Archive for the 'Residetial Real Estate' Category
Hamilton house sales during July fell marginally from the numbers recorded in June. The 8% drop to 191 sales was still a 26% improvement on July 2010. The median price continued to bounce around, jumping to $338,000 from $315,000, fluctuating with the changes in the distribution of sales. More importantly, as shown in the accompanying graph, the 6 month median price trend line has been steady at $325,000 for over 7 months. The number of houses available for sale has been falling rapidly over the first half of the year. However, the number of houses entering the market rose during July which, when coupled with the slight pullback in sales, flattened the decline in stock. Clearance rate of all auction properties, selling prior to, under the hammer or post auction, during the June/July period exceeded 75% by the start of August.
Buyers to this point have remained price sensitive and patient. However, the availability of properties under $300,000 is diminishing and this is causing concern for first home buyers who have been fuelling the market’s recovery. Waiting on the sidelines may no longer be a prudent option for those who have been disciplined to this point.
The popularity of suburbs Rototuna, Hillcrest and Nawton continued during July. However, a surge in activity in Fairview Downs surprised the market. Buyers began to recognise the value of the affordable properties with access to open recreation spaces and easy access into the central city or Westfield Shopping Centre.
The top end of the market roared into life after struggling for the first half of the year. There were a mere 19 sales above $650,000 for the first six months of 2011. By comparison there were 10 sales recorded above $650,000 during July. Highlights in this segment during the month included;
Louis Lin’s sale of a Rangiwari home for $1,000,000
Warwick Johnson’s sale of a Beerescourt river property for $745,000 and
Glenn Collins and Sonia Christison’s sale of a River Road character property for $749,000.
Early indications for August point to a growth in the number of sales as children head back to school and parents refocus on buying their next home.
August 13 2011 | Hamilton and Residetial Real Estate | No Comments »
To date in 2011, investors have re-entered residential real estate with increasing enthusiasm. Of course, individual investors approach the market in different ways – some seek higher cash flow yields, others look for potential capital gains, or they may be among those that seek to secure land for future development.
But just what is a ‘lucrative investment’? Below is the opinion one of Hamilton’s most experienced property managers (himself a ‘perennial investor of 26 years’), David Kneebone, general manager of Lodge City Rentals.
David says while yield is important the true windfall comes when you identify a ‘hyper-growth’ area through solid research, observation, and calculated risk.
David’s investment tactics:
- Wealth generation is a combination of capital gains and cash flow.
- You’re better paying fair value in a blue chip suburb than paying less for a property in a suburb that no-one wants.
- Buy long term – so buy when you can afford to hold on.
- Invest in expert advice – save on paying for mistakes.
- Debt magnifies returns: Unpopular today, but don’t confuse debt that used to buy consumer products with debt that is used to generate income. Manageable and prudent levels of debt will leverage your investment returns over time.
- Specialise in growing your portfolio – thereby growing your wealth potential. Let an expert take care of the day-to-day management.
David has helped a number of investors develop their own criteria for residential investment. If you would like to discuss your entry or expansion in the investment property market, give him a call.
July 25 2011 | Hamilton and Real Estate Investment and Residetial Real Estate | No Comments »
June residential real estate sales in Hamilton show the road to recovery is well underway. The quarter averaged around 200 sales per month compared to 157 sales per month for the same quarter a year ago. First home buyers and investors are key driver in the market. Their influence, particularly in the segment under $320,000, has dropped the June quarter median price from $340,000 in 2010 to $324,500 this year. Prices remain stable and it is anticipated they will remain so in the foreseeable future. Both first home buyers and investors are price sensitive and their reluctance to be drawn into paying more has restricted the budgets of buyers as they move up the property ladder.
At first glance the median time to sell of 48 days being up on the 38 days at the start of the year might point to market weakness. However, the cause of the blowout is the decline in the number of properties available for sale. The number of properties available for sale by agents shifted from around 1300 properties at the end of March to about 1000 properties by the end of June. Typically, if a property is over priced in a market with excess listings when it is re-priced the market can fail to notice the change in value. It can get lost in the clutter as buyers focus on properties which are new to the market. However, as more properties sell and fewer properties are listed for sale all properties become more obvious to buyers. Hence, when properties that have been sitting for some time are re-priced they get noticed by the market and sell. This elongates the time on market measure yet reflects a recovering or strengthening market.
The change in the market is made obvious in the sales to month’s stock ratio which measures how many months worth of houses are on the market or how quickly the market is selling all the houses available. This has fallen from 8 months in February to 5 months by the end of June. Anecdotally, the market experiences upward price pressure when this measure reaches 3, which if the number of houses listed remained low and sales continued could conceivably occur in the next few months. However, typically the market experiences a surge in houses new to the market in the spring so pressure in the area is expected to ease.
Overall the market is well on its way to recovery. Hamilton’s population continues to grow. People new to the city, first home buyers and investors are beginning to see value, and have confidence, in the housing market.
July 18 2011 | Hamilton and Residetial Real Estate and Uncategorized | No Comments »