Property values across New Zealand rose above their previous peak in September, but are still 12% below their 2007 highs when adjusted for inflation, state-owned valuer QV says.
Nationwide values were up 1.8% over the past three months and 5.3% over the past year to rise above the previous market peak of late 2007.
“While nationwide values have been slowly increasing for over a year now, we need to put this into context. The rate of value increase is relatively slow, currently around 5% per year compared to the 10% to 15% we saw during the mid 2000s," QV.co.nz research director Jonno Ingerson said.
“The current value increase is also being driven largely by Auckland and Canterbury. If those two areas are excluded then values across the rest of the country have only increased by around 1.5% over the past year. Furthermore, although values are now just above the 2007 peak, when adjusted for inflation they remain 12% lower," Ingerson said.
“The number of sales in the last few months is higher than in 2010 and 2011, but the years since the global financial crisis have been characterised by very low activity. There is a lack of listings in many areas, particularly Auckland, which is also likely to be constraining sales numbers," he said.
“First home buyers and investors are definitely more active in the market now than has been the case for several years. However, in general buyers are acting carefully, doing their research and not overpaying. This is despite the lack of listings, which would ordinarily mean increased competition and prices.
“Spring is usually a time when the number of listings increases as people prepare their property for sale during the warmer months. There is some evidence of this seasonal lift, but it is only slight," Ingerson said.
Read QV's regional summaries below:
Auckland
Values in the wider Auckland area have risen 2.8% over the past three months and 7.2% over the past year.
Old Auckland City continues to have the steepest increase over the past 12 months, up 8.4%, with Manukau and North Shore close behind, up 6.8% and 6.3% respectively. The increase in these areas is reflective over the past three months also, with old Auckland City rising the most, up 3.6%, and Manukau up 2.8%.
Values continue to rise well above the previous peak of 2007, with the wider Auckland area up 7.8%, another 1.2% increase on last month. Old Auckland City now sits 11.2% above peak, with the North Shore 5.9% and Manukau 4.7% above. When adjusted for inflation no area has reached the previous peak, with Old Auckland City the closest at -2.8%.
QV Operations Manager Kerry Stewart said “Growth in Auckland continues, and while the volume of listings has increased we are still seeing a shortage of suitable stock for both improved properties and vacant residential land. This is leading to limited choice for potential buyers in an already heated market. As a result, further competition for quality properties that come onto the market is likely to increase”.
“With the strong, sustained period of growth recently, and the typical expected lift over the coming months, property values are not expected to slow” said Kerry Stewart.
Hamilton and Tauranga
Values in Hamilton continue to rise, up 4.1% over the last year and 1.3% over the past three months.
QV Valuer Richard Allen said “interest from investors and first home buyers is still driving the lower end of the market, with sales volumes and enquiry from potential buyers in the upper end of the market is still steady. There has been increased demand for existing vacant sites in the east of the city causing a sharp increase in sale prices, as well as demand from developers for high density sites suitable for town house or multi-unit development.”
Tauranga remains relatively flat, although up 1.1% on last year.
QV Valuer Paul Thomas said “Local real estate agents are reporting more movement in the market. However, apartments are generating particularly low sales volumes with a large amount on the market and very little demand.”
Wellington
Although Wellington has seen slight increase in values over the past year, up 2.3%, the market has seen little movement during the past six months, not following the trend of the other main cities across the country.
QV Valuer Kerry Buckeridge said “People with homes priced around $550,000, who would typically be looking to move up the ladder to homes around the $750,000 mark, are sitting still at this stage. Some are actually choosing to renovate instead.”
“Substantially increased insurance premiums are affecting the apartment market, with some current owners rethinking whether they can afford to continue with apartment living” said Kerry Buckeridge.
“In some areas however, there are still good rental opportunities available, with some fetching a strong 7-8% yield. This is attracting some investors back to the market” said Kerry Buckeridge.
Christchurch
Christchurch values continue to rise as the rebuild gets underway and demand stays high. Over the past 12 months values have risen 6.6%, with a 1.8% rise in the last three months. Christchurch now sits 3.3% above the 2007 peak and is looking to stay strong heading towards the start of summer.
