Leonie's blog

Quick News/Updates Feb 12th 2010

1.    Interest Rate Rises – The Reserve Bank has left the official cash rate (2.5%) unchanged for now but signalled interest rate rises over 2010, as the economic recovery continues and less stimulus is needed.  With some economists picking that rate rises may start as early as April, its timely to start thinking about mortgage planning and it may save you a lot of money!  Give me a call or e-mail if you want to tap into some advice.  I work with a preferred mortgage broker and have had great feedback from clients on their service.

2.    Property Market Healthy – The property market recovered strongly over 2009 with values back to just under 4% of November 2007 peak levels*.   Why is this and what does it mean for the future?  Property is a demand and supply picture, and at its most fundamental level is about housing people.  On the demand side net migration was just over 20,000 for the year to Nov 09 (compared to 3,569 for the year to Nov 08) and is expected to remain positive over 2010 while employment is set to improve.  On the supply side, real estate construction is at weak levels (consents issued were 14,199 for year to Nov 09 just up on a previous four decade low of 13,616), and is slow to adjust leaving housing shortages.  Impending tax changes for property investors and interest rate rises are expected to dampen demand and cause a transitional period to wash through.  However, looking out beyond transitional factors, economists are expecting that population growth and less construction will see continued housing shortages and price increases (albeit more moderate).

3.    Selling Now - We are heading into high season - a great time to sell :-) – and the phone is very busy!   Selling property is about the 3 P’s - Presentation, Promotion and Price - and getting the very best results in different stages of the market requires the right approach and process.  I go beyond what most other agents can offer, and work with each of my clients to provide a strategic marketing plan, leading edge technology, and project management to ensure the best possible result.  You would be surprised what a difference it makes!  Who do you think may be the next person you know to buy or sell?  Please put them in touch.   I also give generous referal rewards :-)
* www.reinz.co.nz

A tightening of tax rules on rental properties seems inevitable, the question is more ‘what’ than ‘if’?  I’ve run into several investors this week who feel its getting hard and are thinking of getting out.  Watch for some potential pick up in what comes onto the market next year, as people adjust.  The Tax Working Party reports to government this month.  With a rental property sector of $200b (approx), largely made up of private landlords, housing 1/3 of New Zealanders government has a delicate balancing act to consider.

Under the new Real Estate Agents Act 2008, it is now against the law for an agent to over quote an expected sale price of a property.  They must base their 'quote' price on actual sales for the area and provide a copy of this to the person seeking the appraisal.  For more information check out www.reaa.govt.nz.

New Rateable Values are out for Wellington (check out online services on the Wellington City Council website).  Many have fallen to some degree.  Will this have an effect on prices?  It’s no secret that buyers start by benchmarking using RV’s.  However, as you can see from the latest sold properties below, RV can vary greatly from the actual price paid.  Buyers have usually visited many properties before they put an offer in.  They make their decision based on what others have recently paid for similar properties.  Unless we see a move in interest rates causing the numbers of buyers to reduce, we should continue to achieve similar prices for properties over coming months.

Leonie Snook, Licensed Sales Person, Johnsonville Churton Park, Harcourts

The latest stats are out from Quotable Value and the market is still looking positive.  It is early days yet and may just be signs of a stabilising market - coming back from the depths of 2008 and early 2009.  Wellington has shown a 1.1% increase over the past year (calculated over the three months ending September 2009 in comparison to the same period last year).  Wellington Northern Suburbs have shown a 1.4% increase.

QV is offering free market reports at QV Free Market Reports.  Have a look but take with a grain of salt as they haven't seen inside your particular house.

John Ross has commented in the Hutt News on the Top Ten changes under the new legislation - the Real Estate Agents Act - that takes effect on the 17 November 2009.  This is another great step in helping to clean up the industry.

Here are John's  Top 10:

1. There will be a 24 hour (1 working day) “cooling down” period for the vendor after a listing has been signed.
2. The vendors will be able to unilaterally cancel the listing after 90 days. This will be the default maximum listing period.
3. If the agents doesn’t give the client a copy of an “approved guide” prior to listing, the agreement will not be binding on the vendor.
4. There will be guides for the Sale and Purchase Agreement which the agent must provide to clients.
5. Deposits will have to be held in a Trust account for 10 working days.
6. Agents will be required to have three years experience out of the last 10 years to qualify to become an Agency Licensed Agent.
7. The appraisal and pricing of property must be provided in writing to the clients, must realistically reflect current market conditions and must be supported by comparable information on sales of similar property. Licensees must not mislead customers as to the price expectations of the client.
8. All licensees (agents, branch managers and salespeople) will be able to sell property by Auction without having to have an Auctioneers licence.
9. Agents will have to disclose any rebates and commissions they get (if any).
10. A licensee must not disclose confidential information relating to a client unless: (a) the client consents in writing; or (b) the licensee is required by law to disclose the information; or (c) disclosure is necessary to answer or defend any complaint.

September has been another record breaking month for traffic to NZ real estate websites with over 1,500,000 unique browsers.  The top four real estate websites saw another month of growth in unique visitor numbers for September:

The new Real Estate Agents Act comes into effect on the 17th November 2009.  This act has changes that will effect everyone working in the real estate industry.  To be in the loop - please visit the REAA Website for more details.

The key changes introduced by the new Act are:

• agents, branch managers and salespersons must all be licensed individually
• an independent Real Estate Agents Authority is established that will be responsible for licensing, complaints, disciplinary action in relation to unsatisfactory conduct, industry standards, and providing information for consumers
• new complaints and disciplinary processes are introduced, including the appointment of Complaints Assessment Committees by the Real Estate Agents Authority and the establishment of an independent Real Estate Agents Disciplinary Tribunal
• new responsibilities apply to real estate agents, including duties in relation to the information that must be provided to consumers
• no longer compulsory for agents to be members of the Real Estate Institute of New Zealand (REINZ).

According to an article on the Landlord Website there was a 19% increase in listings in September 2009.  This could be attributed to the 'Spring Fling' however with prices increasing and vendor expectations of prices increasing we do see and increase in consumer confidence.

Of course there is talk of Capital Gains Tax - the government and their media team are 'chip... chip... chipping' away at that one with various media releases and statements, but that doesn't seem to have dampened the rise in prices or buyer activity going on.

Mortgagee sales continue to rise especially in Auckland and in the most part with investors.  If you are struggling with payments please call me first - we may be able to sort out a plan to svae your house from the bank...

Have a great weekend, Leonie Snook, Sales and Marketing Consultant, Harcourts, Wellington.