Go-ahead for huge aged-care project

7th May 2012

Source: The Southland Times

The first sod will be turned before the end of the month for a large-scale retirement and aged-care facility to be built on the outskirts of Invercargill.

Invercargill City Council granted consent yesterday to aged-care specialist Bupa to build 62 retirement units and a 104-bed aged-care facility on Racecourse Rd. The consent hearing was held on Thursday.

Bupa Care Services managing director Dwayne Crombie said the company was delighted with the decision.

"We have spent a few years looking for a suitable site in Invercargill and we want to start the earthworks before winter," he said. "There is still a little bit of paper work to finalise but we are keen to get on with the development."

Bupa was looking to provide an aged-care service in the south after establishing 45 rest homes and hospitals from Whangarei to Timaru, and Invercargill proved to be the best prospect, Mr Crombie said.

"The population of Southland and Invercargill may not be increasing but the population is ageing and we hope to provide care and support services for those people."

Invercargill had the lowest number of care-home beds per capita in the country, he said.

Opponents of the development argued the council was permitting residential development on rural-zoned land and the village would increase traffic on Racecourse Rd.

A hearing panel, chaired by Deputy Mayor Jackie Kruger, put conditions on the project.

"The panel has concluded that the site is suitable for the proposed development, subject to conditions, that it does not compromise the intent of the district plan, and that the overall environmental effects will be no more than minor," she said. "The full decision that details the reasons why council has given the go-ahead, and what the conditions of consent are, is in the process of being written up. It will be ready for release within 15 working days."

Mayor Tim Shadbolt, who is not a member of the hearings panel, was delighted with the go-ahead: "This is doubly-good for Invercargill as it will provide for the needs of our ageing population while also creating jobs for both builders in the short-term and healthcare workers in the long term."

NZ Property Report – April 2012

2nd May 2012

NZ Property Report – April 2012

The April 2012 NZ Property Report published byRealestate.co.nz provides an insight into the state of the New Zealand property market as measured by the supply side of the property market over the month of April. The key measures of the market analysed in the report are the number of new listings, the asking price expectation for those new listings and the level of inventory of unsold houses on the market at this time. The report is compiled from data captured by the website and represents close to 96% of all property movements in the NZ market as managed by licensed real estate agents.

A full print version of the NZ Property Report – April 2012 is published below and is available for download (1.2MB) and distribution.

Summary of the market – April 2012

April did not witness a flood of listings as might have been expected given the signals which have been flashing for some months now in the media that the property market is alert and very much alive; more so in the main centers of the country. Instead levels of listings were nearly identical to April last year.

This however, did not have the expected downward pressure on inventory of unsold houses on the market; this was due to the fact that whilst property sales are strong the latest month’s data for March did not show a seasonally adjusted increase.

This indicates that the market would appear not to be diving headlong into a property bubble, but rather is seeing steady turnover and pragmatic buying and selling in the main.

This behavoural change is supported by the asking price trend which in both seasonally adjusted and normal data eased slightly from recent consecutive new highs. This would support the view that the market is balancing buyers demand with sellers expectation well. Clearly there are pockets of the market where there is not quite this degree of balance, Auckland for example continues to feel the impact of listings in short supply with a new record high asking price, the 3rd in the past 8 months.

The next 3 months are traditionally a quieter time for the market with lower listings ahead of the spring pick up in August, if property sales continue strongly it is likely that asking prices may well creep up further as demand flows through to vendor expectations.

Asking Price

The seasonally adjusted truncated mean asking price for listings in April eased slightly to $423,832 from the high in March of $429,865. This easing in the month was not universally representative of all regions with Auckland again pushing a new higher peak of asking price.

The trend as seen in the chart covering the last 3 years very clearly shows a continuing growth in asking price over the recent 12 months as compared to 2010/2011.

New Listings

The level of new listings coming onto the market in April fell with a total of 10,174. This represents a seasonally adjusted 10% fall from March and is nearly identical to April last year.

On a 12 month moving average basis a total of 128,065 new listings have come onto the market since May 2011 as compared to 129,678 in the prior 12 month period, a fall of just 1.2%. This compares to sales which are up 18% on the same 12 month comparable basis

Inventory

The level of unsold houses on the market at the end of April (46,948) was up as compared to March (46,462) as measured on a seasonally adjusted basis. This total includes houses, apartments and lifestyle properties on the market. With the rising rate of property sales the inventory on the market has seen a significant drop off over the past 6 months pushing it well below the long term average of 41 weeks of equivalent sales.

Regional Summary – Asking price expectations

The national (seasonally adjusted) truncated mean asking price expectation among sellers eased slightly in April to $423,832.

