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 »
Mortgagee Sales now account for 4% of all house sales. This is a disturbing statistics. It is horrifying to think that 1 in 25 houses selling on the market today are mortgagee sales. For statistics
Regional towns across New Zealand are feeling the squeeze as mortgagee sales hit another historic high in September, according to the latest figures from Terralink International.
The data released today showed 343 registered mortgagee sales – up on the previous record number of 321 in July this year.
September 2009’s figures are up 130 per cent from the 149 mortgagee sales recorded in September 2008.
In September 2007, prior to the recession, there were 16 mortgagee sales.
Terralink Managing Director Mike Donald said the new record figures followed an uncharacteristic dip in mortgagee sales the month before.
“The continuing increase in mortgagee sales came as no surprise because all indicators showed the worst was not over for property owners. I don’t think we’ll see a true decline until sometime next year,” he said.
Regional towns and cities showed the greatest increases in mortgagee sales, Mr Donald added.
The number of mortgagee sales in Manawatu has doubled in a month from 11 to 22, Hawke’s Bay has gone from 15 to 24 and there were 32 mortgagee sales in the Waikato region in September, up from 18 the month before.
Northland, Otago and the Bay of Plenty also saw significant increases.
“The recession isn’t just hurting people in the big cities, small town New Zealand is clearly hurting too,” Mr Donald said.
Christchurch was the hardest hit main city, up from 19 mortgagee sales in August, to 29 in September.
figure source: NZ Herald
As I see it now there is no logical reason as to why house prices in New Zealand haven’t yet crashed in a dramatic way like the rest of the world. Not only is farming bad but tourism is terrible. Mortgagee sales and mortgagee auctions have risen 100% in Northland from May 2008 to May 2009, In Auckland during the same period, they rose 211% and in Wellington 1000%
This begs me to ask why are people getting themselves into the hassle of mortgagee sales but unfortunately its just about people not taking the right measures to avoid it. But I still receive emails from people asking why do people get themselves into this situation and others asking what actually happens in a mortgagee sale. So here is a quick excert from a New Zealand Website that details what a mortgagee sale is…
So what happens at a mortgagee sale?
A mortgagee sale is the final stage of the mortgagee process, at which the property which is the subject of the mortgagee action is sold at public auction to the highest bidder. The sale is conducted by a court-appointed referee. The referee commences the sale by reading aloud the Terms of Sale; the Terms of Sale is the document that acts as the contract of sale between the referee and the high bidder, and sets forth the rights, responsibilities and obligations of both the referee and the high bidder. Once the referee has read the Terms of Sale, the referee begins to accept bids for the property. The foreclosing mortgage holder (the “Mortgagee”) usually has an “upset price” which is the minimum amount it will accept in satisfaction of the mortgage debt. If the highest amount bid is less than the upset price, the Mortgagee will usually be the high bidder and take title to the property. If, however, the highest amount bid exceeds the upset price, the property will generally be sold to the highest bidder.
How does this happen?
If you fail to make the payments due under a mortgage on your home, the lender (the “mortgagee”) has the right to recoup the loan amount through exercising the powers contained in the mortgage contract. Usually this is done through the power to sell the property.
The mortgagee must, however, fulfil certain strict legal requirements, including serving you (the “mortgagor”) with the proper notice. If these requirements aren’t met then you may be able to apply to the court for a remedy.
Mortgagee must serve you with notice before taking action
Before taking action the mortgagee must serve you with a notice under section 92 of the PROPERTY LAW ACT 1952. This notice must adequately inform you of:
- the nature and extent of the default complained of (that is, the amount by which you are in default)
- the date by which you must remedy the default
- the rights that the mortgagee is entitled to exercise if you don’t remedy the default by the specified date
The date specified must be at least four weeks from the date on which the notice is given. But if the mortgage contract specifies a period for this that is longer than four weeks, the date specified in the notice cannot be earlier than the end of that longer period.
If you receive a notice from your mortgagee that does not comply with the legal requirements, you may be able to apply to the court for an injunction to prevent the sale going ahead. Further, if the mortgagee exercises the power of sale before the date specified in the notice, you may also be able to apply to the court for a remedy.
The mortgagee’s duty to obtain the best price
The mortgagee has a statutory duty to take reasonable care to obtain the best price reasonably obtainable as at the time of sale. If the mortgagee breaches this duty, you can apply to the court for a remedy.
To satisfy the duty the mortgagee must adequately market the property, which may involve advertising outside the local area, giving notice of the property’s advantages (including the potential for any development), and setting a realistic reserve price based on the property’s valuation.
Three ways of exercising the power of sale
The mortgagee can exercise the power of sale in one of three ways:
- sale through the High Court Registrar
- sale through public auction
- a private sale
Sale through the Registrar
If the mortgagee chooses to exercise its power of sale through the High Court Registrar, it must apply to the Registrar and notify the Registrar of the name and address of the mortgagor and of any other mortgagee. The Registrar must be satisfied that the mortgagee is entitled to exercise its power of sale.
A mortgagee is entitled to buy the mortgaged property only if the sale is conducted through the Registrar.
Your right to redeem the property
There is a small degree of protection afforded to you, the mortgagor, through the “redemption price” – this is the price at which you may redeem the land to be sold. At any time before the Registrar’s sale you may pay the redemption price or the amount due and owing under the mortgage; the mortgagee must then release the mortgage.
The redemption price is set by the mortgagee, and must be specified in the mortgagee’s application to the Registrar to conduct the sale. Any advertisement for the mortgagee sale must state that the redemption price is available at the Registrar’s office and can be obtained before the auction.
The best thing to do is talk to your lender and your solicitor early to avoid heartache.
The reality is that real people are having mortgagee sales. Its as easy as a person losing their job. For example a friend of mine lost his job, have a mortgage holiday but his new job did not give him enough money to pay the mortgage. He then was notified that his home was going to be sold and there was not much he could do. This is very real and looking at the economic situation out there there will not be a sudden drop off from these types of sales.
November 22 2009 | Sellers and The Market | 4 Comments »
Christhchurch Property Trends
Property values in Christchurch declined by 1.9% over the past year (calculated over the three months ending August 2009 in comparison to the same period last year), a substantial improvement on the 5.5% annual decline reported in July. The average sale price for the city increased slightly from to $342,993 to $344,401. Values in Christchurch are down 7.6% since the market peak.
The figures are showing a fifth consecutive month of recovery in Christchurch’s residential property market, indicating a period of consolidation heading toward the summer months. These numbers still need to be treated with caution however.
