South city to come alive

23rd April 2013

Source: The Southland Times

The South Alive project to rejuvenate South Invercargill has been given approval for stage two of improvements, including "greening up" and adding colour and vibrancy to the area.

South Alive project co-ordinator Janette Malcolm said there had been complaints about the south city shopping area for a long time, prompting the group to gather members of the community to brainstorm ideas for sprucing it up. The public wanted to add more colour and vibrancy to the "grey area", art, and a place to hang out, she said.

"People wanted everything from casual sitting-around space to more formal spaces for meetings," she said.

South Alive planned to install more seating areas, small pieces of art and trees in Martin St and "green up" Elles Rd with trees and shrubs, Ms Malcolm said.

There was also an opportunity for a large art sculpture in the median strip of Elles Rd near New World, she said.

Stage two, which includes detailed design, will begin next month for Martin St and Elles Rd.

Stage three would later begin if the funding, which was in the Invercargill City Council's draft annual plan 2013/14, was approved. Stage three includes constructing the finally agreed design.

Meanwhile, a family-friendly park with a half basketball court and stage is under construction behind the South City Mall.

Ms Malcolm said the park would include 18 multi-coloured garden boxes for a community vegetable garden and a grass mound for children, with plans to upgrade fencing and install night lighting.

The park was expected to be complete within six weeks, with the exception of the grass area.

Another South Alive project, Operation Zero Rubbish, has been deemed a success. A day was held last year when volunteers "adopted" south Invercargill streets and collected bags of rubbish.

The volunteers, including 250 to 300 residents, had maintained their streets since and the areas were looking tidier, Ms Malcolm said. The initiative was a way for people to be a part of the project in their own time, she said.

Central bank forecast to stick with 2.5pc rate

22nd April 2013

Source: Stuff Business Day

The Reserve Bank will sit on the fence and hold interest rates at 2.5 per cent this week, caught between a high New Zealand dollar and a strong housing market, economists say.

The one-page April review of official interest rates is due out on Wednesday, a day earlier than usual because of the Anzac Day holiday on Thursday.

The central bank is expected to hold rates this week and indicate that they would remain on hold till the end of the year, with inflation benign at less than 1 per cent in the past year and a widespread drought denting economic growth.

ASB Bank economists expected official interest rates to remain on hold till March 2014.

The currency was about US84.5c on Friday, not far off a recent peak above US86.7c. The exchange rate is about 4 per cent higher than the Reserve Bank assumed in March.

House prices are up about 8 per cent in the past year, driven by hot markets in Auckland and Christchurch.

But at the same time, official inflation remains extremely low, at 0.9 per cent up for the year to March and is expected to remain below 1 per cent, the bottom of the Reserve Bank's target band, for the rest of the year.

The overvalued dollar is holding down import prices, but also making life tougher for exports. A higher dollar suggests the Reserve Bank will hold interest rates lower for longer, even though the lowest mortgage rates in 50 years are boosting the housing market.

The tension between the high currency and a stronger housing market has become worse since March.

While the Reserve Bank has held official interest rates at 2.5 per cent for two years, Westpac Bank chief economist Dominick Stephens said the central bank now seemed to be "sitting on the fence" and that was becoming uncomfortable.

On one side, the Canterbury rebuild and rising house prices were producing rapid growth, which could see inflation rise.

On the other side, inflation was being kept down because of the high dollar, and the currency could rise even more.

In the March Monetary Policy Statement, the Reserve Bank said if the currency stayed high, official interest rates could be cut.

But the Reserve Bank has also recently said if the housing market stayed strong and provoked higher consumer spending, official rates could go up sooner.

"The central bank faces two diametrically opposed risks," Stephens said.

The economic picture is looking rosier, with growth in the December quarter better than expected at 1.5 per cent and business confidence is healthy.

At the same time the farm sector has been hit by drought, which could wipe up to $2 billion off the economy, though a huge leap in world dairy prices, up 50 per cent in two months, will help offset the loss in milk production.

The overall drought impact will dent but not crush growth this year, knocking from 0.5 to 1 per cent off GDP, though it is likely to be toward the bottom of that range.

Fund boost aims to draw more tourists, more spending

22nd April 2013

Source: Stuff Business Day

Prime Minister John Key gave a breakdown yesterday as to how a $158 million tourism budget boost would be spent.

Mr Key, who is also tourism minister, was speaking in Auckland at the start of the TRENZ tourism conference. He said the investment was key to capitalising on New Zealand's tourism potential.

"Over the past decade, visitor numbers have been increasing but spend per visitor has fallen," he said. "As well as attracting more visitors to New Zealand, we need to attract people who spend more. We will be targeting business travellers and high-spending luxury travellers."

The investment already bode well for Queenstown, Mr Key said.

"New convention centres in Christchurch and Queenstown, and the proposed New Zealand International Conference Centre in Auckland, will allow New Zealand to host more, and significantly larger, conferences."

Praise for the massive spending commitment soon rolled in from key tourism industry players.

Tourism New Zealand chief executive officer Kevin Bowler said that the funding would bolster key areas of Tourism NZ's business.

"By delivering in these areas, the focus is firmly on generating value for the industry now but also . . . for the future. We now have sufficient funding to establish a significant presence in the emerging markets of India, Indonesia and Latin America, where effort and investment is required now to capture future growth and secure a strong future position for the New Zealand tourism industry."

Air New Zealand chief executive officer Christopher Luxon welcomed the spend.

"New Zealand faces increasing competition from the rest of the world for tourists. We need to continue to invest to ensure we do not fall behind, but we also need to recognise the new opportunities from strongly growing economies."

TRENZ, New Zealand's biggest tourism conference, is where Kiwi travel industry suppliers get the opportunity to network with almost 300 influential travel buyers from throughout the world.

Destination Queenstown chief executive officer Graham Budd told The Southland Times last week that the massive tourism spending boost would very likely have great spinoffs for Queenstown, because it was one of New Zealand's premium tourist destinations, and was well prepared to handle growth in visitor numbers.

Canterbury house build costs skyrocket

18th April 2013

Source: Stuff.co.nz

The price of a new house in Canterbury is up 12.2 per cent on a year ago.

New-house price increases in the region are well ahead of the rest of the country, data from Statistics New Zealand, released yesterday, shows.

The price of a new house, excluding land, rose 1.2 per cent in Auckland in the March quarter this year compared with a year ago, and 1.4 per cent in the North Island.

In Canterbury, a new house is 12.2 per cent pricier in the March quarter 2013 than the same quarter a year ago.

As part of the Consumer Price Index, Statistics NZ surveys building companies and asks them to provide the price of a standard new house on a section supplied by the client. They also ask about any changes to materials.

Statistics NZ spokesman Chris Pike said it did not include the extra costs of materials that improved the quality of the building in its calculations of price increases because it was comparing like for like.

So the 12.2 per cent increase in Canterbury did not factor in the higher prices of engineered foundations post-quake..

Simon Davis, sales and marketing manager for Christchurch home builder Horncastle Homes, said materials and labour costs had been rising.

There was substantially more site-specific work and paperwork involved for consents to build houses in Canterbury.

"The other thing it is probably reflecting is there's a lot of extra compliance costs and that's adding a significant amount to a new home."

He said the price of some materials had almost doubled, but did not want to reveal which materials because he said suppliers would be unhappy.

When asked whether the building company was taking a bigger profit, Davis said: "No, if anything from our point of view we've actually had to reduce our margins because we know there is only a certain price that we can get on a certain home in a certain development."

The company was selling houses off plans for a year out so the price increases were affecting its margins.

"This is a bubble.What goes up, will come back."

He suspected that if new-house prices rose too much, they might become unaffordable for some.

"We've already got people saying it's starting to get out of our reach."

Horncastle Homes also has a business in Auckland.

"It's probably cheaper to build in Auckland now than it is in Christchurch. Obviously it's the earthquakes and supply and demand. There's so much work here. Trying to get people in any industry at the moment is very, very difficult."

Students big boost for region

15th April 2013

Source: The Southland Times

Overseas students bring more than $20 million into the Southland economy each year and that figure is set to increase, Venture Southland says.

In 2012, there were 864 fee-paying students in Southland from overseas, up from 449 in 2009.

Venture Southland communications manager Phil McCarthy said $20m was a conservative estimate. The figure was calculated from a Business and Economic Research Ltd report on the economic impact of the Southern Institute of Technology and a compilation of the costs of fee-paying high school students.

It included the impact of school and tertiary students on the economy through their direct and indirect spending.

Direct spending included school or course fees, accommodation costs and personal spending by students. Indirect spending covered items including money brought in by families visiting students, he said.

Southland Chamber of Commerce chief executive Richard Hay said attracting fee-paying students to the region had a significant economic impact on Southland outside of spending.

While overseas students were an industry on their own, they helped advertise tourism and build trade and business links with other countries, he said.

Students who stayed on in the region, or found work while they studied, added a new dimension to businesses in Southland, as they brought new ways of thinking or doing things, he said.

Venture Southland tourism events and community group manager Rex Capil said the contribution made by fee-paying students was not just financial.

Overseas students brought diversity and a broader world view into Southland, a region that was isolated and had a relatively uniform society, he said.

"We have a responsibility to our young people to ensure that they get exposure to [other cultures] because normally they don't . . . we don't have exposure to the multicultural, multi-ethnicity experience that other parts of New Zealand do."

Overseas families were often attracted to Southland for education because it offered total immersion, unlike larger centres, where there was often a significant international population, Mr Capil said.

Seven schools in the region are involved in the Education Southland initiative, established by Venture Southland, which works to promote Southland to overseas school students.

Fiordland College principal Lynlee Smith said being part of the initiative allowed the college to attract more fee-paying students.

Without the power of the group, the school could not afford to advertise on the same scale overseas, Ms Smith said.

Although many tourists stopped off in Te Anau, bringing overseas students into the school helped Southland students form connections with the wider world, she said.

"Often the students don't get the opportunity to make a close relationship [with tourists]. It's about establishing relationships," she said. The school now has nine overseas students, from Thailand and Germany.

Waihopai School, the only primary school in the initiative, has 13 Thai pupils studying on the campus this year.

Principal Allan Mitchell said having overseas pupils in the classroom taught Southlanders to think about the world from a young age.

South Alive makes more plans to rally community

15th April 2013

Source: The Southland Times

South Invercargill residents gathered yesterday to celebrate the success of the community group South Alive and to plan further efforts to rejuvenate the area.

The South Alive community planning event - Touch Pause and Engage - examined last year's projects and prioritised projects for the coming year.

South Alive project co-ordinator Janette Malcolm said it was the biggest event on the South Alive calendar because it was the day the community got to have their say.

The community discussed about 15 ideas for new projects such as a youth park and a "super gran" workshop, where grandmothers would share their skills with younger generations.

There were also plans to plant more trees and flower gardens, she said.

Bank of Ideas director Peter Kenyon attended the inaugural meeting last year and spoke to the community again yesterday.

Mr Kenyon, from Western Australia, has travelled to 53 countries in the past 20 years, encouraging people to find ways to stimulate their communities and economies.

He said he was impressed by the progress of the projects planned last year.

South Alive took great pride in Invercargill and had a real determination to make things happen, he said. It was one of the best examples of a group that engaged with its community and he had cited it during his world lectures.

"This group really got back to basics and have done so much for South Invercargill . . . it really is a vibrant, diverse community that takes the lead in its future."

Former Southland rugby player Hoani MacDonald, a South Invercargill resident, was on hand with Invercargill Mayor Tim Shadbolt to award prizes to members of the community.

"It's great what South Alive are doing to rejuvenate the area," he said. "They are doing a great job of letting people know it's a nice place to live."

Invercargill City councillor Neil Boniface praised the group for its efforts so far.

"South Alive is on a roll, but it has to keep the momentum going," he said.

House prices continue to rise: QV

11th April 2013

Source: Stuff Business Day

Nationwide residential house values rose further in March - up 3.3 per cent above the previous market peak of late 2007, according to the latest Quotable Value figures. 

House prices have increased 1.3 per cent over the past three months and 6.5 per cent over the past year nationally.

However, QV research director Jonno Ingerson says the increases in house prices have slowed in the main centres of Auckland, Hamilton, Christchurch and Dunedin in the past two months due to tight supply, but the slow down did not yet signal a wider trend.

"The number of properties on the market remains limited, particularly in Auckland," says Ingerson. 

"This has constrained the number of sales at a time when buyers have generally shown more confidence and have been keen to purchase."

QV says values across Auckland are still increasing - now up 11 per cent over the past year with the North Shore seeing the greatest increase at 11.6 per cent.

But  QV operations manager Kerry Stewart said a lack of listings had worsened over the past month as people started to hold onto their properties, especially in the wake of the release of the draft unitary plan. 

"Many buyers are also starting to feel that house prices are unreasonable and are waiting it out to see if houses become more affordable."

Values in Wellington continued their upward rise since November, after being relatively steady for most of 2012, to be up 2.1 per cent on the same time last year.

QV valuer Pieter Geill said the Wellington market had been "relatively unpredictable".

"Houses priced too high, or perceived as quirky or in need of renovation, appear to be putting younger buyers off.

"Houses around the $300,000 mark are selling quickly in the Hutt Valley, with many buyers tapping into the KiwiSaver first home deposit subsidy, which in the Hutt Valley is capped at house and land packages valued at $300,000." 

Christchurch values remain significantly above last year - up 7.8 per cent - with outlying areas such as Waimakariri and Selwyn continuing to hold their value despite a slower increase in value in recent months.
 
QV valuer Daryl Taggart said the Christchurch market was still "quite strategic with vendors not wanting too show their hand too much if they can help it".

"The outlying areas appear to be not selling like they used to but could see slight lifts again in the future."

Dunedin has seen a 1.7 per cent increase over the past three months, leaving it 4.4 per cent up on last year.

Further north, Hamilton values have grown slightly with a 1.3 per cent change over the past three months and are sitting at 4.6 per cent up on last year.

Tauranga continues to fluctuate, although within a narrow range, and is 0.8 per cent up over the past quarter and only 0.3 per cent up on this time last year.

Decision time: Fixed or floating?

9th April 2013

Source: The Southland Times

OPINION: With more than 36 lenders offering home loans in New Zealand there is no shortage of choice. But what are the advantages and disadvantages of fixed and floating interest rates, and what other costs come with home ownership?

Mortgages

Fixed or floating? This is a perennial question as the interest rate environment is hardly stable. There is no one-size-fits-all either, so your particular situation needs to be well explained and understood by whoever is giving you advice on this decision.

Floating

Advantages: You can repay some of or the entire principal without penalty. If rates should drop your interest rate will too.

Disadvantages: If rates go up your cost will rise as well. If the increase is significant, this could put your budget at risk. It is generally expected that rates will start rising sometime around September 2013 (although some are picking early 2014).

Fixed for one year

Advantages: This interest rate is currently below the average variable (floating) home loan rate offered by lenders.

Disadvantages: If interest rates rise further than expected, then you will go on to a higher rate when you come off the fixed term next year. Break fees will be charged if you repay money early.

Two years

The two-year fixed rate would suit those who prefer interest rate certainty in the near-term, but are willing to take the risk that interest rates will return to lower levels or stay flat during the next 24 months.

Advantages: This is also currently lower than the average variable home loan rate.

Disadvantages: Anyone fixing for this long misses the lower rates if they fall over the next six to 12 months. As with any fixed term loan, break fees will be charged if you repay early and you risk going on to a higher rate at the end of the term.

Three years

A three-year fixed rate would suit those who foresee interest rates returning to higher levels within the next few years but either prefer less risk or foresee a stable inflation outlook.

Advantages: The three-year fixed rate offers the advantage of providing interest rate surety for longer.

Disadvantages: There is a possibility of a missed opportunity if global and local inflation pressures ease and cause rates to fall within the next three years.

Five years

A five-year fixed rate would suit those who strongly prefer interest rate certainty or have fixed income that would restrict their ability to cover repayment increases if interest rates rise.

Advantages: Surety for the next five years. Any rate below 6.5 per cent is well under the historical five-year moving average.

Disadvantages: This is usually the highest of the fixed-tern interest rates advertised.

Other costs

What additional costs are there in owning your own home?

Welcome to home ownership and the additional costs that are now your responsibility.

Of course you are no longer paying rent. Instead you will have regular loan repayments, which figure prominently in most people's budgets.

Other costs are house insurance, increased contents insurance, local government rates, and the hard to quantify but very real property maintenance. In some areas you may also have to pay water rates.

During the years we have seen the majority of our clients benefit from property ownership. It is generally accepted that the sooner you get on the property ownership escalator, the better.

We are confident that those who buy now will be bragging at the price they had paid within five years, and certainly well within 10 years.

Tiwai Pt closure unlikely - analysts

9th April 2013

Source: The Southland Times

Energy sector experts are downplaying a possible Tiwai Pt aluminium smelter closure, putting it at less than a 50 per cent chance.

But should the worst scenario happen, they say the industry is well positioned to handle the huge glut of electricity it would unleash on the wholesale market.

The South Island plant has featured prominently in the headlines since Meridian Energy said last month that negotiations with smelter part-owner Pacific Aluminium over long-term electricity prices had stalled.

Tiwai's majority parent company, Rio Tinto, has since rejected the offer of a short-term subsidy from the Government, paving the way for the smelter to possibly close.

The threat of closure has cast a long shadow over industry earnings and the partial float of the state- owned power companies, with Mighty River Power citing it as one of the biggest risks hanging over the firm in its investment prospectus.

Sector analysts now say the risks have been overcooked and there is no guarantee the plant will close.

In a research note, Forsyth Barr analysts Andrew Harvey-Green and James Bascand said present take-or- pay arrangements at Tiwai, which last until the end of 2016, suggested the chance of the smelter closing in the next three years was less than 10 per cent.

They suggest Rio Tinto would hope to trade these fixed costs against the possibility of rising commodity prices. Aluminium has been trading at about US$1860 (NZ$2200) a metric tonne, a level that could pick up as the global economy improves and carbon credit prices weigh on producers using power from non- renewable power sources such as coal.

Even in the medium term the analysts put the chance of closure at less than 50 per cent because Pacific Aluminium faced costs of between $227 million and $400m to clean up the site.

"Keeping options alive as long as possible has significant value," Harvey-Green and Bascand said.

However, should the bets fail to pay off, Devon Funds energy analyst Phillip Anderson said the sector could easily absorb the power released into the grid by Meridian's Manapouri hydro station by shutting ageing thermal power plants in the North Island.

These included Contact Energy's combined cycle gas plants at Stratford and Otahuhu as well as one or more coal-fired units at Genesis Energy's Huntly power station.

"It will have an impact but it is totally manageable without being critical for these businesses," Anderson said.

Transpower chief executive Patrick Strange said the national grid could already handle much of the load from Manapouri.

However, additional work to strengthen the grid would need to be completed to guarantee stability, he added.

The work had been planned for, and could be completed within two summers for a cost of $100m. That fitted well within the 2 1/2-year wind- down period Tiwai had built into its contract, Strange said, meaning there would be "no constraints getting the power north".

Uncertainty taints the air

8th April 2013

Source: Otago Daily Times

An air of fear and uncertainty hangs over Invercargill and Southland as politicians and bureaucrats decide the fate of thousands of jobs in the area. Negotiations on electricity supply to the Tiwai Point aluminium smelter have reached a stalemate - but not all hope is lost, business editor Dene Mackenzie finds.

The fate of Invercargill is in the balance as the electricity contract negotiations for the Tiwai Aluminium smelter between Government-owned Meridian Energy and Pacific Aluminium remain stalled.

The Government has backed out of further negotiations with the smelter's ultimate owner - Australian resources giant Rio Tinto - and Rio Tinto has said obliquely that Pacific Aluminium will resume negotiations with Meridian.

But Meridian has already said it has reached its end point in the discussions, its bottom line in offers and on paper, and it seems the state-owned company being lined up by the Government for partial listing on the NZX is prepared to wear the consequences of its actions.

Those consequences could mean the smelter closing with the loss of more than 700 jobs, and with up to 3200 others also affected. Rio Tinto has put its smelter assets into the new Pacific Aluminium company as it tries to sell it as a going concern. So what would the closure of the Tiwai smelter actually mean?

Engineers spoken to this week by the Otago Daily Times are wondering if they will still be in business in a few months.

Will the closure of the Tiwai Point aluminium smelter be a death knell for Invercargill? Photo by Phillip Cooper.

None of those contacted would talk on the record because of their contracts with the smelter, but they were worried about the future of their businesses, their staff and the city.

One said he would have to halve his staff if he lost smelter work. That was how important the smelter was to his business.

Others talked about similar fears.

''Nobody knows what is going on. Closure of the smelter will destroy Invercargill. We saw what happened to Bluff when the Ocean Beach meat works closed. We will be another Kinleith. Meridian and the Government should take one for the team on this,'' one engineer said.

Nearly every engineering firm in Invercargill is in the same boat, it seems. The smelter has been even-handed when it comes to dishing out work, and the extent of the its influence spreads widely.

Business owners spoken to told the newspaper while the smelter's closure would have a dramatic impact on the economy, no-one should underestimate the Southland ''can do'' attitude. Anecdotal comments suggested some suppliers had already reduced their Tiwai-related work and were managing to acquire new sources of business or maintain a pipeline of work by focusing on other sectors.

John Harrington

However, full closure of the plant would be tough for the region, the businesses said. It was not just the number of direct employees, but the significant number of indirect jobs which could go.

Former South Port chairman John Harrington said losing the smelter would have a catastrophic effect on the community. Mr Harrington believed more than 3000 people had employment links to the smelter.

While some skilled staff might pick up jobs in Christchurch, some would be unable to leave because their properties would not sell.

Banks were vulnerable if property values dropped in the city, with all of them exposed to mortgages held by people who would be affected in some way or another. There was a danger house values would fall so much that people could owe more than their property was worth.

''Nobody can say this won't affect them. It will affect everybody.''

Asked about the morale within the business community, Mr Harrington said it was low. He had personally been in contact with people worried about their job security.

''People are beside themselves, but this is the age of technology. You can't go anywhere without the radio, television or newspapers reporting the latest news.''

The smelter had always had a limited life after 40 years in operation, despite the quality of the product, he said. It was possible

Rio Tinto had been planning an exit strategy from Tiwai for 10-15 years and had used the latest downturn in commodity prices and the strength of the New Zealand dollar to bring things to a head. Southland Chamber of Commerce chief executive Richard Hay said there was some cautious optimism that a deal between the smelter and Meridian would occur.

In the meantime, there was resignation that, whatever the outcome of the latest standoff, life as Invercargill business knew it would be changed.

''We know the smelter operation will be different from what we have now. It won't be as big a part of the economy as it once was. We know there have been staff rejigs and there could be more to come.''

It had been suggested the smelter had cut its repairs and development budgets, meaning a large amount of money spent in a short time would not happen, he said.

It was unavoidable there would be changes in Invercargill and Southland, and there was an acceptance among businesses that overheads had to be kept down for the smelter to continue operating. Electricity was a major cost factor for Rio Tinto.

''It's a natural thing for Rio to look to cut costs. It needs to do what it has to do.''

Suppliers to the smelter were worried about their future, as many had half of their revenue provided from that source, Mr Hay said.

Having half of their revenue coming from the smelter gave businesses an economy of scale. If they lost the smelter's business, employers would lay off staff and might find it difficult to service other clients.

''But the thing that concerns me the most is the future of infrastructure in Southland. That has grown in the last 20 years because of the smelter.''

An exodus of 4% of the population looking for jobs elsewhere would mean the rest of the ratepayers making up a funding shortfall to maintain current services, he said.

And because most government funding was population-based, that would mean cuts to health services, policing, education, roading and general infrastructure.

''The closing of the smelter will put us back 20 years as a community.''

A good example was South Port. Thirty-eight per cent of its business was Tiwai-oriented.

''Can South Port's services and economies of scale continue with the loss of that amount of custom?''

Mr Hay had heard some schools in the city were already looking at their budgets and forecasts and considering what they could do if the smelter closed.

That was a natural consequence of a falling population. Another negative was that once services were cut, it took a long time to rebuild them. It was difficult to attract industry to Southland once large enterprises had closed. Mr Hay considered the Government should have provided some incentive for Chinese companies to build new milk powder plants in Southland, where dairying was a large part of the rural economy.

Retailers were already hit by the rumours of the smelter closure and discretionary spending was down, he said.

''There is no security about the future.

''It is like walking forward on ice and not knowing whether the ice is thinner or thicker in front of you,'' Mr Hay said.

Lifestyle properties attract buyers

8th April 2013

Source: Stuff Business Day

Owning a patch of country land is regaining favour as confidence returns to the housing market.

The Real Estate Institute of New Zealand said sales of lifestyle properties were up nearly 13 per cent in the three months to February, compared with a year ago.

Sales jumped from 930 two years ago to 1403 sales in February this year, with most of the sales on the fringes of Auckland, Hamilton and Christchurch.

The median price rose more slowly, up 6 per cent to $495,000, to just below a record price in January.

First National chief executive Colleen Milne said lifestyle sales tended to follow the residential market.

"For a while there, I think everyone was sitting tight, obviously nervous to commit to increasing their mortgage but with interest rates continuing to be so low, I think people are feeling a lot more confident."

Aucklanders were moving as far south as Hamilton and Cambridge to get what they wanted.

Real Estate Institute rural spokesman Brian Peacocke said the lifestyle market appeared to be slowly re-emerging "after a pretty tight period" following the global financial crisis.

He said monthly figures could be volatile, with stronger sales in autumn and spring.

Proximity to a major centre was clearly a key consideration, said Lyndsay Kerr, a real estate agent in Kumeu, where a motorway extension has shortened the trip to Auckland to 20 minutes.

He described lifestyle block sales there as "steady" with a slight shortage of listings. "The reason for that, I think, is that people enjoying living around this district."

Lifestyle blocks were also taking off in north Canterbury, driven by immigrants and earthquake victims.

Bayleys Rangiora principal Richard Peter said the Ohoka-Swannanoa district, which was just 20 minutes to the city, was popular.

"It commenced about six months after the September [2010] quake. There was quite a flurry of people from the hillside suburbs of Christchurch and the more affluent areas, they were buying lifestyle properties in north Canterbury on a similar value to what they had in Christchurch."

North Canterbury had been popular for several years with immigrants from Britain and South Africa, who were keen to live a lifestyle they could not have in their own countries.

"Lifestyle blocks don't really exist in Great Britain. There's small farms . . . and most get handed down through the family," he said.

NZ Property Report – March 2013

8th April 2013

Source: realestate.co.nz

March 2013 NZ Property Report published by Realestate.co.nz provides an insight into the state of the New Zealand property market as measured by the supply side of the property market over the month of March. The key measures of the market analysed in the report are the number of new listings, the asking price expectation for those new listings and the level of inventory of unsold houses on the market at this time. The report is compiled from data captured by the website and represents close to 97% of all property movements in the NZ market as managed by licensed real estate agents.

A full print version of the NZ Property Report – March 2013 is published below and is available for download (1.2MB) and distribution.

Summary of the market – March 2013

Property market continues to favour sellers, with asking prices near record levels.

Nationally the property market saw some stabilisation in March, with a mean asking price of $444,883, a small increase of 0.3% on February, but a growth of 4% on the same time last year, close to the $446,277 record set in November 2012. The average asking price (seasonally adjusted truncated mean) in both Auckland and Canterbury climbed further in March, reaching their 2^nd highest recorded figures of $610,628, and 438,298 respectively.

The number of new listings fell slightly to 12,732, down 3% on February and down 4% year on year. However, the decrease in new listings was particularly apparent in the major centres, where the number of new listings in the main centres is not keeping up with demand, Wellington and Canterbury experiencing falls of 9.9% and 8.6% respectively from the same time last year, with Auckland’s figure falling by 4.6%.

The 12,732 new listings that came to market in March did little to ease the record low in inventory seen last month. Inventory – measured by weeks of equivalent sales – settled at 27 weeks. While this is a marginal increase on last month’s 26.2 weeks, it is still 20% less than March 2012, and well down on the long term average of 39 weeks.

Asking Price

The seasonally adjusted truncated mean asking price for listings in March rose by 0.3% to $444,883. It represents a 4% year-on-year growth in the asking price as compared to March last year, and is the close to the National asking price record of $446,227 which was set is November last year.

The trend as seen in the chart opposite, continues to show strength in seller expectation, on the back of low listings, and strong demand in the main centers

New Listings

The level of new listings coming onto the market in March fell 3% from February, to a total of 12,732. This represents a fall of 4% from March last year.

On a 12 month moving average basis a total of 131,703 new listings have come to the market since April 2012, as compared to 128,072 in the prior 12 month period, a slight rise of 2.8%. This compares to REINZ reported sales, which are up 18.1% on the same 12 month comparable basis.

Inventory

The level of unsold houses on the market at the end of March (43,930) was down slightly, when compared to February (44,698). The inventory as measured in terms of equivalent weeks of sales rose in March to 27 weeks, remaining well below the long-term average of 39 weeks. 

The market remains firmly a seller’s market; with 13 of the 19 NZ regions showing inventory levels that are well below long term averages. Both Auckland and Canterbury are witnessing the highest extent of this. Auckland is 53% below its long term average, and Canterbury is 45% below its long term average.

Regional Summary – Asking price expectations

The national asking price expectation among sellers rose by just 0.3% in March to $444,883, just below the high set in November 2012 of $446,277 (seasonally adjusted truncated mean).

The main centers – asking prices in Auckland, and Canterbury remained strong in March, each reporting asking prices close to the record highs seen in October 2012. Auckland sellers remained confident with an asking price of $610,628 (up 9.2% on last year), and Canterbury rose 2% from February to $413,403 (up 7.8% on last year).

In total 8 regions reported asking price increases from February, the most significant rises was seen in the Hawkes Bay region, up 5.1% to an asking price of $354,225. Of the 11 regions witnessing asking price falls on a seasonally adjusted basis there were three that reported a fall of greater than 5%, Central Otago / Lakes fell by 5.8% from the record set last month to $604,824, Gisborne fell 9.5% to $287,097, and Takanaki witnessed the largest drop, falling by 14.1% to $282,019.

Regional Summary – Listings

New listings fell across most of the country in March with just 5 of the 19 regions seeing an increase on a year-on-year basis.

The most significant drop in listings was seen in Gisborne, falling 19.8%, and Taranaki, which fell by 15.7%

Of the 5 regions reported higher new listings than March last year, just 1 region reported significant year on year increases of over 20%. Coromandel was the region to report the highest increase of 41.7% when compared to March 2012, followed by Otago who saw an increase of 12.7%.

The main cities continue to suffer from low levels of listings. Auckland listings were down 4.6%, Wellington was down 9.9% and Canterbury was down 8.6% year on year in March.

Regional Summary – Inventory

The 12,732 new listings that came to market in March did little to ease the record low in inventory seen last month. Inventory settled at 27 weeks (weeks of equivalent sales). While this is a marginal increase on last month’s 26.2 weeks, it is still 20% less than March 2012, and well down on the long term average of 39 weeks. 

Just three regions (Gisborne, Taranaki, and West Coast) showed increases in inventory of homes on the market taking them above their respective long-term average. In addition three other regions (Central North Island, Southland, and Wairarapa) sit close to their respective long-term averages.

Market sentiment continues to favour sellers in 13 regions, with the greatest strain being felt in the 8 regions that are marked in darker blue. This includes the main metro areas of Auckland, Wellington, and Canterbury, which remain under pressure from low listings as measured against sales activity.

Auckland is 53% below its long term average, and Canterbury is 45% below its long term average.

Lifestyle

New lifestyle property listings rose across the country in March. A total of 1,081 listings came onto the market, showing an increase of 2.3% when compared to February, but a fall of 6.3% when compared to March last year. The truncated mean asking price for these listings was up by 3.5% as compared to the recent 3-month average to a record high asking price of $689,910 (up 7% when compared to March 2012).

Apartments

New listings for apartments in March were up 3.2% on a year on year basis, with 544 being brought to the market. The truncated mean asking price of new apartment listings rose 2.4% to $392,443 in March from $383,077 in February, and was also up 7.2% on a year on year basis.

The Auckland apartment market had 369 new listings coming onto the market, up 17.5% when compared to March last year. The truncated mean asking price of new listings in Auckland rose to $380,805 (March) from $380,251 (February). When compared to the recent 3-month average, this represents a rise of 1.4%.

Should we implement restrictions on overseas buying of NZ property?

8th April 2013

Source: NZ Herald.  Writer: Alistair Helm

There are facts that need to be made clear before debating the various sides of this argument.

New Zealand has a very relaxed, and I would like to say open attitude to property purchase.

We would certainly be one of the few countries in the world not to impose a stamp duty in the form of a tax on property purchase, make no capital gains taxation on property sales, have no restriction on foreign ownership outside of the rules of the Overseas Investment Office. At the same time as this open regime to property asset purchase and disposal we offer interest deduction for property purchased for commercial purposes.

As ever we pride ourselves as a nation for having such an open and simple approach to doing business which includes trading, owning and funding property – low in bureaucracy and a positive, encouraging attitude to investment and savings in the form of property as an asset class. This very level playing field is in contrast to our neighbours across the region which impose restrictions and levy taxes on purchase and sale.

With this as a backdrop you have to ask yourself; is it any wonder that people want to invest in property in NZ?

On the one hand we should embrace this demand to buy NZ property. Property cannot be removed, disassembled and shipped overseas. People buying property in NZ are part of a positive decision to embrace NZ with the ensuing economic benefit as new residents or investors. Likely bringing fresh capital into the country rather than relying on domestic banks to fund their purchase based on overseas borrowing.

Our open attitude to property is a mirror of our wider economic presentation to the world – a trusted people with a world view, eager to contribute and trade with overseas partners, welcoming and inclusive, a diverse and highly developed nation.

This is the bright positive side to this growing demand from overseas and I for one embrace it; as to oppose it, would only put in place barriers that could discourage the very people we need to grow and develop our economy. However there are risks and I am not naïve to these.

The biggest risk and one we cannot ignore is scale. We are a minnow in the  world fish pond. A population of 4.4 million with around 1.8 million houses privately owned. We add or have been adding an insufficient c. 18,000 new homes per year. Compare that to China – China builds that number of homes every day. Yes, every day around 19,000 homes are built in China – 365 days a year adding around 7 million homes a year. China has recently imposed restrictions on purchasing second homes as they feared speculative investment would create a property bubble – something their economy could clearly do without, for the old adage of the US sneezing and the rest of the world catching a cold has been fair and squarely been transferred to China.

Now we are not likely to see hundreds of thousands of Chinese buying property this year (I choose to reference China, but there are many other large countries that could be interested in NZ property). The reality is that for NZ property to be of interest, buyers have to see value and benefit. There are many other investment options for property purchase around the world, let alone other financial assets. There are many much cheaper places to buy – look at the prices in US for example and other parts of Europe. Buy a property in Spain at the moment and you get legal residency thrown in!

As with any investment decision there are many factors to consider not least of which is supply and demand. At the moment the supply side in this country is very much constrained and this can, and does become a disincentive, as buyers get frustrated with lack of choice and fear of overpaying. Markets have a very effective habit of self corrected – more so for markets that are open and unencumbered with legal conditions and fiscals penalties.

I final note to bear in mind, is that this question of foreign buyers is not new. Here in NZ we have had foreign buyers for many decades, we saw the same questions raised a decade or more ago when overseas student number growth was exponential, we saw it in the 60’s and 70’s and we saw the post 9/11 exodus from the US and UK. We are a country built on immigration and we will continue to be if we are to remain an open and growing economy.

I believe we should not impose restrictions on foreign ownership. I believe there are long term benefits of foreign investment to our country in the form of property and the people that come along with property. I dispute the view that overseas buyer will leave property vacant - why would they, they are smart enough to see multiple benefits of ownership of a NZ asset including living here and enjoying our countries multitude of opportunities.

Scary prospects for lifelong tenants

8th April 2013

Source: Stuff Busines Day

More of today's young New Zealanders will be trapped in rental accommodation all their lives, a government-funded retirement researcher predicts in a draft policy report. And that fact has to be reflected in pensions policy, the report recommends.

The draft, written by Kay Saville-Smith of the Centre for Research, Evaluation and Social Assessment, raises the spectre that high house prices today will cause privation among future retirees.

It also warns that it is not safe to assume equity in homes can be used to provide retirement income. That is because the elderly are resistant to consuming their equity and to government attempts to harvest it through means-testing.

New Zealand has been called "a home-owning democracy", Saville-Smith writes. But the reality is a rising number of young New Zealanders will be trapped in rental accommodation all their lives.

In "Housing Assets: a Paper for the 2013 Review of Retirement Income", Saville-Smith writes research indicates owning a home mortgage-free in retirement makes NZ Super go further, as well as providing better housing compared to rental accommodation, which is often less attractive, less secure and less comfortable.

The national retirement conversation appears to assume it is relatively easy to turn equity into income, but experience shows otherwise.

New Zealand's focus on house prices "has driven a preoccupation with liquidating housing assets and, frequently, an under-appreciation of the use-value of housing assets", Saville-Smith writes.

"While some individuals may be able to achieve a net benefit from liquidating housing assets, as a public policy approach it is unlikely to deliver a robust platform for sustaining the acceptability and affordability of superannuation and the standards of living for older people nationally."

Factors playing into that include resistance to home equity release loans and the reality that effective "downsizing" means moving into worse neighbourhoods and lower-quality accommodation. It can even mean shifting cities, which can lower quality of life and disrupt the connections older people have with their community.

Saville-Smith says there is strong evidence people want to "age in place", to stay in the home in which they were happy.

"The realisation of housing wealth and using it to offset the societal costs of retirement incomes in the medium to long terms must be seen as both uncertain and limited," she writes.

While today's retirees, and many soon to retire, have significant housing equity, the same is unlikely to be true for a continuing high proportion of future retirees.

"Future cohorts of older people are unlikely to have accumulated housing assets to anywhere near the same extent as today's older people," the draft paper says.

"The conditions that have allowed our current older people to accumulate significant housing assets are not the conditions that prevail for younger cohorts now. Full employment policies, universal education and health care were all components of New Zealand government policy in the post war period up to the mid-1980s."

The paper worries that younger New Zealanders no longer live in a country which conforms to the image of New Zealand as a home-owning democracy.

A particular cause for concern was the market failure that has seen more expensive houses built, leaving those on middle and more modest incomes with a dearth of new homes within their means.

Many New Zealanders will find they do not have the orderly "housing career" that has typified previous generations, the draft paper says.

The rate of home ownership fell to 66.9 per cent of all dwellings by 2006, but older people still have high rates of home ownership.

In 1996, 81 per cent of older people aged 65-79 years were owner occupiers. In 2006, 81.2 per cent of households with an older head of house were in owner occupier dwellings.

It is forecast that this will slowly fall to 79.6 per cent of households by 2021.

That reflects the increasing difficulty young Kiwis will face in entering the housing market while older people stay in their homes longer.

"New Zealand can expect an expanding intermediate housing market consisting of households ineligible for public housing provision, receiving limited or no accommodation supplements, but are locked into the private rental market and unable to enter owner occupation."

Not everyone believes the statistics though.

Michael Littlewood from the Retirement Policy and Research Centre at the University of Auckland's Business School questions official statistics that appear to show home ownership is falling - he said the way we collect statistics may be failing to catch many homes, especially those owned by trusts.

Littlewood fears the spread of interventionist government policy meddling in people's financial lives when, he says, there is no compelling evidence that people in New Zealand are under-saving for their retirements.

Littlewood does concede that home ownership rates may be falling at the margin, but says New Zealand is not well enough furnished with statistical data to be sure.

He is also convinced that government subsidies to make home ownership more affordable - and in this he includes KiwiSaver first home subsidies - only drive up prices by increasing the amount people are willing to spend on housing.

Warning over home insurance calculators

26th March 2013

Source: The Southland Times

A homeowners' lobby group is warning people not to rely on free online insurance calculators the insurance industry is offering as a quick and easy way to work out rebuilding costs.

Free house insurance calculators are being offered by insurance companies as they begin switching New Zealand homeowners from open-ended home replacement to capped cover.

Reinsurers no longer want to underwrite uncapped cover after being stung by the Canterbury earthquakes, so people will now be covered up to a limit.

If the amount the home owner sets is too small, they will not be able to rebuild after a fire or natural disaster. If too big, they will overpay for insurance.

Home owners can pick their own limits using free online calculators or pay between $500 and $2,000 for a professional valuer or quantity surveyor.

Although valuers stand to win new business, the president of  valuers' institute is concerned people are being handed too much risk, too quickly.

Terry Naylor said people at the cheaper end of the market should be exempted from the change. ''The ones building for $3,000 a metre are the ones who are likely to get a certificate from a valuer, and they can afford it.''

Home owners' lobby group, the Home Owners and Buyers Association, advises people avoid using the free online calculators because insurers offering the calculators disclaim any liability for the sum, leaving no-one to turn to if someone is under-insured through no fault of their own.

''At least if you pay a professional you have recourse to them,'' says HOBANZ president John Gray.

But the reality is that many people will baulk at the cost of paying a professional, says John Granville, executive director of the Institute of Quantity surveyors, which he estimates at $750- $2,000 to pay a surveyor. Valuers may start at $500.

''Most New Zealanders will just accept a rough figure and take the risk, as long as it keeps the premiums down,'' said Granville. ''Until there is a real disaster.''

Valuation experts say the online calculators may miss important quirks.

A high stud height, high quality fittings and unstable land combined could double the cost of a rebuild, says PropertyIQ chief executive Nigel Jeffries, whose company is building two rival calculators.

AA Insurance head of customer relations Suzanne Wolton says stud height is taken into account for some houses if their age makes them more likely to be high-roofed.

But the AA Insurance calculator, supplied by international company Cordell, assumes land is stable and would not require extra strong foundations. While it asks about the overall quality of fittings, the calculator does not account for renovations of different ages, including new kitchens or bathrooms. IAG's calculator is similar.

''It does change the risk profile of the relationship,'' says Wolton. ''If the calculator doesn't ask you a question about significant feature of your home, it won't be taken into account and you should go to a valuation expert.''

Insurers said they would explain to people that those with big, high value homes or homes with special features should not rely on calculators. For many others free calculators would be useful - certainly more useful than supplying nothing, said IAG.

IAG said people were better equipped than insurance companies to know what might increase their rebuild costs. But valuation experts question whether people are equipped to know that, and whether the calculators are detailed enough or prompt people sufficiently to consider the right questions.

Many people in Christchurch, for example, had no idea they were living on unstable land. Many did not even know their own floor area and some Government valuation floor areas turned out to be wrong, says Naylor.

''The calculator will be satisfactory to many people who have standard sized, standard-built buildings. It will never be appropriate for people who have done things to their house or don't know enough detail about their house or have special features,'' says Granville.

