Archive for August, 2008
Bernard Hickey of interest.co.nz is predicting house prices will fall and will not get back to their 2007 peak until 2018 – that’s 11 years. Could he have the most accurate crystal ball in the country or is he having a very bad dream?
As a real estate salesperson I freely admit I have a vested interest in the housing market, although I continue to sell homes whether or not the market is hot or cold, however I now wonder is the future really all that bad out there given the following factors are coming into play:
INTEREST RATES
Now trending down, many bank economists predict four consecutive cuts by the Reserve Bank, maybe even 1/2 a percent in September. 8.65% for 3 years fixed now available from KiwiBank is very competitive.
EXCHANGE RATE
Plenty of Kiwis sold their homes in the UK and still have their money sitting there while they wait for the drop so that they get more Kiwi $ to buy a home with. Now the exchange rate is plummeting.
WAGES/SALARIES
Likely that wages will increase 5% per annum for each of the next 3 years.
INCOME TAXES
Income tax cuts are coming, maybe even bigger cuts depending on the election outcome.
HOUSE PRICES
Already down 10% to 15% so more affordable and buyers now 50/50 whether to buy or wait a bit longer – always dangerous trying to pick the top or bottom. There seem to be a large number of potential sellers who simply will not put their homes on the market if they have to take more than a 15% drop on what they could have obtained at the peak.
NEW HOME CONSTRUCTION
With builders and developers struggling to put together a viable project and the companies that once financed them now out of the picture there is a possibility that there will not be enough new building to keep up with natural population increase let alone any surge of immigrants.
INFRASTRUCTURE
Billions are being spent on infrastructure in the Auckland region over the next few years and this must stimulate the Auckland regional economy. The economic impact of the Rugby World Cup should not be underestimated – this may lead to many from other countries deciding to move to New Zealand.
COST OF LIVING
This is the problem factor with petrol, food, rates, insurance etc all increasing or will wage rises, tax cuts and lower interest rates take care of this. Petrol is now heading back down and it would appear that the speculators got a bit worried they have gone too far.
CONCLUSION
So this week I am an optimist but the factors outlined above seem to indicate that if you can buy a home now at a very realistic price, then even if it does drop back another 5% over the next 6 to 12 months, if you plan to stay there for 7 years or more you should be OK.
In my office we recently had no homes left to sell for a 10 day period, the last two sold in a week and we now have three more starting this weekend. We were only one sale down on our average July volume. If the homes are realistically priced they are still selling and in our case most sell at a level very close to the asking price.
Over the last 5 years so many people have borrowed 80% or 90% of the purchase price, gone interest only and sought short term capital gains and have now come unstuck.
Perhaps people need to get back to basics and provided you have a decent deposit in the first place focus on repaying the principal and becoming mortgage free rather than relying on capital gain.
I would really appreciate some comments/feedback related to this post. If you are a buyer are you now feeling optimistic and if you are a seller are you prepared to sell at a figure 10% to 15% below what you could have achieved at the peak? When do you think the bottom will be – can you pick it or are you likely to get caught out? If you are a procrastinator have you read this?
August 08 2008 | Pt Chev News | 17 Comments »
The Pt Chevalier community has been pro-active in promoting the use of the walking school bus concept. It cuts down on the amount of cars manouvering outside the local schools and is a lot safer for the children.
A walking school bus is not really a bus at all but a group of children who walk to and from school supervised by adults. Like a real bus, it travels at a set time and children leave the bus at special stops situated close to where they live.
The walking school bus is powered by the commitment of adult volunteers who walk as “drivers” and “conductors”. No qualifications or special skills are needed to be an adult volunteer and their work helps to reduce the number of cars near the school and helps to keep children safe and healthy.
Walking school buses give children a sense of independence although they are part of a team. They provide a safe, healthy and fun way to travel to and from school, and both children and adults enjoy keeping fit!
Starting a walking school bus requires an enthusiastic parent or other adult from the school who wants to be involved in setting up the walking school bus. If you think you are that person you can contact your local Road Safety Coordinator who will help you.
The Road Safety Coordinator for Auckland City council is Claire Dixon who can be contacted on 09 373 6857 or claire.dixon@aucklandcity.govt.nz and she will help you with the following steps:
1) Conducting a survey of children and adults to identify interest for a walking school bus
2) Identify the safest routes to school
3) Drawing up a roster for adult volunteers
4) Compiling information packs for volunteers
You can download the guidelines for setting up a Walking School Bus. So go for and set one up now!