Suburban Christchurch has held well, with all suburbs showing an improvement year-on-year. The market is showing clear segmentation with the level of activity strongest in the under $350,000 market, closely followed by the $350,000 to $500,000 price range. Local agents report a shortage of listings which is putting pressure on properties currently on the market and consequently we are a seeing healthy sale prices. The auction process also appears to be providing strong results. However, I am fairly confident that this represents a small bubble in the market and is nothing more than a volume-related issue for the short term
QV expect to see things soften slightly as the spring and summer months bring more listings to the market. Overall there has been an improvement in market sentiment, although buyer behaviour is still cautionary with job security and the ability to service debt being key factors for some folks at present. Looking forward we anticipate a more traditional spring and summer market
From where I sit I can see the market seems to be in a very edgy state. There is definitely a fair bit of movement happening and plenty of buyers out there wanting to lock into the market when there is cheaper money available and lower prices of houses compared to the prices 2 years ago. Bt how long do you think this seriously will last for.]
Take a deep breath. Look at the fact that the OCR is not going to stay low. The cost of borrowing isn’t getting any cheaper any more, household debt is still high. There is increasing pressure being put on the export market because of the high kiwi dollar and there are many other factors that mean that the housing market potentially has a lot to worry about
If you lock in now I feel that you will be safe from the harder times that may be ahead. But if you wait too long it will be harder and this will price the first home buyers out of the market. When the first home buyers become priced out of the market there will be problems with the economy. This will mean that older people are going to be the home owners of the future and the people migrating to New Zealand will also benefit, but the dollar will hinder that as well.
There is too much uncertainty out there at the moment to say that a rebound is happening. If you look at the facts it is clear to see that the sales volume is increasing and that the median is on the way up. But be cautious about the future woes that lie around the corner. If you want to act do it sooner rather than later.
September 15 2009 | The Market | No Comments »
How do you find a home?
Once you know what you want and can afford, you want to get a ‘feel’ for the market. You could start by
• searching the Internet – try trademe.co.nz or realestate.co.nz
• reading the papers – weekend papers often have lots of adverts
• driving around areas you like, looking for ‘For Sale’ signs and open homes
• looking at homes in real estate agents’ windows, or on their websites.
Real estate companies
Many people find their homes through a real estate company. Often homes are only listed with one company, so ask agents from different companies to show you suitable homes. If a home is a ‘sole agency’, only that real estate company can show you the home. A ‘general agency’ means the home can be listed with a number of companies.
Private sales
Not all homes are listed with real estate agents. Some people try to sell their homes privately and they may use a ‘private sale’ company to help them with marketing. Don’t assume a private sale means you’ll pay less – the owner may be trying to get more from the sale by not paying an agent – and dealing directly with the owner may be quite stressful.
Finding it yourself
Some homes never come on the market. If you know where you want to live you could put a short note into letterboxes in the area, ask locals if they know of anything coming up, or even put your own advert in the paper.
Things To Ask Your Real Estate Agent if you use on (Just a Hint – A Real Estate Agent if your buying a property can be your best friend if you know how to use them properly, but speaking from experience you need to know how to ask the right questions as at the end of the day the agent is working for the seller).
• why are the owners selling the home?
• how long has it been on the market?
• how much interest has there been?
• what is the Rateable Valuation?
• how much are the rates?
• what are the properties nearby worth?
• what have other places nearby sold for recently?
• what are the neighbours like – do they have children, pets, or noisy parties?
• what facilities are in the area?
• what are the schools like, are they zoned?
• is the house north facing (for sun)?
• when does it get the sun?
• what is the prevailing wind direction?
• is the home sheltered?
• is there noise from traffic, trains, planes?
• is there a danger of flooding or erosion?
• are there any major redevelopment plans for the area?
• are there any zoning restrictions?
• what type of title (ownership) does the property have?
• are there any covenants (restrictions) or easements (rights) on the title?
• are there any protection orders over the trees or buildings?
• where are the boundaries?
• is the home suitable to renovate?
• could the section be subdivided?
• does the home need any urgent repairs?
• has this home been a ‘leaky home’?
• have there been any alterations – do these have consents and certificates?
• has it been re-piled, re-plumbed or rewired – and when?
• what heating and insulation does it have?
• what fittings are being sold with the home?
May 18 2009 | Buyers and Home Sellers and Buyers Guides | No Comments »
Internet marketing is a tough question on its effectiveness and if it actually works or not. For some people it works wonders, and for some its just not worth the time you put into it. I believe in internet marketing and I believe that it will play an increasing part in the way Real Estate is searched and found in New Zealand. I am not just talking about the major portals such as realestate.co.nz but I am also talking about the individual Real Estate Agents that advertise their own listings on their websites.
Some people spend so much money and time on a website that is a stagnant page that does not alot for that person. You need to be able to gather information from all your visitors and actually follow them up.
I found a good article that stimulated me to think and I wanted to share it here with you. From Joe McFerrin streetdirectory
Internet Marketing for Real Estate can be both an effective real estate marketing endeavor or it can be the worst idea you have ever tried out to build your real estate business. Internet Marketing for Real Estate is a whole new ballgame in itself, so be prepared to be an astute learner to gain the most from the experience.
The main purpose of any Internet Marketing for Real Estate campaign is to help you get the leads you need to be able to make a prospects list. This prospect list is composed of people you believe have the potential to become customers for you eventually. And this means managing traffic to your website appropriately.
Internet Marketing for Real Estate websites have to be useful somehow to visitors. Visitors who get disappointed by your website will never return and since you know how hard it is to get a person to visit in the first place, your Internet Marketing for Real Estate website has to offer as much information pertaining to the real estate biz as you can fit in without making your site look cluttered or disorganized. This leads us to the next tip.
The right Internet Marketing for Real Estate campaign will work if you snare the attention of visitors as soon as they enter your site. Yes, first impressions definitely last – but for them to lead to a possible sale, you have to have follow-through as well.
To produce follow-through, try examining your Internet Marketing for Real Estate website as if you were yourself just a visitor: what do you see? Do you just see a website like any other, or do you see a website that would attract people interested in real estate, that provides information that is actually usable for them, and that tells people the owner of this website is the person they should look for when trying to buy or sell real estate? Hopefully, it would be more of the latter for you.
