Revived real estate market in Otago

4th January 2012

Source: Otago Daily Times

 

Median house prices in Otago have remained static in the past two years, but there are signs of life returning to the residential real estate market.

Since the buoyant housing bubble burst in 2007, annual sales regionally have plummeted by up to 40%.

But an analysis of Real Estate Institute of New Zealand (Reinz) statistics shows sales in Dunedin, Central Otago and Queenstown are on the upward trail again.

While confirmed sales figures for December will not be released until the middle of this month, indications are the number of sales last year will surpass 2010 totals, although they will still be far below the levels seen before 2007.

In Dunedin, 1830 houses were sold in the 11 months to the end of November last year, 124 less than the total for all of 2010.

REINZ southern area spokeswoman Liz Nidd last week said December "felt good" and she would expect December sales to reach 160-170. If that was achieved, total sales last year would be about 3% higher than 2010.

There were 2786 sales in Dunedin in 2007.

In Queenstown the pattern was similar, Reinz Queenstown Lakes area spokesman Kelvin Collins said last week.

He expected about 40 sales would be settled in December, giving a total for the year of about 461 - 25, or about 6%, more than was achieved last year.

However, while volumes would be "a little up", Mr Collins said they were still a long way below the mid-2000s when about 800 houses and up to 200 sections were being sold annually.

"When you look at a market of our size, some 10,000 properties, annual sales of houses and sections should be sitting at around 1000.

"Sales will go back to that level, but when, I don't know."

Steady population growth in Queenstown and surrounding areas should also be driving more sales, he said.

He estimated an additional 300 houses were required in the district annually to meet population growth demand.

Mrs Nidd said more confidence was appearing among Dunedin vendors. With sale prices still hovering about 10% below those attained during the boom times, vendors in the middle and higher price brackets had "sat" - not putting their homes on the market unless they had to, she said.

However, that trend had begun to change during the past three or four months, with more "really good" stock coming on the market.

There was a steady number of buyers, she said, including some people relocating from Christchurch.

Asked their predictions for next year, Mrs Nidd said she was "very much a glass half full kind of person" and was going into 2012 with optimism.

"Maybe there will still not be much change in median house prices, but I think we will see a rise in sales volumes."

Mr Collins said he expected the first six months of this year to be "steady as she goes", but was expecting more activity, higher sales volumes and better prices for vendors in the second half of the year, "provided the world [economy] behaves itself". 

Big drop in houses for sale in centres

4th January 2012

Source: Stuff Business Day

Big cities may be heading for a shortage of homes for sale.

Just 8732 new listings came on the property market in December, down by a third on the previous month, according to Realestate.co.nz.

The drop in listings was greatest in Auckland, Wellington and Christchurch.

In the Wellington region there were just 571 new listings in December, down 52 per cent on November.

December is usually a quieter period for new listings.

Nationally, the inventory of unsold homes slipped to 36.7 weeks, if present sales rates continued. That remained well under the average of 42 weeks of stock on the market.

The national average asking price for a home was $420,109 in December, down 1 per cent on November.

The average asking price in Wellington was $422,690 in November, down 6 per cent from November.

The inventory of housing stock in Wellington was equal to 22.5 weeks, compared with 23.4 weeks in November.

Nationally, new listings for apartments fell to their lowest levels for 4 years, with just 346 flats coming on the market, down a third on November.

At just under $397,000 asking prices for apartments are down 14 per cent on a year ago.

Real estate year in review

28th December 2011

Source: Stuff Business Day

2011 was at times a tumultuous year for New Zealand.

There were dizzying highs when the All Blacks won the Rugby World Cup we hosted and tragic lows when earthquake disasters struck Canterbury, flooding hit Nelson and oil leaked into the Bay of Plenty when cargo ship Rena grounded.

These factors combined with a pervading underlying economic uncertainty in the lead up to November's general election and negative news of Europe's ongoing debt dilemmas.

Despite all this drama impacting the economy, the property market continued to improve throughout the year, with Auckland leading the pack.

From January to November, the median average house price based on nationwide sales lifted from $340,000 to $367,500.

Auckland property prices hit record levels, rising above the peak levels last seen in 2007 before the recession hit. The region's average house price was $513,792 in November, up 3.4 per cent from a year earlier and 0.6 per cent above the 2007 market peak.

The time it took to sell a property nationwide also improved in 2011, from an average of 51 days at the start of the year to only 35 in November. Sales volumes nearly doubled throughout the year, from only 3252 sales in January to 6008 houses transacted last month.

However, the overall feeling in the industry was that the property spike has resulted from a shortage of listings, a rising population and lower interest rates rather than any speculative bubble.

Instead, real estate market insiders agree it's only the beginning of an industry upturn that will see even more active property trading in 2012.

Real Estate Institute of New Zealand chief executive Helen O'Sullivan said 2011 was characterised by tight listings, a relatively steady lift in values, and weak sale numbers which started improving towards the end of the year.

''Auckland really has taken pace away from the rest of the country and what you might call the discretionary or recreational sector (baches, coastal properties) has remained pretty slow,'' O'Sullivan said.

Even within Auckland, some areas are doing better than others. CBD suburbs such as Parnell and Ponsonby were up 4.7 per cent on the same time last year to $577,774 on average - some $210,000 or so above the national average.

Real estate agency Harcourts chief executive Hayden Duncan said Auckland's inner city suburbs had stood out over the couple of years compared to the rest of the market. ''Locations like Mt Eden, Epsom, Parnell, Ponsonby, Remuera, Orakei - family homes in those locations have performed exceptionally well in comparison to other sections of the market,'' Duncan said.

''The apartment market has continued to remain relatively soft, partly due to investor reluctance and some borrowing and lending constraints not really kicking that market to its potential. Given the strong rentals achieved and low cost of borrowing it's probably an area I'm surprised at the lack of increase in confidence in.''

Lack of choice and tightness in supply was also a feature of this year's market. O'Sullivan said this had been a problem for buyers who were being ''very logical'' about what they wanted to buy and pay.

''I think back in 2007 we saw people settling because they wanted to buy something, anything, before the prices went up but we don't have that dynamic now. People are prepared to wait.''

Mike Bayley, head of real estate agency Bayleys, said forecasting residential property markets had been difficult in 2011 due to the instability from financial markets.

''The classic scenario being in August for example, when in the space of 48 hours Kiwi trading banks hiked mortgage rates to reflect a 'speeding up' of the economic recovery, then when the US economy began rapidly imploding and the Reserve Bank of New Zealand responded accordingly, the mortgage rates underwent a complete U-turn,'' Bayley said.

''Yet despite everything that went on in New Zealand throughout 2011, property transactions continued to be made. It just shows that no matter what life throws up at the property markets, deals will always be successfully concluded, albeit at somewhat subdued volumes somewhere in the vicinity of 5000 homes sold per month.''

A large number of the transactions seen in 2011 were mortgagee or receivership sales as financial institutions and banks worked to reduce their debt-laden stock.

THE OUTLOOK

The large lift in prices in central Auckland suburbs could indicate where markets nationwide will move next, Bayley said.

''We have found that early signs of recovery have, several times now over the past two years, been seen in these suburbs first. A wider geographic recovery would then see activity and price firmness ripple out to the Greater Auckland suburbs, then regionally spreading to provincial cities in an ever-widening circle,'' Bayley said.

But he cautions against any 'quick fix' cycle happening as such as sustained national recovery, whenever it does start, could happen gradually over the next year, he said.

On the other hand, the consensus among the industry commentators is that prices are unlikely to pull back in 2012, so any bargain hunters might miss out on the house of their dreams if they're waiting for a cheaper deal.

In the year ahead, listings are expected to stay tight at the start of the year with prices improving slowly in the main cities and throughout the regions.

''I think through the regions what we'll see is volumes increase without seeing major moves in any house prices,'' Duncan said. ''We're just starting to see volumes pick up now, I think it may be 2013 or 2014 before we see any dramatic or noticeable rise in house prices through the regions.''

O'Sullivan also expected prices to keep climbing next year.

''It's a cautious, pragmatic, risk-averse market in most places. Still we're seeing some really good results being achieved in some places, particularly Auckland, and particularly at auction,'' O'Sullivan said.

''For 2012 I think the big unknown is still what happens with the international picture and that's always got the potential to have a big impact on the market, so there's still that shadow. But broadly, there should be steady growth in volumes - nothing like 2006, but values holding, then creeping upwards.''

Bayley also thinks it's hard to forecast what the residential property market will do next year. He's picking a slow and gradual return to listing levels seen in 2006, with prices returning to somewhere around 2007 comparisons.

''I'm forecasting there will most likely be a continuing oscillation in the market data, as the residential property sector seeks clearer guidance from the wider economy. While low mortgage interest rates are on offer - underpinned by the Reserve Bank of New Zealand's latest announcement in December - there is a comparatively low inventory of property listings. This will provide support to pricing levels.''

So there you have it - relatively low prices but rising steadily, sales volumes picking up, short supply in sought-after locations, and low interest rates likely to continue throughout next year due to the economic uncertainty nationwide. No boom, but a definite boost, particularly in central Auckland.

All in all, a good time to buy.

Auctions provide a bellwether for the the property market

23rd December 2011

Source: realestate.co.nz

The state of the property market can be assessed by keeping a close eye on the number of properties being marketed for Auction. When you spot more and more of the For Sale street signs emblazened with “Auction” you can safely bet that the property market is heating up.

This view is certainly articulated in the article today titled “Auckland house auctions hit high“. Based on sales data supplied by the Real Estate Institute (REINZ) the number of properties sold in November across the country as Auctions was the highest ever at more than 25%. Looking specifically at the Auckland market Barfoot & Thompson November reported that around 40% of it’s current listings are being for sale by auction.

These reported statistics got me interested as we have in the past reported on the number of listings coming onto the market and specifically on the market across our comprehensive database. Back in August we reported that Auctions across the whole country had risen to a peak in June as representing 13% of all new listings, in Auckland that figure was even higher with over 20% of all new listings being for Auction properties for sale. These figures though are lower than the respective REINZ or Barfoot & Thompson figures.

Looking at the latest data for the month of November we saw 1,206 new listings of Auctions of properties come onto the market across NZ, this represented 9% of all new listings. In Auckland the number was 790 which represented over 17% – a new record, so the data is consistent.

In tracking the data over the past 4 years what is very interesting is that Auctions as a form of marketing rises as available inventory falls (as it does when the market picks up) and similarly falls as inventory rises. This is represented in the chart below, tracking new listings of Auctions per month as a % of all listings (blue bars) against the available stock on the market as measured as equivalent weeks sales as we track for the NZ Property Report.

In Auckland the same trend is evident, and more pronounced.

So it is clear that Auction marketing is a bellwether of the state of the market, which is not that surprising as vendors are more keen to pitch their property to a more active market when there is more demand from active buyers and see the open auction environment ensure that transparency works for them to maximise property demand lead pricing.

Resort holidays more popular

22nd December 2011

Source: Otago Daily Times

Outdoor activities are popular among New Zealanders holidaying in Queenstown. A Tourism industry Association survey found 44% of those surveyed said they would take part in an outdoor activity while in the resort. Photo supplied.

Queenstown is the third most popular New Zealand destination for Kiwis going on holiday this summer, behind Wellington and Auckland.

According to the latest Fly Buys/Colmar Brunton Mood of the New Zealand Traveller survey, released by the Tourism Industry Association, more than half the New Zealanders surveyed were planning to travel within New Zealand over the Christmas and New Year period.

Of those, the majority were planning to visit Wellington, which has remained the top domestic destination for New Zealanders for several years, having only been beaten once since the quarterly survey began in September 2009 - by Christchurch in 2010.

The survey showed Queenstown rose one spot on the 2010 survey results to be the third most popular holiday destination this summer and the most popular regional destination, with 46% of those surveyed saying they were coming to the resort to visit friends and family. A total of 44% planned to take part in outdoor activities.

Destination Queenstown chief executive Tony Everitt said he was "very pleased" with the results, particularly given the first and second spots were taken by "New Zealand's largest population bases".

DQ members would also be heartened to see the number of visitors planning on taking part in outdoor activities, which would give businesses and the resort's economy a welcome boost.

"It's great to get that rating this week as Jetstar launch their Wellington-Queenstown direct flights ... the domestic market has become more important to us in these times of uncertain global financial markets."

Jetstar is due to launch the daily Wellington-Queenstown service on Thursday.

Mr Everitt said anecdotally, summer tourism was "pretty much on track with what we were expecting" so far.

"It's not going to set the world on fire, however ... it's probably the only robust season so far this year. We're getting back on our bike - we're starting to see visitor volumes around last year's levels."

Tourism Industry Association chief executive Tim Cossar believed an overall increase in the number of New Zealanders planning to travel within their own country this year was in part due to "pent up demand" from those who did not travel during the Rugby World Cup.

The survey showed 52% were planning to travel within New Zealand over the holiday period, up from 46% in 2010.

Internationally, Australia remained the top destination for summer/autumn holidays, followed by Fiji, the United Kingdom, the United States and Rarotonga.

Wind-farm backers test turbine

19th December 2011

Source: The Southland Times

The proposed Flat Hill wind farm project near Bluff forged ahead at the weekend with the company behind it putting up a test turbine at the site.

The wind farm, in the consents phase with the Invercargill City Council, plans to have eight turbines erected on Flat Hill, near Bluff, producing about 6.8 megawatts of electricity.

Canterbury company Energy3 applied for consent to build the wind farm last month.

The land where it would be built is owned by Greenpoint farmer Graham Laidlaw.

Mr Laidlaw is an avid supporter of the wind farm, despite opposition from the Bluff Community Board, which submitted against it.

"I'm more than happy with it," he said. "It's met all New Zealand rules and regulations."

He admitted he would be paid to have the turbines on his land, but said he could back up his support with facts and figures in the consent application, something opponents could not do.

The Bluff Community Board had raised concerns about the noise from the turbines, shadow flicker from the blades disrupting traffic, its visual impact and disturbance to the tranquility of Greenpoint Cemetery.

"Some of it I don't know what it's based on," Mr Laidlaw said. "How much noise will the wind farm put into the cemetery compared to the trucks going past (on State Highway 1)?"

The wind farm was more than 1.5 kilometres away from the cemetery, he said, while shadow flicker might be seen 500 metres from the turbines, but not on the road. He also said he enjoyed the appearance of wind farms.

"I like them," he said.

"It's either yes or no – it's clean cut – either you like them or you don't."

Energy3 commissioned reports for its consent application which suggested the noise from the turbines would meet national standards at the nearest house under worst-case conditions.

The Invercargill City Council received 72 submissions on the project. Nine were against it. A decision is expected in the new year.

Mobile usage for finding property reaches a new milestone

15th December 2011

Source: realestate.co.nz

All of us here at Realestate.co.nz are delighted to see the mobile apps for both iPhone and Android blast through the 50,000 download mark this week.

It was just over a year ago when we launched the iPhone app – the first in NZ and the only app with GPS location based property search. A year later and we continue to be surprised and delighted by the uptake and usage which now approaches 14% of all visitor traffic to our listings from the mobile platform.

The appeal of this method of property discovery has been turbocharged in the past couple of months as the summer peak property season has arrived. The month of October saw the highest ever level of downloads with over 6,000 in the month, greatly assisted by the new Android version of the app (another first) in late September. The level of downloads continues with over 200 new downloads per day providing the users with the experience of discovering the convenience and addictive appeal of this app.

Not only are people downloading the app in ever increasing numbers but they are engaging with it more often. Over 2,000 visitors a day check out property for sale and rent whilst on the go – at the cafe, in front of the TV, at open homes.

The app is so comprehensive and so appealing. With the largest selection of listings by licensed agents, usage appeals to the serious property hunter keen to be better informed and in control of the property searching process. Over 90% of users are returning users and unlike the web which is very heavily focused to casual image based browsing the mobile app is all about property information and insight in the palm of your hand.

We have been interested to see just how keen kiwi’s are relative to other countries in regard to uptake and usage of property apps on the the smartphone. Instead of comparing downloads by country (which is tricky as not many other websites publish their data) we chose to use the ranking of the various apps in their respective iTunes app store. Clearly this just seeks to identify the iPhone platform, but this has been the consistent largest platform across all international markets for property apps.

We chose six countries to compare against NZ from Australia and the US / Canada as well as Europe. What we found was very interesting. The Realestate.co.nz property app is the 16th most popular free lifestyle app in NZ, and the 209th most popular free app. Out of interest if you exclude the free “gaming” apps from the rankings the Realestate.co.nz property app jumps up to be the 41st most popular free iPhone app in NZ.

By comparison to NZ; Sweden appears to have the most popular iPhone property app from Hemnet coming in as the 8th most popular free lifestyle app in Sweden, and the 104th most popular free app overall.

Next comes Australia where the Realestate.com.au app comes in as the 11th most popular free lifestyle app and the 127th most popular free app. That then places NZ in third slot amongst these 7 countries. Next comes Canada almost equal to NZ with their Realtor app ranked as the 16th most popular free lifestyle apps and 239th place overall for free apps in Canada. After these four come the the French app from Seloger, the US app from Zillow, and the UK app from Rightmove.

Riverstone will 'sell' Te Anau

12th December 2011

Source: Otago Daily Times

The proposed catamaran, ATV and monorail route linking Queenstown and Te Anau. Graphic from 'ODT'.

The proponent of the proposed $250 millon monorail project linking Queenstown and Te Anau is vowing the company will become Te Anau's biggest promoter.

Riverstone Holdings chief executive Bob Robertson, of Wanaka, believed the monorail, 16 years in the planning, would lift local tourism and the area's economy.

"I think Te Anau locals will probably think it might be negative for them because people are currently travelling through Te Anau."

One of the biggest criticisms of the Milford Dart Tunnel proposed last month was Te Anau would miss out on potential visitors, but Mr Robertson said his company would spend about $5 million a year promoting Te Anau and the "new visitors" would be stopping there for more than "just a coffee".

"We will spend more than anyone has before on selling the destination. We will be an investor locally. We would become the biggest sponsor."

He said the company had put more than $1 million into Wanaka's economy and he would like to do the same for Te Anau.

The monorail was part of Riverstone Holdings' visitor transport package, The Fiordland Link Experience, which would include a catamaran across Lake Wakatipu, an all-terrain ride on back-country roads and the 80kmh monorail trip.

The company had a project budget of $175 million to $200 million, with another $50 million for "long-term upgrades" such as transport facilities running into Te Anau.

If consent was granted, he expected a completion timeframe of within two years.

Mr Robertson hoped to establish a fund to help finance the project, with four domestic investors already expressing an interest in contributing.

"I know if I've got the right economic model... funding is not an issue."

It was not about shortening the trip from Queenstown to Te Anau, he said.

"We're not in a hurry. We're not promoting hurry. We are promoting [an] experience while still delivering a benefit of speed.

"We will get them there quicker and they will stay longer."

The initial idea came from Malaysia, which was where most of the rolling stock and electronics would be built, he said.

However, Te Anau's gain could be Kingston's loss, as travellers choosing the monorail would bypass State Highway 6.

Kingston Community Association chairwoman Annetta Dalziel said local businesses had already shown some concern.

"To me, it seems a terrible way [to travel]. Just whipping people here and there and not giving them the time to meet New Zealanders.

Te Anau Community Board chairman Alistair Jukes, opposed to the Milford Dart Tunnel, said yesterday the monorail was "not as bad".

"It's certainly got its merits. I'm not really in opposition to it."

Southland District Council mayor Frana Cardno said both the monorail and Milford Dart Tunnel were "all about getting to Milford faster".

"New Zealand tourism talks about quality tourism. Is this what we call quality tourism? "

The Department of Conservation had yesterday received 61 submissions for the the Milford Dart Tunnel with submissions closing in January.

Mr Jukes said the Te Anau Community Board would be submitting against the Milford Dart Tunnel.

Public submissions on the monorail will close in February.

Five Mile developers say lease arrangements progressing

12th December 2011

Source: Otago Daily Times

Leasing is "going strong" for Queenstown's $125 million Five Mile Retail Centre development while confirmation of the project's resource consent drags on.

Colliers International, the company in charge of leases for the development, this week advertised for a cafe operator to fill retail space directly in front Five Mile's planned 4200sq m Countdown supermarket.

It cited a completion date of early 2013 for a 120sq m cafe as part of construction of stage one of the complex, which is worth about $70 million.

However, while construction was initially due to start in October, delays in obtaining final resource consent has meant the developer, Queenstown Gateway, still cannot begin work.

Lakes Environmental planning manager Brian Fitzpatrick confirmed last week three elements of the consent were still being worked on.

When contacted for comment, Five Mile spokesman Simon Holloway said they were "marching along still", getting ready for construction and making "strong" progress on leasing.

He was confident the construction company lined up for the project would be able to stay on in Queenstown, despite the delays, but said it was an issue not just for Queenstown Gateway.

"There's plenty of opportunities in other parts of the country at the moment," he said.

"I think it's an issue facing the whole industry. They will struggle to hold the construction industry here unless there are some planned projects starting soon."

The Five Mile development would spell the end of "Hendo's Hole", an excavated site intended to be used as an underground car park for the original Five Mile development, a project which was left uncompleted when developer David Henderson abandoned the plans.

Confirmed for the 26,000sq m big-box retail complex is the Countdown supermarket. Proposed are a six-screen cinema complex, bulk retail outlets and 40 to 50 smaller retail and food outlets in a mall based around a two-level department store.

Real estate recovery not boom: REINZ

12th December 2011

Source: Stuff Business Day

The number of houses sold nationwide in November was up 16.9 per cent on the same time last year, according to the latest Real Estate Institute of New Zealand data, with Auckland sales prices reaching new highs.

But despite the strong lift in sale prices, the real estate market improvement is still seen as being in recovery mode due to the number of houses sold tracking far below the levels seen in 2007.

In November, the Auckland median house price shot up to $490,000, a new high comapred to the previous highest figure of $479,500 reached in April this year.

The median house nationwide also hit a new record, rising 2.1 per cent in November from a year earlier, to a $367,500.

Real Estate Institute chief executive Helen O'Sullivan said while the data coming from the housing market was generally positive, the volume figures say recovery, not boom as some commentators have suggested.

''In 2007 the market reported just over 92,000 transactions in the 12 months to December; the 2011 year to date total is just under 56,000 transactions with the month of December yet to come, demonstrating that the level of activity is still well below 'boom' levels,'' O'Sullivan said.

''The lift in volumes for November is positive following the somewhat muted sales numbers for September and October.

''While there may be some element of 'catch up' from these slightly quieter than expected months, there is a sense of buyers and sellers being ready to commit and clear the decks post Rugby World Cup before the end of the year. ''

Residential real estate sales lifted 20 per cent in November from the month prior, a difference of 1001 more houses sold than in October.

All regions recorded an increase in the number of sales.

Hawke's Bay house sales had the biggest hike in price during November compared to October, up 11.3 per cent to $290,000 on average.

Properties in the Otago region were selling for 5.6 per cent more in November than October, at $311,000.

Queenstown tops regional Google searches

9th December 2011

Rugby is front of mind for Otago folk but Southlanders think of Queenstown ahead of Invercargill in the latest Google search results.  Google has today released its annual list of most-searched items in New Zealand, and for the southern regions, the adventure capital is high up in the findings.  In a list of hottest topics by region, the Rugby World Cup topped Otago’s list, followed by Queenstown and the Christchurch earthquake.  However in Southland, Queenstown topped the most-searched list, ahead of the region’s main city, Invercargill.  Nationwide, the RWC was the fastest-rising search query for 2011. Top newsmakers were the Christchurch earthquake, followed by the RWC, the Japanese tsunami, the All Blacks, iPhones and rugby hunk Sonny Bill Williams.  Top three overall searches were NZ, Facebook and Auckland.  Google spokesperson Johnny Luu says: “The year-end Zeitgeist is a cultural barometer showing us what quickened our national heartbeat and drove our curiosity. From news and current affairs, to pop culture, sports, cars, and everything in between, search trends reveal what’s on our collective minds.”   Hottest searches in Otago:  1. Rugby World Cup  2. Queenstown  3. Christchurch Earthquake  4. Geonet  5. Facebook  Most searched in Southland:  1. Queenstown  2. Invercargill  3. Stuff  4. Christchurch  5. News

House values to 'slowly' increase

9th December 2011

Source: Stuff Business Day

Despite a widely held belief in the marketplace that residential property prices may drop further, BNZ chief economist Tony Alexander predicts a continuation of the slow, steady increase in house values.