Technical Category 3 (TC3) Blue Zone properties are decreasing in value as the extent of substantial work and repairs to foundations become evident. Values of properties within this zone are approximately 3% below values seen before the earthquakes. In contrast, TC2 Yellow and TC1 Grey Zone properties, due to the lesser extent of work needing to be done, are 10-12% above pre-quake values.
QV Valuer Daryl Taggart said “typical trends seen across the previous year or so continue. Eastern areas continue to see very little interest with activity based more in the West. Selwyn and Waimakariri Districts are still considerably above values seen last year, up 12.2% and 12.9% respectively.
Dunedin
Values in Dunedin also continue to rise, now 5.1% up over the past year and 2% up over the past three months.
QV Valuer Tim Gibson said “spring has generated good demand for property in Dunedin with open homes receiving good turnouts. The lower to mid range properties are continuing to be snapped up if priced fairly and well presented. Many are also receiving multiple offers.”
Provincial centres
Like most of the main cities there is now a more widespread trend of slightly increasing values in the provincial centres, at least over the past three months. A few months ago there was more variability with some areas up, some down and others flat. The exception is Whangarei where values have dropped 1.8% in the last three months.
Over the past year values have increased between 0.8% and 2.8% in Hastings, New Plymouth, Palmerston North, Nelson, Queenstown Lakes and Invercargill, with the greater changes tending to be in the north. Rotorua, Napier and Wanganui are at about the same level as last year, while Whangarei has dropped 1.7% and Gisborne has dropped 4.6%.
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54 Comments
Back in the black....??? after the necessary adjustment for inflation, values are down 12%, sounds to me like they lost money (and thats not counting rates and maintenance etc, only if of course investment was the objective) although having said that, inflation, bank fee's and taxes have probably done the same to bank deposits over the same period.
Who's the meat? A dollar coin from 2007 is still a dollar coin today! Inflation only reduces your buying power not the value of an asset.
If a $300,000 house in 2007 is worth $300,000. Assuming it was a rented, you could only have lost money if you were heavily mortgaged - but if you were heavily mortgaged you didn't have $300,000 anyway so you certainly didn't lose money from the reduced buying power of money you didn't have!
If you lost money on cashflow AND didn't get a capital gain - it's because you bought a dud (because most property in low yielding areas has seen strong gains (like Central Auckland)).
The moral is to buy cashflow property and property in good locations.
Of course if you bought a $300k property that got 7% net returns in 2007 (without mortgage) you'd have banked $105,000 over the past 5 years - that's not a loss - much better than $300k in shares or in short-term term deposits.
Still can't sell our house! We are being stigmitised by the shonky Auckland designers and builders and their leaky homes. Our house is monolithically clad - designed by an award winning architect who is still in business, still winning awards. Built from bottom up by a very skilled builder of 30 years experience. We have received an excellent weather tightness report by a registered builder/surveyor firm who found no evidence of leaks and reported that it was designed and built to a very high standard. In ten years it has never leaked and probably won't. It has a QV of $725,000 and we are willing to reduce that substantially but can't seem to give it away. Everyone is scared shitless of the cladding. We are only selling because we are old and arthritic and can't manage the gardening anymore and need to downsize. It is the warmest house we have ever had the privilege of living in, no dampness nothing! So - because no one wants it our house is virtually worthless.
I'll warrant that we are not the only ones who are suffering from this stigma. An untold story in New Zealand, thousands of homes deemed worthless. I've had other houses - wooden, brick etc. and they have all ended up with leaks somewhere and have been damp and cold.
JUST SAYING.
You're not alone, if that's of any consolation. As a guy who has been unsuccessful in finding a way to buy into AKL without being treated like a chump, it has to be said the whole deal is a BS-ridden minefield. This starts from the peddled premise that RE never goes down, to the photos that are stretched or something to make the place bigger, to the ridiculous hyperbole in copy of adverts, to the murky auction process, along with possibility of ending up with a leaker, etc, etc.
Everybody expects me to give them their dream exit so thay go away laughing.
Anyway, I digress. You do sound genuine and there are clad homes that are OK. That you are realistic given this is why I would be interested to know more info on your place... Where, and is there a link or something?
