For most of us this is something that we have been looking to for a while now. There has been plenty of hype running around this years budget and the cat has now been let out of the bag.
Property tax has been hit hard with quite an increase and other things.
Here is an example from the govt website A professional landlord and property investor over the last 20 years, he has built up a portfolio of 25 properties. Dave’s net annual profit from his rental activity, after costs of interest, repairs and maintenance and rates, but before depreciation is $112,000. After claiming depreciation of $52,000 ($1000 a week) on the buildings he owns his net annual profit is reduced to $60,000, which he pays tax on. Under the current rules, Dave can claim depreciation despite the fact that both his houses and the land they are on have substantially increased in value over time.
Under Budget 2010 tax changes, Dave can no longer claim depreciation on buildings. As a result he must now pay tax on $112,000 of annual profit rather than $60,000. Despite personal income tax cuts this increases his weekly income tax by $289.03. As he has less to spend his GST reduces by 85c a week. Overall he is $288.18 a week or $14,985.36 a year worse off.
Here is an overview. For more info go to http://www.taxguide.govt.nz
Budget 2010 tax changes – at a glance
Rewards effort and helps families get ahead
Attracts and retains skilled people in New Zealand
Encourages savings and productive investment
Makes the tax system fairer
At all taxable income levels, tax cuts more than offset the GST rise
The tax package comprises:
All personal income tax rates will be cut from 1 October 2010.
Income Current Rates
New rates
$0 – $14,000 12.5% 10.5%
$14,001 – $48,000
21.0% 17.5%
$48,001 – $70,000
33.0% 30.0%
Over $70,000
38.0% 33.0%
After-tax earned incomes at all levels of taxable income will rise by more than the increase in GST.
Secondary tax and resident withholding tax rates will be reduced from 1 October 2010, to align with the new personal tax rates.
Individuals and families can work out how Budget 2010 tax changes personally affect them at www.taxguide.govt.nz
An increase in GST to encourage savings over consumption
GST will be increased from 12.5 per cent to 15 per cent from 1 October 2010.
Income support and other payments will be increased by 2.02 per cent from 1 October 2010, to compensate for this increase. These payments include:
All main benefits, Student Allowances and a number of supplementary benefits.
NZ Superannuation, Veterans Pension and CPI-adjusted Government Superannuation Fund and National Provident Fund payments.
Working for Families (Family Tax Credit and Minimum Family Tax Credit).
Reductions in tax for companies and savings vehicles to encourage investment and savings
The company tax rate will fall from 30 per cent to 28 per cent from the 2011/12 income year.
The top tax rate for most portfolio investment entities (PIEs) will fall from 30 per cent to 28 per cent, while the other PIE rates drop to align with the new personal tax rates, from 1 October 2010.
The tax rate for life insurance policy holders and widely-held savings vehicles like unit trusts and superannuation funds will fall from 30 per cent to 28 per cent from the 2011/12 income year.
Changes to depreciation rules to better reflect asset value reality
No depreciation deductions will be allowed for buildings with an estimated useful life of 50 years or more (such as rental housing and office buildings) from the 2011/12 income year.
The current 20 per cent depreciation loading on new plant and equipment will be removed, for assets purchased after Budget day.
Stricter tax rules for foreign multinationals to reduce their ability to minimise tax payments in New Zealand.
Tax rules will change from the 2011/12 income year to reduce the interest deductions foreign multinationals can take by having high levels of debt allocated to their New Zealand subsidiaries.
Changes to loss attributing qualifying company (LAQC) and qualifying company (QC) rules to ensure investors are taxed at the correct rate
LAQC and QC rules will be tightened from income years starting on or after 1 April 2011 to prevent people choosing to have losses deducted at their marginal personal tax rate but profits taxed at the lower company tax rate.
Making Working for Families fairer
People will no longer be able to use investment losses, including from rental properties, to reduce their income and become eligible for Working for Families, from 1 April 2011.
One part of the formula that adjusts Working for Families payments for inflation will be amended because it currently gives higher-income families a greater proportional increase than lower-income families.
Tackling tax avoidance and improving the integrity of the tax system
IRD will get a significant funding boost to increase its audit and compliance activity around debt collection, the hidden economy and property transactions.
GST rules will be changed to stop the use of “phoenix” GST fraud schemes.
To Sum Up the KEY Points are
Today’s Budget includes these key points:
- GST increases from 12.5pc to 15pc
- Company tax rates fall from 30pc to 28pc
- All income tax brackets fall, with the top rate levied on income over $70,000 per year coming down from 38pc to 33pc.
- Landlords and businesses will no longer be able to claim depreciation on buildings that are expected to increase in value.
