Shock OCR rate cut announced….
The summer sun may have gone, but that doesn’t mean you should stop looking for the perfect property.
Real estate agents tell me winter is a good time to check out homes for sale. First, you’ll spot a cold damp house pretty quickly, and if you are looking for a property in the country you’ll be able to tell if the land is too boggy to keep livestock on.
Rural properties can look brilliant when it is hot and dry, but come winter some landowners have to move their animals off the land as their paddocks turn to mud in high water table areas.
Agents also tell me that people who market their homes during winter are usually pretty serious about moving on. It could be they have to sell to go to a new job, or are moving out of Auckland — perhaps cashing up while prices are still red hot. There are not many casual sellers at this time of the year.
So if it’s raining this weekend, get your umbrella, put on your boots and head out.
In his latest Sporadic newsletter, BNZ economist Tony Alexander says in the three months to September the annualised rate of growth in average Auckland house prices was 7 per cent. However, in December it hit 23 per cent, and in April rose to an eye-watering 32 per cent.
“This acceleration in the pace of price rises, despite the 1 per cent rise in floating mortgage interest rates from March to July last year, has generated responses from the Government and the Reserve
Bank aimed at preventing a burst of ‘irrational exuberance’ from getting out of control and threatening financial sector stability should a sudden price correction occur,” says Alexander.
He says the recent tax changes, such as capital gains tax, “will probably have little impact but they are an important shot across the bow”. And he says it is “highly probable that full foreign buyer restrictions will be introduced within two years”.
He points out though that such restrictions have not cooled the housing market in Australia (Sydney was described as having a property bubble by the country’s Treasury Secretary John Fraser this week).
The number of building consents issued in December 2014 for homes across New Zealand was 164 higher than for the same time
in 2013. During the past six months there were — on average — 226 more consents issued each month than a year ago. But that number has slipped to double figures.
Alexander says: “The average for January-April 2015 has been a monthly improvement of just 89 with April up by only 30 from April 2014.
“In seasonally adjusted terms consents fell by 3.9 per cent in the three months to April. Activity seems to be peaking at a relatively low annual total of near 25,000 compared with 33,000 in 2004.”