Archive for July, 2014

Banks Woo First Home Buyers

The Reserve Bank imposed LVR (loan to value ratio) restrictions on banks, which limited their lending to people with less than 20% deposit, to 10% of their new mortgages. The banks pulled back so sharply, that the percentage dropped from over 25% to 4% in January to March this year.
Some borrowers, especially first home buyers,  gave up, and lower priced house sales dropped off dramatically.

Reserve Bank statistics are now showing that low deposit lending is increasing again, reaching 8% last month. The banks are “open for business” and Brokers are proving helpful in many cases.
First home buyers can likely purchase a home with a low deposit. We can help too.

Kind regards
Michael Ford

Which Properties Sell Best?

There isn’t a definitive answer, but the closest answer would be, good examples of that style and age of property. It might be a good example of a modest pre 1915 villa, a good example of a 1960’s group house, a good example of a townhouse or a good example of a modern superior home.

Buyers are all looking for different types of property, depending on needs, wants, and budget.

Generally, Buyers like authentic houses that are true to their original architecture. They can be renovated, and updated with modern services and contemporary outdoor living options. These properties are more in demand than houses that have been changed while being modernised, usually many years ago.

Provided that a changed house is tidy, has no major faults and provides good accommodation, it can still sell well, but usually for less than the more authentic renovated property.

When selling, address any faults, carry out cheap and easy tidying up jobs, and present the property as best you can. I can advise specifically. Just give me a call.
Pricing is crucial. I want to achieve the best price possible in the market for you, but not over price the property so that it doesn’t sell. Being a Registered Valuer helps you in this regard.

Good marketing can add thousands to your net price. I have affordable sensible options that are for your benefit as Vendor.

Kind regards
Michael Ford

Feilding’s Market Busy!

The number of Feilding house sales in June through all Agencies was above a long term  average. This is pleasing, and further evidence that the market is good in Winter in Feilding. There were 35 sales compared with 28 last June.

Palmerston North had 78 sales in June 2014 compared to 104 last June. Palmerston North’s market is very slow.

Feilding’s median residential house sale price calculated over 3 months sits at $259,000, after being at $218,500 last June. It has risen because of the lack of activity at the lower end. The peak of the boom in February 2008 saw it at $269,500

Comparable medians in the region calculated over 3 months are:

Feilding                                 $259,000
Palmerston North               $285,000
Levin                                     $187,000
Whanganui                           $152,000
Pahiatua                               $132,500
Rangitikei                             $171,500
Eastern Suburbs Ak        $1,110,000
New Zealand                       $430,000

Kind regards
Michael Ford

Interesting Twist to Affordability Report

The Roost Home Loan Affordability Report for May shows that affordability worsened in most of New Zealand, but it improved for Manawatu/Wanganui.

When I dig deeper I find that it worsened for Palmerston North and improved for Wanganui.

When I look further, I note that the Wanganui position is based on a median house sale price of only $120,000, dropping 32% from $176,500 the previous month. This is a bit of a nonsense, and is why I always work with a median calculated over 3 months. The average of the previous 11 months was $172,445, so $120,000 seems like an odd ball distortion, and is probably responsible for the supposedly improved affordability for the Manawatu/Wanganui Region.

In Palmerston North the median house price and interest rates were up a little on a year ago, but so was the average wage. The end result being that it takes 44% of one median income to pay the mortgage on a median priced house purchased in May, up from 38.4% a year ago. Compare to Wanganui 20.2%, North Shore Auckland 97.4%, Napier 54.2%, Wellington City 64.3%, Christchurch 66.3%, Queenstown 94.5% Invercargill 28.7% and Dunedin 48.5%.

Kind regards
Michael Ford