knock an enclave of nine homes called ‘Lakemba Mews’ after a client had recently said ‘they wouldn’t mind buying there’.

He patiently endured hours of chatting and cups of tea with the elderly owners of all nine homes. It was all worthwhile when he finally got a listing out of the nine properties he visited, which he promptly sold.

The campaign and open homes were such a success that he was left with another 20 buyers who were looking for a similar property. So he re-visited ‘Lakemba Mews’ to prospect for another listing, to which he was successful, and again promptly listed and sold.

Barry is now in the process of hunting out similar properties for the large database of buyers he has assembled as a result of his first door knocking visit to ‘Lakemba Mews’.

Two listings and sales, plus an excellent qualified database of buyers was the result of a straightforward day’s door knocking – which just shows that listening carefully to your clients and getting back to basics is usually guaranteed to get you results.

Home Ownership In New Zealand

I'm often asked what is the average time period of home ownership in New Zealand and the simple answer is approx 7 years this is for both residential and lifestyle.

Of course there are those whom have built and lived in their homes for 20 years plus and those whom get itchy feet after a mere 12months and decide to sell

There is a portion of the market that turns over quite frequently, and these tend to dominate the sales in a given year.

For example, first home buyers typically do not stay in their first house for long, instead trading up after a few years. Similarly younger couples will tend to move to larger houses in family friendly areas after a few years.

These transactions will tend to dominate the sales and overwhelm the much smaller number of sales of houses that have been owned for 20 or more years.

On the Streets of London

Click on the image and see me on the the London Bus

I am scanning the globe to find buyers for our fine properties

People turn to Barry McKean Property Brokers for solutions in tough times.

You only have one shot at getting it right and top quality marketing nets results

We’re hearing that many people are now starting to find it’s taking longer to sell their property in the current housing market.

In recent times we at Property Brokers have had an influx of people turning to us for solutions when their property has been on the market for a long time and hasn’t sold.

Marketing isn't just about those big glossy adverts, although we do those too. (crisp clean and buyer friendly). Its about applying a proven strategy that is focused around proactive marketing, extracting the very best out of your house and presenting that message to the ideal audience.

Its about knowing all the features and benefits of your property . Its about identifying an ideal target market for each property we represent. Its about building invaluable trust and rapport with buyers and sellers.

The first two weeks of your campaign is absolutely critical to the eventual outcome. This is when your home is fresh to the market and all best buyers are looking at it. After this the tide goes out and inquiry falls off rapidly. We work hard over these first two weeks and this seriously pays off for our sellers.

I cringe when I see great properties come up for sale with no clear marketing structure. Near enough is never good enough and this fly by the seat of your pants approach rarely delivers a premium. After all your home is worth hundreds of thousands of dollars and it needs to be advertised representing this true value.

Advert with previous agency

                                                                   Professional Photography


Whether your property is new to the market or has been on the market previously
With the Property Brokers expertise you will stand out in the crowd and will always look fresh to the Market!

WHAT COULD WE DO FOR YOU!