- Rules around ‘loss attributing qualifying companies’ often used by property investors to reduce their tax payments are being tightened.
- All benefits including NZ Super and working for families will increase by 2.02pc to compensate for the increase in GST
- An extra $2.1bn is being spent on health over the next four years, which includes $1.7bn of new operating funding.
- Funding for schools is going up by $1.4bn over the next four years, which includes $350m in new operating and capital funding for school property.
May 20 2010 | Uncategorized | 1 Comment »
As you know I really believe in the Generations and their relevance to how and what they purchase. When it comes to Real Estate this is particularly important because you need to identify which property would suit a certain type of person and then from there you need to work out the way that you can market to that audience the best way. And so far every aged generation has been different in general. Previously we have grouped generations by the dates they were born. Baby boomers born 1946 to 1964-ish, Gen X born around 1965 to 1975 and Gen Y born around 1977 to 2000. Why were these generations grouped by years. Generally its because they all shared the same social environment that were present at the time and therefore generally speaking have similar core values.
However now there is something else happening. And no its not a new generation of people born after the year 2000. These people will all be under 10 still and I hardly think they will be buying real estate. No. It’s a new generation named Generation C. And it is unique as this is the first generation ever that isn’t bound by demographics. It’s a psychographic generation—it’s the generation who communicate using digital technology, they like being ‘in’ digital environments and they are a growing group of people.
Generation C is the world’s first opt-in generation, with an attitude that people of any age can choose to adopt and become one of this generation. And it is clear to see how! Take for example second life, a very out of it reality internet virtual life game. The average age of people on Second Life is 35 years old. But listen to this – its the same age group that accounts for much of the activity on Facebook, and for Twitter the age group skews even higher. People are choosing to become part of Generation C, rather than merely being born into it.
What does the C stand for? Well it’s Control, Communication, Contact and all that goes with it. Generation C is the generation who are in control. Information drive this generation. And we thought generation Y wanted things now. Try this generation. We want it now, and if we don’t get it we will get it from someone or somewhere Else. Its simple really. And you as a real estate agent need to be aware of it. There’s no longer a single dominant culture shaping our thoughts. Commanding the digital environment empowers this generation to carve out their identity by taking that control and making it ‘their own’.
Marketing to generation C is the tricky part. This generation know what they weant and where to get it. This is the internet age and the internet has largely created this generation. The time has come to engage the audience and not just tell them.
There is more on this at http://deonswiggs.com/this-generation-will-change-everything
May 10 2010 | Buyers and Sellers and The Market | No Comments »
But hey!! Reality bites.
How many people these days eat breakfast. I know for one that I skip it – are you like me.
But more seriously maintenance on your home should be as important as your car. If you do not do maintenance on your car it will break leaving you stranded usually in the most inconvenient place imaginable. Just for example when my BMW decided to loose a pipe holding all the transmission oil in the middle of the Kaikoura ranges where there was no cell reception. I am sure most of us can feel this pain. Now I am sure a house wont do this to you. But the point I am trying to make here is that if you dont look after your house and the upkeep. One thing that recently happened to me at our house is a classic example. Very very strong Canterbury nor west winds + a rotten window sill = window falling out = grumpy Deon.
All this could have been avoided if I just opened my eyes and actually took note of the house. This is something we all fall short on, we take our house for granted. Possibly because it doesn’t move and we think that it wont degrade. But the fact it the weather and moisture and just us using the home will cause it to slowly deteriorate. So from now on take note of your home. In the long run it will pay off. It is of course a very expensive asset.
What I have below is a list of some of the more cosmetic things that you should be doing at this time of year. Remember winter is coming. These things are not just for the WOF of your home but also to make sure it looks good for the season ahead.
Things you could have done in March.
1. Inspect the weather-stripping around your exterior doors and windows; replace as needed. – this is what i needed to do!
2. Inspect the caulking around exterior windows and doors to keep out drafts; repair as needed.
3. Inspect exterior roof vents and clean and/or repair as needed.
4. Inspect roofing and chimney caps for damage; repair and/or replace as needed.
5. Get your chimney and your fireplace professionally cleaned to avoid chimney fires and blockages. If your in Canterbury you probably don’t have a fine place any more… how sad!
6. Make sure your heating is working well and efficiently.
7. Inspect the entire outside of your house for cracks, holes, and other openings in the siding. Depending on the exterior material of your home, a Painter, Plasterer or Carpenter may be able to help with repairs you may need.
8. Check to see if your insulation is up to scratch.
9. Inspect the roof space and the under side of your house for signs of pests such as birds or rats and seal cracks and holes if there are any.
