Nov home sales, prices steady in NZ

Source : Business Times – 15 Dec 2009

Price index up 0.2% from Oct and 6.6% from a year ago

New Zealand house prices and sales were flat in November as the property market consolidated its gains of recent months after a sharp slump, the Real Estate Institute of New Zealand (Reinz) said yesterday.

Sales by the industry group’s members were 0.6 per cent lower from October but were up 41.5 per cent on a year ago.

The national median house price was NZ$355,000 (S$358,600), unchanged from the previous month but up 5.2 per cent on the same month last year.

The housing market has been improving over recent months, albeit at lower levels, after its sharp decline in the past year.

‘The market appears to have retained the momentum gained over the last few years and median prices this month mirror the all-time highs experienced in October,’ Reinz President Peter McDonald said in a statement.

The Reinz’s house price index, compiled in conjunction with the Reserve Bank of New Zealand, rose 0.2 per cent in November and was 6.6 per cent higher than a year earlier.

The median number of days to sell a house was 33 compared with 31 in October and 44 a year ago.

On Dec 10 the Reserve Bank of New Zealand held interest rates unchanged at 2.50 per cent, with the recovery in the housing market one factor in an improved economic outlook. The RBNZ said that at the current rate, the market peak of 2007 would be regained in early 2010.

In a survey released on Dec 7, government agency Quotable Value said house prices rose one per cent in November, with a reduced supply pushing up prices.

NZ house prices recover further: survey

Source : Business Times – 8 Sep 2009

Aug data supports views the economy is emerging from long recession

New Zealand house prices showed further signs of recovery in August after a year of sharp declines, data showed yesterday, supporting views the economy is emerging from its longest recession in more than 30 years.

Quotable Value’s residential house price index fell 2.8 per cent in the year to Aug 31, compared with a 5 per cent decline in the previous month – the fifth month in a row the trend in property values has improved.

The government agency said prices have risen 1.9 per cent since April and the number of houses sold was also above last year’s historical lows.

‘The housing market is strongly driven by confidence, and that appears to be returning to the wider market,’ QV spokeswoman Glenda Whitehead said.

She said a general shortage of properties was leading to increased competition and higher prices, but it was unlikely that another housing boom was in the making.

‘Although there has been an improvement in market sentiment, continuing doubts over job security, a lack of wage growth and tougher lending conditions are likely to limit increases in the medium term,’ Ms Whitehead pointed out.

The housing market, once a major inflationary concern for the Reserve Bank of New Zealand (RBNZ), peaked in late 2007, but fell sharply because of high borrowing costs and prices, while consumers cut their spending amid a deepening recession and rising unemployment.

The central bank has slashed interest rates by 575 basis points since last July to combat the downturn, which is expected to last through much of this year.

A Reuters poll is forecasting the official cash rate will be held at a record low 2.5 per cent when the RBNZ reviews rates on Sept 10. The RBNZ, which previously forecast house prices to fall around 20 per cent by early 2010 from their peak, said in its June statement that house price inflation was close to cyclical lows.

Fixed term lending rates for two years or longer have risen to reflect increased wholesale rates as investors have moved to lock in low rates in the expectation that the RBNZ will start raising rates as soon as early next year.

QV said the average sale price rose 0.7 per cent to NZ$385,426 (S$382,283) on the previous month.

House prices in Auckland, the biggest population and commercial centre, were 1.9 per cent lower in August from a year ago, compared with a 3.5 per cent fall in July, while the capital, Wellington, was down 0.1 per cent after a 4 per cent drop the month before.

Prices in two cities – Hamilton and Dunedin – were now higher than they were a year earlier, although most regions remained up to 9 per cent below their highs, Ms Whitehead said.

The monthly residential price report is based on sale prices of properties over the past three months compared with sales over the corresponding three-month period a year earlier.

The data is not seasonally adjusted.

NZ house prices rise for a 3rd month in July

Source : Business Times – 11 Aug 2009

New Zealand house prices rose for the third month in July, signalling the property market is recovering and may help the economy emerge from a recession.

Prices rose 0.7 per cent from June and have gained 1.3 per cent from a low in April, Quotable Value New Zealand Ltd, the government valuation agency, said in an e-mailed report.

