[Bubbles]

House prices rise, but sales fall

20.01.05 2.15pm


UPDATE - House sales slipped but the median price remained stable at $260,000 in December, the Real Estate Institute of New Zealand (Reinz) said today.

There were 8377 houses sold in December, down from 9502 in November and 8703 in December 2003, Reinz said.

The institute's national president Howard Morley said the real estate market continued to show strength, particularly because the median sales price for the month of December had risen 13.53 per cent to $260,000 from the same month in 2003.

"Since December 2001, the median sales price for residential property has increased $82,000 or 46 per cent, making residential real estate one of the better performing New Zealand investments over that period," Mr Morley said in a statement.

The median time it took to sell a house in December was 29 days, against 30 days in November and 23 in December 2003.

Six regions recorded an increase in median sales prices while prices decreased in the other five regions, he said.

The median house price in Auckland was $352,000, down $2000 from November. In Wellington houses prices fell $5575 to $276,250 over the same period.

The regional changes in median house prices were:
Northland $221,500 (up $7500 from November)
Waikato/Bay of Plenty/Gisborne $232,000 (up $2000)
Manawatu/Wanganui $150,000 (up $1000)
Taranaki $186,000 (up $19,500)
Canterbury/Westland $231,000 (up $6000)
Otago $200,000 (up $7000)
Hawke's Bay $225,000 (down $11,750)
Nelson/ Marlborough $265,000 (down $20,000)
Southland $138,000 (down $4000).

- NZPA

[Timbo]

National News

>> Home >> National News


Dream of own home becoming nightmare

28.01.05
by Anne Gibson


Soaring house prices and mortgage interest rate rises are killing the dream of home ownership for many New Zealanders.

AMP's quarterly home affordability index released today showed its steepest annual decline since the height of the last property boom in 1996.

The heated property market is leaving many would-be homeowners long-term renters, prompting the Real Estate Institute to urge the Government to step in and help.

AMP general manager Roger Perry said young buyers were being forced out of the market by inadequate wages which had failed to keep pace with rising house prices and mortgage costs.

Interest rates rose six times last year but are picked to be relatively stable this year. The official cash rate was left unchanged yesterday.

That, coupled with a 46 per cent house price increase between 2001 and 2004, has meant owning a home is now beyond the reach of many.

The AMP index tracks house prices, wages and mortgage costs to come up with a measure showing how affordable houses are.

It showed a 15.1 per cent decline in the last 12 months and has been dropping each quarter for more than two years. In other words, houses are becoming less affordable.

Westpac chief economist Brendan O'Donovan said buying a house was getting harder because wages were so far behind and prices were going up so fast.

The median national house purchase price of $260,000 was now six-and-a-half times the gross annual average wage of $45,000.

"If people spent none of their take-home pay, they could pay off a house within those six-and-a-half years," he said.

"People can't just stop eating and living and spend all their money on paying off the house."

The differential between house prices and wages was at record levels.

Mr O'Donovan said interest rates were being picked to hold firm in the last half of this year, which is some comfort to borrowers.

In the 1980s, house prices were roughly three times the average annual wage.

This climbed in the 1990s to four times the average.

Mr O'Donovan said houses which cost $178,000 in December 2001 were now worth $260,000, a 46 per cent rise in three years.

In 2004, the national median sales price rose 13.5 per cent.

Prices have recovered since averages dipped at the end of last year, stifling pessimistic predictions. Real Estate Institute president Howard Morley said declining affordability was an extremely worrying trend and one which his organisation had urged the Government to change.

"The Government needs to help first home buyers into homes and they have promised to do that but we don't know what form it will take. It doesn't matter how it happens, as long as there is a genuine benefit."

Harcourts chief executive Bryan Thomson said that this month was one of his firm's best, with agents from the rural/lifestyle divisions selling properties worth $47.4 million in the first two weeks alone

[jo b]

mmm

I want house prices to drop like a stone :nice1

I know there's lots of economy issues around this but even if they dropped 5 % would be a start.

Jo

[ateal]

"The median national house purchase price of $260,000 was now six-and-a-half times the gross annual average wage of $45,000".

That's an interesting statistic, isn't that the current ratio for the UK, i.e. the average cost of a house equals 6.5 times the average salary.

[foolsgold99]

I'm not too bothered about houser prices dropping, it's the value of the new zealand dollar that I want to see drop. 2.6 to the pound is going to kill my plans for a north shore mansion

[Wannaway]

I am generally feeling more positive that house prices will stabilise and maybe even drop back, certainly in Auckland. A few days after the headline story on house prices appeaed in the Herald, a letter from a reader appeared asking why, if house prices and sales were still surging ahead, were we seeing the same houses in all the property papers week after week, more and more house with at least indicative house prices, more people are coming out of (low) fixed rates) and a reduction in building consents. All factors hich point to a slowing demand. Estate agents are also putting a lot of effort into talking up the market - I bet they sniff a market on the trun! I'll stick my neck out and say it will be a buyers market before the end of this year.

As for the kiwi dollar, it is beginning to become a big concern for the business community over here. Exporters have been protected because of the high prices of commodities, but they show signs of weakening. Also, foreign exchange cover positions taken out by businesses over the last year or two will mature this year, leaving them exposed (particularly on the USD cross). I doubt we will see $3 to GBP1, but I am hopeful it could get to 2.85 or even 2.90 by the end of the year.

Keep wishin' and hopin'!

Lee

[Bubbles]

"Keep wishin' and hopin'!"



I second that emotion

[Timbo]

Easing of house prices


Auckland suffers house price fall of 1.8%, Nelson drops 3.1% but national average up 13% - Quotable Value survey



14 February 2005

House prices have fallen in central Auckland and Nelson in a survey by Quotable Value.