10. Pressure wash the outside of your house and garage. Use your own water-blaster, or ask a House-Washing company for a quote to pressure wash your house on an annual basis so that you will have one less thing to worry about.
11. Check that your smoke alarms batteries are fully charged; recharge or replace if needed – this is the classic daylight savings thing to do.
12. Sink/Tub Stoppers and Drain Holes: Clean out debris.
13. Garbage Disposal: Flush with hot water and baking soda.
Before the cold winter hits us this is what you should be doing in April and May
1. Clean leaves, branches, and other debris from roofs because of the Autum Fall.
2. Clean out gutters and downspouts and inspect for leaks and damage; repair as needed.
3. Remove window and door screens and clean. Inspect the screens for tears and holes and repair as needed.
4. Clean out de-humidifiers that you use in the winter and replace the filters – or look at buying an HRV.
5. Follow the manufacturer’s instructions and drain your hot water cylinder.
6. Trim tree branches around your house that are touching or are near your roof. This can be dangerous!7
7. Range Hood: Clean grease filter.
8. Tub Drain Assembly: Clean out debris; inspect rubber seal and replace if needed.
9. Floor and Outdoor Drain Grates: Clean out debris.
10. Nuckle down for the Winter and Enjoy the ski season.
This is a fairly generic list of things you should do. But at least its a minimum. You need to look after your home. There are plenty more thing you could and should be doing but please use your common sense with what you want to do to your own home. Remember you have to be comfortable inside it.
March 30 2010 | Sellers and houses | 1 Comment »
I am not going to get into my pet hate at the moment of sensational headlines misrepresenting the state of the housing market – except to say that the newspapers are in the job of marketing their product and bland headlines do not sell newspapers.
Similarly bland photographs do not help sell houses. If you are thinking of selling then please read the blog at Unconditional – it explains with examples how good photography benefits your property marketing.
Once the photographs are taken, the next thought has to be how to market – price or not. In the current market, with low volumes and plenty of uncertainty, sellers need to be very competitive in their pricing. Salespeople are often less than helpful as the practice of “buying listings” is alive and well. By that I mean the sales consultant tells the seller to price too high, knowing it is a figure that the seller would like, though unachievable. They then spend the next few weeks “conditioning” them to the “new” market reality.
A more professional approach is to be clear on what sort of price will sell (whether or not it is what the seller wants to hear), and concentrate on why the owner wants to sell.
The alternative to pricing is no price marketing. At the current time I believe a deadline is essential. Consider this – if you got a telephone bill without a due date to pay, when would you pay it?
It is the same with houses – unless the price is so competitive that the buyer believes they have to act before it is sold to someone else, a deadline is necessary to convince the buyers that the seller does intend to meet the market and sell. Deadlines can be auctions or for offers to be presented.
I am to discuss this further with anyone – just call!
March 17 2010 | Uncategorized | 3 Comments »
If you have a list of questions ready to ask a tradesman, always ensure that you get the answers you need from them immediately. There’s no point in waiting around for them to get back to you. A good tradesman will know the answers straight away and will be happy to put your mind at ease with his or her responses. Below is a list of questions you should always include before hiring any tradesman. And please remember, that the cheapest is not necessarily the best.
1. How long have you been in business?
Always ask initially how long the tradesman has been in business. If they can provide you with some form of proof also, that is even better as you can see they’re not ‘fly-by-night’ types and this should mean they have an established business and business address.
2. Do you have references for past work?
If you can find a tradesman who is willing to show you examples of their past jobs, this is a good sign. If they have photos of their previous jobs, take the time to look at them. Also, if they have references, ask if you can have a copy, then call these people to ensure they were satisfied with the work.
3. Are they a member of a trade organisation?
Many organisations have a protection scheme that helps to resolve any disputes that may occur and also gives you peace of mind that there’s someone to turn to if things go wrong. Get the name of the organisation or association the tradesman belongs to and then ring them to find out whether they’re a member.
4. Do they have insurance against damage?
It is absolutely crucial that you find out whether your builder has insurance to cover any possible damage against your property. Even if they’ve never had any issues in the past, there may be mistakes made in the future, so check that they are liable should there be any unexpected events whilst the work is being carried out.
5. What is the guarantee on their work?
Make sure that you get a written guarantee of work, or that you see their standard guarantee before signing. If their guarantee is backed by insurance, this is even better as you will have protection should the tradesman’s go out of business. It is very important to look at the guarantees as you don’t want to suddenly realise there’s a problem a few weeks outside of your standard guarantee period.
6. Ask if you can see their license?
Obtaining the details of a tradesman’s license can be one of the more fundamental questions to ask before starting any job. Take note of the license details and ensure they’re up to date and are genuine. You may need them in the future and it’s possible that if something goes wrong the tradesman won’t be willing to give the details by that stage, so get them early on and keep them safe.