Around the country the dominant trend was an easing of asking prices with 11 of the 19 regions reporting falls, ranging from just 0.2% in Gisborne to a massive 12.8% in Wiararapa. There were 5 regions where the asking price showed a fall of greater than 5% – Waikato, Nelson, Southland, Marlborough as well as Wairarapa.

In contrast there were some strong growth in asking price with Hawkes Bay and West Coast reporting prices up 14.1% and 5.1% respectively.

Two regions – Auckland and Hawkes Bay reported new record levels of asking prices, in the case of the Hawkes Bay the prior high was last seen way back in 2007 whereas Auckland’s prior high was only 2 months ago.

Regional Summary – Listings

Listings volumes coming onto the market in April matched last April with 10 of the 19 regions seeing less than the same volumes in April last year. Significantly lower volumes were seen in Gisborne (-63%) and Central Otago / Queenstown (-48%), with Coromandel, Central North Island and Nelson all seeing volumes of greater than 20% below last April.

In contrast new listings flowed onto the market across Marlborough, Northland, Hawkes Bay, West Coast and Taranaki with volumes of new listings in all of these regions over 25% up on prior year.

The overall picture from this regional view of listings certainly backs up the position of the market rebalancing in terms of listings.

Regional Summary – Inventory

The inventory of unsold homes on the market eased slightly in April having reached a 4 year low in March.

Across the country the regions showed some rebalancing with the overall trend to a sellers’ market dominating the majority of regions.

There are still 6 regions highlighted in dark blue on the adjacent chart where the market is firmly in the sellers’ domain, this is one less than last month with Marlborough easing the pressure with a stronger flow of new listings.

In contrast there are this month 5 regions where buyers have the upper hand (dark green in the adjacent chart) – 2 more than last month. These additions are Coromandel and Taranaki, this again is the result of stronger flow of new listings.

Lifestyle

Lifestyle property listings fell significantly in April after witnessing strong rises in February and March. A total of 835 listings came onto the market, down 20% year-on-year and down 28% as compared to March. The truncated mean asking price for these listings rose 3% as compared to the recent 3 month average to $655,009 – taking the level to another record high in asking price, surpassing the peak attained over the last 2 months. Across the regions, four reached new asking price highs – West Coast, Canterbury, Southland and Marlborough.

Across the country, listings were weak with just 6 regions reporting year-on-year growth in listings. In contrast lifestyle listings in the Hawkes Bay hit a new record high with 100 listings coming onto the market in April.

Apartments

Listings for apartments fell in April with just 398 being brought to the market, on a year-on-year basis listings were down 12%. The truncated mean asking price of new listings rose to $384,861 in April from $366,288 in March, representing a 4% year-on-year decrease but up 3% on the recent 3 month average.

The Auckland apartment market followed the national trend with 252 new listings coming onto the market, down 20% from March and also down 12% from April last year. The truncated mean asking price of new listings rose to $359,196 from $338,046 in March representing a 3% rise on the prior 3 months.

Sky News: NZ house building consents 2-year high

1st May 2012

Source: Sky News

New Zealand house building consents rose to their highest monthly level in two years in March amid growing demand for new housing in Auckland and Christchurch.

Building consents rose by a third to 1,394 worth $415 million in March, excluding volatile apartment figures, Statistics New Zealand said.

That's the highest monthly number of new consents issued since March 2010. Including apartments, the number of issuance rose 43 per cent to 1,559 worth $430m, the highest total since September 2008.

Auckland had the biggest increase in new dwellings at 511 in March, compared to 298 a year earlier, while Canterbury issuance rose to 281 from 166 in 2011.

"The robust increase in dwelling consent issuance in March is fairly encouraging, and points to a recovery in residential building activity over the coming year," ASB economist Christina Leung said in a note.

"The improvement in residential building activity in Auckland and Canterbury should help to alleviate the housing supply constraints which have emerged in these regions."

A tight housing supply in Auckland and stalled reconstruction in post-earthquake Canterbury have bumped up property prices as growing demand struggles to find a fresh supply of available listings.

That's kept a lid on building activity, which hit a decade-low in the September quarter last year.

The level of new issuance is still tepid compared to the tail-end of the property boom, with annual approvals at 14,596 in the 12 months ended March 31, from 24,533 in the same period in 2008.

The value of non-residential building consents fell 13 per cent to $299m in March from the same month a year earlier. On an annual basis, commercial issuance fell 0.1 per cent to $3.71 billion.

New invercargill office!