There was potential for high inflation after a disaster.

In a situation similar to Christchurch, with new council rules and a scarcity of builders, costs might spike by 30 per cent, said Jeffries.

AA Insurance said its policies will provide no allowance for this because it would drive the cost of insurance up.

Even valuers sometimes get rebuild costs wrong. Gray cites an example of a valuer whose estimate for a Christchurch apartment block was $2 million under cost, even excluding the extra cost of quake-related changes to council planning rules. The owner is considering legal action.

AA Insurance and IAG point out capped insurance is common in Australia but Jeffries said most Australians don't properly understand the risk nor accurately grasp their home's rebuild value.

''It is more important here because of the greater risk of natural disasters.''

A 2005 report by the Australian Securities and Investment Commission investigated why so many people who lost their homes in the 2003 Canberra bush fires were unable to rebuild. It laid part of the blame on capped policies, which it said burdened ill-equipped consumers with estimating rebuild costs.

Tips for capped insurance:
1. For any building work done ask the builder for a schedule of materials used and the cost to help you value your rebuilding cost.
2. Review your house insurance annually to account for inflation, renovations or council building code changes.
3. If a building cost calculator doesn't ask about an aspect of your house you think is important, it won't be covered. You might need a professional valuation.
4. If building costs spike suddenly after a natural disaster, you may not be fully covered.

Navigating house insurance changes

19th March 2013

Source: Stuff Business Day

House insurance is changing, but most of us haven't caught on yet.

A survey giant insurer IAG (owner of the State, NZI and AMI brands) shared with me showed two in three people are unaware that in future they, not their insurer, will be responsible for working out how much to insure their home for.

It is the great "sum insured" insurance shift, and despite what the insurers say, many of us will not find it an easy transition.

Previously we told our insurer our address, paid our premium and should the place burn down, shaken, demolished by a meteor, etc... they'd pay to rebuild it.

This was the era of replacement cover, a comfortable time of certainty.

In the future it will be the homeowner's job to estimate how much it will cost to rebuild their home. Based on that, we then tell our insurer the maximum payout needed should our house be destroyed.

Welcome to the era of sum insured, or capped insurance.

What does the change mean for you?

The Christchurch earthquakes revealed the captains of the insurance industry weren't great at assessing rebuild costs. Neither were the international reinsurers with whom the New Zealand insurers insured themselves.

Never again, was their cry as they surveyed their ravaged balance sheets after the Canterbury shakes. They vowed to always know their maximum exposure and they could only do that by making policyholders do the estimating, and assume the risk of getting it wrong.

So how do you accurately estimate the cost of rebuilding your home?

Insurers have created some nifty online calculators to help. You plug in the rough specs of your home, and the calculators spit out a figure which represents the likely cost. Note the heavy legal disclaimers attached to the calculators. If the sum they produce turns out to be wrong, you can't sue them.

If it turns out they set their insurance cap too low, the policyholder would have to put up with a smaller home being rebuilt in place of the one destroyed, or pay the difference to get what they had.

For those with simpler homes, built in one go, the calculators are pretty good. But some are concerned about their accuracy for homes built up over generations. An alternative is to pay for a professional insurance valuation to help you decide on your sum insured.

As much of the value your property is in the land rather than the house, and as it is the Earthquake Commission and not your private insurer which insures the land, don't use things like market price to set the sum insured. Nor should you rely on Government valuations. Nor should you assume the cost to build it three years' ago is still accurate.

It seems to me people will build in a margin for error to ensure they haven't got it wrong, or in case there was a surge of building cost inflation as happened in Australia after the bushfires and floods.

I suspect this will lead to some underinsurance, which won't cost the insurers a cent, and quite a lot of modest overinsurance, which is money for nothing for the insurers.

The most they will ever pay is the cost to rebuild your home. If you overinsure, they won't be rebating your premiums to you.

GOLDEN RULES

- Take this seriously. Sum insured is here to stay

- If you are not satisfied with the calculators, get an insurance valuation

- The responsibility to get it right is all yours

Search starts for cheaper Stewart Island power

19th March 2013

Source: The Southland Times

A team from the University of Canterbury is working with Venture Southland to investigate cheaper sources of electricity for Stewart Island.

The 12-month project, managed by Venture Southland on behalf of the Southland District Council, will assess the wind, solar and hydro potential on the island.

University of Canterbury energy engineer Ian Mason said the aim was to find a cheap source of electricity for Stewart Island which was renewable, reliable and realistic.

Stewart Islanders were paying about three times as much as Canterbury consumers for electricity, largely because of the cost of fuelling the island's diesel generators, he said.

Dr Mason said the university team was investigating the viability of cheaper, greener options.

"If you look at wind, the fuel is free. If you look at solar, the fuel is free. If you look at hydro, the fuel is free, and, of course, is environmentally friendly."

The team had already measured wind and solar potential at Tiwai Point and completed a pre-feasibility study of hydro power.

Dr Mason believed a combination of the three sources would suit Stewart Island, with diesel generators remaining for backup, but it was unclear which source would be dominant at this stage.

It was a myth solar energy would function effectively only in sun-drenched places, he said.

"In Germany, they have a lot of solar photovoltaic panels and Germany is not a particularly sunny country. You can take some hope from the fact that Germany can make it work."

Venture Southland enterprise project manager Robin McNeill said University of Canterbury staff were chosen to help because they had a lot of expertise with energy projects. The team visited the island two weeks ago and would have a clearer idea what proposals were realistic after the year-long investigation, he said.

Venture Southland had also sent out a request for proposals on wind modelling and data collection to help investigate and measure wind as an energy source for Stewart Island, he said.

Proposals should focus on feasibility and site selection of wind monitoring sites, data collection, and analysis of data collected from the island, and must be received by March 29.

Million-plus boom drives property market

18th March 2013

Source: Stuff Business Day

Nearly 300 homes sold for $1 million or more last month, but it is the middle to lower end of the market where activity is the most frenetic according to the Real Estate Institute of New Zealand.

REINZ figures for February show that 295 homes sold for $1 million or more in February, with 92 of those selling for $1.5m or above.

That's a 47 per cent increase on February last year when 201 homes sold for $1m or more.

That meant there were six suburbs, all of them in Auckland, where the median selling price was above $1m in February: Herne Bay, $1.685m; Remuera, $1.244m; Freemans Bay, $1.1m; Ponsonby, $1.08m; Castor Bay, $1.075m; and Mellons Bay $1.058m.

The median price is the price that would be the middle price if all prices were listed from highest to lowest. The REINZ's median prices are for sales contracts that become unconditional each month, providing a good indication of the latest market activity.

REINZ chief executive Helen O'Sullivan said a $1m median price was a significant threshold for any suburb because it would mean that half the sales made during the month would have been at prices above the median.

However, though the top of the market remained buoyant, it was the middle-priced suburbs that were facing the greatest upwards price pressure, particularly in Auckland, O'Sullivan said.

This was a result of potential buyers being squeezed out of the top suburbs and forced to look for homes in cheaper surrounding suburbs, she said.

If the median prices in the top suburbs had risen from say $800,000 to $1m over a couple of years, there would be a large proportion of buyers who would still like to live there but could no longer afford to.

They would be forced to lower their sights and look to suburbs where prices still were affordable for them.

But the influx of new buyers into these lower-priced suburbs then started pushing up prices there as well, causing a chain reaction, as many more potential buyers are forced to look even further afield at suburbs on the next rung down the property ladder.

In Auckland, where price pressures are greatest because of its growing population, some of the biggest price gains are occurring in suburbs that were once considered to be at the more affordable end of the scale.

In Westmere, which borders the country's most expensive suburb of Herne Bay, the median price was $992,500 in February, up from $812,500 in February last year.

The same effect can be seen a little further out in Sandringham, where the median price has climbed from $589,000 in February last year to $820,500 last month.

Even further out in Waterview, which was once definitely considered a working class suburb, the median price has shot up from $463,500 in February last year to $588,000 last month.

Outside Auckland, it is a lot easier to buy into the most expensive suburbs in most cities.

The REINZ and Fairfax Media (publisher of the Sunday Star-Times) have joined forces to provide the "REINZ/Fairfax Media Housing Market Report".

This lists the median selling prices for most suburbs and towns throughout New Zealand from Kaitaia to Te Anau. It shows that the Wellington suburb with highest median price in February was Seatoun at $916,000. In Christchurch it was Northwood at $784,250,and in Dunedin it was Waverley at $470,250.

For the REINZ/Fairfax Media Housing Market Report for northern New Zealand click here

For the REINZ/Fairfax Media Housing Market Report for central New Zealand click here

For the REINZ/Fairfax Media Housing Market Report for southern New Zealand click here

Fire ban throughout Southland

15th March 2013

Source: The Southland Times

A total fire ban has been declared for all of Southland.

The ban, put in place yesterday morning, means no-one can light any fires in the open and it also suspends all existing fire permits.

The Clutha district is expected to put a fire ban in place, which will mean all of Otago and Southland will have fire bans.

A ban is already in place in the Queenstown Lakes district.

Principal rural fire officer Mike Grant said people in Southland with large piles of debris still burning should extinguish them immediately.

The only exception to the ban was for gas barbecues and cookers in properly constructed containers and in safe areas, he said.

The ban also applied to all townships within the Southland district, Gore district and Invercargill city, and prohibited people from burning rubbish, using incinerators, or cooking outdoors, including in open braziers or hangis.

Mr Grant said that because of continued hot and particularly dry weather, the fire risk was very high to extreme throughout most of Southland.

Though some rain is forecast in a few days, it is not predicted to be sufficient to significantly drop fire danger levels.

"There is potential across the province for significant wildfires to occur so the ban has been imposed for safety."

All of Southland is experiencing warm and dry weather, with large areas of grassland drying rapidly.

Dry and dead vegetation created more fuel for fires, making them more intense and firefighting more difficult and dangerous.

Mr Grant said there would have to be significant rain over an extended period before the ban was lifted.

He also said activities such as chain-sawing or using machinery such as mowers or tractors was also potentially hazardous where vegetation was dead and dry.

House sales boom in February

14th March 2013

Source: Stuff Business Day

Housing sales for February have hit their highest monthly level in six years, with 6632 houses switching owners nationwide, worth a total $3.15 billion.

The latest Real Estate Institute of New Zealand figures show house sales up 7.5 per cent on the same month last year and up 34 per cent on January 2013.

Prices were also up, with the national median house price rising 7.6 per cent to $382,000 compared to February 2012. It now sat $7000 below the record set in December last year.

REINZ president Helen O'Sullivan said despite prices being at near record levels, the rate of sales growth was slowing. The year on year increase in February 2012 over 2011 was 34.3 per cent compared to a more modest 7.5 per cent in February 2013 over 2012.

"Supply shortages in Auckland and Christchurch are the main constraint, resulting in double-digit price increases in those regions with the median days to sell from listing at around 33 days. Across the rest of the country activity is more modest which is reflected in smaller increases in regional median prices," O'Sullivan said.

All but two regions recorded increases in sales volume compared to February last year, with Northland recording an increase of 28.7 per cent, followed by Auckland with 15.6 per cent and Wellington with 11.7 per cent. Given January is traditionally a slower selling month, all regions recorded increases sales in February compared to the previous month.

But the number of transactions remains well below historic levels, with February sales just 71 per cent of the total 9357 recorded in February 2007.

The popularity of selling by auction was reinforced with 1238 dwellings sold by auction in February, representing 18.7 per cent of all sales. That's an increase of 80 per cent on the number of dwellings sold by auction in February 2012.

Transactions in Auckland again dominated the auction market in January, representing 71.9 per cent of the national total.

Farmers adjust to dry conditions

11th March 2013

Source: The Southland Times

While Southland does not yet face such a crisis, continued dry weather is reducing river levels and forcing farmers to delve into their winter feed reserves.

With no significant rain predicted until Friday, Environment Southland is closely monitoring river and groundwater levels and some irrigators and industries in the region have had to stop drawing water under the terms of their consents.

The regional council's environmental management director Warren Tuckey said staff met twice last week to assess the situation and the council was working with the Rural Support Trust and Southland Fish and Game to assess the wider impact on the region.

If the prolonged dry period continued as forecast, the council would convene its water shortage response group this week, he said.

Environment Southland hydrologists said the Aparima River at Dunrobin was at a 16-year low.

Te Anau Fish & Game ranger Bill Jarvie said some rivers had become too low to fish in and trout were being salvaged as more became stranded. They were being salvaged in rivers in Northern Southland, primarily Eyre Creek near Athol and the Whitestone, near Te Anau, he said.

Meanwhile, farmers in Southland and Otago were delving into winter feed reserves as they waited for heavy rainfall.

Federated Farmers Southland president Russell MacPherson said a good February meant supplies of winter feed were good and farmers were now using them.

Although dry conditions were getting worse every day, there was no drought in the region and farmers were expecting rain soon, he said.

The dry weather would be discussed at the Federated Farmers executive meeting in Invercargill today, he said.

Federated Farmers Otago president Stephen Korteweg said parts of Otago were much drier than usual.

Some dairy farmers were considering drying off cows and others were milking less regularly.

"No significant rain is predicted until the end of March but we [farmers] are hoping this is wrong and we get some sooner."

MetService forecaster Stephen Glassey said Southland could expect to get a few light showers early this morning but nothing significant was on the horizon for the rest of the week.

The forecast for Otago was similar, he said.

"The further north you go from Southland, the drier it gets, with less chance of rain."

Hot house prices may force rate rise

11th March 2013

Source: Stuff Business Day

The Reserve Bank is expected to sound another warning about rising house prices this week, and may be forced to start lifting interest rates by the end of the year, according to some economists.

The Reserve Bank is due to issue its latest Monetary Policy Statement on Thursday and was expected to hold official interest rates again at 2.5 per cent.

Westpac Bank economists said that the statement would "almost certainly" include a warning that if house prices continued to rise too rapidly, the official cash rate would need to rise earlier than previously forecast. Westpac is picking the first move up in December.

But Deutsche Bank said it was "most likely" the OCR would remain on hold for the rest of this year, with inflation still benign, a weak job market, a higher currency and a worsening drought in many parts of the country. It tipped the first move up in early 2014.

The Reserve Bank was also expected to point out that local economic activity had been stronger than expected in recent months, though inflation had been lower and the dollar higher, rising 4 per cent since December against a basket of currencies.

The drought declared in many parts of the North Island was expected to be seen as an important "downside risk", Westpac said, but may not be included in the Reserve Bank's economic projections.

Last week, the Government warned that the big dry affecting large parts of the country could cost the economy $1 billion. Primary Industries Minister Nathan Guy extended the drought area, already in place in Northland, to cover South Auckland, Waikato, Bay of Plenty and Hawke's Bay. ANZ also puts it at $1 billion and counting.

The last bad droughts of 2007 to 2009 cost $2.8b and were tipping points for the start of the last recession.

However, this year's drought has come late in the dairy season so its impact is not as bad as it could have been. Fonterra still expected to collect 1 per cent more milk this season than last season, a bank economist pointed out.

But Deutsche Bank said if there was not significant rainfall this month and next, the fall in farm production could easily wipe 0.5 per cent off national economic growth.

In December's statement, the Reserve Bank's forecasts suggested the cash rate would remain unchanged till early next year, but would rise slowly after that.

But Westpac thinks the rising house market could shift a move on interest rates to this year.

Figures out on Friday showed that nationally house prices rose 1.7 per cent over the past three months and were 6.3 per cent higher over the past year, according to QV. Auckland and Canterbury remained the hottest markets, up more than 10 per cent and 7 per cent in the past year, respectively.

Westpac said it believed that the Reserve Bank's fears around housing would be realised.

"Given the current state of the market, house prices could easily rise 9 per cent this year on a nationwide basis," Westpac chief economist Dominick Stephens said.

That would be enough to provoke the Reserve Bank into earlier hikes for the OCR, in December, rather than early next year, he said.

The follow-up pace of rate rises in 2014 would be steeper than markets currently expected, rising to more than 4 per cent by the end of 2014.

But Deutsche Bank chief economist Darren Gibbs said there had been "little change" in the housing market in recent months and household lending appeared to have steadied at "a pace that is not alarming".

The Reserve Bank was still expected to repeat that it was watching developments in the housing market closely.

Gibbs said the Reserve Bank may use "macro prudential" tools as a first response to an excessive increase in house prices and/or household lending, provided that inflation pressures remain muted outside housing.

The Reserve Bank is consulting with the banks about the possible introduction of so-called "macro prudential" tools to help control bank lending, but they are aimed at risks building up in the banking system and keeping banks safe, not directly about controlling house prices or inflation. Fairfax NZ

Kiwis living longer than before - report

7th March 2013

Source: Stuff

New Zealanders are expected to live longer today than 20 years ago, but are dying younger than Australians, new international research shows.

Health data for countries around the world was published as part of the Global Burden of Disease (GBD) Study 2010, led by the Institute for Health Metrics and Evaluation (IHME) at the University of Washington.

The data showed the average life expectancy for a New Zealander had increased 5.4 years in 20 years - from 75.3 in 1990 to 80.7 in 2010.

However, the average New Zealander could expect to spend almost 11 years of their life suffering from disability or disease.

New Zealand's results placed it 7th on a list of 20 countries of similar affluence - four places behind Australia, where people are expected to live 70.1 healthy years and 81.5 years overall.

Kiwis can expect to live longer than those in Britain though, where the average life expect- ancy is 79.9 and the United States, where it is 78.2.

Professor Tim Wilkinson, of the University of Otago's Christchurch campus, said New Zealand's life expectancy could be lower than Australia's because there was a higher proportion of indigenous people in the New Zealand population.

"I think it's probably fair to say the Maori population is still disadvantaged to compared to the Pakeha population in New Zealand.

"There's that inequity that's really important to address."

Australia's indigenous population had an "abysmal" life expectancy, but the country's overall rate was not affected because their indigenous population was relatively smaller, he said.

More than 500 researchers from around the world were involved in the GBD study, which looked at health loss by age, sex, and geography over time.

"Our goal is to help governments and citizens make well-informed decisions about health policies and investments by arming them with information that is up-to-date, comprehensive, and accurate," IHME director Dr Christopher Murray said.

"With these new ways of making the data understandable, people everywhere for the first time can see the incredible progress being made in health and the daunting challenges that remain."

The data showed the leading cause of death in New Zealand in 2010 was ischemic heart disease - the same as it was 20 years before - and poor diet was still the country's biggest health risk factor.

Wilkinson said the data showed how important preventive action was for keeping people healthier longer.

"They're things we can actually do something about," he said.

"From a geriatric medicine perspective the goal has always been to try and improve quality of life rather than just quantity of life."

In 1990, lower respiratory infections were the fifth-leading cause of death, but in 2010 it had been replaced by Alzheimer's disease, which had increased by a staggering 346 per cent in 20 years.

In 1990, Alzheimer's was the 16th most common cause of death, killing about 328 people. In 2010 it was the fifth-leading cause of death, responsible for killing about 1463 people.

MRP interest lodged at one a second

7th March 2013

Source: Stuff Business Day

The Government has long said shares in Mighty River Power would be popular, but even the Treasury was caught out by the level of interest when the programme was launched.

A day after Tony Ryall expressed confidence in the ability of a dedicated website to process pre-registrations, the site buckled under pressure, hours before a $1.1 million advertising campaign was started.

Having been told to expect spikes in demand, servers were added by the Treasury, and Kiwis handed over their contact details, in their thousands.

"We're certainly pleasantly surprised on the upside," said John Crawford, the Treasury's head of commercial transactions, as the number of pre-registrations hit 151,978 at 5.15pm yesterday.

Since the launch on Tuesday morning, Kiwis had been lodging their interest at more than one a second, much faster than Contact Energy, the last major state sell-off, and even Queensland Rail, a larger sale in Australia in 2010.

"The world's changed in terms of media and how people respond quickly ...

"The vast majority of those pre-registrations were driven only by online news channels," Mr Crawford said.

Green Party co-leader Russel Norman said it was no surprise the level of interest was high, with political interest giving Mighty River's float unprecedented profile.

But the numbers were a tiny fraction of the adult population, and did nothing to dent the party's claim that three-quarters of New Zealanders still opposed the sales, he said.

"There's probably a significant number in that 100,000 who don't support asset sales but think 'if they're going to be sold anyway, I might as well do what I can to prevent the shares falling into foreign ownership'."

Some are indeed preparing to buy, in spite of their opposition.

Tauranga retiree Ron, who declined to give his last name, was one of dozens in a Fairfax-Ipsos poll who said last year that state asset sales were the major thing going wrong in New Zealand.

As opposed to the sales now as he was then, he still pre-registered for shares on Tuesday to help keep them in Kiwi hands.

"If they are going to be sold, it's better that I get my slice than some foreigners."

Having made the sales a flagship policy, the Government is now hypersensitive, blaming its approach on Securities Act concerns.

When a story emerged of a woman being contacted by a stock broker minutes after she left details by telephone with the Mighty River 0800 number, the Treasury insisted its systems had "bank level security".

A press statement from SOE Minister Tony Ryall, who was unavailable for interview, told media that its contents "are not permitted to be made available to persons" outside New Zealand.

Through a spokeswoman, Mr Ryall refused to say how much of the pre-registrations would turn into buyers, or how many they expected to sign up.

Meanwhile, officials have been busily taking down documents from the Treasury and Beehive websites which refer to the Mighty River offer, after legal advice.

"[We] have decided to take a very conservative approach now that we are into the pre-registration stage," a spokesman for Finance Minister Bill English said.

Demand creates all-time low in property inventory

5th March 2013

Source: TVNZ

High demand has created an all-time low in inventory of unsold properties, a new report says.
According the New Zealand Property Report released today, the local property market has rebounded from the seasonal lull in listings over the summer break with 13,145 new listings coming to the market in February.
This is a "healthy and expected increase to listings", and is 2% down from the same time last year, the report says.
New listings for the year since February 2012 are up 4% on the previous 12-month period to 132,236, which shows that vendors are eager to make the most of the tightening market.
Despite the increase in listings, inventory (which is measured by the weeks of equivalent sales left on the market) was down 27% year on year.
Last month, inventory levels were lower in 13 of New Zealand's 19 regions. This was felt the most in Canterbury, where property inventory fell by 35% compared to the same time last year.

Realestate.co.nz's Paul McKenzie says Canterbury's inventory figure was a record low. "Inventory levels in Canterbury are at half their long term average of 30 weeks and we expect inventory to remain low while rebuilding projects are completed."
Meanwhile, McKenzie said that the average asking price for properties also remains strong, increasing 1% from last month and 4% from February last year.
The nationwide average asking price for February, $433,734 (seasonally adjusted), was only 1% off the record high set last October. In particular, Wellington and Central Otago / Lakes experienced record highs in asking price of $453,220 and $642,251 respectively. Auckland saw its average asking price exceed $600,000 for the third time, while Canterbury's figure surpassed $400,000, for the fourth time.

In repose to the report, ASB senior economist Jane Turner said that the Auckland and Canterbury "markets remain tight". "As housing demand continues to gradually recover, the imbalance between buyers and sellers will continue to drive prices higher in these regions. The recent lift in building consents is an encouraging sign that new supply is in the pipeline." "However, a larger and more sustained increase in new house building over 2013 is required in order to have a meaningful impact on Auckland and Canterbury housing constraints," said Turner.

While McKenzie said that he expects to see asking price expectations remain strong well into 2013. "Although we saw a similar increase in new listings in February last year, the record low in inventory seen in February shows that the market is not slowing down. "Asking price expectations of vendors are likely to stay above $600,000 in Auckland and above $400,000 in Canterbury for the near future," he said.

NZ Property report - February 2013

5th March 2013

NZ Property Report – February 2013

First funding for groundwater project

5th March 2013

Source: The Southland Times

An initial $10,000 in funding has been secured for a multimillion-dollar groundwater mapping project in Southland.

However, it is unknown where the remaining funds for the $3.55 million project will be found.

A Venture Southland joint committee yesterday decided to allocate $10,000 from its investigations and assessment fund for the Southland Water Resources Mapping and Assessment project.

Venture Southland enterprise and strategic projects group manager Steve Canny, speaking at the meeting yesterday, said the project would be similar to topoclimate mapping in the region, which had proved valuable.

Groundwater resource information was critical for future decision-making in the region, which was why Venture should forge ahead with the initial phase one study, he said.

The project, which was in its early stages, aimed to determine groundwater volumes.

It would include a 3D water mapping and geological model and would also look at the potential for mineral extraction.

Mr Canny said many Southlanders faced the challenge of monitoring water resources on a daily basis.

"Southland needs this fundamental tool for decision-making to provide essential information about this valuable resource, to enable people and organisations to make good decisions and to support industry and the community".

Once the project was complete, the information would assist regional planners, rural and urban communities, farmers and businesses to make decisions about the assessment and allocation of water resources into the future, he said.

It would also support business investment, land use development and protection of potable water supplies.

Venture Southland would continue to work closely with Environment Southland and other stakeholders to advance the project for the region, he said.

Direct consultation with investors, providers and water users was expected to start in May or June and the project was expected to take two years to complete.

But Mr Canny's report said it was unlikely the Government would allocate funding as part of the Land and Water Forum recommendations.

Funding could be available from Government research "Core" funding and other possible sources, he said.

He was also hopeful of external funding, including from southern councils' 2013-2014 budgets.

Southland District Mayor Frana Cardno supported the project and told the committee the future of Southland water was "incredibly important".

She believed the project would show real leadership in Southland.

Environment Southland chief executive Rob Phillips said water was crucial to the future of Southland and it was important all agencies worked together.

Weather records tumble during the big dry

5th March 2013

Source: The Southland Times

February was a record-breaking weather month for parts of Southland and Otago.

Milford Sound had its driest February on record since 1929 and Alexandra had the highest temperature in the country this February at 34.6 degrees Celsius, recorded on February 1, Niwa says in a report issued yesterday.

Niwa climate scientist Georgina Griffiths said the record low rainfall of 76mm in Milford, as well as Alexandra's high, was part of a national trend of warm, dry temperatures for February around New Zealand.

It was a reversal from February last year, going from "record clouds" to "record sunny" and showed that the south had largely got a "good luck summer" for the month.

Nationally, rainfall was less than 25 per cent of the February norm along the west coast of the South Island as well as Taupo, parts of Gisborne and Hawke's Bay, and less than 50 per cent of normal across the rest of the country, she said.

Exceptions included Central Otago and the Lakes District, which had near normal rainfall.

Environment Southland harbourmaster Kevin O'Sullivan said a dry month in Milford would not be as noticeable as in other parts of the country.

"There's not much of an impact that I am aware of. A dry month [in Milford] might just mean the waterfalls aren't as obvious."

There was still "torrential rain" when he was in Milford in early February.

Southland also got the highest wind gust in February, 145kmh at Southwest Cape on Stewart Island. Ms Griffiths said this was not out of the ordinary. Stewart Island often had the highest wind gusts.

Housing consent numbers continue to rise

28th February 2013

Source: Stuff Business Day

Building consents for new homes raced up almost 10 per cent in January, with more new houses planned in Auckland, Wellington and Bay of Plenty.

The trend for new house consents has risen 50 per cent since early 2011, Statistics NZ said.

Consents were issued for 1312 new homes in January, including consents for just 58 apartments.

Statistics NZ said that seasonally adjusted house consents, excluding apartments, were up 9.6 per cent in January, compared with December.

"We've seen continuous steady growth in the trend for the number of new houses consented since March 2011," Statistics NZ industry and labour statistics manager Blair Cardno said.

"Over 22 months, the trend has increased by 50 per cent.

"All of the growth in January 2013, compared with 12 months ago, was from the North Island, with increases in Auckland, Wellington, and Bay of Plenty regions."

Together, Auckland and Canterbury made up more than half of all new housing consents, as they had done almost every month since January 2012.

Compared with January a year ago, the 1312 new homes and apartments were up 19 per cent. Excluding apartments, new homes alone were up 39 per cent to 1254. The 58 new apartment consents in January were down from 198 in January last year.

There were 372 consents issued in Auckland in January, up 140 from January last year. But in Canterbury, the 378 consents were down one from the same month last year.

More cuts to fixed home lending rates

27th February 2013

Source: Stuff Business Day

The mortgage rate battle continues, with HSBC saying its new three-year rate for Premier customers is the lowest offered for that time period by any New Zealand bank in a decade.

The HSBC Premier three-year rate is now 4.99 per cent per annum, down 75 basis points, but conditions do apply.

Customers can also sign up for fixed rates at 4.99 per cent per annum for one or two years, at 5.5 per cent for four years, and 5.75 per cent for five years.

The offers are open for a limited time to new HSBC Premier customers and existing Premier customers who borrow an additional $100,000.

To become a Premier customer, individuals need either a minimum combined home loan of $500,000 or $100,000 in savings and investments.

The loan offers follow recent mortgage rate cuts by other banks.

Westpac this month introduced a one-year fixed rate of 4.89 per cent, three years at 5.39 per cent and five years at 5.75 per cent.

The rates are conditional on at least 20 per cent equity and minimum new borrowing of $100,000.

This week BNZ launched two new home-loan rates for 18-month fixed terms. Its Classic rate is now 5.19 per cent, while its GlobalPlus product now offers an 18-month rate of 5.5 per cent. The rates are available until March 8.

Kiwibank took the knife to its six-month rate this month, slashing almost half a per cent to 4.79 per cent.

Economy seen climbing out of hole

27th February 2013

Source: Stuff Business Day

New Zealand's economy is recovering from one of the "deepest and longest" recessions in living memory, but this year and next should be better, according to latest NZIER forecasts.

Despite the recent spate of high-profile job cuts, NZIER's latest Quarterly Predictions show growth of 2 per cent to 2.5 per cent over the next few years, in a patchy recovery driven by the Canterbury rebuild and an improving picture in Auckland.

A stronger economy would mean much-needed relief, with more jobs and rising incomes, and businesses would see more sales and greater profit margins, NZIER said.

But recent headlines have been gloomy on the jobs front.

Telecom announced plans to cut hundreds of jobs just a day after 1200 jobs were put at risk by the financial crisis at debt-laden Solid Energy. There have also been warnings of hundreds of job losses at Mainzeal, Contact Energy, NZ Post, Summit Wool Spinners and print company Geon Group.

NZIER principal economist Shamubeel Eaqub said despite the headlines, the surveys of hiring intentions and actual hiring were "not quite as weak".

And there had been a big regional difference in the labour market, with jobs in Auckland well up on 2007, but well down in Wellington, and flat in the provinces.

"And Canterbury is now starting to rebound from the earthquake [two years ago]," he said.

Consents for non-residential building in Canterbury were at record highs, and house consents are back close to recent peaks.

"Concrete production is the highest it has ever been," he said. That was an indication that the rebuild was really gearing up.

There were massive amounts of building work across retail, office and industrial buildings, but it was all in the suburbs, rather than in the central city.

"In the last six months it has really come together; it is very encouraging," Eaqub said.

But Wellington had had weak job numbers in the past three years.

Overall, the picture was patchy but the outlook was improving.

Spending was up and people were buying more homes, but activity was concentrated in Auckland and Canterbury, where building consents were also starting to lift in both regions.

"There is a recovery taking place, but it is very regionally focused," Eaqub said.

Provincial areas faced a tougher picture, with dry farm conditions in some areas

Rentals most popular despite share surge

26th February 2013

The belief in property was even higher in Auckland. Photo / Natalie Slade

Source: NZ Herald

Rental property is back on top as the most popular place for people to invest their money despite a stellar run from the New Zealand sharemarket last year.

A quarterly survey undertaken by the ASB bank found 19 per cent of those questioned believed property was the best place to make money for the last three months of 2012.

Rental property overtook term deposits which have been the most popular place to invest since the start of 2010, apart from one three-month stretch last year.

Bank savings accounts were seen as the worst place to invest with just 6 per cent support, while publicly listed shares were only slightly better at 7 per cent.

Bank savings accounts have been paying interest of between 2.5 to 3 per cent for on-call savings while term deposit rates are around 4 to 5 per cent a year.

Conversely, the New Zealand sharemarket's NZX-50 index gained more than 24 per cent last year - its best year since 2003.

Jonathan Beale, head of wealth advisory at ASB, said appetite for rental property was nearly back to where it was before the global financial crisis, when it averaged around 22 per cent.

"Property prices are front page news again."

And the belief in property was even higher in Auckland.

The survey found 24 per cent of Auckland respondents believed property was the best place to make money, up from 23 per cent in the previous quarter.

Property hit a low point of 13 per cent in 2011 after the National-led government tweaked the tax benefits in a bid to level the playing ground between property and other types of investments. But the move seems to have failed to dampen enthusiasm for bricks and mortar.

Critics of high house prices say the tax system still favours property investors. Last week Auckland accountant Alan Dudson said property investors could still deduct the cost of rates, insurance, maintenance and mortgage interest against their rental income.

"An investor has the huge advantage of being able to gear his or her portfolio to pay little tax on their investments and deliberately offset any further loss against other earned income."

Beale said it was a surprise term deposits remained so popular.

"It is a surprise term deposits are up there when rates are low, especially when you look at the New Zealand sharemarket, which is steaming ahead. It goes to show how many people don't have shares."

KiwiSaver and managed funds were the next most popular at 14 per cent. That is the highest level KiwiSaver has hit since it was launched in 2007.

Overall investor confidence remained flat at a net 13 per cent - the same level as the previous quarter.

Beale said flat was not bad considering the concerns around America hitting its fiscal cliff at the end of last year. "All that international stuff does flow over even if people may not understand it."

At the end of 2009 net investor confidence hit a high of 30 per cent. Beale did not see a return to that level in the short term.

The survey data was based on 660 online interviews with adults aged 18 years and older throughout New Zealand.

Home prices expected to keep on climbing

25th February 2013

Source: NZ Herald

Expectations of house price inflation continue to climb in ASB's latest quarterly survey and are close to their all-time high 10 years ago.

The same seller's market is reflected in a drop in the net balance of people who consider it a good time to buy a house. In Auckland and Christchurch it is now regarded as an outright bad time to buy.

Reflecting rising actual prices, a net 59 per cent expect them to rise further, the survey found, up from a net 56 per cent three months ago.

In Auckland the increase was steeper, from a net 61 per cent last time to a net 66 per cent.

The highest this indicator has been, nationwide, in the 17 years of the ASB survey was 61 per cent in January 2003. But while the pressure then was from the demand side, this time it is a lack of supply, according to ASB chief economist Nick Tuffley.

"Demand for housing has lifted modestly over the past year, reflecting a return of first-home buyers as the labour market stabilises, as well as increased interest from investors," he said.

"However, supply of new housing has not yet picked up in response to stronger demand.

The market remains supply constrained due to low levels of housing construction. Supply shortages have been most acute in Christchurch and Auckland. As a result, price increases are strongest in these areas."

In Auckland the population pressure remained pretty steady and in Canterbury there are people displaced and looking for homes.

"But it still feels like much of the dynamic is that the supply side is tight."

Barfoot and Thompson's listings were still lower than at any time during the last boom, Tuffley said.

Interest rate expectations remained fairly low, he said. A net 24 per cent of survey respondents expect them to increase, down from a net 27 per cent three months ago.

This was in line with ASB's own view that the Reserve Bank was likely to hold off raising the official cash rate until March next year.

"However, while we expect floating rates to remain unchanged, fixed mortgage rates are likely to increase over the coming year as the [money] market shifts away from pricing in a cash rate cut to pricing in cash rate increases."

Meanwhile, a Bank of New Zealand survey of real estate agents asked if they were noticing more or fewer foreign buyers in the market and where they appeared to come from, BNZ chief economist Tony Alexander said.

"The top country is the United Kingdom with 27 per cent of agents noting this, followed by China at 24 per cent, then Australia 22 per cent. In Auckland, however, Chinese buyers are seen as prevalent among foreigners by 45 per cent of agents responding."

More police on streets to combat disorder

20th February 2013

Source: The Southland Times

Southern police are taking the fight against crime from the office to the pavements after more than tripling the number of foot patrols in the district in the past 12 months.

The extra foot patrols had resulted in a noticeable drop in disorderly behaviour and intentional damage in the Invercargill CBD during the past 12 months, police said.

Figures released by police show foot patrols have risen from a total of 1341 in 2011 to 4281 in 2012 in the Southern District.

The Southland Chamber of Commerce said the extra patrols had been noticed by businesses in the Invercargill CBD in the past 18 months.

Chamber chief executive Richard Hay said reports from businesses indicated shop owners felt more secure and those causing the problems were aware they were on notice.

"The chamber was told there would be more foot patrols and it is good to see the police department follow through with that assurance," he said.

Acting southern district area commander, Superintendent Steve Caldwell, said a reduction in paper work and streamlining case management systems were responsible for allowing the men and women in blue to have a more visible presence in their communities.

This was despite the police department being hamstrung by a zero budget increase over the past year and being forced to axe 10 support staff positions in the district, he said.

The increase in foot patrols in the southern district highlighted the police department's focus on increasing the visibility of frontline staff in the community, Mr Caldwell said.

A centralised district file management centre, established in Dunedin, is undertaking the extensive management of police files formerly being dealt with by frontline officers, he said.

"The process is about reducing the amount of paperwork that our frontline police are doing and getting our officers out into the community, preventing and solving more crime."

Police, like other government agencies, had to adapt to working in a tight fiscal environment, Mr Caldwell said.

Southland area commander, Inspector Lane Todd, said Southland's policing had fitted in with the new preventative policy and there had been more beat patrols as part of tactical tasking.

There had been a noticeable drop in disorderly behaviour and intentional damage in the Invercargill CBD during the past 12 months and this directly correlated to more foot patrols, Mr Todd said.

"If our officers are on the street and visible it will be a deterrent to criminals."

Police statistics for crime rates for 2012 were being finalised by the department but Mr Todd believed the numbers would show a drop in crime numbers in Southland.

Invercargill area tactical response manager, Inspector Olaf Jensen, said police were out doing more bail checks, making more visits to hotels and pubs and were working with business and community organisations to be pro-active in crime prevention.

"Hot locations have been identified including licensed premises and late-night food outlets and they are being patrolled at high risk times."

Police officers were being supported by community patrols and Maori liaison staff, he said.

Caution leads SIT to surplus $2 million above budget

20th February 2013

Source: The Southland Times

The Southern Institute of Technology ended last year with a surplus more than $2 million above budget.

A report by chief financial officer Bharat Guha shows the polytechnic finished December 2012 with a $3.4m surplus, more than double the budgeted surplus of $1.2m.

The difference between the budgeted figure and the final surplus was largely because of $1.3m of government funding awarded under the Skills for Canterbury scheme, Mr Guha said.

Announced in the 2011 Budget, Skills for Canterbury is an initiative aimed at helping polytechnics train more trade workers to meet heightened demand for labour during the Christchurch rebuild.

Mr Guha had been initially unsure if SIT would be granted the funding, and so had planned for the year without the money, he said.

"When we did our budget, we were just being very cautious."

The polytechnic had also underspent on personnel and operational expenses, which had contributed to the surplus, he said.

However, the report also shows the institute's actual cash reserve at December 31, 2012 was $2.3m less than at the same time in 2011.

SIT had $28.2m in cash reserves on December 31, 2012, compared with $30.5m in 2011. Actual working capital had also decreased, from $27.9m in 2011, to $25.5m in 2012.

Mr Guha said the drop was caused by increased spending on capital expenditure including land and buildings, furniture and fittings, motor vehicles and computer software.

In 2012, SIT had spent $9.5m on capital expenditure, compared with "about six or seven million" in 2011, he said.

Kiwibank cuts six-month home loan rate

15th February 2013

Source: Stuff Business Day

Kiwibank has launched the lowest mortgage rate in its 11-year history, providing more signs that the highly competitive mortgage market is heating up again.

The banking minnow is offering a six-month home loan of 4.79 per cent, slashing almost half a per cent off its existing advertised rate.

The next closest contenders in the shortest fixed-term category are HBS and SBS at 5.10 per cent, with other major lenders priced at 5.25 per cent or higher.

While the state-owned bank has previously instigated several rounds of rate cutting, this time it followed the lead of Westpac and ASB.

On Monday, Westpac introduced a one-year fixed rate of 4.89 per cent, three years at 5.39 per cent and five years at 5.75 per cent., all of which lead the market.

However, they are conditional on at least 20 per cent equity and minimum new borrowing of $100,000.

Kiwibank said there were no such conditions attached to its latest deal, but promoted the rate as a "limited time special", indicating that it may not be available for long.

Mortgage rates cut but with strings

12th February 2013

Source: Stuff Business Day

Westpac has introduced a new round of market-leading fixed mortgage rates in an apparent attempt to win over other bank's customers.

The lender's 'special' rates, which come with strings attached, are well ahead of any other advertised rate for the same fixed terms.

This morning the bank introduced a one year fixed rate of 4.89 per cent, three years at 5.39 per cent and five years at 5.75 per cent.

But the special conditions attached to the deals suggest that the rates are an attempt to win over fresh custom, rather than refinance existing loans.

The requirement for at least 20 per cent equity rules out many first-home borrowers, and minimum new borrowing of $100,000 will rule out most of Westpac's existing customers.

Rival lenders in the highly competitive space will likely feel the pressure to respond with price-cutting of their own, as interest rate cuts typically occur in clusters.

However, the wholesale funding costs behind some of the banks' longer term lending do not appear to be significantly lower.

One to five year swap rates have eased roughly 7 basis points in the last week, and are up roughly 20 basis points in the year to date.

Westpac's general manager of retail Ian Blair suggested that anyone looking at fixing their rates "should make hay while the sun shines".

"We are unsure how long we can sustain them for and will be reviewing them weekly."

That window of opportunity may be as short as three weeks- the time it took for the bank to drop its recent special of 4.99 per cent for a two-year term.

House values rise across country

11th February 2013

Source: Stuff Business Day

The heated property market appears to be bubbling beyond major hotspots in Auckland and Canterbury.

Government valuer QV's latest property value index shows nationwide values have risen 1.5 per cent over the past three months.

Valuations are now 2.6 per cent higher than the previous market peak in late 2007, although still behind on an inflation-adjusted basis.

QV research director Jonno Ingerson said the property market had a reasonably strong start to the year, with plenty of buyer enquiry and sales activity throughout January.

And he said the increasing values were no longer solely being driven by Auckland and Canterbury.

"Over the last month or two values have also begun rising again in most of the other main cities and provincial centres," he said.

"While the rate of value increase is not as fast as Auckland and Canterbury it does signal an increase in confidence across most of the country."

Auckland is the largest property market by far, and Canterbury is booming as the rebuild from the earthquakes progresses.

Ingerson said a shortage of properties for sale would continue to rein in sales volumes around the country, with the number of new listings well below the market peak.