7. What do they estimate to be the time frame for the job?
Always get a written estimate of the time frame for your job. If you need work to be completed by a certain date, make sure that the tradesman is aware of that and ask for it to be written down as an estimate if they believe they’re able to make that deadline. Never agree to a contract with no foreseeable completion date.
8. What will be the quote for the job?
Try to get at least 3 quotes from a variety of different tradesmen, but always ensure that it is a written quote and check how long it is valid for. If there’s anything on the quote you’re not sure about, ask specifically about it and don’t ever feel that there’s a dumb question. Get all the information on how much the work will cost you before agreeing to a contract.
9. When will the work begin?
Many people agree to a contract after being happy at the length of time quoted for completion of the work, but then don’t hear anything from their tradesman for some time. Always find out what the start date will be for your job and make sure that they stick to that. If you can, have it written into the contract that they must start and complete the job by a specific time.
10. What are the terms of payment?
Agree with your tradesman the terms of payment before you sign the contract. Some tradesmen will require a deposit upfront, whilst others are happy to carry out the work and receive payment then. Some will bill you for the work, whereas others may require cash or a credit card on completion. Arrange it in a way that suits you best and makes you most comfortable, but again, get this in writing.
March 10 2010 | Sellers and Uncategorized | 2 Comments »
Auction – there it is, out in the open! Love ‘em or hate ‘em there is no doubt that auction is a common marketing strategy in Christchurch.
I make no secret of being a sales person who advocates auction to many of my clients, however, I do believe that it is not suitable for everyone and may not be the best solution in all market conditions. But this post is not about discussing the pros and cons.
Anyone who has regularly read my personal blog will know that I think that following the weekly results of auctions can provide a timely snapshot of current market conditions. So today at the Holmwood Auction Rooms – 12 auctions called and only 2 sold under the hammer. Not as bad as that in reality, I have a multi-offer to deal with tomorrow on my auction that was passed and there was bidding on about half of the auctions – and in at least 1 case it could be argued that the owner had an opportunity to sell but chose not to!
But that said, I think what can definitely be gleamed from our results today and those in other rooms around Christchurch, is that buyers have the upper hand right now. If you want to buy a home that is up for auction you are probably best served attending and waiting – if you don’t have to bid, why would you? Bide your time and make an offer afterwards – certainly as a strategy it is hard to argue with right now.
This begs the question of why the market is how it is. A number of factors spring to mind - many investors are choosing to wait and see exactly what changes are coming in the budget, there has been a strong seasonal increase in listings and I detect a tightening of financial conditions – anecdotal evidence from clients suggests banks are less keen to lend than they were at the end of last year.
Will these conditions last? Obviously that is the $64,000 question and one I wish I knew the answer to with absolute certainty! I suspect the market will improve into and through winter as the excess stock is mopped up, and will again be swamped in late spring / summer. I also think lending conditions should ease in the new financial year. So what would I be doing if I wanted to sell – I think pricing competitively is a great strategy at the moment – buyers hate the lack of prices with auctions, and well priced property will always catch the eye and attract offers.
March 04 2010 | Buyers and Home Sellers and Buyers Guides and Sellers and The Market | No Comments »
Just a quick post to introduce myself as a new author for this blog. No secrets, I am a real estate sales consultant – but I hope one of the more enlightened breed.
By that I mean that I recognize that the real estate industry is going through, what I beleive is a fundamental change in how business is conducted – and that is online. Not in terms of electronic contracts (though I am sure that will happen) but in terms of information sought and provided.
I hope that I will provide timely, useful and witty insights into the local market and hope that this blog grows into a resource that people can trust and use regularly.
Tim
March 03 2010 | Uncategorized | 3 Comments »
Blog Authors Wanted I am currently in the process of looking for blog authors to contribute to Christchurch Real Estate.
If you are based in Christchurch and would like to have more promotion and exposure online to a very large market I would love to hear from you. I am running out of time and resources to keep writing interesting topics on this blog and this is not what I want for this site. I am looking for 2 or 3 more authors who want to help create a fantastic Real Estate blog site for the people of Christchurch, New Zealand. If you’re an agent, sales person, mortgage broker or investor/expert and want further exposure online I would love to hear from you.
Currently this site gets approx 200 unique visitors per day and approx 700 page impressions per day. This is huge exposure that you as an active player in the Real Estate industry could give you a great heads up. Before the recent change in the domain names this site had received over 150,000 unique views with over 400,000 hits. It has been running for just on two years and its about time to make it a powerful resource for people searching Real Estate especially here in Christchurch.