When visitors drop by and leave a note, what is your Internet Marketing for Real Estate follow-through? Do you just take note of them then drop their names into a giant database to be swallowed up and forgotten forever? If you are a true follower of Internet Marketing for Real Estate follow-through techniques, you should follow through by sending them a message at whatever contact address they may have left. If all they left was an email address, that is okay already. You can start by sending them a thank-you email for visiting your website and tell them that you hope they will agree to be part of your subscription list for your business-oriented newsletter. It is always part of ethical Internet Marketing for Real Estate practice to ask before adding anyone to an emailing list – think of it as good etiquette for real estate agents.
Your Internet Marketing for Real Estate website would be incomplete if all you have are the same static content to showcase day in and day out. This means that your Internet Marketing for Real Estate articles on the website should always be updated, maybe even replaced when necessary, so that visitors get intrigued and come back for more. The better the service you provide this way, the more visitors will want to read and learn about what you have to offer.
Internet Marketing for Real Estate may be misused in one way though, and that is by using too much data that visitors get glassy-eyed and click on the mouse to find a less burdensome site to visit. It is tricky, this Internet Marketing for Real Estate campaign work, so you need to have a good sense of when you are overdoing the content.
If you want to add a personal touch to your Internet Marketing for Real Estate website, you may want to use a blog on your website as well. This helps visitors see things through your eyes.
May 11 2009 | Uncategorized | 2 Comments »
This is an interesting article from the Herald Website which is further indicating that the market could be improving. My honest opinion is that the facts below are just the spike that naturally occurs at this time of year. The numbers we are experiencing are well below what we have known for many years. Our economy is going to be hit hard over this coming year with many mortgagee sales fueling what will be a very volatile market. The building consents that are signaled below are a sign that the market could be improving as their is some renewed interest as the interest rates drop to low levels. But maybe this is over as well as the banks increase these rates. It will be an interesting winter to watch and see what happens. Below also is a graph from the govt.org website of building consents issued in NZ. You can see clearly the downward trend of consents issued and the sharp decline since about March 07.
Building consent figures for February improved from January’s deep hole, but remain low.
Last month 1059 dwellings were authorised, of which 193 were apartments, Statistics New Zealand (SNZ) said today. In February 2008, 1874 dwellings were authorised.
Seasonally adjusted, the total number of new dwellings was up 12 per cent in February after falling 13 per cent in January. When apartments are excluded the improvement in February was just 0.3 per cent.
January’s total of 812 consents was the lowest monthly total since that series started in 1965.
The value of residential building consents in February was $358 million, down 42 per cent from February 2008, SNZ said.
Non-residential building consents were worth $382m for the month, up 5.8 per cent from a year earlier.
This morning’s building consents come as the recession puts a halt to many construction plans around New Zealand, including Wellington.
Funding has been pulled on the luxury $200 million Watermark development in Wellington, and other apartment buildings around the city have also halted construction.
Dougal List from the planning department at the Wellington City Council said resource consents were down 10 to 15 per cent from the same time last year.
Applications for commercial buildings and renovations remained strong but the pace of activity was much slower than it was 12 months ago. He said many people are looking to get consents in place so they can develop once the market picks up in a year or two.
List said the main casualty in the market was multi-unit developments which has almost completely dropped off as developers struggle to get finance.
Statistics NZ said that as with the previous month, the value of consents for residential buildings in February was below the non-residential value. Before January the last time that happened was June 1998.
For all buildings, consents had a value of $740m last month, down 24 per cent from February 2008.
In the year to February, residential building consents were down 26 per cent from a year earlier to $5.77 billion, non-residential consents rose 5.5 per cent to $4.59b, and for all buildings the value was down 15 per cent to $10.36b.
March 30 2009 | The Market | No Comments »
Are the days of having a party at your home inviting friends and family around and possible clients gone. In one way yes and in another way its taken on a whole new form. The old days of making some useful contacts, get referrals and meet prospective clients through events like these prties or dinners or even casual lunch dates with friends are pretty much gone. Dont get me wrong, this type of stratergy can still work but the target markets these days where you want to be putting yourself or your property forward are changing. These offline
activities are still very much a part of every day life and can be very benificial. I know a number of people who cant use a computer at all. They come to the office sit down make a few calls and then all of a sudden the next day they have a new listing or sale. But that older styled way is changing and the scope of reach is never going to be wide and as far as could be achieved now with the internet. People are becoming less social offline and more social online. So what does this mean for you and your real estate business or how you market your peoperty today.
There are two websites that I like to use for the purpose of social networking They are Facebook, Linkedin and the latest craze Twitter. Facebook has quickly become one of the largest social networking sites in the world with ove
r 100 million users. Started by a college kid (now a multi-millionaire), Facebook has grown from a simple college leisure site to one of the most powerful, far reaching social networks on the web. LinkedIn also started with humble beginnings, but has grown to become t
he largest business networking site in its domain. LinkedIn allows professionals from all industries to network with like-minded professionals and/or network to find new jobs or employees.Twitter only a recent addition to the social family is a very very powerful way to create and grow your network. The use of a micro blogging system where you tell your audience what your doing, a useful link or just anything that may help them can have huge benifits to your business. These three networks alone have helped many people take their businesses to the next level by providing them with extremely simple, expansive networks to find prospective clients where they may not have otherwise been able to reach. But remember the use of these sites is not just limited to the use of the Agent. Sellers or buyers can use these sites in a similar way to network out to find what they want to achieve.
But you might ask me why does this bare any relivance to Real Estate which is an offline activity. Well if you think of the initial question of how the fact that people are becoming more social online, as opposed to offline, affects your business you will get the answer. The facts is over 85% of real estate transactions start online usually via looking at the peoperty online and then the person contacting you. Prospective clients are on the web. Whether they are doing searches on Google, conversing with friends on Facebook or watching community videos on Youtube, people looking to buy, sell or invest in real estate flock to the Internet to gather as much information as possible before making one of the largest financial transactions of their lifetime. Why… Because the internet has probably everything that person wants to know and if your their when they are searching you could get a lead. This is more of a reason than any that you must be found easily on the web but you need to establish yourself as an authority for the services you offer in your area. So that when it comes time for that person to make the descision about who he wants to call your at the top of mind.
But how can you set yourself up for this. The one thing that all of you will agree is that everyone hates a kiss arse. Someone who says look at me, pick me blah blah blah. Online it is easy to be like that but if your marketing yourself right you will be seen as a person of help to these people. Inbound marketing tactics work the best online. This is marketing that does not need to be intrusive or interruptive, is one of the most organic and effective ways to accomplish these two goals. Social networking is the prime example of effective inbound marketing – if done right of course. By plotting your social networking strategy and / or employing professsionals to manage or consult you on your social networking strategies, you will be able to define yourself as a true resource on the web – the place where a pool of prospective clients continues to grow each day. They will benifit you in the long run.