1st May 2012

Outgrowing premises within just 20 months of operation is a good problem to have! Invercargill’s brightest real estate company, hoamz, and its property management division, hoamz to rent, have experienced growth to such a level that a move to bigger and better premises is essential. Manager Carl Wilson says is was clear that a swift expansion was going to be an inevitable consequence of the company’s early success ‘ We’d always thought we’d need to move to a bigger space at some point, but it’s come a lot sooner than originally expected. Our real estate and rentals divisions are growing at pace and we’re delighted to be moving to keep up with business.’

The move doesn’t take us far – just across the street in fact. ‘Our location in Spey Street has been good to us, so it was an opportunity we couldn’t pass up to spread our wings into a larger office in the same position’ says Carl. ‘There’s great parking for customers and big windows for property displays – it’s perfect for us’.

With teams actively working in all three sectors of the Southland market – residential, lifestyle and commercial, hoamz deliver a broad range of services with the flexibility to respond immediately to the needs of the Invercargill market. Just one of the benefits of being a local independent company.

Team expansions have been a catalyst for the move – a second Property Manager has recently joined the hoamz to rent team, and there’s now the potential to bring new agents on board to the real estate division too. hoamz will be at their new address at 99 Spey Street as of the 1^st May 2012. Coinciding with the move will be a freshen-up of the brand in print, and the popping of a few corks to celebrate the next big step for our forward-going company. 

SIT to expand student digs

26th April 2012

Source: The Southland Times

Plans to expand the Southern Institute of Technology apartments were approved by the polytechnic's council this week, as growing overseas student numbers increase accommodation demand.

Chief executive Penny Simmonds said the proposal had been approved in principle in the public-excluded section of Monday night's meeting, subject to resource consents.

The polytechnic bought the Aachen Motel, in Yarrow St, last year and the renamed SIT Apartments were now full, she said.

The current property had two, two-storey blocks which housed 44 students, most from overseas.

The expansion would add three more two-storey blocks, bringing capacity to 102 students, Ms Simmonds said.

The next step would be to get the specifications from the architect, apply for resource consents, and put the project out for tender.

The project would go back to the council for approval after the tender process.

The apartments would not be exclusively for foreign students, but that was an area the polytechnic was targeting for growth, Ms Simmonds said.

She hoped construction would start by September, with students able to move in during the first half of next year.

International manager Sam Mackay said the expansion of the apartment complex was positive.

One of the key concerns overseas students had when they arrived in Invercargill was where they were going to live, he said. "Our ability to provide a lot more accommodation to our students is a very positive development."

There was a 25 per cent increase in international equivalent fulltime students at the institute last year, which reflected the marketing work and relationshipbuilding that had been done, he said.

The polytechnic was looking to expand into new markets in Russia, Vietnam and South America.

First Home Buyers on the Rise

20th April 2012

Source: Mortgage Link

First home buyers are on the march, thanks to appealing interest rates, improving job conditions, and rising rents across New Zealand. Even though domestic property prices are highly unaffordable by global standards, according to recent reports, conditions are improving when the New Zealand market is analysed on its own terms.

A recent report published by interest.co.nz found that conditions are actually getting easier for first home buyers. According to data from February this year, 25 to 29 year olds earning a median income require 24.3 percent of household take-home pay to service the mortgage on a lower quartile priced house. This figure is down from almost 40 percent four years ago, although it does assume two median incomes per household and an existing deposit.

Improved interest rates are often seen as the main reason for this improvement, although a strengthening job market is also having a big effect. Along with improving conditions for people who own property, there is also a lot of new energy entering the market, as young couples and families around the country try to escape increasing rents. 

It costs the typical Kiwi first home buyer household only slightly more money to service a mortgage on a bottom range house than it costs to pay a median rent, with 23 percent of household take-home pay needed to pay the rent on a 3 bedroom house. This makes renting only 1.3 percent cheaper than buying, and brings the gap between servicing a mortgage and paying rent closer than it has been in almost 7 years.

ANZ retail managing director Kerri Thompson notes that seminars for first home buyers are all booked up, saying this in a statement to the nzherald. "It's become more pronounced in this last year as the interest rates have dropped off. And when we talked to people in the seminars we found that was what they were saying."

Not everyone is in agreement however, with Property Investors Federation national president Andrew King saying renting is still the cheaper option in a statement to the nzherald. "They should be much the same, but they are not, and it still costs a few thousand dollars more to own than to rent." However, King notes the situation is not the same across the country, saying "In some places, especially Auckland, where rents are going up at a very fast rate, it's probably getting more affordable to buy than to rent, for those who want to."

The gap between the cost of renting and buying is continuing to close, which is great news for people entering the property market. While housing prices in New Zealand are still unaffordable by global standards, prices don't look like coming down any time soon. Instead, people are looking more towards domestic conditions as a basis for their decision, with low interest rates and increasing rents pushing more people into the market.