Over the next few weeks I will be slightly changing the look of this blog so that it better reflects the intentions I have as a Christchurch Real Estate Blog which will benefit the general user who comes to this site for information or for you as a potential author of the site
If you have a general interest then please send me an email to deon@deonswiggs.com with your blog / website for me to look over. If you do not have a website / blog, then do not worry – if you are a good writer and it shows then just email me with some information about yourself. I am looking for 2-3 authors to contribute. I can guarantee that by even just submitting a few articles on here about your particular field your local exposure will be greatly increased.
Thank you for your interest and I look forward to hearing from you.
February 27 2010 | Uncategorized | No Comments »
Here is an awesome blog post from propertyadguru
The benefits of agents running their own real estate blogs are many: they can position you as a local expert in your neighbourhood, enhance your credibility as a businessperson, and attract leads that might otherwise have overlooked you entirely.
At least, that’s the theory. In practice, an agent’s blog can have the opposite effect, driving away leads by presenting an image that’s far from professional. It’s an understandable by-product of the accessibility of blogging – everyone can do it, but not everyone can do it well.
So what are some of the pitfalls to avoid with your blog, and what are some attributes to aspire to? We don’t intend to name and shame, but after scouring the web for agent website examples, we have come up with a few hot tips:
The writing has to be up to scratch. You might be a wonderful communicator “in real life”, but the online environment is less forgiving, as typos and poor grammar sit around until you correct them. The trick is to write as if you were speaking to a friend, keeping your sentences as natural and conversational as possible.
Closely linked to the way you write is what you write about. And here’s where you ask that all-important question: who is my audience? Would potential customers really be interested in the latest industry news? Or would they be more attracted by content that discusses movements in the local community – new shops opening, business successes, perhaps even an interview with the local mayor or council member? Put yourself in your readers shoes and consider what you’d be searching for in your online home hunt.
Speaking of mayors, keep this in mind: politicising your content, while tempting, is a sure-fire way to alienate those readers who don’t see things your way. Of course, it makes sense to discuss local issues and the way government is addressing these, but by taking a hard-line stance you’re sure to upset someone, and that someone could potentially have been a new client.
The basics aren’t enough when it comes to blog design. Of course, not everyone can begin with a perfectly designed blog – at first a basic theme will probably have to do. But as time goes on, readers will expect improvements. A poll, more pictures, updated links, a few more pages – anything to make things more interesting for return visitors beyond the daily or weekly posts.
If you give up, take it offline, at least until you’re ready to re-start. If your blog is your only online presence, consider stripping it back to a basic contact and information page. Then, when you’re less run off your feet, bring back the posts. Nothing will bring doubt into the mind of a potential client more quickly than the top post being dated “September 4, 2008″.
Propertyad guru go further and state this interesting fact:
Track what’s working, and change things accordingly. There’s no point signing up for a web analytics service if all you do is paste in the code and forget about it. Figure out what kinds of posts draw in the most visitors, and what keeps people on your website for more than a few seconds. Your website’s click-stream – the way people move around the website – should also be something you’re familiar with. Using all this information to constantly modify the content on your blog is the key to gaining traffic.
Look at the search terms people are using to find you. Some results will be slightly off-the-wall, but in amongst those will be some gems that tell you exactly what your readers were hoping for when they clicked through to your blog. The next question you have to ask yourself is, did you deliver? If not, what can you add that might satisfy those readers next time?
Colour is important. It is easy to lose a lot of time playing around with themes and colour settings, but at the same time, poor choices here can drive people away. This is where honest feedback from friends and colleagues can go a long way, as well as a survey of your favourite blogs to see what works for them.
Explain who you are up front. Ideally, the description under your blog’s title will tell people who you are and what they can expect to find. Information in your sidebar should expand on this with facts about your business, location, and an option for people to contact you. The more you say here, the more likely people will be to think of this blog as an extension of a real-world business.
Try not to leave people hanging in your comments section. If your readers have a question, answer it. Even if someone else has jumped in while you’ve been away from the computer, take the time to acknowledge the question and throw in your two cents. This helps to remind people that there really is someone on the other side of the posts.
A great post that I think you should think more about. In my opinion going back to the fourth point bought up. The look of your blog. Have a look at my other blog and see if you can get your head around the concept. It looks different and can deliver some great information. Unfortunately this blog is boring and does not function very well. This I know has turned many people away but I want to improve it. Unfortunately I can not due to the limitations set out by the people who manage the host domain – correction also Wordpress MU is a little tough to 
Your blog should be interesting to the eye so that it captures the imagination of your reader, otherwise they will press the back button to the google results and look for something better. I am working on making this site better with better plugins and other themes so watch this space. we will make it happen with the help of the crew.