The reduced choices for buyers meant well-presented properties were often snapped up quickly.

"The overall result is upward pressure on prices" said Ingerson.

Increasing values by region:

Auckland
Up 3 per cent over the past three months

Up 10.2 per cent over the past year

Up 12.4 per cent since the previous market peak in 2007

Wellington
Up 0.6 per cent over the past three months

Up 1.8 per cent over the past year

Still below the market peak

Christchurch
Up 2.4 per cent over the past three months

Up 7.1 per cent over the past year

Up 6.3 per cent since the previous market peak in 2007

Hamilton
Up 1 per cent over the past three months

Up 3.7 per cent over the past year

Still below the market peak

Dunedin
Up 1.1 per cent over the past three months

Up 2.7 per cent over the past year

Still below the market peak

NZ Property report

5th February 2013

NZ Property Report – January 2013

Uncertain times for mortgage holders

1st February 2013

Source: Stuff Business Day

The official cash rate remains at its record low, but floating mortgage-holders should keep an eye on longer-term rates creeping up behind the scenes.

Reserve Bank governor Graeme Wheeler held the OCR at 2.5 per cent this morning, as was widely expected.

The OCR is closely tied to a range of interest rates for borrowers and savers alike, including the floating mortgage rate.

But banks base a lot of their longer-term pricing for fixed mortgages on 'swap rates', which don't receive the fanfare that accompany OCR movements.

While still sitting at historically low levels, swap rates have been steadily trending upwards over the past two months.

BNZ chief economist Tony Alexander said the world was changing, as money started to move out of fixed interest (like government bonds) and into stocks.

"As that happens, those medium to long-term interest rates go up," he said.

Homeowners may risk missing the boat if they don't fix before rates rise, but the point at which that will happen remains uncertain.

Alexander suggested fixing half the mortgage and keeping the other half floating as a potential hedging strategy.

He said there was a very small chance - about 1-2 per cent - that the Reserve Bank could cut the cash rate further, which would likely drag down floating mortgage rates.

However, with the "mother of all construction booms" about to kick off and the Auckland housing market going strong that was highly unlikely.

The universal consensus amongst analysts is that interest rates will begin to move up, not down, at some point in the near future.

But economists have consistently had to push their predictions for the next rate rise further and further out.

The latest Reuters consensus poll of 17 economists has four picking an OCR rise in June, five guessing it will happen around the end of the year and eight supporting a hike in early 2014.

Alexander was frank about taking the forecasts - including his own - with a grain of salt.

"The reason I'm not saying get stuck in, jump into fixed, is because over the past four years none of us have called these interest rates correctly."

He reiterated that there was no guarantee that the global economy would begin to take off any time soon.

"These remain exceedingly uncertain times."

House price rise draws rate caution

1st February 2013

Source: Stuff Business Day

House price rises are spreading beyond the hot markets of Auckland and Canterbury and are likely to continue this year because of extremely low mortgage rates, some economists say.

But home buyers can expect lending rates to rise significantly in the next two to three years, from about 6 per cent towards a "painful" 8 per cent or even 9 per cent, eventually flattening out price rises.

Economists say official interest rates could start rising as soon as September this year or by early 2014, gradually rising from 2.5 per cent to 4.5 per cent or as much as 5.5 per cent over time.

As widely expected, Reserve Bank Governor Graeme Wheeler held the official cash rate at 2.5 per cent yesterday, but fired a warning shot at rising house prices and said the currency was overvalued. On some measures house prices would be as much as 20 per cent overvalued, economists said.

Wheeler pointed out that house price inflation had increased, and said the central bank was keeping a close eye on that. House prices rose 6.7 per cent last year, according to the Real Estate Institute's Housing Price Index.

The central bank is also keeping a watch on household credit growth. Figures out late yesterday showed household borrowing rose 1.2 per cent in the December quarter, the strongest quarterly rise since mid-2008. Net mortgage debt in December was up 3.7 per cent from a year before, a clear acceleration from earlier last year.

"The bank does not want to see financial stability or inflation risks accentuated by housing demand getting too far ahead of supply," Wheeler said.

Westpac chief economist Dominick Stephens expected official interest rates to start rising in December this year, but rise more than others currently expected, from 2.5 per cent to 5.5 per cent by mid-2016.

"Today's fixed rates are low relative to where we think floating rates are going to go," Stephens said.

The housing market kicked off in Auckland and Canterbury because of a shortage of supply, but was now being driven by low interest rates, he said.

"Our concern is that interest rates may need to go up a fair way to check the inflation pressures arising from the Canterbury rebuild.

"If they do, that could be very painful for some people getting into the housing market now."

House prices were overvalued by as much as 20 per cent, assuming interest rates moved back to more normal levels. But with mortgage rates as low as they are now, "house prices could go higher still over the next two years", he said.

"It is now becoming a nation-wide upturn [in prices]," Stephens said.

Westpac is forecasting house prices to rise 9 per cent this year or more, and 4 per cent next year, but then be flat to falling as higher mortgage rates kicked in. House sales volumes were rising rapidly across the board and house prices could follow them up soon.

"The further they [house prices] go up now, the greater the risk of a correction [fall] because of those higher interest rates," he said. There could be a painful combination of rising interest rates and falling prices, as seen in 2007.

Bank of New Zealand head of research Stephen Toplis said if the economy grew at a modest pace this year, the "new normal" interest rate would rise to 4.5 per cent.

BNZ expected rates to start rising in December, and gradually tick up.

Toplis agreed house prices were probably 20 per cent overvalued when compared with wages, rent returns or market averages.

But in the current environment house prices were likely to keep rising at recent levels of 5 to 7 per cent at least for the next year.

House auctions bounce back

28th January 2013

Source: Stuff Business Day

The gavel comes down, the auctioneer cries "Sold!", and the vendors sigh with relief.

Another property is sold by auction, one of the 11,950 that successfully went under the hammer last year.

Statistics show auctions are back with a vengeance. There were just 7100 auctions in 2011, as the property market in general struggled to rebuild previously strong levels of turnover.

Auctions work best when there are plenty of buyers in the market, so the 68 per cent jump in auctions last year is seen as a sign of good health for the real estate industry.

They're "a bit like Brylcreem", reckons Real Estate Institute chief executive Helen O'Sullivan - either in or out of favour.

"They work extremely well when there is competition for a property. For properties that have broad appeal or where more than one party is interested in them, it works really well."

The auction comeback trail is easy to see. Auctions now account for 16 per cent of all house sales, compared to 11 per cent the previous year.

As one might expect, the City of Sails clearly leads the rest of the country, with an auction growth rate of 86 per cent. Even outside the Auckland housing bubble, auctions still grew a healthy 33 per cent last year.

However, like the real estate market more generally, the return of auctions is largely an Auckland-Christchurch story, where housing shortages prevail.

In Auckland, where more than 70 per cent of all last year's auctions occurred, over a third of all the property sales last month were made under the hammer.

But don't believe all you hear about auctions in Auckland, laughs Bayley Auckland's Daniel Coulson, the reigning Australian auctioneering champion.

"You can get as many as 15 potential bidders at an auction but sometimes you've only got the two, or even one. And you can still work with just the one on the day, it's not a standard auction, it's more a negotiation."

That might not sound like much of an outcome, but Coulson says most vendors "would be over the moon" to have two or three unconditional offers laid on their doorstep.

It's easy to see why auctions work better in a hot market. They unashamedly work off emotion, encouraging buyers to strike while the iron is hot. In a downturn, buyers can afford to negotiate more cautiously.

But fans of the auction system argue it's more transparent than tenders. Tenders can be conditional, but the bidder may only get one chance to bid and largely takes a stab in the dark.

Auction bids are unconditional but buyers can eyeball their competition, and take comfort from the knowledge that others can see value in the property.

Kapiti auctioneer Wayne Sutton believes the rise in auctions fits with an increase in due diligence since the global financial crisis.

"Buyers really do their research more than I've ever seen and the auction negotiation process allows them to grab it with both hands.

"With the tender process, even though it's very professionally done, buyers are starting to reject the fact that they're being asked to put their best foot forward blind."

Coulson adds that auction buyers appear to have fewer regrets.

Successful tender bidders never know whether they've paid too much. Unsuccessful bidders go, "Oh gee, if only we'd had a chance to put a little bit more on top, if only we knew we had to pay that we probably would have."

For vendors, the auction process can also be a cleaner process, says Helen O'Sullivan. It allows them to bypass a prospective pile of offers, all with their own conditions.

"The potential for that to get uncomfortable is quite high."

Which is not to say auctions aren't nerve-racking. "It's like a party, worrying whether anyone's going to turn up," says Harcourts' agent Marty Scott.

One city which so far has largely resisted the auction process is Wellington - regarded among agents as the "tender capital".

Scott, who heads Harcourts' Team Wellington branch, thinks it's a mindset left over from the days of government tenders but he believes attitudes are changing towards auctions.

"The advocates of auctions would tell you the problem with tender is that it doesn't put enough pressure on the buyers in terms of extracting the maximum amount."

In post-earthquake Christchurch, it's a different story. Auctions are on the rise, due in part to increased competition for housing but also as a way of re-establishing market values.

Chris Kennedy, a top auctioneer and Harcourts Christchurch's business development manager, says auctions through his agency went up 37 per cent in the Garden City last year.

About a fifth of all its sales now go under the hammer.

After the earthquakes, "the whole city was revalued", he says. But after 8000 to 10,000 houses were taken out of the market, a housing shortage began to bite.

"People have been forced to pay to secure a property."

Kennedy says people have warmed to auctions, particularly if they've had to leave the city quickly.

Southern hospitality recognised in awards

24th January 2013

Source: The Southland Times

Southern hotels and motels have been named among the top 25 hotels in the South Pacific by users of world travel advice website Trip Advisor.

The site, which features reviews, travel guides and holiday accommodation advice, named The Dairy Private Luxury Hotel in Queenstown winner in all four categories in its 2013 Travellers' Choice awards.

The hotel was awarded first place in: Top 25 Small Hotels in the South Pacific, Top 25 Hotels for Service in the South Pacific, Top 25 Small Hotels in New Zealand and Top 25 Hotels for Service in New Zealand.

Meanwhile, Tower Lodge Motel in Invercargill also won the top award in all four categories.

Owners Ray and Dawn Clark said the wins took them by surprise and they initially thought they had been given another excellence award from the website.

The motel has Trip Advisor excellence awards for 2011 and 2012.

"It's amazing to win, we are just two old codgers trying to run accommodation," Mr Clark said.

During the six years they had owned the hotel, they had upgraded and revamped the 17-unit motel, which Mr Clark believed was one of the reasons for the award.

The key to running a successful motel was to keep smiling and be welcoming but not too pushy with customers, he said.

Also rating highly in the Top 25 Small Hotels in the South Pacific were: Eichardt's Private Hotel (9) and Azur, Queenstown (10).

Included in the Top 25 Small Hotels in New Zealand were: Eichardt's Private Hotel, Queenstown (6), Azur, Queenstown (7), Arrowtown House Boutique Hotel (13), Queenstown Park Hotel (18), Wanaka Homestead Lodge and Cottages (23) and Browns Boutique Hotel, Queenstown (24).

The Lakeside Apartments in Wanaka was awarded 14th place in the Top 25 Hotels for Service in the South Pacific.

Other hotels in the Top 25 Hotels for Service in New Zealand were: The Lakeside Apartments in Wanaka (7), Eichardt's Private Hotel, Queenstown (13), Queenstown Park Hotel (15), Arrowtown House Boutique Hotel (18), Azur, Queenstown (21), and Lake Dunstan Motel, Cromwell (24). collette.devlin@stl.co.nz

Developers confident proposed route not in DOC's control

23rd January 2013

Source: The Southland Times

The proposed Haast-Hollyford road, earmarked to be built through Fiordland National Park, could be exempt from the Department of Conservation's strict concession process.

Speaking to The Southland Times, Westland District Property Ltd chairman Durham Havill said he believed land earmarked for the 127km road was classified as a road reserve when the new Department of Conservation incorporated the Department of Lands and Survey, the Forest Service and the Wildlife Service in 1987.

"We believe that land is classified as a roading reserve right through from start to finish," he said.

"And that it was excluded from being under the control of the concession process in 1987, and what we're waiting and hoping for is a resolution from the Southland District Council to allow us to build."

The $220 million privately funded toll road is planned to open up a new tourism route to Milford Sound, and cleave up to five hours off the current meandering 490km route south from Haast to Milford Sound, bypassing Wanaka, Queenstown and Te Anau.

If it goes ahead, the road will be built through Department of Conservation land in the Fiordland National Park and Te Waihipounamu World Heritage Area.

Usually any businesses which operate on department land have to do so under the conditions of a concession issued by the department, and any infrastructure work needs to be cleared as part of the concession.

The proposed $150 million Milford-Dart private bus tunnel, which backers are hoping to build beneath land in Mt Aspiring Park is currently in the process of applying for a concession, which triggered a series of public hearings in Te Anau and Queenstown last year.

Big businesses such as NZ Ski, and many smaller businesses operating on land controlled by the department also operate under the conditions of individual concessions.

Conservation Department senior communications adviser Reuben Williams yesterday said the department would not look into the matter until the road's backers approached them.

"This not something we would investigate until a formal approach has been made to DOC," he said.

Another senior department communications adviser said: "At this stage the department has not been formally approached by Westland District Council in regards to the proposal. As a result we are not in a position to comment on the legal status of the route and, once known, the department would need to confirm any underlying legal road or legal land status before it could consider any planning or permissions processes required."

Mr Williams would not elaborate on whether the department would be powerless to stop the road, should Westland District Property's belief that they were free from concession restrictions prove correct.

Smart meters hold hope of power savings

23rd January 2013

Source: The Southland Times

Electricity prices in Invercargill and Southland could vary over the course of a day if PowerNet decides to roll out "smart meters" across its network.

Chief executive Jason Franklin said a decision on smart meters was one of the company's goals for 2013.

They would replace conventional meters in homes on PowerNet-managed Electricity Invercargill and The Power Company networks from 2014-15 onwards.

Smart meters work by measuring power use over half-hour periods, sending this data electronically to electricity suppliers.

This allows companies to vary prices according to demand, potentially reducing the amount of power consumption spikes as customers move away from peak pricing times.

Genesis Energy has carried out three trials of variable pricing using smart meters, including a year-long pilot in Waitemata where 200 customers have been offered peak, off-peak and shoulder-rate tariffs for power.

In one of the trials, in which consumers were also given energy-saving equipment such as energy-efficient fridges, the average saving on power bills was 19 per cent.

Parliamentary Commissioner for the Environment Jan Wright has expressed enthusiasm for the plan.

"If people are able to reduce power consumption at peak times, that reduces the need to build new power plants," she said.

Mr Franklin said staff were investigating how smart meters could be brought into PowerNet.

The company is part of SmartCo, a group of provincial networks which want to introduce smart metering.

"We would like there to be a decision this year," he said.

Meters would send data to a central point over a radio network.

Mr Franklin said the grid's existing communications network could be changed to incorporate new meters.

Meter readings would be processed by a data-management company, which could be based overseas.

"It doesn't have to be in New Zealand . . . this is very sophisticated technology."

Smart meters had already been introduced in the North Island, and PowerNet was watching that closely, Mr Franklin said.

Genesis Energy has installed 300,000 smart meters in customers' homes and the WEL network in Waikato has introduced smart metering on its network and plans to complete the project by 2015.

It was important to keep customers informed about the changes, Mr Franklin said.

"Your logistics have to be extremely good. From what we've seen [in the North Island] it can be done well."

Other goals for 2013 included the upgrade of the main power line from Athol to Winton to a 66-kilovolt supply, which would position the network for growth in demand for irrigation and dairying in the future, Mr Franklin said.

Several substations were also due for upgrades to cope with demand.

A new substation could be built at Awarua to service the area earmarked for industrial development by the Invercargill City Council.

The existing substation supplies South Pacific Meats and the Open Country Dairy Factory.

"If there's new industry down there . . . power supply won't be a restriction [to development],"

Top 10 house sales pass the $59m mark

22nd January 2013

Source: NZ Herald

All of last year's most expensive home sales were in Auckland, and all near the sea - with a beachfront property in Milford leading the real estate elite at $9.1 million, a tidy $1.6 million above its capital valuation.The most expensive home sold last year was a $9.1 million beachfront property on the North Shore which went for $1.6 million over its valuation.

The four-bedroom house at 39 Saltburn Rd in Milford tops a list of New Zealand's 10 biggest property sales for 2012 - all of which were in Auckland.

Quotable Value records show it was purchased by Hugh Jones, a director of several Auckland companies including helicopter and plane charter business Inflite, formerly known as Helilink, which is based at Mechanics Bay.

The home was not on the market and it is understood Mr Jones approached the former owners through his real estate agent to make an offer after seeing the place. The deal was signed off in August.

The property boasts a 1844sq m section and a 442sq m home, which was built about four years ago after the previous house was removed.

It had a capital value of $7.5 million.

"It's a timeless Cape Cod design," said Andrew Dorreen, of Precision Real Estate in Takapuna.The most expensive home sold last year was a $9.1 million beachfront property on the North Shore which went for $1.6 million over its valuation.

The four-bedroom house at 39 Saltburn Rd in Milford tops a list of New Zealand's 10 biggest property sales for 2012 - all of which were in Auckland.

Quotable Value records show it was purchased by Hugh Jones, a director of several Auckland companies including helicopter and plane charter business Inflite, formerly known as Helilink, which is based at Mechanics Bay.

The home was not on the market and it is understood Mr Jones approached the former owners through his real estate agent to make an offer after seeing the place. The deal was signed off in August.

The property boasts a 1844sq m section and a 442sq m home, which was built about four years ago after the previous house was removed.

It had a capital value of $7.5 million.

"It's a timeless Cape Cod design," said Andrew Dorreen, of Precision Real Estate in Takapuna."It's a half-acre site on the beach and they don't come up for sale very often, and because of its uniqueness and facing north, it attracted a good price."

The previous occupants bought the house in 2006 for $7.6 million when the CV was $6 million.

The 10 biggest sales totalled just over $59 million, according to figures provided to the Herald by PropertyIQ.

Four were beachfront homes, including the top two, while the others were within walking distance of the sea.

Three of the homes were in Herne Bay, the country's most expensive suburb with an average house price of $1,913,333. Another three were on the North Shore - in Milford, Belmont and Waiake - two were in Mission Bay and the remaining two were in in Orakei and Remuera. All but four sold for more than their valuation.

One of the properties, at 28 Ronaki Rd in Mission Bay, is a vacant section, spanning 2393sq m, which sold for $5.86 million and is for sale again.

The second highest sale was for a Belmont home at 22 Winscombe St, which sold for $7 million and is back on the market again.

Strand Plaza Takapuna Ltd, a company owned by North Shore property developers Andrew Holliday and Ian Willis, is on the certificate of title.

Other new owners of houses in the top 10 include property developers Edward and Culum Manson of the Manson family - who were worth $285 million on the National Business Review's rich list last year - and former Wellington cricketer-turned racehorse breeder Matthew Goodson and his partner Dianna Perron.

The Saltburn sale was $800,000 above 2011's biggest house sale - 19 Marine Parade in Herne Bay sold for $8.3 million. The next biggest sale was 53 Portland Rd in Remuera, which sold for $7 million.

PropertyIQ research director Jonno Ingerson said the market in Auckland shot ahead last year and demand had remained strong in the city.

He said the information covered only sales that had been settled and registered with local councils.

As top-end properties often had long settlement times, it was possible there were 2012 sales that could still make the top 10.

Mr Dorreen said his house sales in the past five months had totalled $45 million, which was a record for him.

"There has been quite a bit of movement in the upper end of the market in the last four to five months ... New Zealand's in quite a good state compared with a lot of other economies. A lot of people from offshore are wanting to invest in New Zealand and be based here."

Bayleys managing director Mike Bayley said the resurgence in $2 million-plus sales throughout 2012 reflected growing confidence in the Auckland housing market and improvement in the wider economy.

"Since the worst of the recession in 2008, 2009 and 2010, for many people, the mortgage component of their household debt has been reducing as a matter of priority. Concurrent with that, we have seen floating mortgage rates at historically low levels ...

"And since early last year, pricing levels for homes in the Auckland market have been rising month on month, improving owners' equity

The Herald revealed last week that 2846 homes had sold for $1 million or more last year compared with 2093 the year before - an increase of 36 per cent.

Whitford block sells for more than double value

This Whitford property went for $7.85 million.

Among some of the most impressive lifestyle block sales last year was a Whitford home that went for $7.85 million - $4.25 million over its valuation, which had been set by the council just seven months earlier.

Bayleys real estate agent Angela Rudling sold 42 Porterfield Rd in February. It had been valued at $3.6 million in July, according to Quotable Value records.

The home was not included in PropertyIQ's list of last year's biggest sales as it only referred to residential homes, not lifestyle blocks.

The house, which sits on a 2.5ha section, was sold 12 years ago for $705,000. It features a five-bedroom home with six-car garage, and a three-bedroom guest cottage with a garage for three cars.

Ms Rudling also sold 20 Strathfield Lane in Whitford for $6.05 million to an American buyer for $1.525 million above its valuation.

The Herald sought the two homes' sales prices from public records

"It's a half-acre site on the beach and they don't come up for sale very often, and because of its uniqueness and facing north, it attracted a good price."

The previous occupants bought the house in 2006 for $7.6 million when the CV was $6 million.

The 10 biggest sales totalled just over $59 million, according to figures provided to the Herald by PropertyIQ.

Four were beachfront homes, including the top two, while the others were within walking distance of the sea.

Three of the homes were in Herne Bay, the country's most expensive suburb with an average house price of $1,913,333. Another three were on the North Shore - in Milford, Belmont and Waiake - two were in Mission Bay and the remaining two were in in Orakei and Remuera. All but four sold for more than their valuation.

One of the properties, at 28 Ronaki Rd in Mission Bay, is a vacant section, spanning 2393sq m, which sold for $5.86 million and is for sale again.

The second highest sale was for a Belmont home at 22 Winscombe St, which sold for $7 million and is back on the market again.

Strand Plaza Takapuna Ltd, a company owned by North Shore property developers Andrew Holliday and Ian Willis, is on the certificate of title.

Other new owners of houses in the top 10 include property developers Edward and Culum Manson of the Manson family - who were worth $285 million on the National Business Review's rich list last year - and former Wellington cricketer-turned racehorse breeder Matthew Goodson and his partner Dianna Perron.

The Saltburn sale was $800,000 above 2011's biggest house sale - 19 Marine Parade in Herne Bay sold for $8.3 million. The next biggest sale was 53 Portland Rd in Remuera, which sold for $7 million.

PropertyIQ research director Jonno Ingerson said the market in Auckland shot ahead last year and demand had remained strong in the city.

He said the information covered only sales that had been settled and registered with local councils.

As top-end properties often had long settlement times, it was possible there were 2012 sales that could still make the top 10.

Mr Dorreen said his house sales in the past five months had totalled $45 million, which was a record for him.

"There has been quite a bit of movement in the upper end of the market in the last four to five months ... New Zealand's in quite a good state compared with a lot of other economies. A lot of people from offshore are wanting to invest in New Zealand and be based here."

Bayleys managing director Mike Bayley said the resurgence in $2 million-plus sales throughout 2012 reflected growing confidence in the Auckland housing market and improvement in the wider economy.

"Since the worst of the recession in 2008, 2009 and 2010, for many people, the mortgage component of their household debt has been reducing as a matter of priority. Concurrent with that, we have seen floating mortgage rates at historically low levels ...

"And since early last year, pricing levels for homes in the Auckland market have been rising month on month, improving owners' equity

The Herald revealed last week that 2846 homes had sold for $1 million or more last year compared with 2093 the year before - an increase of 36 per cent.

Whitford block sells for more than double value

This Whitford property went for $7.85 million.

Among some of the most impressive lifestyle block sales last year was a Whitford home that went for $7.85 million - $4.25 million over its valuation, which had been set by the council just seven months earlier.

Bayleys real estate agent Angela Rudling sold 42 Porterfield Rd in February. It had been valued at $3.6 million in July, according to Quotable Value records.

The home was not included in PropertyIQ's list of last year's biggest sales as it only referred to residential homes, not lifestyle blocks.

The house, which sits on a 2.5ha section, was sold 12 years ago for $705,000. It features a five-bedroom home with six-car garage, and a three-bedroom guest cottage with a garage for three cars.

Ms Rudling also sold 20 Strathfield Lane in Whitford for $6.05 million to an American buyer for $1.525 million above its valuation.

The Herald sought the two homes' sales prices from public records

NZ housing 'seriously unaffordable'

22nd January 2013

Source: Radio New Zealand

New Zealand houses became less affordable in 2012 as incomes failed to keep up with soaring prices in Auckland and Christchurch.

The annual Demographia survey shows affordability in New Zealand's eight major housing markets is as bad now as in the housing boom of the mid-2000s.

The annual world-wide survey of 337 metropolitan housing markets describes all eight of New Zealand's major markets as either severely or seriously unaffordable.

Last year, houses cost on average 5.3 times the median household income, up from 5.2 times the household income in 2011.

Only Hong Kong, with prices 13.5 times the median household income, and Australia, at 5.6, were costlier.

Study co-author Hugh Pavletich, a property developer, said ownership moved even further out of reach in his home city of Christchurch and in Auckland last year.

He said the study shows cities prepared to build outside urban limits have more affordable housing.

"In middle North America, for example they're getting starter homes in place - that's with the land, the section and the construction - all for about $600 to $700 per square metre.

"Here, on the fringes of Christchurch for example it's $2500 and beyond, in Auckland $3500 and beyond."

Finance Minister Bill English urged local councils to make changes to their processes to encourage the building of more affordable housing.

"What we're saying to the councils is the Government really wants to see results here. If the councils don't take action then the Government will."

Mr English told Radio New Zealand's Morning Report programme that it costs too much and takes too long to build a house in New Zealand.

He said it is better that the Government continues to work with councils rather than takes control of the land supply - though such a "dramatic solution" would be possible if the situation became significantly worse.

New link road now mapped at 127km

22nd January 2013

Source: The Southland Times

The latest GPS technology has been used to gauge the length of the proposed Haast-Hollyford toll road, adding 19 kilometres to previous estimates.

Proposals for the road which would establish a West Coast-Fiordland link through the Arawhata River south of Haast were first floated in the 1860s, and were even mapped out in a photolithograph in 1884.

However, new GPS distance measuring by contractors working for the road's backers, Westland District Property Ltd, have put the exact distance of the road at 127km. Previous estimates put the distance at 108km.

Yesterday, Westland District Property Ltd chairman Durham Havill told The Southland Times a road formed in the 1970s and another, formed possibly as far back as the late 19th century, measured 30km and after upgrades would be incorporated into 97km of new road, including bridges, which would have to be built from scratch.

"This is the latest information we've received on the exact distance of the proposed road and has been carried out with the latest technology, so we're confident this new distance replaces previous estimates," Mr Havill said.

The latest version of the road would be built near the confluence of the Jackson and Arawhata rivers, traverse south and skirt Lakes Wilmot and Alabaster, and the eastern bank of the Hollyford River before intersecting with State Highway 94, near the Homer Tunnel on the Te Anau-Milford Sound route.

The toll road project has had $220 million pledged to its construction by a New Zealand firm, not an American company, as had been previously reported, Mr Havill said.

He declined to name the company at present because of a commercial confidentiality agreement.

If it goes ahead, the road will be built through Department of Conservation land in the Fiordland National Park and Te Waihipounamu World Heritage Area.

The project is planned to open up a new tourism route to Milford Sound, open up previously inaccessible land, and cleave up to five hours and 355km off the existing route from Haast to Milford Sound.

The current trip from Haast takes drivers through Wanaka, Queenstown and Te Anau on a 490km, 6.5-hour journey.

Company representatives would soon meet with the Southland District Council, Mr Havill said, and he was hopeful councillors would pass a resolution to allow the road to be built.

"There's no cost or risk to any of the Southland district ratepayers and I'm hoping the council will accept our proposal enthusiastically."

About 1500 construction and associated jobs could be created in Southland and Westland if the project gets the green light.

Guide aims to excite visitors about city

21st January 2013

Source: The Southland Times

Invercargill's first official visitor guide will flood the city and hit key visitor centres and tourism markets throughout the country early next week.

Filled with options for accommodation, entertainment, activities, sights and places to eat, the Invercargill City Guide also lets visitors into some Southland secrets - like how to make their own cheese rolls.

The guide also had a section of puzzles and games for younger tourists.

Owned and developed by Invercargill business Market South, the guide has been endorsed by the Invercargill City Council.

Market South owner Carla Forbes said the guide promoted the best of Invercargill, with an aim to excite people about the city while encouraging visitors to stay longer and spend more.

The production team had worked for several months on the project, with a print run of 30,000 copies, Ms Forbes said.

"It was a huge project and although we have done visitor publications for the past eight years, this one was really exciting, focusing exclusively on our home turf," she said.

The guide was part of a package of Invercargill promotional initiatives under The Locals publishing brand, with the next publication an annual, stylish magazine to promote and showcase the lifestyle and cultural aspects of Invercargill, she said.

Invercargill Mayor Tim Shadbolt caught his first glimpse at the visitor guide yesterday, before its launch.

"It had come as a surprise to find Invercargill had never had an official visitor guide in its own right, so its about time we had one," Mr Shadbolt said.

"I've been to towns with much smaller populations and less to do and they have their own tourist guides."

The guide and suite of promotional tools that would form the overall marketing package were an exciting move for the city, he said.

ASB kick off 2013 mortgage war

21st January 2013

Source: Stuff Business Day

ASB Bank has cut its long-term fixed mortgage rates, marking the first signs of life returning to the aggressive home loan market this year.

The bank shaved 15-25 basis points off its three, four and five-year terms, while also ending its special two-year rate.

Its three year rate is now 5.75 per cent, on par with the Co-Operative Bank and AMP, but behind market leader Kiwibank's 5.65 per cent.

ASB also cut its four-year rate 15 basis points to the market-leading 5.95 per cent.

Its closest competitors are Westpac, the Co-operative Bank and Kiwibank, all advertising 5.99 per cent rates.

ASB's five-year rate was cut to 6.25 per cent, well behind the sub-six per cent rates offered by Westpac, SBS/HBS, and Kiwibank.

Westpac ended its special short-term rates last week, bringing them in line with other major lenders.

Reserve Bank statistics show most home owners with fixed mortgages are opting for shorter terms of less than two years.

However, the changes to longer term rates provide an indication of where the banks think interest rates are heading.

The Reserve Bank has kept its official cash rate - which influences short-term mortgage rates - on hold at 2.5 per cent for many months. Economists expect it to remain unchanged until early 2014.

Leading investment strategists have forecast a climate of rates remaining lower for longer over the next decade.

The latest standard for residential home loans can be compared here.

$389,000 to buy a Kiwi dream

16th January 2013

Source: Stuff Business Day

House prices have reached new heights, with the median price for a Kiwi home $389,000 - but to buy your dream home for that amount, you may need to move to Oamaru.

Latest data from the Real Estate Institute shows the national median house price reached a record $389,000 last month, up almost 10 per cent from the previous year.

But value for that asking price varies widely around New Zealand, with the same budget yielding a two-bedroom unit in Auckland's Mt Eden or a five-bedroom, two-bathroom home on a quarter-acre section in Oamaru.

And Wellington buyers looking to live in the central city will have "very little" to choose from at that price, a real estate agent warns.

The institute figures, issued yesterday, showed 74,000 houses were sold in 2012 - a 21 per cent rise from 2011 and the highest annual total since 2007.

Institute chief executive Helen O'Sullivan said the Auckland and Canterbury/Westland regions were the key drivers last year, accounting for more than half the real estate activity.

"The strength of these two regions is starting to spill over into other parts of the country, with Central Otago Lakes and Wellington both seeing more invigorated markets, particularly in terms of sales volumes."

Wellington's market remained subdued, with just 0.6 per cent growth, but house prices continued to rise, with the region's median price reaching $407,500 last month.

That was 5.3 per cent up from 2011 - with prices steadily climbing about $2000 each month in the last quarter of 2012.

"We're not expecting it to take off like it has in Auckland," said the institute's Wellington spokesman, Euon Murrell.

"Wellington has always been steady and consistent and we hope that will be maintained."

Mr Murrell, a Tommy's real estate agent, said there had been positive signs in the January market so far.

"Things are happening, so at this stage it is an indication there is a lift out there.

"In general there is an increase in the number of people coming to open homes."

Homes in the eastern suburbs, such as Miramar, and central city fringe areas appeared the most popular with buyers.

But RE/MAX Wellington manager Stephen Platt said while $389,000 may be affordable - with many buyers in that price range at the moment - choice would be limited in Wellington.

That price would buy a "reasonable-quality three-bedroom home in the Johnsonville or Newlands area - basic without being stunning".

In the more popular central and eastern suburbs "you might get a townhouse, but you'd struggle", he said.

Property listings on Trade Me also showed a wide variation in options at that price.

Suburbs such as Seatoun had no houses listed in the $100,000 to $400,000 category, while a two-bedroom unit in Miramar compares with a three-bedroom, two-bathroom home in Upper Hutt.

New Zealand's rural areas provided the best value, with a five-bedroom property in Oamaru and a four-bedroom Milton home on an 8094-square-metre section available for the same price.

Professor Bob Hargreaves, of Massey University's real estate analysis unit, said while strong competitive markets in Auckland and Christchurch had made housing less affordable in those markets, across the rest of the country competitive interest rates were working in buyers' favour.

The regions with the highest December price lift were Nelson/Marlborough, up 8.3 per cent, Central Otago Lakes, 5.9 per cent, and Taranaki, 5.4 per cent.

Hawke's Bay prices eased by 7.9 per cent in December, Southland by 5.1 per cent, and Otago by 4.1 per cent.

Across the whole country the total value of residential sales was $2.73 billion in December, up from $2.32b in December 2011. The total value of residential sales for all of 2012 was $33.95b.

House prices rise in tight market

15th January 2013

Source: Stuff Business Day

The property market continued to boil hotter at the end of last year, as house prices reached new records and sales volumes topped five-year highs.

Latest data from the Real Estate Institute of New Zealand (REINZ) shows the national median house price reached a new record of $389,000 in December, up almost 10 per cent from the previous year.

All regions recorded falls in sales volume during December, as is normal during the shortened trading month.

But 74,000 houses were sold over the course of the year, marking a 21 per cent rise from 2011 and the highest annual total since 2007.

Despite the strong growth in sales volume, the number of sales relative to total dwellings remained below the long-run average and well behind the 2003 peak, when more than 120,000 properties were sold.

REINZ chief executive Helen O'Sullivan said the Auckland and Canterbury/Westland regions were the key drivers last year, accounting for more than half the country's real estate activity.

"The strength of these two regions is starting to spill over into other parts of the country with Central Otago Lakes and Wellington both seeing more invigorated markets, particularly in terms of sales volumes."

Sales by auction went through the roof in 2012, growing by 87 per cent in Auckland and by one third across the rest of the country. 

O'Sullivan said the trend was evidence of the ongoing tightness in some parts of market where demand was increasing, but supply remained constrained. 

While the national median house price increased by $5750 in December, prices in Auckland eased by almost the same amount.

However, the median Auckland price of $535,000 was still up more than 10 per cent from December 2011.

Canterbury/Westland's median house price rose 1.7 per cent compared with November, reaching a new record of $351,000.

The regions with the highest lift in prices for the month were Nelson/Marlborough, up 8.3 per cent, followed by Central Otago Lakes, up 5.9 per cent, and Taranaki, up 5.4 per cent.

Hawke's Bay prices eased by 7.9 per cent in December, Southland by 5.1 per cent, and Otago by 4.1 per cent.

Wellington was subdued at 0.6 per cent growth, though the capital city's median house price has grown 5.3 per cent year-on-year.

Across the whole country, the total value of residential sales was $2.73 billion in December, compared with $2.32b in December 2011.

The total value of residential sales was $33.95b during 2012.

Wrecked houses used as rentals

14th January 2013

Source: Stuff Business Day

Christchurch houses judged by insurance companies as too damaged to repair are being snapped up at bargain prices by savvy investors who are then renting them out for a high return.

Real estate agents say they are seeing a growing number of sales where property owners have taken a cash settlement from their insurance company for the rebuild of their quake-damaged home and are then selling their property for the value of the land only.

Investors are buying the properties and, in many cases, renting the houses out until they can realise their long-term development potential.

Christchurch-based Real Estate Institute of New Zealand (Reinz) director Tony McPherson said many properties deemed by insurance companies as uneconomical to repair were still habitable.

"There's definitely a market for those - you're buying the section and the house is a bit of a bonus," McPherson said.

"Ultimately if it [the house] has to be demolished, it will at the new owner's cost but quite often they are habitable. What an insurance company deems as uneconomic to repair may, with some remedial work, be fine for the next few years, after which it can be redeveloped. And, of course, in the interim they [the investors] can get quite a good return by renting it."

Examples of such properties currently on the market include a 660sq m hillside section in Sumner that has an asking price of just $225,000. A house - which has a capital value for rating purposes of $256,000 - comes with the land but it has been written off by the owner's insurers.

In Avondale two two-bedroom townhouses for which the owners have been paid out by their insurance companies, are being offered for sale "as is where is". One is being marketed at $149,000, which is $137,000 less than its rateable value of $286,000 while the other is being offered by negotiation over $145,000. Before the quakes it had a rateable value of $277,000.

Real estate agent Phil Jones, of Ray White, is selling both the Avondale properties and has already secured offers on them. He has found demand from investors for "as is where is" properties and is looking for more.

"This particular market is driven by investors because you have to have cash because the banks won't loan on them," Jones said. There were some risks to buying such properties but the potential returns were significant if the houses could be rented out.

"You could get a 20 to 25 per cent return on your investment," Jones said.

Mike Pero, of Mike Pero Real Estate, said he was aware of a number of sales in the eastern suburbs of properties where the houses had been written off by the insurance companies and then sold on with full disclosure.

"What people are realising is that a house might have a crack through the foundation but otherwise be fine as long as we don't get another quake. Why shouldn't they take the risk of paying $250,000 for the land when they can get a free house that would cost them another $300,000 to $400,000?

"It's a wee bit like buying a car that has been written off because the chassis is bent. As far as the insurance company is concerned it's not the way it was and the owner deserves a new one [car], but you can take it to an engineer and get it straightened and for all intents and purposes it will be OK. I have no problems with that as long as the buyer is aware.

"As an investor you could buy a five-bedroom house in Queenspark that had been written off by its insurers, make it safe, and put tenants in it . . . and you might be able to get $1000 a week.

"You've got to know the risks though, and know you won't get insurance and you won't get a mortgage on it," Pero said. "I would have no hesitation myself doing it."

Deluge: Cleanup begins across the south

11th January 2013

Source: The Southland Times

The cleanup has started across the south after heavy rain and flooding on Wednesday night and yesterday.

Northern Southland and Fiordland were among the hardest hit, with floodwaters washing away the approach on the Whitestone Bridge near Te Anau, and swamping paddocks and farmland elsewhere.

Surface flooding was common, with the Gore Fire Service attending eight call-outs to homes, businesses and a car crash while roads throughout the region were closed.

Lake Te Anau rose a metre overnight on Tuesday, sparking some concern about the impact of continuing rain, but by yesterday afternoon the rate of increase had slowed.

Meridian Energy fully opened the control gates on Lake Te Anau because of the influx of water.

Water had risen to cover the Kepler water taxi jetty and pontoons at the Te Anau Boating Club.

Environment Southland also monitored the region's rivers. Some, including the Mataura River, were expected to peak this morning.

New Zealand Transport Agency acting Southland state highway operations manager Murray Clarke said repair work on the Whitestone Bridge had started.

Concrete blocks and rocks were being used to fill the washed away section and it was hoped the bridge would open this morning, Mr Clarke said.

The approach would be unsealed until the surface could be compacted, he said.

Downer and the NZTA were also called on to escort bus loads of cruise ship passengers from Te Anau to Milford Sound to meet up with their ship. The buses were also used to bring trampers stranded in Milford Sound back out.

But the Milford Road remained closed to the public with a further inspection to be carried out this morning, the agency said.

The Department of Conservation said there had been widespread flooding in Fiordland National Park causing sections of the Milford and Routeburn tracks to be closed.

DOC spokeswoman Annie Wallace said while the full extent of the damage was not yet known, the department was working hard to keep the Milford, Routeburn and Kepler up and running.

Staff were being flown into the Milford Track to replace damaged bridges, and trampers were being flown over a short section of track, she said.

An electrical storm also damaged the radio repeater on the Milford Track making communication difficult on the track.

In Gore some residents woke to find their gardens and yards under water after torrential rain blanketed the area overnight on Tuesday.

The Fire Service were called out on Tuesday night and Wednesday morning, six calls to residential properties, one to a business and another to a car accident in a flooded area.

Two of the six residential properties were at risk of internal flooding but were saved by the brigade.

Gore Fire Service chief fire officer Steve Lee said it was a busy night for volunteers but the rain had since ceased and water had subsided.

"It was a great team effort by 22 members of the volunteer fire brigade," he said.

Gore resident Susan Dennison said she woke about 8.30am to find her yard flooded and water underneath her Coutts Rd property.

"It's never happened before and we've been here eight years," she said.

Several roads were closed in the Gore district but some had reopened by the end of the day.

Retailers and business owners in flood-prone parts of Queenstown and Wanaka were briefed by council staff yesterday after heavy rain continued to push lakes up above flood warning levels.

Queenstown Lakes District Council spokesperson Meaghan Miller said Lake Wakatipu was not expected to peak until this morning, after initial modelling given by flood experts indicated it would peak yesterday.

"The ORC (Otago Regional Council) is still projecting we may get to the 311.40m mark," Ms Miller said

AS IT HAPPENED

~ Gore Fire Service called out to eight jobs related to flooding between 1.30am and 6.30am yesterday.

~ State Highway 94 from Lumsden to Te Anau closed after the approach to the bridge at Whitestone River is washed out by floodwaters.

~ State Highway 94 Milford Road, from Cascade Creek to Milford Sound, closed except to convoy cruise passengers back to their ship in Milford Sound and return with stranded trampers.

~ Helicopters used by DOC and tourism companies to move trampers along the Milford Track after sections of track washed away. Routeburn Track closed at the Lake Mackenzie outlet – midway through the track – because of flooding.

RB tipped for fresh action on housing

8th January 2013

Source: Stuff Business Day

The Reserve Bank could reach deep into its economic bag of tricks in 2013 to cool the country's overheating housing markets and soaring demand for home loans.