A recent article in the Economist listed New Zealand as one of nine countries worldwide with the most overpriced property markets in the world, with a housing bubble that could be set to burst.

While Alexander agreed with The Economist's view that New Zealand houses were over-valued by about 25 per cent, he expected prices to rise rather than plummet.  

"Using the measures that they have looked at we are overvalued, but the question is will we see a correction in the overvaluation? No, I don't think so at all," Alexander said.

"When I look at the population long term growth in New Zealand, very weak level of construction we have got here, the lifestyle we choose - we live in New Zealand because we want our own house etc - but I think we will stay, by their measures, overvalued forever and a day."

According to the November BNZ-REINZ Residential market survey released yesterday, 25.4 per cent of prospective house buyers are holding back from purchasing because they still believe prices will decline further.

"I don't think the perception out there as yet is that it is inevitable house prices will go up. I think there are still many people who find that the prices are relatively high," Alexander said.

"Those who keep waiting for the house prices to decline already missed out on the cheaper prices back in 2009 and I think the longer they wait they more they'll find house prices have gone up even higher - but slowly, nothing aggressive, just a slow appreciation of the prices."

The real threats to the New Zealand housing market, said Alexander, are that property will only become more unaffordable because of the shortage of new construction.

While the number of building consents issued rose 11 per cent in October from a year earlier, there could be a shortage of builders once the rebuilding of Christchurch kicks in in the second half of next year.  

"In the second half of next year with the rebuilding of Christchurch and extra catch up construction in Auckland, I think we're going to run out of builders. They will either already be across in Australia or continuing to go there, there will be fewer young people coming through to be builders - we've already seen a 40 per cent decline in the number of construction apprenticeships," Alexander said.

"We're going to hit a builder shortage in late 2012 which I think will limit the construction of new houses. Prices will go up and affordability will worsen."

Floating rate is 'sweet spot'

9th December 2011

Source: Stuff Business Day

Floating home-loan rates look like the best option for borrowers, with the official cash rate likely to remain on hold until late next year, economists suggest.

While the Reserve Bank left the OCR unchanged yesterday at 2.5 per cent, borrowers coming off high fixed rates will be able to move to floating mortgages at much cheaper rates in coming months.

ANZ Bank estimates that the effective average mortgage interest rate, now about 6.15 per cent, will fall to 5.9 per cent by the end of next year, equal to a reduced interest bill of about $400 million, on $170 billion of debt.

So, while the Reserve Bank is holding the OCR and will keep it low for perhaps another year, there is still a hidden boost coming into the economy.

ANZ chief economist Cameron Bagrie said the Reserve Bank had "kicked for touch any notions that interest rates are going up". Floating rates were the "sweet spot" for borrowers and would remain so for some time.

But, as borrowers came off fixed-term rates, there would be a "passive stimulus" for the economy in the next six to nine months equal to cutting rates by 25 basis points.

The hurdle to the Reserve Bank actually cutting the OCR was high and would need to see a repeat of 2008's global financial crisis.

"While the outlook is grim, I don't think it is that grim," Bagrie said. But he suggested it was also unrealistic to expect the global economy to be stable in the first half of next year.

It was, he said, hard to see a decent performance in the global economy which would be a precursor to interest rates moving up at a solid clip. "We are so far away from that scenario it is ridiculous."

The New Zealand economy was scratchy, with "grumpy growth".

"But in a relative sense, we are a beacon of opportunity [compared with others]."

The Government retained the confidence of investors when parts of Europe did not. Business confidence was holding up, commodity prices had fallen but remained relatively high, and the kiwi had fallen to act as a buffer.

The economy's report card rated a B to B-minus overall, he said.

Australia cut its official cash rate this week, but that was to 4.25 per cent – still much higher than New Zealand's rate.

Bank of New Zealand chief economist Tony Alexander said it would be best to stay on a floating rate, with the Reserve Bank indicating it would not change rates "for quite some time".

The central bank pointed out the risks of a slowdown in Europe, with the prospect of prolonged recession and a possible slowdown in Asia. "I don't see fixed interest rates jumping up much in the near future, so I'd sit floating," he said.And, unless the eurozone fell over, Alexander expected house prices to rise in New Zealand next year, on average about 5 per cent, led by Auckland, where prices have risen about 6 per cent in the past year.

House-building rates were "exceedingly weak", with an undersupply of homes, so that would push up prices. He also expected a lot of young first-home buyers to move into the market in the next year or so.

When people wanted to build new homes, the country would quickly run out of builders, especially with the rebuild of Christchurch looming.

But Alexander said it was an uncertain global picture, with massive shifts in interest-rate forecasts in the past year. "Much as I'd be happy sitting on a floating rate, a lot of people may find two-year fixed rates about 5.89 per cent attractive," he said.

"That certainty might suit first-home buyers, for the first couple of years of a loan."

Queenstown polls as number one destination for Kiwis

6th December 2011

 Source: Voxy.co.nz

More than 80% of Kiwis intend to travel within New Zealand over the summer holidays and Queenstown is their most sought after destination according to a survey by Travelbug, the travel website run by Trade Me.

The online survey of 11,000 New Zealanders showed Queenstown as the best destination people had visited in New Zealand (attracting 16% of the vote), and the most preferred in terms of the "next place you want to visit" (15%).

Head of Travel at Trade Me, Daniel Bridges, said Queenstown was massively popular because it was built for visitors.

"It's no longer just a winter playground - there's so much to see and do and it really is an exhilarating place to be all year-round. It's exciting, unlike anywhere else in the country and offers world-class visitor experiences."

He said "the Queenstown obsession" was strong amongst the younger crowd, with 26% of those aged between 18 and 29 picking it as their number one holiday destination.

Destination Queenstown CEO Tony Everitt was delighted with the result.

"Domestic tourism has been strong for Queenstown this year. Continually improving air access - more flights, more routes and bigger aircraft - is making it easier for Kiwis to come and enjoy the spectacular lake and alpine scenery and experiences Queenstown has to offer."

Rate hold likely for 12 months

5th December 2011

Source: Stuff Business Day

The Reserve Bank is set to signal interest rates will stay on hold for the foreseeable future this week, as the economy slows as the threat of crisis in Europe grows.

Governor Allan Bollard will on Thursday morning announce its review of the official cash rate, which will almost certainly remain unchanged at 2.5 per cent.

The accompanying monetary policy statement, which lays out detailed forecasts for the economy, is expected to signal weakening growth compared with three months ago and economists now expect interest rates to stay on hold until at least late 2012.

All of New Zealand's four major banks expect the official cash rate, which directly influences floating mortgage rates, to remain unchanged for at least six months.

Bank of New Zealand's official prediction is for an interest rate increase in June but head of research Stephen Toplis said there was "absolutely no conviction" behind the date.

"It's just saying that hikes are coming and it's later rather than sooner," Toplis said, adding that international conditions could push the first interest rate increase out to December.

In September, the Reserve Bank signalled it was likely to begin raising interest rates in March, based on the assumption global influences would have only a mild impact on New Zealand's recovery.

Since then economists have been trimming forecasts, with the Institute of Economic Research slashing its prediction for growth in 2012 to 1.5 per cent.

Cameron Bagrie, chief economist at ANZ, said that since the last Reserve Bank forecasts, global conditions had worsened and while the impact on New Zealand had been limited, this might not continue.

"The global scene is getting worse; we've got our fingers crossed that the impact remains mild [in New Zealand] but there is a little bit of wishful thinking in that," Bagrie said.

There were signs of a sharp slow-down in investment in China and, while the world's most populous nation would likely maintain demand for food commodities, New Zealand could suffer indirectly from a downturn in mining-focused Australia, our largest trading partner.

Meanwhile there was a growing chance of a deep financial crisis in Europe, where much of New Zealand's bank funding is sources.

"The euro is at risk of breaking up. I wouldn't put it as the central scenario but it's a non-trivial risk at the moment."

Until late November financial market pricing suggested the official cash rate would be cut by March, and last week the Manufacturers and Exporters Association called for a 0.25 per cent cut on Thursday to take pressure off a strong New Zealand dollar.

"For a small, open, heavily indebted economy, I think that sends the wrong economic signals," Bagrie said, adding however that if Europe's financial crisis deepened "it's game on".Bagrie said that with inflation running at about 2 per cent, excluding last year's hike in GST, an official cash rate cut would mean New Zealand, a small country dependent on foreign investment, would effectively have negative interest rates.

NZ Property Report – November 2011

2nd December 2011

Source: realestate.co.nz

The November 2011 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 November. 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 95% of all property movements in the NZ market as managed by licensed real estate agents.

A full print version of the NZ Property Report – November 2011 is published below and is available for download (1.5MB) and distribution.

Summary of the market – November 2011

The property market is now firmly in the active Summer season with a strong surge of new listings coming onto the market to provide variety for the prospective buyers who have certainly been more active over the winter and spring period of this year. This current level of activity is likely to result in full calendar year sales in excess of 60,000. This would be up 7% on the prior year; however this level of sales is far below the peak of the property market (now a somewhat distant memory) of 2004 when in excess of 120,000 properties were sold in that year.

The slightly lower level of listings in October are now judged to have been influenced by the Rugby World Cup with sellers possibly hesitant to list at that time preferring to wait until the event was over before marketing their properties. It is still though noticeable the extent to which this year has seen a much lower level of new listings than 2010, so far this year 116,016 new listings have been brought to market 11% lower than last year.

With this new flow of listings has come what can be considered to be a confident position by sellers on asking price; which whilst slipping slightly in the month continues to show a slow but steady increase over the past few years. This confidence on the part of sellers is certainly supported by the rate of sale of property which is being shared by real estate agents in their daily contact with the public, and can also be seen in traffic to online listing sites which has seen an aggregated increase this year of 6% with over 187,000 daily visitor sessions across all sites (Nielsen Online).

Asking Price

The truncated mean asking price of $425,956 for all new listings in November eased slightly from the peak in October of $434,161. On a seasonally adjusted basis the asking price fell 2% indicating that whilst expectations are rising the rate of increase is not as high as seasonal factors would expect.

The long term trend as seen in the chart has been a steady increase in asking price over the past 3 years – the seasonal trend each year tends to see asking prices rise through from mid winter to October before falling back.

New Listings

The level of new listings coming onto the market in November rose on a seasonally adjusted basis by 17%. A total of 13,369 new listings came onto the market representing a 3% year-on-year rise.

On a 12 month moving total basis the number of new listings in the past year totals 124,412 as compared 140,214 for the same period a year ago – a fall of 11%.

Inventory

The level of unsold houses on the market at the end of November turned down slightly in what was a somewhat unexpected trend. At the end of the month there were 48,647 houses, apartments and lifestyle properties on the market barely up from 46,597 in October and down from 54,365 a year ago. This current level of inventory represents 38.1 weeks of equivalent sales.

Regional Summary – Asking price expectations

The national truncated mean asking price expectation among sellers eased slightly in November to $425,956. This price trend has been seen for each of the past 4 years as rising asking prices begin to ease as the summer approaches.

Across the 19 regions the view is generally of increasing prices with 12 regions reporting increases as measured against the recent 3 month average. There were 3 regions with rises of over 5% – Hawkes Bay, Nelson and the West Coast, the latter of these reporting a new record high up 25% over the prior year to $315,993.

Amongst the 7 regions showing a fall in asking price there were 4 regions where the fall was over 5% – Northland, Gisborne, Manawatu / Wanganui and Southland. The largest of these falls was in Gisborne which saw asking price fall by 29% vs. November last year, this level at $260,189 is approaching a record low last seen in early 2009.

Regional Summary – Listings

New listings rose across most of the country in November with just 5 of the 19 regions seeing falls in listings of greater than 5%. The biggest fall was in the Coromandel which was down 29% with just 247 new listings, this compares with levels of over 400 in prior years.

Contrasting these regions were Nelson reporting 24% increase, Northland with a 46% increase and the Central North Island with an enormous 120% increase – this latter region has seen a consistently low level of new listings this year. In the first 10 months of this year only 1,284 listings came onto the market, whilst 296 new listing hit the market in the single month of November.

The remainder of the country seems to reflect a balance with 6 regions reporting barely changed levels of new listings which would indicate a balance between buyers and sellers.

Regional Summary – Inventory

The inventory of unsold homes on the market eased slightly this month having seen a slight upturn in October; given the rise in new listings this would indicate a strong rate of sale.

Across the country there were a total of 8 regions where the advantage is to sellers. Of these the 5 regions of Auckland, Manawatu/Wanganui, Canterbury, West Coast and the Waikato remain very much in strong sellers markets. If anything the past month has seen a degree of rebalancing of the market overall in all but these extreme market-condition-affected regions.

There are however still 5 regions (Marlborough, Wairarapa, Southland, Taranaki and Gisborne) were the market is certainly favouring buyers with high levels of inventory set against long term average.

The market is now firmly in the peak summer season and with the more balanced market in terms of inventory of unsold properties on the market the options seem more open for both active buyers and sellers.

Lifestyle

Lifestyle property listings shot up in November with 1,133 listings in the month, this represented a 15% seasonally adjusted increase but was down 5% on the same month last year. The truncated mean asking price at $574,507 was up 3% from last year but down 3% down on the recent 3 month average.

Across the country strength in new listings was seen in Northland (125, up 67% Yr. on Yr.) and the Waikato (120, up 13% Yr. on Yr.). Whilst the Bay of Plenty, Hawkes Bay and Wellington all saw year on year falls of over 25%.

Apartments

New listings for apartments picked up in November with 535 apartments coming onto the market up 20% from October but 10% down on last year. The truncated mean asking price of $370,532 was up 2% from prior month and in line with last year.

The Auckland market which dominates the apartment market saw a stronger performance with 350 new listings which was 25% up on prior month and just 1.4% down on last year. The asking price was $352,407 which was up nearly 15% on last year and 2% up from October.

November property listings surge

2nd December 2011

Source: Stuff Business Day

The number of new homes being put on the market surged in November, as sellers rushed to list their properties now that the disruption of the Rugby World Cup is out of the way, according to realestate.co.nz.

The online property portal reported an 18 per cent leap in the number of new listings in the month to 13,369 compared to October, its highest level in 18 months.

The charge was again led by Auckland, the most active property market in the country, with 4459 new listings in November.

Alistair Helm, chief executive of realestate.co.nz, said the data appeared to show that property sellers saw the Rugby World Cup as a distraction and thought ''it was best to wait until all the excitement had died down''.

However, the company said that overall listing numbers were still well down on 2010, with 116,016 properties brought to market so far this year, down 11 per cent on the equivalent period last year.

The listings surge in the month saw the average asking price dip 2 per cent to $425,965 - reversing gains seen in October, but remaining stable on a three-month basis.

Of the country's 19 regions, 12 saw price increases on a three-month comparison, led by Nelson, Hawke's Bay and the West Coast. Decliners were paced by Northland, Manawatu/Wanganui, Southland and Gisborne.

Inventory levels, as measured by the time to take for a property to go from listing to unconditional, fell 1 per cent on October to 38.1 weeks, which the property website said was an ''unexpected'' trend, suggesting a ''strong rate of sale''.

Wishes CAN come true!

30th November 2011

Source: hoamz

The team at hoamz are experts when it comes to making your property wishes come true. We also love making children’s wishes come true.

So bring the kids along to one of our special hoamz Wishing Trees between 1^st and 10^th December, help them write their Christmas wish upon a star and then hang it on the tree.

Every wish will go into the draw, and we’ll be granting the wish of one lucky child as part of the Shotover Jet Christmas Spectacular on 11^th December.

hoamz Wishing Trees and stars can be found at the hoamz Queenstown office, The Queenstown Events Centre and in Santa’s Christmas Tree Grotto at Smiths City.

Hoamz - making heartfelt wishes come true this Christmas.

Proudly raising funds for the Wakatipu Youth Trust.

For more information on the Remarkable Christmas Spectacular, visit www.lakesleisure.co.nz or phone 03 450 9005

Queenstown Lakes property report

29th November 2011

Queenstown Lakes / Central Otago Property Pulse factsheet – October 2011

Meet the lords of the dance...

29th November 2011

 

Source: Otago Daily Times

Members of the 2011 Remarkable Men's Ballet Troupe are (back from left) Graeme Jackson, Rowan McDonald, Craig Ferguson, Andrew Bisset, "Tall Paul", Henry Youngman, Chris Dagg, JD Marrable and Irik Anderson. Middle left is Tony Moore, right Darren Craig and front Otago Daily Times and Queenstown Times reporter James Beech. Absent from the photo are Clark Scott, Simon Thew, Allan Gerard and Brendan Quill. Photo by Tracey Roxburgh.

If the good people of Queenstown feel the earth shaking over the next few weeks, they need not dive under the nearest table. Chances are it will be a dozen sturdy blokes performing an especially energetic grand jeté in unison.

Ballet is a beautiful, graceful and precise form of physical and artistic expression which has enthralled the world for five centuries. However, Wakatipu residents will get to witness the dance in its purest and most dazzling interpretation when the Remarkable Mens' Ballet Troupe takes the stage as part of the 2011 Shotover Jet Christmas Spectacular on December 11.

A gleeful Tracey Roxburgh, a ballerina for 10 years, "volunteered" this reporter for the comical highlight of the spectacular when compere without compare Simon Green was short of bodies.

We lords of the dance gathered for our first and second rehearsals in the Queenstown Primary School Hall last week.

(Out of class hours - the children will be traumatised enough during the show.)Some members make their encore this year, but I was among the newcomers who threw themselves on the mercy of Queenstown School of Dance co-founder Anna Stuart, back for a second year.

Shoes and socks off, the spirit of fun and a feeling of ridiculousness ran as rampant as we did while our teacher instructed us on the delicate techniques we will perform, in full costume and make-up, to the waltzing strains from The Nutcracker.

Respect for real ballet dancers has increased 10-fold, given the multitude of moves and timings we have to remember while running, jumping and flouncing around with our imaginary harps and bouquets.

Yet no-one wants to let the side down and everyone wants to nail the sequence to deliver the best and funniest performance.

Plan to triple size of Queenstown Mitre 10 store

28th November 2011

Source: Otago Daily Times

A proposed $20 million Mitre 10 Mega store in Queenstown will be a major expansion on an existing store, an application by Cross Roads Properties (CRP) says.

The company, a subsidiary of H & J Smith's Holdings Ltd, is seeking non-complying consent to construct a commercial building, associated car parking and landscaping for use by Mitre 10 Mega at a site in Shotover Park, near the existing Glenda Dr industrial zone.

The site was next to where Foodstuffs had applied for a $30 million Pak'nSave supermarket, for which consent was declined last month.

Foodstuffs and Porter Group Ltd are appealing the decision.

CRP's application said the existing Mitre 10 store in the Remarkables Park Town Centre had grown and now required a store of sufficient size to stock 30,000 stock-keeping units, up from 10,000-15,000 10 years ago.

The "business evolution" meant the Remarkables Park store "fails to comply with the Mitre 10 (NZ) Ltd brand standards" in terms of floor space and product availability and "offer into the market".

The business was "over trading" on a site too small for the business requirements, resulting in insufficient room at the site and it was "literally overflowing" with goods often extending outside of the store.

In 2000, Mitre 10 moved from a 500sq m site to a 2200sq m site.

"They now need to expand again, this time to approximately 6800sq m, a 300% expansion. Such expansion would be fulfilled by the introduction of a Mitre 10 Mega store to Queenstown. The introduction of this type of store type will bring even greater benefit as being part of the Mitre 10 Mega franchise means Central Otago customers will also enjoy the national pricing policy associated with Mitre 10 Mega, which provides for identical product pricing throughout New Zealand.

"This means Central Otago builders and home owners get to buy at Auckland prices."

If it gained consent, the Mitre 10 Mega would replace the Remarkables Park store, the application said, and would operate from 7am to 7pm every day, with a "requirement" to operate to 10pm every day between November and the end of January.

It was the third attempt for the store in Queenstown - the first in 2003 was proposed for a site very close to the existing proposal, but it was "shelved" due to zoning issues. In 2007 the land was unavailable due to Queenstown Airport Corporation requirements.

The application said the most recent attempt, a $20 million investment, "reinforces the belief the company has in the future growth of the Wakatipu/Central Otago region."

H & J Smith's had concluded a sale and purchase agreement with Shotover Park for two lots, totalling 18,677sq m, east of the proposed Pak'nSave.

The store, comprising a total floor area of 8006sq m, would be "centrally located" providing easy access for builders and tradesmen as required.

"The design of the building has taken into account the need to balance both function, as a large format hardware store, and it's visual aesthetic within the Frankton Flats."

The main part of the building would include schist as well as incorporating the company's signage made from orange Coloursteel with the "distinctive black/orange bands" around the building.

The signage reflected the national branding "albeit at a significantly reduced level given the proposed location of the site".

A total of 11,526cu m of earthworks were planned over a total area of 20,532sq m, with the site zoned either Rural General or Industrial.

Mitre 10 Mega
$20 million investment by Cross Roads Properties, a subsidiary of Invercargill-based H & J Smith's Holdings Ltd.
Gross floor area of 5937sq m, comprising:
• Central retail area
• Drive-through section
• Inwards goods
• Garden store
• Cafe
• Mezzanine floor, above the main entrance
• Yard area attached to the northeastern side of the building
• Delivery area, proposed at the rear southeastern side
• Total floor area: 8006sq m
• Maximum building height 9m from existing ground level
• Comprehensive landscaping

House prices up while activity remains flat

28th November 2011

'Hobbit' crew big spenders

28th November 2011

The "unit base" for 450 cast and crew members who worked on The Hobbit location shoot on Arcadia Station, near Paradise and Glenorchy, 66km from Queenstown.

More than $1 million is estimated to have been pumped into the Wakatipu economy while the main film unit of The Hobbit shot on location in Paradise, near Glenorchy, and more money is expected to be spent when the second unit begins filming in the next few days.

Academy award-winning director Sir Peter Jackson, of Wellington, and stars including Orlando Bloom, Martin Freeman, James Nesbitt, Mikael Persbrandt and Sir Ian McKellen were among 450 cast and crew who arrived early and filmed for three days on the remote Arcadia Station, 66km from Queenstown.

The main unit continued its national tour of personnel and equipment in about 200 trucks on Wednesday to its next location shoot in Te Anau.

 

However, the Queenstown Times understands at least 150 film-makers in the second unit, helmed by first-time director and Gollum actor Andy Serkis, will return to the Wakatipu before the end of the month and will work for the next few weeks.

Mr Serkis was seen in Arrowtown on Wednesday night.

Parties were asked to sign confidentiality agreements, but it was common knowledge some residents in Glenorchy were employed to plant greenery on the set, Glenorchy School pupils were allowed to visit the set and the township's cafes did a brisk trade.

Business operators and staff enjoyed spotting the stars as they patronised cafes, bars, restaurants, hotels and Reading Cinemas in Queenstown.

 

Film Otago Southland executive manager Kevin Jennings this week said it was unknown exactly how muchThe Hobbit cast and crew had spent in the Wakatipu. However, the financial benefits had been felt and talked about not only in the basin, but out into Central Otago as some film-makers followed the wine trail on their days off.

"During a time that's traditionally quiet, it's great to have the boost of these crews in town spending up," Mr Jennings said.

