Archive for the ‘Overseas Property – NZ’ Category
NZ house prices rise for a 3rd month in July
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(WELLINGTON) 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.
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. — Bloomberg
NZ June home-building approvals fall 9.5%
(WELLINGTON) 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. — Bloomberg
Man acts to wind up firm over rent dispute
A disgruntled buyer of a New Zealand waterfront property has moved to wind up the company that sold it to him.
Mr Roy Titchmarsh, 58, who bought the apartment a year ago when it was marketed here, said he is owed about $70,000 in guaranteed leaseback returns.
The Briton noted that the company, Wensley Developments, returned to Singapore two weekends ago to market yet another Queenstown property, The Marina.
Mr Titchmarsh, who is chief operating officer of a ship management company, said he bought a Wensley property called The Club in Queenstown. He did not want to say how much he paid.
He added he had a deal with a sub-company called Wensley Developments The Club which agreed to lease the apartment from him for two years and guaranteed him a 13 per cent annual return. ‘I received the first payment, but soon after that, the payments stopped. The name Wensley Developments The Club was also changed to New Zealand Resorts,’ he said.
‘Because I had an agreement only with Wensley Developments The Club, I had no guarantee under the new company name,’ he added. He said that Wensley Developments The Club went into liquidation last November and he was told he could not claim any money.
He got lawyers in New Zealand to send Wensley Developments two statutory demands for payments. When it missed the deadline of the second, winding-up proceedings were lodged against the company.
Contacted by The Sunday Times, the New Zealand-based Wensley Developments said it started suffering financial difficulty when the recent credit crunch hit. According to Mr Greg Wensley, one of the directors, the company has ‘experienced trouble arranging enough funding for normal needs’.
Mr Nic Soper, Mr Titchmarsh’s lawyer, said six other clients have issued statutory demands against another sub-company, Wensley Developments The Shore. All the clients are from outside New Zealand.
He added: ‘Winding-up proceedings have been lodged against Wensley Developments Limited and Wensley Developments The Shore in respect to unpaid guaranteed rental.’
An online article last month in a New Zealand paper, The Southland Times, said Wensley Developments is NZ$23 million (S$21 million) out of pocket after buyers reneged on payments for apartments in Queenstown.
Mr Wensley said that along with ‘our financiers, we are committed to honouring our commitments’.
He added that Mr Titchmarsh is ‘one of two that we have not been able to reach agreement with at this stage, although negotiations are ongoing’.
‘We owe him three months of rental payments. He now receives directly the income that is earned from the sub-lease of the apartment,’ he said.
Mr Titchmarsh claimed he is not getting this payment at all.
Mr Wensley added that new customers will receive their guaranteed returns or leaseback payments upfront in full.
Wensley Developments marketed five developments here in the last eight years. It is not known how many apartments were bought by Singaporeans.
The apartments cost between NZ$350,000 and NZ$3.45 million.
Source: Sunday Times, 21 June 2009
NZ’s home prices fall at slowest pace in May
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.
Source: Business Times, 9 Jun 2009
Plus points for NZ: lovely scenery and cheaper loans
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.
Source: Straits Times, 26 April 2009