Official figures released last month show the New Zealand economy expanded at a pace of 0.2 per cent in the September quarter, even as home prices in Auckland continued to soar.

Slowing growth of the economy was likely to prevent the central bank from using traditional measures, such as lifting the official cash rate or OCR from its current historic low of 2.5 per cent.

ASB pushed out its bets on when the OCR was likely to rise from September to the final quarter.

That tips policy action in favour of non-traditional macro-prudential tools such as lifting the deposit level homebuyers would need to qualify for a mortgage and capping the amount of debt people can take on relative to income levels.

ASB chief economist Nick Tuffley saw potential for Reserve Bank governor Graeme Wheeler to use macro-prudential methods to offset soaring property prices and growing demand for credit.

"The hottest parts of the inflation outlook, construction and housing, are showing more tangible signs of heating up," Tuffley said.

"The RBNZ is now placing more emphasis on these factors, and we expect they will become an increasingly bigger part of the RBNZ's policy decisions (this) year."

ASB expected the New Zealand dollar to continue gaining in value in the first half of the year peaking at US84c in June, but Tuffley believed the RBNZ already factored that into the current OCR level.

The pace of economic activity was expected to pick up in the year ahead thanks to the Canterbury earthquake rebuild finally getting under way.

That should feed into support industries such as transport, wholesaling, consumer spending, manufacturing and professional services.

However, further signs of that progress are unlikely to be seen in this week's building consents data.

ASB estimates the number of building permits issued in November fell 1.5 per cent compared to October due to slow construction activity in Christchurch.

NZ Property Report – December 2012

7th January 2013

Source: realestate.co.nz

The December 2012 NZ Property Report published by Realestate.co.nz provides an insight into the state of the New Zealand property market as measured by the supply side of the property market over the month of December. The key measures of the market analysed in the report are the number of new listings, the asking price expectation for those new listings and the level of inventory of unsold houses on the market at this time. The report is compiled from data captured by the website and represents close to 97% of all property movements in the NZ market as managed by licensed real estate agents.

A full print version of the NZ Property Report – December 2012 is published below and is available for download (1.2MB) and distribution.

Summary of the market – December 2012

New Year starts with even fewer properties for sale, but an ease in asking prices.

The property market saw a further tightening of supply in December, more especially in the 3 major cities where the market remains very firmly as a sellers market. In overall terms the number of new listings coming onto the market in December was considerably lower than expected given the surge in November. Overall stocks of unsold homes fell to a 5 year low of 26.6 weeks of inventory (long term average = 39 weeks).

Auckland, Waikato and Otago were most affected by low inventory levels, with stocks of unsold homes falling to a new record lows of 13.9 weeks of inventory in Auckland, 31.5 weeks in Waikato, and 20.4 weeks in Otago, each well below their long term inventory levels.

Inventory levels across the country remain low and the market remains a firms sellers market across 16 of NZ’s 19 regions.

Asking Price

The seasonally adjusted truncated mean asking price for listings in December eased from the record high of $446,277 set in November to a December level of $422,636. The month-on-month decrease of 5% takes the month level to 1% up on December last year.

As can be seen from the chart that the fall in the month does not significantly affect the trend line which continues to show a steady rise over the past 2 years.

New Listings

The level of new listings coming onto the market in December fell on a seasonally adjusted basis by 8.4%. A total of 8,482 new listings came onto the market representing a 3% year-on-year fall.

For the calendar year of 2012 a total of 132,243 new listings came onto the market as compared to 124,748 for calendar year 2011 – a rise of 6%. By comparison the prior years stats were 2007: 177,529; 2008: 163,488; 2009: 135,416; 2010: 138, 789. So as compared to the peak of the market on 2007 listings are down 26%.

Inventory

The level of unsold houses on the market at the end of December (42,513) was down, when compared to November (45,228). The inventory as measured in terms of equivalent weeks of sales fell to a 5 year low last month to 26.6 weeks last month. This fall was witnessed across 16 of the 19 regions.

With the rising rate of property sales, the inventory on the market has seen a significant drop over 2012 pushing it well below the long-term average of 39 weeks of equivalent sales.

Regional Summary – Asking price expectations

The national (seasonally adjusted) truncated mean asking price expectation among sellers fell by 5.3% in December to $422,636.

In the main centers, Auckland, and Christchurch reported a fall in the asking price in December. Auckland fell 1.5% to $588,088, and Canterbury fell 4.1% to $389,273. Wellington reported a rise in asking price of 0.8% to $434,843.

In total 5 regions reported asking price increases, and 3 regions saw rises greater than 5%. The most significant rises were seen in Gisborne, Wairarapa , and Hawkes Bay with Gisborne showing the largest increase, up 33.9% to $335,905. Of the 13 regions witnessing asking price falls on a seasonally adjusted basis there were 6 that reported a falls of greater than 5% with Northland falling by 14.4% to $366,584, Central Lakes / Otago falling by 12.8% to $515,859, Central North Is falling by 9.9% to $332,649, Marlborough falling 8.7% to $362,071, West Coast fell 7.2% to $277,538 and Taranaki fell 6.3% to $281,856.

A new record high asking price was seen in Southland, rising by 3.6% to $264,028.

Regional Summary – Listings

Overall new listings decreased on a national basis, as seen in the adjacent chart and across the regions there were slightly more regions showing increases than falls.

There were 11 regions reporting year-on-year falls, with significant falls (over 20%) seen in just 1 region, West Coast – falling by 35.1% when compared to December 2011.

Record low numbers of new listings were seen in West Coast, Auckland, and Wellington, putting more pressure on the already low number of listings in the main centers

8 regions reported higher new listings than December last year with Southland being the region to report the highest increase of 72.5% when compared to December 2011, Followed by Northland who saw a increase of 42.9%, and Coromandel who saw a increase of 35.8%.

Regional Summary – Inventory

The inventory of unsold homes on the market tightened significantly in December – Falling to a new record low of 26.6 weeks of equivalent sales from 29 weeks (on a seasonally adjusted basis).

Three regions (West Coast, Southland, and Central North Island) showed increases in inventory of homes on the market taking them above their respective long-term average. In addition one other region (Taranaki) sits close to it’s respective long term average.

Market sentiment now favours sellers in 14 regions, with the greatest strain being felt in the 10 regions which are marked in darker blue, which includes the main metro areas of Auckland, Wellington, and Canterbury which remain under pressure from low listings as measured against sales activity.

Auckland, Otago, and Waikato all reported record low numbers on Inventory (based on weeks of equivalent sales), with Auckland reporting an all time low of 14 weeks of equivalent sales.

Lifestyle

New lifestyle property listings fell across the country in December, dropping 23.7% when compared to November. A total of 813 listings came onto the market, showing a fall of 3.8% when compared to December last year. The truncated mean asking price for these listings was down by 4.8% as compared to the recent 3-month average to an asking price of $624,860 (up 13.6% when compared to December 2011). New record high asking prices were seen in 1 region in New Zealand (Hawkes Bay $765,375).

Apartments

New listings for apartments in December were down 6.1% on a year on year basis, with 325 being brought to the market. The truncated mean asking price of new apartment listings fell 3.9% to $378,750 in December from $394,282 in November, and was down 4.5% on a year on year basis.

The Auckland apartment market had 163 new listings coming onto the market, down 17% when compared to December last year. The truncated mean asking price of new listings in Auckland fell to $352,786 (December) from $386,818 (November) representing a 5.7% fall on the prior 3 months.

Slim pickings in summer NZ real estate

4th January 2013

Source: Stuff Business Day

The New Zealand property market is drying up this summer with a record low number of houses available, according to industry website Realestate.co.nz.

Inventory, or the number of weeks it would take to sell all housing stock on the market, sunk to a seasonally-adjusted 27 weeks in December, compared to a long-term average of 39 weeks.

Sixteen of the 19 regions across the country saw falls in property availability, with Auckland undergoing its biggest drought in the five years since records began.

The country's largest property market registered a new low of 14 weeks of housing stock, down 11 per cent from the previous month, and 43 per cent on the same time last year.

Record lows were also seen in Otago (20 weeks) and Waikato (32 weeks), despite a surge of new listings towards the tail-end of last year.

Realestate.co.nz marketing manager Paul McKenzie said new listings were usually down in December, but had plummeted 37 per cent from the previous month and 3 per cent on an annual basis.

"For this to happen at a time when demand is so high is significant," he said.

"Compared to the peak of the market in 2007, new listings are down 26 per cent."

McKenzie said the tight inventory would continue to tilt the market firmly in favour of sellers.

However, a slight easing in asking prices to a seasonally-adjusted average of $422,636 would provide some relief for house-hunters.

"Following the record high asking prices recorded over the previous two months, questions of housing affordability were naturally coming into the frame," said McKenzie.

"However, buyer demand is still clearly strong, so seller confidence is likely to remain high for some time to come."

Due to the limitations of the small sample size and seasonally adjusted data, ASB senior economist Jane Turner interpreted the figures with greater caution than usual.

"Nonetheless, the results suggest the housing market has potentially tightened further in December with supply failing to respond to the increase in demand over 2012," she said.

Turner said the Reserve Bank would not be able to tolerate the momentum in house prices and credit growth for much longer.

There was a "growing possibility" that it would step in with macro-prudential tools - such as limits on lending - to ease pressure in the housing market.

Boxing Day spending jumps

27th December 2012

Source: Stuff Business Day

Kiwis hit the shops with gusto yesterday, pushing Boxing Day spending up 13.4 per cent or $14.2 million on the same day last year, according to Paymark.

Shoppers put more than two million transactions and $120m through retailers' tills yesterday. 

Paymark sales and marketing head Paul Whiston said the result was a return to the kind of spending growth figures seen prior to the global financial crisis and was the first time in five years it had seen double-digit growth on Boxing Day. 

Consumer electronics such as phones and computers were especially popular with shoppers yesterday, with sales up almost 32 per cent on last year. 

Spending in clothing and apparel was up nearly 21 per cent on last year, while jewellery spending shot up more than 24 per cent. 

Department store spending rose more than 22 per cent year-on-year. 

Gisborne saw the biggest shopping boom of all the regions, with spending up almost 23 per cent on Boxing Day last year. 

Palmerston North and Taranaki/Taupo were both up over 18 per cent, while spending in Auckland/Northland rose nearly 14 per cent.

In the Wellington region, spending jumped over 12 per cent year-on-year. 

Paymark processes about three-quarters of electronic transactions in New Zealand.

$3m deal gives city airport control

24th December 2012

Source: The Southland Times

The Invercargill City Council holding company has ploughed $3 million into "routine" maintenance for the city airport, in the process taking almost complete control of it.

Invercargill City Holdings (Holdco) announced it had bought $3m worth of shares in the airport yesterday.

The airport had offered $3m of shares to both Holdco and the Crown, its two existing shareholders, so it could afford maintenance work on its taxiway and apron.

The Crown declined to invest, saying it was under capital restraint.

Holdco's $3m buy was unanimously approved by the council during the public-excluded session at the full council meeting on December 11.

Holdco now owns 97.19 per cent compared to its 55 per cent stake before the buy.

The Crown's share has been diluted from 45 per cent to 2.81 per cent.

The airport made a profit of just $3274 in 2010-2011.

Holdco deputy chairman Cam McCulloch said the airport did not have the resources to do the work without capital investment.

It may have to raise its landing fees, the main source of its profits, in order to boost its operational funds, he said.

"[The fees] might not have been sufficient and may need to go up in the future."

Mr McCulloch said the $3m investment would not have an affect on Holdco's annual dividend to the council, which was forecast to be $3.7m this financial year.

"It is not going to affect the return. It doesn't come out of the [Holdco] profit . . . it will reduce the income in the short term but it does not affect the projected dividend."

Airport company chairman Joe O'Connell denied it was effectively a $3m bailout from the council.

He said council investment was positive and showed its commitment to infrastructure.

"What this is about is supporting a very important infrastructure asset . . . you can view it as no different to water or sewerage or roading."

The landing fees were going to have to increase to support the infrastructure the airport needed, he said.

"The reality is these airports aren't cheap to run."

Asked if the airport could get private investment, he said it would be difficult.

"It's a not a particularly attractive business proposition . . . [regional airports are] a very challenging business to be in but very important for all regions."

Push for magnificent Mainland

24th December 2012

Source: Stuff Business Day

"South, the heart of New Zealand," is a new industry strategy being pushed into the hotter visitor markets of Asia to inject growth as memories of the persistent earthquakes recede.

Dave Hawkey, the former chief executive of big South Island tourism operator Real Journeys, has been in the role of manager for "South" since the initiative was launched with Christchurch International Airport funding in February.

There is commitment.

CIAL chief executive Jim Boult has taken about $500,000 out of the airport's "aeronautical marketing budget" towards the tourist stimulation project.

But the idea is that 12 regional tourism organisations (RTOs) put more money towards South in the 2013-14 year.

In his more than three decades in the tourism industry Boult sees the recent period following the earthquakes and the global financial crisis as one of the worst for some operators.

"This would be one of the hardest times we've seen in the tourism industry . . . go and talk to tourism retailers down the West Coast or down south, right up through the country. They are finding it really, really tough."

Soon after the quakes, CIAL recognised it would have to do something radical to retain aeronautical volumes given that a big chunk of Christchurch's tourism infrastructure, mainly the big hotels, was destroyed .

Boult says the recovery of the tourism sector can be speeded up by bringing the influential RTOs into an overarching group.

The RTOs in the South Island have a combined annual budget of about $14 million.

Tourism Dunedin chief executive Hamish Saxton says his RTO, which has a council-budget of $1.2m, is committed to the idea of South and recognises that Christchurch Airport is of enormous importance to the South Island.

International visitors to Dunedin have fallen as a result of the quakes, but on the other hand Christchurch residents are enjoying visits to the city and its intact heritage. "Dunedin is being seen through different eyes now with its urban infrastructure."

Funding of South and its endeavours to attract visitors from Asia is a distinct possibility.

"We have indicated that we will be putting some funding towards the model, though that has yet to be confirmed," Saxton says.

Rodney Bennett, owner of High Country Explorer Tours, says times remain tough for operators, given the number of quake-destroyed hotels.

"We do operate a product out of Christchurch, but we're not promoting at the moment heavily . . . because of the situation since the earthquake in Christchurch with the lack of accommodation, we just can't get volume and nobody can."

Hawkey says despite the quake damage, the city on the positive side has a hire and drive base rather than being a "fly and drop" destination like Bali or Fiji.

"Some recent research that's just come out . . . demonstrated that Christchurch and Canterbury is the No 1 spot in the country for campervans in terms of people staying. No 2 is Queenstown and No 3 is the West Coast."

Boult says South will not need the big dollars to market at a retail level. Rather it will be specific, talking to tourism wholesalers in China, for example, about the merits of the South Island as a whole as a destination.

"It's about growing the pie rather than fighting over a share of the pie," Hawkey adds.

Boult wants the period of recovery to be marked by new medium to long-haul flights into the Garden City. The airport is targeting a Los Angeles to Christchurch route, possibly provided by Air New Zealand or another airline.

It also wants direct routes from Australian cities such as Perth and Adelaide, and importantly a new route from southern China. The earthquakes and other impacts such as the downturn and a delay by Boeing in the delivery of 787s to airlines have not helped.

The airport saw 5,592,529 passengers in calendar 2011. Those movements were down 405,000 or 6.7 per cent over calendar 2010. The figure dropped again to 5,551,600 in the 12 months to June 30, 2012.

But the airport anticipates growth in volumes in the next two years partly stimulated by rebuild workers, Boult says.

"Look we will get an LA service, sometime in the next two years . . . We will get a China service and that will be sometime in the next couple of years as well. We will get services from other parts of Australia, that we currently aren't getting . . . for example Adelaide and Perth. Particularly when the rebuild gets [fully] under way."

Getting airlines to commit to new unproven routes was a long arduous process. Airports such as Christchurch typically spend years wooing the aviation decision-makers and sometimes with limited success.

CIAL announced with much fanfare the arrival of Air AsiaX, a service that started in April 2011 only to slam the door shut on the last passenger trip a bit more than a year later.

CIAL chief operating officer Andy Lester says there are still benefits from the Air AsiaX service with increased Malaysian visitors still coming to New Zealand. There were 30,720 visitors from that country to New Zealand in the year to November 30, 2012.

Boult says the airport still hopes to win back Air AsiaX. It is also in talks with Air Garuda, China Southern, Cathay Pacific and Indian airlines.

"We don't think we'll get an Indian service for maybe five years but we've started the ball rolling."

China is the welcome air service for a decline in international tourists from the "Western" countries which include Europe, Britain and the United States, and who have stopped travelling in the harsh economic climate.

"China and to some degree Australia are the only markets that have been showing some significant growth, China in particular," Hawkey says.

"The challenge with Australia is that you are very much into the repeat visitor market, so a lot of Australians have been here . . . over half now are repeat visitors."

Hawkey says it has been a tough year with the number of international visitors to New Zealand down in the year until October.

In the South Island international bed night numbers were down by 8.5 per cent in the 12 months to October 2012 compared with the same period to October 2011. In the North Island the decline was less severe at 4.7 per cent in the same comparative period, though there was probably a Rugby World Cup impact.

However, some international tourists who did choose the Mainland stayed longer. For example, Chinese arrivals into Christchurch notched up 9.8 days for an average length of stay in the south, much more than the six-day average stay for visitors to the North Island.

However, the Chinese still favour the North Island cities of Auckland and Rotorua by number, Boult says. "[But] many of the Chinese visitors coming to Auckland, for example, get off the plane and kind of, ‘where's the mountains and lakes?'."

South is in the process of appointing a China-based "dedicated trade manager" who will be able to talk to and work with travel wholesalers in that country on behalf of RTOs, Boult adds.

Hawkey a month and a half ago visited the cities of Hong Kong, Guangzhou, Beijing, Hangzhou and Shanghai to talk to 360 travel agents and wholesalers, to help kick-start South.

"We don't have the budget, nor should we get involved in large consumer campaigns. That's Tourism New Zealand's role but our role is pretty much focused on the trade outside Australia. . . . the RTOs sent us a pretty clear message: ‘We need your help in the longer-haul market and the ones where language is a barrier'."

Some of the South Island's bigger tourism operators/owners including Ngai Tahu Tourism, Real Journeys, Skyline Enterprises, and John Davies who has a stake in the Hermitage at Mt Cook have indicated their support for the idea.

Hawkey is urging the RTOs and operators to offer a Chinese-language option on their websites. South marketing booklets for wholesalers highlighting the Mainland's tourism options had been produced in Chinese with Korean and Japanese language versions at "the printers".

NZ's highest growth towns and suburbs

24th December 2012

Source: Stuff Business Day

 

Top 20 Real Estate Hot Spots.

 

 

The housing boom is turning many country towns into real estate hotspots as home buyers search for cheaper alternatives to skyrocketing city prices.

Figures compiled by the Sunday Star-Times show the country's hottest residential property market is in Foxton, a small North Island town 20 kilometres north of Levin.

According to figures from the Real Estate Institute of New Zealand, the median selling price of homes in Foxton was $180,000 last month, a massive 59 per cent increase on the $113,500 median price in November last year. Over the same period the number of homes being sold in the town has more than doubled.

In the 12 months to November 2011, only 34 homes were sold in the town, but in the 12 months to November this year the number of sales jumped to 77. The figures do not appear to be an anomaly.

Also rating highly on the Sunday Star-Times' list of top-20 real estate hotspots were nearby Foxton Beach and Waikanae Beach.

Other small towns to feature on the list were Arrowtown and Darfield in the South Island, Helensville on Auckland's northern outskirts, and Oneroa on Waiheke Island.

 

Given the way the Auckland property market has grown this past year, it is surprising that only four central suburbs made the list: Mt Roskill, Parnell, Grafton and Epsom.

To be included on our list, suburbs or localities had to have recorded an increase in their median price of at least 30 per cent between November 2011 and November 2012 and a minimum 30 per cent increase in the number of sales in the 12 months to November (refer to graphic for the full list).

That made those locations true hotspots because not only were their prices rising strongly, so were the number of homes being sold, meaning the overall real estate activity in these areas was outstripping activity in other parts of the country.

Over the same periods, the national median price increased by 4.3 per cent, while the number of homes sold increased by 8.2 per cent.

REINZ chief executive Helen O'Sullivan said for sales activity in towns like Foxton to increase so much in a 12-month period was "quite remarkable".

"We are seeing a lot of what are called displacement effects, where people say, ‘OK, I've got $400,000 to spend, what can I get for that'," she said. That included looking at options outside of the main centres and weighing up the pros and cons.

"People are prepared to make more of a compromise on things like travelling times in order not to have to compromise on space," O'Sullivan said.

That was often helped by the fact that many employers were prepared to help with flexible working hours, which allowed people to avoid rush-hour traffic when they needed to commute into the city, and the growth of technology which allowed people to work from home, she said.

O'Sullivan does not see the current property boom changing much in the coming year.

 

"It's going to be interesting. In Auckland and Christchurch, supply issues are going to continue to be a problem."

She said that over the five years from 2003 to 2008, the number of homes sold each year was equivalent to about 6 per cent of the total housing stock but now it was running at only 4 per cent.

O'Sullivan said she expected the housing market to continue to firm in 2013, "but probably at a slightly slower pace".

SMALL-TOWN TIME WARP

Wendy Voyce was spending as much time out of Palmerston North as she could. The weather was getting to the mother-of-three. The cost of living was getting to her, too; and the children, she thought, were not as happy as they could be.

She had lived and worked in the North Island city for years but last December, after increasingly heading to the beach for the weekends, Voyce started wondering why they didn't just pack up and leave. There was good weather at Foxton Beach. There was great fishing and friendly people too, she said. Whenever she went into a shop they seemed glad to see her. It was almost like a time warp - one with wonderful sunsets and million-dollar views.

"But you're not paying for them. Why wouldn't you move?"

Last December she answered that question definitively. The family sold their three bedroom home in Palmerston North for $280,000 and bought a much larger two-storey home on 800 square metres for $60,000 less.

Voyce said the kids were now happier, her partner commutes the short 30 minutes to Palmerston North and she still felt like she was on a holiday. "There is so much to do here but it is back to basics."

Instead of trips to the mall or paying for go-karting and 10-pin bowling, they go walking in the forest or searching for tadpoles.

Voyce's decision has helped boost the country's residential market. According to data from the Real Estate Institute of New Zealand, crunched by the Sunday Star-Times, smaller cities and towns have increasingly turned up in the top places in New Zealand for increases in sales and year-on-year price increases.

Over the past year, both Foxton Beach and Foxton have seen big increases in the number of residential sales and the prices paid for them. The trend is echoed in many towns on the outskirts of larger metropolitan areas.

Owner of Ray White Foxton, Ellen Graham, said the location was previously known as a gang town. Now, however, it was seen as a place for both commuters and retired farmers looking for a simpler life.

"I've been selling crap out there which is crap but people want to pay half a million," she said. Members of the older generation who had held on to sections they bought for $30,000 can now sell them for $400,000.

Amanda Street, who was born and bred in the area, bought her first house in the early 2000s for $73,000 and sold it five years later for $180,000. Now she is selling subdivisions on a larger property she bought with the profit from that first acquisition.

"You can buy at a reasonable price, earn the city money, commute and live at the beach," she said. "I'm only leaving here in a coffin."

Helensville, 40km north-west of Auckland, has also seen a boost in sales.

Mark van Lent, Helensville manager for Barfoot & Thompson, said the prices in central Auckland had helped push families further out.

"You can still buy a reasonable three-bedroom home in the $300,000s [in Helensville] and it's not that far out."

For many families who worked on the North Shore, 35 minutes away, it was a more attractive option, he said.

"It's to do with affordability."

In Darfield, Canterbury, the Christchurch earthquake was behind a similar trend. Some had come from the city but others were transferring from as far away as Auckland for a different and cheaper lifestyle, said Devlin Real Estate sales representative Annie Smith.

"There is an awful lot of unknown and they like to go to something that is quite solid."

Christchurch Airport was only about 25 minutes away, and Darfield was a good alternative for people who did not want to live in a big city.

"It is unseen and unspoiled. Whereas Rolleston and Rangiora had an immediate boost after the earthquakes and are now seen to be a bit overcrowded, we don't have that in Darfield.

Are leasehold properties a good buy?

24th December 2012

Source: Stuff Business Day

Most Kiwi property owners aspire to own both their house and the land, but there is another option which is miles cheaper.

It's called leasehold, where the homeowner only owns the building and rents the land.

More commonly used for rural and commercial properties, leasehold residences are scattered around the country, often owned by church groups or councils.

But they are most visible in central Auckland where about 15 per cent of the central city's apartments are thought to be on leasehold land.

The allure of leasehold is easy to see. In a city where freehold apartments cost about $7000 per sq m to build, leasehold apartment values have tumbled to about $2000 per sq m.

However, there's a good reason why leasehold prices have plummeted.

The annual "ground rent" is subject to review every seven or 21 years, depending on the lease.

Rent reviews are usually based on a fixed percentage of the land value and with Auckland's soaring land prices, they can be a shock.

Olly Newland, an Auckland property commentator and investor, is not a fan. He recommends people steer clear of leasehold.

Leasehold land was a good idea 100 years ago because they used to have what is known as Glasgow leases which went forever and were reviewed every 21 years, when inflation or your land price, were flat, he said.

"And so there were just gentle increases every 21 years. It was a cheap way for people buy farms or houses. But it all screwed up in the last 50 years when land prices roared up and the rent went with it. So it's a very bad investment now."

Kelvin Horspool invested in a one-bedroom apartment in Scene 3, a swish apartment complex on Maori land in Auckland.

Apartment owners were given a rent holiday for the first seven years but now its iwi owners want to start charging ground rent.

Scene 3's penthouse was sold off the plans for $780,000 and was passed in at auction recently at $330,000.

Horspool says he has no beef with the Maori land owners, as he was well aware of the fine print in his contract.

However, he suspects many of his fellow apartment owners - some of whom are reportedly Australian investors - were less well-informed.

"New Zealanders, in my opinion, can be quite naive in leasehold situations. Take Australia, they've got very little in terms of residential leasehold…but around the rest of the world, leasehold is very popular because it's the only way people can buy into houses."

Martin Dunn, of Auckland real estate agency City Sails, blames the plunge in Auckland leasehold values on property "spruikers" who sold the apartments at inflated, virtually freehold prices.

"I will say that we have never sold leasehold apartments off the plans," he explains.

"We say that a leasehold investment is an oxymoron, like a fun run. It's a conflict of terms."

Dunn believes the entire leasehold market will eventually convert to owner-occupier status.

In the meantime, he says there is a place for leasehold, particularly with Chinese buyers who are familiar with the concept, and with young people who would be otherwise priced off the property ladder.

Prices have gotten to the point in his view where they are almost "irresistible" but they are still failing to gain traction.

A two bedroom, two-bathroom apartment Dunn knows of, with a tennis court, gym and carpark, sold for $350,000 four years ago, and is now a snip at $120,000, although the building has some remedial issues.

"Now the outgoings would be $10,000 but if you bought that and got a flatmate in, the flatmate would pay you $200 a week, that would cover your ground rent…How cheap does that have to get?"

However, there are a couple of considerations. The first is that it's harder to get a mortgage because it's secured against the building alone, requiring a bigger deposit.

The retail banks are less keen on lending against leasehold property.

The other is that there is always a day of reckoning if the ground rent goes up or the owner wants to exit.

And for those currently trying to get out of their lease, the length of time is a crucial factor.

If a rent review is due in a year, the apartment's rental situation may well have lost much of its lustre.

On the other hand, if it's a 21-year rent review and there are many years to go, a prospective owner might take a punt that land inflation is slowing down and that the eventual rent increase will be small.

Most leases are in perpetuity, although some on Princes Wharf are limited to 70 or 90 years. That gives you security but also means that your only exit options are to sell or illegally walk away.

However, if you've saved a few quid in your cheaper home, there may be another option: an offer from the landlord to buy the property (the land).

This has often happened with religious land owners who don't want the image of being a "greedy landlord," says Newland.

He agrees that freeholding the land quickly, before land prices go up further, might be a short-term cheap way to get a decent property. But he couldn't recommend it.

"There's always another sucker who just goes for the price and doesn't think about it."

Questions to ask about leasehold

•When are the reviews?

•How is the value of the land determined? Is it considered bare land or developed?

•How possible is it to buy the lease? And when?

•How hard might it be to sell the property?

•Are there land restrictions? (ie. no sleepout or added buildings)

Cost of stadium may hit $40m

20th December 2012

Source: The Southland Times

The cost of the Stadium Southland rebuild may balloon to $40m - $11.5m more than the original estimate - and the Government has all-but ruled out giving the project a cash injection.

Stadium trust chairman Acton Smith went cap in hand to Prime Minister John Key in August, asking for $1.5m, but said yesterday the Government's response was not positive.

"They have said to us that it's unlikely."

Mr Smith said yesterday the cost over-runs had got to the point where it was possible the final stage five of the project, known as the hero option, may not go ahead.

But he stressed no decisions would be made until the new year when the stadium's final costs were known and all funding options had been considered, including asking the public for donations and getting a bank loan.

When asked if the stadium could cost as much as $40m, Mr Smith said it may cost that much, but he would not know until the new year.

The stadium costs have ballooned from an original estimate of $28.5m in 2011 to $34.5m five months ago to a possible $40m now.

Mr Smith indicated yesterday that the trust had between $35 and $36 million nailed down to build the stadium.

However, with the stage five hero option to cost about another $4m, it was possible it may not proceed, he said.

"We will look in the new year to see if we can proceed prudently."

Stage five, if built, will be the stadium's "community sports house", consisting of office space for the likes of stadium staff, the Sharks basketball and Steel netball franchises, other Southland sporting groups, medical rooms and function rooms.

"The key thing is to get stages one to four done because that's the replacement of what we had before, with improvements." The costs had continually risen during the rebuild as a result of the more stringent building requirements following the Christchurch earthquakes, Mr Smith said.

Citing an example, he said the trust had allowed for 47 tonnes of reinforcing steel to go into the ground for stage three of the rebuild but the engineers had demanded 170 tonnes.

Stadium manager Nigel Skelt yesterday said he would like to see the stage five "hero option" built because it was what the community had asked for when it was consulted.

If it was not built there was a danger stadium bosses would have to go back to the community in five years and ask for more money to give the stadium more space, he said. "It's important we future proof the stadium for the next 20 years, we need enough space . . . we don't want to have to rebuild again in five years time."

He supported asking the public for donations and questioned what was wrong with borrowing money for the stadium.

"Is there a reason why future generations shouldn't pay a little bit towards it?" Mr Skelt said.

Meanwhile, The Southland Times understands the successful naming rights sponsor for the stadium will be announced soon.

Hello cows, goodbye sheep

19th December 2012

Source: The Southland Times

Southland sheep numbers have dropped by nearly 30 per cent to 4.1 million in the past five years, compared with 19 per cent nationally, says Beef + Lamb NZ.

The news comes after Statistics New Zealand released its provisional agricultural production census this week, showing national sheep numbers have dropped by 7.3 million to about 30 million since the last census in 2007.

During the same period, the national dairy cattle herd has increased by 1.2 million and now stands at 6.5 million - a 23 per cent increase from 5.2 million.

Beef + Lamb New Zealand economic service executive director Rob Davison said Southland was one of the fastest-growing dairying regions in New Zealand and the dairy expansion was displacing sheep and beef. In 2007, Southland recorded 5.7 million sheep which has this year dropped to 4.1 million, he said.

Dairy conversions displace sheep because they take the land that they graze, Mr Davidson said.

Federated Farmers Southland dairy chairman Allan Baird said the sheep industry was not generating sufficient income for farmers, resulting in more converting to dairy.

"I see it as farmers looking at the future and being realistic, and the sheep industry hasn't really performed in the last seven to eight years."

With the price of lamb forecast to drop below $100, sheep farmers might look at their options for dairying, he said.

Dairy NZ senior economist Matthew Newman said Southland dairy cows contributed to 8 per cent of the national herd and it was the second-fastest-growing dairying region in the country behind Canterbury.

The number of dairy cows in Southland last month was about 540,000, up from 350,000 in 2007-08, he said.

At a milk price of $6.30, about $1.3 billion of revenue was generated for Southland farmers annually, Mr Newman said.

The region's dairy cow herd had increased by nearly 40,000 for each of the past five years, while more than 3000 Southlanders were employed on dairy farms.

Statistics NZ agriculture statistics manager Hamish Hill said national dairy numbers had been booming in the past five years.

"The extra production equates to about 370 two-litre bottles of milk a year for everyone in the country," he said. "Dairy's obviously been a big mover, and the sheep number has fallen."

Statistics NZ is not expected to release its full regional figures until May 2013.

The census was conducted in partnership with the Ministry for Primary Industries.

Sun may be setting on land boom

17th December 2012

Source: The Southland Times

The value of the Southland district has risen by $450 million, much less than the heady increases of several years ago which indicates the boom times for land sales in the south are over.

Latest revaluation reports from Quotable Value New Zealand show the Southland district's overall capital value is $19.27 billion, up 2.4 per cent on the $18.8 billion it was valued at in 2009.

The greatest contribution came from rural properties, which increased 2.7 per cent to a total capital value of just over $13.7b.

But the rise for rural property capital value is much lower than the district's staggering 51 per cent rise in 2009.

Southland Federated Farmers president Russell MacPherson said a combination of declining prices, the global financial crisis and more conservative lending from the banking sector had slowed down the rural property sales.

"Meat, wool and milk prices have all come back so people can't pay as much for farms," he said.

New land use regulations for non-dairy farms had also had an impact on their value, he said.

Mr MacPherson said there had been noticeably fewer rural sales during the past few years.

"If you look at land sales in Southland it's been hard to sell properties," he said.

Harcourts Invercargill rural sales manager Murray Jackson said the small increase in rural property capital value was to be expected after the 51 per cent increase during the previous review period between 2006 and 2009.

"Things went a little bit crazy during a time of big price land grabs," he said. "There has been a slow down in the rural sector during the past few years and a return to more realistic values."

The 2009 increase was so big it couldn't possibly be sustained, Mr Jackson said.

The value of Southland's residential properties and value of sections have also come down.

In the latest report, the value of Southland's residential land with buildings fell by 3.7 per cent, while the residential land value fell by 8.8 per cent. The average value of a house and section was $211,000 and the average residential section value was $69,000.

At $307,000, Te Anau had the highest average for house and section, followed by Manapouri ($258,000), Winton ($252,000), Stewart Island ($251,500) and Wallacetown ($226,400).

Quotable Value Ltd southern manager Tim Gibson said the report was driven by the market value of properties through a study of property and land sales.

Residential sales in the more rural areas had come back during the past few years, he said.

Increased development and over-supply had forced down values in Te Anau and a cool-off on coastal properties had affected Stewart Island property and land values, he said.

Despite the overall drop in property and land value in Southland, there were communities bucking the trend, Mr Gibson said. Edendale and Wyndham had an increase of 12-13 per cent in capital land value with land value for Edendale rising by 110 per cent.

There had been significant housing development and sub-divisions in Edendale and the council had provided water and sewerage infrastructure, Mr Gibson said.

Southland District Council transactional accountant Jamie Cunningham said the region's value played a role in setting rates but the council did not anticipate significant changes to next year's rates arising from the revaluations. However, final budgets for 2013 had not been developed, so it was not known exactly how rates would be affected, he said.

The council based its rates on factors including capital value, uniform targeted rates, land value, and improvement value, he said.

AT A GLANCE
Southland District Residential Revaluation 2012

ANZ leads the homefront in mortgage war

17th December 2012

Source: Stuff Business Day

This year has been great for homeowners, who have benefited from flurries of home loan cuts as interest rates remain at record lows.

But what about the lenders who have been fiercely sparring for their attention?

All the major banks have now released their disclosure statements for the quarter just passed, which show how their mortgage books have coped with somewhat stale lending growth.

As most head into the new financial year, here's an indicator of who the winners and losers were in the three months to September 30:

1. ANZ BANK

The country's largest lender dominated the mortgage market in the September quarter, growing home loans by 1.7 per cent.

After securing more than $1 billion worth of fresh lending in the June quarter, the bank wasn't far off another cool billion - notching up a further $904 million of home loans.

The big question for ANZ is whether it will bleed valuable home-owning customers after the axing of its popular National Bank sister brand.

Rivals started trying to poach disgruntled customers within hours of the announcement in September, and a couple of weeks of frenzied advertising followed.

But the transition went seamlessly, and the early signs are that ANZ has been able to retain or even increase its market share.

The impact of the big merger should start to filter through in the December quarter.

The Numbers:

$53.46b of home loans

$904m increase in lending between the June and September quarters

30.2 per cent of total market share*

2. KIWIBANK

The little green bank still isn't making much cash for taxpayers, but it does provide excellent value through frequent needling of its bigger Australian cousins.

Kiwibank introduced several market-moving "special" mortgage rates throughout the year, such as a 4.99 per cent six-month fixed mortgage rate for customers with 30 per cent equity in July.

That competitive approach has been great for consumers and for the bank, which saw 1.5 per cent growth in residential lending in the last quarter.

The Numbers:

$11.8b of home loans

$171m increase in lending between the June and September quarters

6.7 per cent of total market share*

3. ASB BANK

ASB secured $318m worth of new residential lending in the three months to September, growing its books by 0.85 per cent. However, it was the only big bank to have gone backwards in the previous June quarter so is playing catch-up to some extent.

The ASB was right in the thick of the rate-cut fray, competing vigorously with special deals and promotions.

At the start of the quarter it cut its special five-year fixed mortgage rate to the lowest it had been in three years. It followed that up with another "Olympic" special, again targeting longer term borrowers in the four-year range.

The other noteworthy change was a recent update to its broker network advising a change to its lending policies for the likes of apartments and lifestyle blocks.

By abandoning the one-size-fits-all approach it will be able to start lending flexibly in areas which have traditionally had strict loan-to-value ratio limits.

The Numbers:

$37.7b worth of home loans

$318m increase in lending between the June and September quarters

21.3 per cent of total market share*

4. BANK OF NEW ZEALAND

The BNZ saw modest lending growth of 0.74 per cent, with just over $200m of new loans on its books.

The bank's massive and mysterious "Money is good, Money is bad" campaign, which linked with products like its TotalMoney offset mortgage, was still under wraps during the September quarter, so it will be interesting to see if it has any direct impact.

The Numbers:

$28.1b worth of home loans

$207m increase in lending between the June and September quarters

15.9 per cent of total market share*

5. WESTPAC

Westpac sits at the bottom of the list with a measly 0.25 per cent growth, or $90m in new lending last quarter, but it is not likely to be worried.

The bank has mostly refrained from getting too caught up in the price-cutting and doesn't position as the cheapest home loan lender in the market.

A key project to watch will be the bank's HomeClub website, which it launched in conjunction with Trade Me in August.

The hook-up has the potential to funnel Trade Me house-hunters all the way through to mortgage pre-approval, but it remains to be seen how effective it will be in bolstering lending.

THE NUMBERS

$35.9 billion worth of home loans

$90 million increase in lending between June and September quarters

20.3 per cent of total market share*

*Data sourced from the Reserve Bank has been used to provide a reasonable proxy for calculating market share, but may not fit exactly with the banks' reported figures

Southland land offer not enticing

12th December 2012

Source: The Southland Times

Hopes a government tender for resource exploration in Southland could win new investment in the region have been dashed after no companies bid for the right to explore it.

A 1214-square kilometre area of the Waimea Plains to the northwest of Gore, including Riversdale and Balfour, was opened for tender in June. New Zealand Petroleum and Minerals believed there were significant amounts of lignite in the area, which could be used to produce coal-seam gas.

It was one of 23 blocks of land put up for tender in NZP&M's 2012 Block Offer.

Farmers and other residents of the area met Ministry of Business Innovation and Employment officials in August about the block offer process.

They raised concerns about the possible use of fracking, the controversial extraction practice being investigated by the Parliamentary Commissioner for the Environment, and land access issues.

However, Energy Minister Phil Heatley announced yesterday only 10 blocks had been awarded to companies, and the Waimea Plains block was not among them.

Venture Southland group manager enterprise and strategic projects Steve Canny said the lack of firm data on the area may have put off bids.

"The reality of these kind of locations in Southland is generally we have quite a lot of scant detail around geology," he said. "Common logic would indicate it is possibly quite a prospective location, but it is quite a high-risk opportunity."

Companies were reluctant to commit to an unknown quantity.

The onshore tender blocks which had been awarded were all in Taranaki, a region with a long history of oil and gas exploration and production, where much was known about underlying geology and prospectivity.

"I guess it demonstrates at this time there isn't an appetite for this kind of exploration in New Zealand, but that doesn't mean it won't come [to Southland] at some point in the future," he said.

NZP&M spokesman Britton Broun said the fact that nobody bid for the area was not a reflection of its prospectivity.

"Alone, the block was not sufficient to generate new international interest in developing coal seam gas in the South Island of New Zealand."

The block may be included in a future offer, he said.

"The Government has decided that future onshore blocks would first be nominated by industry, giving some indication that there is interest in the area."

The Shell-OMV consortium which is exploring the Great South Basin has taken on a new 8508sqkm permit area, east of the area it spent $50 million surveying last summer using the Polarcus Alima.

Upgrade going ahead with reduced funding

11th December 2012

Source: The Southland Times

The Invercargill skatepark upgrade will go ahead with a reduced budget after the Lotteries Commission injected $250,000.

The funding, announced yesterday, means $550,000 has been raised for the Elles Rd skatepark upgrade - $200,000 short of what was originally projected.

Initial costings in April, when the Invercargill City Council gave the go-ahead, indicated it could cost as much as $750,000.

The upgrade would see the old skatepark replaced by a modern "all wheels" facility which could accommodate scooters and BMX bikes.

Community development manager Mary Napper said the young people involved in the project would be asked to prioritise what they wanted to spend $550,000 on.

"We have exhausted all our funding sources as far as grants go," she said. "We hope to still build most, if not all, of it, but we are not going to compromise on safety."

While the youths had been fundraising for the upgrade, they were not likely to pull in enough to make a huge difference, she said.

The council has loaned $100,000 to the project, with $150,000 from the Invercargill Licensing Trust and the ILT Foundation and $50,000 from the Community Trust of Southland.

Councillor Graham Lewis said loan funding from the council meant ratepayers would not face an immediate lump-sum cost for the upgrade, but would pay back the loan over time.

In this way, he said, future ratepayers who used the skatepark would contribute to the cost.

Reserve Bank holds interest rate at 2.5pc

7th December 2012

Source: The Southland Times

The Reserve Bank is leaving the official cash rate unchanged at 2.5 per cent and is flagging the first rate rise will not be until 2014.

New governor Graeme Wheeler said economic growth slowed in recent months and inflation has been low, while unemployment was rising.