Sir Peter and family shopped in Steamer Wharf, enjoyed a Shotover Jet boat ride and travelled on the Skyline Gondola during their time in Queenstown.

"I've been up the luge which I've always done and our kids have loved since they were tiny," he told the Otago Daily Times on Tuesday. "When I was up there I finally decided to paraglide down, which is what I've always wanted to do, and I thought 'Now's as good a time as any.' I absolutely loved that."

Sir Peter said while a core creative group was touring the locations to film, the film-makers hired many residents wherever they filmed.

"We had the weekend off and walking around Queenstown, just going shopping, I'm banging into crew the whole time, so you sort of get the feeling we've taken over Queenstown.

"The funniest thing that happened down here was I was walking around the [Queenstown] mall and a lot of people were asking for photos and stuff, which was fine, and then this young backpacker type guy comes up to me says, 'Ah, are you Peter Jackson? Oh my God, you're Peter Jackson, aren't you?

'"I say yeah and he says 'Ah, I've only got one question I want to ask you.' I said 'Sure, fire away.' He says, 'When's Avatar 2coming out?' And I said 'In about three years.' He said 'Oh cool, mate, thanks!' and he walked away a happy man. That was good, always pleased to help anybody I can."

 

25th November 2011

Source: Mountain Scene

Striking designs have seen Queenstown architects and buildings dominate the Southern Architecture Awards 2011. 

Winning entries include purposeful public buildings and beautiful homes that will make neighbours’ hearts ache with jealousy. 

Eight buildings either in Queenstown or designed by local architects were recognised in the awards, which celebrates the best of Otago and Southland architecture each year. 

Judge Brent Knight, a Dunedin architect, says: “The high number of entries and the high standard of winners are signs that the region’s architects are doing good work in difficult times. 

“We were impressed by some significant community and public buildings, and found that this was also a very strong year for residential architecture.” 

The category winners now go through to the New Zealand Architecture Awards, which will be announced in May. 

2001 Southern Architecture Awards 

Commercial Architecture 
Church Street Development, Queenstown – MAP (2010) Ltd
Extend­ing over a large block in the town centre, this “immaculately detailed” mixed-used development con­­trasts stone and timber with steel and glass. 

Public Architecture
Remarkables Primary School, Queenstown – Babbage Consultants Ltd
This “simple and bold” building concept was informed by advanced developments in creative learning. In the new school, layered teaching spaces open out to a play-and-recreation space sheltered by the crescent-shaped form of the building. 

Residential Architecture – houses
Peninsula Road House, Queenstown
– Warren and Mahoney Architects Ltd
On a difficult site, the architect has created a “fluent sequence of spaces” that interrelate with each other and the lake views beyond. This is a well-detailed house that is “very difficult to leave”.
Whakatipua Addition, Arrowtown. 

– Michael Wyatt Architect Ltd
The addition “genuinely complements” Whakatipua, the original iconic house designed by Peter Beaven. Formally organised, restrained and eminently livable.
Mt Iron House, Wanaka – Crosson Clarke Carnachan Chin Architects Ltd (Arrowtown)
This “deceptively simple yet refined” family retreat uses carefully considered materials and has beautifully crafted details. 

Queenstown House (Shotover)
– Thom Craig Architects Ltd
This “subtle yet striking” holiday home exhibits a deep understanding of landscape context and the “ethos of retreat”. Set back from the edge of an old river terrace, the folded form, clad with cedar battens, reflects the textures of the Shotover Valley. 

Queenstown House – Michael Wyatt Architect Ltd
The modest street presence of this two-level house opens up to a generous family home, which is immaculately detailed. The house is a “genuine, comfortable retreat” for extended family gatherings within the bustle of central Queenstown. 

Residential Architecture – multiple housing
Lakeside West, Queenstown – ASC Architects
This complex is a “laudable” result from an architect working on a “difficult site and in challenging circumstances”. Scale is used to provide interest to the public elevation facing Lake Wakatipu, and the design logic adds real value to a commercial endeavor.

New CBD site emerges for conference centre

25th November 2011

Sir Eion Edgar Vanessa van Uden The council-owned Gorge Road carpark has emerged as a leading option for Queenstown’s urgently-needed conference centre.  Queenstown conference centre steering group member Sir Eion Edgar reveals Gorge Rd and a privately-owned Man Street site are the two main contenders.  “They’ve both got good merit and it’s good to have two competing opportunities,” he says.  Edgar expects his group will recommend to council, early in the New Year, “at least two and possibly three very good alternatives”.  Group chair, Queenstown Lakes mayor Vanessa van Uden, says Gorge Rd is among five options.  “There were a lot of really good ones,” she says.  Van Uden says Gorge Rd ticks boxes.  “In terms of location in town, and easy access, and it does line up quite nicely with the other activities in that almost-precinct, in terms of what’s happening with the Memorial Hall.”  And the options are...  Options floated for a 1000 to 1200-person capacity conference centre include:  Above the Gorge Rd carpark – as proposed by architectural designer Murray Bennett  Above the Man St carpark – developer John Martin has had architects’ plans drawn up  Stanley St – formerly proposed for a conference/performing arts centre  Events Centre  Remarkables Park  Hilton hotel complex – a conference centre was formerly mooted for stages two and three, now in receivership Van Uden – who says the conference centre would be built over the carpark and the spaces will be retained – stresses the concept hasn’t gone to council for any input in terms of it being council land.  Mountain Scene has learnt the site was proposed by local architectural designer Murray Bennett.  Bennett is reluctant to comment except for giving reasons why he considers it the best option: “Location, location, location, council already own the land and it’s got a great reserve/park-type precinct setting.”  That last comment refers to the Recreation Ground, across Horne Creek from the carpark.  Mountain Scene understands another downtown contender is council’s Stanley Street land – the original site for the proposed Remarkables Centre conference and performing arts centre.  That concept was thrown out by the previous council when its likely cost blew out to $140 million.  It’s believed the steering group also received proposals for three Frankton sites – Remarkables Park, the council-owned Events Centre and the Hilton hotel complex in Kelvin Heights.  However, Edgar notes the conference industry is adamant a venue has to be close to downtown Queenstown – or, in his own words, “within stumbling dis­tance”.  The steering group was set up in August, following strong lobbying by business and other interests.  A month earlier, Edgar had told Mountain Scene that Queenstown was missing out because it doesn’t have a 500-plus capacity conference centre.  “Everyone wins from it – it spreads out [tourism] activity through the year, you bring in the top end of the market,” Edgar said.  Prime Minister John Key has also said the Government could help out with funding.  Queenstown’s case is also stronger after the Christchurch convention centre was wiped out by February’s earthquake.

More than a bridge – it’s a work of art

25th November 2011

Sitting pretty: An artist’s impression of a planned replacement for the historic Kawarau Falls bridge Queenstown’s urban design panel is taking an arty approach towards the proposed new Kawarau Falls bridge scheme being bandied about.  The New Zealand Transport Agency unveiled its proposed new bridge at a recent Queenstown Lakes District Council meeting, after consulting QLDC’s urban design panel.  Sugar-coating criticisms with diplomatic blandishments, the Queenstown panel critiques the bridge design as if analysing a work of art.  The new bridge design is “a memorable companion to the historic one-way bridge”, the panel says, but “does not sit well in relation to the existing bridge”.  “The two bridges pinch together in an awkward juxtaposition which detracts from both.”  While the new bridge is “a simple yet graceful design ... it seems as if the two [bridges] are engaged in some titanic struggle ...”  And: “The result fails to respect the historic bridge and spoils the special sense of arrival that one should feel on entering Queenstown.”  Stripped down, the urban design panel’s four-page report recommends NZTA site the new bridge further downstream, buying up “several private properties along the Frankton riverbank” to do so.  “Greater separation of the two bridges would allow each its own identity and dignity,” the panel says.  The urban designers are also pushing for a 50kmh speed limit across the bridge all the way to Frankton – NZTA assumes a 70kmh limit.  “Bridges last for a long time,” the urban design panel says. “Five or more generations will probably use this bridge.”  This last comment could be an understatement, given the existing one-lane bridge was built in 1926 and that NZTA has been duckshoving for decades over replacing it.  Minutes from the council’s September meeting show Queenstown mayor Vanessa van Uden questioning the involvement of the urban design panel and expressing concern about the cost implications of their input.  Van Uden also questioned the emphasis on aesthetic factors, saying that getting a practical two-way bridge was the main priority.  Cr Cath Gilmour acknowledges Van Uden’s concern but asks for one of the panel’s objectives – ensuring the bridge is usable by walkers and cyclists – to be retained, the minutes show.

School could take another 150 pupils

23rd November 2011

Source: Otago Daily Times

Remarkables Primary School could educate an extra 150 pupils if the Ministry of Education and the Queenstown Lakes District Council approve.

The school also expects to learn from the ministry this week when the proposed reduced enrolment zone will be adopted. It will be two months since the school submitted what it labelled a "Band-Aid" response to the ministry's concerns of future overcrowding in Remarkables Primary School and enrolment growth in the Wakatipu.

Principal Debbie Dickson said yesterday an extra four classrooms could be built "very quickly" and kept consistent with the design of the school on the existing site at the end of Ahuwhenua Pod near Boyes Cres, allowing an extra 150 pupils to be accommodated.

"We just need approval that we are allowed to do that. A term and a-half and [the classrooms] would be there. Approval is all to do with the ministry's projections and planning. That's what we're waiting for. The council have to give their consents for it, but they've already indicated that is viable. Using the space would be perfect."

Mrs Dickson said the sixth pod of four classrooms was originally planned, but removed before construction of the $17.3 million school began on the 3.6ha site in April 2009.

Building the extra classrooms would "alleviate some of the pressure and gives time for the ministry to secure the next primary school site. It's a short-term fix, not a long-term fix."

The ministry was aware the school and board of trustees wanted direction on what was to happen so they and parents could plan next year and beyond, she said.

Asked for her reaction to the growing roll, Mrs Dickson said it was "exciting in the sense it's the last part of our staged opening and we become a full primary school. On the other side, as a board and a school we've got to manage our roll and that's the hard bit about what happens.

The primary school opened with more than 50 pupils in February 2010. It welcomed one additional pupil last week and two this week, which will take the total number of pupils to 367 by Friday.

There will be more than 400 pupils in total when 37 pupils in year 7 and six pupils in year 8 begin classes on February 1. The school was built for 460 pupils.

The proposal to exclude pupils from Lake Hayes Estate, Quail Rise Estate, Tucker Beach, Marina Heights and the northern side of Frankton Rd, from term 2, next year, was overwhelmingly rejected by residents who lodged school feedback forms by mid-August.

In a statement attributed to Southern regional manager Raymond Webb, of Christchurch, the ministry confirmed it was considering a request from the board for the date of implementation to be the beginning of term 2, 2012 and would advise the board this week.

Ministry property management group manager Kim Shannon said in a statement: "The ministry is considering a range of accommodation options for student accommodation at Remarkables Primary School. The chosen accommodation option will depend on roll growth at the school during 2012."

Glenorchy road gets $500,000 work for tourist traffic

21st November 2011

Source: Otago Daily Times

Five much-needed slow vehicle bays worth about $500,000 are planned for the road between Queenstown and Glenorchy to cope with increasing tourist traffic.

Four of the five government-funded bays will not require resource consent, with work expected to begin before Christmas and to finish in February.

Queenstown Lakes District Council acting capital works manager Steve Hewland said the plans were prompted by concerns raised by members of the community over unsafe passing.

"It's just recognised that out there, with the type of the road being coastal and mountainous, that there weren't many opportunities for safe passing, which is a real issue."

He said the volume of traffic was "nowhere near" high enough to meet the government's funding rules for passing lanes, but the bays were a perfect solution.

Because of the topography, four of the bays will be on the way to Glenorchy and one on the way backThe QLDC has filed for resource consent for the fifth, at the Twenty Five Mile Creek Bridge, which requires a 70m-long reinforced wall up to 4.5m high.

Engineering consultant MWH New Zealand was brought in by the council to investigate possible locations for the passing bays.

In the application, MWH said the extra bay was necessary for "more efficient passage of traffic ... where passing opportunities are limited".

The chosen site climbs steadily uphill from the lake, making it an important spot to address traffic safety issues.

Approval has been gained from the Department of Conservation, Fish and Game, Kai Tahu Ki Otago Ltd and Te Ao Marama, with Lakes Environmental requesting written approval from Land Information New Zealand and Te Runanga o Ngai Tahu.

If granted consent, construction of the fifth bay was scheduled to start in January 2012, and would take about one month.

The road provides entry to Paradise and the start of the Routeburn, Greenstone, Caples, Dart and Rees tracks.

Mega III: the applications continue

18th November 2011

Source: The Southland Times

Backers of a proposed $20 million Mega Mitre 10 store in Frankton Flats are hoping it is third time lucky in gaining consent for the Queenstown franchise.

The resource consent application filed by H&J Smith outlines previous attempts to open a store, which were turned down.

The first attempt, in 2003, was for a proposed site close to the current location being applied for. The site would be on the corner of an extended Glenda Drive, and a new arterial road.

It was "shelved due to zoning issues," the consent application says.

A 2007 application did not advance because "land was made unavailable due the Queenstown Airport Corporation's requirement for land for the airport," the application states.

The H&J Smith group has been in business in Queenstown since 1971, and currently operate the Remarkables Park Mitre 10, H&J Smith department store and Element outdoor sports store.

The $20 million investment by the group "reinforces the belief the company has in future growth of the Wakatipu [and] Central Otago region," the application states. However, since the group's 2007 "shelved" application, zoning challenges in the Frankton Flats area have not become easier.

A resource consent application by Foodstuffs South Island Ltd – which H&J Smith managing director Acton Smith supported, was rejected because of plan change complications last month.

Mr Smith yesterday said the Queenstown store was of strategic importance for the Mega Mitre 10 group, which is approaching its goal of establishing a nationwide network. "It's all about national pricing, meaning Queenstown people will be able to pay the same price for goods as people in Auckland, or anywhere in the country," he said.

Although the current application had taken a lot of work and planning, and was tailored to plan change specifications, the zoning complications surrounding the Frankton Flats area were a concern, Mr Smith said.

"This plan change has been going for so many years with no resolution. We need resolution so people can move forward. I believe we will see our application supported in an Environment Court appeal by Foodstuffs, because we're both trying to bring the largest stores to the district to provide the best-priced products."

Monorail builders hope for consent

14th November 2011

Source: The Southland Times

Developers of a proposed $200 million scenic monorail linking Queenstown and Milford Sound say they are hopeful of gaining Department of Conservation consent in the next few weeks.

Rivertsone Holdings chief executive Bob Robertson said yesterday a decision was "imminent" on the plans for his company's 34km monorail from the Kiwiburn to Te Anau Downs.

On Thursday, the developers of the proposed competing $150m, 11.3km underground bus-only tunnel linking the Routeburn and Hollyford roads announced they had been granted DOC consent in principle. That proposal would now go to public consultation and progress to the resource consent stage.

Mr Robertson said he had understood his company's consent decision was to have been announced at the same time, but it would now be in the next few weeks. "My expectation is we would get there," he said.

The monorail proposal has been in the pipeline for 16 or 17 years, first mooted by former Queenstown Airport Corporation chairman Philip Phillips, who still retains a shareholding in the Riverstone project.

"We're probably a couple of weeks behind in the race ..." Mr Robertson said.

The monorail proposal had been revamped three times now to meet DOC and other stakeholders' concerns after it originally cut through a section of Fiordland National Park.

"We've been down that same road as Milford Dart on a long, long road.

"We made three major changes and moved it outside the park. We decided not to go down the hard route and moved it, in sympathy with DOC and other stakeholders."

The monorail route would now begin with a catamaran ride from Queenstown to Mt Nicholas, then transport on an all-terrain bus system through the existing public road alongside the Von River to Kiwiburn, where the monorail would cut through a forest, "not a strategic one", to Te Anau Downs. Riverstone owns a hotel and backpackers lodge at Te Anau Downs.

"We're trying to improve the journey not race."

The proposal was aimed at getting visitors closer to nature to experience and enjoy the outback without large numbers impacting the resource, Mr Robertson said.

The monorail, which could be operating within two years if consents were granted, could take 160 passengers at a time and would halve the travel time between Queenstown and Milford.

"We could cope with 1 million people a year (into Milford) – there are 500,000 at the moment."

First-timers drive housing market

14th November 2011

Source: NZ Herald

Young professionals who stayed at home with their parents during the recession were now driving competition in the market for first homes.

Chief economist Tony Alexander said the need to spread wings, low interest rates, talk of housing shortages, rising rents and an improving labour market had first-home buyers out in force.

A Bank of New Zealand and Real Estate Institute of New Zealand (REINZ) survey found investor buying had dropped while first-home buyers had dominated sales.

"In contrast to investor activity, first-home buyer activity continues to rise very strongly and is perhaps the most notable feature of our survey in recent months," Alexander said.

He also noted people selling and buying again were much more likely to be downsizing rather than trading up.

The survey - of 10,000 licensed real estate agents - also found that the third-biggest motivation for selling, behind "needing the money" and "leaving town", was the break-down of a relationship.

Latest figures from REINZ showed 58.6 per cent of properties sold in October were in the under-$400,000 price bracket.

Peter Thompson of Barfoot & Thompson agreed the first- home market was busy but said the $1m to $2 million market also showed great growth. The first-home buyer's bracket was competitive but he warned buyers not to over-extend as interest rates would only rise.

Savings with second hand

First home owner Greg Skinner researched for five years before choosing to relocate rather than build on his family's dream site.

The Muriwai man found he could get more for his dollar with a second-hand home than a new build.

"Our house is nearly 200sqm and for the same money we would have only got a 100sqm of new house," Skinner said.

"With this option we got a big place with character and we think it is going to be worth more in a few years than a smaller modern house."

The four bedroom bungalow has plenty of space for his partner and two daughters.

The couple had to have it delivered, re-wired, re-plumbed, insulated, plastered and the interior painted - paying half of what a new build would have cost.

A new home based on between $1500 and $2000 a square metre would cost up to $400,000.

Deal could mean direct fares south

10th November 2011

Source: Otago Daily Times

Direct tickets from emerging Asian tourism markets to Queenstown and Dunedin are a potential dividend of the $9 million marketing deal announced by Tourism New Zealand and Jetstar yesterday.

The tourism crown entity and the low-fare Qantas subsidiary agreed to contribute $1.5 million a year to joint brand, promotional and "tactical" campaigns, plus consumer events and print, online, television and social media activities.

The three-year agreement runs to mid-2014. The new partners described their first formal marketing partnership as the single largest push undertaken by the budget airline in New Zealand.

Asked what the partnership meant for Wakatipu and Southern residents and operators, Destination Queenstown chief executive Tony Everitt said the addition of Jetstar's resources to the ongoing push by DQ and Tourism NZ in Australia, Singapore, Japan and across Asia was going to be "very helpful for us".

Mr Everitt referred to DQ's promotion of the resort with Tourism New Zealand in Japan last year as an example of how partnerships could work.

"We talked with Jetstar people about their flights to New Zealand and, as a result, they put an air fare into the market that was Tokyo-Queenstown, not just Tokyo-New Zealand, so that customers could buy a fare all the way through to our own resort.

"We are hopeful that could be a possibility out of the Singapore market, or that whole southeast Asia market."

Asked if potential travellers in emerging markets wanted Queenstown as a holiday destination, Mr Everitt said there was certainly interest, but a lot of marketing work was needed.

"The irony is that not many people in the world know a lot about Queenstown, so the marketing job is a big one to do and to hear there's $9 million of additional resource to leverage that is very helpful."

Jetstar's low fares could open New Zealand up to a new generation of travellers, Jetstar Group chief executive Bruce Buchanan said yesterday.

"With our Singapore hub providing connections with 25 Asian destinations, it makes New Zealand an increasingly accessible holiday destination for an emerging middle class in China, the Philippines, Thailand and Indonesia," he said.

NZ property values continue slow climb

10th November 2011

Source: tvnz

New Zealand property values have continued their slow grind upwards, underpinned by gains in Auckland and in post-earthquake Christchurch.

Property values were 1.2% higher in October than a year earlier and are 4.4% off the peak in late 2007, according to government agency Quotable Value. Auckland region's values are just 0.1% from the previous market peak, and have driven national gains in an unequal manner.

"While initially the upward movement in values was being driven by Auckland and post-quake Christchurch, many other areas of the country are now increasing," said research director Jonno Ingerson.

"While there has been a slight increase in new listings in many areas, this has yet to translate into an increase in the number of sales."

New Zealand's property sector has been struggling to come out of the doldrums this year amid a lack of demand for new housing as people used record-low interest rates to repay debt rather than adding new borrowing.

Auckland property values were 2.7% higher than the same period last year with an average sale price of $526,861 over a rolling three month period, down from $529,028 in September.

Wellington area property values were 0.9% lower than in October 2010, with the average three-month sale price at $432,894, down from $433,714 a month ago.

Christchurch property values were 3.4 percent above the same month a year ago, with the average sale price at $379,462, down from $380,374, and Dunedin property values were 2.4% lower than in 2010, with the average sale price at $262,472 in October, down from $266,073.

Pak'n Save decision to be appealed

7th November 2011

Source: Otago Daily Times

Declined Pak'n Save supermarket plans for Queenstown, revealed by the Otago Daily Times, will see Foodstuffs South Island and a major Queenstown developer appealing the case to the Environment Court.

The multimillion-dollar Frankton Flats supermarket and fuel station was expected to create 250 jobs, but was refused consent by commissioners David Whitney and Lyal Cocks late last month.

Part of the proposed $100 million Shotover Park retail development, the 6603sq m facility would be close to the planned $125 million Five Mile retail and entertainment complex, including a 4200sq m Countdown supermarket.

Porter Group Ltd director Alastair Porter said the decision was "extremely disappointing for the Queenstown community" in the face of constant requests for a Pak'n Save.

"The Pak'n Save resource consent is about affordable groceries for members of our community, a $30 million investment at a time when business development is seen as relatively stagnant" the Remarkables and Shotover Park developer said.

Mr Porter believed the supermarket had been turned down because too much weight had been given to a "redundant" zoning report and not enough on considerations on improving affordability.

"The only objection was from the developer of the former 5 Mile site, whom we absolutely regard as being motivated by self interest given he is involved with the planning for a Countdown supermarket on a nearby site adjacent to Grant Rd."

He said Porter Group Ltd would be joining Foodstuffs in appealing the decision in the Environment Court, but considered the best solution would be to come to an agreed settlement.

Foodstuffs South Island general manager property and retail development Roger Davidson did not wish to comment on specifics of the decision, but confirmed it would be appealed.

Like Mr Porter, he said he was disappointed "more for the people of Queenstown", who would have to wait longer for the discount supermarket.

A spokesperson for sole appellant, Queenstown Central Ltd, said it was comfortable with the decision on the proposal.

Simon Holloway, also spokesman for the Five Mile development, said allegations that Queenstown Central Ltd had acted for supermarket operator Progressive Enterprises had been addressed in the September hearing"The commissioner also took that into account in his decision, and that is obviously covered off."

H&J Smith, parent company of Queenstown's Remarkables Park Mitre 10, which is proposing a Mitre 10 Mega facility next to the Pak'n Save complex, said its plans were still going ahead.

Managing director Acton Smith said the company planned to progress matters on its own land, and would file for resource consent within the next ten days .

"I have hope that having Pak'n Save and Mitre 10 Mega beside each other will be very beneficial for the people of the Wakatipu Basin . . . employing about 70 to 80 people."

The commissioners found the proposal failed to "promote the sustainable management of natural and physical resources" and would have "significant adverse effects" on the rural general zone. Mr Whitney and Mr Cocks said approving the proposal without a finalised structure plan, or approved outline development plan would establish "an undesirable precedent".