Unfortunately I'm not in Auckland - Greytown South Wairarapa. A lovely place to live especially if you are retired. I had it listed on Trademe for a while - over 2000 hits in three weeks and 11 people watching but not one contact. Not listing it with any agents as we just keep getting the feedback about the cladding! Agree with the BS-ridden minefield. Have someone who is interested and loved the location etc but the face said it all when looking at the cladding. Anyway if they don't want it I will be putting it back on Trademe with no bullshit advertising and telling it like it is - with wording from what I have put above. If anyone wants it then, they will be getting a beautiful warm leak-free home, in a great location at a really discounted price becuase that is the only way we can see of selling it.
If we can't sell it - then we will live here till we die and our kids will have to try and get rid of it then - not a good outlook for an old couple like us! Heartbreaking actually when you save all your life etc.etc. Glad we haven't got a mortgage - feel so sorry for people in the same boat who can't sell their well-built, warm, leak-free but monolithically clad homes like ours.
As for RE values going down - oh yes they do. I'm of an age where I've been through it all before.
Greytown is a lovely place, we actually looked at buying there at one stage however the commute into Welly put us off. If there was the chance of getting a job in the Wairarapa we could have stuck it out with a long commute for a while, but there doen't seem to be much going. As far as Monolithic cladding goes, anyone who considers buying this style of house has to consider the possibility that they will probably have trouble selling it themselves eventually, regardless of how good the house is.
Agree but now that just puts another nail in the coffin - as I said our property is now considered worthless. But listening to National Radio the other day, a year old weatherboard house with cavity, not built properly, owners wanted to sell it - property inspection found a leak and it was rotting. Not just monolithically clad houses to blame. Any house that is not built properly will have problems sooner or later.
So anybody want a stunning house in a stunning location that is worthless ??? And there are hundreds if not thousands throughout New Zealand. A perfect storm is on the way if not already here folks. All because of shonky design, shonky builders and shonky council building inspectors with no education or competence. And we are now suffering. Oh well a gin is looking good right now and as I said we will just put up with the arthiritic knees and enjoy our house.
Von, the leaky building situation is appalling especially as only houses that actually leak within 10 years can get any compensation.
But if you have a house clad in plaster it's not going to be worthless unless there are numerous faults which can't be remedied and actually need fixed immediately. The sad reality though is that it is probably worth a bit less than you expected and possibly quite a bit less than a brick house of similar age (well at least until another earthquake hits the region!).
The problem with the lack of interest could be more to do with it being near the top end of the market in a small town. It's always hard to sell in specialised markets no matter how buoyant the overall market is.
If could be useful to find out how much it would cost to remediate all the leaky issues (definitely don't consider doing the work) but if you have a price for a reclad in linea or similar including refitting all the joinery and flashings then if people start offering low prices and quoting the cost of potential repairs to justify the low price, then you'll have something to go back to them with, you'll also know how much you might need to consider selling it for.
Remember that as a vendor you'll have to disclose anything you know about the house to a potential purchaser, so you if you do know of any leaky issues be careful.
I've found that if you want a property sold, it's best just to sell and move on (within reason). Rating valuations are unreliable (unless you're Gerry Brownlee - poor red zoners!) so find out what the house is genuinely worth (at least 3 appraisals by good agents who sell lots of houses (not ones just looking for listings) should tell you this), if they say a price well below what you think yours is worth they might be right, which could explain the lack of interest. But if you're concerned about their valuation consider getting a registered valuer because that should give a fair current market value.
Selling for a little less is better than spending years being anxious about not being able to be sold. Everything has a value, even if it falling over, on a liquefaction zone or a leaky home.
Thank you Chris_J all good advice which we have already had done. Yes you are right in that our house is in the top price bracket in a small town. However, our house has NO LEAKY ISSUES - its ten years old has never leaked, has no mould anywhere, is as dry as a bone! Its been checked out by a registered builder/surveyor who could find no problems in design or build.
We are fully prepared to drop the price by as much as $100,000 but can't even get people down the drive to look at it. Or if they do come their faces drop as soon as they see the cladding! So catch-22.
Thanks anyway. We'll keep enjoying living here for as long as we can if no one wants it. Its beautiful and I am not in love with my own house - everyone who comes here says so.
idlebumski ..... the standard of RE agents in AKL, esp. in this market is disgusting ..an example, an agent rang me yesterday about my property (owned 19 yrs) as he had sold the unit next door and proceeded to point out to me, in an arrogant tone, that units don't go up as much as houses with land .....WELL I NEVER .... as if I didn't know that !!