If you have any further comments let me know.
Deon
February 26 2010 | Uncategorized | 4 Comments »
This is an article that is something that will hopefully help you more understand why the dam interest rates go up or down, usually we only complain when they go up, as this directly costs us more money. Although written with a slight US feel, with the words federal, the principles are the same which is why i’d like to share this with you.
Mortgage rates are linked to the trends in financial markets and changes in economy. There are a number of factors that determine the home mortgage rates. The interest rates on home loans are affected by stocks, treasury notes and bonds, inflationary trends, actions of the federal government, international forces, etc. It is better to have an understanding of the changes that affect the loan rates before applying for a home loan.
Here are some of the factors that determine the interest rates on mortgages:
- Federal Reserve discount rate: Federal Reserve Discount Rate is the cost that banks and other financial institutions are charged for borrowing money from Federal Reserve Banks. When Federal Reserve Banks increase the discount rate, it becomes expensive for investors to obtain money and hence they are not able to borrow much. As a result of this, the investors/lenders (banks and financial institutions) increase the rates they charge their customers for home loans.
- Inflationary trends: Inflation reduces the purchase power of money and so lenders increase the interest rates on home loans during inflation. On the other hand, deflation tends to reduce the interest rates.
- Stock market: The stock market plays an important role in determining the home mortgage rates. The stock market fluctuations affect the credit supply in financial markets and this in turn affects the home loan rates. As stocks go up, more money is invested in stocks. More investment may lead to less money invested on mortgage backed securities and this would increase interest rates on mortgages.
- Treasury notes and bonds: The government often sells mortgages (packaged together with treasury notes and bonds) to investors. These are issued in financial markets as mortgage-backed securities. A higher demand for treasury bonds lowers the home loan rates.
There are certain other factors that affect the home loan rates. If international/ foreign investors put in money in the domestic financial market, the rate of interest on mortgages decline. Major fluctuations of dollar in foreign exchange market also affect the home mortgage rates.
February 24 2010 | Uncategorized | No Comments »
There is a nice trend the past few years to buy an existing home and renovate it to either make a capital gain or have a nice home to live in. However I have a feeling that we are soon going to see a shift in attitude and see people buying land in new residential areas and build. This is already done now but I think it will take off.
When buying residential land, you must ensure that the location is not only affordable for your budget but it is also liveable and have a nice environment for your needs. To determine this you need to find out about the current council zoning and their future plans if any are made up. This can determine very quickly whether the property has future potential. There is nothing worse than building a home and finding it worthless because it’s on the edge of the new industrial zone of town, or the new motorway.
Here are some things to keep in mind:
section
Environment and Location.
You must consider the overall standard of other properties that are in the area and think are the buildings you plan to build in cue of the one you’re planning. For example if you are planning to build a new home in an area where there are mainly older homes this may adversely affect the future investment possibilities. It is always tempting to buy a modest property in a lower socio economic area but take a step back and think about what are your needs to the property.
Site and Services.
When looking at your piece of land ensure the site lends itself to accessibility of the services and it has a range of housing design options available. For example if you buy on a steep section your building costs go up and the type of property you can build goes down. The things you need to consider are excavation, engineering, foundations, drainage, transport, landscaping and so many more. Other things is to make sure sewer, water, gas, electricity, phone and that roading, kerbs and other lighting services will be in place before you buy.
Position and Facilities.
As well as looking out for those views if any keep in mind the aspect to the sun. Where can I place my house to get the best aspect of sun? Think about the location to the local shops, schools and other public transport amenities. In the long run this will have a major effect on the saleability of your future house. If the area is new you need to investigate where and when and if new future developments that may be in the area.
Titles:
When looking to buy your land make sure you understand what the title is all about. The best type for buying and selling is freehold, which is free from covenants and other ownership restrictions.
Sub divided and cross leased sections:
Residential zoning by-laws determine how many dwellings will be permitted on one site depending on the land size and the dimensions. Generally when a block of land is subdivided it is chopped up and the sections are of their own title. But sometimes you can get a cross leased section. For more information on this have a look at a previous blog post of mine on titles.
Legal Advice:
Always seek legal advice before purchasing. I only say this as it can sometimes save you a fair bit in the long run. Sometimes a lawyer will be the devil’s advocate and try and put you off a deal. Listen to their advice but remember you are your own boss when it comes to buying your section. Also make sure you get the legal title searched. This means you can find out if there are no caveats or covenants on the land, or no problems over ownership of the land for sale and no legal obstacles to building on the site.
