To be successful in any business the support & encouragement from your entire family is so very important. Yet this works both ways and this weekend my son Cameron played for a local wedding in Palmerston North what a wonderful job he did. He made a Dad very proud
Please enjoy
Each week, well known real estate industry expert, Barry McKean of Property Brokers, releases his views, opinions, observations and predictions of the Palmerston North real estate market.
Friday, November 20, 2009
Thursday, November 19, 2009
Getting the engine warmed up…
By ANZ chief economist Cameron Bagrie
Confidence continues to build especially in the metropolitan centres. Weighing against this is a further lift in fixed mortgage lending rates, with the likelihood of more to come.
Mortgage rates are heading up the higher way, with the mortgage curve continuing to get steeper, and it’s not hard to see the positive slope continuing. Three to five year mortgage rates are now above their decade averages, and it would be surprising to see too many people at all going into that part of the curve. Those who fixed two years ago at 9.1 percent and one year ago at 8.2 percent who are coming up for renewal will still be looking at decent savings even at the two year part.
What is clear is that more and more people will be heading into floating and fixed short term mortgages, giving the RBNZ the kind of traction they have not had in years. How long before the current mortgage curve starts to weigh on the housing market?
Household lending growth rose 0.3 percent in the month, which is still quite soft considering the pickup in the housing market. This suggests while new lending growth for housing is rising, a lot of people are paying down their existing debt. Confidence may be picking up, but it is certainly not translating into enough of a conviction to get out and invest just yet.
House sales rose 2.7 percent in September, to be up over 43 percent a year ago. Sales have more or less held on to this level of activity over the past six months, albeit with still an upward trend. In saying this though, the number of sales is still well down from the peaks experienced between 2002 and 2007. This better illustrated once house sales are adjusted for the size of the housing stock, which shows turnover still below historical averages.
However, putting this aside, it is still clear that a shortage of listings is continuing to support prices and ensuring a reasonably quick time to sell. The REINZ median house price rose to $350,000 in the month – up 6.1 percent a year ago. The median number of days to sell held constant at a reasonably low number of 34 days. Auckland still appears to be leading the pack in terms of price growth, with the regions median selling price rising 8.3 percent compared to a year ago.
Building consent issuance is now beginning to stabilise, although at this stage the pace of recovery is nothing to right home about and we need to remember that the level remains extremely low. Never the less, we are expecting further rises over the coming months.
With the housing market turnover improving, it is not at all a surprise to see the residential consent issuance begin to rise. There has been a strong historical relationship in the past, and we see little reason to why it wouldn’t continue in the future. The rebound in housing has a course seen wholesale swap yields rise, necessitating an upward re-pricing of mortgage rates, and it looks to be a case of the chicken and the egg between the two.
Confidence continues to build especially in the metropolitan centres. Weighing against this is a further lift in fixed mortgage lending rates, with the likelihood of more to come.
Mortgage rates are heading up the higher way, with the mortgage curve continuing to get steeper, and it’s not hard to see the positive slope continuing. Three to five year mortgage rates are now above their decade averages, and it would be surprising to see too many people at all going into that part of the curve. Those who fixed two years ago at 9.1 percent and one year ago at 8.2 percent who are coming up for renewal will still be looking at decent savings even at the two year part.
What is clear is that more and more people will be heading into floating and fixed short term mortgages, giving the RBNZ the kind of traction they have not had in years. How long before the current mortgage curve starts to weigh on the housing market?
Household lending growth rose 0.3 percent in the month, which is still quite soft considering the pickup in the housing market. This suggests while new lending growth for housing is rising, a lot of people are paying down their existing debt. Confidence may be picking up, but it is certainly not translating into enough of a conviction to get out and invest just yet.
House sales rose 2.7 percent in September, to be up over 43 percent a year ago. Sales have more or less held on to this level of activity over the past six months, albeit with still an upward trend. In saying this though, the number of sales is still well down from the peaks experienced between 2002 and 2007. This better illustrated once house sales are adjusted for the size of the housing stock, which shows turnover still below historical averages.