"On balance, it remains appropriate for the OCR to be held at 2.5 per cent," he said in today's Monetary Policy Statement, which was seen as keeping rates firmly on hold.

There was no hint that rates could be cut, despite extremely low inflation and high unemployment, so the statement was seen as "hawkish" or tough on inflation by economists. That saw the New Zealand dollar rise from about US82.5 cents to about US82.9c on the statement.

Unemployment at 7.3 per cent, a 13-year high, was largely dismissed as a statistical blip and it should be back around 7 per cent at the next reading.

Wheeler indicated that the first rate rise would not be until 2014, though ASB economists still expected it sooner, by September next year, because of a stronger growth outlook compared with the central bank's.

The Reserve Bank's own 90-day interest rate forecast indicated the first move up in the OCR in March 2014, but it would only rise modestly after that.

The central bank warned that interest rates could rise if house prices keep rising and household credit growth gathers steam. Auckland house prices have risen about 12 per cent in the past year and nationally prices are up about 5 per cent.

Westpac Bank economists said it expected the housing market to remain buoyant, and so it expected the cash rate to start rising in September 2013.

TD Securities, which earlier expected rates to start rising as soon as March 2013, pushed that out to June, with the cash rate rising to 3.25 per cent by the end of the year - a much steeper track than others expect.

TD Securities expected the Canterbury construction boom now under way would push up wider inflation in due course, and so dictate the first rate rise. New Zealand's was likely to be the first central bank to lift rates, TD said. 

The Reserve Bank said that despite a sluggish economy recently, in the next two years growth is expected to pick up to between 2.5 per cent and 3 per cent a year. The global outlook remained soft but was less threatening than earlier in the year.

Repairs and rebuilding in Canterbury were gathering pace and the housing market was getting stronger, especially in Auckland. The Reserve Bank is now expecting about $30 billion of quake-related work in Canterbury, but over an extended period.

In the statement, the Reserve Bank warned that if the housing market continued to gather steam, there was a risk of a stronger pick-up in household credit and rising house price inflation. Higher house prices and greater household spending was likely to lead to higher inflation than is currently projected.Lower funding costs for banks and increased competition had seen mortgage interest rates fall from already low levels. 

"All else equal, such a development could necessitate a higher official cash rate," the bank said. But government belt-tightening and cautious spending by households and businesses were offsetting factors for the economy.

The high New Zealand dollar remained a "significant headwind" Wheeler said, restricting export earnings and encouraging demand for imports.

But the overall outlook was for stronger domestic demand and so "excess capacity" in the economy would be eliminated by the end of next year.

That was expected to see inflation rise gradually towards the 2 per cent mid-point of the central bank's target range.

Latest annual inflation was extremely low at 0.8 per cent, just below the bottom of the target range.

The bank was keeping close watch for any further "moderation" in inflation and was mindful of recent surprises with high unemployment at 7.3 per cent and low inflation.

But Wheeler also warned that with the reconstruction pick-up in investment "now clearly underway", the bank would also keep watch for higher inflation than presently assumed.

"On balance it remains appropriate for the OCR to be held at 2.5 per cent," Wheeler said.

The cash rate has been held at the historically low rate since March 2011, when it was dropped to help counter the impact of the Canterbury earthquake.

The bank's projection for 90-day bank bills remains flat for all of next year, before gradually turning up early in 2014, but only reaching 3.3 per cent by early 2015, compared with about 2.7 per cent recently. The track for 90-day rates is slightly flatter than in September's Monetary Policy Statement.

While unemployment was up to 7.3 per cent in official figures the Reserve Bank said that was overstating the worsening picture and that the economy continued to expand, albeit slowly.

Housing investment is projected to be up almost 20 per cent in the year to March 2013, jumping 29 per cent in the following March year as the Canterbury rebuild ramps up.

The Reserve Bank is also projecting economic growth of 2.2 per cent in the year to March 2013, and then 2.8 per cent in the following March year.

Unemployment is expected to fall from 7.1 per cent in March 2013, to 5.9 per cent in the March quarter in 2014.

But the Reserve Bank holds out no relief in sight for exporters, with the New Zealand dollar expected to remain high for the next few years. That would continue to dampen export earnings and encourage imports with import volumes expected to remain high.

Property market tightens

7th December 2012

Source: Voxy.co.nz

The New Zealand property market tightened further in November as ongoing high demand from buyers drove inventory levels of property for sale to a five year low, while asking prices registered another record high.

According to data released today in the NZ Property Report, inventory - which is measured by the number of weeks it would theoretically take to sell all unsold housing stock on the market - fell to 28.7 weeks in November (seasonally adjusted); a 29% drop from the same month last year, and well below the long term average of 39 weeks.

The drop was felt most keenly in Auckland, where inventory has fallen to just 15.5 weeks; its lowest level since Realestate.co.nz began collecting the data in 2007. This is half the long term average of 31 weeks, while also 20% down on the previous month and 43% down on November 2011.

Paul McKenzie, Marketing Manager for Realestate.co.nz, says that following a strong month of sales in October which saw 6,640 properties change hands (according to REINZ Residential Market Statistics), numbers of new listings from vendors are not keeping pace with buyer demand.

"Numbers of new listings are traditionally up at this time of year, and November was no exception, with 13,571 new listings arriving on the market," says McKenzie.

"However, as has been the case for much of this year, such low levels of inventory place the market firmly in seller’s favour. This has been reflected once again in the average asking price this month, which has topped October’s record high to register a new high of $446,277."

Mr McKenzie says that while sellers still have the upper hand, the message clearly coming from this activity is that there are still plenty of buyers keen to get into the property market.

"This eagerness to buy is matched by the availability of attractive mortgage packages, but is not being met with a sufficient supply of new property listings, which is continuing to drive the current sellers market. From this, we can anticipate that the market will remain tight for the foreseeable future."

Realestate.co.nz is the country’s most comprehensive property listing website profiling listings of licensed real estate agents with more than 110,000 real estate listings covering residential, commercial, business and farms for sale.

The November 2012 issue of the NZ Property Report - a monthly report of housing market activity compiled by Realestate.co.nz - can be found along with more analysis of the property market on www.unconditional.co.nz, the news and information website for New Zealand real estate.

Doors closing on lowest mortgage deals

7th December 2012

Source: Stuff Business Day

Interest rates are still at historic lows, but the window of opportunity for homeowners looking to lock in a juicy mortgage deal may be beginning to close.

This morning the Reserve Bank left the official cash rate - which strongly influences interest rates offered by banks - unchanged at its record low of 2.5 per cent. New Reserve Bank governor Graeme Wheeler noted that lower funding costs for banks and increased competition had seen mortgage rates fall.

The floating mortgage rate for most major banks sits around 5.75 per cent, currently undercut by cheaper fixed terms of one to two years.

Westpac chief economist Dominick Stephens said the central bank had begun to acknowledge the risk of the heated housing market.

"We do think house prices will keep rising pretty aggressively in 2013, and therefore our view is that the Reserve Bank will have to begin increasing the OCR from September."

The number of Kiwis switching to fixed-term mortgages has been steadily increasing since April, although about 56 per cent are still floating.

Stephens said on balance, it was likely to be better to fix before interest rates began to recover from their record lows.

"The only way you can win by floating is if the Reserve Bank reduces the OCR, or if fixed mortgage rates fall further from here," he said. "I don't think either of those things are going to happen, unless there's a really serious disastrous development overseas."

Stephens said there was however a "reasonably small" chance that the OCR could fall further.

That was seconded by ASB chief economist Nick Tuffley, who put the likelihood around 20 per cent. ASB is also forecasting that the OCR will begin to rise from September next year.

"You still do have, say, anywhere between 9-12 months or so before the cash rate is likely to be going up," said Tuffley.

He said interest rates weren't likely to shoot up in the short term, but cautioned those contemplating fixing not to wait until the last moment.

"If you're leaving it until it's pretty clear interest rates are going up, the rates will have already risen in anticipation."

Tuffley also pointed out that the decision to float or fix was not always clear-cut, and depended very much on individual circumstances.

Floating had the advantage of flexibility and ease of repayments, while fixed mortgage rates offered a degree of certainty.

While New Zealand interest rates look set to rise, the Reserve Bank of Australia dropped its cash rate to 3 per cent yesterday, the lowest it has been since the global financial crisis.

Three out of the four big Aussie banks responded by passing on most of the 25 basis point cut to drop variable mortgage rates by 20 points.

ANZ Australia is sticking with its tradition to not announce its decision until the second Friday of each month, which will be December 14.

Stephens said there was no logic to suggestions that New Zealand should follow Australia's lead by cutting the OCR.

He pointed out that Australia was at a completely different point in the economic cycle, and its cash rate was still higher than New Zealand's.

AAI moves insurance risk to homeowners

7th December 2012

Source: Stuff Business Day

Homeowners who insure with AA Insurance are going to have to become rebuild cost experts.

From 16 December AA Insurance's new house cover policies will become "sum insured", meaning the homeowner specifies the sum they want their home insured for. For those with existing policies, the change will happen on 1 July.

In other words homeowners will become responsible for knowing how much it would cost to rebuild their home, and for making sure they update their coverage each year to account for any rises in the costs of building services and supplies.

If they do not, they face the risk of being unable to rebuild their home to a similar standard in the case of its destruction by fire or natural disaster.

Suzanne Wolton, head of customer relations, AA Insurance, said: "This is really about providing swift and certain resolution, and managing future affordability for our customers.

"The key learning from the [Canterbury] earthquakes is that after a large scale event our customers most want certainty surrounding resolution from their insurance – to know what is covered, and to be able to get on with their lives as quickly as possible."

While there are benefits to homeowners of moving to sum insured, as the new-style policies will make payouts much quicker, the big benefits are to insurers and their international reinsurers who will be much more able to understand their risks.

Insurance expert John Prendergast said people would have to be careful not to end up finding themselves underinsured because they had got the rebuild cost wrong.

"This is shifting the responsibility from the insurer to the insured," he said.

He also warned that people would need to consider that when a mass rebuild was taking place building costs could rise fast.

Prendergast said even insurance experts like himself would struggle to keep tabs on rebuild cost changes. "The cost of replacing your house might be half a million now, but in six months you might find it has risen," he said.

Commercial building owners tended to insure on a sum-insured basis based on annual valuations, Prendergast said.

As homeowners will have to have a similar understanding, there looks likely to be a boost to the valuations industry. Their only alternative would be to base their decision on online calculators estimating rebuild costs for houses of certain size and materials.

AA Insurance had placed a calculator on its site, which would be updated regularly by quantity surveyors from around the country, Wolton said.

The Canterbury events had changed the face of insurance in New Zealand.

"By moving from square metres to sum insured, our customers will know upfront the most their insurer will spend to rebuild their home, in the event it does need to be rebuilt. They will also know they are paying the right price to insure their property, and that the specifics of their home have been taken into account," she said.

The move was driven by reinsurers. "Over the last two years, we've seen reinsurance premiums and EQC levies rise in the hundreds of percent. Sum insured allows our reinsurers to calculate with confidence the appropriate premium we need to pay for our reinsurance cover," Wolton said.

She did not expect reinsurance costs to drop as a result, but the hope was they would not rise as fast in the future.

And she predicted other insurers would follow suit. "Our policies are changing as part of what is likely to be an industry wide shift that will help ensure that the average Kiwi can afford to insure their home."

Sum insured was common overseas, and there didn't appear to have been under-insurance issues as a result, she said.

NZ Property Report

4th December 2012

NZ Property Report – November 2012

Hidden gems: Invercargill

22nd November 2012

Invercargill has 40m wide streets that northern city planners and motorists would drool over. Photo / Colin Hogg

Invercargill expected to be bigger - much bigger. Many things about our most southern (and most western) city suggest that big ambition - the madly wide boulevards, the 80 grand hectares of Queens Park, the enormous churches and banks and the ornate Civic Theatre, which seems better suited to the West End of London a century ago.

Southland, the province Invercargill is queen of, is big, too. And empty. This is car country and the most impressive way to approach Invercargill is, after a two-and-a-half hour drive from Queenstown Airport, a cheap landing point for northern visitors.

The far south is the least populated of our populated parts and, as it unfolds before your bonnet, it takes on a mythic quality. Once you leave mighty Lake Wakatipu at Kingston, mountain ranges slip away to form distant views and the great plain of Southland widens your eyes. Which helps prepare you for the great metropolis.

The Invercargill city limits are forever away from downtown. As I approach, the town sign at its northern edge has a barrow of turnips sitting beneath it with a sign that's on roadsides all the way across western Southland: "Swedes $1 Each", which seems quite pricey for an item dined on by sheep in paddock after paddock out there.

The country laps at the edges of Invercargill, which was once confident of being as big as Hamilton. But Invercargill got to only the mid-50,000s and then fell back.

Lately, though, the tide has turned a little, thanks to clever initiatives such as dropping all fees for tertiary students. There are 5000 of them in Invercargill now. And more tourists too, though mostly they're only passing through, which is a pity.

Invercargill may well be our best-kept secret, though everyone knows about it. But maybe it's because Invercargill's so far away from almost everywhere else it's so misunderstood.

Invercargill is more interesting than anyone allows. It has a lot of character, being bereft of either hill or indeed dale. Even a bendy road is rare and rather exciting.

And the view, of course, is a little other-worldly. Set so low, on the edge of river and estuary, and lying so very flat, there's a terrific amount of sky on show.

From my fifth floor suite at the Kelvin Hotel, I look straight across low roofs to the Water Tower and the great trees of Queens Park. The Kelvin's a bit of a classic with good-sized rooms, a friendly house bar and a decent restaurant.

It opened with a lot of excitement in 1965 and it stands the test of time. The bath fills in three minutes, there's a power shower and the hot water never runs out. My room faces due east and one morning I see the sun rise red and misty behind the Water Tower. For a tiny, pre-coffee moment, I imagine I'm in Italy.

But we're a long way from seeing Invercargill in the same romantic way we see Pisa. Invercargill is one of those places people have tended to say not-very-nice things about. Like some other lonesome towns around New Zealand, someone famous has insulted it.

In Invercargill's case, that someone was Keith Richards. After playing the Civic Theatre there in 1965 with the Rolling Stones, he dubbed it the "arsehole of the world".

Keith, though, may have had reasons other than geography for being so cruel. The Stones played that long-ago Invercargill show top of the bill above Roy Orbison, much to the chagrin of the Orbison-loving Southlanders, who chanted "We want Roy" through most of the Stones' short set.

There was, in fact, another insult delivered that very night when Charlie Watts, the band's lugubrious drummer, introduced one of their songs "for all you sheep shearers out there".

Unlike the Stones, all these years later, Invercargill's getting better with age. It's a handsome city, as befits one that was carefully planned, its centre laid out, in 1856, inside a square mile containing those 40m wide main streets, four parks and street names singing the memories of Scottish rivers - Tay, Dee, Don, Spey, Esk.

For Invercargill, life has been a series of booms and busts, each boom marked by an outbreak of distinctive architecture - Victorian in the 1880s, Edwardian in the early 1900s, Art Deco in the '30s and Modernist in the '50s. There are 60 listed buildings, including an Art Deco courthouse and the city's landmark, the Water Tower, a red brick Victorian mix of practical and pretty. It's the highest point in town, standing more than 42m and holds 300,000 litres of water in the great tank on top, as the city's emergency supply.

When it comes to encountering Invercargill's attractions, there are two sorts - the ones that shout out, like the Water Tower, and the ones that need finding.

Of the shouty-out ones, you can walk around the base of the rather good-looking tower, but you can't go in because of earthquake issues.

Not far away are the city's other stand outs - Queens Park and the adjoining Southland Museum and Art Gallery, housed inside a big white pyramid of a building. It isn't any of that which makes this place a stand-out. It's the tuatara.

Not even native to these parts, our most ancient native animal has thrived in the museum's famous Tuatara Breeding Programme. There are more than 90 of them living in the museum and it's a virtual guarantee you'll see them out and about in their big warm enclosures.

Run into curator Lindsay Hazely and he's likely to be wearing one happily draped across him, like a huge brooch.

Next door, Queens Park, behind its great gates, stretches way off out of focus. Find the tea kiosk and sample a local high-calorie delight, the cheese rolls, hot and dripping with butter, $2 each. The coffee's good, too - as it is in cafes all over this town, notably the Batch in Spey St and the Zookeepers Cafe in Tay St.

Strangely, even the harder-to-spot local attractions come slightly super-sized. If it's art you want, with attached native bush walks, out on Invercargill's northern edge is Anderson Park, a stately Georgian-style country house sitting amid 24ha of bush and lawn and containing a large and eclectic collection of New Zealand art. Not remotely stuffy.

Possibly the least stuffy collection in Invercargill resides in the unlikely premises of E Hayes & Sons, downtown in Dee St. Hayes is worth a visit, simply for being a truly gigantic hardware store.

But there's the plus that among all the wheelbarrows and spanners of every conceivable size is the actual Indian motorbike ridden by the world's fastest local, Burt Munro.

Plus a lot of other wheeled collectors' items on display as well. It's big, mad and completely free - unless you buy a spanner.

The best looking of the many big attractions in Invercargill, though, is the biggest surprise of all. The Bill Richardson Truck Museum is a 10,000sq m super-shed housing more than 200 historic trucks. You may think you don't like trucks, until you see this lot. Some of them are outrageously good-looking. You need an appointment - and $10 - to see them and it is worth it. People come from all over the world to do it.

But it's lunch time and a good reason to visit the best nearest place to our destination - which, in Invercargill's case, is Bluff, the port town 20 minutes' drive south at the end of Highway One.

On a sunny day, gritty, crumbly Bluff seems strangely beautiful, looking like a movie set waiting for a movie.

The op shop here is a legend, but so are the oysters and chips from the Galley takeaway. For $18 you get six big fat battered ones, and lemon, and plenty of chips.

Park down the road by the old lighthouse and eat them off the car bonnet and think, "Top that, French Cafe ".

Back in Invercargill after the salty oysters, it may be time for a drink. The city's had an interesting relationship with the demon booze. In 1905, Invercargill voted in a prohibition that would last until 1945 when the servicemen came home from the war and demanded a drink.

Like the south of the US, this was once a place of bootleggers and backyard brewers. Even now, Invercargill keeps a rein on its drinking, operating under a licensing trust which, among other things, prohibits alcohol in supermarkets.

You can, though, visit the Invercargill Brewery, a classy boutique beer and cider operation that welcomes visitors to its plant downtown in Wood St where they make brews of growing national legend like Smokin' Bishop and their wild and crazy Boysonberry fruit beer.

The hospitality, of course, is big. As mentioned, many things are big in Invercargill. And it's surprisingly hard to leave.

Who knew?

Save a home loan deposit in three years

22nd November 2012

Source: Stuff Business Day

Gaze into the depths of the crystal ball, and picture your life three years from now.

A picture begins to swirl out of the clouded glass: You're walking through the front door of a modest first home. The sold sign outside says $420,000. And the deed is in your name.

This is no Tui billboard - it could really happen. While we'd hate to throw yet more fuel on the housing fire, it's hardly unreasonable that people want a place to make their own.

The hard part is often scraping together a big enough deposit to get in the door, particularly if you're not earning megabucks and don't have any savings already.

But the following example demonstrates how even an average Joe and Jane can get their foot on the property ladder by making a few simple saving decisions.

The Rules

This is a game for two players, so you will need a special friend. You will both need to be clear of any major debts, and earning at or above the median salary, which according to Statistics New Zealand is roughly $42,000.

The way you win the game is to save up a 20 per cent home loan deposit in three years. Based on the average national house sale price for the past three months, that means the magic number is $84,000.

Obviously this isn't for everyone, but it is achievable by following three simple steps.

Step One: Consider KiwiSaver

KiwiSaver was designed for retirement saving. But it's also becoming quite popular for building a home loan deposit, says Capital Advice owner and mortgage adviser Kit Jackson.

"It's a question of making people aware of what it actually offers, as well," he says.

Most KiwiSaver providers will let you tap your nest-egg early for a first home purchase, with two juicy carrots to boot.

The first is that your employer has to match your contributions to at least 2 per cent (soon to be 3 per cent). 

That's effectively a 100 per cent return on investment for the money you put in, that you'd struggle to beat in even the dodgiest of investment schemes.

In our example, our couple are both contributing the mid-range 4 per cent of their salaries. 

The second big bonus is up to $10,000 cash that you and your partner can get fellow taxpayers to put towards your deposit.

The first-home deposit subsidy is administered by Housing NZ, which says you can apply if you've regularly contributed to KiwiSaver (or another complying super fund) for at least three years.

The subsidy is $1000 for each year, up to $5000 per person - well worth having.

Step Two: Basic maths

You'll have to set aside much more than 4 per cent of your pay to make any headway on saving a deposit.

"A rule of thumb which many people use is to spend no more than 30 per cent of your income on housing - rent or mortgage," says David Kneebone, executive director of the Commission for Financial Literacy and Retirement Income.

Most renters obviously won't be paying anywhere near that much, leaving plenty of room for saving.

Work out what your annual rent payments are, and subtract them from one third of your income - the balance is what you can start squirrelling away.

Our young couple are prepared to rent a room in a flat for $200 a week, allowing them to put away a combined $17,000 a year in additional savings.

Step Three: Set and forget

Divide the figure above by 12 months, which works out to $1416 for our couple.

Set up an automatic payment right after payday that diverts that sum straight into a basic savings account. Now is not the time to be playing the stock market with your hard-earned cash.

"I know it's boring but keeping the house deposit savings in the bank is still the best option," says Spicers financial adviser Jeff Matthews.

To invest in any other shares or property investment, you need a minimum of three to five years, he says.

"While the one to three year returns from shares etcetera are looking good, the five year returns are flat to negative, so timing is everything."

The likes of RaboBank offer a low-fee 3.4 per cent interest call account, so you can probably hope for 2.5-3 per cent after tax.

With all that done, you can kick back, relax and do nothing.

Year One:

Your KiwiSaver contributions together with your employers' have fed $5000 into your combined accounts. The pair of you have saved close to $18,000 into your high-interest bank account. 

After taking out tax, KiwiSaver, rent and savings you still have close to $40,000 left over in the household accounts to cover food, power, transport, clothing and all the other costs of living.

Year Two:

By the end of the second year you already have close to $50,000 saved between KiwiSaver and your bank account. Compound interest is beginning to slowly add up too.

Year Three:

Congratulations - you've made it! The final tally includes the $10,000 deposit subsidy, assuming you've both been contributing for five years, $16,000 in KiwiSaver and $56,500 in the bank.

Well, just about. That adds up to $82,500, so it might take another month or so to hit the agreed deposit size.

The whole process is painless because it comes straight out of your pay, and disasters aside, shouldn't put too much pressure on the household.

As mentioned, this won't be appropriate for everyone, like those with kids or debt or single incomes. But at the very least it's a good example of the power of regular saving.

Here are some alternative situations for people with other needs.

The older couple

Flatting or renting a shoebox apartment for a few years is understandably not going to float everybody's boat.

Lots of first home buyers are happy to do so, says Jackson, but some couples want their own space.

Let's say our own couple are paying $400 a week in rent, instead of $200.

That's a lot less money that can be diverted towards saving. At that rate it will take roughly five to six years to save the same sized deposit.

Flying solo

If you're a single income earner or don't have a partner, you're not ruled out - you just have to be stacking paper.

"I've got single clients who - depending obviously on what they're earning - can borrow any amount," says Jackson.

In our scenario you'd have to be on an annual salary of at least $84,000 or so to crack the three-year mark.

Smaller deposit

These days the banks have cautiously begun to lend in the higher ranges, up to 95 per cent or in some cases even the full value of a property.

But the bigger the deposit, the better, says Kneebone:"20 per cent used to be the minimum deposit required, and it's still worth aiming for that."

That's because the less you borrow, the less you're going to be paying over the lifetime of the loan.
 
If you only put down 5 per cent on our $420,000 house, you'll end up paying $340,000 in interest over the whole mortgage.

That's about $50,000 more going straight down the drain compared to a 20 per cent deposit.

But the loss will actually be much bigger then that because the costs are higher too.

Banks charge a low equity fee which usually applies to deposits smaller than 15-20 per cent.

Disclosure: The information in this article is of a general nature only and in no way constitutes direct financial advice. Always consult an authorised financial adviser before making any investment decision.

Squatter decamps after $1m-plus sale

22nd November 2012

Source: Stuff Business Day

A Wellington businessman has taken a big punt on an old Mt Victoria villa - paying more than $1 million for a stripped-out house that he couldn't get to see inside.

The house at 48 McFarlane St, next to St Gerard's Monastery and with spectacular views of the harbour, was marketed as "an opportunity like no other" when it was put up for mortgagee sale by Westpac bank.

The house, which has a 2012 rating value of $2m, was formerly owned by imprisoned tax fraudsters David Rowley and Barrie Skinner, who bought it two years ago for $2.13m.

It was mortgaged to Westpac and Wellington property developer Vladimir Barbalich, and had been stripped of its kitchen and bathroom fittings. Floorboards had also been ripped up in recent months.

Harcourts agent John Callam listed it with a less-than-glowing endorsement, declaring: "If you are prepared to take on a challenge, it could be yours too."

He also advised that would-be buyers could not get into the house - a statement reinforced by a man living in the house, who told anyone coming to the door that it was not for sale.

The new owner said that when he took possession on Tuesday there was nobody there.

The former resident, "who seemed pleasant enough", turned up later and left after being given the Maori sovereignty flag that had been hung on the front window.

"I don't know if it's a bargain or not," the buyer said.

He was not prepared to say how much he bid for the house, except to confirm it was more than $1m and that it was going to cost "a fair bit more" to fix it so it could become his family home.

Mr Callam said he could not disclose any details of the sale, apart from confirming that it had gone through.

Westpac spokesman Chris Mirams was not prepared to disclose how much it was owed on the property and whether that had been recovered by the sale.

"We have nothing else to add."

NZ named as favourite Worldwide country by Telegraph readers

19th November 2012

Telegraph Travel Awards 2012: the winners

Earlier this year we polled 17,000 Telegraph readers about their favourite travel companies. This week, those companies were awarded during a ceremony at the ME Hotel in London. Here is a full list of the winners.

 

Housing price expectations approach record level in latest ASB housing confidence survey; most buyers think interest rates will stay low for a long time

19th November 2012

Source: interest.co.nz 

Most New Zealanders think now is a good time to buy housing because prices have started to rise again and interest rates seem planted at low levels. But Aucklanders don't share this view due to the affordability crisis in their region.

Nationwide housing confidence remained steady as price expectations approached record levels in the three months to October, according to the latest ASB Housing Confidence Survey.

Expectations of further increases in house prices are becoming firmly embedded with a net 56% of respondents now expecting prices to rise over the next 12 months. This is approaching the record level last set in March 2003 of 60%. (The lowest level was -55% in June 2008.)

"Price expectations remain highest in Auckland and Canterbury where supply is tightest," said Nick Tuffley, ASB chief economist who released the survey. "However housing confidence outside of the two main centres is climbing suggesting that market buoyancy is spreading throughout the regions."

In contrast to the nationwide overall rise in the Index, Auckland housing confidence has been falling steadily over 2012, and is now down to just 8%, while the rest of the country has been showing increased confidence that now is a good time to buy.

"Levels of new listings and housing inventory have remained low in the region, and clearly that is making it difficult from a buyer’s perspective," said Tuffley.
In other areas, supply is not so tight (although inventory is falling) and so the market is less tilted in favour of sellers.

ASB says housing demand is unlikely to drop off, with intensifying expectation that interest rates will remain at low levels according to the latest survey. Over 40% of respondents expect interest rates to remain on hold over the next 12 months, the highest proportion since 1999.

"The broadening belief that interest rates will remain low could further fuel interest in entering the market," said Tuffley.

Suspension bridge to be restored

6th November 2012

Source: The Southland Times

A historic Southland suspension bridge, closed because of safety concerns, has been recognised for its special heritage significance.

The Clifden bridge, closed in April 2010 after an inspection revealed structural deficiencies, has been entered into the Institution of Professional Engineers New Zealand heritage register.

IPENZ heritage adviser Karen Astwood said the bridge had outstanding engineering heritage because it marked a key milestone in New Zealand bridge building, having the longest main span in the country when it was completed in 1899.

New Zealand Historic Places Trust planned work programme manager Peter Walker said applications to select an engineer for a restoration project closed yesterday. The engineer would prepare a report on the work needed to re-open the bridge before the restoration job was put out for tender, Mr Walker said.

"It is hoped actual work will begin on the bridge in late February or early March with the bridge open to pedestrians by June 2013."

The Clifden suspension bridge is about 15 kilometres north of Tuatapere and remains largely unchanged in features and materials since it was constructed to Southland County engineer Charles Henry Howorth's design.

NZ Property Report – October 2012

5th November 2012

Source: realestate.co.nz

The October 2012 NZ Property Report published by Realestate.co.nz provides an insight into the state of the New Zealand property market as measured by the supply side of the property market over the month of October. The key measures of the market analysed in the report are the number of new listings, the asking price expectation for those new listings and the level of inventory of unsold houses on the market at this time. The report is compiled from data captured by the website and represents close to 97% of all property movements in the NZ market as managed by licensed real estate agents.

A full print version of the NZ Property Report – October 2012 is published below and is available for download (1.5MB) and distribution.

Summary of the market – October 2012

The property market continues to show signs of confidence and heightened activity as compared to the past few years. The confidence amongst sellers bringing their properties onto the market has pushed up the (seasonally adjusted) truncated mean asking price to a new high of $445,529 – the highest level since the collection of data began in 2007. This rise in asking price was noticeable right across the country, with Auckland reaching a new record high of $611,864, and Canterbury reaching a new high of $414,070.

November saw a good rise in new listings (up 12% on October 2011), and this rise has lead to some balancing of the property market in both Wellington and a number of provincial regions.

While inventory levels across the country balanced in October, the market remains a firm sellers market across 12 of NZ’s 19 regions. Overall stocks of unsold houses rose slightly to 33 weeks of inventory (long term average = 40 weeks). Both Auckland and Canterbury remain firmly sellers markets, with overall inventory levels continuing to remain well below long-term averages.

The next data for November will be interesting to review as to the final flush of new listings coming onto the market in Spring – November is traditionally one of the biggest listings months of the year. Last year that total was just over 13,000 – that at a time when inventory was considerably higher than today.

Asking Price

The seasonally adjusted truncated mean asking price for listings rose 4% (from September) to an all time high of $445,529 in October. This new record asking price level was up from the prior peak of $435,887 reached in May this year.

The trend as seen in the chart opposite continues to show strength in seller expectation and strong demand in the main centers.

New Listings

The level of new listings coming onto the market in October continued to increase, with 12,688 listings in the month – up from 11,514 in September (14% increase). October also saw big increases on last year, with an increase of 12% in listings.

On a 12 month moving total basis the number of new listings that have come onto the market in the last year totals 132,291, as compared to 124,503 in the prior 12 month period, this represents a rise of 6.3%.

Inventory

The level of unsold houses on the market at the end of October (43,921) remained stable, when compared to September (44,063) as measured on a seasonally adjusted basis. The inventory as measured in terms of equivalent weeks of sales rose last month to 33.1 weeks last month. This rise was witnessed across 17 of the 19 regions. But overall inventory levels still fell well below the long-term average of 39 weeks.

Regional Summary – Asking price expectations

The national (seasonally adjusted) truncated mean asking price expectation among sellers rose 3.8% in October to a new peak of $445,529. This exceeds the prior peak of $435,887 reached in May this year.

Following the new record high for the national asking price figure, both Auckland and Canterbury also posted record highs in October. This is the first time that the seasonally adjusted mean asking price has topped the $600,000 mark in Auckland ($611,864), and the $400,000 mark in Canterbury ($414,070).

In total 15 regions reported asking price increases, and 7 regions saw rises greater than 5%. The most significant rises were seen in the Central Otago/Lakes, Canterbury, Gisborne, Manawatu/Wanganui, Southland, and Auckland regions, with Central Otago/Lakes showing the largest increases, up 18% to $621,200 (the highest seen since November 2007). Of the 4 regions witnessing asking price falls on a seasonally adjusted basis there was just 1 reporting a fall greater than 5% with West Coast seeing a fall of 6.5%.

Regional Summary – Listings

Overall new listings increased on a national basis, as seen in the adjacent chart however across the regions there were slightly more regions showing increases than falls.

There were 16 regions reporting year-on-year rises, with significant increases (over 20%) seen in 10 regions. The largest increases were in Taranaki (68%), Wairarapa (40%), Hawkes Bay (34%) and Gisborne (31%)

Only 3 regions reported lower new listings than October last year with Northland being the region to report the highest fall off of 17.4% when compared to October 2011.

Regional Summary – Inventory

The inventory of unsold homes on the market eased in October, rising 9% from September to 33 weeks of stock, and shows the market re-balancing.

This re-balancing is however not occurring in the two major markets of Canterbury and Auckland where the inventory continues to remain low.

Five regions (Taranaki and West Coast) showed increases in inventory of homes on the market taking them above their respective long-term average. In addition four other regions (Central North Island, Southland, and Otago) sit close to their respective long term averages indicating a more balanced market.

Market sentiment continues to favour sellers in the remaining 10 regions, with the greatest strain being felt in the 3 regions which are marked in dark blue, which includes the main metro areas of Auckland, and Canterbury, which remain under pressure from low listings as measured against sales activity.

Lifestyle

New lifestyle property listings had another boost across the country in October, rising a further 18% when compared to September. A total of 1,121 listings came onto the market, showing an increase of 12% when compared to October last year. The truncated mean asking price for these listings was up by 7% as compared to the recent 3-month average to a record high asking price of $689,375 (up 13% when compared to October 2011). This record high was reflected across 4 regions in New Zealand (Northland, West Coast, Canterbury, and Central North Island).

Apartments

New listings for apartments in October were up 1.5% when compared to September, with 484 being brought to the market (on a year-on-year basis listings were up 9%). The truncated mean asking price of new apartment listings fell slightly to $398,121 in October from $399,489 in September, but was still up 8% on the recent 3-month average.

The Auckland apartment market followed the national trend with 300 new listings coming onto the market, up 7.1% when compared to October last year. The truncated mean asking price of new listings in Auckland rose again to $382,303 (October) from $366,057 (September) representing a 9.8% increase on the prior 3 months.

South Alive office opens

29th October 2012

Source: The Southland Times

A group set up to rejuvenate south Invercargill now has a physical presence in the neighbourhood.

Invercargill Mayor Tim Shadbolt snipped the ribbon on South Alive's new office in the South City Mall last week and the office was blessed by Te Ao Marama kaupapa taiao manager Michael Skerrett in front of a crowd of dignitaries and south Invercargill community members.

Project convener Janette Malcolm said the office was made available with the support of the South City Mall owners Contel Holdings and the Invercargill City Council.

It would provide a physical space for the community to engage with the south Invercargill rejuvenation initiative, Mrs Malcolm said.

''The office will make it easier for residents to get in touch with ideas and feedback. The office would also provide a venue for our eight Project Action Groups to have their meetings,'' she said.

Mr Shadbolt said the opening of the office was the result of the Invercargill City Council working with community groups to transform what was once a storage room into an inviting office.

The office and the work already achieved by South Alive would hopefully inspire other suburban communities to rejuvenate their patch, Mr Shadbolt said.

Councillor Neil Boniface said south Invercargill was buzzing as the community embraced the South Alive concept but it was important the community kept the momentum going because eventually council funding would decrease.

''There was $300,000 in the budget this year but that would fall to $150,000.''

South Alive steering group member Colin Anderson said the council needed to maintain its funding.

''The funding from council is essential to achieving the community's long-term goals,'' Mr Anderson said.

New Wee Nippers centre fulfils dream

29th October 2012

Source: The Southland Times

An early-childhood centre geared towards "helping out the working families" is opening in Invercargill next week.

Owner Simone Flight said Wee Nippers was the realisation of an eight-year dream to "provide the community with what we struggled to find for our own children".

"It's been our dream for a while."

Long opening hours, from 7.30am to 6pm, aimed to support parents and businesses in balancing work and family life, Ms Flight said.

As an independent, locally owned and operated business, she also hoped it will provide a lift for the area.

She and her co-owner husband George Crossan sought to employ mainly Southland businesses "as much as possible" during construction.

Centre manager Stacey Gallagher said the centre was an ideal place for children to play.

"I'm really looking forward to seeing kids out there playing. It's a beautiful building."

Wee Nippers will open on November 5, cater for 75 children aged 3 months to 5 years, and employ 15 staff.

Deal to preserve smelter tipped

26th October 2012

Source: The Southland Times

State-owned Meridian may need to negotiate a short-term discount on perhaps half the electricity it sells to the Tiwai Point aluminium smelter at Bluff if the plant is to remain open, a source says.

The smelter, majority owned by Australian miner Rio Tinto, and Meridian, which owns the Manapouri hydro power station supplying the plant, have been in talks about the electricity price.

The smelter operation has been hit by a slump in world aluminium prices, a high New Zealand dollar and increased international competition.

Rio Tinto was under "intense pressure" to get a solution to keep the plant going, but it was also in the Government's interests to strike a deal, the source said.

"My view is that there is a short-term deal to be done [on price]", the source said.

Rio Tinto put the smelter up for sale in October last year. It was still possible the smelter could be sold cheaply to an Asian buyer, who might refurbish the plant and aim to get another 20 years or more out of the operation, the source said.

Given flat demand for electricity, a surplus of generation and the challenges of getting power from Manapouri to other parts of the country, it would be in the Government's interest to strike a deal. That price would have to allow the smelter to operate profitably, rather than making a loss.

However, grid operator Transpower has said that if the smelter closed it would cost about $170 million to re-route the power out of Southland and electricity market prices throughout the country would fall as a result of the glut of supply.

But Rio Tinto would be well aware of the social impact of shutting down the plant employing about 800 people in Southland. So Rio Tinto was likely to keep the plant going if they could get a "slightly positive outcome" on the smelter's returns.

"I don't think you are talking about the whole power supply [being discounted]," the source said.

The electricity contract could for example be broken into half on the existing contracted price, and half at a lower price. The discounted price on electricity might have to be for a "fair period" but not for years.

World aluminium prices have slumped from US$3000 a tonne before the global financial crisis hit to US$2500 a tonne late last year, to just under US$2000 a tonne now.

"Rio is facing a pretty serious challenge . . . I would think they are under intense pressure to come to a solution," the source said.

Smelter general manager Ryan Cavanagh said yesterday that NZAS "continues to operate in very tough business conditions - a combination of the high New Zealand dollar, low metal prices and increased international competition.

"Much has been done to improve the smelter's competitiveness and viability over the years and particularly over the past year," he said, but would not comment directly on NZAS's accounts.

It is still possible that Rio Tinto will sell the smelter, possibly to a Chinese operator or another Asian smelter company.

"They would get it for a very cheap price," the source said.

The NZAS public accounts show the property, plant and equipment is valued at about $566m. If a new owner picked up the plant for a low enough price, it could afford to gut the cell lines and put in the latest technology which would have a dramatic impact on the plant's efficiency and profitability.

25th October 2012

Source: The Southland Times

State-owned Meridian may need to negotiate a short-term discount on perhaps half the electricity it sells to the Tiwai Point aluminium smelter at Bluff if the plant is to remain open, a source says.

The smelter, majority owned by Australian miner Rio Tinto, and Meridian, which owns the Manapouri hydro power station supplying the plant, have been in talks about the electricity price.

The smelter operation has been hit by a slump in world aluminium prices, a high New Zealand dollar and increased international competition.

Rio Tinto was under "intense pressure" to get a solution to keep the plant going, but it was also in the Government's interests to strike a deal, the source said.

"My view is that there is a short-term deal to be done [on price]", the source said.

Rio Tinto put the smelter up for sale in October last year. It was still possible the smelter could be sold cheaply to an Asian buyer, who might refurbish the plant and aim to get another 20 years or more out of the operation, the source said.

Given flat demand for electricity, a surplus of generation and the challenges of getting power from Manapouri to other parts of the country, it would be in the Government's interest to strike a deal. That price would have to allow the smelter to operate profitably, rather than making a loss.

However, grid operator Transpower has said that if the smelter closed it would cost about $170 million to re-route the power out of Southland and electricity market prices throughout the country would fall as a result of the glut of supply.

But Rio Tinto would be well aware of the social impact of shutting down the plant employing about 800 people in Southland. So Rio Tinto was likely to keep the plant going if they could get a "slightly positive outcome" on the smelter's returns.

"I don't think you are talking about the whole power supply [being discounted]," the source said.

The electricity contract could for example be broken into half on the existing contracted price, and half at a lower price. The discounted price on electricity might have to be for a "fair period" but not for years.

World aluminium prices have slumped from US$3000 a tonne before the global financial crisis hit to US$2500 a tonne late last year, to just under US$2000 a tonne now.

"Rio is facing a pretty serious challenge . . . I would think they are under intense pressure to come to a solution," the source said.

Smelter general manager Ryan Cavanagh said yesterday that NZAS "continues to operate in very tough business conditions - a combination of the high New Zealand dollar, low metal prices and increased international competition

It is still possible that Rio Tinto will sell the smelter, possibly to a Chinese operator or another Asian smelter company."Much has been done to improve the smelter's competitiveness and viability over the years and particularly over the past year," he said, but would not comment directly on NZAS's accounts.

"They would get it for a very cheap price," the source said.

The NZAS public accounts show the property, plant and equipment is valued at about $566m. If a new owner picked up the plant for a low enough price, it could afford to gut the cell lines and put in the latest technology which would have a dramatic impact on the plant's efficiency and profitability.

Low rates fuel for property fire

17th October 2012

Source: Stuff Business Day

Floating home mortgage rates are likely to stay low for even longer, with economists pushing out the Reserve Bank's first move up in rates till late next year, or even into 2014.

But even cheaper one- and two-year fixed mortgage rates could eventually jump sharply if there was a sudden rush from floating rates in an effort to beat a rising tide, economists said.

Annual inflation hit a 13-year low of just 0.8 per cent in figures out yesterday, reflecting a high New Zealand dollar holding down import prices.

The kiwi dipped after the figures came out, falling from almost US81.9c to end just under US81.6c.

Inflation is also being held down by slack demand and "full price phobia" , forcing retailers to discount widely, especially for electronics and more recently second-hand cars.

Unexpectedly low inflation of just 0.3 per cent in the September quarter has raised the probability of an interest rate cut to perhaps 40 per cent, according to Bank of New Zealand. But Westpac economists say a rate cut would probably not be sparked unless the global economy got much worse, or there was a serious slowdown in New Zealand.

Most economists still think new Reserve Bank governor Graeme Wheeler will sit on his hands in his first official one-page statement to the market next week.

