Listings down, prices steady: Homeowners make their move.
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| The overall result is that homebuyers are out in force, leading to our third consecutive month where SuperCity Mortgages wrote $47+ million in settled home loans. These being similar numbers to the ‘peak’ 12-18 months ago, so there is a lot of activity out there, especially for the historically quieter winter months.
Most of those buyers have been homeowners upgrading, downgrading or renovating. Homeowners with children have been taking advantage of the lack of investors (particularly the international investors) to move to the school zone they want. We’re seeing a dip in auctions and the welcome return of negotiation, a huge benefit for homebuyers. That lets you find the right house in a market where listings are tight and make the purchase conditional on the sale of your own home. Lenders have at times been reluctant to provide bridging loans, unwilling to put themselves in a position to be caught out if you can’t sell your home and are left with an 80%-plus loan-to-value ratio. However we do have other options if the main banks say no.
Lenders are also putting some hard-and-fast rules in place – but the rules aren’t the same at every bank. The result is loans declined because of what we call ‘Computer says no’. For instance, one bank won’t do an interest-only loan if the LVR is even a smidge over 70% for an owner occupied property, never mind if you’ve got a baby on the way and only need it for a short time. But I can move you to another lender and get that interest-only term without difficulty, which is why having the rare ability to deal with all main banks being such an advantage for me and ultimately, for my clients. More nuances between lenders means more opportunities for borrowers to switch to get the result they want.
With interest rates seemingly set to remain low for at least another year, it’s not surprising that buyers are making their move. When spring arrives, the lenders will start doing their spring home loan campaigns, so expect some attractive offers. Remember there is up to a week’s turnaround to approve loans at present at the banks, so try to talk to me now if you’re considering making your move this month. Let’s get the paperwork in place so you can start house-hunting in confidence. |
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Land use costs to blame for half the price of an Auckland house.
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A startling report was released late last month, blaming up to 56% of Auckland house prices on land use costs. It makes for interesting reading ( full report or summary here):
- “Even in New Zealand cities with plenty of flat land, prices are higher than might be expected in a well-functioning market.”
- House density isn’t increasing in sought-after areas because “regulation appears to not allow this to happen.”
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- Construction costs do matter, but house prices are “far in excess of construction costs”.
- If you have few land use restrictions, the land price should be very similar before and after development. Instead, “prices post-development are four to nine times higher than for land prior to development.”
- The large differences between house prices and costs seem to indicate that the market is functioning poorly.
- “In Auckland, land use regulation could be responsible for 56 percent or $530,000 of the cost of an average home.”
This probably won’t come as much of a surprise to my developer clients, but the size of the impact certainly shocked me. It seems to be a problem across New Zealand, too, not only in the super city.
I suspect this report will provide a strong catalyst for the authorities to stop, think and to review and refine. |
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Housing infrastructure spend: $1 Billion dollars.
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More details of the $1 billion infrastructure budget have been announced and it’s good news across the major cities. Auckland, Hamilton, Waikato, Tauranga and Queenstown will see 40 new roading, bridging and water projects – ultimately opening up 103,000 new sections. |
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- Auckland: 10,500 new houses in Whenuapai and Redhills.
- Hamilton: 8,100 new houses in Peacocke.
- Tauranga: 35,000 new houses in Te Tumu.
- Queenstown: 3,200 new houses on the Frankton Flats and in Kingston.
When you think about where to buy property, it’s always important to choose areas with great prospects for employment and population growth, so think about whether your next buy could be in one of these progressive areas. |
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| Did you know that the average age for a client making a claim this year has been 35? Those claims have included breast cancer, brain tumours, back injuries and melanoma – every claim has been accepted and SuperCity Insurance continues our 100% claims success rate to date.
To continue providing you with this unsurpassed level of service and expert advice for protection plans and claims, we’re happy to welcome to two new team members to SuperCity, adding enormous value for all our clients.
Judy, our new Manager, has over 30 years’ experience in the insurance industry, with a thorough understanding of every aspect of the process. She is also a Registered Financial Adviser who can advise you with your plans and help with claims. If you do happen to get a phone call from Judy, and if you do, you’ll know you’re in excellent hands. Zoe is going to be providing policy servicing assistance and administration. She is currently studying at the University of Auckland towards her Masters degree in Educational Policy. Judy and Zoe will be working alongside our wonderful existing team member Karen. Jaime continues her work as director of SuperCity Insurance and providing clients with specialist advice for powerful family, assets & business protection plans. |
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Jaime, Managing Director & Registered Financial Adviser
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| Judy, Manager & Registered Financial Adviser |
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| Zoe, Administrator |
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| Karen, Administrator |
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| Whether you’re talking to Jaime, Judy, Zoe or Karen, SuperCity Insurance can provide a suite of free services like claims facilitation, policy servicing, reviews and expert advice and recommendations. We’re on hand to advise and support you, your assets and your family giving you outstanding value and peace of mind.
If you would like any help, would like a review or need to make a claim – you can reach me directly on 021 527 069.
JAIME JAMES
Managing Director
SuperCity Insurance
021 527 069 |
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