How are things working out for you in the States. I have some very good friends that moved to MD 4 months ago and have already bought a condo to rent out and an SFR to "fix n flip" ... all close to DC and the numbers REALLY stack up :) .... not like the 3.5% you get in this fine city.....
Hey Crazy; Thanks for asking. I was state-side Aug and Sept and briefly played with idea of Vegas but went off that as either you or speckles mentioned flooding and don't know the area well enough, so went back to LA drawing board again.
Somewhat irritatingly for me, I do have to admit the core LA market is not depressed like other US areas, with inventory in decent areas real tight. Realtors said because rates are so low, nobody is selling (and it seemed true), leaving it much like AKL in that regard, but still way cheaper if using the size of the economy the need for housing rests on, as a marker. Basically, the good stuff will have an offer within hours, with other stuff languishing for whatever reason.
The most likeable proposition I could find was a tidy little apartment bldg, near LAX, bringing approx 900USD/month in off each of four, with vendor wanting 520k. Despite many attempts couldn't get seller to return calls.
Also, followed the foreclosure trail a little bit and even though buying these places with occupants who may not be friendly etc has its own risks, there was a place which was interesting amongst literally thousands of others offered city-wide; A big 4 bdrm SFR on edge of LAX runway, where bidding was to begin at 267k. This place ended up selling for about 550k, which has to be about what it's worth, so no deal there.
As you can see, I like the LAX area, as it's handy for us foreigners, plus with surrounding hotels, represents a big steady employment base.
Despite some pimples I'd forgotten about on credit history, still got pre-approved for 15-yr fixed at 2.87%, which is good for 90 days, then renewable assuming nothing of negative consequence has happened during.
So I came away empty handed, for time being. However just after New Year, expect to be back with a renewed approval, hopefully for amount larger than the amount granted so far, as by then, credit pimples will be scrubbed and off my history.
With new greenshoots of manufacturing showing and an Obama-led mini-renaissance in auto-making, might take a trip across to rust belt, as the mortgage approval applies to anywhere, not just LA where it was issued/administered. For some reason (perhaps it's the snowy winters, which locals hate), I like that part of the country, specifically, Detroit, Cleveland, Buffalo, and Cincinnati, so may take a long look around on next trip.
As I understand it MD is alo very cheap and close to DC. Same goes for eastern NJ, being easy train hop away from Manhattan. So, I would say all of the US is a buy excepting NYC and better parts of LA, which do not represent fire-sale prices as much.
Some of my more tuned-in mates there reckon another leg down is coming so I felt no need to rush, or buy something just for sake of it.
Nothing much else to report, other than continued astonishment at what RE agents in AKL will try on, all with a straight face.
Howdee idlebumski ....good to hear all seems to be progressing well.
Was in Vegas in 05, so saw "first hand" the craziness of the market in it's "hey day" there...a friend of mine had a new 2 storey, 2 bedroom on a separate site, great property in the SW area off Jones Blvd (good area) ... think it was worth then about 350k ... would not want to even think what it would be worth today. I think she moved back to LA, where her mum who was apparently in her early 70's , a very successful property developer. As you said about LA ..... the market would be similar today and not affected like everywhere else !!
I think it would of been speckles who mentioned about the flooding in Vegas, as I have never heard of it ...however i know they have huge underground drains, that even homeless people use as shelter, that's how big they are ... so they would definetly get those intense summer storms. .... with flooding.
I liked the look of the 4 x 1 bdm apmt in LA ..very nice, funny how the vendor didn't return your calls? ....but as you say, they probably had quite a bit of interest .... but no reason not to call you back !!
I love the Santa Monica area and still close to LAX ... but ya pay for it !!!!
2.87% ....now thats a good rate, eat your heart out SK et al ... hoping to get someting through our friends in MD, as I am classified as a "foreign national" .... better than being called an "alien" as the US used to !! They do charge foriegn nationals a higher rate of interest, but will shop around as well.