Reserve Bank governor Alan Bollard last month kept the benchmark interest rate at a record-low 2.5 per cent and said he is unlikely to raise borrowing costs until late 2010.

Rising consumer confidence, housing demand and immigration are helping New Zealand recover from its worst recession in three decades.

‘There are signs that more vendors are putting their properties on the market,’ Glenda Whitehead, valuation manager at Wellington-based Quotable Value, said in the report. ‘This is perhaps in response to reports of shortages of listings and signs that values have stopped declining.’

House prices slumped last year amid a credit crisis and a plunge in consumer confidence. By March, prices were 9.3 per cent lower than a year earlier.

In July, prices were 5 per cent lower than a year earlier, yesterday’s report showed.

New Zealanders are more optimistic about the housing market, with 27 per cent of 600 people surveyed in July saying they expect prices will rise, ASB Bank Ltd said in a report last week.

Sixty-four per cent said it was a good time to buy a home. Annual immigration growth accelerated to the highest level in more than two years in June, while house sales rose 40 per cent.

Consumer confidence rose to an 18-month high in the second quarter, according to a survey by Westpac Banking Corp and McDermott Miller Ltd.

NZ June home-building approvals fall 9.5%

Source : Business Times – 30 Jul 2009

New Zealand’s home-building approvals fell for the first time in three months in June, signalling that lower mortgage rates are yet to kick-start sustained demand for property.

Permits declined 9.5 per cent from May, Statistics New Zealand said in Wellington yesterday, citing seasonally adjusted figures.

Second-quarter approvals rose 16 per cent from the first quarter and the trend in approvals is rising by about 2 per cent a month, the agency said.

Reserve Bank governor Alan Bollard cut the benchmark interest rate to a record-low 2.5 per cent in April and will probably leave the rate unchanged at his review today to help the economy recover from its worst recession in more than three decades.

Economists expect building approvals to keep pacing gains in house sales and prices and eventually lead the economy out of recession.

‘We expect core consent issuance to start to improve with the lift in housing demand, as indicated by the rise in house sales,’ said Jane Turner, economist at ASB Bank Ltd in Auckland.

‘We expect consent issuance to pick up off its lows over the second half of 2009.’

New Zealand’s dollar bought 65.57 US cents at 11.55 am in Wellington from 65.65 cents immediately before the report.

Home sales rose 40 per cent in June from a year earlier, the Real Estate Institute reported earlier this month. Second-quarter house prices increased for the first time since late 2007, according to a government report published on July 6.

Excluding apartments, building permits rose 3 per cent in June and were down 27 per cent from a year earlier, yesterday’s report showed.

Property construction has slumped amid the recession, which began in the first quarter last year, and as a credit crisis curbed development projects. Second-quarter approvals fell 39 per cent from a year ago, yesterday’s report showed.

The value of home building and renovations approved in June plunged 18 per cent from a year earlier, the agency said. The value of non-residential approvals declined 7.4 per cent.

NZ house prices rise amid call for cheaper loans

Source : Business Times – 7 Jul 2009

New Zealand house prices rose for the first time in six quarters, a sign the economy may be starting to recover from the worst recession in more than three decades.

Average prices gained 0.4 per cent in the three months ended June 30 from the preceding quarter when they fell 2.1 per cent, Quotable Value New Zealand Ltd, the government valuation agency, said in an e-mailed report.

The Reserve Bank yesterday said there is scope for home-loan interest rates to fall further. Reserve Bank governor Alan Bollard has cut the official cash rate 5.75 percentage points since July to a record-low 2.5 per cent to help kick-start demand. House prices may keep rising as lower borrowing costs stoke consumer confidence and encourage more people into the property market.

‘Houses prices are pretty much at the bottom,’ pointed out Nick Tuffley, chief economist at ASB Bank Ltd in Auckland. ‘There is a lot more buying demand starting to pop up, and interest rates have a lot to do with it.’

The average variable home-loan interest rate was a 41-year low of 6.4 per cent in May, according to central bank figures. One-year loans are available from the nation’s largest banks at fixed rates as low as 5.5 per cent.

‘Interest rates are on the very stimulatory side,’ said Mr Tuffley. ‘The prospect of further cuts in rates probably looks fairly slim even if the Reserve Bank cuts the cash rate further. The Reserve Bank is no longer in the driver’s seat.’