If you want you should take the time to learn more about the social networks mentioned above. Marketing for your real estate and your business online in these types of ways can truly increase your client base by making you a trusted resource online. Remember, you may be one of the top producers in your market, but if your clients can’t find you online when they are looking for your services then you may as well be a brand new agent with no experience or credibility yet. It is never too late to get started, especially on social networking as this is still relatively new for the real estate industry, so take advantage of it before you fall too far behind the pack. And as I said it doesnt just stop at marketing your business online.
These social network sites are only the party. This is where people get channeled in. I will talk a little later on how to channel these from the social networking sites to your own site and to your properties which is where you ultimately want traffic online to go. But just remember its all about the party and entertaining your guests that have arrived and stearing them into the right direction.
March 15 2009 | Uncategorized | 7 Comments »
The article below is an article that has been published in the New Zealand Herald and after reading it though I thought was one of the most informative and interesting articles that details the problems that we are facing in terms of our New Zealand housing market. Simply put the prices of our houses in New Zealand are high. Housing affordability is becomeing alot better but is still a long way off the rest of the world. Have a read through this article and leave your thoughts at the bottom in the comments box.
According to the 5th Annual Demographia International Housing Affordability Survey, buying a home in New Zealand is prohibitively expensive due largely to planners.
The reality, however, is far more complex.
In this instance, coming second to Australia is not so bad. The Aussies are the undisputed world champions in unaffordable housing – a home in the lucky country costs 6.3 times the average annual household income.
But New Zealand is not far behind. Buying a house in Godzone is prohibitively expensive too – 5.7 times average household earnings. Crikey. That’s almost double the rule of thumb for affordable homes – that they should cost no more than three times annual household income. In Canada the “median multiple” is just 3.5. And in the United States, it’s 3.2. How the hell did things get so out of whack Downunder?
According to the 5th Annual Demographia International Housing Affordability Survey, the root of the problem is planners – specifically the way their zoning rules and regulations constrain the supply of land.
Free up the supply of land, especially at the city fringes, says Demographia and housing will become affordable again. More suburban sprawl brings housing for all.
What may be surprising about Demographia’s analysis is not that it reflects a property developer’s ultimate fantasy, but that the Government is buying its message.
“National understands there’ll be property cycles, but the recent cycle has been so extreme as to suggest there are fundamental problems with how the market is operating, notably around the supply of land,” said Housing Minister Phil Heatley last week.
“This research proves that many first-home buyers are excluded from entering the property market by a number of factors, including restrictive zoning and consent laws, which not only make life difficult for ordinary Kiwis but are major factors in New Zealand’s poor productivity and economic growth levels.”
Actually, the research doesn’t prove anything about restrictive planning. And before jumping on the Demographia bandwagon, the minister might want to take a closer look at the survey.
The non-profit social change agency, Shelter New South Wales, commissioned research in October 2008 to do just that. It found the overarching methodology flawed, pointing out that it includes all house prices across an entire city – multimillion-dollar properties alongside lower cost homes.
That can easily give a skewed impression. “A city with a high median multiple might have large numbers of affordable properties that operate as separate housing markets in the city,” says the research. Demographia only includes home purchases, excluding dwellings in the public and private rental sector, which are important sources of affordable housing supply.
Andrew Coleman of Motu Economic and Public Policy Research is concerned too that Demographia’s analysis doesn’t take into account the essential financing cost of a house over an extended period of time. “For most of the last decade New Zealand has the highest interest rates in the OECD, so that makes housing far less affordable in New Zealand than elsewhere.”
Another feature not taken into account is the increase in the average size of new houses in New Zealand – from about 130 square metres in 1990 to just under 200 square metres today. He notes too that the boom in house prices in New Zealand has occurred in places like Timaru which have few problems with land availability. “It’s not really obvious that we have constraints in finding sites to build on .”
Shelter NSW’s research argues housing affordability is a complex mix of supply and demand variables including income levels, employment trends, access to (and the cost of) finance, demographic shifts, and housing preferences.
“The Demographia surveys reduce this very complex issue to a simple casual relationship between house prices and assumed planning constraints on land supply,” says the research.
The research takes issue with Demographia’s claim there is an economic consensus regarding the role of “prescriptive planning” in causing housing affordability loss.
Demographia: “There is a growing consensus that more land must be made available on the urban fringe to accommodate new residences and that a competitive land market needs to be restored.”
Shelter NSW: “Most authoritative economic sources focus on demand factors (eg falling real interest rates, strong economic growth, immigration rates, and, in some countries, weakening lending standards and easy credit) to explain house price growth…”
Shelter NSW’s research also criticises that lack of empirical data on whether a city’s planning regime is “prescriptive” (bad) or “responsive” (good) and concludes that Demographia’s planning data “conveniently reflects the subjective impressions of the authors.”
But while Demographia’s view may be understandable, given that one of its authors is Christchurch property developer Hugh Pavletich, the overall finding that housing here, and especially the land component, is overpriced, can’t be denied.
Other housing affordability indexes paint a similar unaffordable picture. But unlike Demographia, they focus on the cost of mortgages and highlight the fact that – thanks to falling house prices and falling interest rates – the tide is turning rather sharply.
Interest.co.nz shows that it now takes 59.6 per cent of one median after-tax income to pay the mortgage on a median priced house purchased in December, down from November’s 63.8 per cent. The index was a whopping 81.1 per cent a year ago and 52.3 per cent five years ago. It reached its highest point – 82.9 per cent – in November 2007.
But as Interest.co.nz managing editor Bernard Hickey points out, while prospects are improving, housing is still out of reach for most. “We reckon housing isn’t affordable again until we get near the 40 per cent mark, where it was in 2002 and early 2003.”
For household incomes the picture looks better. “Median-priced housing is now affordable for families in New Zealand when both adults work,” says the website. On this measure it now takes 38.9 per cent of a median household take-home pay to service a mortgage of a median home purchased in December. That’s down from 41.6 per cent in the previous month and a year ago, when it was 52.8 per cent. But it’s not as good as five years ago when the index was 34.5 per cent.
