Archive for April, 2013

Home Loan Affordability Changes

Surprise, surprise. Auckland is becoming even less affordable! The Roost Home Loan Affordability Report for March indicates that in Auckland Central it takes 87% of one median income to pay the mortgage on a median priced house. A typical buyer is assumed to be in the 30-34 age group. This is up from 76.2% in February! It gets even worse in Auckland Central when the First-home buyer affordability index is looked at. It takes 90.8% of one median income of a person in the 25-29 age group to pay the mortgage on the lower-quartile priced house, which is up from 74.7% in February. A lower quartile priced house is half way between the lowest priced house and the median (middle) priced house, which is where typical first home buyers are looking.

We don’t have figures for Feilding, but we can extrapolate from Palmerston North and Wanganui, and the news is very good by comparison!

Where Auckland Central is 87% of one median income to pay the mortgage on a median priced house, Palmerston North is 40.3% and Wanganui is 23.4%. I estimate Feilding to be about 35%.

Where Auckland Central is 90.8% of one median income of a person in the 25 – 29 age group to pay the mortgage on the lower quartile priced house, Palmerston North is 36.8% and Wanganui is 15.7%. I estimate Feilding to be about 30%.

I consider that Wanganui’s index will increase. They had a particularly low median house price in March.

Our Manawatu Wanganui region is the second most affordable after Southland. This is good news for anyone wanting to buy, and especially our first home buyers.

Kind regards

Michael Ford


Volume Lifts, but Not Prices!

The March Real Estate Institute Of New Zealand statistics are out and the number of sales in Feilding and Palmerston North was quite good – a fraction more than a long term average. This follows 2 months with well below average sales numbers in Feilding. To date this year Feilding is running at 80% of a long term average in terms of sales numbers, and 11.5% down on the first 3 months of last year and 7% up on 2010, which is very different from Auckland where the market is booming. Sales volume in Auckland was 19% up on last year for the first 3 months and 51% up on the same period in 2010.
Feilding’s median sale price is actually 6% down on last year.
Median sale prices regionally plus eastern Suburbs in Auckland and NZ are as follows (calculated over 3 months):

Locality Median Sale Price
Feilding $235,000
Palmerston North $269,000
Levin $190,000
Pahiatua $147,000
Wanganui $158,000
Rangitikei $155,000
New Zealand $385,000
Eastern Suburbs Auckland $897,500

Kind regards
Michael Ford

New Code of Conduct

The Real Estate Agents Authority has released a new code of conduct this week to further protect Clients and Customers when dealing with Licensed Real Estate Agents and Licensed Salespeople. I highlight the main changes:

Agents must now recommend to all parties that they seek legal advice before signing agency agreements (listing authorities) and sale and purchase agreements. It is up to the Client and Customer whether they decide to follow the recommendation. I consider that it is certainly prudent with sale and purchase agreements, and certainly can be for some people in relation to agency authorities. Some people may not consider it essential.

Agents must explain to Clients when an agency agreement will end. Most of us have been doing this from the day we started, but apparently some haven’t been.

Agents must explain to Clients in writing when there is no comparable or semi-comparable sales data to base an appraisal on. I hope that this rule is not abused by Agents and salespeople avoiding appraisals when it should be possible to produce a reasonable appraisal.

Before an agency agreement is signed, the Agent must explain to the prospective Client that how they choose to  sell their property can impact on the benefits the Agent,  Salesperson or Company receives. We keep it simple and there is no difference with our firm, but every Company is different.

Don’t hesitate to contact me to discuss any aspect of the changes.

Kind regards

Michael Ford

Statistics – Manawatu District

We have just completed a new 2013 census, and it will be interesting to see whether there are many changes from the following 2006 statistics:

Manawatu had 49.7% males and 50.3% females. Our Maori population made up 13.7%, compared to NZ at 14%.

We had 11,640 dwellings including unoccupied and under construction. Our population grew 2.7% from 2001 to 2006, after dropping from 1996 to 2001. Some dwellings and people went to PN in the recent boundary change. Manawatu was the 41st largest District out of 73 in terms of population, but only had 0.7% of NZ’s population.

23% of our population were under 15, compared to 21.5% for NZ.

12.9% of our population were over 64 compared to 12.3% for NZ. This dispels the myth that Manawatu District is full of older people. We have only fractionally more than the national average, and slightly more children than average.

In 2006, our median age was 38, compared to 35.9% for NZ.

Manawatu’s most noticeable variations from the average of NZ are that we have a much larger percentage of 10 – 14 year olds, and considerably less 20 – 29 year olds, which we would expect as people move away for tertialiary education, employment and travel opportunities. Most other age brackets reflect the national trends.

34.8% of us had a post school qualification compared to 39.9% nationally, and 31.4% have no formal qualification compared to 25% nationally.

Kind regards, Michael Ford