Parliament Committee Lenders have come under fire from business groups and politicians for failing to lower their home-loan rates by the same amount as the Reserve Bank.

‘Banks should listen carefully to what the Reserve Bank is saying,’ Prime Minister John Key said in Wellington yesterday. ‘We would like to see lower interest rates because it is healthy for the economy.’

Last month, Parliament’s finance and expenditure committee said banks should reduce their lending margins and ‘take on a greater role in sharing the burden of the current recession’. New Zealand’s four largest banks are units of Australian lenders. Last month, Australian Treasurer Wayne Swan said a decision by Commonwealth Bank of Australia to raise its variable mortgage rate was ’selfish’ and hindered the government’s efforts to support the economy.

The Reserve Bank of New Zealand yesterday published an analysis of lending trends and concluded that a large part of its rate cuts had been passed on to borrowers. It said funding costs for banks have increased as deposit rates rise and international borrowing became more expensive.

‘The pricing of floating-rate mortgages appears unusually high over recent months and we believe there is some scope for further reduction in these rates without compromising the viability of this lending,’ the central bank said.

Mr Key said the Reserve Bank was ‘irked’ that lending rates weren’t reduced when it cut the official cash rate by half a percentage point in April, and that banks may have been widening their margins instead of passing benefits on.

New Zealand house prices began falling last year amid the global credit crunch and the onset of a domestic recession. House sales dropped to a record low in January and prices in March were 9.3 per cent less than a year earlier.

NZ’s home prices fall at slowest pace in May

Source : Business Times – 9 Jun 2009

New Zealand house prices fell in May at the slowest pace this year, signalling the housing market may soon pick up and help the economy recover from a recession.

Average prices dropped 8.1 per cent from a year earlier, Quotable Value New Zealand Ltd, the government valuation agency, said in an e-mail report. The annual decline is the smallest since December.

Reserve Bank governor Alan Bollard cut the benchmark interest rate to a record-low 2.5 per cent in late April to help kick-start the economy, which is in its worst recession in more than three decades. House sales and home-building approvals are rising as consumer confidence in the housing market improves.

‘The wider market is moving toward some form of equilibrium,’ said Quotable Value spokeswoman Glenda Whitehead. ‘The recent buoyant activity has been fuelled by people taking advantage of lower mortgage rates.’ More consumers are inspecting properties and making offers, Ms Whitehead said. A lack of new listings is helping to underpin prices, she said.

A net 46 per cent of people surveyed in April said it was a good time to buy a house, ASB Bank Ltd said in a report last week. The net figure, which subtracts pessimists from optimists, has risen from 38 per cent in January.

New Zealand house prices began falling in July last year amid the global credit crunch and plunging consumer confidence. House sales fell to a record low in January and prices in March were 9.3 per cent lower than a year earlier.

Rising unemployment and tighter lending criteria from banks will slow the recovery in house prices, Ms Whitehead said. The government last week forecast the jobless rate would rise to 8 per cent by early 2010 from 5 per cent in the first quarter of this year.

Plus points for NZ: lovely scenery and cheaper loans

Source : Sunday Times - 26 Apr 2009

New Zealand may not be the first place that springs to mind for property investment, but the depressed market makes it a good time to look at the land of snow-capped mountains and golden beaches.

Ms Sue Charlesworth, marketing manager at Southern Lakes Real Estate, told The Sunday Times: ‘The prices have certainly come down from the levels of 18 months ago…plus the New Zealand dollar isn’t very strong at the moment, hence overseas investment becomes more feasible.’

A year ago, the kiwi dollar was worth S$1.07 but it is now down more than 20 per cent to 85 Singapore cents.

Ms Charlesworth said the reduced cost of lending in New Zealand is also helping to make property investment at any level very accessible.

Prices are expected to remain relatively stable for the next few years,

buoyed by increasing migration to New Zealand but capped by rising unemployment.

Residential property expert Andrew King, of Andrew King Property Management Services in New Zealand, believes that it could be a good time for investors to consider putting down money, as ‘cashflow is good while interest rates are low’.

