Latest NZ Property Market News

Traditionally, Kiwis have preferred fixed rates for the certaintly they offer. However, we may now be entering a period where borrowers may choose to retain their mortgage on a floating rate, taking advantae of the low levels as well as the flexibility of floating rates. Everyone’s circumstances are different though and it is always best to discuss your personal situation with a qualified mortgage broker.

# Source: Kerry Alcock, Mortgage People, NZ

The national median house price rose to $350,000 last month, from $346,750 in August, according to the Real Estate Institute of New Zealand (REINZ).

Prices have gained from $330,000 in September 2008. There were 6,464 sales in September, up more than 30% from the same month last year.

The number of days to sell a house fell to 33 from 34 in August and is down from 52 in September last year, the REINZ report showed.

# Source:  Landlords.co.nz

Nationally, values are now only 1.1% below the same time last year, another improvement on the -2.8% reported in August.

Despite values remaining 7.1% below the market peak of late 2007, they are a healthy 2.7% up from their low in April this year.

Average sale price also improved further in September to $387,567, from $385,426 a month earlier. 

"There are signs of more activity in the market with an increase in the number of sales and more listings in many areas," says QV manager Glenda Whitehead.

"This increase in activity is normal for spring but there is still a feeling that activity levels are below normal, with somewhat fewer listings to date this spring than was expected."

Whitehead says QV has seen strong competition among keen buyers in some localities and price brackets for the limited properties available.

"This competition is pushing up many sale prices, as previously unsuccessful bidders offer higher prices in an attempt to secure a property. With prices in some localities rising, this will likely encourage more sellers to put their properties on the market as their price expectations come closer to being met," she says.

Confidence in the market has been steadily improving, although a degree of uncertainty remains, according to the results of the latest quarterly QV.co.nz Housing Survey.

# Source:  QV.co.nz

“Buyers and sellers are cautiously re-entering the market, and there is cause for optimism that the housing market is settling,” managing director Peter Thompson said.  

 
“The combination of lower interest rates, awareness of the low number of residential building permits being granted and the general growth of the Auckland region are all contributing factors to this modest turnaround,” he said.

Reserve Bank Governor has slashed the official cash rate to 3.5% from 8.25% since July and economists predict he will reduce the OCR by a further 50 basis points to a record low 3% next week. Banks have followed suit, driving down the cost of home loans.

# Source:  The Landlords.co.nz Newsletter, 5 March 2009

As expected, the NZ Reserve Bank reduced the OCR by 1.5% in January, to the lowest level since it was established. The lenders have reacted by slashing interest rates, and for the first time in a long time, borrowers are now able to fix at rates below 6%. Most lenders have made changes to their standard criteria, particularly in the percentage of property value they will loan to (LVR). Currently it is very difficult to borrow 90%, and on rental investment properties it appears that 80% is the maximum we can borrow.

So, mortgage finance is much cheaper - however, lenders have reacted to the credit crunch by tightening their lending criteria. The consequence is that money is cheaper; it is just not as easy to borrow. Investors are eager to take advantage of the current market, but finding that raising funds is now more difficult.

# Source:  Kerry Alcock Feb 2009 Newsletter -  Mortgage Broker.  Mortage People NZ