Low inflation was helpful for the central bank, but it was future inflation that mattered. That was expected to head back towards 2 per cent next year, in part because of the inflationary impact of a burgeoning housing market and the Canterbury rebuild and the waning impact of a high currency.

Cutting rates now could add fuel to the already booming Auckland and Christchurch property markets. The central bank would also be concerned about the potential for rising construction costs in Canterbury, already running at almost 10 per cent this year, to spread to inflation outside the region economists said.

But for now official rates are expected to stay on hold for at least another year.

About 60 per cent of borrowers are on a floating rate mortgage at present, with rates averaging 5.87 per cent.

Some fixed rates are even cheaper, with some rates for one and two years fixed about 5.25 per cent or less.

Westpac chief economist Dominick Stephens said fixed mortgage rates were so low the housing market would pick up even more in the coming year.

One- and two-year rates were lower than floating because of a "small risk" of large cuts to the OCR if there was a real collapse in the European economy.

"There are a lot of New Zealanders currently floating and looking to fix. If they all opt to fix at once, fixed rates could jump up very rapidly," Stephens said.

So sitting on a floating rate till it was clear interest rates were going to rise "might leave you stranded".

"Trying to beat the market is perhaps not a good idea, but who knows when the market will wake up and realise the importance of the Christchurch rebuild [for inflation]," Stephens said.

ANZ Bank senior economist Mark Smith said official interest rates would remain "lower for longer" with the Reserve Bank keeping rates on hold till 2014.

The central bank had time on its side because of the high proportion of borrowers on a floating rate. That meant any lift in the official cash rate would flow through to borrowing rates for many people quickly, unlike when most were on fixed rates and the impact took time to feed through.

Meanwhile, yesterday's inflation figures showed more discounting, accounting for about 12 per cent of items on sale in the quarter, especially imports benefiting from a high dollar.

Sharp discounting may account for the near 3 per cent fall in second-hand car prices in the September quarter.

THE LOWDOWN

Annual inflation: 0.8 per cent (year to September) September quarter inflation: 0.3 per cent

Quarterly rises: Food group: up 1.1 per cent

Tomatoes: up 57 per cent

Lettuce: up 32 per cent

Local authority rates: up 3.6 per cent

House rents: up 0.6 per cent

House insurance: up 17 per cent

Quarterly falls: Second-hand cars: down 2.8 per cent

Domestic air fares: down 7.8 per cent

Fresh milk: down 3.8 per cent

Source – Statistics NZ

Homes more affordable, except in Auckland

10th October 2012

Source: Stuff Business Day

Owning your own home has become more affordable thanks to rising wages and lower borrowing rates offsetting higher home prices - except if you live in Auckland.

The latest Massey University Home Affordability Report shows the national affordability index improved by 2.8 per cent on the three months ending August to its lowest level in 10 years.

That was due to a $6.25 increase in the average wage and further declines in monthly mortgage costs outstripping a $1000 rise in median home prices over the period.

The Manawatu/Wanganui region had the biggest jump in quarterly affordability, with a 9.4 per cent improvement, followed by Hawkes Bay and Waikato at 8.4 per cent and 4.9 per cent respectively.

Wellington had a 1.4 per cent deterioration in affordability in the three months, and the Canterbury/Westland region chalked up a 0.3 per cent decline.

On an annual basis almost all regions saw affordability improve by 4.9 per cent versus 2.9 per cent 12-months ago.

Auckland was the single exception, with affordability decreasing 0.4 per cent compared to August last year.

"House prices in Auckland are increasing faster than other regions due to the imbalance of new supply to meet demand from the increasingly population," said Bob Hargreaves, director of Massey's Real Estate Analysis Unit.

"In the short run, while interest rates stay low and builders aren't building, house prices will continue to rise in Auckland."

Floating mortgage rates from most major banks are currently about 5.75 per cent and two-year fixed rates start at about 5.25 per cent.

Waikato, Bay of Plenty, and Otago had the biggest year-on-year improvements in affordability, both at 12.8 per cent, followed by Manawatu/Wanganui at 11.1 per cent.

Canterbury/Westland and Wellington had annual improvements of 2.3 per cent and 1.8 per cent respectively.

Only the Central Otago/Lakes district beat Auckland in the least affordable housing stakes, with an index ranking of 134.6 per cent versus the national average, although affordability had been improving of late. Auckland scored 129 per cent.

New air quality regulations set to snuff out region's open fires

8th October 2012

Source: The Southland Times

Open fires could become a thing of the past in Invercargill and Gore homes, with Environment Southland banning their installation from June next year as part of national efforts to improve air quality.

The rule, advertised from today, bans the installation of new domestic solid fuel open fires at homes in the Invercargill and Gore airsheds, and includes renovations where an open fire is to be replaced. Existing fireplaces will not be affected.

The ban is required under the Government's National Environmental Standards for air as both Gore and Invercargill breached the standards during winter.

Environment Ministry regulations mean PM10 - microscopic particulates of matter in the air - must not exceed 50 micrograms per cubic metre of air.

Invercargill breached the standard 23 times between May and August, and Gore six times.

Policy and planning manager Ken Swinney said the council had been monitoring the air in Invercargill and Gore for several years.

"Results show that each winter the level of fine particulate (PM10) from chimney smoke causes repeated breaches of the national standards," he said.

"This means that the air is so polluted that human health is at risk - particularly for asthmatics, the elderly, infants and anyone with a chronic lung condition."

Environment Southland senior resource planner Sonya Heenan said the ban was one of many options available to the council, which was currently reviewing its air plan, which would result in more changes.

Councils throughout New Zealand would have to enforce the ban within a year of breaching the standards.

The council was monitoring other airsheds in the region and the open fire ban could be extended, she said.

Invercargill City and Gore District councils' building inspectors would enforce the ban, and information was being provided to architects and fireplace companies.

City council building regulation services manager Simon Tonkin said new open fireplaces were "not very common at all", with about 10 installed in the past year.

People with masonry chimneys had also been encouraged to take them down since the Christchurch earthquakes, he said.

Heat pumps were popular, especially with a Government subsidy, and prices were going down, he said. Multi-fuel burners and pellet fires were also popular.

They all had to meet Energy Efficiency and Conservation Authority standards, he said.

The rule change would not have much of an effect on council building inspectors given the small number of open fires applied for, Mr Tonkin said.

Council targets unkempt sections

4th October 2012

Source: The Southland Times

Invercargill City Council has launched a new initiative to get dozens of unkempt residential sections in the city cleaned up.

The council's environmental health manager John Youngson said the council was enacting its bylaw to get overgrown and rubbish-filled sections without houses on them tidied up.

The council also planned to put a focus on the derelict houses in the city, he said.

More than 40 empty and unkempt sections in south Invercargill had already been identified as needing clean-up work and the rest of the city's properties were being checked in coming weeks.

"We are identifying more every day," Mr Youngson said.

The council had begun sending letters to the owners of the untidy sections giving them a fortnight to respond. If the clean-up work was not done within a further 28 days the council would do it and bill the owners, Mr Youngson said.

He expected the first of the sections to be cleaned up in November, with the work ongoing.

Once that task was completed the council would work with property owners to get untidy sections with vacant houses on them cleaned up, funds permitting.

"If the houses on those sections are dilapidated we will assess what to do with them, which could be a repair notice or another avenue," Mr Youngson said.

The council also planned to look into the issue of derelict houses which people lived in, he said.

If those houses needed repair work the council was likely to refer the owners to appropriate agencies to get help.

"But if they tell us to bugger off we will use the medical officer of health to go in and make an assessment . . . if a property is considered a nuisance under the health act we can force people to clean them up. We will certainly be looking at that."

The council had $75,000 in its budget for property clean-ups and derelict house demolition this year, with Mr Youngson saying the work may need to be prioritised as the money wouldn't last forever.

It would last longer if property owners did their own section clean-up work, he said.

The community group charged with rejuvenating south Invercargill, South Alive, which receives council funding, had kicked the initiatives off by identifying some untidy sections, with the council now taking it further, Mr Youngson said.

South Alive co-ordinator Janette Malcolm said the issue of vacant and overgrown sections and derelict houses had been identified by south Invercargill residents as key areas of concern when South Alive was being formed.

"It's fantastic the council is putting resources towards this."

NZ Property Report – September 2012

3rd October 2012

Source: realestate.co.nz

The September 2012 NZ Property Report published by Realestate.co.nz provides an insight into the state of the New Zealand property market as measured by the supply side of the property market over the month of September. The key measures of the market analysed in the report are the number of new listings, the asking price expectation for those new listings and the level of inventory of unsold houses on the market at this time. The report is compiled from data captured by the website and represents close to 97% of all property movements in the NZ market as managed by licensed real estate agents.

A full print version of the NZ Property Report – September 2012 is published below and is available for download (1.5MB) and distribution.

Summary of the market – September 2012

The property market has now fully entered its traditional spring period, an active time in the market with new listings appearing as the weather improves. After finishing winter strongly, the market is indicating that we will continue to see good levels of activity in the market in the lead up to the end of the year.

The start of spring has seen steady levels of new listings coming onto the market, falling in-line with the levels of listings seen in September last year (with a 7.6% increase on August, bringing the market over 11,500 new listings).

Inventory levels across the country remain low, and the market remains a firm sellers market across 15 of NZ’s 19 regions, and overall stocks of unsold houses fell slightly to 30.5 weeks of inventory (long term average = 40 weeks). Auckland is the most affected by low inventory levels, with stocks of unsold houses falling to a new low of 17.4 weeks of inventory, well below the long-term average of 32 weeks.

The property market continues to show signs of confidence and heightened activity. The confidence amongst sellers bringing their properties onto the market stabilised in September, with the truncated mean asking price steadying at $429,312.

Asking Price

The seasonally adjusted truncated mean asking price for listings in September fell slightly. The September figure of $429,312 was down just 0.3% year-on-year on a seasonally adjusted basis as compared to September last year.

The trend as seen in the chart opposite continues to show strength in seller expectation on the back of low listings and strong demand in the main centers.

New Listings

The level of new listings coming onto the market in September increased from August with 11,514 listings in the month – up from the 10,365 in August (7.6% increase). Seasonal trends of new spring listings remains true, showing a small 0.3% increase in listings when compared to September last year.

On a 12 month moving average basis a total of 130,915 new listings have come onto the market since October 2011 as compared to 125,102 in the prior 12 month period, this represents a rise of just 4.7%.

Inventory

The level of unsold houses on the market at the end of September (44,063) remained stable, when compared to August (44,291) as measured on a seasonally adjusted basis. The inventory as measured in terms of equivalent weeks of sales fell slightly last month to 30.5 weeks last month. Auckland showed another new record low number of unsold houses in September with levels falling to 9,567 or just 17.5 equivalent weeks of sales (Auckland long term average = 32 weeks)

Regional Summary – Asking price expectations

The national (seasonally adjusted) truncated mean asking price expectation among sellers fell slightly in September by 0.3% to $429,312.

In the main centres, both Wellington and Canterbury saw increases in September, with Wellington increasing 3% to $447,388. The asking price in Auckland witnessed a slight fall in September (down 1.8% to $574,798).

In total 10 regions reported asking price increases, and 4 regions saw rises greater than 5%. The most significant rises were seen in the Coromandel, Central North Island, Taranaki, West Coast and Nelson regions, with Nelson showing the largest increases, up 10% to $455,705. Of the 9 regions witnessing asking price falls on a seasonally adjusted basis there was just 1 reporting a fall greater than 5% with Manawatu / Wanganui seeing a fall of 7.4%.

Regional Summary – Listings

Overall listings volume was steady on a national basis, however across the regions there were slightly more regions showing increases than falls.

There were 11 regions reporting year-on-year rises with Southland reporting an increase of 26.6%, and Marlborough seeing the largest increase of listings (up 38.5%).

8 regions reported lower new listings than September last year with Central Otago / Lakes being the region to report the highest fall off of 35.2% when compared to September 2011.

Canterbury continues to see new listings fall again compared last year and remains under pressure to meet buyer demand.

Regional Summary – Inventory

Market sentiment continues to favour sellers nationally with inventory of unsold houses on the market remaining well below long term average based on equivalent rate of sale.

Two regions (Taranaki and West Coast) showed increases in inventory of homes on the market taking them above their respective long-term average. In addition three other regions (Central North Island, Southland, and Otago) sit close to their respective long term averages indicating a more balanced market.

These 5 regions aside, the remaining 14 regions all remain seller’s markets with the greatest strain being felt in the 4 regions which are marked in dark blue which includes the main metro areas of Auckland, and Canterbury, which remain under pressure from low listings as measured against sales activity.

Lifestyle

Lifestyle property listings had a boost across the country in September, rising by 29% when compared to August. A total of 951 listings came onto the market, showing an increase of 8.3% when compared to September last year. The truncated mean asking price for these listings was up by 1.8% as compared to the recent 3-month average to $649,343. When measured against September last year the asking price is up 8.3%

Apartments

Listings for apartments in September were down 9.8% when compared to August, with 477 being brought to the market (on a year-on-year basis listings were down 3%). The truncated mean asking price of new apartment listings rose to $399,489 in September from $349,192 in August, representing an increase of 10.2% on the recent 3-month average.

The Auckland apartment market followed the national trend with 264 new listings coming onto the market, down 11.7% when compared to September last year. The truncated mean asking price of new listings in Auckland rose to $366,057 (September) from $334,130 (August) representing a 5.5% increase on the prior 3 months.

City gets tiny replica of Webb Ellis Cup

3rd October 2012

John Hawkins/Fairfax NZ

Invercargill Mayor Tim Shadbolt with a tiny version of the Webb Ellis Cup.A year on from the Rugby World Cup, Invercargill has been thanked for its hosting efforts with a mini version of the winner's trophy.

Source: The Southland Times

Invercargill Mayor Tim Shadbolt accepted a 16cm replica of the Webb Ellis Cup on behalf of the Invercargill City Council this morning.

It was presented by ANZ regional manager Grant Dermody as thanks for hosting teams in the city during the 2011 Rugby World Cup.

Mr Shadbolt said one of the biggest challenges of hosting was accommodating teams from vastly different cultures, especially the Romanians.

''I was a bit worried about some of the teams. Of course, Scotland was right at home here so we didn't have to worry about them.''

He plans to show off the cup during the next council meeting before moving it to the mayoral lounge for permanent display.

All centres that were involved in world cup hosting will be presented with a similar replica trophy, Mr Dermody said.

110,000 float through the south

3rd October 2012

Source: The Southland Times

Southland could benefit from the rising number of cruise ship passengers visiting the region.

With 110,000 passengers floating through Fiordland and the south in 2011-12, a new study will determine the risks and opportunities the cruise ship industry presents.

Venture Southland has approved $10,000 in funding to assess the benefits and impacts disembarking passengers could bring to Southland communities and businesses.

Community Development team leader Bobbi Brown said the research, to be done during the 2012-13 season, would involve working with cruise ship operators, passengers, communities and businesses.

''The number of cruise ships visiting Southland has significantly risen with further growth projected,'' she said.

''There may be an opportunity to capitalise on the benefits of these increasing numbers.''

Environment Southland maritime manager and Cruise New Zealand committee member Kevin O'Sullivan said he was all for more people spending money in Southland.

But the environmental impacts and logistics of an increase in passengers disembarking in Southland would have to be determined, Mr O'Sullivan said.

''It would be good if Southland could tap into the cruise ship industry as an economic resource but the size of some cruise ships would challenge the facilities in a place like Milford Sound.''

Cruise ships varied in size with some carrying about 80 passengers while others held 2,500, he said.

''That is the population of Winton.''

Mr O'Sullivan said a small number of passengers got off the cruise ships calling in at Milford Sound and transferred to land based transport to meet up with their ship in Dunedin.

Stewart Island had benefited from the visit of cruise ships including the Volendam, a 1450-passenger Holland America cruise liner, Mr O'Sullivan said.

The island had appeared to cope with the cruise ship passengers who disembarked and spent money on the island. While cruise surveys showed Stewart Island was the highlight of many of passengers' trip, he said.

The Dunedin City Council's website said the city received nearly 88 per cent of all cruise ship passengers who visited New Zealand and estimated 161,000 cruise ship passengers would visit the city in 2012-13.

Each passenger would spend $125.

AT A GLANCE

● 92 cruise ships are scheduled to stop in Milford Sound, Fiordland in the 2012-13 season

● 15 cruise ships are scheduled to stop in Paterson Inlet, Stewart Island in the 2012-13 season

● Cruise ships visiting Southland pay a Marine Fee to Environment Southland

● Revenue is used to pay for coastline management

● $1.45 million was generated from cruise ship visits in the 2012-13 season

● $1.9 million is projected to be generated for the 2012-13 season

● Without the Marine Fee, ratepayers would face a 26 per cent hike in rates

● The number of cruise ship passengers visiting Southland has increased from 6,300 to 110,000 in the past decade. Source: Environment Southland

ASB cuts fixed mortgage rate

2nd October 2012

Source: Stuff Business Day

ASB Bank has dropped its two-year fixed home loan rate from 5.45 per cent to 5.25 per cent, the lowest non-special rate on the market.

And as an added sweetener to try and coax new customers across to its home loan deals, the bank is offering a free Samsung Galaxy tablet and up to $1000 cash.

Customers who lock in to the deal will get a free tablet computer, which currently retails between $500 and $600. The $1000 cash is available on new lending of $250,000 and over, and $500 for lending over $100,000.

ASB retail products and strategy general manager Shaun Drylie said the reduced rate was part of the annual spring home loan campaign, which marks the traditional increase in house sales during warmer months.

He said new and existing customers who fixed more than $100,000 of their mortgages for the next three to five years would also receive a free Samsung Galaxy tablet.

ASB's latest attempt to win market share extends the latest round of rate cuts and promotions sparked by Kiwibank last Thursday.

The state-owned bank dropped all its rates of two years and under to 4.99 per cent, although the special deal requires customers to have 30 per cent equity in the property.

ANZ, which had just announced the axing of its National brand, quickly followed suit with its own special of 4.95 per cent for six month and one year loans, conditional on 20 per cent equity.

TSB Bank had the best advertised two-year rate prior to ASB's cuts on Monday. It also launched a campaign last week to win over disgruntled National bank customers, offering new customers $1000 towards legal costs, no application fee and a credit card loaded with $500.

The majority of mortgage lending is still floating rather than fixed, which means most consumers are able to switch lenders without getting slammed with hefty break fees.

Sellers rule the property market

2nd October 2012

Source: Stuff Business Day

The New Zealand property market remains firmly in favour of sellers, according to the latest monthly NZ Property Report.

The report from industry website Realestate.co.nz, shows a steady level of new listings hitting the market as is traditionally the case with spring, apart from Auckland where supply remains tight.

Nationally there were 11,514 properties for sale in September, in line with the same time last year and 7.6 per cent up on August. The average asking price remained steady in September at $429,312.

But inventory, which measures the number of weeks it would theoretically take to sell all unsold housing stock, is still falling. Inventory levels of unsold homes in September fell 1 per cent from last month to 30.5 weeks, 21 per cent down on the same time last year and well below the long-term average of 40 weeks.

Paul McKenzie, of Realestate.co.nz, said the inventory drop while slight was led by high on-going demand for property in Auckland which saw its inventory levels fall to its lowest levels in five years at 17.4 weeks.

"Although price expectations have steadied, the Auckland property market is especially active at the moment and the low inventory will no doubt continue to raise confidence amongst sellers in the region," he said.

"Inventory levels across the country generally remain low and the market remains firmly in favour of sellers across 15 of the country's 19 regions."

In terms of the number of regional listings, 11 regions showed year-on-year rises with Southland reporting a rise of 26.6 per cent and Marlborough reporting the largest listing increase of 38.5 per cent.

In the major centres, asking prices in Auckland fell 1.7 per cent to $575,798 on the previous month while new listings dropped 1.1 per cent to 3666.

ASB senior economist Jane Turner said the listings decline in Auckland suggested new construction was yet to deliver a "meaningful" increase in housing supply.

"However recent building consents figures do point to a gradual increase in building activity in both Canterbury and the rest of the country," she said.

In Wellington the asking price rose 3 per cent to $447,388 while new listings jumped 26.3 per cent to 918 and in Canterbury the asking price rose 1.8 per cent compared to last month to $381,345 while the number of new listings rose 17.7 per cent to 1208.

Three Southland businesss scoop top prizes

28th September 2012

Source: The Southland Times

Three Southland businesses scooped the top prize at the Hospitality New Zealand Awards for Excellence in Wellington.

The Batch Cafe in Invercargill won the Best Cafe section; Thomas Green, Gore, won Best New/Redeveloped Bar/Restaurant category and Fiordland Lodge, Te Anau, won the Best Environmental, Sustainable and Ethical Practice section.

Mint Bar in Wanaka was a finalist in the Best Music Entertainment Venue section.

Batch cafe manager Kate French said everyone at the cafe was delighted with the win.

"It hasn't really sunk in because we have been so busy cranking out coffee," she said.

She said staff at the cafe had worked hard for the award.

It was great to win because it put Invercargill, which was not known for having a cafe culture, on the map, she said.

Husband and wife co-owners Donna and Gareth Hamilton said they were shocked when the announcement was made.

"We didn't expect it. We just looked at each other in disbelief and said ‘go Southland'," Mrs Hamilton said.

Thomas Green systems development manager Mark Paterson said it was an honour to win such a national accolade and it came as a surprise. He said Mataura Licensing Trust general manager John Wyeth had called him from the awards to tell him it was "a much bigger deal" than he thought it would be.

The trophy would take pride of place in the Thomas Green, he said.

Fiordland Lodge manager Andy Cunningham said the award would sit alongside the best accommodation award that the lodge picked up at the same awards last year.

Sustainability was important at the lodge and every aspect of business took it into consideration, he said.

Hospitality New Zealand chief executive Bruce Robertson said Southland could be proud of its winners against stiff competition from the big cities at the awards held on Wednesday night.

He said the judges noted a theme in this year's winning entries from Southland - a determination of their businesses not to be stymied by a slower economy, and daring to be different in what some customers are seeing as a "vanilla" or homogenous marketplace.

The judges also noted that the winners were increasingly reviving "old school" hospitality practices - such as founding marketing strategies around strong local customer networks, engendering staff loyalty, and offering amenities and ambience from throughout the generations of New Zealand's heritage, he said.

Mr Robertson said the public were now seeing businesses with a balanced blend of old and new in an environment where the two styles blended seamlessly to deliver an outstanding customer experience.

"Whether that's a night out for dinner, a Sunday morning brunch, a few beers with the boys, or as a corporate guest in an upmarket hotel," he said.
Entrants into the Hospitality New Zealand Awards for Excellence were judged over a six-week period by a panel of independent industry professionals.

OCR could stay flat till 2014

14th September 2012

Source: Stuff Business Day

Households look set to enjoy record-low interest rates for at least a year, with the Reserve Bank signalling a low official rate could be in place into 2014.

In his final official cash rate decision, Alan Bollard, who is stepping down later this month as governor after more than a decade, said the bank's own forecasts were for interest rates to be stable for another year.

Three months ago the central bank indicated that the OCR, which has a direct influence on mortgage and deposit rates, would begin increasing around June 2013.

There was little reaction from the financial markets yesterday, with suggestions the delay reflected only a stronger New Zealand dollar – but the news looks good for mortgage holders.

Economists at Bank of New Zealand pushed out when they expected the OCR to begin rising by six months to December 2013.

Last week ANZ said interest rates could be on hold into 2014.

Both banks have acknowledged that there is a chance that the OCR could be cut, particularly if a slowdown in China starts hurting Australia, New Zealand's largest trading partner.

BNZ head of research Stephen Toplis said though retail spending and the housing market were heating up, a high exchange rate, weak manufacturing figures and low consumer confidence all suggested a cut could be in order.

"It's very much a tightrope at the moment where it could go either way."

Bollard said he did not see signs that the market expected rates could be cut.

The OCR was reduced to a record low of 2.5 per cent during the recession of 2008-09, to help stimulate consumer spending.

After being raised to 3 per cent in early 2010, the OCR was cut back to 2.5 per cent after the September Christchurch quake.

Since then expectations of when interest rates would be hiked have been progressively moved back.

Yesterday, Bollard signalled that the strong New Zealand dollar, while hurting exporters, was helping keep inflation "low", allowing rates to be left lower for longer.

Cutbacks in government spending, and a move by households to pay off debt faster than before the global financial crisis, were also allowing it to maintain interest rates at a level it had previously said was "stimulatory".

Not all of the banks agree that interest rates will be held as low for as long as the outgoing governor predicted, with uncertainty on how Graeme Wheeler, Bollard's replacement, will view monetary policy.

Dominick Stephens, chief economist at Westpac, said that there were already signs that housing activity and prices were rising, and continued low interest rates would only cause pressure to increase.

"With these low interest rates he [Wheeler] will be facing a steadily warming, bordering on hot, housing market by early 2013," Stephens said.

INFLATION TARGET RIGHT WAY TO SET RATE, SAYS BOLLARD

A Bollard is defending the mechanism used to determine interest rates, calling it "completely fit for purpose".

Currently the bank's main focus when determining what the Official Cash Rate (OCR) should be is inflation, with a target of 1 per cent to 3 per cent over the medium term. Opposition MPs, led by Labour finance spokesman David Parker, have been pressing for broader targets for setting interest rates, to take in the impact of interest rates on employment and exchange rates.

Appearing before the finance and expenditure select committee at Parliament yesterday, Bollard defended the policy.

"The scope that the Reserve Bank Act gives, it's allowed us to deal with a very tight, growing housing market back in the 2000s, it's allowed us to deal with a very nasty financial event back in 2008."

Bollard said the bank had not felt bound by a "strict suit" of inflation targeting, and while he acknowledged not all economists agreed it was the right policy, it remained the "established" position.

"That's the model that's used by I think 23 OECD [countries] and other banks," he said.

Property market favouring sellers

14th September 2012

Source: Stuff Business Day

There's more confirmation that it's sellers' market for property with sentiment from real estate agents picking up on all fronts.

More motivated buyers, stronger prices and more activity from first home buyers and investors were all themes of this month's BNZ-Real Estate Institute of New Zealand survey.

BNZ chief economist Tony Alexander said the results were similar to the previous month's, with a net 18 per cent of agents now believing it was a seller's market.

"The shift in the New Zealand real estate market in favour of sellers happened in May and has largely strengthened since then."

However, there were still regions which were more of a "buyer's market," primarily Northland, Bay of Plenty, Manawatu/Wanganui, and Nelson-Marlborough-West Coast.

A strong net 41 per cent of agents perceived property prices to be rising and the smooth upward trend "speaks to the strength of the turnaround in pricing behaviour", Alexander said.

A firm net 25 per cent felt more investors were returning to the market and a net 39 per cent of agents had noticed more first-home buyers about.

However, a big jump in open home attendance was likely to be due to the seasonal spring surge in interest, Alexander said.

A net 37 per cent of agents reported seeing more people at open homes, up from 27 per cent in August.

Alexander said a rise in agents getting requests for appraisals , up from 2 per cent in August to 25 per cent this month, was worth watching to see if more stock was listed.

A similar report late last year had not seen a surge in listings.

Auctions appeared to be getting strong outcomes, with a record net 32 per cent of agents reporting rising auction clearances.

Alexander said that with interest rates set to remain low for some time, things were looking up for the property market.

"The housing market is likely to remain firm with assistance from rising construction costs and an underlying shortage of property - predominantly in Auckland."

Rising costs may force public appeal

14th September 2012

Source: The Southland Times

The Stadium Southland rebuild will not be completed until next winter and its ballooning costs may result in a public appeal for cash.

Stadium Southland Trust acting chairman Alan Dennis said yesterday the expected completion date for the stadium rebuild had been forced back to July 2013.

This means the Southland Sharks basketball and Southern Steel netball teams will again be consigned to playing their home matches at the adjacent velodrome next season.

The delays have also put in doubt two major sporting contests pencilled in for the new stadium next March.

Plans were well advanced for boxer David Tua to fight at the stadium in March and the world-famous Harlem Globetrotters basketball team were also scheduled to play at the venue at a similar time.

Stadium manager Nigel Skelt would only say yesterday that a large number of events had been scheduled for the new stadium and he was now working with promoters to either reschedule them for later in the year or use the velodrome.

Stadium Southland is being rebuilt bigger and stronger after the original stadium roof collapsed under a heavy dumping of snow in September 2010.

Its rebuild has been beset by delays and budget blowouts.

The rebuild was originally scheduled to be completed in March this year before being put back to February next year.

But Mr Dennis said at a media briefing yesterday that progress had slowed due to amended building code standards, earthquake loadings, extensive geotechnical reports and complex engineering work.

A peer review report also highlighted a considerable amount of unexpected work was needed to bring the remaining parts of the original Stadium Southland up to compliance with the latest building standards, he said.

Mr Dennis said the cost of the stadium rebuild was now estimated at $35.5 million, with the trust looking at several options to make up the $4m funding shortfall.

The trust is in the process of selling naming rights to the stadium and is seeking government funding, while it may also ask the public for money, he said.

"We haven't asked the people of Southland yet. There's mums and dads with $5 and $10 and that's a possibility down the track."

Representatives of the sporting codes affected by the ongoing stadium delays indicated yesterday that they were disappointed, but they understood the reasons, were focused on making next season a successful one at the velodrome and looked forward to the new stadium opening next winter.

NZ Property Report – August 2012

10th September 2012

Source: realestate.co.nz 

The August 2012 NZ Property Report published by Realestate.co.nz provides an insight into the state of the New Zealand property market as measured by the supply side of the property market over the month of July. The key measures of the market analysed in the report are the number of new listings, the asking price expectation for those new listings and the level of inventory of unsold houses on the market at this time. The report is compiled from data captured by the website and represents close to 97% of all property movements in the NZ market as managed by licensed real estate agents.

A full print version of the NZ Property Report – August 2012 is published below and is available for download (1.7MB) and distribution.

Summary of the market – August 2012

The property market finished winter strongly and is showing all the signs of gearing up for a strong Spring season. The market is still firmly parked as a sellers market, with inventory levels across the country remaining low. Good levels of new listings have started to come onto the market, with a 10% increase on July, bring to the market over 10,300 new listings.

The next 3 months usually represents the peak season for house sales, and the current indication is that we will continue to see good levels of activity in the market in the lead up to the end of the year.

The property market continues to show signs of confidence and heightened activity. The confidence amongst sellers bringing their properties onto the market stabilized in August, with the truncated mean asking price rising slightly to $430,443 when compared to the last 3 months. This slight rise in asking price was noticeable in 12 of the 19 regions, with Auckland pushing a new high of $585,482.

Asking Price

The seasonally adjusted truncated mean asking price for listings in August rose slightly. The August figure of $430,443 was up just 0.3% on a seasonally adjusted basis from July. It represents a 1.7% year-on-year growth in the asking price as compared to August last year.

The trend as seen in the chart opposite continues to show strength in seller expectation on the back of low listings and strong demand in the main centers.

New Listings

The level of new listings coming onto the market in August increase from June with 10,365 listings in the month – up from the 9,411 in June. This represents a 6.7% increase on a seasonally adjusted basis.

On a 12 month moving average basis a total of 130,878 new listings have come onto the market since September 2011 as compared to 124,544 in the prior 12 month period, this represents a rise of just 5.1%.

Inventory

The level of unsold houses on the market at the end of August (44,291) was down slightly as compared to July (44,729) as measured on a seasonally adjusted basis. The inventory as measured in terms of equivalent weeks of sales barely changed last month to 30.9 weeks last month. Auckland showed a new record low number of unsold houses in August with levels falling to 9858, or just 18 equivalent weeks of sales (Auckland long term average = 32 weeks)

Regional Summary – Asking price expectations

The national (seasonally adjusted) truncated mean asking price expectation among sellers rose slightly in August by 0.3% to $430,443.

Across the 19 regions of the country asking prices showed a significant range of variances. The star of the months was Auckland, reporting a 1.8% increase and hit a new record seasonally adjusted average asking price of $585,482. The asking price in the other main centres of Wellington & Canterbury witnessed a fall last in August, with Canterbury showing the lowest asking price since January this year (down 4.8% to $374,732).

In total 12 regions reported asking price increases with Northland the largest riser up 8.4% to $388,790. Of the 7 regions witnessing asking price falls on a seasonally adjusted basis there were 3 reporting falls greater than 5% with the biggest falls seen in Taranaki (down 6.7% to $280,560) and the Central North Island (down 6.1% to $325,982).

Regional Summary – Listings

Listings started to flow back into the market last month

Overall listings volume was steady on a national basis, however across the regions there were more regions showing increases than falls.

There were 16 regions reporting year-on-year rises with Central North Island, Gisborne, Taranaki, Wairarapa, and Otago reporting increases of over 20%, with Wairarapa seeing the largest increase of listings (up 40.1%).

Just 3 regions reported new listings lower than August last year with Bay of Plenty being the region to report the highest fall off of 15.4% when compared to August 2011.

Canterbury saw new listings fall again compared to August last year and remains under pressure to meet buyer demand.

Regional Summary – Inventory

Market sentiment still favours sellers nationally with inventory of houses on the market remaining well below long term average based on equivalent rate of sale.

Two regions (Taranaki and Southland) showed increases in inventory of homes on the market taking them above their respective long-term average. In addition three other regions (Central North Island, Nelson, and Otago) sit close to their respective long term averages indicating a more balanced market.

These 5 regions aside, the remaining 14 regions all remain seller’s markets with the greatest strain being felt in the 3 regions which are marked in dark blue which includes the main centres of Auckland and Canterbury which remain under pressure from low listings as measured against sales activity.

Lifestyle

Lifestyle property listings remained low in August. A total of 737 listings came onto the market, down slightly by 3% year-on-year but up 4.7% as compared to July. The truncated mean asking price for these listings fell by just 0.8% as compared to the recent 3 month average to $638,698 and also fell 0.4% below the June level of $641,444.

Manawatu / Wanganui was the only region to record a record high for lifestyle listings of $533,671 (up 34.6% on August 2011). On average 67 new lifestyle listings a month are listed in the Manawatu / Wanganui region.

Apartments

Listings for apartments in August were up 16.3% when compared to July, with 529 being brought to the market, on a year-on-year basis listings were down 15.9%. The truncated mean asking price of new listings slipped again to $349,192 in August from $356,762 in July, representing a decrease of 5.6% on the recent 3 month average.

The Auckland apartment market followed the national trend with 385 new listings coming onto the market, up 19.2% on July 2012 and down 16.7% when compared to August last year. The truncated mean asking price of new listings in Auckland fell to $334,150 from $344,479 in July representing a 9.2% fall on the prior 3 months.

Discover rental properties on your smartphone

27th August 2012

Source: realestate.co.nz

Since the launch of the Realestate.co.nz iPhone app in November last year over 35,000 downloads of the app have been made by property addicts keen to discover property for sale around them. On an average day over 1,500 people fire up the app to check out local properties; come the weekend that activity leaps as open home tours are instigated by serious property seekers, especially now that Spring is round the corner and the property market is showing strong signs of activity.

Up until now the app has only displayed property for sale. This is all changing as we have now released version 1.1 of the app – complete with the discovery of  rental properties. You can now fire up the app to check out the rental properties around you, wherever you may be in New Zealand. The app is free to download from the Apple apps store.

At this time there are some 4,262 rental properties discoverable on the app based on their location, covering all sizes, price ranges and locations right around the country. Using the search function you can find another 3,000 listings that unfortunately have not been addressed, but full details of these rental properties can be found on the app.

Unlike some real estate mobile apps we have decided that we would not clutter up a local map with both rental properties and properties for sale. So with our new version of the app you choose to discover rental properties or properties for sale. Return to the home screen at anytime to make a change to the other selection by the icon at the bottom right of the screen.

This latest version of the iPhone app is destined to be a great asset when searching to find that next rental property. You no longer need to be tied to your PC at home to access this great ability to find rental properties close by.

Real estate app hits 100,000 downloads

22nd August 2012

Source: Voxy.co.nz

The free mobile app created by Realestate.co.nz that gives users real-time, location-aware information about homes for sale and rent has now been downloaded over 100,000 times.

The milestone - reached this week - coincides with the release today of the 2012 Nielsen Real Estate Market Report, which shows a huge surge in homebuyers using mobile property search applications on smartphones.

Realestate.co.nz CEO, Alistair Helm, says the report revealed that 27 per cent of homebuyers who responded to the survey have used a property search mobile app in the last year, jumping up significantly from just 7 per cent recorded in 2011.

Helm says the report also revealed that seven out of ten of those homebuyers are using the Realestate.co.nz app.

"The significance of these two factors can’t be understated. It shows the app is truly changing the way New Zealand home shoppers look for and view homes, and how they interact with property and agents whilst on the go."

The Realestate.co.nz app gives home shoppers a birds-eye view of any area in New Zealand, showing properties that are for sale or rent. By simply tapping on the ‘Near Me’ button, browsers are taken to a street map that shows properties within a one kilometre radius of their current location.

Helm says the app - available on both iOS for the iPhone and iPad as well as Android devices - has become an essential accessory for Kiwis searching for local properties for sale or rent. He is aware of several buyers who have found and purchased their home for sale solely through using the mobile app.

"Agents tell us that people are turning up to open homes guided by the app with a schedule fully planned of where they are going and what they are going to check out," says Helm.

"It is a growing trend that is going to have significant ramifications for property marketing in New Zealand."

To celebrate the GPS-enabled app reaching the 100,000 downloads milestone this week, Realestate.co.nz is running a nationwide treasure hunt through the app, where users can win $5,000 worth of prizes.

Three golden pins will be hidden on national Realestate.co.nz’s listing map at a variety of locations throughout the country. Clues to the locations will be given during the competition on the Realestate.co.nz Facebook page and Twitter feed.

The first person to find one of the pins wins a new iPad. Each person that uncovers pins thereafter will go into a random prize draw with mobile phones and hundreds of dollars worth of vouchers to be won.

Southland Property Pulse factsheet – July 2012

21st August 2012

Source: realestate.co.nz

The Southland region property pulse factsheet for July 2012 is published using data from Realestate.co.nz and REINZ (Real Estate Institute of NZ).

Property sales in Southland at 134 in the month was down when seen on a seasonally adjusted basis, there has been a steady slowing of sales through the past 5 months since the very strong activity seen in February. In actual terms sales were down 5% as compared to a year ago. The inventory of unsold houses on the market were up slightly at 36 weeks of equivalent sales, this represents 5% fall in inventory as compared to July last year and is above the long term average of 34 weeks.

Median sales price at $185,000 slipped slightly from June, and was the same as compared to a year ago. The asking price expectation of new listings was down by 3% as compared to a year ago at $234,123.

The level of new listings coming onto the market in July at 245 fell as compared to June but was up 8% as compared to a year ago.

This leaves the Southland region finely balanced between a seller’s market and a buyer’s market.

Bumper borrowing as economy picks up

20th August 2012

Source: Stuff Business Day

Credit reporting agency Veda says a bumper increase in business and home loan borrowing activity is a sign of renewed confidence in the economy.

Commercial loan enquiries have increased for the first time in five years, which Veda managing director John Roberts said was "enormously positive".

"Business has hung in through a slow economic recovery," he said. "An increase in enquiries is a welcome sign of emerging stimulation in the commercial sector."

Commercial credit enquiries rose by nearly 7 per cent in the May-July 2012 quarter compared with the same period last year.

At the same time, the number of commercial loans that were defaulted on fell significantly, showing the sector was picking itself up from the aftermath of the global financial crisis.

Veda also recorded a massive increase in home loan lending enquiries, up 44.4 per cent in July compared to the same period last year.

The flurry of interest was especially frenzied amongst the Generation X group aged 28-43 years old, who increased enquiries by almost 50 per cent.

However, Reserve Bank statistics for June show an annual increase in the number of residential home loans of just 1.5 per cent.

That modest figure is consistent with recent reports from the major banks, with ASB yesterday saying its mortgage books had remained flat in the year to June 30.

Last month, BusinessDay reported that a flood of home loan approvals peaking in June had failed to translate into any significant loan book growth.

Roberts said the increased activity had been driven by the highly competitive housing market, with access to stable interest rates and relatively low cost borrowing.

"With the Reserve Bank's Official Cash Rate remaining at 2.5 per cent since March 2011 the banking industry has fiercely competed to attract new customers with very competitive interest rates - this is causing consumers to shop around to get the best home loan deal they can."

Consumer demand for credit was also on the rise, with inquiries up by 8.8 per cent for the quarter May to July 2012 on the same period last year.

That was the second consecutive quarter showing an increase in enquiries, which Veda said indicated a slow return to growth in the consumer credit market.

House prices expected to keep rising

16th August 2012

Source: Stuff Business Day

A growing number of people think house prices will rise in the next 12 months, but fewer people expect interest rates to rise, according to a bank survey.

ASB Bank's latest housing confidence survey shows that 61 per cent of people expected higher house prices in the coming year, up from 57 per cent in the previous quarter.

Just 11 per cent of those surveyed expected house prices to fall, giving a net 51 per cent expecting a rise in prices, up from a net 45 per cent last survey.

Demand for houses had picked up recently, but new listings and stock on the market remained at low levels, which had seen an uptick in prices ASB said.

ASB Bank itself is picking a 4 per cent rise in house prices nationally in the coming year, though prices were expected to rise more in Auckland, reflecting a tighter market than elsewhere.

Prices in Christchurch would keep being pushed up because of the shortage of habitable property after the earthquakes last year.

The latest ASB survey shows "further price increases are firmly embedded in households' expectations".

A net 58 per cent of Aucklanders expected house prices to rise, while a whopping net 77 per cent of Christchurch people expected prices to go up.

"Buyers in Auckland are increasingly under the impression that the market is weighted in favour of sellers," ASB said.

Some buyers might feel the market was becoming "too pressured or unaffordable" but others would be attracted by the chance of capital gains.

Interest rate expectations have dropped sharply in the latest survey, given a more uncertain international picture, and recent cuts to some fixed-term mortgage rates ASB said.

Some 37 per cent of those surveyed expected higher interest rates, compared with 48 per cent in the previous quarter.

The survey showed 16 per cent expected lower rates, compared with 5 per cent last survey. The balance said rates would remain the same or didn't know.

PM asked to help in stadium rebuild

16th August 2012

Source: The Southland Times

Ballooning costs of the Stadium Southland rebuild have resulted in its owners writing a letter to the prime minister asking for a $1.5 million cash injection from the Government.

Stadium bosses also decided this week to forge ahead with selling naming rights to the new stadium, which is now expected to cost at least $34.5m - up from the $28.6m budgeted for the job last winter.

The original Stadium Southland collapsed under a heavy dumping of snow in September 2010, with its rebuild beset by budget blowouts and delays in its construction.