KiwiSaver boost for first-time home buyers

7th November 2011

Source: Stuff Business Day

Buying a first home has been made a little bit easier for close to 2000 KiwiSaver members who have received government subsidies of between $3000 and $4000 each.

But others are missing out because they or their agents do not fully understand the process.

People who have been in KiwiSaver for three years can apply for a first home subsidy of $1000 for every year they have been contributing, up to a maximum of $5000.

The first KiwiSavers became eligible just over a year ago.

Since then, Housing New Zealand has received more than 3000 applications.

Figures as at the end of September show 1623 applications have been approved. Another 417 were pre-approved for people who were not yet buying a property but wanted to know if they were eligible. Of the pre-approvals, 197 expired before the applicants used them. (Pre-approvals last for 90 days.)

Most of the successful applicants – approximately 90 per cent – received $3000, while the rest received $4000.

As well as subsidies, KiwiSaver allows first-home buyers who have been in the scheme three years to apply to their scheme providers to withdraw their contributions, and their employer's contributions.

Government contributions cannot be touched.

Workplace Savings New Zealand executive director Bruce Kerr said some people had been missing out because they did not know they had to apply before settlement.

The group, which represents KiwiSaver providers, is working on a free guide to help people work out if they are eligible and how to apply.

Kerr said it was important everyone involved in the house buying process, including real estate agents, bankers and lawyers, was fully up to speed.

To be eligible for a subsidy you must have contributed at least 2 per cent of your income to a KiwiSaver scheme for at least three years, and plan to live in the house for at least six months.

A couple buying a house together can both qualify for a subsidy and receive up to $10,000 between them.

If one or two buyers are purchasing a home, they must earn $100,000 or less between them. The house must cost no more than $300,000, or $400,000 in Auckland city, Wellington city and Queenstown Lakes.

People can apply to withdraw money even if they don't qualify for a subsidy, as long as they have been in the scheme three years.

And people in a similar position as a first-home buyer (known as second-chance buyers) can also qualify.

Cool million for shabby Queenstown hall

4th November 2011

Source: scene.co.nz

New look: An artist’s impression of the upgraded Memorial Hall

A million-dollar grant is kickstarting a fundraising campaign to upgrade Queenstown’s bedraggled community hall. 

A working party has produced a $2.56m plan to improve the ageing Memorial Hall as a community, performance and conference venue. 

The plan includes increased tiered seating, an extended lobby, external foyer, removal of the mezzanine floor, raised stage roof, a retractable wall and structural strengthening. 

Central Lakes Trust chair Sir Eion Edgar today announces a $1m contribution towards the “excellent and well-presented community project”. 

The working party, chaired by Queenstown councillor Cath Gilmour, is also approaching funding agencies like the Community Trust of Southland and the Lottery Community Facilities Fund.Queenstown Lakes District Council is likely to stump up $475,000. 

“It is inescapably time to upgrade our hall – the rather bedraggled home of so many community celebrations, musical and drama productions, Anzac Day services and social gatherings,” Gilmour says. 

Several hundred thousand dollars in sponsorship and in-kind contributions will also be required by the soon-to-be-formed Queenstown Memorial Hall Trust, Gilmour says. 

Three fundraising events are planned. 

Gilmour says the long-term goal of a separate, purpose-built performance venue for the Wakatipu remains “but the fragile economy means this is not currently a realistic answer to Memorial Hall’s shortcomings”. 

“It might not make everyone as ecstatic as a magically fully-funded arts centre would, but it sure will make a lot of people a lot happier.” 

Gilmour says some parts of the project like air-conditioning and acoustics were planned when the hall was renovated in 1998 but were dropped for funding reasons. 

The working party believes the upgrade will significantly improve hall usage, which has dropped away because of its inadequacies – many touring shows, for example, don’t come as a result. 

The upgrade, and the retractable wall, in particular, would also make the hall more attractive for 150 to 300-delegate conferences, Gilmour says. 

The hall’s original “memorial” character will also be enhanced – it was originally built in 1959 to honour locals killed in World War II. 

The latest upgrade project was triggered by working party member and performing arts enthusiast Steve Wilde, who was shocked to see rain falling on RSA president Dave Geddes’ head during an Anzac Day concert last year. 

“It really did make me wonder about the future of the hall,” he says. 

“But with the upgrade, it’s now going to continue to be exactly what was first envisaged – a living memorial at the centre of community cultural life,” Wilde adds. 

Gilmour says there’s been great support already from community groups like the RSA and Showbiz Queenstown – which is contributing $125,000 worth of lighting and sound equipment – as well as local consultants. 

The Wakatipu Rugby Club has also offered manpower to put in a downstairs changing room. 

The working party hopes the project will run from next August and be completed by the end of 2012. It’s inviting the public to the hall this Saturday, from 11am till 2pm, to view the plans.

NZ Property Report - Oct 11

2nd November 2011

House building figures hit new low

1st November 2011

Source: Otago Daily Times

House building in New Zealand has slumped to a new record low.

Statistics NZ said consents for just 13,533 new houses were issued in the year to September 2011, down from 16,292 consents issued in the year to September 2010.

Louise Holmes-Oliver of Statistics NZ said yesterday the big drop in seasonally adjusted figures for new home approvals in September partly reflected the strength of the increases in the previous two months.

Darren Gibbs of Deutsche Bank noted the extremely soft numbers and predicted Christchurch could help eventually.

"Following two months of solid improvement the number of dwelling consents issued fell sharply in September. Together with another soft reading in the non-residential sector, the near-term outlook for the construction sector appears likely to remain depressed despite widespread expectations that earthquake-related repairs in Canterbury will help boost the industry sharply from next year," he said.

Philip Borkin of Goldman Sachs & Partners NZ said the data was inherently volatile and the underlying trend was still rising, albeit at a more gradual pace.

Non-residential consent issuance was valued at $320 million in the month, broadly in line with the past 24-month average.

Statistics NZ said earthquake-related building consents were issued in Canterbury worth $29 million in September of which $26 million was for non-residential consents. Overall, residential consent values totalled $398 million in September, down 12 per cent compared with the same month last year, while non-residential consents totalled $320 million, down 13 per cent. Helen O'Sullivan, chief executive of the Real Estate Institute, said the number of new-house builds had reached critical lows and was a factor stopping people from listing their older houses.

Real Estate Institute warns buyers against unlicensed inspectors

The Real Estate Institute is warning against low-quality pre-purchase building reports and told consumers only to use inspectors who are members of two professional industry bodies.

Helen O'Sullivan, REINZ chief executive, said members of the Institute of Building Surveyors and the Royal Institution of Chartered Surveyors were qualified to do the work.

People should not buy a house without a professional written report, she said. Agents cannot recommend any provider in particular, but membership of the two bodies indicated inspectors were properly qualified and held professional indemnity insurance, she said.

A desperate shortage of houses for sale and poor inspection reports were two of the biggest problems dogging the real estate sector, she said.

The critical shortage of houses meant some people were being forced to buy before they sold, she said. The shortage was caused by the construction downturn and general economic uncertainty which meant people were reluctant to list their house for sale or move.

From around 2004 when about 11,000 houses sold monthly to now when only about 5500 places are selling, buyers were left with little stock to chose from, she said. The sector turns over real estate worth about $23 billion a year with about 66,000 residential properties selling for a median $350,000.

From about 22,000 agents at the peak of last decade's boom, only about 13,000 were licensed now, of whom about 10,500 were working.

The institute has rebranded and had a new focus, after the new act came in and the Real Estate Agents Authority and Real Estate Agents Disciplinary Tribunal were created, removing all the institute's disciplinary work.

O'Sullivan, who started last November, is a chartered accountant formerly of Korda Mentha and Crockers and said unregulated property managers were another huge problem for the sector. The recent failures of Wellington's Jericho Residential Property Management and Auckland's Trump Assets Management and City Gardens Management were of great concern to the industry, she said.

The institute wants managers to be regulated but the law change removed that, O'Sullivan said, as well as exposing vendors to a double commission nightmare where they might have to pay once to a selling agent and again to a listing agent.

Lakes region in Lonely Planet top 10

31st October 2011

Source: The Southland Times

Lonely Planet has named Queenstown and the Southern Lakes in its top 10 regions to visit in 2012.

The Lonely Planet Best in Travel 2012 book, on sale today, puts Queenstown, Lake Wanaka and Fiordland at No8 on the list.

It is the only New Zealand region in the book, which recommends the best destinations, journeys and experiences next year.

Destination Queenstown chief executive Tony Everitt said the announcement would give the region worldwide recognition.

The endorsement was "priceless" and would inspire more tourists to travel to the region, Mr Everitt said.

Lonely Planet New Zealand spokeswoman Sarah Bennett said the news was hardly surprising.

"Words like breathtaking, jaw-dropping, exhilarating and stunning are grossly overused in the tourism industry but the Southern Lakes region has a right to them all," Ms Bennett said.

The region was given the No8 spot because of its activities, such as skiing, golf and water sports, and spectacular scenery.

The book also gives credit to the region's "excellent wineries and superb restaurants".

Coastal Wales was given the No1 spot, followed by La Ruta Maya, in Central America, and northern Kenya.

Destination Fiordland manager Lisa Sadler said the power of the Lonely Planet books should not be underestimated.

The books heavily influenced travellers, so the announcement that Fiordland had been named in the top 10 was superb, Ms Sadler said.

Lake Wanaka Tourism general manager James Helmore said: "Appearing in Best in Travel 2012 will considerably enhance our profile and allow more international travellers to discover what everyone who lives here is so passionate about."

The "ultimate alpine playground" on offer in Wanaka and the Southern Lakes was a perfect fit for the Lonely Planet reader, Mr Helmore said.

$17m sport facilities plan presented

27th October 2011

Source: Otago Daily Times

Proposed sports field, court and Queenstown Event Centre developments costing $17 million were yesterday presented to the Queenstown Lakes District Council as part of Lakes Leisure's master facilities plan 2011.

The council-owned sports and leisure organisation's report was received at the full QLDC meeting, after which it would be put out for community consultation.

It included 2012-13 plans for a $1.8 million sports fields and athletics track development at the Queens- town Golf Club, a $9.8 million main stadium extension, including two additional courts, toilet and change facilities, and two new squash courts worth $500,000.

Also proposed for the same period was construction of a learners pool at the Wanaka Community Pool, at a cost of $200,000, and Queenstown Events Centre road access and car parking developments.

For 2015-16, four covered hard-surface courts next to the QEC main hall, worth $3.8 million, were proposed, with additional sports field development at Grant Rd in 2019, at a cost yet to be determined.

The plan proposed the QLDC contribute $13.8 million of the total cost.

Queenstown Lakes Mayor Vanessa van Uden stressed the proposal was coming from Lakes Leisure, not the QLDC.

By receiving the report, Lakes Leisure will be able to proceed to community consultation on the plan, with Ms van Uden saying it must make sure its intentions were "spread far and wide".

A major issue outlined in the plan is the availability of sporting facilities, with "insufficient space" at the QEC for consistent access to in-demand sport and recreation activities.

It said sport growth rates suggested demand for the facilities would "continue to exceed availability", potentially limiting the growth of local sports and the emergence of new sports.

The QEC stadium was described as the only suitable venue in Queenstown for large events - such as the Trenz tourism conference earlier this year - which have seen sports users increasingly sidelined.

This winter, 41 "bump-out" days because of event use of the stadium were recorded, affecting about 3200 people, up from 24 days last winter.

The plan proposed to maintain and develop the QEC as a recreational hub, as opposed to focusing on satellite sports fields.

OCR left unchanged

27th October 2011

Source: Reserve Bank of New Zealand

The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 2.5 percent.

Reserve Bank Governor Alan Bollard said: “Domestic activity has continued to expand at only a modest pace despite relatively strong commodity prices. More recently, domestic business confidence has fallen back somewhat. Further ahead, earthquake repairs and reconstruction in Canterbury are still expected to provide significant impetus for demand.

“As foreshadowed at the time of the September Monetary Policy Statement, there is a real risk that the European sovereign debt crisis could cause a further slowing in global activity, putting downward pressure on New Zealand’s commodity export prices.  The difficult international market conditions could also result in increased New Zealand bank funding costs over the coming year.

“Annual headline CPI inflation continues to be above the Bank’s 1 to 3 percent target band. That largely reflects the one-off effect of last year’s increase in the rate of GST. September quarter inflation data suggest that, once GST and other one-off influences have passed, underlying inflation is settling near 2 percent.

“Given the ongoing global economic and financial risks, it remains prudent to continue to keep the OCR on hold at 2.5 percent for now. However, if global developments have only a mild impact on the New Zealand economy, it is likely that gradually increasing pressure on domestic resources will require future OCR increases.”

Third boat group eyes lake

26th October 2011

Source: Otago Daily Times

Another proposed jet-boat operation on Lake Wakatipu is on the cards, after a favourable Environment Court decision regarding Thunder Jet issued last month.

Former Queenstown Lakes District Council chief executive Duncan Field is behind Ecojet Ltd, proposing a new jet-boating and water taxi system on the lake, already home to Kawarau Jet and now Queenstown Water Taxis operating as Thunder Jet.

Mr Field applied for resource consent in May to operate four boats across a network of water taxi drop-off and pick-up points, including the Remarkables Park retail complex.

The company has already secured two berths and a kiosk at Queenstown Wharf and is backed by partners - Queenstown developer and jet-boat driver Alistair Hey and Christchurch biochemist Nick McMillan.

Mr Field told the Otago Daily Times after lodging the application the company agreed with Lakes Environmental "it would be good to wait until the Environment Court had issued their final decision [on Thunder Jet] before we proceeded to have the resource consent processed".

Queenstown Water Taxis was given approval by the Queenstown Lakes District Council for two consents, which were subsequently appealed to the Environment Court by Kawarau Jet.

The Environment Court has now approved both consents, subject to conditions, with Queenstown Water Taxis Ltd permitted to operate one jet-boat (up to four trips per day) and also three boats (about 10 trips per day) on the Kawarau River, from the Kawarau River bridge, about 14km downstream, to near the Arrow River confluence.

Both applications involve pick-up and drop-offs of passengers at an established berth at a jetty in Queenstown Bay, or at Frankton Marina.

Mr Field said he and his business partners were now "getting our heads around that" and preparing for the next step of the resource consent process.

"Now, we can move on with ours.

"It's pretty straightforward, and a simple decision [from the Environment Court].

"I think there's a considerable process to go through yet, but we're confident with all that we've seen that this is a safe and suitable activity for that area."

Home loans at most affordable levels in 8 years

25th October 2011

Source: Stuff Business Day

Lower average house prices and downward pressure on interest rates meant home loans hit their most affordable levels in September that New Zealand had been seen in eight years.

According to the latest Roost Home Loan Affordability report, last month offered the best levels of loan affordability since 2004 with 20.6 per cent of the average income of a couple on the median wage needed to meet payments on a floating 80 per cent mortgage for a median priced house.

This was down from 20.7 per cent in August this year. For singles on the median wage, it would take 50.7 per cent of a salary to meet mortgage payments, down from 82.2 per cent in September 2007.

However home ownership is still priced high for most people earning the median take home pay a week - almost $800, the report says. "Essentially the median income for the typical buyer is not high enough to buy a median priced house, even with a 20 per cent deposit," the report said.

The median house price eased off by $5000 to $350,000 last month and economists are picking the Official Cash Rate will be kept at 2.5 per cent into 2012, so floating mortgage rates are expected to stay low.

Floating interest rate were 5.73 per cent on average at most banks in September, unchanged since August but down 51 basis points from a year earlier. More than half of all mortgage holders nationwide are currently on floating options.

Rhonda Maxwell, spokeswoman for mortgage broker Roost Home Loans that produced the report, said banks were eager to lend.

"First home buyers are seeing low interest rates and a stable outlook into early next year, which is improving confidence," Maxwell said.

"Banks are also competing hard to boost their lending to property investors and first home buyers, who are increasingly withdrawing their KiwiSaver funds to use for deposits."

The Murphys call last orders

21st October 2011

Source: Scene.co.nz

Queenstown’s longest-established hospitality operators are putting their prime-site businesses on the market.
 
A marketing campaign launches today for Lisa and Grant ‘Spud’ Murphy’s Chico’s Bar & Grill and Old Man Rock cafe. 

Grant bought into Chico’s – a restaurant/nightclub now in its 30th year – in 1987. 

Four years later he bought out his remaining partners including his dad Gordon, who operated Arrowtown’s New Orleans pub for 18 years. 

Grant and wife Lisa opened Old Man Rock, below Chico’s, in 1999, at the time of Queenstown’s record flood. 
“People were able to kayak up to our front door,” Grant recalls. 

Grant says he and Lisa are selling as “it’s just time for a change”, and they’re planning to open a convenience store and licensed cafe at Lake Hayes Estate. 

“We’d like to pour 100 per cent into it.” 

Operating Chico’s and Old Man Rock has been “a fantastic lifestyle,” Grant says. 

“I wouldn’t change it for the world – the only regret I probably have is I can’t be 30 again and do it all again.” 

Grant says “a lot of locals who were here when I started didn’t think I would last six months”. 

“There were only three-odd places to go for a drink after midnight, and we used to think that was pretty tough.” 

Grant puts a lot of their success down to the atmosphere created by their historic premises and its location on the sunny side of The Mall. 

“Ninety-five per cent of tourists walk right past our door so it gives us a chance to market to them.” 

Grant says he was the first person to deploy staff outside to explain the menu – some call it ‘touting’ – and to put out tables and chairs. 

Chico’s became known, too, for its ‘brain eraser’ cocktail and live music. 

Grant says his businesses also became a vehicle to foster his and Lisa’s sporting interests by sponsoring rugby, netball and touch sevens. 

Listing agent Garry Pankhurst, from Hoamz, says it’s up to the market to assess what the businesses are worth – the sale deadline is November 30. 

“Stuff in The Mall doesn’t come along very often, it’ll be pretty sought after, I’m sure.” 

Combined rental for the two businesses is $125,000 a year.

Queenstown to get a slice of $340m regional aircraft deal

20th October 2011

Source: Scene.co.nz

Queenstown is likely to benefit from a NZ$340 million investment by Air New Zealand to bolster its aircraft fleet. 

The national carrier today (Wednesday) announced it has ordered seven new-generation ATR72-600 aircraft with purchase options for a further five between 2012 and 2016. 

The order with French-Italian company ATR, subject to contract signing, potentially doubles the size of Air NZ’s ATR fleet and will put a further 200 million seats into the domestic regional market each year, CEO Rob Fyfe says. 

“For our customers that will mean a big increase in the number of business-timed seats and seriously cheap grabaseat fares we have on regional routes every day.” 

Each aircraft will come with advanced cockpit technology including Required Navigation Performance (RNP) equipment – which Queenstown flights heavily rely on due to the mountainous terrain surrounding the airport. 

“The benefit of these aircraft being RNP-configured is clearly valuable for Queenstown. Being able to extend that to the ATR fleet is something we think is very important.” 

Fyfe isn’t sure how many more flights will pass through Queenstown Airport as a result of the move – but “you will see more ATR flights going through there”, he promises. 

“We rate Queenstown as one of the top two or three most exciting growth destinations in NZ and we see that continuing for the foreseeable future. 

“Queenstown has undoubtedly been one of the fastest-growing destinations in NZ and Air NZ has invested enormously in infrastructure at Queenstown Airport and in capacity going into Queenstown,” Fyfe adds. 

“We are very strongly motivated to maintain our competitive position in Queenstown and we intend to lead the market by continuing to deploy capacity and continuing to support the growth for that market.” 

The first of the 68-seat ATR72-600 aircraft will be delivered to Air New Zealand in October 2012 followed by a second in December that year, two in 2013 and another each year for three years. The five purchase options are available for delivery between 2014 and 2016.

Five Mile consent delay

19th October 2011

Source: Otago Daily Times

The consent process for the $125 million Queenstown Gateway shopping and entertainment complex at Five Mile is on hold, resource consent body Lakes Environmental said.

New Five Mile developer Tony Gapes in August told the Otago Daily Times he hoped construction of stage one of the complex, worth $70 million, would begin at the 7.8ha site later this month.

However, Lakes Environmental urban designer Paula Williams yesterday said the consent application "remains on hold at this stage" while waiting for more information from the applicant.

"Really, the ball's in their court and it's up to them when they get back to us," she said, unable to put a date on when the consent might be granted.

Confirmed for the 26,000sq m big-box retail complex is a 4200sq m Countdown supermarket.

Proposed are a six-screen cinema complex, bulk retail outlets and 40 to 50smaller retail and food outlets in a mall based around a two-level department store.

The development would spell the end of "Hendo's Hole", an excavated site intended to be used as an underground car park forthe original Five Mile development, a project which was left uncompleted when developer David Henderson abandoned the plans.

A spokesman for Queenstown Gateway could not be contacted yesterday.

Report highlights boom-bust construction cycle

18th October 2011

Source: TVNZ

The boom-bust cycles that drive the New Zealand construction industry are adding to its low productivity, says accounting firm PwC in a report for the Construction Strategy Group.

The sector lobby group had Minister for Building and Construction Maurice Williamson launch the report in Auckland, as part of an effort to focus government attention on the skills shortages likely because of the Christchurch rebuild and the potential for an industry bust after that surge of activity concludes.

The earthquake restoration work, combined with nationwide leaky homes action and upgrades to seismic strengthening offer "the prospect of the largest construction-led boom" in New Zealand's history.

"Do we currently have enough skilled people to do the work?" the report asks. "How do we ensure the greatest building boom ever is not followed by the greatest bust?"

Among proposed answers to that prospect are greater planning of capital spending by local and central government, encouragement for public-private partnerships to accelerate public infrastructure projects, tax changes to discourage property speculation, and adding employment targeting to the Reserve Bank's sole focus on inflation.

The argument to curb residential housing boom-bust cycles is based on research showing this part of the construction sector is the "major driver of volatility."

The report shows how the building industry boomed through early to mid-2000's on the back of the residential property speculation boom, adding 60,000 jobs between 2000 and 2007, "almost 50 percent more than any other sector in New Zealand."

In the recession that followed, the sector then experienced "by far the largest decline in employment since the peaks of the boom years."

These trends, in turn, are encouraging low investment in relevant skills and allowing large numbers of construction sector workers to deal with downturns by simply leaving the country, possibly never to return.

This high volatility compared to other parts of the New Zealand economy was almost certainly contributing to the construction sector's poor record of labour productivity, which is the subject of one of the first investigations by the newly formed Productivity Commission.

The sector was also the fourth lowest paid, which also reflected its tendency to pick up large numbers of relatively unskilled workers.

"Volatile cycles in the construction sector do not allow it to build and maintain capacity, or to plan more than a few years out because there is no certainty over any length of time," the PwC report says.

Yet even a 1% improvement in the productivity of the sector would be worth $300 million a year to the New Zealand economy, PwC says.

While government spending could help smooth out cycles in the construction sector, its current contribution to construction spending was about a quarter of the annual total, meaning it could only partially offset big changes in private sector activity.

Better planning of capital and infrastructure spending, along with more use of PPP's, would both be ways to increase the government's capacity to dampen volatility in the sector.

The report also suggests that employment targeting, which is common in other countries' monetary policy settings, could be added to the Reserve Bank's single-minded focus on low inflation.

The New Zealand Institute, a think-tank, last month also called for the government to consider changes to monetary policy, including using quantitative easing - otherwise known as printing money - to help float the economy through recessions.

Frankton land may be rezoned

17th October 2011

Souce: Otago Daily Times

Another block of Frankton land could be rezoned for commercial use after the Queenstown Lakes District Council accepted developers Shotover Property Investment Ltd's submission.

The 2ha area, which is zoned as low density residential, is opposite the Queenstown Events Centre across State Highway 6, northwest of the intersection of Joe O'Connell Dr, Hansen Rd and SH6.

