Rising house values behind past peaks

By TRACY NEAL - The Nelson Mail

House values in Nelson and Tasman are on the rise, but are still lagging behind the peaks of late 2007 and early 2008, according to the latest figures from QV Valuations.

QV valuation manager Glenda Whitehead said the latest residential price movement index showed Nelson city house values were 4.6 per cent lower than they were at their peak in December 2007. Tasman district hit its peak in April 2008, and values were currently 2.2 per cent lower.

However, the region is among the country's few provincial centres to show strong improvement. New Plymouth was the standout performer in 2009 with a 7.1 per cent increase in values, followed by Palmerston North and Tasman district at 3.3 per cent, Invercargill at 3.2 per cent and Nelson at 3.1 per cent

Overall, New Zealand house values rose 2.8 per cent throughout 2009, and are now only 4.9 per cent below the peak of the market.

The latest QV residential price movement monthly report shows prices in Nelson city improved from a 1.1 per cent annual change in November last year, to 3.1 per cent a month later. The average sale price in December was $346,400.

Tasman district edged slightly above Nelson City for the same period, moving up from a 1.1 per cent annual change last November to 3.3 per cent in December. The average sale price in the district was $371,499.
Neighbouring Marlborough recorded a drop from 1 per cent growth to 0.6 per cent between November and December last year.

Whangarei and Gisborne ended the year lower than they started, while Rotorua, Hastings and Queenstown Lakes all finished the year more or less level, Ms Whitehead said.

She said residential property values in most provincial and rural areas did not increase as strongly as the main urban areas. Reports indicated that property listings in the lower performing areas were more abundant, with demand lower due to localised economic factors such as closures of local industries and subdued earnings for the rural sector dampening confidence.
"There are now signs of confidence returning to the provincial markets, with activity in more recent months showing value increases," Ms Whitehead said.

Real Estate Institute of New Zealand Nelson-Marlborough spokesman Vaughan Borcovsky said today anecdotal information from the industry supported the QV findings, but a shortage of listings remained in the region, partly because people were being cautious about selling. However, the trend was starting to ease.

Mr Borcovsky said tighter lending patterns had led to people working to a price ceiling, and vendors needing to be realistic with pricing.

Ms Whitehead said sales activity was expected to lift in the first few months of this year as owners who had held off in 2009 decide to move.

"The future continues to hold uncertainty and risk, and that risk is being priced into the market by sellers, buyers, investors and most certainly lenders," she said.

December Market Overview

The Palmerston North residential market is, in our opinion, at a healthy but not booming state at present. From a volume point of view, there are between 400 and 450 properties for sale in the city. REINZ reports that there were 118 sales in November, down from the 139 sales in October. The medium days on the market is 28 days.

Well presented and well located properties are the sort after ones. Anything needing lots of work isn’t appealing to buyers at the moment. Over-riding all of this is that buyers are particularly fussy at the moment and they are not rushing into buying just anything and if a property isn’t priced right, it will be rejected.

Sales are spread right through the price ranges, with no particular buyer group standing out over others.

Real Estate Agents Authority/ Real Estate Institute of NZ

On the 17 November 2009 we welcomed in the new Real Estate Agents Act 2008. With the new Act came the establishment of the Real Estate Agents Authority. The Authority is a Crown entity, established under the Real Estate Agents Act 2008 to provide independent oversight of the real estate industry, increase consumer protection, raise industry standards and to raise public confidence in the performance of real estate agency work. Their website is www.reaa.govt.nz.

The Real Estate Institute of NZ provides key services to members of the real estate industry- being the voice of the industry, representing the industry with the Government and the Real Estate Agents Authority, education services, and essential statistics services. It is the REINZ statistics that we have quoted in this report.

Marketing

Be positive, leave no stone unturned, market the property as a “hot seller” and you will have no reason to doubt whether you have done enough marketing to place your property in the “hot to sell” category. We are happy to discuss all options for you to make an informed decision. You need not rush this decision.

The Manawatu Property Press is the main source of activity for buyers actively looking. Any advertising must include this publication in the marketing mix.

The Manawatu Evening Standard is frequently used to source passive buyers. By this I
We mean people who are not actively looking but may casually look in the paper and see a “wow” property.

We would be delighted to assist if you require any further information.

The Spotlight is on the Suburb of Riverdale

Although Riverdale is not a council official suburb, for those whom live there and those aspiring to, it is very much a suburb in its own right.

Riverdale is made up of approx 839 residential homes and many being built in the eighties when it was the must place to live. As a result there is a diverse range of real quality homes, with still a surprising number of original owners still living in them.

Riverdale has remained an area where the owners have real pride in their properties and as you drive around the streets you can admire the well kept grounds.

We think this is one of the instant appeals, coupled with schooling, river walks, and amenities close at hand.

These properties are always in high demand, which is brilliant , making this suburb a good sound investment.

To date in 2009 there have been 55 property sales. Bayleys are very pleased with their contribution made to this total.

A recent sale at 11 Ruha Street highlighted the area interest with a staggering level of internet activity and an offer being received within 24 hours of the property press being released and sold at the asking price shortly thereafter.

Have a Happy New Year

Christmas Cheer Promotion

My Christmas Cheer to You

With Christmas now just a few days away, our attention is definitely more focused around the festive season. Retailers Christmas advertising campaigns are in full swing with what appears an endless supply of options, and if your home is anything like mine my children wanting one of everything that’s on offer.

I enjoy the Christmas period with watching the kid’s excitement during build up and then some time to relax and catch up with family and friends in the New Year.

Our local real estate market has been steady all year with good activity in all price sectors and there appears no sign of slowing down with good levels of inquiry from genuine buyers. I am certainly keen to see this continue through well into the New Year, assisting vendors to achieve a good hearty result quickly.


Christmas is a time for giving & sharing

I would like to play my part in the Christmas cheer by offering $1000 Worth of Grocery Vouchers* to those homeowners choosing to list their property exclusively with me during the months of November through to
31st January 2010. These vouchers will be redeemable upon an unconditional sale.

Your friends, family and work colleagues are also welcome to take up this offer, so feel free to pass on this good Christmas cheer.

As a dedicated professional and family man it’s a pleasure to offer this, and I welcome your support through the remainder of the year and into 2010.

Have a very Merry Christmas & Happy New Year and look forward to hearing from you soon

Warm regards

Barry McKean
Bayleys Residential Advisor
Mob: 021 372 422 Bus: o6 350 6062
Email: barry.mckean@bayleys.co.nz

Local Bagpiping Talent

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

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.

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.

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.

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