Stadium trust chairman Acton Smith said the trust had decided this week to sell naming rights for the stadium, with five organisations expressing an interest in buying the naming rights.

"We are going to have to do it, we are finding our costs are continually increasing."

Mr Smith said he had also written to Prime Minister John Key about two months ago asking for $1.5m from the Government towards the stadium rebuild.

"This was Southland's major disaster and I felt that the right place to go to was the prime minister. If we can get funding from central government and we get lucky with the naming rights, we have got it [costs] covered."

A spokeswoman for Mr Key said yesterday that Mr Smith's letter had been transferred to the local government minister and the community and voluntary sector minister.

Mr Smith said the cost of the stadium rebuild was continually rising because the engineers were demanding more in the construction phase.

"For example, in stage three, to fill in the northwest corner, we had allowed for 20 piles to go in and engineers have now specified 44 piles go in," he said.

He expected the costs to rise above the newly estimated figure of about $34.5m.

It was now uncertain if the stadium would be completed in February, as had been predicted in recent months.

"We keep getting the [building] specifications lifted," Mr Smith said.

Expectation for house price rises, needs to be seen in the context of recent falls

16th August 2012

Source: realestate.co.nz

The ASB in their quarterly Housing Surveysay that a net 51% of respondents expect house prices to rise, with their expectation of a rise of 4% in the year ahead.

This expectation would see a continuation of price rises which have been seen since the beginning of 2011, 18 months ago. At that time the Stratified mean price (as published by REINZ in association with the Reserve Bank) was $351,450, in July of this year it was up to $380,425 a rise of 8% over 18 months which equates to an annual rise of 6% which makes the ASB forecast an logical extrapolation of the current trend as seen in the chart below.

A increase of 4% would see the Stratified mean price rise to $395,650 which would see it a 4% increase from the peak of the market in November 2007 – certainly a 4% increase over 5 years does not keep in line with inflation, in fact it shows a 10% decline in real dollar terms.

The following charts track the latest Stratified mean sales price across the 3 main centers. The Auckland market has already seen Stratified sales prices break through the prior peak of the market back in July 2007 and are now some 4% ahead of that level. The same is seen in Christchurch were prices are up 3.5% on the October 2007 peak. Wellington though is going against the trend where the current Stratified mean sales price is down 4.2% from the peak of October 2009 which was only marginally above the peak of September 2007.

SIT set to increase student accommodation

9th August 2012

Source: The Southland Times

The Southern Institute of Technology is expanding its property portfolio with a $7 million Spey St development on the cards.

Chief executive Penny Simmonds said the polytechnic was buying three houses and a motel in Spey St subject to the Invercargill City Council approving resource consents.

If approved, SIT will develop the Shiny Paua Motel and numbers 228, 232 and 234 Spey St as student accommodation.

Ms Simmonds said the three houses would be removed or demolished and replaced with apartments. The motel would stay as is to begin with, with a decision within five years whether to demolish it and build new apartments.

The latest rateable value for the motel, 240 Spey St, was $580,000.

The development, including buying the four properties and building the apartments, would cost about $7 million and be spread over three years, Ms Simmonds said.

It was a ‘‘ball-park figure’’ and the final cost would be known when the tender process was completed, she said.

The properties would house 200 students when finished, and while it would be for both domestic and international students the development would predominantly house the latter, Ms Simmonds said.

Late last year SIT bought the Aachen Motel in Yarrow St, now named SIT Apartments, for $925,000. It was the first student accommodation the polytechnic had bought.

The current property has two two-storey blocks that housed 44 students, most from overseas. Consent applications to add a further three two-storey blocks to the site, bringing capacity to 102 students, will be considered by the council at the same time as the Spey St consents. A house on the property will be demolished to make room for the new buildings.

SIT international manager Sam MacKay said the apartments ensured the international students were housed in safe, warm and secure accommodation from when they arrived in Invercargill.

There are about 600 international students from 41 different countries studying at the polytechnic’s four campuses at Invercargill, Gore, Queenstown and Christchurch, with the majority based in Invercargill.

The aim was to increase that to more than 1000 by 2015, Mr MacKay said.

‘‘Most of our students hail from India and China but we are continuing to diversify the countries from which our international students come from,’’ he said.

‘‘Having so many students from all parts of the world study with us on our campuses is a great opportunity for our region and the links we develop with the rest of the world whether in business, culture or exchange.’’

Neighbours of the Spey and Yarrow street properties were sent the proposed site plans and information on the apartments in June. Most will have two-bedrooms, with self-contained kitchen and bathroom facilities and indoor and outdoor living areas, and will be rented by SIT students and their families, the information says.

Online data driving a core change in real estate marketing

8th August 2012

Source: realestate.co.nz

As the property market has awoken in the past year from its enforced slumber brought on by the Global Financial Crisis and the consequential recession, the attitudes and practices of the real estate profession has changed.

One of the noticeable changes is the attitude-to; and usage-of media for advertising property. Heading into the downturn in 2007 the usage of the web by home shoppers was in relative terms, already high – the annual Nielsen survey at that time found that over 70% of active home shoppers judged that the specialist real estate websites of Realestate.co.nz, Trade Me Property and AllRealestate (no longer in business) were the number one choice for home shoppers when looking for property information especially over the past 7 days.

At that time based on industry analysis, the total industry spent around $125 million per year on all forms of advertising. Despite the dominance of online searching for property the amount spent online only represented  just under $7 million, a mere 5% of the total industry spend. The lions share going to the print media – newspaper property supplements and specialist property magazines.

Now fast forward 5 years and the question is; have things changed?

Not surprisingly the active home shoppers judge even more highly the value of online search, now encompassing both the web and the mobile platform – that 70% figure above, has pushed out above 80+%. Most significantly though the attitude and behaviour of agents has changed. They are now using and valuing the web as an advertising medium not just as a classified listings site.

A noticeable change driving this, is the engagement the agents are having with statistics. Whereas 5 years ago agents would only (and in some people’s view “could only”) judge interest in property by how many phone calls they had had or how many people visited the open home; nowadays there would be many more active agents who quote the daily and weekly visitor traffic to each listing as well as analysing the make up such traffic, as to geographical source as is detailed on the realestate.co.nz website.

Such data was never, and will never be available for print media. The ads on the page generate awareness but have no tracking mechanism as to their value in generating interest or enquiry. Nowadays it is common to see vendors as clients are keeping a close watch on such stats and tracking them themselves as discussing them with the agent.

Recognising this growing focus on performance of advertising is driving a rapid uptake of online premium property advertising. From barely 5%, 5 years ago the representation of online advertising has already grown to around 12% of the total industry spend on advertising. That still means print media amounts to over $90m as compared to online at just $13m. It is very likely that expenditure online for real estate will grow significantly faster in the next 5 years to exceed 25% and power on towards 40% – the current level seen in Australia. That would see a diversion of some $35m flow from print media to the online world.

The proof of this hypothesis and analysis can be seen in all of the Featured and Showcased properties on the website at this time – vendors recognise the value in being more visible to ensure that they provide the best professional marketing to their clients. A great recent example of the effectiveness of online premium advertising is live on the site at this time. An almost perfect case study of 2 nearly identical brand new homes marketed on the same day by the same agent in the same suburb – one with premium advertising and one without.

How to get the best price for your house this spring

8th August 2012

These tips will come in handy when it comes time to selling your house. Photo / Thinkstock

Appearance matters when selling your home. This is according to Paul McKenzie, marketing manager for Realestate.co.nz, which lists most of the houses for sale nationwide.

He says getting your house ready for sale should start with a big clean up and clear out. Don't even think about calling an agent before you've got rid of your junk and de-cluttered.

And if you think you can skip scrubbing inside cupboards, think again - some people peer into every space to judge if a home is well kept. Get rid of mould and musty smells, wash windows, clean the inside the fridge and tidy that overflowing wardrobe.

"Getting it perfect is key," says Paul, "because people want to be able to envisage your home as theirs."

Aim to have your house as immaculate as a hotel with the emphasis on luxury and comfort. Become a neat freak.

He advises "de-personalising" your house by storing away family photos, but a top-selling agent for Barfoot and Thompson, Ketiesha Elliott, adds that you should pull back from making your house too sterile.

"It's worth keeping a few personal touches because people like buying a home that has heart and soul," says Elliott.

The good thing about these first steps is they cost nothing.

Where you should spend money is on fixing things, such as leaky taps, creaky doors or drawers that won't open. Buyers note everything that could cost them; little glitches are viewed as flaws.

Paul says space matters too and there are tricks to opening up rooms. One tip is to give away, store, or sell some furniture that hogs space and makes the place "cluttered". Keep only the most essential pieces of furniture in any room.

An extra step is to paint the walls a light colour, and add light-coloured curtains to create a sense of more space.

Go the extra mile and get your timber floors re-polished - they will look stunning and you'll get your money back come sale time.

Come open home day, display flowers and candles, and exchange your workaday towels in the bathrooms for fluffy new ones. Ketiesha advises to heat your home in winter, and leave it cool in summer. Turn on lights in hallways and shady rooms. Take one last spin around the house to gather up family clutter, then leave the agent to show off the house so buyers have a free reign to look around.

If you have the cash, Paul says consider "dressing" your lounge, dining room and the master bedroom in particular. It may cost about $2500 to stage a three-bedroom home with artwork and furniture, but you are likely to recoup the costs when you sell because your home will be more appealing.

Street appeal will also get buyers through the door, and when they reach the back yard they want to see that the section is low-maintenance.

Paul encourages sellers to clean the outside of the house, mow lawns, trim trees, weed and even plant flowers to make the place pretty. Waterblast paths, decks and outdoor furniture. Light is a big "want" on buyers' lists, so if there's a hedge or tree shading a window, cut it back.

Next, think about energy efficient features such as insulation. It's one of the top things house-hunters look for, according to a survey undertaken by Realestate.co.nz in association with the Green Building Council for the Sustainable Housing Summit.

According to Albrecht Stoecklein, technical manager at Right House Ltd (which offers energy efficiency products), it costs about $3000 to insulate a three-bedroom home. This isn't a huge investment when Stoecklein says overseas studies reckon houses can sell for up to 6 per cent more if they're energy efficient.

"Years ago buyers were all about the Italian bench-tops, but now they look closely at energy efficiency," he says.

When you think you've done all you can to get your place ready for market, Paul suggests getting a mate to walk around and spot things you might have missed. After that, it's a matter of keeping it clean and tidy throughout the marketing campaign.

Choosing an agent

Paul advises finding a good agent by looking at their online profile and homes they are selling on Realestate.co.nz.

Philip Macalister, who publishes NZ Property Investor Magazine and runsLandlords.co.nz, recommends finding an experienced agent who is a "best seller".

"If they're good, they'll tell you," he says, adding that good agents don't tend to negotiate on their rates or marketing packages, but tend to have options for the latter.

Don't worry about dodgy agents too much, he says, as the industry is now well policed. However, people can check that an agent is licensed and whether they have had claims brought against them on the Real Estate Agents' Authority website.

Macalister cautions sellers against being too lean with their advertising budget, saying "you have to market it", especially if your property is in a high value bracket for which there might not be a big pool of buyers. Clever marketing can make the difference between getting a small audience, or filling an auction room with bidders.

Ketiesha also believes good marketing matters, and great photography is part of that. Most agents will have a professional house photographer they recommend and the results will be well worth the extra cost.

So should you sell by auction, negotiation or fixed price? Macalister says a skilled agent can advise on the best method of sale for your type of home and your area. Where demand is high, auctions can work well in driving up the price. More unusual houses, or those in less desirable areas, sell better through negotiation.

Ultimately, Macalister advises shopping around for an agent and getting them to make a pitch on what they think your house is worth and how they would market and sell it. Seek recommendations from other homeowners in your area, and ask local real estate offices who their most successful agents are. Agents with plenty of experience in your patch will have a database of potential buyers, know what they want, and know how to market your place to them.

Lick of paint earns big bucks

Penny and Scott Bower recently paid $918,000 for a two-bedroom 1940s brick bungalow in Mt Eden. That's $200,000 above its CV, and they're thrilled.

The original home was cleaned and de-cluttered, so bidders could visualise living there, and there was fierce competition at the auction.

The Bowers say they are rapt to have secured the well-loved and well-looked-after home in a spectacular spot.

Ray White agent Robyn Hoonhout says two parties asked post-auction if the Bowers would on-sell it, such was their "devastation" at "letting it go" at auction.

"But we said we'll never leave," says Penny, "only in a pine box!"

The home is in their dream location: a sun-drenched position in the heart of the double grammar zone, walking distance to Mt Eden Village (they have views of the mountain too) and it's in a quiet cul-de-sac that's "a real community" for their children Oscar, 5, and Alexi, 2, to grow up in.

The couple have already renovated by painting inside, lifting worn flowery carpets, polishing wooden floors, installing a heat pump and making a third bedroom out of part of the old laundry and some cupboard space, so the kids have a room each. They'll renovate the large storage area downstairs in the future.

Penny says after they finished the $80,000 renovation, friends who initially "looked horrified, bless them" at the house when they first bought it, have since said "wow!"
The couple say they could afford to buy in Mt Eden after selling their 1920s ex-state house in Orakei.

Initially they couldn't sell their old house because buyers were put off by the work that it needed, says Penny. So they sought advice from a real estate agent and a professional building inspector on what to do and then "listened to every instruction" about renovating it properly. They painted, stripped door handles back by hand, insulated and landscaped.

The top class renovation cost about $100,000 but resulted in the house selling for $780,000, $230,000 above CV.

Penny says their Barfoot & Thompson agent, Bruce Christian, was great during the process, advising them to not take pre-auction offers that were $100,000 less than the eventual sale price.

"People think real estate agents do not earn their money, but this is a case in point where one totally did," she says.

Penny says renovating the Orakei house was good for their confidence as homeowners, because it meant "we were not afraid to renovate" the Mt Eden pad they went on to buy.

Market heats up

New Zealand is supposed to be in a recession but the real estate market is running hot in some spots, particularly Auckland and Christchurch.

It's a sellers' market due to factors such as lack of supply and relatively little building going on to meet demand. This has created a build-up in buyer numbers. Meanwhile, low interest rates are enticing and banks are competing for clients.

This is according to QV.co.nz research director Jonno Ingerson, who forecasts home values will continue to grow, particularly in Auckland.

"What would cause them to drop is a massive over-supply and it's unlikely that the balance is going to swing around anytime soon," he says.

Ingerson says family homes in good school zones are in demand, first-home buyers are hunting and investors are also wanting to get back into the market. Other factors include people leaving Christchurch for Auckland after the earthquakes, and there's a limited stock in Christchurch due to earthquake-damaged homes.

However, Ingerson says Kiwis remain fairly cautious about taking on too much debt: they're watching Europe and there's a general feeling we're not out of the woods yet with the recession.

According to QV data on sales that occurred in the three months to the end of June, Auckland City suburbs are selling on average 10 per cent above CV, while on the North Shore, Waitakere and Manukau the average is about 8 per cent above CV. The top performer was North Shore's Stanley Point, selling on average 18.4 per cent above CV.

Ingerson says nationwide property values had risen in June. Values are up 1.8 per cent over the past three months, 4.2 per cent over the past year and are now only 1.3 per cent below the previous market peak of late 2007.

Across the wider Auckland region, values are now 4.8 per cent higher than the 2007 market peak, and in the old Auckland City Council area values are 7.6 per cent higher than the peak.

In Christchurch, values now sit 1.5 per cent above the previous market peak.

Housing market on sellers' side

8th August 2012

Source: Stuff Business Day

House asking prices edged up last month as, despite buyers having more choice than this time last year, the market remains on the side of sellers.

Sales outstripped listings at a faster rate than the historical average, listings website realestate.co.nz said.

The website's latest property report shows 9411 new listings last month, slightly down on a seasonally adjusted basis but up 5 per cent year-on-year. Asking prices increased 1 per cent on June and are up 4 per cent year-on-year.

The national seasonally adjusted, mean asking price for the month was $429,181.

Realestate.co.nz chief executive Alistair Helm said the inventory level - the average number of weeks houses take to sell - had hit a four-year low in June but the steady pace of new listings last month had provided some relief for buyers.

"Recent months have placed some stress on the market for buyers, with the shortage of new listings along with higher numbers of sales placing the market's favour firmly in sellers' hands."

The 5 per cent growth in new listings year on year was well behind the year on year sales growth - which was over 18 per cent.

The inventory level was at 31 weeks, still well below the long term average of 40 - "but buyers do have some richer choices now".

House asking prices in the three main cities all increased last month on June, with the mean price tag in Canterbury setting a new record price - up a seasonally adjusted 0.9 per cent to $393,433 - for the third consecutive month.

The mean price in Wellington lifted 3.1 per cent to $442,590, and Auckland increased 3 per cent to $574,932.

Ten regions saw asking prices fall, with Northland and Nelson reporting drops of more than 10 per cent.

New listings fell in Wellington - by 7 per cent to 616 - and in Canterbury - by 4 per cent to 1129, but increased in Auckland - by 10 per cent to 3333.

NZ Property Report – July 2012

8th August 2012

NZ Property Report – July 2012

Residents appeal granting of wind farm

6th August 2012

Source: The Southland Times

An eight-turbine wind farm on Flat Hill outside Bluff will power the community if it is allowed to go ahead, the company behind the project says.

Christchurch-based Energy3 was granted consent to build the wind farm by the Invercargill City Council commission in February.

However, the Runaka o Awarua Charitable Trust and a group of residents lodged an appeal to the Environment Court against the project.

Energy3 director Tom Cameron said he was confident the wind farm would eventually be built despite the ongoing appeal.

Mediation talks between the company and opponents were held last month and Mr Cameron said he firmly believed a resolution would be reached.

The mediation talks had been constructive, Mr Cameron said.

"It was a good way of working through the issues that have arisen from the project," he said.

The company was eager to get started on the wind farm, Mr Cameron said.

Environment Court procedure called for both sides to attempt mediation and to inform the court of their progress.

Council planning manager Terry Boylan said mediation was ongoing between all parties.

If all parties could not come to a decision the case would go to the Environment Court, he said.

A spokeswoman for the Environment Court said an Environment Commissioner was present at the meeting but a report had not been formalised.

Gail Thompson, spokeswoman for Te Runaka o Awarua Charitable Trust, said she could not comment on the mediation process.

FLAT HILL WIND FARM

The Invercargill City Council granted the Christchurch-based company Energy3 consent to build the wind farm in February. The wind farm would produce up to 6.8 megawatts of electricity and cost around $15 million. An appeal was made against the wind farm on the following grounds: Cultural heritage of the area has not been respected. Development did not fit into the district plan. Failed to consider the adverse effects on residents.

Southland houses remain at top of affordable list

6th August 2012

Source: The Southland Times

Southland is still one of the most affordable places in New Zealand to buy a house, a home loan affordability index says.

The Roost Home Loan Affordability Index for June shows Southland is one of the most affordable regions to buy a home in New Zealand, while Central Otago Lakes is the least affordable.

When compared with Auckland, Southlanders had $269.20 more in weekly disposable income after weekly mortgage payments.

Carolyn Davies, from Invercargill, said cheap housing was a factor for her daughter Kristie Davies when she decided to buy a home in Southland.

"It's still very affordable to buy houses here and that was a reason she didn't move away elsewhere," she said.

Ms Davies is now helping her daughter buy her first home and says it's because her daughter had KiwiSaver. The house they are considering is in Newfield and costs about $150,000.

KiwiSaver was the key to her decision because it meant she could afford to put a deposit on a home, she said.

"Kristie had been renting but realised mortgage payments would be cheaper with KiwiSaver."

The report also shows it took 73.9 per cent of an average weekly take-home wage to pay the mortgage on a median-priced house bought in the Central Otago Lakes district in June, up from May's 66.4 per cent and up from last June's 71 per cent.

The median house price was $465,000 in June, up from $417,000 in May. The median house price was $433,500 in June 2011 .

In Auckland it took 68.8 per cent of a median income to pay the mortgage on a median-priced house purchased in June.

The figures are in sharp contrast to Southland district, where it took 21.1 per cent of an average weekly take-home wage to pay the mortgage on a median-priced house, the report says.

The figure was down from 29.4 per cent in May and down compared with 29.4 per cent in June 2011, the report says.

The median house price was $188,000 in June, down from $190,000 in May but up from $184,500 in June 2011. In Invercargill it took 30.3 per cent of an average weekly take-home wage to pay the mortgage on a median-priced house in June, down from 31.7 per cent in May and 31 per cent in June last year.

The median house price in Invercargill in June was $186,250, down from $194,250 in May.

In June 2011, the median house price was $185,000.

In Queenstown it took 79.5 per cent of one median income to pay the mortgage on a median-priced house purchased in June, down from May's 83.6 per cent and last June's 87.7 per cent.

The median house price was $500,000 in June, down from $525,000 in May and $535,000 in June 2011. Nationally, the median house price rose to record highs, with the index showing it took 54 per cent of one median income to pay the mortgage on a median-priced house in June, up slightly since May.

The median house price was $372,000 in June, up from $369,000 in May.

The report shows affordability for home buyers in central Auckland, Wellington and Christchurch remains difficult as housing supply shortages caused a surge in house prices.

The typical buyer was assumed to be in the age 30-34 age bracket.

Chadderton Valuation principal Tony Chadderton said the property market was more buoyant than it had been in the past three years.

"Prices have not moved much but there has been more activity," he said.

Banks were actively lending, giving discounts and incentives and it helped that banks cut their fixed mortgage rates through May and into early June as wholesale interest rates fell, he said.

Fixed mortgages gaining in popularity

2nd August 2012

Source: Stuff Business Day

The banks' battle to hook mortgage customers with attractive fixed-rate deals has begun to pay off, with Kiwis gradually swinging away from floating home loans.

New Reserve Bank data shows the trend towards fixed rates continued to gather momentum in June.

Floating mortgages made up $104 billion or 60 per cent of the mortgage market during the month, compared with their peak of $109 billion, or 63 per cent, in April.

The move towards fixed was first seen in May which was the first month since August last year that the total value of floating mortgages decreased.

Floating rates have been gathering dust at around 5.75 per cent for months, in contrast to the hotly contested fixed term market which has seen big discounts and deals.

Several banks' six-month and one-year fixed terms now undercut the floating rate, which is unlikely to move until the closely-tied Official Cash Rate budges from its historic low at 2.5 per cent. This is not expected to happen until well into next year.

The Reserve Bank data shows the most popular fixed loans continue to be shorter terms of six months to two years, with modest growth in longer three to five-year options.

Yesterday Westpac economists said the balance of risk favoured fixing, which was still attractive compared with where floating rates might head in coming years.

"Even though floating rates are not expected to change for a long while yet, fixed rates could rise sooner. In fact, one or two rates have already risen off their lows."

June was also a big month for household and business borrowing, with total household debt up 1.8 per cent, the fastest rise since October 2010.

However, Infometrics economists said that growth was below historic levels and they expected it to remain there until at least halfway through next year.

Quarterly growth in household debt was still well below the 2.1 per cent average over the past decade and only barely above the rate of inflation, they said.

Floating mortgages sitting pretty

26th July 2012

Source: Stuff Business Day

Kiwis on floating mortgage rates will be sitting pretty for some time yet, with no change to the Official Cash Rate and none expected until at least next year.

Reserve Bank Governor Alan Bollard announced this morning that the cash rate would stay on hold at the historic low of 2.5 per cent.

The floating rate is strongly linked to movements of the OCR in this country, meaning any major change will be precipitated by the Reserve Bank.

While the highly competitive 'mortgage wars' environment of recent months has seen fixed interest rates plummet, roughly two thirds of mortgage holders are still floating.

This morning Bollard repeated earlier predictions of modest growth and continuing uncertainty in Europe, firming up the widely held belief that rates are going nowhere soon.

The little-changed economic outlook means the holders of almost one million floating loans will likely have at least eight to 12 months before a rate rise.

Standard floating mortgage rates amongst the banks range from 5.65 per cent to 6.24 per cent, with SBS, HBS and Kiwibank leading the market.

Floating rates have hovered at historic lows for the past two years, compared to peaks well above 10 per cent in the lead-up to the global financial crisis.

"There's a degree of certainty that interest rates are unlikely to be going up this year, and that remains," said ASB chief economist Nick Tuffley.

"There's still certainly that issue of they will go up in the future at some point, but that does not seem to be right around the corner."

Deutsche Bank chief economist Darren Gibbs said if there was an earlier change, it was actually more likely to see rates plumb new lows.

''We continue to think that for at least the balance of this year a cut in the OCR triggered by developments offshore will remain more likely than a hike in the OCR driven by developments at home.''

Tuffley said ASB's forecast was unchanged: "we still view March as about the earliest we would see rates going up, and we see the risks being skewed to a later start than that."

ANZ chief economist Cameron Bagrie was looking at a possible rise mid-next year, although he said that would be heavily influenced by other factors.

"The global economy still has to stabilise before that happens."

Tips to get the bank to say 'yes'

26th July 2012

Source: Stuff Business Day

Recognising that first-home buyers are most likely part of the technology savvy generation, a New Zealand mortgage broker has written them a guide in the form of an ebook only.

The author is Campbell Hastie, co-owner of Auckland-based mortgage broking company The Go 2 Guys.

Hastie says buying a home is within the reach of most Kiwis, even if house prices are going up.

"Saving for a deposit has never been easy, and if you're struggling, you're probably not trying hard enough," he says.

"Ask your parents about saving for a house and you'll hear tales of working three jobs, living on mung beans and using tea bags twice."

Hastie's book, entitled The Bank Said Yes! How To Get A Mortgage If You're A First Home Buyer In New Zealand, has saving tips and answers to the sort of questions first-time buyers ask, such as: "How much can we borrow?", "How do we save for a deposit?", and the tricky one, "How do we fix our bad credit rating?"

The ebook is aimed at helping young buyers negotiate the mortgage process and get them into a home more quickly.

The process may seem hard, and "a lot of stuff" is needed, but buyers just need to follow the application steps logically, he says.

"First-home buyers need to prove to lenders that they are the most solid, stable and predictable people around.

"Don't switch jobs or load up the credit card in the months leading up to your mortgage loan application."

Having a better understanding of how banks think improves prospective buyers' chances of a getting their mortgage application approved.

Buyers also need to be in reasonable financial shape for the bank to say yes.

He describes the process of buying a home as time-consuming, expensive and frustrating, and likens the feeling of saving for a deposit to climbing Mt Everest.

Most people have a basic idea of how to do it, but the numbers are big and emotions are high, he says.

"The reality is that it has never been easier to save for a house than right now, because the target has been getting progressively easier for first-home buyers to hit."

Hastie points to lower interest rates, the KiwiSaver deposit subsidy and lower deposit requirements as reasons home ownership has become easier to achieve in the past three to four years.

He typically sees first-time buyers with $20,000 to $25,000 saved, which puts them in a good position to buy, he says.

Campbell Hastie's tips for first-home buyers:

If you are part of the KiwiSaver programme, ask your provider how much you can withdraw for a first-home purchase. You might be closer than you think.

Go through the application process even if you're not quite ready to buy. Having a broker screen your application before it goes to the bank will help set you up for success and a good deal. Budget, budget, budget.

Understand your income and outgoings now and plan for how life will be once you have a mortgage.

Southland Property Pulse factsheet – June 2012

25th July 2012

Source: realestate.co.nz

The Southland region property pulse factsheet for June 2012 is published using data from Realestate.co.nz and REINZ (Real Estate Institute of NZ).

Property sales in Southland at 141 in the month was down when seen on a seasonally adjusted basis, there has been a steady sowing of sales through the past 4 months since the very strong activity seen in February. The sales were up just 1% as compared to a year ago. The inventory of unsold houses on the market were up slightly at 34 weeks of equivalent sales, sitting right on the long term average.

Median sales price at $188,000 slipped slightly from May, and was up 2% as compared to a year ago. The asking price expectation of new listings was down by 10% as compared to a year ago at $228,558.

The level of new listings coming onto the market in June at 273 fell as compared to May but was up 13% as compared to a year ago.

National Property Pulse factsheet – June 2012

25th July 2012

Souce: realestate.co.nz

Property sales across the country totaled 6,135 in the month showing a fall on a seasonally adjusted basis in June but at the same time representing a 17% increase as compared to a year ago. The inventory of unsold houses on the market at just below 30 weeks sets a new 4 year low and represents a turnaround from a rise in May reflecting how the rate of sale is outpacing the growth in new listings.. The current level of unsold properties on the market represents a very clear sellers market, well below the long-term average of 41 weeks of equivalent sales.

The stratified median house price for property sales in June was $383,095 which represents a 5% increase from June last year and sets a new record level for the country. The recent trend continues the steady increase for the past 18 months. The asking price expectation of new listings fell in June to $425,783 as measured on a seasonally adjusted basis, this represents a 2% increase from the asking price in June last year.

The level of new listings coming onto the market in June at 10,794 was up down on the May total of 11,544, and up 18% as compared to a year ago.

Consumers crack the QR code

25th July 2012

Source: Stuff Business Day

If you are a follower of fashion you'll know those strange looking black squares with Escher-like patterns can take a smartphone user to a website or to YouTube just by snapping their picture.

But New Zealanders have been pretty slow to use QR codes - that's QR for "quick response".

Depending on which side you sit on, QR codes are either the best marketing invention since sliced bread, or a fancy barcode for geeks.

Originally used for tracking car parts in Japan, QR codes can hold 7000 characters, much more information than an ordinary barcode. So it was not long before they were harnessed by those who could see its marketing and database potential.

On the optimists' side is Wellington's Ollie Langridge. He co-owns the designer QR code company Set QR NZ.

Set QR has made a name for itself as arguably the first company to put artwork and 3D images into the codes. With a branch in Tokyo, the company boasts a eye-popping list of global clients such as Disney, Time Warner and Louis Vuitton.

Ninety per cent of the company's business is offshore but New Zealand firms are beginning to take notice, including Immigration New Zealand and Helipro.

"What's happening is a lot of imported goods are coming into New Zealand with QR codes on them, so people are going 'What's that?'," says Langridge.

"A year and a half ago, a lot of people thought they were like a little printing mistake, a kind of digital tweak and other people thought it was a crossword gone wrong."

The key reason for Langridge's optimism is smartphone use by Kiwis is growing fast. Just last year only 16 to 18 per cent of Kiwi adults had a smartphone.

"Suddenly it's exploded and figures released at the end of June indicated that we were at 44 per cent smartphone penetration in New Zealand."

With consumer behaviour changing so quickly, Langridge is convinced that QR codes will become as commonplace here as they are in Japan and Korea.

One of the earliest adapters of QR codes here is Napier's National Aquarium of New Zealand.

The aquarium has free wifi and places QR codes at various points to offer smartphone users audio or video snippets - a virtual guide, if you like.

Manager Rob Yarrall says many Kiwis don't know what they are, but young people and foreigners do.

"A lot of Asian visitors to New Zealand, they recognise the QR codes instantly and straight away you see them pulling out their smartphones."

A similar experiment with QR codes and another new technology, "augmented reality", drew crowds of new customers to a museum in Poland.

Yarrall doubts that his visitors are coming for the QR experience but "it enhances the visit for people who were probably coming anyway".

On the negative side, QR codes are still new to many of us and even the advertisers are aware of this.

John Schofield, managing director of digital marketing firm Catch!Media, says it's been his experience that QR codes are just a bit too much for most people.

In the US, he says, marketers have found they need to put as much effort into educating people as they do developing the actual campaign.

"The problem with it all ... is that it requires people to do stuff that there's a reasonable big hurdle to jump over. "Reach into their pocket, pick up the phone, open their app, hold it up. To get people over hurdles like that, you have to give people reasonably big incentives to do it.

"It's not as easy an action as clicking a banner [on the internet] or even picking up a phone and making a phone call."

The other major barrier for QR codes is that other new technologies are racing over the horizon.

Kaleb Francis, of brand consultancy Marque, is a qualified supporter of QR codes but he's certain they will be superceded by NFC (near-field communication) or RFID (radio frequency ID) devices within a year.

New Zealand banks are already testing NFC as a way of making payments with a phone.

Even augmented reality, a nascent form of technology not unlike holograms, is making inroads.

"You can get near-field communication stickers which you can literally stick onto the back of your phone and you've then got a device which can pay for all your groceries, which is really cheap.

"That's being rolled out in the States at the moment. It's just a matter of time before that trickles down here ... QR codes will be a thing of the past."

However, Francis says QR codes have still been used to amazing effect, such as at the Tesco supermarket in Korea.

The supermarket allows time- poor subway users to order their groceries from a wall of codes and have them delivered to their home. Net effect: increased sales and market share.

QR codes also make novel business cards and are great for publicity. The NZSO has used them on concert posters for more than a year, to link people to sound files so they can preview the music.

Other advantages to QR codes are that they are inexpensive to create and can provide a rich source of data for marketing use.

But Francis warns people will get turned off QR codes if they are abused.

Badly designed links which give the much derided "QR fail" message, or being transported to a feeble website won't advance their popularity.

"It really just comes down to [advertisers] understanding how to use it and how they can get people to scan it.

"Because as a consumer, I don't have a lot of time to muck around. There are so many other interesting things for me to look at that if I have one bad experience with a QR code or with any other sort of brand engagement, I'm going to be gone."

Langridge agrees QR "misuse" is an issue, but said there's no reason all the new technologies can't coexist.

NFC codes, he says, are fantastic for payments but can be intrusive, with their pop messages, whereas QR codes are elective and visible.

"QR, once you see the code, is a call to action. It's a bridge between the physical and the digital world. It's a visual cue.

"It's a very trendy thing to say QR codes are finished and they're over. But if you look at the stats behind the growth and the awareness then I really think the QR codes going to be around for a substantial amount of time."

He's amazed that given their commonplace use in Asia, only a handful of Kiwi exporters are putting QR codes on their Asian- bound products.

NFC, AR, RFID, "all of these things can exist in parallel with each other ... People go, it's going to be this system or that system - well, actually it's going to be all of them."

QR FACTS

Leading uses of QR codes: product information, free coupons, and embedded real estate videos

Barriers to QR codes: having to scan it, a poor experience from brand owners once scanned, and older smartphones which cannot scan the code

Where not to use them: T-shirts and other non-flat surfaces, billboards and in poor lighting

Fixed-Term Loans Getting More Popular

23rd July 2012

Source: MortgageLink

Recent data from the Reserve Bank shows borrowers swinging away from floating mortgages and back towards fixed-term loans. While the proportion of floating mortgages is still high at 61.7 percent, this figure has dropped from the record high of 63 percent in April. This is the first drop in floating mortgages by value since August last year, with some commentators predicting further moves in this direction.

The overall value of residential mortgages in New Zealand is now at $173.181 billion, up $610 million from May. Unlike previous periods however, the major area of growth was in fixed-term loans, with one to two year fixed deals growing by 13 percent, or $2.6 billion, to $23 billion. In contrast, two to three year fixed loans dropped slightly in value by $4 million, with floating mortgages falling by $1.95 billion to $106.86 billion. 

The banks are keen to get new customers through their doors at the moment, with many institutions offering low rates, incentives, and even cash deals to attract new blood. In fact, mortgage rates are so low and conditions so competitive right now that banks are having trouble keeping up with demand. In a statement to the Nzherald, one mortgage broker recently said "It's clogged up [in] the banking system and people are waiting for decisions."

However, no matter how friendly the banks have become, the big question for homeowners remains: Whether to get a floating or fixed-term loan. While floating mortgages have been on a massive rise since 2009, recent data is hinting of a change to come. With such a low cash rate and so many highly competitive fixed options now available from a variety of institutions, borrowers around the country are locking in loans while current conditions are good. 

The majority of floating mortgage rates are now higher than most two year fixed-term rates, according to interest.co.nz. In a summary of all advertised bank mortgage rates, one year rates were found to range from 5.20 percent to 5.29 percent, with two year rates ranging from 5.30 percent to 5.65 percent. With advertised floating mortgage rates ranging from 5.60 percent to 5.75 percent, it is easy to see why some borrowers are jumping ship. 

Opinions differ widely on the relative advantages of fixed and floating rate mortgages, with 'floaters', 'fixers', and 'sit on the fences' all well represented. From one perspective, the economic situation in Europe could lead to a further global slow down, with further interest rate cuts a definite possibility. On the other hand, interest rates do have to come back up at some time, with some experts advising people to lock in fixed-term loans while they are so competitive.

There are lots of things to consider when taking out a mortgage, including interest rate types, loan periods, and the relationship between flexibility and debt. While fixed-term borrowers will give away any chance of benefiting from worsening overseas conditions, low rates are helping more people to take the plunge and lock in a mortgage while things look good.

Profit boost for licensing trust

20th July 2012

Source: The Southland Times

The Invercargill Licensing Trust Group has posted a net profit of $11.045m for the 2011-12 year.

The profit result was announced at yesterday's licensing trust meeting.

Last year's result was $5.217 million, which was affected by the negative impact of a one-off deferred tax liability.

After this adjustment, the profit performance was up 8.5 per cent.

ILT general manager Greg Mulvey said the 2012 profit result was a pleasing performance given the negative impact of the ongoing economic recession.

He hoped the current year would be as strong but it would be hard work to match the result.

"We are now in a strong financial position with comfortable reserves, which could be used to develop new businesses in the future. We may also . . . give grants to additional projects and give more significant grants," he told the board.

The 2011-12 financial year had exceeded expectations and was ahead of budget expectations, he said.

The ILT (Parent) operating surplus before tax of $7.884m was up 12.8 per cent on last year and ahead of budget, Mr Mulvey said.

The board was told a sales increase of 4.7 per cent was mainly the result of hosting three Rugby World Cup games in the city last September.

The ILT Foundation operating profit of $5.219m was up 2.1 per cent on the previous year. $9,430,000 was allocated in grants by the ILT group to community projects and organisations.

The ILT annual meeting will be held on August 8 at Elmwood Garden.

Low inflation to delay RBNZ hike

20th July 2012

Source: Stuff Business Day

The Reserve Bank will delay its first interest rate rise until July next year, according to Westpac Bank economists.

Westpac earlier forecast the central bank to make its move in March next year, but has just shifted that out another quarter, with inflation likely to remain low until the middle of next year.

Figures out earlier this week showed lower than expected inflation of just 1 per cent for the year to June, at the bottom end of the Reserve Bank's target band.

The Reserve Bank is due to review the official cash rate next week on July 26, with most economists expecting rates to be held and kept lower for longer.

Westpac chief economist Dominick Stephens said he expected the OCR to remain unchanged at 2.5 per cent next week, but with no hint of a rate cut.

Rates would not be cut because there had already been a "material easing" with cuts to fixed mortgage rates in June and July, and in June the central bank made it clear it was not considering a cut.

So even though the inflation outlook had eased since June, it had not dropped enough to back off the central bank's position established "so firmly" just six weeks ago, Stephens said.

Pace of property sales continues to outpace listings

19th July 2012

Source: realestate.co.nz

Every quarter we step back from the monthly sales and listings data to look at the trends of these two key measures of the supply and demand for the property market as tracked by respective movements over the last quarter.

The picture for the second quarter of 2012 as measured against last year is that the growth in sales across the country is easing. That is not to say that sales themselves are easing, just that the rate of growth is slowing. A year ago in the April to June period 15,981 properties were sold, this year across the same period 18,986 properties were sold a rise of 19%. At the same time listings rose just 7% from 29,190 in April to June 2011 to 31,306 this year.

The chart shows the relative growth or decline of property sales (red bars) and new listings (blue bars) measured by 3 month period compared to the same period the prior year. The data covers the past 3 years. The overall picture from this total NZ property perspective is of the rise in sales volumes for the past 5 quarters since the second quarter of 2011. The listings volumes though slow to respond to this rise in sales have yet to show the scale of increase necessary to re-balance the market from the very strong sellers market now being experienced.

Across the country within the 19 regions the picture is fairly consistent of a still strong sales growth but with listings lagging behind keeping the pressure on the market. The exceptions to this trend can be seen in the Coromandel where sales are down as are listings and in Nelson where activity has slowed, although listings are in short supply.

Below are the charts for each of the 19 regions in alphabetical order – hover over each one to identify the region and then click through to see the full chart.

NZ has land supply problem, not house price problem – Brash

17th July 2012

Source: National Business Review

New Zealand doesn't have a house price problem so much as a land supply problem, former Reserve Bank Governor and ACT leader Don Brash says.

On TVNZ's Q+A programme yesterday, host CorinDann asked Dr Brash if high Auckland house prices were not simply a function of the fact "people just wanna live in Grey Lynn [a trendy central Auckland suberb, where a basic two-room home can sell for close to $1 million]. They want it all right now."

People could get cheaper housing if they were willing to live on the city's outskirts.

Dr Brash replied, "That’s not true.

"I recently saw a subdevelopment just out ofPukekohe [south of Auckland] – $249,000 for a500sqm section. I mean, that’s a ridiculous price. That’s $4 million a hectare.

"I think the Productivity Commission report had a very good chart in it which compared the price of land just 2km inside the metropolitan urban limit in Auckland with the price 2km outside that limit and the multiple was nine times.

"It’s a question of supply of land."

Local government was blocking access to land, pushing up prices, Dr Brash said.

"The market is stopped from working. It’s local government which has stopped the market from working."

Dr Brash's comments were backed by Canterbury University economist Dr Eric Crampton, who told NBR ONLINE a self-inflicted land supply problem, and restrictive housing policy, was making Christchurch quake problems worse.

On the same Q+A panel, CTU president Helen Kelly suggested a "possiblemonpoly" on the supply of building materials could be pushing up the price of the average house by 20%.

Dr Brash dismissed the suggestion.

"We don’t have import controls. There’s no reason that we can’t import cheaper building materials," he said.

A third panelist, Otago University political science lecturer Bryce Edwards, jabbed in with "Fletcher has a monopoly, let’s face it."

Dr Brash replied: "You can import any building material, including cement. You can import any building materials. There’s no reason we can’t import.

"[Productivity Commission chairman] Murray Sherwin made the point that at the moment 60% of the price of house in Auckland is land. That’s the core problem."

No price crash needed – just home homes built

Earlier, Mr Sherwin rejected the notion that house prices had to drop sharply.

He was reacting to Bernard Hickey, an Auckland financial journalist, who has variously predicted house prices will plummet between 15% and 30%.

"I don’t think we ever need a big crash," Mr Sherwin said.

"I think what we need right now is a supply response. We need houses to be constructed to meet the demand.

"We have one of the fastest growing populations in the OECD, and a lot of it is concentrated around Auckland, and we just need to recognise that andrecognise that the status quo won’t stand.

"There’s a lot of status quo bias in our planning. There’s all the resistance from existing residents who don’t want intensification or new developments, councils who are reluctant to fund the infrastructure and the other things that are required.