First-time buyers, however, continue to struggle. It now takes 52.2 per cent of one median income of a person in the 25-29 age group to pay the mortgage on a lower-quartile priced house in December, down from November’s 54.4 per cent.
“Essentially a single median income for a first-home buyer is not high enough to buy a lower-quartile priced house, even with a deposit around 10 per cent of the house’s value,” says the website. “However, a couple/family with more than one income may find the lower-quartile house price is affordable.”
Massey University’s Home Affordability Index to November paints a similar picture – showing affordability improved 4.6 per cent over the last 12 months. The national index is based on median house prices, average personal income and mortgage interest rates. In November it was 32.31 – still a long way off an affordable 20 last seen in November 2002. (A low index equals improved affordability).
But just when the trend towards affordability is improving, a new barrier has emerged – the banks’ increased deposit requirements. Whereas in the past, banks regularly lent 95 per cent and sometimes 100 per cent of the mortgage, they now require a 20 per cent deposit. “Based on current income and house prices it will take an individual 8.2 years to save the 20 per cent deposit as now required by most banks,” says Interest.co.nz. A first-time buyer wanting a lower quartile priced house will struggle too – taking 6.6 years to save the 20 per cent deposit as now required by most banks.
Despite such hurdles ahead, Demographia maintains freeing-up land on the fringe of metropolitan urban limits will save the day. Pull up the boundary fence and let the city limits push out. In its vision of suburban paradise, Demographia does not dwell on the downside – that a more sprawled-out Auckland for example would result in increased infrastructure, transport and social costs.
There’s another problem too. Changing zoning laws doesn’t automatically lead to cheaper land – especially when greenfields land is concentrated in the hands of a few land-bankers.
Professor Bob Hargreaves, of Massey University’s Property Foundation, points out that the land-bankers would need some other incentive to sell. “Research shows that freeing up the land doesn’t make much difference. The reality is, it’s not in the developers’ interest to suddenly dump a lot of sections on the market at low prices. There has to be some penalty on developers if they just sit on land and don’t bring it into the market, but I’m not sure on how you do that.”
From a developers point of view, Hargreaves says it makes sense to corner the market and drip-feed sections on to the market to get a higher price.
A closer look at Demographia’s list of 87 “affordable” housing markets in North America gives new meaning to the word. “Is it any coincidence that the top 20 most affordable markets are in economically distressed regions?” asks Keith Hall, chief executive of the New Zealand Planning Institute and a member of the American Institute of Certified Planners. “These are mostly the ‘rust belt’ cities of the American Midwest and neighbouring Ontario in Canada, areas chronically plagued by high unemployment among predominantly blue collar auto industry workers. The one exception to the auto-steel industry connection among the top 20 is a community on the equally distressed Atlantic Coast of Canada.”
Hall, who stresses his views are his own and not the official position of the New Zealand Planning Institute or American Planning Association, says many of the cities in Demographia’s affordable regions are mostly inland cities in the vast Midwestern flatlands of humid summers and extremely cold winters. “The first Sunbelt city on the list, Killeen, is best known for its large Army base, and a 1990s mass murder that made global headlines.”
Unplanned and unzoned Houston is often touted as an example of how the lack of growth management and the absence of planning can maintain regional affordability. But the irony of Houston is that it’s a city with lots of planners. “That is where I began my career in planning,” says Hall.
Yes, planning processes in Houston are certainly different, and both the regulatory environment and the flat coastal landscape allow unabated sprawl in nearly every direction. But, says Hall, a key advantage to Houston’s system of planning is that it has facilitated central city intensification. “Even in free market Houston, there is strong demand for high quality, medium and high density housing in walkable, mixed-use neighbourhoods with good public transport access.”
Hall also owns a house in Houston – a convenient six blocks from a tram line that passes close to every sports stadium, most of the city’s world-class museums and performance venues, two universities, and the headquarters of many corporations. The convenience did not happen through random dropping of a sports stadium here and a museum there says Hall. Planning took place to ensure that these major investments captured “the synergies of co-location”.
As to affordability, Hall points out that while mortgage interest rates are significantly less in the United States, property rates, insurance, and utilities costs offset Houston’s affordability when compared to Auckland.
Looking at Demographia’s 64 “severely unaffordable” housing markets in North America, Hall notes most are coastal cities and many are near mountains. “Never mind the artificial constraints that politicians place on these cities with their growth management and zoning regulations, these cities face real limitations on growth in constrained geographies.”
“If you want to live in an affordable housing market, why not move to the most affordable city on the list?”, says Hall. Homes are affordable in Youngstown in Ohio because more people are relocating away from, rather than to this prime location also known as “Murder City,” and offering the “Youngstown Tune-Up” – auto worker slang for the city’s frequent car bomb assassinations.
A close reading of the Demographia data shows “affordable housing” is found largely in flat terrain with extreme climates, high levels of crime, dying economies, few natural amenities, and limited prospects for academic and professional achievement for the next generation.
But Hall, like Shelter NSW, says the value of the Demographia reports is that they highlight housing affordability issues and serve as starting point for a dialogue between developers, planners, economists, banks and government that urgently needs to happen.
Hall agrees there are planning and growth management challenges in the mix, but other complex issues also contribute to the problem. If a dialogue were to occur, Hall and others say the taboo subject of a capital gains tax on investment property should be on the agenda. So should government incentives for first-time buyers such as cheap interest and suspensory loans – especially for new houses.
And, if the Government is serious about finding ways to stimulate the economy, getting builders out there building – invigorating a supply chain that reaches all the way back into our forests – seems a good place to start.
February 01 2009 | The Market | 3 Comments »
What’s in store for 2009.
Seems like everyone is giving their predictions for 2009. It also seems everyone has a different opinion. If you go down the street and ask someone what’s in store for 2009 every single person will give you a different response. Some people are positive, some people are negative. Some have very strong views but one thing I have noticed is there is not many that don’t care. This varied response is actually in my view what’s going to happen in 2009. It’s going to be varied and unpredictable in the whole.
Let’s look at 2008 and what’s been. I am not going to get into this too much because we all know what’s happened. The global credit crunch has hit and it has hit us hard. We started the year on the peak. It was the peak of almost every single market, not just the real estate market. The dollar was high, the stock market was buoyant, petrol prices were well over $2 a litre, house prices had just hit their peak, but everyone knew that that was the peak by this time. We have been in a year of constant downward trends. Consumer and business confidence has been at an all time low with sales volume and capital have steadily been lower and lower and unemployment levels this year have risen 2%. I know three of my friends who lost their jobs in the last week because of less business turn over.