It will become a "special zone", called the Frankton mixed-use zone, to allow for commercial, showroom, office, visitor accommodation, education, health-care and retail facilities to be built there.

The council approved the developer's proposal earlier this week and the proposal will open for public submissions from October 26 to November 25.

John Edmonds, speaking on behalf of Shotover Property Investment Ltd, said at this stage there were no particular plans for the land, but if the rezoning was successful it would lead to other opportunities.

He said the process from here was a timely one and no action could be taken before the proposal went to the hearing stage in April next year.

If developers chose to build on the site, it would be directly beside the City Impact Church and, unlike some similar zones in the area, there would be no discretion over public transport or affordable housing.

The specific design of the buildings would be controlled through resource consent, with those within 30m of the cemetery or 45m of the highway being no more than two storeys high.

The proposal also included the possibility of underground parking.

In 2001, the land was rezoned from rural to low density residential.

Farm sales for quarter rise 56.7%

17th October 2011

Source: Otago Daily Times

Farm sales for the three months ended September have increased 56.7% on the corresponding time last year, figures released by the Real Estate Institute of New Zealand show.

There were 257 farm sales in the three-month period, compared with 164 in the corresponding period in 2010.

Excellent early spring conditions and, for many, the best growing conditions in years combined with strong income levels was generating "cautious optimism" in the rural sector. That was being reflected by the banks' increased appetite for lending to farmers, REINZ rural market spokesman Brian Peacocke said.

Sales volumes reflected the early spring period, with many marketing programmes just commencing.

Early signs indicated higher expectations for volumes and prices as market momentum increased.

Supply of listings in some areas was becoming short, although the volume of properties available was higher than at the corresponding time last year.

The median price per hectare for all farms sold in the three months to September was $17,694, compared with $15,148 in the three months to August, and $17,447 for the three months to September last year.

Sales for the 12 months to September totalled 1053, the highest in more than two years.

Eight regions recorded increased sales volume for the three months ended September, with Wellington recording the largest increase (up seven sales).

Six regions recorded fewer sales, with Southland recording the largest fall (down 11), followed by Otago (down nine) and West Coast (down 6).

Included in sales for the month of September were four dairy farms at an average sale value of $32,334 per hectare.

The lifestyle property market remained "patchy and variable" from region to region, Mr Peacocke said.

The level of activity was indicative of the economic mood, but there was a sense of people holding back waiting to see how the market developed.

What's your house really worth?

17th October 2011

Source: Stuff Business Day

It's hard to know how much the bricks and mortar you inhabit or you've rented out is really worth, with property prices changing, councils updating their valuations and the neighbours selling their three bedroom bungalow for a lot less than you were hoping your own similar-sized house could fetch.

The prices residential properties sell for are now returned to almost the same levels seen in the market peak in 2007, before values crashed along with the worldwide economy in the global financial crisis.

Just last month, the national average prices houses sold for were more than 20 per cent higher than a year earlier - but that doesn't necessarily mean the cosy cottage that you call home has gone up 20 per cent in value since last Spring.

In Auckland, homeowners city-wide are nervously eyeing their letterboxes for notifications from local council about the new property valuations it recently carried out, to discover whether they'll be forced to fork out more for rates or not.

For many, the new council valuations are also a chance to get an idea of what their home is worth.

However many people say that you should only take the council valuations with a grain of salt, because they're just indicative of the amount of rates that should be paid and not really advice on what the house might sell for if potential buyers were to start a bidding war for it at auction this afternoon.

After all, how accurate could the valuation be if the person who created it hasn't been inside your house and taken stock of the fact that you upgraded the old kitset bathroom installed fifteen years ago with a swanky new shower and spa bath complete with Italian fittings or the lovely landscaping out the back?

Not very, most people would say.

Property Investors Association president Andrew King rubbishes council valuations.

"I put very little weight on CV's, they are very inaccurate. They're done in bulk and they don't specifically look at individual properties, just what the area has done since the last time it was valued. They may do a drive by but they're not going to be remarkably accurate," King says.

"I think all homeowners should look at what valuation is and if it doesn't appear right, investigate it and if necessary put in an objection."  

The Auckland council itself says that "a rating valuation is a reflection of a property's market value as at the date of the valuation, and that day only"

So what are your options if you don't want to rely on the rating valuation?

1. Go independent

There's always the option of seeking a professional property valuation before you look at selling.

President of the New Zealand Institute of Valuers Nicki Bilbrough says valuers give an independent and objective assessment of the current market value on the day the property was inspected.

"What a valuer does is come along and fully inspect the property inside and out, taking note of construction, age, condition, style. They measure up the gross floor area, look at the size of the site, its aspect, garaging and other improvements like  swimming pools and suchlike. They take note of the location, the condition of surrounding properties and they compare the subject property to sales that have occurred in that area," Bilbrough said.

"It's quite an involved process. People should look for a valuer who is an expert in the locality of the property they want valued."

Because valuers don't get any benefit from the price a property sells at - unlike real estate agents who are usually paid on a commission based on the amount the house sold for - their report is completely independent.

The period professional valuations stay current for depends on what the wider property market is up to. If it's in a boom period when prices are tracking up quite quickly, it might only last two months, Bilbrough says.

But in more stable environment it could be current for a longer period such as 4-6 months. If prices are falling it's a good idea to update a professional valuation after three months for a more up to date view.

2. Go online

There are several services that give people an approximate idea of what a house is worth almost instantly, like website Zoodle where anybody can buy a report on a property online.

The Home Valuer reports detail an estimate market value by compiling information such as comparable local sales and the rateable or council value.

Terranet is another website that provides details on property value, but instead of making an estimate it just shows the council value, similar recent sales nearby and aerial photographs.

3. DIY street slog

There are also other ways to get a good idea about what kind of price your house might sell for without putting yourself out of pocket even one penny.

Take some time to see what's happening in the area you're looking to buy in if it's a new home you're after or in your own neighbourhood if you're wanting to sell can create a reasonably clear picture of what a property is likely to be worth.

You could pop along to open homes in the area you're curious about to get a feel for what else is available in that market with your own eyes.

It might mean spending several Saturdays racing around between open home appointments but it's a great way to get a feel for an area.

King says that this might be a time consuming idea, but it's usually very effective.

"Going out and actually viewing homes that are for sale, talking to real estate agents, does require a lot of legwork but it means you become an expert in that area and get the know the good streets, bad streets and what's happening in the area."

He recommends being meticulous about the properties you're staking out the prices of by keeping all the promotional marketing material given out at the open homes, writing down the date you saw the house on that promotional blurb, and then following up with the real estate agent to ask what it ended up selling for.

4. The agents' view

The best part about this time-consuming and studious approach to approximating the value of property is that it won't cost you any money.

Building up a bank of opinions can give an idea of what a house might sell for. King suggests calling real estate agents from several different companies to talk about potentially selling your home.

The agents are usually happy to come over, look through the house and give what one would hope is an honest opinion about what a property will sell for.

They're more likely to be honest if not directly involved in the sales process at that point, even if they hope to be! 

If you are looking to sell your house, speaking to several agents before making a decision is always recommended in any case.

And don't forget if you do make the call to sell, make your house look as presentable as possible to potential buyers before you list it. That's one sure way of lifting its value.

Tenants face stiff competition for rentals

14th October 2011

Source: Stuff Business Day

The rental market is tightening, with advertisements falling 7 per cent in the September quarter, according to online website Trade Me Property.

Brendon Skipper, head of Trade Me Property, said the decline in listings had been led by Auckland (down 13 per cent), Wellington (down 30 per cent) and Christchurch (down 27 per cent), compared to the same period a year ago.

As a result, landlords were asking for a relatively modest 6 per cent more in rent.

"As the rental market tightens, tenants can expect to be competing against plenty of other prospective tenants for rental homes," Skipper said.

"We've already seen this start to occur, with the number of enquiries sent to landlords via the site up 10 per cent nationwide on a year ago, and spiking more than 20 per cent in Manukau, Wellington and Christchurch."

He noted the trend had been accompanied by a 14 per cent rise in homes listed for sale. "It's a bit early to get carried away so we will be watching to see if a trend develops, but we could be seeing the impact of Government tax changes or confidence in the `for sale' market starting to return."

At 30 per cent, Wellington had the largest drop in rental property listings, but enquiries from prospective tenants, or "demand", leapt 23 per cent.

Rents had been relatively flat in the Capital but Skipper believed they were set to come under pressure over coming months.

He thought Auckland's rental shortage was likely to ease as World Cup fever subsided. Rental asking prices in the inner city jumped 10 per cent and demand was up 9 per cent.

Demand in Christchurch soared 27 per cent as it become harder to find a home.

Queenstown Airport boss pushes for night flights next winter

14th October 2011

Source: scene.co.nz

The boss of Queenstown Airport wants evening flights next winter – and urges aviation regulators to make them a priority. 

Queenstown Airport Corporation chief executive Steve Sanderson says with runway lighting now installed and recent sign-off on runway extensions for extra safety, there are no major obstacles. 

It’s been reported budget carrier Jetstar is working on risk analysis of night flying into Queenstown – and Sanderson urges sky regulator the Civil Aviation Authority not to procrastinate if an airline lodges what he calls an “evening flights” application. 

“We want to get on with it. The regulators need to give their full attention and support to New Zealand’s number one destination – it’s not something they can procrastinate on. 

“Everybody’s hoping for next winter and that’s doable,” Sanderson says. 

“There’s a lot of talk amongst wholesalers and tour operators, kind of half anticipating evening flights next winter. 

If we can bring it on home, the town is going to see a lift in people coming.” 

Sanderson says an extension of the flying window will also ease passenger bottlenecks at the terminal. 

As it stands, the airport is consented to operate till 10pm. However, in winter the last flights tend to be around 5pm as airline safety plans for Queenstown require take-offs 30 minutes prior to dusk. 

Sanderson hopes to get it pushed out to 6pm or 7pm. 

Jetstar chief executive David Hall, who last month announced extra trans-Tasman and North Island connections with Queenstown, said at the time the practicalities of night flights should be assessed. 

“The airport, aviation regulators, the community need to work together constructively to assess how we further grow the Queens­town proposition – absolutely night flying will be part of that.” 

However, Air New Zealand spokeswoman Marie Hosking this week says her airline has no plans to make an application to CAA. 

Air NZ has done a lot of work to understand night flight risks in and out of Queenstown, she says. 

“There are a number of infrastructure issues yet to be resolved, including approach and obstacle lighting. 

“Ultimately, we’ll be guided by the CAA and at this point the safety case has not been sufficiently made.” 

CAA spokesman Bill Sommer says no airline has applied yet. 

“Any airline would have to show they can carry out such an operation safely. If they make an application, it’ll be gone through completely.” 

Craig Douglas, marketing boss of Queenstown snowfield operator NZSki, says he’d love evening flights next winter: “It would enable Australians in particular to come for short-stay holidays and that’d open up opportunities.” 

Sanderson says Queenstown Airport, which last year failed in a bid to get approval for night flying between 10pm and midnight, has no plans to revisit those hours.

$6m starter loan scheme for first-home buyers

13th October 2011

Source: The Southland Times

Twenty first-home buyers will sign up for a $6 million pilot starter loan scheme launched by the Queenstown Lakes Community Housing Trust and Central Lakes Trust last night.

About 80 people turned out for a function in Queenstown to announce the new starter loan scheme, which offers a five-year fixed interest mortgage rate locked in at 5.2 per cent for three-bedroom, two-bathroom homes in the trust's new $10m Nerin Square development at Lake Hayes Estate.

Central Lakes Trust has joined with the housing trust offering $6m in funding for the new scheme loaned at interest rates, 250 basis points below current 7.7 per cent market interest rates. Each of the 20 successful applicants would receive a $300,000 mortgage and only have to fork out a deposit of about $30,000.

Housing Trust executive officer Julie Scott said the scheme locked first-home buyers into affordability giving them that stability for five years.

"In New Zealand you're locked in for just two years on market rates and they've gone through the roof," Ms Scott said.

At the end of five years home buyers in the programme should have paid back 10 per cent of the principal on their loan to the Central Lakes Trust and could then convert to a pre-approved market rate mortgage with SBS Bank.

The scheme was being funded by a five-year housing bond and security would be underwritten by the Queenstown Lakes District Council. There were no penalties if homeowners wanted to exit early.

"It delivers certainty for five years to household budgets and restores confidence to buyers."

Housing Trust chairman David Cole said Queenstown was listed as the most expensive housing region in the country.

Households should not be spending more than 30 per cent of their household income servicing mortgage debt. However, research locally showed some were spending 45 per cent to service mortgages and that was unsustainable.

"They're hanging on by their fingernails to meet week-by-week and month-by-month expenses."

A household on a $70,000 income buying a $400,000 house in the district needed a $120,000 deposit to keep its obligations down to that 30 per cent, Mr Cole said.

The first four homes in the 22-lot Nerin Square were completed and another three would be in a few months, with the whole project targeted for completion in 12 to 18 months.

Applicants could combine the trust's shared ownership programme with the new loan scheme to buy into Nerin Square.

Mr Cole said the trust had more than $20m invested into affordable homes around the district and had helped about 42 households so far.

ELIGIBILITY CRITERIA 

Central Lakes Trust chairman Sir Eion said he hoped the starter loan pilot could be a model for the rest of the country.

Applicants must: Be resident in the district for six months

Be permanent New Zealand residents or New Zealand citizens

Have maximum household income no more than $100,000 for two

September property sales up 21 per cent

13th October 2011

Source: Stuff Business Day

The property market rebounded strongly in September from a year ago, but the usual spring lift failed to materialise with just 43 more houses sold than in August.

The number of properties sold across New Zealand last month was up 21.1 per cent from September 2010, with the latest figures from the Real Estate Institute of New Zealand showing 5,235 unconditional sales were written in September.

The median house price of $350,000 weakened 1.4 per cent, or $5,000, from August.

However, house prices were increasing from the low levels they sank to during the recession, with fresh data from QV showing property values were back to only 4.6 per cent below the 2007 market peak.

There were 869 houses sold in August, and 912 sold in September. Typically there is a larger leap seen in September with more houses sold as the weather improves.

"The volume data indicates that the New Zealand real estate market is in better shape when compared with this time last year with volumes up and a continued reduction in the number of days to sell," Real Estate Institute chief executive Helen O'Sullivan.

"That improvement is flattening out with a weaker than usual seasonal lift from August volumes. There is clear evidence from across the country that buyers are very focused on value and are well informed about what they can afford and are prepared to pay."

The number of sales in Auckland was up 1.5 per cent from August, with a 12.7 per cent increase in Otago and a 12.4 per cent lift in the Wanganui and Manawatu.

Wellington sales suffered, with volumes falling 9.3 per cent in September from the previous month and a 6.5 drop in Waikato and Bay of Plenty, with a 7.9 per cent fall seen in Taranaki

"We're seeing is an interesting market with listings improving though still reported as tight, plenty of buyer interest but only on a very rational basis - there is no appetite on the part of buyers to overpay or rush to purchase," O'Sullivan said.

QV data, which is calculated from sales data for three months leading up to when it is reported, showed Auckland had the biggest lift in property values, with a 3.7 per cent increase since January and a 3.4 per cent lift from this time last year.

QV research director Jonno Ingerson said there were signs the market may also be turning in other areas.

"Values in Hamilton edged up very slightly over the past month after being flat for several months and are now only 1.2 per cent below last year.''In Tauranga, values have been gradually rising for several months now and as a result values are only 0.1 per cent below last year. Both Hamilton and Tauranga are still nearly 12 per cent below the market peak," Ingerson said.

"Dunedin continues to be volatile, but rises in the last month mean that values are now only 2.0 per cent below last year.''

Values in the Wellington area appeared to have levelled off in recent months and were now 1.1 per cent below the same time last year, he said. Wellington was 7.6 per cent below the 2007 market peak.

''In Christchurch values continue to steadily increase, they are now 2.1 per cent above the same time last year."

Of September house sales, REINZ showed 184, or 3.5 per cent, were above the $1 million price mark. Nearly 12 per cent, or 617, were between $600,000 and $999,999.

The majority - 60.3 per cent or 3,158 - were in the under $400,000 price bracket, with the remaining 1276 properties, or 24.4 per cent, sold for between $400,000 and $600,000.

Prices increased the most in September from August in the Hawke's Bay, with a lift of 8.3 per cent, while Auckland houses sold for 4.9 per cent more in September. Wellington sales were up 4.1 per cent in price.

Significant Frankton Rd work, and more

12th October 2011

Source: Otago Daily Times

More than $3.7 million is to be spent on roads in Queenstown and Arrowtown this summer - with most of Frankton Rd to be targeted over the coming months.

New Zealand Transport Agency Central Otago area manager John Jarvis told the Otago Daily Times some of the $500,000 of resurfacing work of Frankton Rd carried out by DownerEDI last summer had not survived the winter.

"It's delaminating - it hasn't managed to stick to the existing surface. [The work] is unacceptable ... and it's the contractor's responsibility to fix it up," he said.

Mr Jarvis said only parts of Frankton Rd would need to be resealed but adding to the disruption would be $300,000 of work remaining from last season to be done by Fulton Hogan along Frankton Rd - and another $700,000 of asphalting within the 50kmh area of Frankton Rd, from the Spinnaker Bay luxury condominiums to the Ballarat St roundabout.

Preliminary work has started, with contractors expected to be "into it full swing in November".

"It's a significant amount of work we're trying to organise. We'll get as much as possible done before Christmas, but parts of it will have to be done after the new year."

Meanwhile, Queenstown Lakes District Council contractors have started work to complete the $900,000 Malaghans Rd project, which began in February.

Project manager Steve Hewland said the work was initially scheduled for completion in May, but land negotiation, funding approval and power pole relocation processes had taken longer than expected.

The first phase of the project involved tree trimming, installation of drainage and the building up of shoulders for the widening of the road for the cycle lane.

Stage two comprises pavement reconstruction which would involve taking up the chip seal surface, reshaping the road, stabilising the gravel layers and placing a new seal finish.

Mr Hewland said the council decided to time stage two of Malaghans Rd with "rehabilitation" work in Buckingham St ($510,000), Centennial Ave ($530,000) and Adamson Dr ($815,000), in Arrowtown.

Real estate mobile search comes to the Android smartphone

12th October 2011

Source: realestate.co.nz

The success of theRealestate.co.nz app for the iPhone has transformed the NZ real estate search experience. Every day thousands of eager property seekers fire up the iPhone app to checkout what property is for sale or rent right around where they are at that time. It’s the only property app in NZ for a smartphone that utilises the GPS capability to help you discover your favourite new home, from the most comprehensive database of listings for properties on the market.

All of these benefits has made the Realestate.co.nz app for the iPhone the mobile app of choice and is why over 40,000 downloads have been made through the iTunes app store in the past 11 months – with still over 100 new downloads every day.

The iPhone is unquestionably an innovative and highly appealing device, but globally the Android operating system is proving the leader with over 500,000 activations a day globally. In NZ the Android platform offers a wide range of smartphone options and this why it is so important for all these Android smartphone owners to have a mobile app for house hunting. To meet this need Realestate.co.nz is delighted to release an Android app to complement the iPhone app .

The functionality is very similar – again offering the only GPS enabled property search app in NZ for the comprehensive selection of property on the market. The app for both iPhone and Android draws on the enormous property database of Realestate.co.nz hosting as it does over 95% of all listed properties by licensed real estate agents.

The Android app is free and can be downloaded through the Android marketplace. Simple and easy to use and sure to swell the numbers of property seekers turning to their smartphone as well as their web browser to search for their next home.

$300m Queenstown project advances

10th October 2011

Source: Otago Daily Times

A $300 million-plus 750-home development near Queenstown cleared a major hurdle yesterday, after independent commissioners backed the proposal, subject to amendments.

The Queenstown Lakes District Council strategy committee will decide at next Tuesday's meeting whether to adopt a plan change that would have the 120ha Shotover Country site, between the Shotover River and the Lake Hayes Estate development, changed from rural to a special zone, allowing housing and a small-scale convenience retail outlet.

Clarke Fortune McDonald principal Neil McDonald, a spokesman for the group behind the development, the Ladies Mile Partnership, was happy to see the proposal progressing.

Amendments to the plan sought by commissioners Leigh Overton, Mel Gazzard and Cath Gilmour included a small reduction in area of land considered at risk of flooding.

The commissioners also recommended another low-density area be rezoned medium density, with about 20 residential sites lost overall.

They also recommended a safeguard to ensure a proposed school and village green area did eventuate.

Once 450 lots had been given consent, the developer would be required to build roundabout access from State Highway 6.

Developers would also be required to gift 26 lots to the Queenstown Lakes Community Housing Trust for affordable housing, before any other residential activity could start.

Mr McDonald said the only "significant change" was the exclusion of the small area of land perceived to be at risk of flooding.

"The Ladies Mile Partnership are very pleased to see the commissioners have made a recommendation that the Shotover Country proposal be adopted, and we are looking forward to that happening at the meeting on the 11th."

The commissioners heard submissions on the proposal in the week starting March 7, and adjourned the hearing until June 16 to hear further evidence.

QLDC general manager policy and planning Philip Pannett said the council's guiding documents suggested the plan change was not necessary at the moment, but added commissioners had given weighting to future planning.

"The commissioners viewed the land in question as being possibly the last area in the Wakatipu basin of reasonable scale which broadly met the requirements for residential development."

They also considered there was an ability to provide "critical mass" for public transport, retail and education facilities in conjunction with Lake Hayes Estate.

"The benefits of the site, in the opinion of the commissioners, outweigh any potential adverse effects generated by the development," Mr Pannett said.

If adopted, the decision will be notified, subject to appeal to the Environment Court.

Reserve Bank 2011-2012 report

3rd October 2011

Source: The Reserve Bank

During a year of shocks and volatility, the Reserve Bank has focused on the resilience of the New Zealand economy and financial system, while staying on top of inflationary pressures, Reserve Bank Governor Alan Bollard said today.

Releasing the Bank’s 2010-2011 Annual Report, Dr Bollard said the developed world is struggling to cope with the aftermath of the global financial crisis and the very large accumulation of public and private debt in the last decade.

“It is now clear that we have a slow grind ahead, with surprises and disappointments that we cannot necessarily foresee. The Bank has been seeking to increase the resilience of the financial system, which will help reduce its vulnerability to external shocks.”

The Annual Report chronicles a year marked by market volatility due to unsteady recovery in the US and ongoing sovereign debt crises in Europe, while the Canterbury earthquakes have caused significant disruption, destruction and economic uncertainty.

Offsetting this, domestic activity has been stronger than expected, and farm earnings have benefited from strong commodity prices, driven by growth in China, East Asia and Australia.

However, future inflation expectations have risen as tax changes contributed to a hefty rise in headline inflation. A very strong kiwi dollar has offset the inflationary impact to some extent.

“Overall, the Bank will need to monitor the situation carefully especially as there is now a real risk that global economic activity could slow sharply,” Dr Bollard said.

The Bank reported a net profit of $144 million for the year to 30 June 2011, and paid a dividend of $210 million to the Crown.

The Annual Report notes that the Bank has continued its investigations into macro-prudential tools that may help bolster financial system resilience and moderate credit cycles, though Dr Bollard cautioned that expectations need to be realistic about what can be achieved.

Also featured in the Annual Report is the Bank’s work on tighter prudential standards. These include Basel III and the implementation of capital models for housing and agriculture, recently introduced liquidity requirements, and progress on insurance regulation.

“At the same time, we have had to manage our own balance sheet to take into account big moves in the kiwi and fragility in offshore sovereign markets. Our foreign reserves benchmarking project will help us to do this in the coming year.”

The Annual Report notes that, as the New Zealand currency ages and security features mature, work has started on a multi-year banknote upgrade project.

It also recognises the improvement to the Bank’s ability to handle significant Wellington disruptions by using its new Auckland office disaster recovery capability.

