Daily Archives: November 27, 2008

Who’d have thought – the race to ZERO?

As you can see from the chart♣ it looks like the race to Zero is well & truly on.

Who will be the first there?

Some, like Japan, have been there before. In a well written article Kathy Lien asks exactly the same question.

And then under the heading….What Happens After Zero? Kathy details some interesting thoughts and scenarios. She comments “When a central bank runs out of room to cut interest rates, they resort to Quantitative Easing………..Even though quantitative easing drove Japan into deflation, it was the key to turning around the economy and this is a risk that the US central bank may have to take.”

As the author of “Millionaire Traders” and an accomplished Foreign Exchange Currency expert, she is well placed to make these comments.

Thanks to Kathy for allowing me to republish her chart here.

Kathy Lien (New York, NY) is the Chief Currency Strategist at Forex Capital Markets, LLC. She is responsible for providing research and analysis for DailyFX, including technical and fundamental research reports, market commentaries, and trading strategies. Lien is also the author of Day Trading the Currency Market (0-471-71753-3).

Is the sky about to fall in for First Home Buyers?

Well, no!

You will have no doubt heard, as I reported yesterday, that ANZ / National have said that new borrowers from today will need a 20% deposit for their new home loan applications.

On account of the fact that they are NZ’s largest bank, it’s not hard to imagine that others will see it as an opportunity to realign their own lending policies.

And rest assured as I type this, the media I believe will be cooking up a story.

I may be proved wrong, but it wouldn’t surprise me to see this item mentioned not only on the TV News tonight but also stretched out on the 7pm Current Affairs slots too.

What’s happening?

Well obviously in light of the global credit situation, it’s only normal that local banks are reviewing their lending policies, and anything that stems from that.

However it’s also just as obvious that as a buyer, if you deal with just one bank, then that banks policy will dictate what is available, and ultimately what will happen to you or your application, regardless of your present financial situation, and possibly counter to your loyalty over the last 10 years to them.

What’s important is, even with this new bank lending policy, there are other options available to get into the marketplace.

What are the options;

Things like using Mum & Dads home as security

Mum & Dad getting a top-up on their loan/credit facility

Mum & Dad having the ability to “gift” a deposit

Relatives taking out a small loan for a deposit…

….and more…..

Just the one thing to remember if you are a first home buyer…there are options available.

And where to start, well an NZMBA Mortgage broker would be a good start, maybe perhaps one who was voted by his peers and outsiders as the number 3 broker in NZ.

His operation is not to tie you into one bank but to find the best deal for you. Yes you have loyalty to a bank who has looked after you for years, but when they deny you the ability to buy your dream home, shouldn’t other options be investigated?

Race to sell before Xmas, but not here…

Some London House prices have really been slashed over the last 2 weeks

Just in case you are wondering why ex-pats may be looking towards home, or even local residents may be looking to emmigrate, check out what is happening in the UK.

Globrix, a UK property portal report in their blog that….

“Hundreds of house prices across the capital have been reduced over the past fortnight, with reductions in Westminster and Kensington & Chelsea averaging in excess of £100,000.”

Story has also been picked up by others here & here..

So perhaps in this particular case there is merit in the old saying “the grass could be greener on the other side of the world.”

UPDATE – even Savills have chipped in with their thoguhts.

Proof that a photo / chart can be worth 1000 words.

And reinforcing the power of correctly structured marketing, utlilizing the best of the web ( no pun intended for the agent ).

Check out the chart at left and see if you can spot a pattern?

It would be suffice to say that once the property became “known” as part of a feature listing on realestate.co.nz it experienced something of a bit of an “upturn” in visitations.

The second and just important thing to note is that this property was available to a chosen view in advance of that for a few days.

In this particular case we are talking about a Tender and its associated closing deadline date is a while off, so therefore no rush to action was required.

However on the other hand, had it have been advertised with a fixed price, one of those buyers working with a local agent would have had some days headstart on the “main stream.”

Guess it just goes to show that working with a “good” agent is as important as it ever was.

And the photos, well you make up your own mind.

Funnily enough I was just talking about “seachange” in my last post, and this is about as close to paradise as you can get, plus tons of land to build your dream home on.

And interesting too is the chart to the right showing that out of 440 hits, only 209 were from NZ, fully 52% of interest coming from off-shore.

Fascinating too, in light of my comments in my last post about ex-pats, and overseas interest.

And talking with the listing agent, Gordon this morning, this interest has most definitely had an effect in the real day to day world, they have had heaps of emails and phone calls already in the first 6 days of marketing, well…with over 440 hits in 5 days its not wonder.

Nelson Home buyers – out of town interest on the rise?

Over the recent last week or two I’ve dealt with buyers from Auckland, Hamilton, Tauranga, Palmerston North, Upper Hutt, Blenheim, Christchurch, Rangiora, Christchurch, Temuka, Cromwell, Invercargill and mid Otago. Talking with my colleagues in our office they have seen buyers from Sydney, and Brisbane too.

Every year over the Xmas break/holidays we see an uptick in visitor interest in our region, mainly from visitors who like the area so much they make some property inquiries whilst here on holiday.

Interestingly over the last few weeks there would appear anecdotal to indicate out of town buyers are seeing value here and are making the trip themselves. Many that I spoke to were in the “may buy now and come to live later” mode, and that’s a direct reflection of the current interest rates, combined with rental returns in the Nelson region.

We are currently on a 4 year high for rental rates in most parts of our town.

With interest rates plus the NZ dollar coming down, even though we might not notice it locally, the value proposition of our region goes up for an overseas buyer.

As previously mentioned NZ has the 2nd highest percentage of its population offshore at any one time, just behind Ireland, so the fascinating thing to keep an eye on here is the effect that any such upsurge might create in those coastal spots overseas buyers like.

After all one of the initial “kickers” last time to our busy market was just that, a surge in buyers not just to NZ, but more importantly those who wanted their own seachange, to live by or on the coast.

Property market buying & selling trends are a fickle item to predict, but it’s intriguing to read reports & comments in Australia about an upsurge in ex-pat overseas interest again.

It would appear on the surface though that the stimulus package put together by the Rudd Government is possibly a bit more enticing that what’s on offer back home in NZ.

Ex-pats in the banking & finance industries would certainly have their finger on the pulse as it were, in regards to financial timing when relating to buying / selling property.

Just an interesting observation….