The global credit crunch started by dodgy subprime loans in the states has had a ripple effect around the world and instantly devalued the price of all the assets we use to trade on. The stock market plummeted, oil prices have fallen 138% this year, our New Zealand dollar went into a free fall loosing almost 35c of the American in less than 2 months. New Zealand’s housing market went into dire straits with sales volume bellying out to levels not seen since 1992 (16 years ago) with only approx 55,000 sales being transacted in 2008. Real Estate prices have fallen by up to 10% – 15%in some areas already from their peak in late 07.
The world reserve banks have slashed the official cash rates all around the world. In the states its now the lowest in history at under .2% and in New Zealand it’s almost the lowest level at 5%. Interest rates on houses have come down a considerable amount. But the banks are not going to lend on any risk at the moment with most of them putting their minimum deposit amounts up to 20% on all new loans. So all up it’s been a year of considerable change and a year that has hurt and seen many people become closer to financial hardship.
2009 is not one that will bring pleasure or happiness to many people caught up in this economic downturn. As credit lending gets tighter and banks put on the pressure to repay loans on property that has decreased in value and in some cases decreased to levels below what they owe on the property. Unfortunately this is going to be a reality for some people and there will be more and more forced sales from it. Banks will step in and won’t be accommodating if you’re in a position to not pay them back.
I think in 2009 that the economy will start to bottom out a little. I don’t think we will see the prices of oil drop to much further, or the stock market crash to much further. There will be a lot of fluctuation though that will cause consumer confidence to remain low for a period of time. The New Zealand dollar although risen against the US Dollar in recent weeks will remain around in my opinion the 50c mark and will remain around there. But there is still too many uncertainties to place too much weight on this.
There are still factors I believe in America that could pan out either way. One of the bigger ones is the car industry and the almost total collapse of that. GM and Ford America are part of one of the biggest industries that feed the American economy. This industry is looking at almost completely shutting down. Already workers are taking pay cuts, working less hours just to try and help the companies stay afloat. But the reality is if the government doesn’t bail them out there is going to be a catastrophic meltdown of the economy in America. And it’s not just the car industry that I am talking about. It’s all the suppliers, all the people who service and or repair the cars, the distributers, shipping companies, you name it they will be affected. If the car industry goes under their will be job losses in the millions. They expect there will be more people lose their jobs than people that live in New Zealand. At this time all we know is that the government have given a reprieve till March 09 and we will have to wait till then to see what will happen.
Back to New Zealand what this really means is 2009 will be a year of consolidation for all I think. It will be the time when people who have borrowed on easy credit will need to take a reality check and downsize and live the life they can afford. I think we have in New Zealand seen the huge falls of commodity prices. It’s now a case of waiting and letting that filter though the system. What I think we will see a lot of people tightening up and living more economically. Not because of want but because of having to.
There are things that could happen in 2009 that if did happen will change everything that I have spoken about. The fact of the matter is that the world is on tender hooks in regards to the economy. It’s almost like balancing a car on a pin, it could go any way and we won’t know till it happens. This uncertainty is going to mean though that volumes of sales and consumer spending is going to remain low into 2009.
For the housing market there will be more and more forced sales in the coming year as the pressures of day to day living and the tighter economic conditions start to mean more job losses and less money for families. There is going to be a need for huge cooperation in 2009 between everybody who provides services and products. As sales volumes drop and bottom lines drop costs are going to be cut and this will mean suppliers are going to need to be flexible with their costs just to keep their existing clients. Food costs need to come down as people find it harder to buy for them and their families, and more people start eating less expensive foods. We will all need to help each other. The boom years have been a selfish time when people have made easy money but now for people to get ahead they will need the support of others.
For first time buyers in 2009 you will have to creatively think how you are going to service and in the first place get a loan to purchase your house. Thats if you dont have 20% of savings. Use the help of faily that already have high equity in their homes and ask to borrow some of it. Its a risk for them but it also will make you accountable for your repayments. There are many ways and its just about getting that help and support and it applies not just to housing as well. We could all save so much money if we worked together in some things instead of fighting to get the most as we have selfishly done in the boom times. This is not the time do do this.
For the aggressive investor and purchaser I think there could be some good opportunities coming up in the property market. There are already properties you can buy that are positive cash flow. And if you’re going to sit on them for a number of years until the economic climate stabilizes to normal again you will do well out of them. Although I do think that property prices will fall further as there will be time when wages come into line with property prices and may not stablise during 2009. I base this on the prediction that there will be increased forced sales which will put pressure on normal sellers to meet the market where the forced sales are if they want to achieve a sale. It will come down to sellers if you want to sell your house for a good price you need to display added value for the purchaser against the one down the road for similar money.
It will be tough out there for anyone in the next year but if you can ride it you will be fine. 2009 will be a year along with 2008 for global change. People will come out of this and look differently upon how we treat both money and the world. I think there will be a lot of good come out of next year. It’s just a case of taking the hit now and getting on with life. We have all lost out but we will all reap the benefits when they do come around.
December 26 2008 | Uncategorized | 2 Comments »
During the last few years the real estate market was rising all over and we were experiencing a sellers market. The media went wild over the frenzy and everywhere you looked there was someone or something telling you that real estate was HOT HOT HOT! Prices were going through the roof and there was unprecedented growth and people were becoming rich by simply buying and selling houses.
Now the market going through a correction because there was too much growth too fast. In some areas prices and inventory levels are going to decrease. Is that a good thing? Yes, it is. It’s healthy for each market to go through it’s cycle. This ebb and flow is good and allows each market to grow and then collect itself and catch up, and then eventually grow again.
What has happened over the past few years is prices have increased and increased and just keep increasing. But this prolonged spur of growth can’t be sustained forever and there then there comes a point when people are no longer able to pay the prices of the homes. During the boom times people begin to notice how much the neighboring homes are being sold for and they want in on the action. When a market heats up and prices begin to rise quickly everybody starts throwing their homes on the market and the market becomes flooded with property.
Eventually when the demand slows, but people are still wanting to sell for more and more, those home-sellers (who are always the last to accept the end of a growth period) will need to adjust for this and the market can correct itself.
Here below is a wheel with what I call the 4 seasons of any market. I will explain them below.
This boom or growth time is called the expansion. Expansion brings job growth, population growth and a high demand on the infrastructure of an area. Roads need to be built, restaurants open, hospitals expand and prices rise. This in the Real Estate market brings new construction, new sub divisions and more money. Property prices increase and demand for the property on the market increased. This was felt here in New Zealand around the years of 2001 to 2007.