“As the current environment demonstrates, we can expect more disruption and fragility ahead, much of it originating from offshore. We cannot predict all of this, but we can plan to be resilient through it.”

You can read the Annual Report at the following link: http://www.rbnz.govt.nz/about/whatwedo/0094054.html.

Cut unlikely to hit mortgages

3rd October 2011

Source: Stuff Busines Day

New Zealand's credit rating was knocked down a notch by two agencies, just a day after the Government hauled in a massive $1 billion from investors, showing there is no lack of appetite to put money in New Zealand.

Both Fitch and Standard & Poor's cut New Zealand's rating from AA-plus to AA yesterday, with the biggest impact seen in the dollar, which fell about US1 cent. The Kiwi dollar ended at US76.76 cents late yesterday, down from as high as US78.28 cents the previous day. The dollar is back to levels last seen in April.

A downgrade means New Zealand is seen as more risky, and in theory means higher longer term interest rates to compensate for the risk. Some economists said the downgrade could see longer term rates rise slightly, but it would have little impact on short term or floating rates.

International borrowing costs could rise by 5 to 10 basis points as a result of the downgrade, Deutsche Bank said, but that would be more for long-term borrowing, rather the floating rates where most people borrowed at present.

However, on Thursday, the government's Debt Management Office raised a massive $1b in one of the biggest bond tenders this year, showing there was no lack of interest in New Zealand.

Economists say the Government had easily borrowed money internationally this year.

Bank of New Zealand chief economist Tony Alexander said in theory a credit rating downgrade meant slightly higher interest rates.

But the impact of the downgrade was likely to be "lost in the wash" for mortgage interest rates, with downward pressure on global interest rates.

The five-year swap rate, an indicator of long-term mortgage rates, is about 3.70 per cent, down from about 4.56 per cent in early August. So that recent fall, driven by international events, would cap any rise in longer term rates in New Zealand, as a result of the credit downgrade, ASB Bank said.

Longer term borrowing rates reflected what was happening overseas, while short-term rates were influenced by the Reserve Bank here.

BNZ's Alexander doubted it would lift rates any time soon.

New Zealand had no history of default and the government had run surpluses for many years before the recent run of deficits.

At AA, New Zealand's rating remained high, with a low level of government debt by world standards.

"There is not much the government can do to alter the credit rating outlook. It is up to the private sector and household to build up financial assets and get debt down," Alexander said.

Alexander doubted the credit downgrade would see the Kiwi dollar fall much further, when internationally other countries were being downgraded.

Fitch rating for NZ: AA – a low risk of default New Zealand's rating by Fitch remains near the top of the international tables, close to Australia's AA-plus and well above the basket cases of Europe such as Greece on CCC, or Portugal on BBB minus.How does nz rate?

Anything above BBB is "investment grade" and below that is "speculative" down to a D rating. AA means there is "a very low default risk", that is, little risk of not paying debts as they fall due, while at CCC default is a "real possibility", with single C meaning that a default is about to happen.

NZ Property Report

3rd October 2011

Source: realestate.co.nz

Millbrook course celebrates 'best resort' title

3rd October 2011

Source: The Southland Times

Queenstown's five-star Millbrook Resort has been lauded as New Zealand and Australasia's leading golf resort at a world travel awards ceremony.

Millbrook, which was named the 'world's best golf resort' by an Australian travel magazine in April, won its latest title at the World Travel Awards 2011 Asia and Australasia ceremony held in Bangkok, Thailand, this week.

Millbrook director of golf Brian Spicer said the award, which has been hailed as 'the Oscars of the travel industry', placed Millbrook among the elite golf resorts of the world, and recognised its highest standards of course design and delivery, as well as its standing as one of the most scenic golf courses.

Housing deals work out better for buyers

3rd October 2011

The spring surge of new homes for sale has arrived, despite the distraction of the Rugby World Cup, but average selling prices are still lagging more than $50,000 behind asking prices.

The average asking price in September rose 2 per cent to $425,565, according to the latest New Zealand Property Report from Realestate.co.nz.

However, selling prices are flat, rising just 1 per cent in the past year, despite the lowest floating mortgage interest rates since the 1960s. Those rates are set to stay low till well into next year as a result of the uncertain global economy and an ongoing government debt crisis in Europe.

The surge in listings came through last month, despite the international rugby tournament and the upcoming general election next month, which do not appear to have stopped people putting homes on the market.

"New listings continued to come on to the market – by no means a flood, but in line with seasonal trends," the report says.

Source: Stuff Business Day

The flush of new listings led to a $10,000 rise in the average asking price for property for sale. There is typically a rise in asking prices during spring, but this year it was stronger than usual.

Although there were no figures yet available for final selling prices for homes put on the market last month, the previous month's figures show a large gap between asking prices and final selling prices, the report says.

In August, the asking price was about $415,000, but the selling price was about $363,000 – a gap of almost $52,000. In July, the gap between buyers and sellers was $42,000.

So although asking prices have risen about 3 per cent in the past year, the average sale price is virtually flat, up just 1 per cent, the report says.

There were more than 11,000 new listings on the market in September, up 10 per cent on August, but because there is usually an increase in the month, the seasonally adjusted rise was just 0.3 per cent.

Realestate.co.nz chief executive Alistair Helm said the rise in asking prices showed sellers were "clearly looking to capitalise on the higher demand for property".

The stock of unsold homes on the market was up slightly to 37.2 weeks of inventory, if present weekly sales rates continued. The stock on the market has steadied after dropping for five months, but was still below the average stock on the market of 41 weeks.

Figures issued last month from valuation agency QV showed national average prices were up just 0.1 per cent in the year to August. QV figures showed Wellington house prices were down 2.4 per cent in the same period but Auckland prices rose more than 2 per cent.

National average asking price in September: $425,565, up 2 per cent from August.Slow movers

New listings in September 11,117, up 0.3 per cent seasonally adjusted.

Inventory (stock on the market) 46,299 homes, flats and lifestyle properties.

The stock would take 37.2 weeks to sell at current rates.

Hardware giant plans $20m development for Queenstown

30th September 2011

Source: voxy.co.nz

Successful hardware and homewares store Mitre 10 is planning to more than triple the size of its Remarkables Park operation by making the move to a proposed dedicated DIY precinct including a discount supermarket.

Invercargill-based businessman Acton Smith, owner of H&J's Mitre 10 Remarkables Park, said today (Thursday September 29) that the company planned to move to a new shopping precinct at Shotover Park alongside a proposed PAK'n SAVE supermarket.

Mr Smith told a hearing into the PAK'n SAVE application that the existing Mitre 10 business had been so successful it was now over-trading on a site that had become too small for its current level of business and was literally overflowing with stock.

"We're planning to increase from the current store size of 2200m2 to a store and yard of approximately 6800m2, a 300% expansion," he said.

"Not only will Queenstown builders and homeowners enjoy the national pricing policy associated with Mega and its identical product pricing throughout New Zealand, but there will be greater benefits overall and double the choice," he said.

Mr Smith said the evolution of the Remarkables Park Town Centre into a more sophisticated pedestrian orientated shopping centre for convenience goods with high pedestrian foot traffic, combined with overall growth in the Mitre 10 business, had prompted the move.

He said it would be better if the existing Mitre 10 in Remarkables Park was converted to more convenience stores providing more shopping variety there, and for the much larger new Mitre 10 Mega to operate in a specialised trade precinct.

"We will need easy access for large goods delivery truck access and easy, close access for on-loading of frequently heavy or bulky goods to customer trucks, utilities and cars."

He said he had looked at other site options around the Frankton Flats, but believed the Porter Group-designed Shotover Park development, co-locating PAK'n SAVE and other DIY retailers, was the best solution for Queenstown and would work "extremely well" for Mitre 10 Mega customers.

Mr Smith said it was important that the Shotover Park location would be easily accessed from State Highway 6, both from the existing Glenda Drive where many trade customers were based and the proposed SH6 Eastern Access Road.

He said it made sense to support the PAK'n SAVE application as a complementary use because they were also a large destination store.

Ministry sticking to school zone plan

29th September 2011

Source: Otago Daily Times

The Ministry of Education has given its strongest indication yet it will approve the proposed reduced enrolment zone for Remarkables Primary School by advising the board of trustees it was its "preference".

The new zone, due to come into force on February 1, would exclude children living in five Queenstown suburbs from enrolling in the Frankton school, despite community opposition to the restrictions.

The ministry advised the school board it was "unable" to officially approve the new zone, just one hour before the deadline set by trustees on Monday.

The deadline was given to urge the ministry to respond to the concerns raised in 156 public submissions, many of which labelled it a "Band-Aid" zone reduction, and because the board must plan staffing, operational budget and infrastructure needs for 2012.

Board chairman John Stalker said yesterday the ministry told the trustees there were "inconsistencies" with their submissions and the Education Act and "processing requirements" meant it was unable to sign off on the zone.

"They don't believe the policy we've written fully meets the guidelines of the Secretary of Education," Mr Stalker said.

"All they've said is it does not fit within the Wakatipu Area Strategy. They've asked us to check through those things and resubmit it to them by October 14. We wait for them to make another decision."

The board was also waiting to hear from the ministry on its solutions for district-wide population growth and schooling options for the future, he said.

Trustees were "very demoralised, disappointed, frustrated. The whole process just seems to be taking time with little communication from the ministry. There is a lot of planning that needs to be done for next year, particularly the fact that we have years seven and eight starting next year, so there are staffing requirements for that.

'Aussie invasion' to boost tourism in South

28th September 2011

Source: Otago Daily Times

A $1.6 million campaign aimed at boosting South Island tourism numbers with an "Australian invasion" has been launched by Tourism New Zealand and partners.

The Spectacular South Island Road Trips campaign is pitched at three markets - 18-29-year-olds, families and the over-55s - encouraging them to hire a rental car or campervan and explore the South Island.

Tourism New Zealand and regional tourism organisations Destination Queenstown, Tourism Dunedin, Lake Wanaka Tourism and Christchurch and Canterbury Tourism have partnered in the campaign.

Destination Queenstown chief executive Tony Everitt welcomed Tourism New Zealand's support for the "largest single advertising campaign Destination Queenstown has been directly involved in".

After the Christchurch earthquakes, tourism numbers to the resort were down 10% with fewer visitors arriving from Japan and South Korea.

Australia was New Zealand's largest inbound tourism market, and with favourable exchange rates and excellent air links it "still has a lot of potential for us".

New hotel capacity in Queenstown meant the resort needed to grow rather than retain current numbers, he said.

Tourism Dunedin chief executive Hamish Saxton said the campaign was a response to a softening of arrival numbers, and a reduction of airline capacity into Christchurch since the February earthquake.

"This has the potential to revitalise and get Australians coming to the South Island and trying the quintessential road trip."

The three South Island international airports - Christchurch, Queenstown and Dunedin - would be promoted, along with road trips around those arrival points, he said.

Australia was more responsive than long-haul markets and it was hoped the campaign would result in more visitors coming from across the Tasman during the next six months, he said.

Tourism New Zealand general manager Australia Tim Burgess said the three-month campaign would also ensure the South Island remained a popular tourist destination for Australians in the years to come.

"Most New Zealanders know that the South Island is the perfect place to do a road trip.

This campaign enables us to make sure Australians are aware of that too, and encourage them to experience it for themselves first-hand."

'Cheaper bridge' may be required

26th September 2011

CLICK PHOTO TO ENLARGE An artist's impression of a possible solution to a Kawarau Falls replacement bridge, which links Kelvin Heights and Frankton via State Highway 6. The existing bridge is at the left of the picture. Image from NZTA.

The Queenstown Lakes District Council will recommend the New Zealand Transport Agency (NZTA) continue design development for a new two-lane, two-way bridge at Kawarau Falls, but acknowledge a possible need to adopt a "cheaper bridge type" at its meeting on Tuesday.

In a report to the council, transport manager Denis Mander said the NZTA was seeking council guidance for its design process of the replacement bridge, which in 2006 was estimated to cost $17 million, to link Kelvin Heights and Frankton via State Highway 6.

The council had been seeking a commitment from the NZTA and its predecessors for several years for a new bridge, based on the "deficiencies of the existing one-lane bridge" which were "incongruous with a growing urban area".

The agency had started the development of a process which would produce a "specimen design", but it needed to be emphasised that did not imply an NZTA commitment to the bridge construction was imminent, Mr Mander said.

"Rather, it will enable NZTA to be in a position to progress the project relatively quickly ...

when the project meets its funding criteria requirements."

Several options had been considered and discarded through the years, the preferred option being to build a two-lane, two-way bridge immediately downstream of the existing bridge.

The proposed bridge would be roughly the same height as the existing bridge and downstream of the heritage bridge.

"The NZTA is pushing hard for the completion of the specimen design for the bridge and for the lodging of consent applications by the end of this year.

"This is important in that the project outputs will include a good definition of the bridge proposal, a cost of works and an evaluation of project feasibility."

Mr Mander said making the decision to build the bridge would present "considerable challenges", particularly given the estimated price tag.

"A cheaper bridge design may improve the likelihood of the bridge meeting NZTA funding criteria by improving the benefit-cost ratio. Accordingly, it is important that options to select cheaper bridge designs remain alive."

Mr Mander warned in his report the Frankton bridge would be competing for funding with similarly priced projects in more congested parts of New Zealand, and the QLDC would have to "develop robust competitive arguments for the bridge in terms of the NZTA project assessment criteria".

School zone boosts rental housing

26th September 2011

Source: The Southland Times

There is increased demand for rental properties in Queenstown's Frankton, Kelvin Heights and Jacks Point areas following the Education Ministry's proposed new home zone for Remarkables Primary School.

Real Estate Institute of New Zealand Queenstown branch rental property spokeswoman Hayley Stevenson said the hottest demand was from families looking for three to four-bedroom homes in the $450 to $550 a week range.

REINZ Queenstown branch spokesman Kelvin Collins said agents were already noticing prospective purchasers were paying more attention to whether homes they were looking to buy would be within the proposed new zone.

"There have been a couple of instances where there's been a lot more appeal [for areas within the proposed zone]."

"People have said, `are we within the boundaries' ... but it's probably not a dominant factor."

Remarkables Primary School principal Debbie Dickson said there was definitely more demand from families to be living within the proposed zone, particularly those coming from out of Queenstown.

The school sent 156 submissions from concerned parents, strongly opposing the new boundaries, to the Education Ministry by September 12 and was still waiting for further information from the ministry. It had requested that information by Monday, but so far only had a letter of acknowledgement.

Mrs Dickson said it was important to hear back from the ministry so the school could inform the community. "It's not just our school affected. It's all schools. It affects our planning structure and staffing for next year."

In the meantime the school's roll continued to grow, now at 355, with five new pupils enrolled in the past few weeks. They were a mix of new entrants and new families to the area. The new school would open to year 7 and 8 students from next year when the roll was expected to be in the 400s.

PROPOSED ZONE

The proposed new Remarkables School zone includes all properties from the Shotover River to the west along the south side only of the Frankton/Ladies Mile highway (State Highway 6) to Kawarau Road (BP Roundabout) and all roads to the south of these roads. Also included are: McBride St, Yewlett Crescent and all roads leading off these roads to the south of Frankton Road. Remarkables Park, Kelvin Heights, Jacks Point, Lakeside Estate, south to Wye Creek and all areas in between.

Jetstar flies capital - Queenstown

26th September 2011

Wellington is expected to benefit from the popularity of southern tourism heavyweight Queenstown with the announcement of low-cost direct flights.

Jetstar will launch a daily flight between the capital and the resort town from December 22, with fares starting at $79 one way.

Currently Air New Zealand holds a monopoly on the route, with a direct flight for December 22 priced at $266, while a longer flight with a stopover in Christchurch costs $147.

Tourism officials hope the competition will boost domestic tourism between the two centres and increase spending in the capital as international visitors stay in the city before heading south.

Wellington City Council economy portfolio leader Jo Coughlan said the announcement was great news.

It would bring obvious economic benefits and the more people that were "hubbing" through Wellington Airport the better.

The next big step would be to attract an airline to operate direct flights to Asia from Wellington and the council planned to act "aggressively" to hopefully secure an agreement by 2013, she said.

Positively Wellington chief executive David Perks said one of the main advantages of the announcement would be the Wellington-Queenstown route linking in with Jetstar's parent company Qantas and their OneWorld Alliance global codesharing agreement.

23rd September 2011

Source: Scene.co.nz

Queenstown is facing its biggest leaky homes fiasco to date with a multi-million dollar lawsuit brought by the owners of troubled Greenstone Terrace. 

The body corporate and owners of the 75-apartment complex on Frankton Road are suing Queenstown Lakes District Council and prominent nationwide building company Naylor Love over long-standing weathertightness issues. 

If successful, ratepayers may need to fork out for the estimated $5 million-plus claim because QLDC is unsure whether it will have full insurance cover for it. 

Acting for the body corporate is one of the country’s top leaky homes lawyers Grant Shand, whose firm Grimshaw & Co won a landmark case in the Supreme Court over a North Shore weathertightness claim last year. 

“The issue is coming to Queenstown now primarily because its construction period was a bit later than in Auckland and Wellington,” Shand says. 

“It has similar construction methods to those used in other complexes throughout New Zealand that are known to cause problems. 

“I’d say this is one of the early complex cases in Queenstown and I expect there’ll be a lot more.” 

In Grimshaw’s winning case against appeals by the North Shore City Council last year, the Supreme Court upheld the duty of councils to inspect buildings and ruled that a person who buys a leaky home can sue the council for negligence even if a previous owner sued the council over the same issue, as long as loss caused by negligence can be proven. 

It also ruled that body corporates are entitled to sue over damage to common property. 

Shand adds: “[The North Shore case] essentially confirmed councils’ liability. So other cases since then will just follow the law.” 

According to papers lodged at the High Court in Invercargill, the body corporate alleges QLDC breached its duties because it issued building consents and a code compliance certificate despite not complying with the Building Code when the units were constructed in 2001-02. 

It’s alleged that Naylor Love, which built the units, was negligent because the buildings suffered water damage soon after construction and require remedial work. Greenstone Terrace will need to be reclad and the roofs need replacing, court papers say. 

Owners are seeking damages including: Remedial work, lost rental income, professional fees, alternative accommodation, relocation and storage costs, repair funding costs, stigma, and each want $25,000 for stress and anxiety caused by the predicament. 

Shand “doubts” whether QLDC will have insurance cover for the Greenstone claim. 

QLDC finance boss Stewart Burns says the council’s still determining what sort of cover it has, if any, because more information is needed. 

This financial year, QLDC has allocated $500,000 in its annual report as an “estimate” for potential liability, outside its insurance cover. 

Because case law is constantly evolving around the issue, Burns is unsure of QLDC’s potential exposure to more claims. It’s already dealing with another lawsuit brought by the owners of The Point. 

“Cover has diminished over time,” he admits. 

“It’s obviously a concern but I’m hopeful that these aren’t the tip of the iceberg, that perhaps [Greenstone and The Point] may be the iceberg.” 

Naylor Love managing director Don Stock says the legal action came as a “total surprise” because the company hadn’t heard from the owners in about eight years and there’s no history of dispute. 

“To the best of our knowledge we don’t believe it’s a leaky building issue and are trying to gather further details. 

“We will absolutely be defending it.” 

Shand, who’s working with local firm Berry & Co, urges other people owning monolithic cladding homes built within the past 10 years to lodge a free claim with the Department of Building and Housing.

Nerin Square 'significant milestone', minister says

22nd September 2011

Source: Otago Daily Times

A "significant milestone" was reached by the Queenstown Lakes Community Housing Trust yesterday, when its comprehensive Lake Hayes Estate development, Nerin Square, was officially opened by Housing Minister Phil Heatley.

Nerin Square now features seven homes, with 20 more - comprising four different architectural designs - to be built over the next year, along with a child-care centre and cafe.

It is the first comprehensive mixed-tenure development of its kind in the Queenstown Lakes district and yesterday also marked the official opening of the first home in the trust's "rent saver programme".

Trust chairman David Cole said the programme was aimed at those who struggled to find enough money for a deposit on a house.

CLICK PHOTO TO ENLARGE

The Queenstown Lakes Community Housing Trust's Nerin Square development as it will be on completion.

"The trust charges a market rent and, for the renters, for every $1 they save, the trust will match it dollar for dollar.

"If they save $50 a week over five years, at the end of the five years they will have $25,000, which is the deposit on their house.

"Then they can buy the house they've been renting under the shared ownership programme."

Under the shared ownership programme the housing trust take a 30% equity in the houses, making it more affordable for first-time owners.

However, Mr Cole said yesterday was also about "throwing down the gauntlet" when it came to affordable housing.

"We're trying to dispel this myth affordable housing is ugly, cheap and a compromise in quality.

"We still get people in the community saying 'we don't want affordable housing where we are'.

"It's nothing about the quality - it's all about the way we make these houses affordable."

He told the invited crowd, comprising councillors, council chief executive Debra Lawson, deputy chief executive Stewart Burns, trustees, Mr Heatley and residents there was no doubt Nerin Square would become a "very special place to live".

After Mr Heatley invited the first tenant in the rent saver programme, Whitney Wanous, to cut the ribbon to her new home, which she will move in to with her partner, Hayden Smith, and their son Maddon (2) next weekend, deputy mayor Lyal Cocks said it was a significant milestone for the district.

"We are quite unique from the rest of the country - it's an expensive place to live, but it's also a wonderful place to live.

"We [the council] support the housing trust and we will continue to do so."

Rugby fans lead surge in visitors

21st September 2011

Source: Stuff Business Day

More than half of the extra visitors who arrived in New Zealand from overseas in August were here specifically for the Rugby World Cup, showing the impact the tournament is having on tourism.

There was a 4.7 per cent increase in the number of people who came here last month compared to August 2010, according to the latest data from Statistics New Zealand.

Of all the people who arrived here in August, 4,400 of them were fans here to celebrate and support the Rugby World Cup. About 1,200 of those arrived in the final week of August.

Since July, a total of 5,600 people have travelled to New Zealand for the Rugby World Cup.

With this time of year not typically popular for international tourists to visit, Tourism New Zealand chief executive Kevin Bowler said local businesses will be glad for the fans' spending.

"We look forward to seeing further increases in international visitor arrivals for the Rugby World Cup 2011, giving many New Zealand businesses a boost during the tourism industry's shoulder season," Bowler said.

In the 10 days since the tournament began, at least $12 million has been spent through credit cards by international visitors in sectors such as food and drink, hire cars and accommodation.

Sales of farm property in New Zealand at highest for two years

21st September 2011

Source: Property Wire

Farm property sales in New Zealand are at their highest for nearly two years and the trend is likely to continue, according to the latest report from the Real Estate Institute of New Zealand.

In total 1,003 farms were sold during the 12 months to August 2011. This is the first time since October 2009 that the annual tally had exceeded 1,000 which indicates an underlying rising trend, the organisation it said.

Institute rural market spokesman Brian Peacocke said farmer returns remained solid with an expectation for commodity prices to hold or in some cases firm slightly as the season progressed.

There were 265 farms sold in the three months to the end of August, up 38% on the same time last year but down 12% on the end of July.
Dairy farm sales were low, as expected for this time of year, although there was demand for good quality grazing, fattening and dairy support units with sales spread evenly across the country, he said.

‘What is encouraging is the solid increases in the number of sales across most farm types compared to this time last year, with all but one region recording an increase in sales compared to August 2010,’ Peacocke explained.

The median price per hectare for the three months to August was $15,148 for all farms, compared to $16,968 last year.

‘I think that as more properties become available based on the inquiries that are emerging already that will put a little bit of pressure on prices if the shortages of supply continues. So we expect that there'll be more properties being sold but the prices will be remaining reasonably constant,’ he added.

Lifestyle market sales for August were down from a peak in May but well above last year The number of lifestyle properties sold for the three months to the end of August was 1,304, up from 1,066 in the same period last year, with a median price of $444,000 down from $453,000 for the period ended July.