‘An investment in New Zealand property would be a long-term hold as prices are not expected to increase for at least three years,’ he added.

Several New Zealand ‘island-like properties’ are being advertised on the website of Vladi Private Islands, which markets islands worldwide.

There are national sensitivities involved in the acquisition of such rare locations and they are protected by rules and regulations.

But the New Zealand government is planning to overhaul the Overseas Investment Act this year. This regulates the acquisition of ’sensitive land’ by overseas investors.

Reforms may make it easier for foreigners to buy property.

Bayleys Real Estate managing director Mike Bayley suggested some unique locations Singaporean investors can consider.

‘For personal investment and for use as holiday homes, there are properties scattered throughout the country in locations ranging from islands, remote beaches and lakes through to snow-capped mountain lodges.’

He said most international investors are in the main cities of Auckland and Wellington, where there are large-scale residential investments.

In Queenstown, a small town by a picturesque lake surrounded by snow-capped mountains in South Island, Ms Charlesworth said an investor would need at least a NZ$250,000 (S$210,000) deposit for a managed apartment.

Such properties are rented out to visitors most of the year and are managed by a property company.

For a high-quality residential property, which is considered to have solid, predictable returns, at least NZ$450,000 would be needed.

More expensive residential investments generally require considerably less capital investment as a percentage of the total purchase price than managed apartments. This is because banks are more willing to offer loans for these types of properties.

NZ home prices still sliding

Source : Business Times - 10 Feb 2009

QV’s January index falls 8.3% as buyers expect further drops

New Zealand house prices fell for the seventh month in a row in January, with the pace of decline picking up, government agency Quotable Value (QV) said yesterday.

QV’s residential house price index fell 8.3 per cent in the year through Jan 31, compared with a 7.4 per cent decline in December. Tentative signs that the decline in the market may be levelling out at the end of last year had proved short-lived.

‘Declining interest rates would normally stimulate buyer activity, but concerns over job security, and a more cautious approach to lending by financial institutions seems to be preventing this,’ said QV spokesman Blue Hancock. ‘Many buyers also appear to be holding back in expectation of further property value and interest rates drops throughout 2009.’

The housing market, once a key inflationary concern for the Reserve Bank of New Zealand (RBNZ), has been falling steadily over the past year because of high borrowing costs and as consumer spending slowed in the face of an economy in recession. The central bank has slashed interest rates by 475 basis points since last July, and is likely to cut rates again at its next review in early March.

The RBNZ has forecast house prices to fall around 16 per cent by the end of 2010 from their peak in 200

NZ house sales slump to 26-year low

Source : Business Times - 11 Sep 2008

Sales of New Zealand houses fell to a 26-year low last month as interest rates close to a record curtailed demand for property.

Weak demand: The median house price last month fell to NZ$330,000 from NZ$350,000 a year earlier - a drop of 5.7 per cent

The number of homes sold dropped 34 per cent to 4,220 last month from 6,394 a year earlier, according to a report from the Real Estate Institute of New Zealand Inc.

The median house price dropped 5.7 per cent.

Slowing consumer spending and a plunge in the housing market tipped New Zealand’s economy into a recession in the first half of this year, prompting Reserve Bank governor Alan Bollard to cut interest rates for the first time in five years in July.

The central bank will probably cut borrowing costs again today, according to all 15 economists surveyed by Bloomberg News.

‘The underlying fundamentals for housing demand remains weak, with mortgage rates still at high levels,’ said Jane Turner, economist at ASB Bank Ltd in Auckland. ‘It is tough going for households financially, and they need interest rates to be much lower to provide any real improvement.’

An over-supply of houses in the market will weigh on prices, she said.

Buyers are staying on the sidelines, forcing vendors to either take their property off the market or accept a lower price.

‘Economists are on the money with predictions of a 5-10 per cent decrease’ in prices, said Murray Cleland, national president of the institute. ‘Much will depend on the Reserve Bank’s decision. The expected decrease will take the pressure off mortgage costs.’

The median house price fell to NZ$330,000 (S$316,509) from NZ$350,000 a year earlier. Prices dropped NZ$10,000 from July.

The median time it took to sell a house was 55 days compared to 33 days in August last year. Still, the number of days it took to sell declined from a record-high of 58 in July.