In New Zealand what we experienced in the later parts of 2007 was equilibrium. Equilibrium is when things begin to slow and settle. Prices have reached their limits, or beyond, and this period of time brings high prices and as a natural consequence less businesses move into, or expand in, the area. In this part of the cycle prices usually slow to a steady lever but this time because of the Global Credit Crunch we have seen a very short time in this area and fast movement into the next step in the cycle which is Decline.
Decline occurs as the demand for housing decreases, job growth stops and businesses begin to relocate to save money. During this time, prices become stagnant or even decline as rents and occupancy go down. Usually this decline is merely a slowing of the growth rate, but in markets where the rise was too fast the decline must result in a correction (decline) of prices which is what we have seen during 2008.
The market will then move into absorption. Absorption occurs as the lower prices and occupancy levels fall below the national averages and/or the area becomes attractive again to businesses looking to relocate. Usually in this time incentives are introduced by governments to encourage growth within the community.
I like to think of the market as a natural and living cycle that has laws that it has to follow. The easiest way to explain this is by calling the 4 cycles in the market a season. Just as nature has it’s seasons, real estate markets have a healthy way of transitioning from period to period. Sometimes depending on external factors such as warmer sea temperatures a season could be more violent. In the real estate market the same principle will apply. If there is an unusually high turnover of volume or higher than usual debt in the market this will affect how the next season performs. Experiencing these transitions and understanding them is very important and if your serious on property this will give you a huge leg up and will also help you as a home buyer or seller understand how they work so you can weather out the storms and relax in the warmer and rosier seasons.
December 20 2008 | The Market | 2 Comments »
If you are wanting to market a property on the internet you need to have an edge on the marketing. Video is something that both engages the audience and wows them. On my YouTube channel I have done a comprehensive tutorial on making a video slideshow using windows movie maker. There is three parts to it.
If you want to view the finished product it is here. This only took me an hour to make, it is by no means perfect but it is simple and there isn’t an excuse not to be able to do this. Some companies charge $250 + to do this but if you can do it yourself you can use that money in some other productive ways. I hope you find this useful
Regards
Deon
December 04 2008 | Uncategorized | 1 Comment »
The arts and crafts era (1880’s – 1920’s) takes a side step from the traditional New Zealand home. Recently I have spoken about The Modern Townhouse, The Transitional Home, The New Zealand State House, Art Deco Homes, Beautiful Bungalows and The New Zealand Villa. But both before and during the time of the Villa another style of house was built in New Zealand which is now dubbed the Arts and Crafts.
The Arts and Crafts architectural styles were being driven by British architects back in the years between the 1880’s and the 1920’s. The houses of the Arts and Crafts Movement were informal and unpretentious, sophisticated in a very subtle way and designs suggested handcraftsmanship and a “harmony with the setting”
Arts and Crafts homes were built in a time in New Zealand when there were a number of other styles emerging. Art Deco was a spring off from the Arts and Crafts home and also we saw the transitional time from the New Zealand Villa to the Bungalow.
The Arts and Crafts movement sought to reunite what had been ripped asunder in the nature of human work, having the designer work with his hands at every step of creation. These types of homes were built off ideas, they followed a trend which was followed by the British architects but there were a lot of variances depending on the person building the house.
This period of home was the first to use mass machined wood within the homes. The industrial revolution was changing the way homes were built and builders of this time were experimenting from traditional ways of building homes with at the time new and experimental ways of putting together the house. This resulted in simple, sturdy and functional furnishings. But there were still the elegant and grand designs that preceded this time as many designers were still holding onto these craftsmanship skills.
Good Points:
Usually large and grand designs in good areas of towns
Simple designs makes it easy to add own touch.
High pitched roofs allow good water runoff.
Large eaves so moisture doesn’t get into structure
Built with native timber and with larger than normal thickness of wood. usually by craftsmen
Rooms are usually large and have a high stud.
Not So Good Points:
Rooms are all built separate with no flow from one room to the next.
No thought for indoor outdoor flow.
Can be drafty and have little or no insulation.
Can be dark inside and rooms aren’t not positioned well for the sun.
It’s fair to say these homes are of a grand design. Built in a similar age of when the Villa and Bungalow were built all these homes are generally well loved by their owners and are well looked after. Maintenance can be high but the rewards for living in one of these beautiful pieces of history would be priceless.
November 28 2008 | Buyers and houses | 2 Comments »
BUYING AT AUCTION:
Auctions can be a daunting time to buy a property as some Auctions you may not have any idea where it might sell or what it is worth. In New Plymouth we have adopted a policy of publishing the Auction Reserve in order for the whole process is transparent. We do about 60% of our Auctions this way. But in any case Auctions still are done in a set time frame and you need to have things sorted out so that you don’t miss out on your dream property at Auction. Here are a few things that will help you in your purchase at Auction. In Christchurch auctions are done in a more of a traditional way where auction reserves arent published and in many cases arent decided till a few days before the auction. Here is a quick run down on the things you should do when looking at buying a property from auction.
BEFOREHAND:
Do your Research
When you are looking in an area, whether buying ‘for sale’ or through an Auction, research the prices in that area for the type of property that you want. Find out about the good and bad features of the area, and comparative prices to other areas. Look at similar properties to the type that you are seeking.
Attend Local Auctions
It is valuable experience to attend as many local Auctions as you can to see how the Auction proceeds. Observe how people bid, and who is at the Auction. Work out people’s style of bidding. The same people may be bidding against you for your property in the near future.
Arrange your Finances
Ensure that you have your Finance in place prior to the Auction. Establish you bidding limit. Make sure you allow for all extra costs that may be involved and leave a buffer for bidding so that on the day you know exactly what it will cost you when your bidding.
WHEN YOU HAVE DECIDED ON THE PROPERTY:
Register your Intent with the Agent
Advise the Real Estate Agent if you are interested in a property. They will be able to give you more information on the property and guide you through some other things.
Establish your Bidding Limit
It is important that you set your own bidding limit. Decide what the property is worth to you based on what you can afford. Talk to your local mortage broker or bank for this as they can give you advice on repayments at any given cost.