‘The continued easing in the median price is consistent with the trends in the rural and residential property markets, where sales volume increases are occurring but prices are either trending sideways or easing,’ Peacocke said.

Extra $12m spent in first 10 days of RWC

20th September 2011

Source: The Southland Times

Tourist spending spiked during the first few days of the Rugby World Cup tournament, with $12 million more spent from overseas-owned credit cards since the opening ceremony.

Electronic transaction processor Paymark, which puts through 75 per cent of all credit card sales in New Zealand, said it saw a 32.5 per cent increase in spending on foreign cards compared to the same period last year.

The bulk of this extra spending was on food and drink, with a $9.2 million or 10.3 per cent rise noticed in the hospitality sector compared to the same time last year.

Rental car companies have enjoyed a $2.1 million or 32.5 per cent year-on-year increase in business, and accommodation spending was up by $0.9 million or 4.1 per cent.

The day after the opening ceremony was held in Auckland, there was an extra $1.5 million spent in the city taking total foreign credit card spending up by 25.1 per cent compared to the same Saturday in 2010.

Paymark chief executive Simon Tong said most of the spending was in cities that were hosting games, which linked the increase to the Rugby World Cup, but spending nationwide outside these sectors had only risen by 3.5 per cent compared to last year.

"So while it's clear that host cities and specific sectors are seeing great benefit from the RWC, for others the story hasn't changed a great deal," Tong said.

"We're hearing a lot of this from customers in the more discretionary categories who are yet to feel any real impact from the Rugby World Cup. With another influx of tourists expected to arrive for the finals, let's hope we see a pickup in the wider retail sector."

'Hobbit' filming boost for Queenstown

20th September 2011

Source: Otago Daily Times

Filming part of The Hobbit on location in Queenstown gives the opportunity for "significant exposure" for the Wakatipu on the main world tourism markets, Destination Queenstown says.

DQ chief executive Tony Everitt was asked to comment yesterday after proposals lodged by Three Foot Seven Ltd to film sequences in at least three Wakatipu locations.

The Wellington production company applied this month for resource consent for filming activities involving "over 200 people" between early October and mid-December.

Queenstown Lakes agency Ican Models & Talent was getting "a wonderful response" from advertisements for extras with "character faces" for an undisclosed shoot in late October, late November or early December, director Tracy Neave said yesterday.

Filming was proposed to occur mainly at Arcadia Station, Glenorchy, and on nearby land owned by the Paradise Trust, with an additional site at Tucker Beach, by the Shotover River.

Flight plans were also detailed for filming at Greenstone Station on the western side of Lake Wakatipu.

Paradise Trust chairman Tom Pryde, of Queenstown, said yesterday "substantial compensation" was paid by producers when four scenes were shot on the estate for The Lord of the Rings.

Improvements to the water system and some tracks were also made and remained, he said.

"If the movie people come and respect the property and respect its values, and they do, then we can't see any incompatibility [with our aims]."

The application said the proposed filming would provide employment for residents, revenue for local businesses, including accommodation providers, and invaluable exposure for Queenstown.

"The ongoing positive effects from [The Lord of the Rings filming in the area] are still continuing today and it is anticipated that this production will also have a significant long-term impact," the application said.

Mr Everitt said yesterday the proposals were an encouraging first step. Any Hobbit filming in the Wakatipu "would be a wonderful development".

If shooting in the Queenstown area went ahead, it would give "significant exposure" in the United Kingdom, home base for fans of author of The Hobbit and The Lord of the Rings J.R.R. Tolkien, plus North America, Australia and increasingly Asia, Mr Everitt said.

"If there is going to be some filming in this part of the world, that would be fantastic.

The impact from The Lord of the Rings was huge and we would be delighted to hear that is happening again," Mr Everitt said.

Filming at the Tucker Beach location was proposed to take place with a smaller crew, for a shorter period of time.

Mortgages - to fix or float

19th September 2011

It's the eternal question for homeowners: to fix or not to fix?

You make the decision, regret or rejoice, and then two years or so later you have to make it again.

If you're in a quandary, no wonder. Seasoned economist Tony Alexander says this may be the most difficult environment for predicting interest rates that New Zealand has ever seen.

So what's a homeowner to do?

Are you an optimist or a pessimist?

There's no easy answer. Economists themselves can't agree on when mortgage interest rates will rise, or whether - if you jump into a fixed rate now - you'll be better or worse off in two or three years.

First of all, if you've already fixed, don't panic. Even though most economists are now saying you'd be better off floating, they also say fixed rates are unlikely to go much lower.

Translation: if you fixed pretty recently, you probably didn't get a bad deal - just missed out on a few months paying the lower variable mortgage rate.

Chances are - like me - you were spooked by economists predicting an imminent rate hike that upped and receded thanks to wobbles in Europe and America.

Now the Reserve Bank has pushed predictions of an official cash rate hike into early next year, making those of us who rushed feel a little bit silly.

At least we weren't alone.

ANZ, ASB, BNZ, Westpac, and Kiwibank all had more people than usual switching to fixed rates during the past two months.

For a heady three weeks, sixty per cent of BNZ customers coming off fixed loans chose to re-fix, compared with the usual 10 per cent.

By contrast most Kiwis are content to ride out the ups and downs - BNZ and ASB both say more than 70 per cent of their lending is floating.

If you haven't fixed, should you?

BusinessDay asked three bank chief economists whether fixed or floating was a better bet right now. Two went for floating and one - just marginally - for fixed.

ANZ's Cameron Bagrie and BNZ's Tony Alexander backed the floating rate over the next two years.

"I don't think there's a big mad rush to jump into those fixed rates," said Bagrie.

"To be expecting floating rates to be to moving up aggressively pretty quickly, you've got to have an expectation that the global economy is going to be relatively robust. I think that's a very heroic assumption at the moment.

"Tony Alexander agreed: "The situation offshore is deteriorating all the time."

Only ASB's Nick Tuffley said fixing for two or three years would work out fractionally cheaper than floating.

"But it is very much at the margins and it wouldn't take much to steer things a little bit either way," he added.

Tuffley said the pre-GFC situation of pricey short term borrowing vs. cheaper long term rates had been turned on its head.

"So there's going to be this trade-off...how much am I prepared to pay for the certainty a fixed rate gets me?"

Certainty, after all, is one thing you can't get from a floating rate.

"The decision between fixing vs. floating is not just about cashflow," says Bagrie. "A lot of people want the certainty a fixed rates offers."

So if sleep is important to you, you might just opt for peace of mind.

"There's nothing guaranteed, the floating rate could go up a long way," says Bagrie.

How much does the OCR matter?

It's tempting to think of the official cash rate as the sole predictor of interest rates.

But a one or two percentage point rise in the cash rate doesn't necessarily mean mortgage rates will rise by the same amount, says Bagrie.

For example, if global economic risks reduced enough for the Reserve Bank to hike the cash rate, the same factors could make borrowing overseas cheaper - reducing the overall effect on interest rates, says Bagrie.

It works both ways, says Tuffley.

"If we do get into a really messy situation with the European debt crisis and that spills over to the European banks...it's always possible that banks' costs (of borrowing) do get lifted high by that.

"But if that was the case, the Reserve Bank might just opt to not lift the cash rate as much (because the inflation environment wouldn't warrant it.)."

Sorted's mortgage repayment calculator is a good way to work out if you can afford an interest hike.

And if you want to give your heart a flutter, check out the historic mortgage rates compiled by the Reserve Bank. A casual 15 per cent interest, anyone? Yep, it happened in 1990.

If you fix, when?

If you want to fix, economists say you probably have some time up your sleeve.

But don't muck around too long. "There's pressure (on fixed rates) to move up," says Bagrie.

Fixed rates tend to move around more often than floating, says Tuffley, so it's not a good idea to wait until after the floating rate has moved.

Right now, fixed rates are on the low side compared with what economists are predicting will actually happen to the cost of money next year.

"One important thing to bear in mind is that market doesn't have much built in the way of interest rate increases going forward," says Tuffley.

"If you wait too long and market starts to re-price, you may miss the boat on getting a fairly low fixed rate."
Alexander says fixed rates are unlikely to go lower before rising.

But: "If you fix right now you're sacrificing a low floating rate to do that, so the real questions how long can one safely stay floating before moving into fixed?"

He still says floaters have time on their sides. "If you stay floating you're not facing the prospect of the fixed rate suddenly jumping up on you."

But he admits waiting is always a gamble.

As for how long to fix for, all of the economists said two year and three year rates were looking much more attractive than longer terms. "I wouldn't go longer than two years," says Bagrie.

Hedge your bets

Remember all those post-GFC headlines about people trying to break their fixed loans?

If you fix and floating rates fall dramatically, it can be costly to get out.

Banks have complicated formulas for deciding how much to charge you, but basically they do their best to recover the difference between what you would have paid by staying on the fixed rate and what they will get by you breaking the term.

With floating there's no penalty if you want to pay the whole amount early.

Alexander says, if he was going to fix, he would hedge his bets by leaving some of the loan floating.

House price rises: South near top

15th September 2011

OCR unchanged at 2.5 percent

15th September 2011

Source: Reserve Bank of New Zealand

The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 2.5 percent.

Reserve Bank Governor Alan Bollard said: “The New Zealand economy has performed relatively well while headline inflation has increased somewhat since the June Statement.  At the same time, however, global economic and financial risks have increased.

“Domestic economic activity has surprised on the upside and capacity usage appears to have increased.  Continued high export commodity prices and, in time, reconstruction in Canterbury are expected to provide impetus to demand over the projection horizon.

“However, the outlook for New Zealand’s trading partners has deteriorated markedly.  There is now a real risk that global economic activity slows sharply.

“Global financial market sentiment has also deteriorated. Sovereign debt concerns in Europe and the weakened global outlook have caused international bank funding markets to tighten.  If conditions do not improve, New Zealand bank funding costs will increase.

“Largely because the New Zealand economy has been doing better than many others, the New Zealand dollar has appreciated since the June Statement.  The high level of the New Zealand dollar is having a dampening influence on some parts of the tradable sector and on imported inflation.

“Annual headline CPI inflation continues to be above the Bank’s 1 to 3 percent target band.  However, much of the current spike in inflation has been driven by last year’s increase in the rate of GST, and will therefore be temporary.  Wage and price setters should focus on underlying inflation, which, while rising, is currently estimated to be near 2 percent.

“If recent global developments have only a mild impact on the New Zealand economy, it is likely that the OCR will need to increase.  For now, given the recent intensification in global economic and financial risks, it is prudent to continue to hold the OCR at 2.5 percent.”

View the Monetary Policy Statement page http://www.rbnz.govt.nz/monpol/statements/ for the current policy assessment, Monetary Policy Statement, and data file.

Gongs and fund raising at hotel awards

15th September 2011

Source: National Business Review

More than $60,000 was raised last Friday for the Christchurch Earthquake Appeal Trust at the 2011 HM Awards for Hotel and Accommodation Excellence dinner.

About 60 hotel industry leaders pledged $1000 each to participate in draws for donated prizes from the awards sponsors. 

A record 600 hoteliers, industry leaders and major suppliers attended the 9th annual awards dinner at the Sydney Town Hall celebrating the awarding of 48 hotel awards for the hotel industry’s finest staff, properties, brands and chains across Australia, New Zealand and the South Pacific.

Major award winners from New Zealand included Paul Richardson, the head of Accor for New Zealand and South Pacific, who was voted New Zealand Hotelier and Bruce Garrett, the hotel general manager at the George Hotel in Christchurch, was voted best New Zealand general manager.

Best New Zealand Hotel was won by the Sofitel Queenstown Hotel and Spa, the Hilton Taupo was voted best regional property, and Blanket Bay at Glenorchy the best Lodge in New Zealand.

The awards dinner followed the second annual Australasian Hotel Industry Conference and Exhibition held during the day at the Four Seasons Hotel Sydney, hosted by hotel industry magazine HM (Hotel & Accommodation Management) and attended by over 200 delegates.  
 

Click here to view the range of apartments currently available in the Sofitel Queenstown complex. 

House sales show bounce

14th September 2011

Source: Stuff Business Day

House sales volumes are showing a slightly stronger lift than usual for this time of year, while prices are up marginally and homes are taking less time to sell.

Real Estate Institute of New Zealand figures for August showed 5,192 unconditional sales for the month, up 905 sales or 21 per cent on August last year. 

The volume of sales for August 2011 was up 264 on July - a slightly stronger lift than the seasonal pattern expected at this time of year, REINZ said.

The REINZ Housing Price Index rose 0.5 per cent in August compared with July, with the stratified median house price just over $363,000. The REINZ Housing Price Index recorded increases in Auckland, Wellington, and Other North Island, and falls in Christchurch and Other South Island. 

Compared with August last year, the REINZ Housing Price Index was up 0.7 per cent and is now 4.7 per cent below the peak recorded in November 2007.

The national median 'days to sell' (measuring the number of days from listing date to unconditional date) improved by three days to 39 days in August.  Over the past five years, the median days to sell has averaged 41 days across New Zealand.

Waikato/Bay of Plenty recorded the strongest rise in house sales volumes compared to August 2010 with an increase of 33.2 per cent. Nelson/Marlborough had the next strongest rise, up 29.0 per cent, followed by Auckland, up 27.4 per cent, and Northland, up 25.0 per cent. 

Only one region, Taranaki, saw a drop in sales volume compared to August last year.

Nationally, prices were relatively steady. Northland recorded the strongest lift in prices for the month of August (+11.8 per cent), followed by Southland (+7.0 per cent), Central Otago Lakes (+6.1 per cent) and Otago (+5.6 per cent). Compared to August 2010, Otago recorded the strongest lift in prices (+4.9 per cent), followed by Canterbury/Westland (+3.2 per cent) and Auckland and Southland (both +1.8 per cent). 

"The tight supply of listings across the country is the key feature of the market currently. With the arrival of spring listings are showing signs of increase, but the impact of the Rugby World Cup and the General Election soon after makes it difficult to predict how the market will respond," said REINZ Chief Executive Helen O'Sullivan.

Better volume in the past few months was a positive sign, but prices remained essentially steady, she said.

Rates set to hold as building hits low

9th September 2011

Source: Stuff Business Day

The Reserve Bank is expected to leave official interest on hold next week with the lowest level in house building for 18 years knocking the wind out of the economy.

Given the recent global financial market turmoil, the Reserve Bank may not make its first move till December and only lift rates from 2.5 per cent to 2.75 per cent initially.

Statistics NZ figures out yesterday showed home building slumped a massive 12 per cent in the June quarter. It has now fallen 24 per cent in the latest year.

The official figures show the total amount of building work fell 6.6 per cent in the June quarter, after adjusting for price and seasonal effects, with overall activity down to the lowest level in 10 years.

Economists said the weak building figures would knock about 0.3 per cent off June quarter growth, which may be about 0.5 per cent, ASB said. More recent home building consent figures showed an upturn in July, suggesting the depressed industry may be now past the trough.

But despite the lowest floating mortgage interest rates for decades, as cheap as 5.6 per cent, residential building work is at its worst since 1993. In part that was due to the low levels of building in Canterbury after the February quake, but the rest of the country was weak too, economists said.

However, a building boom in Christchurch next year was expected to result in home construction up about 50 per cent from present lows, ASB economist Jane Turner said. Over time, as many as 20,000 new homes may be built in Christchurch, but some economists do not expect to see meaningful levels of work till next year, with work held back by a lack of insurance cover.

Westpac Bank chief economist Dominick Stephens expected the Reserve Bank to stay on hold next Thursday, but signal that rates would rise in the near future. The recent tensions in the global financial markets, with the risk of a "messier collapse", argued for caution in the near term, he said. There were growing worries that growth would stall in the United States and Europe, as well as fears that some countries may default on their government debts.

Westpac said the first rise by the Reserve Bank would be by 25 basis points in December, with the economy recovering faster than realised and an increasingly worrying outlook for inflation.

TD Securities head of research Annette Beacher said while the economy had generally recovered in the first half of the year, the increased global risks meant the Reserve Bank would hold off raising rates from 2.5 per cent this month.

Infometrics economists said uncertainty about the housing market, "very weak" investor demand, and difficult financing conditions had all taken a toll on the building industry.Instead, there were likely to be small 25 basis point rises in both October and December, she said, removing the "emergency" rate cut of 50 basis points made in March after the big Canterbury quake.

The value of house building work was a "significant" $142m below Infometrics' forecasts for the June quarter, though additions and alterations work held up.

But with house prices starting to recover and rental returns becoming more attractive, home building was expected to gradually recover, Infometrics said.

The housing market is also facing the headwind of about 5000 more people leaving the country than arriving permanently in the June quarter.

Despite weak building work figures for the June quarter, recent home consent figures for July showed approvals up 13 per cent, including apartments, in a sign the market may be starting to turn. It was the first decent lift in consents in a year.

THE NUMBERS

Building work put in place June quarter volumes: All building activity: down 6.6 per cent to a 10-year low

Residential building: down 12 per cent to an 18-year low

Non-residential building: down 1.4 per cent

The building work put in place figures show how much is actually done while monthly building consents show an intention to build.

Rent rises ahead for most

7th September 2011

Source: The Southland Times

Most people renting face a rent increase over the next year, as landlords compensate for smaller increases in the value of their properties following changes in tax laws.

Some 80 per cent of property investors in a new survey expect to increase their rents this year, a 5 per cent rise on last year, according to the latest ANZ/NZ Property Investors Federation survey.

Investors expect rents to increase by up to 5 per cent on average in the next year. Almost all investors expect rents to rise in the next five years by between 6 to 10 per cent.

Due to the removal of depreciation on investment properties in last year's Budget and other regulatory changes, some landlords have already acted with rents rising 3 per cent nationally last year.

But Property Investors Federation president Andrew King said that 3 per cent rise compared to a 4 per cent increase in inflation, so the 26 per cent of landlords that had already increased rents in the past year ended up not much further ahead.

He said the bite from the Budget changes on depreciation won't really be felt by investors until March next year when tax assessments are made, and he estimated the impact would be around an average $45 a week. A rental increase of $15 a week to recover some of that is likely, he said.

''House prices are not going to scream off any time soon so they [landlords] will be turning their attention to rental returns if there is no capital gain,'' King said.

''If rentals don't rise you won't get investors coming into the market to provide the properties needed, and if they do it's better to have a steady creep up over time than a short, sharp rise due to shortages.'

King said Auckland was leading the way for both rental increases and property prices, whereas landlords in smaller provincial towns were meeting resistance to any rises due to more oversupply.

The survey of 1800 property investors nationwide showed they were expecting only modest increases in property prices - around 2.5 per cent over the next 12 months and 6-10 per cent over the next five years.

Almost nine in 10 investors intend holding onto their property for the longer term, and there's been a 4 per cent rise in those planning to renovate or develop their property rather than sell.

Since two years ago, 16 per cent fewer investors plan on purchasing another property due to economic uncertainty, the depreciation changes, a possible capital gains tax if Labour wins the election, and having other investment options.

The survey also shows almost 40 per cent of investors looked at their insurance cover following the Christchurch earthquakes.

NZ property buyers better off than Aussies

6th September 2011

Source: TVNZ

New Zealand property buyers seem to be getting a better deal than their Australian counterparts, says a commentator from across the ditch.

Chris Gray, the host of Australian programme Your Money Your Call on Sky News, says Kiwis have a big advantage in not paying as much tax on property as Aussies.

Australians are charged a 5% stamp duty when they buy a property. On a $500,000 property this equates to $25,000.

And, also unlike in New Zealand, there is a capital gains tax in Australia.

"With capital gains tax if you sell within 12 months you get taxed on all the profit. If you sell after 12 months you are taxed on half the profit," says Gray, the keynote speaker at the New Zealand Property Investors Federation conference in Queenstown on the weekend.

Interest rates are also better in New Zealand, he says.

"We are paying seven percent, where you can get mortgages for five percent in New Zealand. None of us in the western world have had that.

Even if capital gains tax is introduced in New Zealand, he doesn't think it will hurt the market.

"Good properties in good areas will always do well. Capital gains tax is not the end of the world. If you never sell you never pay the tax."

But Gray warns people not to buy expecting taxes to stay the same because they will change.

The Labour Party is proposing to bring in capital gains tax if it is elected in November, although it is lagging well behind in the polls.

KiwiSaver boosts property market

6th September 2011

Source: Otago Daily Times

KiwiSaver is giving New Zealand's provincial property market a boost. For the past nine months, first-home buyers have been able to withdraw their savings to help them buy a property.

Regional centres in particular have noticed an influx of people at entry level.

Kiwibank spokesman Bruce Thompson said he had been surprised at the number of people wanting to use their KiwiSaver funds to buy property.

"A very high number of Kiwibank KiwiSaver participants have not only inquired about using their savings for a first home, but have activated it,'' Thompson said.

"As soon as the three-year mark ticked over, we began to get inquiries.''

He said that for many young people being able to withdraw the funds was the reason they joined the scheme in the first place.

Thompson said that regional centres such as Palmerston North and Rotorua were feeling the impact of a new generation of home-buying KiwiSavers and that in smaller centres three years of savings was enough for a deposit.

Martin Dear, manager of the Whangarei branch of Barfoot and Thompson, said he was beginning to notice it too.

"People are just starting to get to the stage where they can withdraw funds and we are seeing more and more of it.''

Maree Mortimer, head of the Rotorua Property Investors Association, said she had noticed a big increase in the number of first-home buyers. "Investors don't have the market all for ourselves any more.''

Thompson said he expected to see the benefits flow through to larger centres such as Auckland in about five years, when people had had a chance to save more as deposits in those areas were higher.

KiwiSaver allowed people to show a savings history, something that a lot of young people found difficult.

One Path, which operates four KiwiSaver funds, including those of the ANZ and National banks, has had 715 people withdraw funds to buy a home since it became possible and ASB has had 500 people withdraw funds since July.

Steve Wiggins, the general manager of Gareth Morgan Investments, said the system was a good way to show young people the value of saving. Rather than having to wait 40 years to be able to access the money they had been putting aside for their retirement, young people were able to get their hands on it for something much more immediate.

The 116 completed applications that had gone through his organisation were slightly more than expected.

The average amount withdrawn was about $10,000.

He said people who knew they were signing up to KiwiSaver intending to pull funds out three to five years later would need to talk to their provider about investing in a different way from someone aiming to save purely for retirement.

Whereas most savers in their 20s could take the highest-risk options to save because they had 40 years in which to do it, people who knew they would want funds available in the short term needed to take a more conservative approach.

Fisher Funds spokesman Michael Raynes said that in the nine months to March this year, 29 people had withdrawn an average of $14,000 to go towards a first home.

"That's nearly 5 per cent of a $300,000 house.''

NZ Property report - August

2nd September 2011

Source: realestate.co.nz

NZ Property Report – August 2011

NZ houses for sale jump in August

1st September 2011

Source: Stuff Business Day

Spring has come early to the New Zealand property market with a surge in new listings in August, website realestate.co.nz says.

However, high levels of sales are keeping inventory low, putting the ball in the seller's court.

The traditional spring burst of activity usually came in September but this year there was an earlier rush - with 10,120 new listings on the site in August, up from 8966 last month, chief executive Alastair Helm said.

This was a 3 per cent rise on the same time last year, and the first monthly increase since March.

At the same time, inventory levels dropped for the fifth month in a row due to high buyer demand. At the end of August there were 44,689 properties on the market, down from 45,674 in July and 50,138 a year ago.

The overall market was now pointed in favour of sellers, with 12 of the 19 regions of the country now below their long term average inventory levels, Helm said.

''It's a much more buoyant market we are seeing at the moment. The rate of sale is the highest it has been for 18 months. Interest rates are attractive so buyer confidence is healthy. This has led to more sellers entering the market, but demand is continuing to outstrip supply.''

The demand has led to Auckland recording its lowest level of inventory in four years.