The latest here is that we are looking in buying in MD to get started .... a SFR or a good condo. Did a trip to Phoenix last November (which sparked the US property thing off) and now found that in the space of 3-4 months since then, the market just got away on us !! ... now its an Auckland situation, where my friends, about 5 months ago made an offer (the listed price) and were "gazumped" !! ... so properties in Phoenix selling over their list price !! Have you heard similar stories re: Phoenix ?
I now believe that Phoenix went up, too much, too fast ... and I read now even the locals are not happy.....
As you said, if you get out of the very obvious areas that were really hit by the foreclosure crisis ie Phoenix, Florida, etc and head to the lesser known areas in this regard ie MD, NJ, OH VA etc you will pick up some good deals without these "market swings" .
As to " another leg down" in the US market ?? ....well that's the $64,000 question ??? Unless there is another big financial crises,I think it will be a slow, steady improvement. Just stick to the areas where there is good employment !
Cheers CH
Von did you personally engage the Architect? As a designer I am interested in that aspect. The trouble with monolithic cladding from a design principle is it runs counter to the principle of truth in construction. ie: you are making one form of construction look like another. The flaw is that timber is a living and breathing material that grows and shrinks which is clad in something rigid. Based on that I would say no monolithic cladding can ever be considered secure no matter what the quality of workmanship is like.
Yep we did engage the Architect. The thought that flaw - isn't brick something rigid!!!! And everybody and I mean everybody seems to be building brick nowadays! Because its cheap! and what happens to brick in an earthquake?
People are still building monolithic houses as well!!! I see them every day being built in Greytown - million dollar price tags!
Brick is always put directly on a concrete foundation so the movement of the timber framing doesn't have a great an effect and so no leaky homes. The mass helps as well. Yes if the bricks are thrown off but the framing is sound it is easy enough to reclad. But otherwise the truth in construction still applies. Brick is used the wrong way as it should be incorporated as a capacitive insulator for passive solar heating(& cooling if done right)
Futher Von, the architect should have anticipated your needs better. Really the design let you down because it isn't fit for purpose. I am picking from your valuation figures that the house is large in terms of square metres? Unfortunately large doesn't always mean an effective design. I am working through a great book at the moment called "The Not So Big House", which aligns with my own philosopy of effective working spaces rather than ineffective monuments.
Scarfie - our house is not big - 197sm which includes the double garage. The value is in the land which has quadrupled in 10 years due to a greedy South Wairarapa District Council! Our land is classed as rural and we sit on three quarters of an acre and we are not allowed to subdivide!
In my opinion buildings depreciate in value - they get old, they get issues - ours is NOT A LEAKY HOME, has not leaked in ten years, is as dry as a bone. Land on the other hand becos of councils wanting more rates goes up and up and up and there in lies the problem in New Zealand.
Familiar story Von, and yes houses are a liability. Your house doesn't sound overly austentatious although the value seems nuts considering the wages or salary that are likely to be available to the area.
Personally I don't see the need for an attached garage as this need can be fulfilled by a covered carport with covered access to the house. This makes the way for a far better journey and entrance as you cross the threshold from the public realm to the private. To my way of thinking an incorporated garage does not act as a satisfactory way to make this important transition, you want to really know that you have arrived home!
But therein lies the answer for you as well - ignore your RV - as you yourself have said, the land value is inflated way beyond what is reasonable.
I would perhaps set your price expectation based on what you paid for the place + agents fees/cost of sale.
I'm not sure the cladding is your problem - more likely it is the price. Median sale price in Greytown is around $300K and I'm guessing the market is either for under $200K first homes in town and then the lifestyle block market of a few acres plus in the rural zone. So, it's more a matter of your place being out of the norm for what folks are looking for in the area. Your competitive edge is price - you have to sell at a whole lot less than what it would cost to rebuild it. .
One by one, down they go. Bummer.
Any snake oil guys needing a winner? Sell gravity reduction kits to property investors in the remaining frothy markets...
Using inflation numbers to prove a point is a nonsense.
Inflation in general runs at a different speed from property prices.
Property prices got well ahead of inflation up to 2007, and in the next year or two will get well ahead again.
The two are not tied together unless you look over decades to get a true picture.
No body can say they weren't warned.
The report by info metrics might have been a bit optimistic but at least they were looking in the right direction.
Olly Newland was saying the same from 2007 and has been consistently right since then.