Ms Turner said that wet weather last month may have added to the slump in sales, keeping buyers at home rather than inspecting properties.

NZ Housing Affordability Improves In July

Source : Business Times - 19 Aug 2008

Housing affordability in New Zealand improved to its best level in 18 months in July, driven by lower interest rates and a cooling property market, a mortgage broker said yesterday.

Buyers’ market: Falling interest rates, rising wages and lower tax rates are working in favour of home buyers

Wizard Home Loans said an average homebuyer needed to spend 77.4 per cent of post-tax income to afford a mortgage on a median-priced house last month, from 78.3 per cent in June and its lowest since February 2007.

The position of home buyers was expected to improve through the rest of the year.

‘Home buyers are in a much stronger position than they have been for a long time,’ John Grant, director of New Zealand business at Wizard Home Loans, said in a statement. ‘It is a buyer’s market and falling interest rates, rising wages and lower tax rates are all working in favour of home buyers as we head back into summer.’

The Reserve Bank of New Zealand cut interest rates by a quarter point to 8 per cent last month, its first policy easing in five years, and has said it was likely to lower them further to support an economy widely seen in recession.

Hit by record high interest rates and soaring food and energy costs, the once-rampant housing market has been cooling rapidly.

Data from the Real Estate Institute of New Zealand showed last week the national median house price held steady at NZ$340,000 (S$342,250) in July, while sales rebounded from 18-month lows.

A tight labour market, buoyant economy and rising net migration gains saw house prices nearly doubled over the past six years. — Reuters

NZ home prices fall for first time since Feb 2005

Source : Business Times - 12 Aug 2008

New Zealand’s house prices fell from a year earlier for the first time in more than three years in July as record-high interest rates eroded demand for property.

Average prices dropped 2.2 per cent from a year earlier, Quotable Value New Zealand Ltd, the government valuation agency, said in a report released in Wellington yesterday.

That’s the first decline since the monthly series began in February 2005.

Home-loan interest rates have soared the past year, forcing buyers out of the market and requiring vendors to accept lower prices.

Reserve Bank of New Zealand governor Alan Bollard said in June that house prices will fall 7.7 per cent this year and won’t start rising until 2011.

‘We expect to see more weakness in house prices over the coming months,’ said Jane Turner, economist at ASB Bank Ltd. in Auckland. ‘Housing turnover has been on a steady decline since mid last year.’

House sales fell for a fourth straight month in June, reaching a 16-year low, according to Real Estate Institute figures published last month.

Home-loan approvals in July fell 27 per cent from a year earlier, according to the central bank.

‘Many sellers are accepting the state of the market and dropping their expectations accordingly,’ said Blue Hancock, a spokeswoman for the government agency. ‘The questions has now changed from when will prices stop rising to when can we expect to see them stabilise?’

Prices in Auckland, the nation’s largest city, fell 3.6 per cent. Wellington prices dropped 1.6 per cent, the agency said.

Global turmoil in credit markets has prompted lenders to raise borrowing costs by about one percentage point the past year, even as the central bank kept its benchmark interest rate unchanged at a record high.

Mr Bollard cut borrowing costs last month for the first time in five years and said further declines are possible.

The decline in prices adds to signs Quotable Value’s quarterly price index may fall for the first time in more than seven years. — Bloomberg

NZ home sales in May at 16-year low

Source : Business Times - 12 Jun 2008

New Zealand home sales slumped 53 per cent to a 16-year low last month, reinforcing speculation that the central bank will cut interest rates from a record high.

The number of houses sold dropped to 4,373 last month from 9,285 a year ago, the Real Estate Institute of New Zealand Inc said in a report to Bloomberg News yesterday. That’s the fewest since December 1991.

A cooling property market adds to signs that the economy is slowing as retail spending drops, employers cut workers and construction declines.

Reserve Bank governor Alan Bollard kept the official cash rate at 8.25 per cent last week, and said that he was likely to lower borrowing costs this year as moderating domestic demand helps ease inflation pressures.

‘The pace and depth of the current housing and economic correction suggest to us the central bank should have been easing already,’ said Shamubeel Eaqub, an economist at Goldman Sachs JBWere Ltd in Auckland.

‘The outlook for the residential property sector remains challenging.’