However, putting this aside, it is still clear that a shortage of listings is continuing to support prices and ensuring a reasonably quick time to sell. The REINZ median house price rose to $350,000 in the month – up 6.1 percent a year ago. The median number of days to sell held constant at a reasonably low number of 34 days. Auckland still appears to be leading the pack in terms of price growth, with the regions median selling price rising 8.3 percent compared to a year ago.
Building consent issuance is now beginning to stabilise, although at this stage the pace of recovery is nothing to right home about and we need to remember that the level remains extremely low. Never the less, we are expecting further rises over the coming months.
With the housing market turnover improving, it is not at all a surprise to see the residential consent issuance begin to rise. There has been a strong historical relationship in the past, and we see little reason to why it wouldn’t continue in the future. The rebound in housing has a course seen wholesale swap yields rise, necessitating an upward re-pricing of mortgage rates, and it looks to be a case of the chicken and the egg between the two.
Wednesday, November 11, 2009
Residential property prices in NZ cities rise above last years values
Ray Clancy Emerging - Emerging Property Markets
A shortage of properties for sale has pushed real estate prices in many parts of New Zealand higher than they were a year ago, according to the latest published figures.
Values in the main centres have recovered since earlier this year and most are now above what they were the same time last year.
In Wellington values were up 1.6%, Christchurch saw an increase of 1.3% and Dunedin was up 4.3%. Only Hamilton and Tauranga failed to improve on last year's values, down 0.1% and 1.4% respectively.
Provincial values have faired less well. With the exception of New Plymouth, Palmerston North and Nelson, all the centres are down on last year's prices.
QV valuation manager Glenda Whitehead said a shortage of properties, especially in urban areas, had led to more buyers than available properties, meaning many sold for well above expected values.
While it is clearly a good time to sell, especially in the main centres, needing to buy again in a market which has a shortage of available properties for sale will also be putting some people off,' she explained.
She added that overall market activity remained below normal spring levels. Sales numbers had remained relatively static in the past few months, and there was little evidence of a rise in new listings in most areas.
'The continued shortage of properties, especially in the main urban areas, is leading to a continued imbalance in the market with more buyers than available properties. As a result our valuers are seeing many properties sell for well above their expected values. These demand-based price increases are likely to continue until the balance in the market changes,' Whitehead said.
Meanwhile there has been a lacklustre response to the government's shared equity pilot scheme, a free financial top up scheme for modest income earners to buy properties in more expensive locations that they might not otherwise be able to afford.
Official figures show that only $1.6 million of the allocated $18.4 million has been used so far in the programme which is due to end next July
A shortage of properties for sale has pushed real estate prices in many parts of New Zealand higher than they were a year ago, according to the latest published figures.
Values in the main centres have recovered since earlier this year and most are now above what they were the same time last year.Auckland's residential property values for October were 2.5% higher than they were a year ago, up from the -1.1% the previous month, the data from QV shows.
Provincial values have faired less well. With the exception of New Plymouth, Palmerston North and Nelson, all the centres are down on last year's prices.
QV valuation manager Glenda Whitehead said a shortage of properties, especially in urban areas, had led to more buyers than available properties, meaning many sold for well above expected values.
While it is clearly a good time to sell, especially in the main centres, needing to buy again in a market which has a shortage of available properties for sale will also be putting some people off,' she explained.
She added that overall market activity remained below normal spring levels. Sales numbers had remained relatively static in the past few months, and there was little evidence of a rise in new listings in most areas.
'The continued shortage of properties, especially in the main urban areas, is leading to a continued imbalance in the market with more buyers than available properties. As a result our valuers are seeing many properties sell for well above their expected values. These demand-based price increases are likely to continue until the balance in the market changes,' Whitehead said.
Meanwhile there has been a lacklustre response to the government's shared equity pilot scheme, a free financial top up scheme for modest income earners to buy properties in more expensive locations that they might not otherwise be able to afford.
Official figures show that only $1.6 million of the allocated $18.4 million has been used so far in the programme which is due to end next July
Thursday, October 29, 2009
Goodbye to low mortgages next year
By JAMES WEIR - BusinessDay
Floating mortgage rates could jump as soon as April next year, rising to more than 7 per cent in a few months as the Reserve Bank starts to lift official rates, according to some economists.