And this is only the beginning.
See what happens when interest rates get cut again in the next few months.
Ain't over yet folks - not by a long shot.
If the wheeler dealer over at the RBNZ decides to drop rates , to keep a greater distance between the Kiwi & the Aussie bankrate , then one suspects a new round of borrowing to buy investment properties will take off .....
..... more so if inflation perks up a tadge , and folks don't wanna be caught with too much cash in the bank .......
Ummm , so Bernard is wrong for a bit longer .... another year or three ? ...
Gummy, who knows what wil happen in the next year or three. Like me, Bernard has probably given up predicting, given that this nonsense often seems to defy logic, as do our elected idiots who have done nothing for the past 5 years - they promised they would and I believed them (and thats a "Key" reason I voted for them) and that was one reason why I didn't pick this house price recovery. Would you right off the possibility of a crash in Auckland? I certainly wouldn't. Not that I would say it will definitely happen either. I'd say there's at least a 40-50% chance though.
Reading this excellent article on California, I couldn't help but thinking of Auckland - except Auckland is worse posiitoned because it doesn't have the same strength of tertiary institutions, research and the tech sector:
Rather than migrating to other parts of NZ, Aucklanders unlike Californians move to Aus.
6 years ago in California they were saying the same things BigDaddy, SK, the bank spruikers et al are saying today - prices will keep rising because supply isn't keeping up with demand blah blah blah. but they were blind to the bubble then WHAMMMMMMM!
Time will tell, but I suspect parts of Auckland are looking like bubbles, and bubbles by their veyr definition burst. See Mary Holm's piece in the Weekend Herald
Uncle Ollie got his predictions spot on , pretty much by analysing the supply / demand balance in NZ housing . And I don't think much has changed there .
..... on a different tack , an Aussie tourism wallah was on the radio last night complaining that tourism from Kiwis to Australia has dropped off remarkebly , since Wayne Swan ramped up the departure tax significantly ...... on long haul flights ( USA / Europe ) this doesn't make much difference to the ticket price , bu he claimed that the tax can contribute 25 % extra to a Kiwi's ticket to Oz . And apparently , Kiwis are a significant chunk of the Oz tourism market .....
Unintended consequences , from an " I know best " politician , yet again ...
MORE than $20 billion worth of properties are sitting as impaired assets on banks' balance sheets, with 26 per cent of all commercial properties advertised as mortgagee-in-possession receiver sales in the September quarter, the latest LandMark White Forced Sales Monitor shows.
The impaired assets are generally properties where the owners or developers have failed to meet repayments and have been taken back by a bank.
Most of them sit in a ''bad bank'' section of a financial institution's accounts.
The director of commercial sales and investment at Knight Frank, Brett Burridge, said he was seeing consistent levels of requests for submissions and actual appointments of receivers from within the "distressed property" sector.
These came mainly from banks or mortgage funds as mortgagee in possession.
''In NSW, most of the work is in the residential development sector, approved sites and in some cases partially completed projects,'' Mr Burridge said.
Read more: http://www.smh.com.au/business/mortgagee-sales-to-remain-high-20121009-27b3k.html#ixzz28s1DykGi
There is no "bubble" while newly built houses cost more than used houses or when newly developed land costs more than existing land..
When ever land and building costs become less than existing land and buildings then we have a true "bubble" - and that's when we head for the hills.
In fact head for the hills when land and building prices are almost even or when a rush of gross and ugly "palaces" a la Hotchin reapppear .
In fact there are some small signs already. A "well known" architect has just destroyed a gracious Remuera home by adding two large extensions in corrugated aluminium tacked awkwardly onto the grand 1900's mansion.
Hopefully a vomitorium is included somewhere in this eyesore.
Anymore if these excesses and it may be time to ring the bell .
As predicted last month, the gold ounce to house price ratio has moved in favour of gold over the past month. It now takes 5 gold ounces less to buy the median priced Auckland house than it did in August, and 7 ounces less to buy a median priced house in New Zealand. See the latest graph here.