"So there’s a lot of status quo bias, but that looks very awkward in the face of rapidly rising population."

Islanders up in arms over gas-drill plans

17th July 2012

Source: The Southland Times

More than 50 Stewart Islanders have signed a petition against the decision to allow a gas exploration well at Horseshoe Bay.

Organiser Britt Moore said 55 people signed in two hours on Saturday.

Other islanders were away and could not sign, she said, while several holiday-home owners had called and emailed to express their support.

"We've gone from the community board saying there isn't any [opposition] to getting all these people in a couple of hours," Dr Moore said. "I hate having to do the petition. I shouldn't have to do that."

The Southland District Council granted Greymouth Petroleum consent for the exploration well on Thursday after a non-notified process, which does not require public consultation.

Another non-notified application had been lodged for a well at Ringa Ringa, near the island's golf course, but was on hold while the first well was drilled, Dr Moore said.

The petition asked for public notification for any future drilling, for independent environmental impact studies, and opposed any kind of drilling on Stewart Island, she said.

"It is clear people are upset they were excluded from the process as it goes against two decades of developing an ecotourism-based economy," she said.

Greymouth Petroleum had held a community meeting to discuss its plans but this was not consultation, she said.

"Public consultation empowers a whole community [on and off the island] to influence the decision-making process," she said. "This did not happen in the case of Greymouth Petroleum."

The petition would continue to be available to sign at the Kiwi-French Creperie, she said.

"It is difficult for people to stand up and be counted in small communities where the tall-poppy syndrome dominates. Not everyone will go to a public meeting or sign their name to a letter or petition."

Six British tourists who saw the rig site in Horseshoe Bay came to the cafe and said they could not believe it was there, she said.

"These guys [Greymouth] are going to be here to almost December. That's really concerning because lots of tourists are going to see it."

She said she hoped to make the drilling a national issue.

Greymouth could not be reached for comment yesterday.

Property market recovering, not booming - expert

10th July 2012

Source: TVNZ

The median house price has hit a record high, but the Real Estate Institute of New Zealand (REINZ) is tentatively dubbing it a recovery. 

REINZ says the housing market's vital signs show it is getting back on its feet, with sales up 17.3% compared to last year, a new record median price of $372,000, and house prices up 3.3% over the last year.

But the institute's spokesperson, Helen O'Sullivan, told TV ONE's Breakfast the figures are not rosy enough yet to be called a boom."The house prices are up 3.3% on last year, really that's just inflation," she said. "We look at three key measures when it comes to the housing market. We look at the price, obviously, which is the median price, we look at the number of transactions of the market, and we look at the days to sell." One of the most telling indicators is the number of transactions because it shows how confident the market is, she said. "Looking at these numbers, roughly 6,000 transactions in the month of June - at the absolute peaks of transactional booms back in 2004, the market would turn over 11,000 houses in a month. At 6,000 this month - that's a recovery as opposed to a significant boom," said O'Sullivan.

According to O'Sullivan, Auckland and Canterbury are leading the charge with sales volumes. Canterbury/Westland recorded an increase in sales of almost 56%."Auckland and Canterbury between them are about 50% of the total, and it's really those two areas that are driving the increase," she said. "But despite what the figures we had recently from Barfoot, the Auckland realtor, showed us, we're actually seeing sales volumes figure up ." Chalmers-Ross said it is no surprise the big sales increases are being seen in the Canterbury/Westland area.

Tread carefully

O'Sullivan said home buyers should still play it safe, despite interest rates being at a record low and banks fighting for business. "You've still got to be really careful because the reality is you can still overpay relative to your own situation, and good rates are good at the moment, but they will go back up," she said. "So you've always got to look at what rates are now, take in three years worth of repayments and factor in what your repayments are going to look like when they go up by one or two percent." O'Sullivan said she predicts a gentle uplift in activity in the housing market for the rest of 2012 compared to last year.

ASB cuts fixed rate

3rd July 2012

Source: Stuff Business Day

ASB has cut its five year fixed mortgage rate to the lowest it has been in three years, offering hope that the mortgage war may not be over.

The bank dropped its rate by more than half a percentage point to 5.99 per cent, a "special" deal that it said would be available for a limited time.

To qualify, homeowners would need to own at least 20 per cent of the equity in their homes. According to ASB's latest disclosure statement, 83 per cent of existing customers would fit that criterion.

However, sister banks/building societies SBS and HBS have offered the same rate with the same equity condition to customers who do their full banking with them since May.

The last round of home loan cuts, which ended weeks ago, was originally sparked by a special deal introduced by Kiwibank.

Sellers hold the power as house shortage bites

2nd July 2012

Source: New Zealand Herald

People selling their homes hold the power as a worsening shortage of property listings combines with strong demand from buyers.

Figures released yesterday by Realestate.co.nz show the number of homes for sale in New Zealand has dropped to its lowest point since January 2008.

And the industry says the shortage will be long term as a lack of easy finance and political urgency slows new development in areas such as central Auckland.

Realestate.co.nz's monthly property report also showed that in June the national inventory of homes for sale dropped below 30 weeks for the first time in four years, to 29.8 weeks.

The long-term average is 41 weeks.

Inventory is measured by the projected number of weeks it would take to clear existing stock of unsold homes on the market.

"For the first five months of 2012 sales are 25 per cent up year on year. But over the same period new listings were only up 6 per cent," said Alistair Helm, the site's chief executive.

Each of the key regions - Auckland, Wellington and Canterbury - registered some of their lowest levels of inventory on record in June, simply because buyers have been so active."

He said the shortage of listings in almost every region of the country had now reached a critical point.

"With inventory levels so low, not one region of New Zealand can now be described as a buyer's market.

"If properties do go to auction you're seeing very aggressive bidding and some quite incredible prices achieved for what in some ways have been pretty ordinary properties."

Mr Helm said high demand for homes pushed average asking prices up to record levels last month, but that had reduced slightly in June to a seasonally adjusted average price of $424,315.

"It will be interesting to see how the ongoing demand for property affects asking prices over the remaining winter months."

The housing market has heated up as rock-bottom interest rates pit investors and first home-buyers against each other in the bid for a limited number of property listings.

Pent-up demand combined with record-low interest rates have seen some buyers face a long search for a suitable property.

Real Estate Institute of New Zealand chief executive Helen O'Sullivan said the data was more confirmation of a long-term trend that was set to continue.

She said the demise of finance companies had meant funding for new developments was scarcer.

Political will to address the housing issue in cities such as Auckland was also questionable, Ms O'Sullivan said.

"The Auckland Council set a target of building 70 per cent of the city's growth within the existing [urban] city limits for the next 30 years. And that's created some pressure points. You see community groups opposed to intensive developments in their area, and yet people aren't that interested in living in intense housing developments a long way from the city."

Another steep drop in number of homes for sale

2nd July 2012

Source: realestate.co.nz

The number of homes now available for sale in New Zealand has dropped to its lowest point since January 2008, as continuing high demand and a shortage of new listings have tightened the property market even further.

Data released today in the NZ Property Report – a monthly report of housing market activity compiled by Realestate.co.nz – revealed that in June national inventory of homes for sale dropped below 30 weeks for the first time in four years to 29.8, far below the long term average of 41 weeks.

Alistair Helm, CEO of Realestate.co.nz, says the ever steepening drop in inventory that has been registering in almost every region for the past six months has now reached a critical point, overwhelmingly leaning the market in favour of sellers across the nation.

“Sales of homes are up 20% year on year, but the numbers of new listings just haven’t kept pace, so demand continues to outstrip supply. Each of the key regions – Auckland, Wellington and Canterbury – registered some of their lowest levels of inventory on record in June, simply because buyers have been so active,” says Helm.

However, Helm says buyer demand has also now pushed inventory in regions from Waikato, Hawkes Bay and the Wairarapa to Otago, West Coast, and Queenstown to levels well below their long-term averages.

“With inventory levels so low, not one region of New Zealand can now be described a buyer’s market, even though buyer demand is what’s driving the market activity.”

Inventory is measured by the projected number of weeks it would take to clear existing stock of unsold homes on the market, matched to the longer term average based on five years of seasonally adjusted data.

Helm says while the pre-winter surge of new listings that was registered in May tailed off a little in June, with levels falling 16% from the previous month to 9,689, it has not been significant enough to boost inventory in the face of the high demand.

He also says that while the high demand for homes helped push average asking prices up to record levels last month, seller expectations balanced out somewhat in June, with the seasonally adjusted average price falling slightly to $424,315.

“It will be interesting to see how the ongoing demand for property affects asking prices over the remaining winter months. Although it’s been cold, home hunters are still on the trail of hot property and that will no doubt continue to be on sellers’ minds.”

Realestate.co.nz is the country’s most comprehensive property listing website profiling listings of licensed real estate agents with more than 110,000 real estate listings covering residential, commercial, business and farms for sale.

The latest issue of the NZ Property Report, covering June 2012, plus more analysis of the property market can be found on www.unconditional.co.nz, the news and information website for New Zealand real estate.

NZ’s first Zero Energy House leads move to end power bills

2nd July 2012

Source: scoop.co.nz

Intelligent Roof on NZ’s first Zero Energy House leads move to end power bills

The country’s first Zero Energy House will lead the move towards more Kiwis fitting Intelligent Roofs on their homes, to protect themselves from the rising cost of power, says the CEO of the nation’s leading solar power company.

SolarCity has partnered with the home’s owners Joanna Woods and Shay Brazier, and energy consultants and ecocompanies, to help build the Point Chevalier-based Zero Energy House (ZEH). The home aims to achieve net-zero power bills by generating as much electricity as is consumed, through a blend of energy-efficient features and an Intelligent Solar Roof.*

Labour leader David Shearer and one of Pure Advantage’s Trustees Stephen Tindall met with SolarCity CEO Andrew Booth and Shay Brazier this morning (Friday 29) at the home to see the Intelligent Roof which has just been installed.

Andrew Booth says the Zero Energy House’s roof has a combination of an Artline Solar Hot Water system manufactured in Christchurch and the Pacific’s first installation of the Solarcentury C21e solar power roof tile. “Our new Intelligent Roof will generate clean, renewable energy that saves money and offsets electricity consumption – helping homeowners put an end to power bills,” Andrew Booth says. “The price of power in New Zealand is more than 70% higher than in Australia and the United States. There is very little point switching power companies in the face of such high prices. Homeowners would be far better off switching to solar.”

Shay Brazier, Zero Energy House owner, and Head of Design and Innovation at SolarCity, says his Zero Energy House could save as much as $50,000 - $80,000 in power costs over the next 25 years.**

“Our Zero Energy House protects us from the impact of electricity rate increases while safeguarding the environment for the next generation,” Brazier says. “The country needs to start thinking about making their roofs more intelligent, and start thinking about the cost of running a house per square metre, rather than just the cost of building a house per square metre. “An intelligent roof works for you, rather than sits dormant,” he says. “It uses the free sunshine and turns it into electricity, which let’s face it, is a huge monthly cost for everyone. It pays for itself by significantly reducing the cost of running a home, as it costs a fraction of the energy costs that the house would incur over its life.

“Each house’s situation is different, so the mix of Solar Hot Water and Solar Photovoltaic technologies people may choose to make their roof intelligent will be different,” he says. “Our intelligent roof includes a SolarCity Artline Solar Hot Water system, and the new C21e roofing tiles, which SolarCity has just made available in New Zealand. The Artline system will provide 25% of our home’s energy by heating the majority of our water for us, and the C21e solar slate roofing tile will provide 45% of our power needs, and the rest of the home achieves zero energy through energy efficiency.

“We are thrilled to be the first in the Pacific to have the C21e roofing tile, which is a product that proves that a roof can be smart and attractive.”

Stephen Tindall says "The key to making cases like Shay's the norm will be the Government and business working together, to put real innovation to work for us. The problem is that we're still subsidising fossil fuels, instead of using our natural advantage to build a sustainable economy, reduce our environmental footprint, and improve living standards for everyone."

Labour leader calls for solar on new homes In his electorate today at the Zero Energy House, Labour leader David Shearer said New Zealanders should all be aiming towards having Zero Energy homes.

"New Zealand should be as clean and green as we say it is,” Shearer says. “Given our high sunshine hours and mild climate, New Zealand has the perfect opportunity to reduce our reliance on carbon fuels. The government should be reducing the barriers to solar energy for everyday New Zealanders, so we all have the opportunity to minimise our power bills and carbon footprints, as Jo and Shay are doing. These guys are showing us the way."

Shearer says it was totally regressive for the National-led government to remove solar hot water grants, which it did earlier this month. "In Europe, solar and other forms or renewable energy are seen as the way of the future. New Zealand is lagging behind when we should be way out in front.

"Labour believes increasing renewable energy in homes is the way of the future,” he says. “Solar technology is becoming more affordable by the day, and in Christchurch is even being fitted as standard across 3500 new homes, which will harness solar energy to power themselves, and sell any excess energy back to the national grid. The Zero Energy House is a house of the future, and a wake-up call."

Notes for Editors:

Solarcentury C21e Roof Tile: World-leading solar roof tile available for first time in the Pacific SolarCity has this month become the sole supplier of the world leading Solarcentury C21e roof tile in New Zealand.

The C21e tile sits flush with adjoining roof material, so looks like the roof. It has won a number of awards internationally for its unique integrated design.

SolarCity’s Andrew Booth says the company has been negotiating for over a year with the tile’s manufacturers about bringing it to New Zealand.

“It is fantastic that New Zealanders can now access this amazing roofing tile, which means you don’t have to put a solar system on top of the roof, as the C21e is part of the roof,” says Booth. “It is installed by a trained roofer, and as it is a roofing tile, it also needs no additional building consents from those already needed for the roof.

“As electricity prices continue to rise, it is the perfect time for New Zealanders to embrace the notion of an intelligent roof,” he says. “New Zealand gets at least 2000 hours of sunshine a year, on average. For many of us, our roofs are soaking it all up, but it is not being used for anything.

“To help people evaluate the best solar products for their needs, there’s a web tool on our website where people can choose products and see exactly how intelligent these products make their roofs.” The C21e tile is fitted to standard wooden battens, using traditional roofing practice, with one solar tile covering the width of several conventional tiles. For more information please go to www.solarcity.co.nz/intelligentroof

The Zero Energy House

* The Zero Energy House is designed to produce as much electricity as it consumes on an annual basis, on average. Utility fees, surcharges and distribution charges may remain. Estimates are based on average use by household with published data from manufacturers, suppliers and others, and calculated using software approved by the Ministry of Economic Development. Energy usage not guaranteed and energy production and consumption may vary based on home, orientation, climate and usage of electric appliances.

** Based on 2010 price levels. Adjusted for inflation, residential electricity prices have almost doubled in the past 25 years (Ministry of Economic Development. (2011). New Zealand energy data file: 2010 calendar year edition. p130- 131. Meanwhile, in this year alone prices for some households have gone up by almost 12%.

For more go to: http://www.zeroenergyhouse.co.nz/

Don’t delay – get your property on the market

29th June 2012

Source: realestate.co.nz 

The message from the market of the past 12 months has been of a shortage of listings. The NZ Property Report back in May of last year foreshadowed this situation by stating that themarket has reached a turning point, subsequent months have only reinforced this perspective, as property sales have remained strong with a consistent 20+% year-on-year growth as evidenced by the chart below which tracks the % growth / decline of the market over the past 4 years.

In the space of 12 months the inventory of property on the market (measured by the equivalent rate of sale in weeks) has gone from 47 weeks down to 36 weeks, a fall of over 20%. In actual numbers, the stock of property on the market in June last year was 47,738 whereas today it sits at 43,917 – the key difference is that this time last year around 161 properties were being sold a day whereas now it is up over 200.

The key question though has been, when would inventory start to rise, when would homeowners take note of the market signals and create a steady flow of new listings coming onto the market driven by this strong sellers’ market that has been present for close on a year. Back in February an analysis was undertaken to identify the likely trend for sales and new listings through 2012. At that time there was a belief borne of analysis that identified a 6 months lag between the trend of sales and the response of listings – sales being the demand leading indicator and listings being the supply lagging indicator.

The analysis foretold a picture of steadily rising new listings through this year as represented by the chart below (listings being represented by the red line measured off the left hand axis, sales being represented by the blue line measured off the right hand axis):

The forecast at that time anticipated that new listings would rise steeply from around 10,500 per month to around 12,000 per month on a moving average basis as the year progressed, thereby providing a match to the rise in sales which were anticipated to rise from 4,600 a month to just under 6,000 per month, again on a 12 month moving average basis.

However with 5 months of activity under our belt for the year it is valuable to see how the forecast is tracking. As far as sales are concerned the rise since the start of the year has tracked exactly as forecast and by the end of the year sales will likely slightly exceed the forecast of 6,000 a month on a 12 month moving average basis as shown int he chart below. However when it comes to listings things are not tracking to the forecast – the red line below shows a revised forecast reflective of recent levels of new listings and seasonal trends out to the end of the year.

This revised forecast now looks more like a year end position of just over 11,500 listings a month on a 12 month moving average basis.

This continued lag in the trend of new listings is likely to see a continued pressure on the market with continued shortages in specific local markets. That means the message appears to be the same as at the start of the year – if you are thinking of selling then now would look like a good time to get your property on the market. However I hear a lot of people saying – isn’t that the message the industry always wants the market to hear? – well of course; but I can assure you I am not speaking from the motivation of the real estate industry, I am purely trying to share insight from the available data and analysis which we derive from the website.

Part of the extrapolation of this revised forecast is the seasonal trend of new listings. This data which has been shared before (in fact 2 years ago in an article titled “Is summer really the best time to sell a property?“) is that the variance by month of new listings is more extreme than that for sales through the year. This fact is best showacsed in the chart below which tracks the % each month represents of annual sales and annual listings (based on 6 years worth of data).

The chart shows very clearly through the green bars those months when sales proportionally are higher than listings – the winter months; and in the red bars the months when listings are proportionally higher than sales – the summer months. The take out of this data is that potentially to list a house over the winter allows you to compete in a less cluttered market in which buyers are still active. This period extends from May through to August before that classic spring surge of new listings occurs.

So just maybe the smarter sellers and smarter agents can benefit from this insight and help homeowners choose the right time to sell and profit from greater insight based on data.

Energy efficiency as important as aesthetic features for house buyers

28th June 2012

Source: realestate.co.nz
There is a widely held opinion that the things that matter most to home buyers are gourmet kitchens and spectacular indoor / outdoor flow
The reality though is that this perception is changing, and energy efficiency to provide a warm and dry home is fast rising up the shopping list for buyers.
A survey undertaken by Realestate.co.nz in association with the Green Building Council for the Sustainable Housing Summitsurveyed over 1,700 people as to their attitude to features seen as important when looking for a home to buy.
The number one feature that home buyers judged as most important was the orientation of the property to the sun. More than half of those surveyed regarded this as of “very high importance” with a further one third rating it as “high importance”. This compares to the importance of a gourmet kitchen, which scored just 16% on the scale of “very high importance” with 34% judging it as of “high importance”.
After orientation to the sun, the next most important feature was a high level of insulation. Scoring a 46% on the scale of “very high importance” and 35% of “high importance, insulation surpassed other aesthetic features such as a 3rd bedroom and off street parking, as well as the ubiquitous “indoor / outdoor flow”.

The full list of 18 features are detailed below on a mean importance score on a 1 to 5 scale. The features highlighted in red relate to energy efficiency and performance rating of a home.

Inspection Priorities

The survey went on to investigate to what extent buyers had inquired or inspected for aspects of environment / energy performance. In this case the 3 features that are “visible” and top-of-mind for buyers were inquired of in more than 70% of the time – presence of insulation, inquiring about heating and asking questions about dampness. Certainly buyers appear to be front-footed on these performance features that impact the warmth and comfort of the home.
On the other hand fewer asked questions about water an operating costs or any environmental features of the home each inquired about by less than a third of buyers.

Price Premium

Of those questioned who were looking to sell their property or had recently sold a staggering 88% believed that there was the potential for a price premium for properties that could demonstrate performance features such as energy, water and heating efficiency.

We then went on to seek to find out what type of features would most impact this perception of a price premium. The big 3 items were high levels of insulation, efficient heating and cooling system and double-glazing. Judged of lower opinion on a 1 to 5 importance rating score were low energy lighting, fixtures and fitting with low toxicity and or an independent rating certificate for a home’s performance.

This is the first such comprehensive survey undertaken into this area of home buying. It certainly has established that energy performance and the warmth and health aspects of a home are very much on the shopping list. As to what buyers look for as a signal, at this stage it appears to be very much around tangible items that can be seen and touched as opposed as to performance measures behind features. Time will tell if these performance measures move up the priority list and start to surpass that granite benchtop.

Homeowners' enviable dilemma

21st June 2012

Source: Stuff Business Day

It's the question that many homeowners have agonised over - to fix or float?

Current market conditions have led to historically low mortgage rates, prompting many to rethink how to manage their debt.

While some believe the low rates won't last and homeowners should lock in a fixed rate mortgage, others think they've still got further to go. However, make the wrong decision and it could cost you thousands of dollars.

BNZ economist Tony Alexander suggests it doesn't have to be one or the other and the solution could be to do both.

"My advice to people is not to think so much in terms of trying to pick the bottom in the fixed interest rate cycle, because most of us are simply not going to be able to do that this time," said Alexander.

"I would think more in terms of it's a good idea to have some of my debt fixed and some sitting at floating. Then it becomes a personal preference if you go half-half or 30 per cent fixed and the rest floating. I would look at some sort of combination like that."

With more than 60 per cent of all home loans on floating interest rates, many New Zealanders are opting to float and it's easy to see why - the lowest floating mortgage rate is 5.65 per cent, a 48-year low.

Property Investors Federation president Andrew King's advice is to look at your personal finances before making a decision.

"I think what you really need to think about as a property investor is your risk," said King.
  
"If you've got a high amount of debt and rates spiked, would you risk having to sell your property? If so, then fix them or at least fix a portion of them. You don't have to fix or float everything."

Last week the Reserve Bank held the official cash rate, the main driver of mortgage costs, at its record low of 2.5 per cent - where it's been since March last year. The central bank forecasts imply it won't rise until next year. Economists are keeping a close eye on Europe, because if the situation worsens then floating rates are likely to drop further, but if it gets better rates will rise.

Alexander said the low mortgage rates mean now is a good time to pay off debt, as by remaining on the floating interest rate you can repay the principal faster without incurring early repayment penalties. However, fixed rates offer certainty around payments and protection from interest rate increases.

Strong competition between banks means there is a range of fixed rates at historically low levels. ASB, ANZ, National and Westpac's one-year fixed rates are all at 5.25 per cent. King said it was important to do your homework before negotiating for even lower rates.

"It's really important for property investors to crunch the numbers all the time actually, I recommend at least once a year. You look at your investment portfolio and go over it and make sure it's doing what you want it to do," said King.

"The best thing about that is you know what situation you're in. If you've got a good [cash]flow and good equity then you're in a strong position to bargain with your bank and get your interest rates as low as possible and the conditions as favourable as possible."

Property market now favours sellers

18th June 2012

Source Stuff.co.nz

The property market has returned to being a sellers' market after four years of favouring buyers, according to a fresh survey of real estate agents.

The monthly BNZ-Real Estate Institute of New Zealand residential market survey said both investors and first home buyers were showing renewed interest in residential property.

A record net 27 per cent of agents noticed more investors in the market last month, up from 19 per cent last month and just 4 per cent a year ago.

Interest from first home buyers was also strong, with a net 41 per cent of agents reporting more contact with those seeking their first step on the property ladder.

BNZ chief economist Tony Alexander said the appearance of the extra buyers suggested buyers were now more motivated than sellers, he said.

''For the first time since our survey started we feel one can say with strong confidence that the New Zealand market has shifted toward being a sellers' market rather than the buyers' market which has been more the norm for the past four years,'' he said in the survey commentary.

Earlier this week, Alexander suggested that low returns for term deposit and interest rate uncertainty were prompting would-be house buyers to look at the property market afresh.

However, while more people were looking, there was no sign yet of a pick-up in buyers, the survey showed.

Fewer agents reported an increase in people going through open homes, a net 13 per cent compared to 21 per cent in May.

Requests for appraisals from those wanting to sell a property were also static, underlining the perception that sellers were not rushing to come to the market.

After sharply increasing in May, the number of agents who felt property prices were rising had retreated to a more usual 24 per cent.

OCR unchanged at 2.5 percent

14th June 2012

Source: Reserve Bank of New Zealand

The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 2.5 percent.

Reserve Bank Governor Alan Bollard said: “New Zealand’s economic outlook has weakened a little since the March Monetary Policy Statement.

“Political and economic stresses in Europe, along with a run of weaker-than-expected data, have seen New Zealand’s trading partner outlook worsen. Furthermore, there is a small but growing risk that conditions in the euro area deteriorate more markedly than is projected in the June Statement. The Bank is monitoring euro-area developments carefully given the potential for rapid change.

“Increased agricultural production and the weakened global outlook have driven New Zealand’s export commodity prices lower. The resulting moderation in export incomes, although partially offset by depreciation in the exchange rate, will weigh on economic activity in New Zealand. Fiscal consolidation is also likely to constrain demand growth going forward.

“Offsetting these negative influences, housing market activity continues to increase, supported by recent reductions in mortgage interest rates. In addition, repairs and reconstruction in Canterbury are expected to substantially boost construction sector activity in coming quarters. Aggregate GDP growth is projected to pick up slightly to just over 3 percent next year. Given this economic outlook, inflation is expected to settle near the mid-point of the target range.

“It remains appropriate for monetary policy to remain stimulatory, with the OCR being held at 2.5 percent.”

View the June 2012 Monetary Policy Statement: http://www.rbnz.govt.nz/monpol/statements/index.html

Low interest rates spark jump in house sales

14th June 2012

Source: NZ Herald

The housing market has taken off as rock-bottom interest rates send investors and first home-buyers competing for a limited number of property listings.

Pent-up demand combined with record-low interest rates have seen some buyers face a long search for a suitable property.

And an economist has warned people against taking on unsustainable debt as mortgage rates as low as 4.75 per cent spur renters to buy their first homes.

Data from the Real Estate Institute of New Zealand shows 7175 unconditional sales in May - an increase of 26.4 per cent compared to April.

Sales across New Zealand were up 24.4 per cent compared to May last year, with Auckland's sales volume increasing 27.6 per cent over the same period.

Reinz chief executive Helen O'Sullivan said feedback from members was that, while still much below demand, there had been an increase in listings recently.

Low long-term interest rates, often targeted at people with good equity, was another factor.

"There's also an increase in confidence ... there's not a fear now that if you buy now you'll be catching the fall of the market," Ms O'Sullivan said.

"Prices are stable to rising, and that makes it a reasonably good time to put your stake in the ground and purchase."

The latest QV index, released yesterday, shows nationwide property values rose in May.

Auckland led the way with values up 1.2 per cent over the past month.

Values in the old Auckland City are now 7.4 per cent higher than the same time last year and 6.5 per cent above the previous market peak in 2007.

"This more widespread increase in values is in contrast to two or three months ago when values in many areas appeared to be flattening off," said QV research director Jonno Ingerson.

"First-home buyers and investors remain active in many parts of the country, attracted into the market by low interest rates and perceived affordability.

"There are now buyers who have been looking for a house for some time and either cannot find something that meets their needs, or are being out-bid by other keen buyers."

As well as central Auckland, property values in areas such as Rodney, North Shore and Waitakere had risen fast in the past three months.

QV Auckland valuer Glenda Whitehead said in central Auckland the market was predominantly in the $700,000 plus bracket.

In west or southwest Auckland demand was strong from buyers with around $400,000 to spend.

Ms Whitehead said people wanting to buy in more popular suburbs often needed to adjust their expectations and look further afield.

Westpac chief economist Dominick Stephens said low mortgage rates meant the calculation between renting and buying had swung in the favour of buying.

"Observing the housing markets tell you that interest rates can't be kept this low forever."

Mr Stephens predicted that over 2013-2015 rates would rise much higher than markets would be prepared for.

"I've got a real concern that interest rates are going to rise far further than people are prepared for.

"Some people taking on loans now to buy houses might find those loans difficult to service when interest rates rise."

Rising prices spur first time buyers into action

A property market trending upwards meant Sean Cameron and Tineke van der Walle knuckled down in their search for a first home.

The couple, both 27, settled on a three-bedroom house in Mt Albert last weekend.

"[Interest rates] are good at the moment ... and we were wanting to get into the market because we knew it was going up and up," Mr Cameron said.

They had been saving all they could manage over the past year but bought after only about a month of intense house hunting, he said.

"We definitely got into it a lot faster than we imagined ... it really kicked us into gear, seeing prices going up, it motivated you to do your homework and get out there.

"With renting, we didn't want to pay somebody else's mortgage. And [rent] is going up anyway."

Mr Cameron said they bought their home through negotiation, after their hopes were quickly dashed at a previous auction.

The owners of a two-bedroom property in Three Kings put the property on the market at auction for $500,000 - but it went for about $560,000.

GOING UP

7175 unconditional house sales in May

26 per cent increase on April

24 per cent increase on May 2011
Source: Real Estate Institute

Mortgage deals boost property sales

13th June 2012

Source: Stuff Business Day

Low mortgage rates - the result of strong competition among banks - brought the housing market back to life in May, with an almost 25 per cent increase in sales year-on-year.

Latest Real Estate Institute of New Zealand data shows 7,175 houses were sold unconditionally in May, up 24.4 per cent from last year and up 26 per cent on the number of properties sold in April.

The median sale price was 5.4 per cent higher than a year earlier, at $369,000. Auckland prices rose 7.8 per cent in the same period to $500,000.

Real Estate Institute chief executive Helen O'Sullivan said sales volumes were surprisingly strong in May, with all regions recording increases in sales.

''May is typically stronger than April, ranking as the third busiest month in the year for real estate sales, but the increase is considerably stronger than normal seasonal trends would suggest. This is likely partly driven by good deals on interest rates during the month, and a desire by buyers to complete purchases before winter,'' O'Sullivan said.

She said the strength of the real estate market continues to be focused on Auckland and Canterbury, with Auckland reaching a new milestone with a record median price of $500,000 and Canterbury/Westland maintaining its record median price of 
$335,000.

All areas saw a rise in sales volumes, with the earthquake-stricken Canterbury region making the strongest recovery. There were 56 per cent more properties sold there in May from a year earlier, with prices 4.4 per cent higher.

Just over half of the $3.3 billion worth of properties sold last month went for under $400,000. A quarter of the houses sold in May went for between $400,000 and $599,999, with 14.5 per cent between $600,000 and $999,999 and just 4.2 per cent sold for more than $1 million.

Should you step onto the property ladder?

13th June 2012

Source: Stuff Business Day

If you're thinking about buying your first home, it looks like now is the perfect time to jump onto the property ladder.

The lowest advertised floating mortgage rate is now 5.65 per cent. To put that in perspective, the last time rates were close to that was September 1964 when they were at 5.7 per cent.

However customers have been able to get even lower floating rates due to competition between the banks, with some scoring rates around the 5.15 per cent mark.

Strong competition from banks means rates are at record lows. All the major banks have dropped their short term deals with ASB, ANZ, National and Westpac's one-year fixed rates all at 5.25 per cent. The Reserve Bank is likely to keep its Official Cash Rate at 2.50 per cent when it releases its decision on Thursday.

BNZ chief economist Tony Alexander said conditions were ripe for a first time home buyer to enter the property market.

"Now is a good time for two reasons. Number one because interest rates are so low and number two because the upward leg of the house price cycle is only just restarting - meaning in two years' time, even if interest rates are at the same level, I expect house prices to be higher.

"Therefore it's better to be a first time home buyer now than it is down the track."

Alexander believed the existing housing shortage in some parts of New Zealand would remain for a very long period of time, which would also continue to place upward pressure on the housing prices.

While the tantalisingly low mortgage rates may be luring first time home buyers to the market, property experts suggest buyers look beyond the numbers before taking the plunge.

Property Investors Federation president Andrew King said it was important to start small.

"They shouldn't be thinking they need the palace that their parents have got or the home they've lived in since a child. They need to think about the home they'll have for the next five to 10 years rather one that they'll have all their life."

Alexander agreed that rates shouldn't be the only consideration.

"I would invite people to run your affordability scenery not on the basis of a floating mortgage rate of 5.75 per cent at the moment," he said.

"Run your numbers on 8 per cent. I'm not forecasting the mortgage rate will bump up to 8 per cent anywhere in the near future, but you've got to ask yourself what are the conditions which would lead to me losing my home? If it was that interest rates of 8 per cent would cause you to lose your home, then you're not ready to buy it."

Squirrel mortgage broker John Bolton suggested buying between four or five time a household's income before tax, and also to look to the future. Events such as starting a family would impact on what people could afford.

Many New Zealanders have been using KiwiSaver to help with their deposit, with people entitled to a first home deposit subsidy after three years of contributions.

With current lending rates so low, many people may be tempted to borrow to the hilt.

However, most property experts advised first time home buyers to take advantage of the low rates to pay off as much of their loan as possible. This could be as simple as moving a few extra dollars into the mortgage every month.

"You really want to keep it low and try and pay it off as soon as possible otherwise you could end up in a mortgage trap over the years, where you can't buy a bigger house that you want because you simply can't afford the mortgage.""It's important to pay off the loan as fast as you can, because the time you spend paying it off means much more interest that your're paying so even if the interest appears low at the moment, don't think 'I can afford it I can borrow up to the max'," said King.

Southern property values up

13th June 2012

Source: The Southland Times

Nationwide residential property values, including Southland, rose last month, QV figures show.

Property values rose across Southland, Invercargill, Gore, Queenstown and Central Otago but fell in the Clutha district, the QV index showed.

Property values were 1.7 per cent higher in the Southland district last month compared with the same period last year, with an average sale price of $205,762.

Values in Invercargill rose 0.7 per cent, with an average property sale price of $212,364.

Queenstown Lakes was up by 0.1 per cent on last May, with an average property sale price of $585,883. Central Otago property values were up 3.9 per cent on last year, with the average property sale price of $299,252.

However, the index said property values for Gore and Clutha might not be statistically accurate because the values were based on a low volume of sales. Gore values were up 3.8 per cent, with the average price of $184,476, while Clutha values were down by 2.7 per cent, with the average property sale price of $163,638.

Nationally, values were up about 1 per cent during the past three months, and 3.9 per cent above the same time last year, with the average sale price $411,788.

Values are 2 per cent below the previous late-2007 market peak.

Stadium's costs may force naming rights issue

31st May 2012

Source: The Southland Times

The growing cost of the Stadium Southland rebuild could result in its owners being forced to sell naming rights for the complex.

Acton Smith, chairman of the trust which owns the stadium, said yesterday the final cost of the stadium was expected be more than was anticipated because of the time delays in the project.

Five months ago Mr Smith said there was still a $1.35 million funding shortfall for the then $32m project, but the trust had other funding applications in place and he was "utterly certain" it would open debt-free. "Naming rights will come if we need funding to finish the stadium."

The trust had been asked to consider naming rights, but Mr Smith declined to say who made the approach.

Its preference was not to have naming rights because the stadium was for all of Southland, Mr Smith said. "But if we need funds we have an asset which we can sell naming rights to."

There were still three stages of work which had not begun at the stadium: Building the foyer and entrance to the stadium; the landscaping and courtyard work; and building two floors of offices above the squash courts.

Mr Smith said it was hoped the stadium would be completed in February, adding it will become clearer in the next two months what the precise cost will be.

"We still haven't got to the stage where we know how much more money we will need."

The other issue the stadium trust has to consider is the new name for the cycling velodrome located adjacent to the stadium.

It was called the ILT Velodrome until last year, when Invercargill businessman Louis Crimp gave $2 million towards the stadium rebuild on the condition the ILT was dropped from its name. Mr Crimp is a business rival of the Invercargill Licensing Trust (ILT).

The public has suggested a host of names for the velodrome, but Mr Smith said its name could yet be tied in with the name of the stadium. No decisions had been made.

Walking track projects given $44,000

30th May 2012

Source: Otago Daily Times

Five projects in Otago and Southland designed to improve access to the outdoors have received more than $44,000 in funding from the New Zealand Walking Access Commission's Enhanced Access Fund.

Fifty organisations across New Zealand applied for a portion of the $230,000 made available in this year's funding round, with 22 projects successful in their applications.

The contestable fund contributes to the commission's goal of free, certain, enduring and practical walking access to the outdoors.

The Lawrence-Tuapeka Community Board's Gabriel Gully Walking Track project received $10,000 to assist the formation of the last 400m of the 4km walking and cycling track from Lawrence to Gabriel's Gully.

Upper Clutha Tracks Trust also received $10,000 to assist in the creation of a 12.5km track which would provide walking, mountain biking and fishing access along the Clutha River, east of Wanaka.

The Newcastle Track would link with the Hawea River Track and the Upper Clutha River Track to create a loop.

Ten thousand dollars also went to the Queenstown Mountain Bike Club to help create the Golden Lakes Discovery Loop, a walking and cycling track which will take in lakes Wakatipu, Moke and Dispute.

The new loop track would combine existing and multiuse tracks with mining pack tracks and water races to provide a scenic walkway for locals and visitors to Queenstown.

Other recipients were the Otematata Wetlands Walkway project, driven by the Otematata Residents Association, which received $5400 funding for track markers and signs to access the walkway, on the shores of Lake Aviemore; the Mataura Community Board's Mataura Walkway project which received $5000 for construction of an 800m walkway to provide access along a flood bank between Asquith St and State Highway 1 at Mataura; and the Lower Shotover Conservation Trust's Lower Shotover Conservation Area Walking Access, which received $4007 for the installation of a gate and construction of a new 500m trail, linking the Lower Shotover Conservation Area to the neighbouring Tucker Beach Wildlife Reserve.

Clients enjoy mortgage 'craziness'

25th May 2012

Source: Fairfax Media

With fixed home loan interest rates at historic lows and banks further undercutting advertised rates for those that ask, mortgage holders have never had it better.

But some warn the "craziness" cannot continue, and people should consider fixing their home loans while the floodgates remain open.

It's also a good time for those bold enough to ask to cut a deal on the rate they pay.

It is understood that ASB Bank, for one, is negotiating deals with clients that shave as much as half a percentage point – or more – off their advertised rates.

The biggest savings were made on six month and 18 month terms, taking 65 and 50 basis points respectively off each.

More tightly contested one, two and three year loans had 15 to 20 basis points knocked off, undercutting any advertised bank rate.

And although floating mortgage rates have been gathering dust for months, ASB was also prepared to slash 30 basis points off its carded rate to 5.45 per cent.

ASB spokesman Shaun Drylie confirmed that customers had been more interested in negotiating rates recently, and said the bank had always been willing to find them the best package.

In addition, ASB will cut its six month fixed home loan rate by 0.5 percentage points to 5.25 per cent from today while the 18 month fixed home loan rates will drop 0.4 percentage points to 5.4 per cent.

Only SBS and HBS's conditional six month rates are lower than ASB's, while only BNZ's 5.1 per cent rate is lower than ASB's on an 18 month term.

The other major banks – ANZ, Westpac and National – are offering fixed 18 month rates of 5.55 per cent.

The New Zealand Bankers' Association was concerned about the "flipside" of the recent spate of interest rate cuts, and said net interest margins were already lower than pre-global financial crisis levels.

"Banks need to retain an interest margin to continue operating and investing in New Zealand", said NZBA chief executive Kirk Hope.

Probe into wholesale electricity prices in SI

23rd May 2012

The Electricity Authority is investigating why South Island wholesale power prices are apparently being inflated against the national interest in a move that could lead to higher household prices.

State-owned power companies Meridian Energy and Genesis Energy, which run the Waitaki River hydro scheme that generates a quarter of the country's electricity, refused to comment yesterday on the investigation and their recent management of South Island reserve power prices.

Spot prices have rocketed to more than $500 a megawatt hour at times in recent days, more than five times those in the North Island.

Southern hydro lakes are under pressure as a result of low inflows from the driest four-month period in southern hydro catchments in 80 years.

Source: Fairfax NZ

The authority yesterday announced its probe into the increasing South Island reserve prices since May 10.

Its concern is the inter-island link bringing power south has been constrained "not due to any transmission limit, but due to the prices at which reserves were offered by some South Island reserve providers".

"The reduced ... south transfer increased the need for South Island generation, which is undesirable, given the current low South Island storage situation," it said.

"The authority is looking at the reasons for the increased South Island reserve offer prices."

Auckland power consultant Bryan Leyland said he could not fathom the move.

"What is the logic for doing it, given that it depletes the storage and massively jacks up the spot prices? As these high prices will eventually finish up affecting retail prices, the cost to the country is large," he said.

"What I cannot understand is why, when the South Island is short of water, any rational organisation would want to constrain the inter-island link. But that is what they are doing.

"It is, most definitely, not in the national interest.

"It may well be in the commercial interest of one of them.

"I do not blame the generators for this. What they are doing is entirely within the rules of the electricity market.

"The problem is that we have an electricity market that is seriously flawed and we are, once again, seeing how it fails to consider the interests of the consumers."

Asked if Meridian was raising reserve prices for any reason, spokeswoman Claire Shaw said it would be "inappropriate" to comment before the authority reported its findings.

Genesis spokesman Richard Gordon had the same comment.

Keeping you up-to-date with the Queenstown Property Market

22nd May 2012

Southlanders can now keep up with the Queenstown property market by popping into our Invercargill office and picking up a copy of the Lakes District Property Press (bi-weekly) and the Mountain Scene delivered each week.

Lions provide emergency packs

21st May 2012

Source: The Southland Times

Plans to help people prepare for natural disasters and fires will see every household in the Ohai and Nightcaps area receive a smoke alarm and emergency pack.

Ohai-Nightcaps Lions Club president Jocelyn Sinclair said next month had been designated "Get Thru" month for the people of Ohai, Nightcaps, and the surrounding areas.

An initiative of the Lions Club, along with the New Zealand Fire Service and Emergency Management Southland, meant all 650 households in the area would receive a 10-year smoke alarm and an emergency pack which included a combined torch, radio, siren and cellphone charger and an emergency planning guide.

Each pack was worth more than $60 and was funded by the income from the gaming machines operated by the Lions Club at the Railway Hotel in Nightcaps, she said.

"We put a lot of money back into the community. We help a lot of people in the community, sports clubs, schools, but this is a way we can give everybody something back."

The Lions club installed smoke detectors in every home in the district in 1999, and had distributed a new battery every year since then.

The club wanted to continue that work, in the hopes that it would save lives, she said.

Sod-turning ceremony

21st May 2012

Source: The Southland Times

The first sod was turned on the develo