The average value nationwide is up more than 13 percent for the year to the end of January, however prices fell 1.8 percent in central Auckland and 3.1 percent in Nelson.

In Auckland, the slowdown related to properties in the central city only and the suburbs were experiencing modest growth.

Quotable Value says two other regions previously thought of as property hotspots, Tasman and Queenstown Lakes, have shown little growth.

[Bubbles]

Lookin' good.

Well, for me, anyway :nice1

[Timbo]

Houses taking longer to sell


38 days to sell a property with four of 11 regions seeing median price fall but national median price up $5,000 to $265,000



21 February 2005

It is taking longer to sell a house and prices have fallen in some regions.

January figures released by the Real Estate Institute show that while the national median price is up $5,000 to $265,000, there has been a significant reduction in sales.

The length of time it takes to sell a property has gone from 29 days in December to 38 days last month.

Turnover in sales was down to 7,078 in January compared with 8,404 in January 2004. Four of 11 regions saw the local median price fall.

In Auckland, the metropolitan median price dropped from $355,000 to $340,000 due to increased sales of small apartments and lower sales of highly-priced properties.

The Real Estate Institute says there is evidence of a shortage of listings, coupled with sellers showing what it terms a degree of determination on price.

[Diny]

The length of time it takes to sell a property has gone from 29 days in December to 38 days last month.


Oh half their luck !!!!!!!!!http://tcwozere.co.uk/smileys/ac39.gif

[Moorf]

As many of you know, Woz and I have had ups and downs (mainly downs to date) with the purchase of a property in NZ. We initially looked in all the places we had dreamed of back in the UK. Emotions took over from financial savvy and we threw ourselves into finding the "dream house" in places like Diamond Harbour.

Our house in Diamond Harbour fell through so we took a step back and thought long and hard about what to do next.

The areas we aspired to live in - Sumner, Redcliffs, Mt Pleasant (all seaside areas with hills and views) - are just too expensive - we could afford it if we wanted a big mortgage but that isn't what we want for our life in NZ.

So - how to make our money go further in terms of house and garden size, plus which areas would be seeing the biggest rises in property prices over the next few years...

We decided on the Brighton area. Long has it had a reputation for being a tatty, run-down area with a terrible shopping area - and it certainly lives up to that reputation. It also has the cheapest Pacific coast property prices in the world (as Kiwi mentioned in another post, anywhere else in the world where it takes just 5 mins to a beach like Brighton's would be the reserve of millionnaires.).

Investigation into the area has shown that development is on the way and big investors have moved in and bought up most of the coastal houses (they are being rented out and are tatty and rundown). South Shore is fast becoming "the" place to buy and has the highest rise in property prices in Chch. Younger couples and families are slowly moving in to the Brighton area and doing up houses that have been left to rot for years by an ageing community.

What I am trying to say here is that, to get as much from your investment in property as possible in NZ, don't always go for the "already popular" areas - check out those areas that are yet to be "discovered" - and think of all the immigrants coming in who will see the areas for what they are and not have the baggage of "reputation" to put them off.

Having spoken with several property developers over the last few weeks it is obvious that Brighton does have the potential to be the place to be... maybe not today, maybe not tommorrow.. but in years to come when the others areas of Chch are crowded out and the hills can't take any more development.

A couple of interesting links...

http://www.listener.co.nz/printable,3095.sm

http://www.ccc.govt.nz/NewBrighton/ (the master plan was developed back in 2002 and after a conversation with the co-ordinator work starts end of Winter 2005 as expressions of interest for investors ended Sept 2004).

We should complete on our Brighton property tomorrow :hopeso but I thought that this little insight might make others think differently about what and where to buy here in NZ.... although this post does only concern my info and research about Brighton I do feel it would be relevant elsewhere.

And for those who said, when our property fell through in D.Harbour, that it wasn't meant to be? How bloomin' right you were... :nice1 The house we are currently buying went on the market the day our other one fell through! Spooky huh!

Moorf

[kiwi]

and she will be my neighbour!

We have been here 10 yrs and love it...the only snag is no decent high school (although my son is thriving at Aranui...immigrant children would find it tough)

There was land at parklands for a high school, but the government sold it off a few years back (shame, cos now there is north shore and tumara park, forest park etc that would really benefit from a decent high school and werent around when the land got sold)

2 aunts and a cousin live in southshore...my dad recons it is dissappearing as there is water both sides, his sister (my aunt) thinks he is talking out his.....

[Rob K]

I can only agree with Moorf regarding the New Brighton area. We are currently renting a house in the Southshore area and New Brighton is where all the amenities are.

I think that the New Brighton Mall area is actually very pleasant and is a well thought-out development. Instead of a huge building where you see endless franchises, you can stroll in a pedestrian-only avenue lined up with a mix of unique stores and yes, the unavoidable franchises. The parking area is on the other side of the mall. You can then cross the street and you have a great library overlooking the ocean (great views from your armchair inside!). You can go for a walk on the pier. There is also a playground nearby with a wading pool and a few steps further, the beach.

Granted, it is a bit run-down but that will change. We are really enjoying it.

Hope that helps some of you who are still looking for an affordable area that is also kid-friendly. I don't know much about schools but the South Brighton school seems nice. Maybe somebody can shed more light on the subject of schools.

Sandrine

[Moorf]

Yep Kiwi - that is a down side (the schools, not you being a neighbour), although with no kids its not a prob for us and I hear the primary is good...

With regards to water creeping in on South Shore - I think that the liquefaction concerns are more the area to watch - affecting more than just the shores due to the type of soil that Chch is built on :eek But if you were to worry about that then you'd probably be better off buying elsewhere as many areas in NZ have their own problems like earthquakes (Welly) and sitting on thin layers of land above cauldrons of lava (Auckland). :eek