Others say the Reserve Bank will move "late and hard" from September next year, lifting rates fast and in big bites from 2.5 per cent to 5 per cent or more, pushing up floating rates.
With longer term lending rates already rising and forecasts for higher unemployment, house prices are expected to flatten out after their recent bounce.
The Reserve Bank held official interest rates steady yesterday at 2.5 per cent and reiterated that rates would remain low until the "second half" of 2010.
Some bank economists expected the central bank to start lifting rates by April despite market pricing earlier in the week suggesting a strong chance of a rise as soon as January.
After the Reserve Bank's statement, the kiwi dived to US71.74c yesterday, down from US75c two days earlier.
However, some economists still expect the currency to move up toward US80c over time, as the US dollar weakens further.
ANZ National said it expected the Reserve Bank would move rates from 2.5 per cent to about 5 per cent, starting from September. The Reserve Bank would wait for other central banks around the world to lift their rates first, which would be a sign of confidence about the global recovery.
ANZ National Bank chief economist Cameron Bagrie said most people were borrowing on floating rates or fixed rates of six months to a year because of the much higher cost of a longer term fixed rate.
The Reserve Bank would be comfortable with that trend because when it did finally start to lift rates, "they will get a lot of bang for their buck".
Borrowers were better off being on shorter rates, although they might be grumpy when rates rise later next year.
Mr Bagrie said financial markets had been overly optimistic about a rapid economic recovery.
The recent rebound in house prices was a "dead cat bounce" and masked weakness behind the scenes with rising unemployment and already rising fixed interest rates. House prices were likely to be flat in the next year and land prices were likely to fall.
ASB Bank said if the Reserve Bank got confirmation that the economy was recovering, rates would jump from 2.5 per cent to 4 per cent in three moves, starting in April. That was likely to push up floating rates 150 basis points, from 5.7 per cent to more than 7 per cent.
ASB Bank economist Jane Turner expected the Reserve Bank to lift rates in April, rather the second half of the year because of the pick-up in domestic demand, especially in the housing market.
"The best way to slow the housing market is to raise interest rates," she said.
RESERVE BANK'S VIEW
* Official cash rate held at 2.5 per cent until the second half of 2010.
* Inflation "comfortably within the target range over the medium term".
* Housing market has partly recovered from price falls.
* Signs of a gradual lift in household spending.
* Government spending is supporting activity.
* But business spending is weak and credit growth is low.
Floating mortgage rates could jump as soon as April next year, rising to more than 7 per cent in a few months as the Reserve Bank starts to lift official rates, according to some economists.
Others say the Reserve Bank will move "late and hard" from September next year, lifting rates fast and in big bites from 2.5 per cent to 5 per cent or more, pushing up floating rates.
With longer term lending rates already rising and forecasts for higher unemployment, house prices are expected to flatten out after their recent bounce.
The Reserve Bank held official interest rates steady yesterday at 2.5 per cent and reiterated that rates would remain low until the "second half" of 2010.
Some bank economists expected the central bank to start lifting rates by April despite market pricing earlier in the week suggesting a strong chance of a rise as soon as January.
After the Reserve Bank's statement, the kiwi dived to US71.74c yesterday, down from US75c two days earlier.
However, some economists still expect the currency to move up toward US80c over time, as the US dollar weakens further.
ANZ National said it expected the Reserve Bank would move rates from 2.5 per cent to about 5 per cent, starting from September. The Reserve Bank would wait for other central banks around the world to lift their rates first, which would be a sign of confidence about the global recovery.
ANZ National Bank chief economist Cameron Bagrie said most people were borrowing on floating rates or fixed rates of six months to a year because of the much higher cost of a longer term fixed rate.
The Reserve Bank would be comfortable with that trend because when it did finally start to lift rates, "they will get a lot of bang for their buck".
Borrowers were better off being on shorter rates, although they might be grumpy when rates rise later next year.
Mr Bagrie said financial markets had been overly optimistic about a rapid economic recovery.
The recent rebound in house prices was a "dead cat bounce" and masked weakness behind the scenes with rising unemployment and already rising fixed interest rates. House prices were likely to be flat in the next year and land prices were likely to fall.
