Michael's Real Estate Column

Mortgage interest rates continue to currently remain low, with a range of 4.45% for 1 year fixed, to 5.7% for floating.

I find it interesting to look back over the last 50 or so years and make comparisons. These are very general and approximate.

1966                         6  %
1977                          11  %   and climbing
1987                          20.5%  I was paying 23%!
1994                          7.4%  low point
1994 – 1998            mainly over 10%
1998 – 2007            mainly under 10%
2007 & 2008           over 10%
2009 – 2017            under 7%, and under 6% recently

From 1976 to 1992 (16 years)  mortgage interest rates were over 10%, and from 1980 to 1991 (11 years) they were over 14%.

Enjoy these low interests rates while they exist.

Kind regards
Michael Ford

There were 40 house sales through all Real Estate Agencies in Feilding in May, which is high. Palmerston North bounced back from 94 in April to 136 in May. The median residential house sale price for Feilding is $315,000 when calculated over 3 months, and $345,000 for Palmerston North.

Median house prices in May, calculated over 3 months were:
Feilding                            315,000
Palmerston North          345,000
New Zealand                   541,500
Eastern Suburbs Ak    1,550,000
Auckland Total               858,000
Wellington Total            535,000
Levin                                 255,900
Whanganui                      195,000
Rangitikei                        200,000
Pahiatua                           170,000

Kind regards
Michael Ford

Many people incorrectly believe that cost equals value when it comes to real estate. When a house is built, the value may be higher or lower than the cost to build, or it may be the same. It all depends on the state of the market.

Similarly, many people incorrectly believe that the value of an older property is derived by estimating cost and deducting an allowance for physical depreciation.

Economic obsolescence, or the lack of it, needs to be taken into account.

This is why value is based upon the sales of comparable properties, and not cost.

The cost to build in Eketahuna and Remuera will be similar. It may even be more expensive to build in Eketahuna because of transport costs. The values will be very different, most of which is accounted for by the difference in land value, but the market may add a premium or a value penalty over and above the difference in land value.

Kind regards
Michael Ford

The following extracts are from www.realestate.co.nz .

Of all 19 regions in NZ, Manawatu/Whanganui (M/W) has seen the greatest percentage reduction (-32.1%) in the number of houses for sale from May 2016 to May 2017. By contrast, Auckland has seen a 50.8% increase in the number of houses for sale, and NZ a 4% increase.

M/W showed a 2.8% increase in average asking price in May 2017 compared to April 2017, 4th highest behind Otago 6.5%, Canterbury 4.3% and Marlborough 2.9%. The NZ average was a decrease of 1.1%. The average asking price for the M/W region was $327,422, which was the 4th lowest behind Southland $267,697, West Coast $288,197 and Gisborne $315,480. Auckland sits at $962,196 and NZ at $682,157.

If no new listings came to the market in M/W, all existing listings (inventory) would be sold in 15 weeks, which compares to the long term average of 36 weeks. Wellington has an inventory of 7 weeks, Auckland 22 weeks and West Coast 105 weeks.

Kind regards
Michael Ford