August 03 2008 | Pt Chev News | 2 Comments »
You’d have to have a very accurate crystal ball to pick the top or bottom of the market:
PROCRASTINATION
I hesitate to make a list
Of all the countless deals I’ve missed
Bonanzas that were in my grip
I watched through my fingers slip
The windfalls that I should have bought
Were lost because I over thought
I thought of this I thought of that
I could have sworn I smelt a rat
And while I thought them over twice
Another bought them at that price.
It seems I always hesitate
Then make my mind up much too late
A very cautious man am I
And that is why I never buy
A corner here, ten acres there
Compounding values year by year
I chose to think and as I thought
They bought the deals I should have bought
The golden chances I had then
Are lost and will not come again
Today’s I cannot be enticed
For everything’s so over priced
The deals of yester-year are dead
The markets soft – and so’s my head
At times a tear drop drowns my eye
For deals I had but did not buy
And now I wish the words I pen
IF ONLY I’D INVESTED THEN
Written 1917
by Marion Morris
August 02 2008 | Pt Chev News | 1 Comment »
I began my real estate career selling homes in Masterton, a town of approximately 20,000 people down in the Wairarapa. That was way back in the early 1980’s before cell phones, faxes and open homes were even invented. There was no internet, signs had to be hand painted by craftsmen and we never worked on Sunday.
At that time another local salesperson, Andrew Jackson worked for Harcourts and even though Masterton was a very small catchment area Andrew was consistently # 1 for Harcourts New Zealand. He simply dominated the local real estate market and right from that point I was motivated to at some time in the future replicate his success.
Throughout my real estate career many other business and sports people who have reached the top of their game have inspired me, with another Masterton example being Superbike racer Aaron Slight, who won the Suzuka Superbike eight hour championship three times and came very close to winning the World Superbike Championship – only bad luck prevented him winning the main prize. His book “You don’t know the half of it” is a fantastic read.
Scott Dixon is another example of a Kiwi who with single minded determination and a great deal of help from family and financial backers, has won what undoubtedly is the world’s single greatest motor racing event and pocketed NZ$3.22m for his effort at Indianapolis – one of sports biggest pay days. What a great ambassador for NZ Scott has become.
On the golfing front we have Michael Campbell from Titahi Bay with his big win at the US open and Steve Williams – what an achievement securing the role as caddy for Tiger Woods.
I am always looking for inspiration and recently read the Michael Schumacher book “The edge of greatness” – a fascinating account of Michael’s career.
We are lucky in NZ to be surrounded by success stories. There are many, many examples of Kiwis at the top of their field and the Beijing Olympics will no doubt see more of our sports men and women hit their peak.
So where is all this leading?
Well, since joining the Professionals in 1996 I have made it a goal to reach the top of the group. The annual awards ceremonies pumped me up and seeing top operators like Don Ha, Gary Robertson and Chris Gemmell receive the top prize made me even more determined. Several years I made it to the runner up or third position and couldn’t quite make it to the top as my sales dollar value was right up there but not quite enough sales units. I understood how Aaron Slight felt coming so close but just missing out on that world championship.
So that brings me to last night and the Professionals Auckland/Northland awards evening. Last year I was proud to receive on behalf of my team the first runner up award and that motivated me to try even harder for the top spot this year and to use the words of Sir Edmund Hillary “we’ve knocked the bastard off” and finally achieved the # 1 award. It was a very emotional moment and I wondered if I could even get through a speech so just as well I had one ready!
We also received an award for achieving $250,000,000 worth of sales while with the Professionals group and only missed out by two sales on receiving an award for a total of 500 house sales – will have to wait for next year!
Of course this achievement is, like Scott Dixon’s, a team effort and would not have been possible without the assistance of my support crew comprising my wife Tanya and brother Lawrence von Sturmer. I’ve also been helped out over the years by another brother Derek, currently on his OE and Emily Carter.
The administration team at Lochores Real Estate and company owners Paul and Jean Lochore are an integral part of our success and the fabulous team led by Sharee Martin at Professionals head office deserve a big thank you for their support and encouragement over the years.
The past winners of the Professionals awards provided me with the inspiration and motivation to put in the effort required so I sincerely hope that last night was the spark that lit the fire of motivation for a whole lot of salespeople in the room. I look forward to seeing some new faces up on the podium next year!
A big thank you to all our loyal customers for your continuing support and thanks also to all those that were in touch today offering congratulations.
August 02 2008 | Pt Chev News | 12 Comments »
Ross Brader AREINZ