Check the Paperwork
If you are seriously interested in a property and intend to bid you should have your Solicitor inspect the Contract of Sale. It is a good idea to have a good read through all the paperwork related to the Auction beforehand. Wherever possible, contact the Agent handling the sale and ask them to provide you with a copy of the documentation. This is normally possible in the week prior to Auction. Read through all of the documents and always ask if you are unsure of anything. It is important to clarify details such as settlement terms, deposit and fixtures before the auction commences.
Inspections
If you want a building and LIM inspections done do it before the Auction. It is not possible to make an Auction purchase conditional on inspection results. Make sure that any reports or inspections have been carried out to your satisfaction before you attend the Auction.
Ask for Help
Many people find the Auction process daunting. Don’t be afraid to ask a friend, relative or Real
Estate Agent, to assist you with your bidding. Many people ask someone else to bid on their behalf as they may be less inclined to bid emotionally and will not exceed a predetermined limit. Make certain that they have very clear instructions in writing on what they can and can’t do on your behalf.
ON AUCTION DAY:
Check the Contract of Sale again
On the Auction Day you should always check that your copy of the Contract of Sale is exactly the same as the original Auction Contract and that there have been no late changes.
Bidding
Remember how an Auction looks from the Auctioneer’s perspective. They are often looking at a large number of people who are invariably turning around, whispering etc. If you are standing at the back of this scene, or hidden in the shade of a tree, the Auctioneer may well miss your bid, particularly when you are bidding for the first time. Stand in clear sight of the Auctioneer and make your first bid obvious to them.
Make sure the Auctioneer understands what you are doing. Bid early, clearly and confidently, and avoid unusual sign language that may be misunderstood. Buyers are usually reluctant to start bidding at Auction but the best policy is to bid loudly and confidently signalling to all other bidders you intend to purchase the property or should the reserve price not be reached that you are given an opportunity in any further negotiations.
Keep Control of your Bidding
If the bidding is increasing in larger denominations than you are comfortable with, consider offering a lower denomination as your bid. The Auctioneer does have the right to refuse it, but there is absolutely no harm in trying.
It is important not to be drawn into a bidding war on a property you want. Emotion can lead to you payingmore than you can afford and there is no cooling off period with an Auction.
Making the Deposit
When the property is sold at the Auction you are required to sign the Contract of Sale and pay a deposit of usually 10% on the spot. This can be paid by Personal or Bank Cheque.
This information should be used as a guide. Always seek legal and professional advice when buying any real estate. Every situation is different so make sure your prepared. Enjoy the process and enjoy your new house if your buy one.
November 27 2008 | Buyers | 2 Comments »
Over the past few weeks we have been speaking about New Zealand houses and their designs.
We have covered The New Zealand Villa, The New Zealand Bungalow, The Art Deco Age, The New Zealand State House, The Transitional Period Home and we are onto the Modern Townhouse.
Modern Townhouses from the 1990’s to the early 2000’s are the houses of today. This is where modern architecture and trendy thinking comes into the picture of housing. There were many different types of designs that made it to play in New Zealand. Some were single level, some were multi level, some were made of permanent materials and some not. Houses were built to budgets in this age. The ones that were built with larger budgets were built with good standards and will generally last a good lifetime. But the downside is that many houses in this time are built with a developmental focus and on tight budgets which meant that in some cases the quality was sacrificed. Many of todays townhouse designs are built of the in the shadow of Joe Eichler who was in the 1970’s a revolutionary architect who designed houses that at the time were considered way before their time. But today these designs are now are much more seen, in different variances. The modern Townhouse is a good family home and is equally secure for the elderly or security conscious person.
Good Points:
· Very easy a functional designs to live in.
· Large open plan living areas with thought to sun positioning and indoor outdoor flow for entertaining.
· Further incorporation with internal access garaging for more security and comfort.
· Economical and dry to keep warm with most houses with full insulation.
· The modern building styles offer much greater scope house profiles and styles.
Not So Good Points:
· Multiple roof angles with multiple leak possibilities.
· Single sheet monolithic cladding, often poorly applied which when expands and contracts, leaks can form.
· Limited or no eaves and overhangs (excessive water cascading down exterior faces seeps in around windows and joins and cracks in cladding).
· Decks and parapets attached directly to exterior cladding can leak; framing can rot.
· Wide use of untreated timber framing (particularly houses built 1998 – 2004)
· Timber pile foundations in many free-standing houses where the exterior piles are subjected to constant wet and drying which can lead huge movements in the building.
· Insufficient “ground clearance”; concrete bases are built quite low and the cladding is very close to ground on many houses, this can cause water to seep in.
Although there were a number of building issues mentioned with these properties, it doesn’t mean they all have these issues. It is important, like with most properties to get a building inspection done. This will answer any questions you may have to do with the building and give you peace of mind in the buyingprocess.
These homes are very elegant and look the part for someone to live in. People who live in these homes usually take pridein them and the gardens and exterior of the houses kept in very good order.
November 26 2008 | Buyers and houses | No Comments »
In the Past four posts I have spoken about The New Zealand Villa, The New Zealand Bungalow, The Art Deco Era and the New Zealand State House. Now we move into the transitional era of housing for New Zealand (1960’s -1980’s). This is the time when we saw the beginning of the developer driven construction. Houses of this time we still built by qualified builders but there were some compromises the durability of materials used. For example pine or particle board flooring material was used instead of tawa or matai, window frames were made from aluminium and many buildings used artificial weatherboards.
Houses of this time were very much family orientated. This was the time when many of the baby boomers were in the prime of their child bearing ages. One of the major reasons of this time becoming developer driven was because of this huge demand for family homes to house the baby boomers families. There were a lot of homes all built in a very close time frame. The properties of this time had larger living rooms than previous homes and were more integrated into living areas.
These homes built in this era are considered by many to be the good ol kiwi family home. We all have at some stage of our lives lived in one. Here are a few points on these homes.
Good Points:
· Family orientated, often had larger living spaces for families to congregate in.
· Mostly northern facing and positioned good for the sun.
· The first homes to start having good indoor outdoor flow.
· Were cheaper to construct than all the previous homes, but are easy to modify if needed later in the years.
Not So Good Points:
· Was the first time pressed iron tile roofing was used. Was weaker than other materials but if fitted properly still had good durability.
· Some problems with condensation and insulation. Especially homes fitted with gas heaters.
· Homes were still plain in design and rectangle. Most had a similar floor plan with slight variances.
These homes are a good family home. Although not as grand as any of the previous homes and built with more of a budget in mind they still offer a good solid and fairly cost efficient home to own.
November 24 2008 | houses | No Comments »
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