Leonie's blog

Investment property buys

The tax rule changes were widely expected to remove claimable depreciation on investment property, though expect to see some landlords reconsidering their portfolio with some looking to sell and fewer people buying investment properties***.  I have had several enquiries at the coal face since the budget, and as an experienced investor, I can guide you through buying or selling investment property.  With more investment properties coming onto the market, look for some very good buys.  Check out my website for criteria on purchasing an investment property or give me a call for advice. 

*** BNZ Weekly Overview

Leonie Snook, Top Wellington Real Estate Agent

Export-led recovery

Figures out yesterday show New Zealand’s first annual trade surplus in almost 8 years, at $161 million for the year to April.  The Treasury, on the back of government’s budget announcements, are forecasting economic growth to reach 3.2% for the year to March 2011 (up from -0.3% for the year to March 2010) and ranging around 3.0% for the 3 years following.  Unemployment is forecast to fall to 6.2% for March 2011 (down from 7.1% for March 2010), and is forecast at 5.5%, 5.1% and 4.6% for the three years following**.  This is all good news for the property market and house prices in the medium term, and is against a backdrop of housing shortage with demand expected to exceed supply.  Buyers are out there, and now is a great time to trade up!  If you or someone you know is thinking of moving, drop me an e-mail for a free and no obligation market opinion (leonie@leoniesnook.com).

* Mercer 2010 Quality of Living Survey
** The Treasury, March quarters

Wellington has just ranked 12th (out of 221 cities) in a global poll of the world’s most liveable cities.  While we are left scratching out heads about how Auckland ranked 4th :-), having two of our major cities in the top dozen in the world is great, and of course positive for migration and our property market.  I work all over this awesome city, so if you or anyone you know wants to stay in touch with property or needs high quality real estate advice, give me a call or pass my update on (Leonie 027 664 6063).

Leonie Snook, Top Wellington Real Estate Agent

Well, the weather is turning and flu season has started!  So take care of yourself... grab a cuppa and spend a couple of minutes catching up with this week's 'no fuss - no confusion' market round-up.

Quick News/Updates

• Interest rate picks - The Reserve Bank left the official cash rate (OCR) unchanged at 2.5%, but said they expect to begin removing their 'monetary stimulus' over coming months. Economists are torn on whether the rate rise will begin from June or July – but with a broad economic recovery taking shape (yay!) it’s a case of when and not if (boo)! For buyers and sellers, now is a great time to make your move and get in before interest rate increases.
• Free market sales – See my website for updated sales information. If you, a friend or a work mate want to know where your property sits in the market give me a call for a free and no-obligation market appraisal. I work all over Wellington…get top results for my clients…and give generous referral rewards :-) .
• Confidence climb - economy right behind! - Business confidence levels increased this month to +50*, suggesting good economic growth ahead. Its also the first time since 2001 that more firms expected the unemployment rate to fall than rise – all good for jobs, investment and growth. For the Wellington region housing market, things are well recovered and stable with prices up 6.6%** on a year ago and sales volumes for March similar to last year.

In any market, the best house sale prices come from the best approaches – through smart marketing, leading edge technology and negotiation, my clients continue to get better results. Don't just pay someone to stand at your open homes... you need the best marketer and negotiator you can get.  If you know someone thinking of selling this year put them in touch or drop me an e-mail to find out how (leonie@leoniesnook.com).

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.

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

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.

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.