LIM: Land Information Memorandum:
My advice is you must get one of these. It will cost you up to $200 but for the price of the section your buying it will save you a whole lot of issues. It will provide you all the known information on the land including erosion possibilities, subsidence issues, soil type, location of drains, any permits, certificates of land use and any restrictions by the department of conservation or historic trusts. Again read my blog post on LIM’s.
Buying land can be exciting, especially when you’re looking to buy land to develop a house on. Just make sure you do it right.
February 20 2010 | Uncategorized | No Comments »
The Breaking News story today is about property again. Seems like lately everything is about property property property. Today’s headline states Property sales plunge in January – January house sales worst in nearly two decades…
Sounds terrible doesn’t it! This story is quite a different picture that was being painted last month when the authorities were talking about the market in December. It is clear that there is a huge amount of instability within the market place. People are unsure what exactly is going to happen and the media is always reporting on the has been or the statistics. Here are some of the facts relating to the latest data that has been released.
- January saw just 10,272 new listings coming onto the market; the first time in 4 years that the January figure has been lower than December
- The national median of $350,000 was up 7.7 per cent on the corresponding figure of $325,000 for January 2009, but was $10,000 down on the median price for December 2009.
So why the big change between December and January when January is typically the busiest month for Real Estate transactions in New Zealand. SO what is holding it up. The answer isn’t as simple as one answer. There are many reasons. Some of these include the recent news about the possibility of tax reforms relating to property, some factors include New Zealand heightening unemployment ratio, other things such as the media releases stating that house prices are at levels not seen since the 2007 peak.
I think all these factors have put the brakes on people making decisions relating to property. Naturally because property is a massive investment people don’t want to be making investments when there is uncertainty around it.
The next step in the equation is almost anybody’s guess. There are no hard and fast rules. When it comes to property investment it would be fair to say that many people will be holding off, including myself until it is clear what the government is going to do regarding the tax reforms relating to property and gst. The recent Speech done by the prime minister will have adverse effects on peoples perceptions of residential property
investment. This is the key part to the speech.
“We have a tax system that taxes labour and investment income at relatively high rates, taxes consumption at a relatively low rate and generally gives money back to people when they invest in residential property.
Is it any wonder that our economy is tilted towards consumption and property investment, that we have a shortage of savings, and that a high proportion of New Zealand graduates live overseas?
Tinkering over recent years has made the tax system more complicated, led to poor incentives in the economy, and created a raft of different ways for people to minimise their tax payments.
The Government will therefore be introducing measures this year to reform the tax system. We intend to announce those measures as part of the Budget in May. “
It will be a long awaited Budget in May and I can’t wait to see what it produces. There will be big change and until then unfortunately I feel the property market might be quite subdued because many investors will be holding off buying. But on the flip side to this with a relatively higher property inventory compared to the number of sales there could be some great buying opportunities for people who wish to buy their own home as some vendors could become pressured due to the lack of interest in the market.
There is also one other point to take into consideration which could cause all of what I have said above to be a uncredible. Since the Real Estate act changed in 2009 agencies do not need to be members of the REINZ who usually supply all the stats for the sales etc. SO just possibly maybe there is a slight problem with the stats from here on in and the real estate stats are not up to date. This could be the case because agencies do not have to submit their results to the REINZ. This would cause a dip in the stats if someone didnt enter their data. this is something I will investigate further.
This is surely interesting times.
If you want to view the entire John Key speech visit this link to download a copy of it.
February 12 2010 | The Market | 4 Comments »
I have been reading a few things lately about the Real Estate prices in and around Christchurch and New Zealand. There seems to be much talk about the market prices climbing up and up and up in recent months and reaching what one is calling record prices. What the hell is going on. The country is still suffering one of the longest recessions in recent times and Real Estate companies across the board are spouting out that the housing market is in full recovery.
Here is what I read on stuff.co.nz http://www.stuff.co.nz/the-press/news/christchurch/3239911/House-prices-break-record
Christchurch house prices have hit an all-time high as a shortage of properties fuels a market recovery.
The city’s median house price last month was $347,250, up 12 per cent on a year earlier and beating the previous record of $340,000 set in November 2007, Real Estate Institute figures show.
There were 506 Christchurch house sales last month – about the same number as in December 2008.
Bank of New Zealand chief economist Tony Alexander said prices were rising as the low level of new-home building curbed supply, while a rise in immigration and lower interest rates boosted demand.
The market was playing “catch-up” after the recession kept buyers away, he said.
Cities were leading the market recovery, with export concerns and farm debt hurting rural areas.
“I’d expect that prices on average in many parts of the country will continue to rise by 5 or 10 per cent over the next year,” Alexander said.
Longer-term interest rates were rising, but he expected floating and shorter-term rates to stay low until next year, prolonging the market rally.
