By Gareth Vaughan
The BNZ has seen a recent lift in housing market activity with the bank’s retail director now feeling “optimistic” about the outlook for house sales.
Andy Symons, who took up the role as BNZ’s retail director in August after a two and half year stint as CEO of Fly Buys operator Loyalty New Zealand, told interest.co.nz in a Double Shot interview BNZ had noticed a "pleasing" recent pick up in the housing market.
Symons’ comments come as the latest weekly Reserve Bank data for mortgage approvals shows both the value and number of mortgages approved last week hit their highest level since May. There were 5,596 mortgage approvals in the week to November 26, valued at NZ$742.9 million.
Several banks, including BNZ, have been trimming some fixed mortgage rates recently in an attempt to breathe some life into the housing market.
This comes after the latest monthly sales figures from the Real Estate Institute of New Zealand (REINZ) showed just 3,903 properties were sold in October, the lowest October total since REINZ records started in 1992. The volumes were only slightly above the all-time record low for any month of 3,666 hit in January this year and was down 36% from October a year ago. However, there was a surge of new listings and First National reported sales picked up in the second half of November as banks had loosened their lending criteria.
“On a historical basis you’d have to say there are some good interest rates out there at the moment,” Symons said. “(And) there is some good (housing) stock out there at the moment.”
“My personal view is that there are some people who are keen to sell at the moment. So I’m feeling like the pick up is an indication that people are starting to realize that there are some good lending products out there that will help them get into the home, there’s some good homes out there that they could look at, and I’m feeling optimistic about the pick up we’re seeing.”
Meanwhile, Symons said BNZ was looking closely at the country’s aging population and considering introducing a product targeted at people with their wealth tied up but wanting to maintain their quality of life. This comes after ASB announced in August it was becoming the only major New Zealand bank to offer reverse equity mortgages.
Reverse equity mortgages have been controversial in the past, particularly among borrowers concerned about putting debt back into houses they had hoped to hand on to their children or heirs unencumbered. The Auckland District Law Society issued a paper on reverse equity mortgages in December 2007. It said unless the borrower was over 70 years of age and intending to borrow only a small proportion of their equity, they should be "very circumspect" about entering into such a mortgage.
Symons said BNZ was looking at this area closely.
“We’re talking to our customers a lot about what they need from us in this area. We’re looking at the aging demographic in the New Zealand market and we’re being very careful to not simply lift and import concepts from overseas that have had varying results,” Symons said.
“We will look to bring a product to market that meets the needs of people who may have some different kind of wealth tied up elsewhere but need to maintain a quality of life.”
* This article was first published in our email for paid subscribers earlier today. See here for more details and to subscribe.
20 Comments
Yippee.
Happy days are here again.
The economy might be shrinking, people losing their jobs, government deficits ballooning, main street shops empty of tenants, retailing down,
But break out the champers!!!!! House prices are on the rise again!!!!!!!!!! And the banks want to talk to you about buying one on EEEEAAAAASY terms!!!!!!!!!!!
Why don't the politicians and the bankers see "house prices de-linked from the reality of the rest of the economy" as THE MAIN PROBLEM, like I do?
"..My personal view is that there are some people who are keen to sell at the moment.."
Can't fault him on that observation! But...
"..BNZ was looking closely at the country’s aging population and considering introducing a product targeted at people with their wealth tied up but wanting to maintain their quality of life.."
It's not about 'quality of life', Andy! .. its about trying to make old people not-sell their only asset into a glutted market, therby forcing prices down further!
He deserves the bankers silver spoon for coming out with such fabulous BS in the midst of an economy slip sliding backward and with bugger all chance of doing sod all else for about ten to twenty years.
Now if he was to start cutting back the debts owed to the bank by those who borrowed heaps in the Labour bubble to splurge on property...then I might see him in a different light. Fat chance of that.
Bankers live by the rule "the next sucker is just around the next recession" and it pretty much works for them. There will be some very optimistic people out there who are desperate to own (relative term that) their own home EVEN while Europe & America begin to fall apart. But all you have to do is talk to a NZ real estate agent or banker for 30 seconds and they will tell you "that's not a problem you need to worry about, BUY BUY BUY!" they will say.
The country is FULL of great optimists and most are RE agents and bank economists.
Ofcourse, anyone out there with even half a brain KNOWS the party is crashing and it's GLOBAL. Your best investment may soon be weapons training
Banks are being quite receptive to customers. I rang up my personal banker yesterday for depositing funds for 18 mths from a property sale. She rang head office and the answer was they (ANZ) would match any other bank rate. I said PSIS was offering 5.65% and expected a response along lines that it wasn't a real bank etc, but no, they said fine, no quibble.
It's amazing how many people out there believe that you'll only get 4-5% for large deposits and so instead you should blow the cash on rotting houses.
The same people may think nothing of negotiating and haggling for days or even weeks when it comes to property transactions, yet also believe that the bank's rate is a take it or leave it deal, even when the bank's website states that they offer 'special' rates for deposits above a certain amount.
PIs hate the idea that there are other and better things to do with money than buying houses.
No Wolly, had money in SCF and that was bad enough experience, even though was getting 10.5% and fortunately had GG.
The Man's Back, my properties are not rotting, I owe the banks nothing, there's a reasonable income flow to live off (if I wanted to) so think you are a bit shrill. I have a policy of buying counter cyclical and will buy more in about 18 months time, but it''ll be wholesale or no sale.
Good for you Muzza...I think the GG remains in force at fpf through to maybe oct 011...the banks that are going to the covered bond shite are not to be trusted...deposits could be lost in a crash.
Property is losing its halo rapidly down my way...heaps more listings since that last data report so there could be over 100 weeks of supply here.....agent said prices were down around 20%....
It's a shame the govt engineered debasement of the dollar will wipe out your 5.6% this year!
It might be worth looking at shares in a utility although they pay stuff all as well.
Malarkey, did you get out of bed the wrong side?
Weren't most banks and finance companies under a GG? or did you find somewhere to put your money that wasn't?? Check!
Never had a LAQC in my life. Check!
Massive burden on society? Have a business that employs people. Check!
Yes, as a taxpayer who pays personal tax at the top rate, we are great. Check!
So lighten up a bit and enjoy life more. It's a lovely day, I have recently broken my right hand hence a bit limited but have been reading some good books lately.
"now we see the foreign-borrowing tap being turned back on again so people can pump more cash into housing values"...BH at the Herald
I expected this turn of events...the bubbles have become the economy...Bollard has embarked on a plan to BS a way through to greater economic activity inside a revitalised property bubble and the CFR changes were spin from day one. The evidence is in the covered bond shite, games goings on.
Some time ago English got the word...."this economy belongs to the banks and we will tell you how it will be done...now move along boy"
No worries Muzza...they are bonds on terms longer than 12 months..backed by first dibs on a package of the best mortgage meat in the bank books...first dibs means deposit money comes a distant second after the taxes and other slices are chopped off should the bank fail..as did the BNZ in the 90s. .....Since the security is better, the bonds have a lower rate....so the bank can expand its margin and fatten its profits...or outcompete other banks that don't follow the same route to hot cheaper credit dreamed up by the Fed or ECB or any other thieving entity.
The point is, the banks selling this stuff will seek to lend into the residential mortgage market...to shore up their own mortgage values...to prop up their own covered bonds!
And so the whole stinking mess explains why the banks are trying to shove mortgages down the throats of the peasants.....at the very time when rates are set to shoot higher...because the money printing fraud going on can only lead to that.......ie, oil is going to $150 and you know what that signals....stay away from debt....stay very far away from smiling bankers.
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