The Reserve Bank forecasts that the economy would grow 1.2 per cent this year, which would be the slowest pace in a decade.

Thirteen of 15 economists surveyed by Bloomberg News expect Mr Bollard to cut interest rates in the third quarter. Two forecast a reduction in the fourth quarter.

New Zealand’s currency touched a 20-week low of 75.03 New Zealand cents yesterday. The five-year bond yield was unchanged at 6.52 per cent.

Demand for housing is slowing after immigration fell to a six-year low and investors reduce buying on expectations of falling prices and weaker rental returns, Goldman’s Mr Eaqub said.

The median house price slipped 1.4 per cent from a year ago to NZ$345,000 (S$357,700), the Real Estate Institute said yesterday.

Prices were unchanged from April. Mr Bollard said last week that house prices would fall over the next three years.

Adding to signs of a cooling economy, retail sales fell 1.2 per cent in the first quarter. Construction and the number of people employed also declined in the first three months of 2008.

The median time it took to sell a house increased to 49 days, the second longest on record, from 44 days in April, yesterday’s report showed. Days-to-sell reached 50 in February.

The growing amount of time needed for sales suggests that prices should fall further to clear a large stock of unsold residences, said Goldman’s Mr Eaqub. — Bloomberg

NZ home sales in May at 16-year low

Source : Business Times - 12 Jun 2008

New Zealand home sales slumped 53 per cent to a 16-year low last month, reinforcing speculation that the central bank will cut interest rates from a record high.

The number of houses sold dropped to 4,373 last month from 9,285 a year ago, the Real Estate Institute of New Zealand Inc said in a report to Bloomberg News yesterday. That’s the fewest since December 1991.

A cooling property market adds to signs that the economy is slowing as retail spending drops, employers cut workers and construction declines.

Reserve Bank governor Alan Bollard kept the official cash rate at 8.25 per cent last week, and said that he was likely to lower borrowing costs this year as moderating domestic demand helps ease inflation pressures.

‘The pace and depth of the current housing and economic correction suggest to us the central bank should have been easing already,’ said Shamubeel Eaqub, an economist at Goldman Sachs JBWere Ltd in Auckland.

‘The outlook for the residential property sector remains challenging.’

The Reserve Bank forecasts that the economy would grow 1.2 per cent this year, which would be the slowest pace in a decade.

Thirteen of 15 economists surveyed by Bloomberg News expect Mr Bollard to cut interest rates in the third quarter. Two forecast a reduction in the fourth quarter.

New Zealand’s currency touched a 20-week low of 75.03 New Zealand cents yesterday. The five-year bond yield was unchanged at 6.52 per cent.

Demand for housing is slowing after immigration fell to a six-year low and investors reduce buying on expectations of falling prices and weaker rental returns, Goldman’s Mr Eaqub said.

The median house price slipped 1.4 per cent from a year ago to NZ$345,000 (S$357,700), the Real Estate Institute said yesterday.

Prices were unchanged from April. Mr Bollard said last week that house prices would fall over the next three years.

Adding to signs of a cooling economy, retail sales fell 1.2 per cent in the first quarter. Construction and the number of people employed also declined in the first three months of 2008.

The median time it took to sell a house increased to 49 days, the second longest on record, from 44 days in April, yesterday’s report showed. Days-to-sell reached 50 in February.

The growing amount of time needed for sales suggests that prices should fall further to clear a large stock of unsold residences, said Goldman’s Mr Eaqub. — Bloomberg

Millennium & Copthorne Hotels New Zealand completes Auckland hotel deal

Source : Channel NewsAsia - 30 Jun 2008

Millennium & Copthorne Hotels New Zealand said it has completed its purchase of the Copthorne Hotel Auckland Harbourcity.

But in a filing to the Singapore Exchange, it said the price of the deal was confidential.

Millennium & Copthorne is funding the purchase with cash and a new loan facility.

The area around the Copthorne Hotel Auckland Harbourcity is now a focal point for entertainment and access to the Waitemata Harbour.

Millennium & Copthorne Hotels and Resorts now has three owned or leased properties in Auckland.

It also recently clinched a short-term management agreement for the Metropolis Hotel Auckland. - CNA/ms