Real Estate Institute president Peter McDonald said house prices had “definitely stabilised” and were now rising, boosting optimism in the industry.
New homeowner Tania Power said competition from other buyers meant she and partner Marc Greenhill made their top offer to secure the Christchurch home they moved into last week.
The couple spent a year “saving really hard” and watched prices rise.
“There were definitely a lot of people looking when we bought ours,” she said.
“It went to a multi-offer, so we had to offer them the asking price, but it was worth it to get the one we wanted.”
Christchurch real estate agent Rob McCormack, co-owner of offices under the Harcourts Grenadier brand, said houses and sections were selling well.
“There’s a feeling of optimism out there, and I don’t think it’s a dead-cat bounce,” he said. “If we do have a problem it’s getting stock. We don’t have the supply, but there is certainly the demand.”
Rising prices made properties hard to value, and more sellers were prepared to auction their houses, McCormack said.
Statistics New Zealand figures show house-building has been at its lowest point for several decades. About 1500 consents for new homes are being issued each month by councils, half the number from six years ago.
The Real Estate Institute’s figures show prices rose in 11 out of 12 regions in the past year, with the national median price of $360,000 up 9.6 per cent on December 2008.
Of 4957 sales across the country last month, 58 per cent were under $400,000. Homes sold in a median 33 days.
//
In the Canterbury-Westland region, December’s median priced matched the February 2008 high of $320,000 after rising 7 per cent in the past year.
Median house prices in other regions in the year to December were, with annual price growth in brackets: Nelson-Marlborough $343,500 (14.5 per cent), Wellington $400,000 (8.1), Southland $184,000 (10.84), Otago $230,000 (unchanged), Central Otago Lakes $432,500 (1.16), Auckland $470,000 (6.81), Northland $306,000 (minus 2.08), Taranaki $280,000 (7.69), Manawatu-Wanganui $230,000 (2.9).
Come on. Look at the bigger picture and look whats going on. Now I know I am not qualified to rattle off any official stuff. But you have to ask the questions that will this price recovery actually keep going. And when they talk about median prices. The reality is that more higher priced homes have been selling in the last 6 months than in previous homes comparatively to the lower priced homes. From my understanding of going to peoples homes the amount I have been most people who own homes under the 400k mark are finding the times tougher and arent moving.
Compare that to many people who are downsizing their homes at the moment. People in bigger houses in posh locations looking to downsize and have something with smaller mortgages. The reality is that people out there still worry about the prices of homes. Our home affordability allbeit better than previous years is rising fast and is one of the most expensive in the world.
On top of all of this you have to keep in mind we still have an extremely low OCR which is tipped to rise by June this year kissing good bye to the relatively cheap money we have had access to for the past 12 months. Bollard has tipped a mid-year increase in the official cash rate from its current record low 2.5 per cent but the market is anticipating he will start as soon as March and have hiked the OCR by 75 basis points by June 30.
I am sorry to say but if you look at the signs they do not paint a pretty picture. The average Kiwi is going to be priced out of buying a home. And if they do they most certainly will be stuck with a massive mortgage.
I feel the Real Estate industry shouldnt be telling the country that house prices are heading to an all time high. Its just not healthy to be doing this at this time. Sellers will start to expect higher prices. Great if your a home owner though. There is a drought of listings at the moment. A sure sellers market. So what the industry needs to do is attract more listings. Which is what the article above will most certainly do. Before you buy or sell right now make sure you do your research on true facts as there are too many conflicting opinions out there, including mine. But you need to look at cold hard numbers and look at the trends.
Good luck.
January 19 2010 | Uncategorized | 2 Comments »
Energy saving around the home does not have to be all about installation of equipments that will help you generate the amount of power you need. Here are two things that work hand in hand to make your home warmer as 60% of your energy costs in the year come from space heating. To view more tips visit my personal Healthy Home Blog
Tip #5: Invest for the insulation of your home so you will require less energy to heat up during winter.
Tip #6: Make sure you ventilate your home so that the any build up of moisture from a well insulated home doesn’t occur. This makes your home more energy efficient. Products like carpet, cabinetry, plywood and paint can contain petroleum products or formaldehyde and off gas VOCs (Volatile Organic Compounds). There are now many products available that give off little or no VOCs so that as well as a ventilated house you can have clean healthy home.
Many have suggested that going green is the way to economical and ecological recovery. Some see it as a way to decrease their carbon footprint, and others see it as a means to create new job opportunities in a waning economy. Whatever your reasons for going green there will be substantial gains personally to be made.
For more on green homes or sustainable housing visit my Personal Blog.
January 15 2010 | sustainable houses | 1 Comment »
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