Gotta help Shearer and Norman find vote catching policies...this one should do the trick:
"The property market remains closed to foreigners and even Cubans are only permitted to own one home, to prevent speculation"
http://www.bbc.co.uk/news/world-latin-america-19755852
Come on your two...out with a promise..."we will follow the Cuban pathway to utopia...join us as we journey into a better future with jobs for all...higher wages and taxes that murder enterprise"
Wellington “Substantially increased insurance premiums are affecting the apartment market, with some current owners rethinking whether they can afford to continue with apartment living” said Kerry Buckeridge.
Most of the body corporates are in real trouble,both due to the increased insurance premium and to increased maintanence costs,some with substantive problems both with external wartertight issues,and internal failures (failed tiling showers etc) mostly in the office conversion area.
The commercial market is worse with 15000m^2 of available retail and 250000M^2 of office.
The earthquake risk problem strenghtening issues will arise following the issue today from the Royal Commission,which will cover the unreinforced masonary etc.If as signallled the property owners and council will have unlimited personal liability for death etc,the risks will increase to the investors.
In Wellington some estimates for commercial strenghtening are around 500Billion and household ,another 250Billion.Bollard suggested this will see a reconstruction industry in Wgtn at the same time as CHCH.
The delay response in landlords to mitigate the problem,will see either deleveraging,or higher costs for those who have delayed.
In Wellington some estimates for commercial strenghtening are around 500Billion and household ,another 250Billion.
Is this for real - three quarters of a trillion NZD? The leaky home saga is chump change - better start high density dairying on pontoons - or better still move to a solvent jurisdiction.
A lot of the old commercial property couldnt get insured as commercail so was "converted" to residential where it could. 10 years ago it was in full swing, I watched agog as brick built buildings were tarted up and on sold to investors and owners by shonky developers....
Now it looks like that [re-]insurance impact that also impacts Chch (hello Hugh) is coming back to haunt ppl elsewhere. I know my insurance has jumped 25% in one year....it was up 50% the year before...and my place isnt "risky".
Those owners btw have to sell to some other bigger fool than them, illiquid jumps to mind....and/or take a huge loss...
I take it that when they say council liability its for the council's own buildings and not for the ones the council inspectors signed off? If that isnt the case it looks like the repeat of the leaky home fiasco with ratepayers carrying the can....
oh dear.
regards
I have said this before... regarding Auckland..
There IS NOT an increase in the number of houses sold althu there is an increase in sales
Why?
Because the people who look at the stats are too lazy to look behind them...approx 1/3 of sales are simply resales of the same address......approx 4 to 8 weeks later... after buying low, spend 20 to 40K and resell on for another 50 to 80K.
And has anyone bothered to compare actual address solds in 2006/ 2007, and bothered to find out the condition sold back then and now? Is any increase due to "inflationary" pressures or simply added value.. new kitchen bathroom , add a bedroom and carpets/ polished floors.....
It appears that most here are simply taking these stats at face value, then manipulating them to justfy their own agendas, rather than look behind and find out actually is what is happening.
I know what is happening in areas of Auckland, and since Auckland is a big player in the country stats...if the Auckland stats where reasjusted, not just for inflation, and seasonal, but also speculrtion added valve to the stock, we would be seeing a far more accuracte situation.
But hey I dont have a degree, Im not a speculator or have big finacial interest in property, I just have a huge list of thousands of addresses, dates and sale prices going back yrs.
Steps
http://www.customresidential.co.nz/CR5072/
Yet another derelict unliveable shack went under the hammer yesterday for over $1million
Gotta be in to win!
If we have established that sellers right now are winning, then to have purchased it earlier automatically makes it a righteous decision. No dispute.
What I wanted to know is whether you bought it, or would buy something similar, now. Or was your "Gotta be in to win!" recommendation a "Do as I say, but not as I do." kinda thing?
So that we can be clear where you're coming from, Im sure you won't mind clarifying.
The new Unitary Plan is supposed to make housing more affordable by making it possible to build more.
However the draft looks like it's going to do the opposite:
Until 2004 Res 6 density was 1/350sqm (disc.) then and now it's 1/375sqm GROSS site area. Under the new plan it's loking like 1/400sqm NET (smaller than gross) site area - ow. If you have a site 1500sqm plus you can increase the density - but no one does so it's moot.
New rules = less density = higher house prices.
There is a clause allowing doubling withing existing unit - however chances that'll stay in the plan are slim.
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