Tag Archives: Market

Housing demand pushes price growth in eastern suburbs

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Liz McDonald at The Press reports:

House values are booming in Christchurch’s beach suburbs as buyers increasingly opt for coastal homes.

In a growing trend that began late last year, real estate values along the New Brighton coast have been rising faster than anywhere else in the city.

According to the latest report from Quotable Value, the Christchurch suburb with the fastest-rising values in the past year was South New Brighton (8 per cent), followed by North New Brighton (7.3 per cent) and then Central New Brighton (7 per cent).

While I wouldn’t go as far as to say the seaside suburbs are ‘booming’, the market out east for entry-level homes has been very active. This is mainly attributable to a variety of different factors: historically low interest rates, recent KiwiSaver incentives, and significant capital investment in the area. New Brighton and its neighbouring suburbs have been identified by first-home buyers as providing good value for money and a family-friendly lifestyle.

Quotable Value figures showed the city’s cheaper suburbs had also seen strong price growth as first home buyers got into the market.

Other areas with good growth in values were the suburbs of Wainoni (7 per cent), Southshore (5.9 per cent), Aranui (5.6 per cent), Lyttelton (4.6 per cent), and Phillipstown (4.4 per cent).

It’s also worth noting that these suburbs took a reasonable hit post-quake, with the rebuild taking a bit longer to take hold in the years that have followed. In addition to the factors outlined above, I suggest that this recent uptick in median prices is at least partly attributable to this delayed recovery.

Anecdotally, the ‘as is’ market appears to be one of fits and starts, with buyers enjoying a greater selection of properties as insurance companies ramp up their cash settlements before the end of the financial year. However, where buyers perceive an offering as particularly rare, premium results are often achieved. Earlier this month, an ‘as is’ property in Somerfield had over 50 groups inspect and 10 bidders attend the auction, resulting in a premium price for our sellers.

All in all, I believe this stabilised Christchurch property market provides great opportunities for both buyers and sellers alike. Proceed with confidence!

Tony Alexander on housing affordability

Tony Alexander’s BNZ weekly overview contains some interesting points with regard to housing affordability:

 If the housing problem is home affordability then special generalised Auckland (or national) imposts such as minimum deposit rules will make things worse for the already cash/deposit-strapped group we want to be able to afford houses. One instead will need to take buyers out of the market which are not the ones we think deserve to buy affordable housing. That means something like a law banning second property purchases, banning purchases by foreigners, and forcing people to sell houses they own but are not occupying – perhaps because they are overseas.

A capital gains tax (CGT) would have little impact as people would simply not sell existing holdings thus worsening listings. Plus we have seen LAQC and depreciation changes have no impact on investor willingness to buy property. And Australia has a CGT but affordability is also poor in the major cities. So CGT will not solve the affordability problem and neither will higher interest rates by definition.

Affordability can only be improved by boosting cheap supply or stripping out non-desired buyers which sounds a bit too much like social engineering for Kiwis to tolerate. Only a radical cheap supply boost will improve affordability.

Regardless of any solutions or ideas, the bottom-line still remains same and is quite simply acquisition of real estate. The sooner you own a slice of NZ real estate the sooner you are on the property ladder. Maybe we have just become so used to buying what we can’t afford or without having to pay the price of saving before we buy? Perhaps a simpler and more affordable option for the first home and low income Auckland buyer is to purchase a property (or even two) outside of the Auckland market?

I must take my hat off to a young lady (barely 20 years old) who last night secured her first home from me in a respectable neighbourhood for well under $300,000. While getting plenty of moral support from Mum and Dad, she had largely saved the deposit herself – obviously seeing the price of saving well worthwhile, proved quite clearly with a 4.00am start for work this morning. Now isn’t that the true Kiwi can-do attitude?

What do you think should be done to improve housing affordability in New Zealand? I’d like to know your thoughts.