 | Welcome |
| | to Valu in Review for April 2005. This is a summary of news articles in the press over the last month. We hope you had a great break and that you now….
Read, learn, enjoy ……..
…….. and happy investing!
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| Economic. |
| | Migration has continued to slow. Figures for year ended March show the net gain from migration as:
2005 10,010
2004 28,000
2003 41,000 The REINZ figures for March show that the median house price increased by $10,800 to $280,000. This is an increase of 6%. It is believed the increase is due to a number of properties that are in the higher end price brackets being purchased. The volume of sales was relatively flat compared to the previous month (Feb 10,231, March 10,398). On a year-on-year basis they are down (March 2004 – 11,371). The Official cash rate has remained at 6.75% following its review on 27 April. Part of this is believed to be the fact that inflation is running close to the top of its target range (3%). The housing sector remains one of the biggest inflationary pressures. However with close to 80% of all mortgages on a fixed rate the increases in the Official Cash Rate last year have not really had an impact as not all mortgages have come off fixed terms. The Reserve Bank has advised that here will not be rate cuts in the near term. The next review of the Official Cash Rate is 9 June.
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| Some interesting statistics on the most valuable state houses. |
| | | Region | Value | Rent/ week | | Auckland | $1,088,000 | $75 | | Manawatu – Wairarapa | $216,616 | | | East-Coast/ Hawkes Bay | $465,000 | | | Wellington | $515,000 | $97 |
The most expensive house is in Auckland. It is a three-bedroom house. The house is valued at $88,000 with the land at $1m.
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| Property back in vogue? |
| | AMP Capital Investors, NZ’s largest fund manager, has announced this month that it is moving money into commercial property. It sees the opportunity for increased yields as many fixed tenancies are now coming up for renewal. Rents are increasing due to the demand for commercial premises and few new premises being constructed.
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| Local Body Rates. |
| | Many regions are having increases in the value of their property as assessed for statutory rating purposes. The flow on effect from this in that many rates payers will be having rate increases this year, purely as a result of their property being worth more. In some areas the Councils are also looking to collect more in rates to assist with extra capital expenditure as a result of the booming economy.
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| Government gives assistance in local body rates. |
| | The Government has advised it will give away $50m a year in assistance to low-income households that experience difficulty in paying their rates. It is estimated that a third of homeowners will benefit from the tax break. The break applies to rates in excess of $160, with the maximum benefit payable being $500. It is also ties the tax break to the income of the household.
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| Research into effects of affordability. |
| | The Centre for Housing Research is looking for someone to undertake research into the effects on the significant increases in house prices in Nelson, Marlborough and Tasman regions. They are looking for the study to “identify the nature, scale and extent of housing stress being experienced by people in the area”. They are offering a grant of $150,000 to $180,000.
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| Soil Contamination. |
| | The Auckland councils seem to be taking different approaches to notifying property owners of soil contamination. Waitakere City Council notes on all LIM’s warnings about possible contamination. North Shore City Council has decided to advise all people seeking a LIM to undertake their own research to ascertain if the land could have been contaminated with horticultural sprays. Auckland City Council does not say if a site was previously used for horticultural purposes. Manukau City Council is undecided at this time. Bay of Plenty. Research by the 5 councils in the area has found that in some areas there is dangerous chemical residue. Western Bay of Plenty was the worst where the council found that 22% of residential and 33% of agricultural land exceeded the recommended guidelines.
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| West coast of the South Island. |
| | With the substantial increase in coal to be mined from the region (from 100,000 per annum to an expected amount of 3.8m tonnes within 5 yeas) both Greymouth and Westport will experience growth. Both towns are currently lobbying the community and the mining companies to secure the trade via their towns. One key issue that has been raised is getting the coal from the mine to one of three possible ports and the substantial increase in traffic movements.
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| Christchurch. |
| | First time homebuyers in Christchurch are experiencing the difficulty of finding entry-level homes. The median house price has risen from $155,000 three years ago to $270,000. This means that suburbs that were once considered undesirable or “rental” areas are now almost becoming fashionable as first time buyers buy into the areas (often with older housing stock that can be renovated), are closer to the CBD and are on public transport routes.
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We have tried to include a variety of articles and viewpoints on property recently contained in the media. Please note that the articles are a summary of the main points and we endeavour to reflect these as accurately as possible. The contents do not constitute professional advice and should not be relied upon as such. We strongly recommend that you seek professional advice at all times. The information is in no way a reflection of views held by Valuit Asset Appraisals Ltd or its staff.
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