ASB Bank said if the Reserve Bank got confirmation that the economy was recovering, rates would jump from 2.5 per cent to 4 per cent in three moves, starting in April. That was likely to push up floating rates 150 basis points, from 5.7 per cent to more than 7 per cent.
ASB Bank economist Jane Turner expected the Reserve Bank to lift rates in April, rather the second half of the year because of the pick-up in domestic demand, especially in the housing market.
"The best way to slow the housing market is to raise interest rates," she said.
RESERVE BANK'S VIEW
* Official cash rate held at 2.5 per cent until the second half of 2010.
* Inflation "comfortably within the target range over the medium term".
* Housing market has partly recovered from price falls.
* Signs of a gradual lift in household spending.
* Government spending is supporting activity.
* But business spending is weak and credit growth is low.
Tuesday, October 6, 2009
Homes Sell Themselves
Every day I hear from vendors that homes sell themselves. You walk through the front door get the warm fuzzy feeling tingling up your spline and you just know this is the one.
And yes it does happen from time to time like this but believe me its not that straight forward. The home may have sold itself but it hasn't yet achieve that premium price yet.
A professional agent will thrive in this arena, with a prospective purchaser buying on emotion rather their head. So now its not just about making the sale but about how much of a premium can be achieved exceeding a vendors expectation.
However there are those other homes for some unknown reason that don't present their features & benefits quite so well to potential purchasers and this is where good agents have the skill & ability to expose them to a broad audience.
The August median time period to sell in Palmerston North was just 20 Days and demand for good real estate continues to increase.
Good agents are an investment in all markets and will always achieve a premium in that given market.
Barry McKean
Tuesday, September 15, 2009
Spending up in Palmerston North, but down in Manawatu District
By GRANT MILLER - The Manawatu Standard
Spending in Palmerston North is up, but down in Manawatu District after a dairy payout drop.
Core retail spending in the city was up 5.5 per cent in the July quarter against the same quarter last year.
In the Manawatu District, it was down 7.1 per cent after low international prices and the exchange rate pushed dairy company Fonterra to forecast a reduced payout ahead of this season of $4.55 per kilo of milksolids.
The spending difference is also marked in the total spending measure, which includes motor vehicle sales and servicing, according to statistics supplied by Palmerston North City Council.
Total retail sales in Palmerston North were up 0.5 per cent in the quarter, compared with the same period last year, but down 13.1 per cent in Manawatu District.
Total spending in the city and district was $475.9 million in the quarter, down 1.3 per cent on last year.
The most recent figures for Palmerston North show buyers are picking up properties quicker. The median number of days to sell a property dropped below 50 in the three months to April, falling to just 26.
However, the number of sales fell from 425 in the May quarter to 380 in the August quarter, according to the Real Estate Institute.
City council economist Peter Crawford said house sales volumes had been slowing since a burst of activity in March and May. The market could be constrained by lack of supply.
According to the Real Estate Institute, the median price for a farm in the Manawatu and Wanganui region in the August quarter was $1.275 million down from $1.86 million.
The median price for a lifestyle block in the region dropped from $345,000 to $330,000.
However, farm and lifestyle block prices appeared to have increased in the past month.
Median prices in the August quarter were higher than for the three months to July this year.
Motor vehicle-related spending in the city and district was down 11.7 per cent.
More guests were staying longer in Palmerston North commercial accommodation, but there was a decline in Manawatu District.
Is the first offer the best?
Often we hear the first bite of the cherry is the best, and this can be true on many occasions. However reading the market and taking advice from your trusted agent is crucial.
At present the Palmerston North Real Estate Market is really humming along in all price sectors so being hasty may not be the best strategy.
Exposing your property to a good solid and well prepared marketing campaign could mean the difference to thousands of extra dollars in your pocket. With a little patience allowing time for all prospective buyers both passive and active to be view your home will create competition should there be multiple interest.
The extra time with the marketing of your property exposing it to these passive buyers will pay off - these are the people who are not in market to purchase but fall in love with it at an open home and just have to have it - Generally they pay the most.
Marketing is like fishing with a net, the bigger the net the more fish you catch.
My advice is to at a minimum have a least one open home before accepting offer.
Barry McKean
Bayleys Residential Specialist
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