There had also been a slight shift in the average national asking price, which had lifted back up to June's level of $415,000.

This suggested that while the market was in leaning in their favour, sellers were not over-confident on price expectations.

''While the end of winter is traditionally the signal for sellers to list their property, the levels we are seeing now should certainly be seen as a further green light for sellers who are considering entering the market.''

In Auckland, listings were up 16 per cent on the same time last year, while inventory was down 32 per cent. Waikato saw listings rise 21 per cent on last August, and inventory fall 37 per cent.

In Wellington, listings were down 4 per cent on last August, but inventory was also down 19 per cent, while  Canterbury listings fell 17 per cent and inventory was down 10 per cent.

House building slump may be over

30th August 2011

Source: Stuff Business Day

The house building slump may be starting to turn around, with new home consents up 6.3 per cent in July, after the market hit a low point in February.

Including apartments, mainly retirement units, consent approvals for July were up 13 per cent, however apartment consents tend to jump up and down from month to month.

Consents were issued for 1035 homes in July, Statistics NZ figures show, with apartments adding another 168 to take the total of 1203. The figures are adjusted for normal seasonal effects.

Despite the pick up in July, the value of residential consents in July was down 14 per cent to $420 million compared with the same month last year.

"The latest increase, excluding apartments, is enough to confirm a positive swing in the longer-term trend," industry and labour statistics manager Kathy Connolly said. "This now indicates that February was the low point in the number of homes being approved.

"The picture is similar when apartments are included, but one more month of strong data will be required to confirm that these numbers have also turned," added Ms Connolly.

Apartment numbers were relatively high in July at 168 approved. Of those, 111 were assisted-living apartments. Adding apartments to the 1,035 other new homes, the total number for the month was 1,203.

In Canterbury, earthquake-related building consents totalled $32 million in July 2011, compared with $14 million in June and $28 million in May. The July consents comprise $26 million for non-residential work and $6 million for residential work (including 36 new homes, of which 28 are relocatable units intended to house displaced residents).

Non-residential consents nationally rose 17 per cent in July to $343m, compared with the same month last year, reflecting a $105m consent for work on Middlemore Hospital in Auckland.

Overall, consents for homes and commercial buildings in July were worth $763m, down 2.6 per cent on the same month a year ago.

Big pay-out from Queenstown Airport

30th August 2011

Source: Scene.co.nz

The Wakatipu community will receive a $2.46 million pay-out from Queenstown Airport Corporation’s first-ever dividend. 

A statement from QAC today (Friday) says record passenger numbers, increased aircraft movements and strong revenue from commercial activities helped bolster the amount that shareholders will receive.

Operating revenue for the year ended June 30, 2011, increased 17 per cent to $15.6m and the 2011earnings before interest, tax, depreciation and amortisation was $9m – a 31.1 per cent increase over the 2010 EBITDA of $7.54m. 

As a result, shareholders of QAC – Queenstown Lakes District Council and Auckland International Airport – will receive $3.28m and $821,000 respectively, next year. 

The amount exceeds the originally-anticipated figure of $1.5m-plus, which was revealed with QAC’s dividend policy in May. 

The first-ever pay-out stems from the secret June 2010 strategic alliance between QAC and Auckland Airport, when AIAL bought a 24.99 per cent share for $27.7m. 

The deal sparked an outcry within some areas of the community – with a local group of powerful businessmen trying to stop the deal through the High Court. The matter was later settled out of court. 

This year’s net profit after tax (NPAT) of $4.58M represents a lift of 22.1% over 
normalised NPAT of $3.75M in 2010, acting board chairman Murray Valentine says. 

“The Airport saw a record 924,248 scheduled passengers travel – up 14 per cent on the previous year. International passengers were up 50 per cent at 161,089, while domestic passengers rose 8.5 per cent with 767,159 passengers moving through the Airport.” 

Airport CEO Steve Sanderson says the seat capacity in and out of Queenstown grew by 14 per cent to 1.176m over the past year. 

Retail spend, in particular in the areas of food and beverage and duty free increased and demand from rental car operators remains positive. 

“Queenstown Airport has consolidated its position as the second largest base of New Zealand rental car operations and this activity is going from strength to strength,” Sanderson says. 

The continued growth of the airport has also accelerated the company’s master plan. 

“Queenstown Airport continues to grow and the year ahead is very exciting,” Sanderson says.

Panel votes to retain hospital

30th August 2011

Source: The Southland Times

An expert health panel charged with planning the future of Wakatipu health services has voted to retain Lakes District Hospital, including its emergency department, and further develop the site into a health campus.

National Health Board costings show the panel's proposals can be implemented for the same $24million now spent by the Southern District Health Board on the Wakatipu population.

The panel wants to see greater co-operation with nearby Dunstan Hospital in Alexandra, with the district health board delegating responsibility for Central Otago/Lakes District healthcare services to a "tier 2" manager of its executive team. This should be done independently of historic boundaries in a way that best meets the needs of patients, ensuring better equity of access and "pathways of care across the whole region that are safe and as much as possible close to home", the panel's 80-page report says.

The district health board should continue to govern Lakes District Hospital, including the funding and provision of health services.

Dr Foley told the meeting the panel had not ruled out provision of GP services in future.

The panel wants the Queenstown Lakes District Council to establish a community reference group, in consultation with the Wakatipu Health Trust and Wakatipu Health Governance Reference Group.

At a Glance

The panel comprises former New Zealand Medical Association chair Dr Peter Foley, Christchurch Hospital clinical emergency department director Dr Angela Pitchford, Mike Ardagh, professor of emergency medicine, Christchurch School of Medicine and past head of Consumer New Zealand David Russell.

The panel says it has repeatedly discovered a lack of trust and respect for the district health board at multiple levels.

The panel was struck by a lack of co-ordinated long-term regional planning and development of clinical pathways that reflect community and patient needs.

The National Health Board will be watching the new DHB closely to ensure time frames for its recommendations are met.

The panel will formally present its findings to the DHB in Queenstown on Friday.

Full report can be viewed online at http://nationalhealthboard.govt.nz

Kiwis abandon sprawling homes for savings

30th August 2011

Source: Stuff Business Day

The five-bedroom, triple-car "McMansion" style home is becoming less popular as Kiwi buyers struggle to afford them.

Figures from Statistics New Zealand show the size of the average new dwelling fell in the year to June for the first time in years.

After growing relentlessly since the 1970s, it seems house sizes may finally have hit a temporary peak at 200 square metres in 2010.

The last time the average floor size was the same as it is now - 196sqm - was in 2009, when more apartments were being built. This suggests most standalone dwellings were actually larger than they are now.

Fletcher Residential general manager David Halsey said while people still aspired to own large homes, the question was whether they could afford them.

Rising land prices, a squeeze on borrowing and a slower housing market were putting huge houses out of people's reach, he said.

"If we could build three-car garages with five bedrooms and have them at a certain price the houses would sell like hotcakes," he said.

But in 2007 the market slowed and affordability became a factor. "People building houses now say, 'if I put it at $800,000 [in Auckland] they are not going to sell,' so you have to price it at say $720,000. The only way can do that is to slightly skimp on floor area."

Halsey said people were squeezing more into a smaller area - adding storeys and cutting bedroom sizes, halls and backyards.

In Australia, the trend has been dubbed the "end of the McMansion", a phrase coined by US media to denote subdivisions of mass- produced luxury houses.

Statistics New Zealand building consent figures show that in the year to June 1974, the average new house was a modest 110sqm.

Ten years later it had crept up to 125sqm, before ballooning the following decade to 160sqm in 1994. By 2004 the average new house was 180sqm and growing.

2010's peak size was almost double the floor area of 1974's standard three-bedroom bungalow.

"In the 1970s people were building houses of about 100sqm . . . and people were satisfied with that," Halsey said.

"After that people became slightly wealthier. They saw American magazines and they wanted ensuites, walk-in wardrobes and they needed more than three bedrooms . . . and more than one bathroom," he said.

"That 100sqm house grew into a house probably of 250sqm with an attached double garage, 2 1/2 bathrooms and probably four bedrooms," he said.

"It led to a market where if you had a house with five bedrooms you got a heck of a lot more for it than one that had three."

Now Fletchers is building housing like the Stonefields development at the old Mt Wellington quarry, and scrapping the individual 600sqm backyards of old.

"We've put quite large homes on small sites and these houses don't have gardens like I was brought up in," Halsey said.

"They have outdoor living areas where you can sit out in the sun and have a beer and you might have two of those. But you don't have a garden that you can throw a ball in."

Property search via mobiles on the rise

25th August 2011

Kiwi homebuyers who search for property online are also turning to their mobile devices to track down homes for sale, says a real estate industry survey released today.

The Neilsen Real Estate Market Report, based on a survey sponsored by Realestate.co.nz is into its sixth year, and aims to understand how the ability to search for homes and investment properties online plays a major part in the way the real estate industry does business.

Questions about accessing online property information via mobile devices were added to the survey for the first time this year. The Report found that nearly a third of New Zealanders with Internet-enabled mobile devices who research property online have accessed property information web sites from their device.

The Report also discovered that real estate researchers online were much more likely than the national population to own an Internet-enabled phone or device, with 48 percent compared to 34 percent of the overall population.*

Alistair Helm, CEO of Realestate.co.nz, says that the Report confirms that the huge growth in smartphone usage by New Zealanders is changing the way consumers look for property to buy and rent, and how the real estate industry will need to market properties into the future.

Source: Voxy.co.nz

"The options for researching property via mobile devices that have become available to consumers in the last year are making the home buying process more immediate and dynamic," says Mr Helm.

"Mobile phone users with Internet access don't tend to do frivolous browsing for property. They are more likely to be serious home hunters looking to buy or rent."

Mr Helm says that the Report findings are backed up by the fact that Realestate.co.nz's iPhone app has been downloaded more than 35,000 times since launching late last year.

"The app is location-aware and lets users discover properties available for viewing and sale in their immediate vicinity - usually a one kilometre radius - in real time."

Mr Helm says that of the estimated 200,000 iPhones in New Zealand, one in six have the Realestate.co.nz app, which is also in the top 100 downloaded apps of all kinds available in New Zealand.

"Use of the Realestate.co.nz iPhone app always surges on weekends, when people have time to go out and look for property to buy in their preferred locations."

The Nielsen Real Estate Market Report is based on a site-intercept survey on New Zealand real estate web sites conducted during May to June 2011 with a sample size of 1,219 respondents and a margin of error of 2.86 percent.

Realestate.co.nz is the country's most comprehensive property listing website profiling listings of licensed real estate agents with more than 107,000 real estate listings covering residential, commercial, business and farms for sale.

Further analysis of the findings of the Nielsen Real Estate Market Report, and the New Zealand property market in general can be found on <a href="http://www.unconditional.co.nz/"> www.unconditional.co.nz</a>, the news and information website for New Zealand real estate.

New outlook for Frankton marina

24th August 2011

Source: The Southland Times

A new multimillion-dollar marina in Frankton is a step closer after years of false starts and troubled developments.

Queenstown Lakes District Council members cancelled an agreement yesterday with the preferred developer, Queenstown Marina Developments, after it missed deadlines. The firm, based in Christchurch and run by Buzz March, was chosen last year to build a $20 million marina with more than 200 berths.

Frankton Marina Association spokesman Tony Bennetts said his group, which includes recreational boaties and commercial operators, was concerned about the future of the marina.

He suggested the council considered a development similar to the Te Anau marina.

"The feedback we got is that people are concerned we're giving away the crown jewels," he said.

Many boaties favour in-shore berths and the development of swamp land at the existing marina while the Christchurch firm proposed a marina in the middle of the Frankton Arm.

Queenstown developer Alan Kirker told councillors a marina plan with Californian brothers Iraj and Nasser Barabi, who plan to settle in Queenstown, was drawn up two years ago by Lakes Marina Project.

A three-stage development of the existing Frankton marina involved digging out in-shore berths for 52 boats. Stage two would provide 30 more berths and stage three would develop off-shore berths for 50 boats enclosed by a breakwater.

"We have the financial backing and we would use all local contractors and local knowledge," Mr Kirker said.

Council project manager Ken Gousmett said Mr March's firm missed every date to provide information, including finances.

The company invested substantially in the plan but there was no legal "comeback", he said.

Councillor Russell Mawhinney said the plan to develop an off-shore marina in the middle of the lake was the "dumbest idea I have ever heard". Councillors agreed to cancel the agreement with the Christchurch firm and invite expressions of interest to build a marina along the Frankton Arm.

Building more homes key to affordability

24th August 2011

Source: New Zealand Herald

Policy-makers need to focus on housing supply as they try to make homes more affordable, according to the Reserve Bank.

The pace that new housing can be built is a "critical factor" for house prices, and needs to be the focus of any long-term policy, the central bank said in its submission to the Productivity Commission's investigation into home affordability.

That comes after recent local and international research shows New Zealand's housing supply hasn't been responsive to big swings in housing demand.

"Evidence suggests that significant supply constraints lead both to bigger house price booms and eventually to nastier house price corrections," the submission said. "Policy should focus on regulation that gets supply conditions in the housing market right and removes barriers that impede productivity gains in the construction sector."

The commission was asked by the government to evaluate the factors influencing the affordability of housing (both rental and owner-occupied housing) and examine potential opportunities to increase housing affordability.

The central bank also said a "sensible tax structure" is likely to matter, and inflation indexing the treatment of interest would reduce benefits of property investment.

"A more appropriate tax treatment of the inflation would probably largely eliminate reported tax losses on residential rental properties even near the peaks of the housing booms," the submission said.

New Zealand house prices hit their peak in 2007, according to the discussion paper released by the commission. House prices rose 180 per cent in real terms relative to 1990 levels through to 2007, with the largest price increases exceeding 200 per cent in real terms and concentrated in major urban centres and holiday locations, and exceeded only by Australia.

Since the global financial crisis nominal house prices have fallen around 5%. House prices had risen from an average of around two and a half times personal income to five times between 1990 and 2007.

Among other submissions, construction company Fletcher Building Ltd. said land costs was the primary cost for building new housing, followed by materials, project management costs, labour and regulatory costs. To lift productivity in the sector, land needs to be more available and greater standardisation is needed to drive efficiencies, it said.

Commercial property lobbyist the Property Council said in its submission the debate on housing affordability was "wrongly skewed primarily in favour of public analysis about demand," and supply issues had a wider impact on the issue.

The Department of Labour talked down the impact of immigration on house price appreciation, saying that although there was evidence of a correlation at a national level, that didn't filter into a regional level.

Housing New Zealand Corp. said low rental yields restrained both rents and the cost of government support for housing, though if that reverses, rental affordability could become a "real issue."

Insurer IAG New Zealand used the recent bout of natural disasters to ask the commission to "not lose sight of an important point; making houses more affordable must not occur at the expense of making them less resilient to the dangers posed by our geography and climate."

Rental property owners group, the New Zealand Property Investors Federation used its submission to criticise any tax reform, saying "current tax settings seem to be efficient and are not overly lenient for residential rental property providers."

The commission was allowed to examine the efficiency of tax treatment for owner-occupied and rental housing, even though the current government has ruled out a land or capital gains tax.

Last month, the Opposition Labour Party said it will introduce a capital gains tax on most assets, excluding the family home, at a flat rate of 15 per cent if it is elected in the November election. 

Snow fans flock to best days of season

22nd August 2011

Source: Scene.co.nz

Skiers and snowboarders in Queenstown are enjoying some of the best days of the season – despite what Aussie marketers might be saying. 

Coronet Peak ski area manager Hamish McCrostie says Wednesday was probably the best day of 2011, closely followed by yesterday (Thursday). 

Between 3000 and 4000 punters were up the hill on Wednesday enjoying fresh powder – the first fine weather after three days of unprecedented blizzard-like conditions. 

Yesterday saw more than 4000 people took to the slopes of Coronet Peak. 

“This is one of the best days of the season – there’s snow top to bottom, side to side, wall to wall,” McCrostie says. 

“The question has been asked ‘Are we going to extend the season because of all this snow. We’ll make that call closer to the time, but if we’ve got snow and there’s lots of people because of the Rugby World Cup, then if we can – we will.” 

The epic powder days come after what some weather forecasters have called a one-in-50-year winter blast that dropped more than half a metre of new snow on Queenstown ski fields. 

The cold snap made roads treacherous and closed Queenstown Airport’s runway for two days. Just before the storm hit last weekend, Snow Australia boss Colin Hackworth was quoted in Melbourne’s Herald Sun newspaper that New Zealand roads are “death-defying” and flights are often interrupted. 

Australian tourist Justin Cooke, who spent yesterday afternoon skiing on Coronet Peak, says: “We haven’t had a problem. 

“We like the variety here and the longer runs. Plus it’s cheaper, bro.” 

Cooke’s mate Marc Summers: “The only downfall is you can’t stay on piste but what we’ve experienced is better snow.”

Auctions - the hottest ticket in town

22nd August 2011

Source: Stuff Business Day

The overall property market may be a little sluggish still in some parts of the country but property auctions are running hot.

Recent statistics from the real estate industry have proved what many potential house buyers have probably discovered - properties selling at auction are becoming more mainstream.

June and July saw the number of residential properties up for auction at a four-year peak, according to industry website realestate.co.nz, with 1168 homes up for auction in June and 1132 in July against a typical month of about 600 auction listings.

Auckland, always at the forefront of any property trends, saw one in five listings going to auction over the past two months and accounted for 56 per cent of the 1132 national auction listings in July.

TradeMe's Paul Ford said auction listings had "ticked up" in recent months on the site, with the most noticeable rise occurring in July, which recorded a boost in auction listings of 25 per cent on the previous month.

This increase was both because of the lift in the number of auctions listings but also because of a decrease in total listings, meaning auction listings increased proportionally, Ford said.

The increase was driven by listings in Auckland, Waikato, Christchurch, Bay of Plenty and Otago, Ford said.

These trends have been noticed by agents.

Ray White's Carey Smith said the national real estate group had seen a "substantive" lift in the group's auction listings, from 460 to 607 in the last quarter.

"The Ray White Group was appointed to over 20,000 controlled listings per annum and during 2011 14 per cent of those have been by auction and during the last quarter, this has lifted to 21 per cent," Smith said.

But are the properties at auction selling?

Yes, said the BNZ Real Estate Institute's residential market survey released earlier this month.

The survey, which collates data from the institute's members, said that agents believe more properties are selling at auction after holding negative views of auction sales in May and June.

BNZ chief economist Tony Alexander said while this wasn't an actual figure for completed auction sales it showed agents' perceptions had switched to being positive about auction sales.

Again, Smith agreed and said Ray White's "under hammer success rate" had gone from 58 per cent a year ago to 71 per cent now for auctions.

But why the sudden popularity of the auction? And what are the benefits and potential pitfalls of auctions, for sellers and for buyers?

Smith had some ideas.

"Auctions are providing vendors with the ability to polarise the buyer pool into a set time frame. With the reduced amount of stock on the market, auctions are also showing an increased response rate from buyers attending open homes and also registering to bid for properties."

In short, an auction draws a line in the sand that both seller and buyer have to adhere to.

Once the auction date is set, it's all on.

Because auctions are unconditional sales all the legwork has to be done in the lead up to auction day. That includes investigating the condition of the property, possibly organising a builder's report, reading through the paperwork like unit title and body corporate information if its an apartment or unit and most importantly, arranging your finance so you are ready to roll on auction day.

That's because if you are the winning bidder you are required to sign an unconditional cash deal on the day - if, of course, the seller's reserve has been met.

Harcourts' national auction manager Richard Valentine said auctions add impetus and urgency to the process that's good for both parties.

He said buyers can be sure they are dealing with motivated sellers, who have invested in marketing campaigns to get a result.

"In addition, at an auction buyers can compete on an equal footing with others and everything is out in the open. They can track their competitor's bids and control theirs - and if their bid is accepted it's a done deal in a very timely and straightforward fashion."

Anyone who has played the "multi-offer bid game" will know how appealing a blunt bidding duel can be in comparison.

For vendors the unconditional cash sale at auction is clearly appealing and it should also flush out more buyers, some of whom can get caught up in the moment of competing against other bidders and end up paying more than they might have offered in a less heated environment.

Smith said there had been specific examples at Ray White where an auction had "pepped up" buyer demand.

"At a recent auction held by Ray White Ponsonby price expectations were exceeded by almost 20 per cent. This was directly attributed to the auction form of marketing."

The pros and cons

Pros

No secret negotiations. An auction puts the sale process all out in the open, you are either the highest bidder - or you're not, and your property has either sold, or it hasn't.
There is no shadow boxing with another bidder, and trying to guess which magic number will secure you the property over and above someone else. For a seller, you know how much you are going to get within a matter of minutes and can control the price by setting a reserve.

You can plan ahead. Because you know when and where the auction is happening planning your strategy, including your top dollar, should be a breeze. You also must have all information to hand from the seller about the property and have any reports you have commissioned completed.

Show them/me the money. If you buy at auction the sale is unconditional, including your finance, so you have to get this organised in advance. The upside is you know what you can afford to bid and there is no anxious wait for bank approval. Of course, this is also great for the vendor.

Cons

Caught up in the moment. The auction bidding could get heated and take you, and your budget, along with it with the end result that you pay more than you had budgeted for. (This is probably a pro for the vendor, however)

Who's that bidder? Yes, it's the vendor. The vendor/auctioneer can bid against you until the reserve is met.

Out of pocket. You have had a building inspector in and had the lawyer go through the paperwork. Then you miss out at auction. Unfortunately, these bills still need to be paid.

Unconditionial. No conditions on the sale that will safeguard the buyer if something later turns out problematic such as leak issues.

Bumper ski season may make up for lost trade

19th August 2011

Source: The Southland Times

The Wakatipu economy can cope with lost trade this week because the potential for a bumper snow season is high, business leaders in Queenstown said yesterday.

More than half a metre of fresh powder has blanketed the region's skifields during 36 hours of intense snowfall.

Most of the Wakatipu Basin and Central Otago ground to a halt on Monday as a severe southerly storm system swept across the country.

The weather eased yesterday, allowing roads to reopen, supply trucks to get through and most flights to resume at Queenstown Airport.

NZSki chief executive James Coddington said the season, which kicked off late after an unseasonably warm start to winter, was unusual and memorable.

He said the potential for a bumper ski season was high, especially with the availability of flights from the east coast of Australia.

The weather at Coronet Peak and The Remarkables was expected to ease after a frustrating day yesterday as southwesterly winds blew in across the skifields, he said.

"The weather certainly had an impact on people choosing to go out in those conditions.

"The snow is fantastic and once the weather clears we can get people to enjoy it.

"It's what we live for.

"We've had such an unusual season, a warm start then major snow," he said.

Remarkables Park director Alastair Porter said the Frankton shopping hub, which includes the Wakatipu New World and a Warehouse store, was mostly closed on Monday.

This was the first time a storm closed the park but the district economy could absorb the loss of some trade, he said.

"We're an alpine resort and snow is part of our business.

"It's pretty magical.

"August is the premium skiing month so if you're keen and you're flexible, it's the time to be here."

New Zealand Hotel Association Queenstown chairwoman Penny Clark said it would be a different story if the storm did not abate.

During the storm, guests scheduled to leave the resort stayed, while those expected to check in could not get through because highways were closed, she said.

With signs of a thaw in downtown Queenstown yesterday, she said the resort was resuming business.

"Nobody could get in and nobody could get out but I think everything is going to be OK."

Ms Clark said many tourists were already in the region for the Winter Games, so any lost trade was tour groups or coach companies unable to reach Queenstown.

17th August 2011

Source: 3 News

The blizzard-like conditions sweeping the country might be causing chaos for most but for the nation’s ski field operators there is no such thing as too much snow, at least not this year.

Just two months ago, food parcels were being delivered to seasonal workers at some of the South Island ski resorts and the cold bite of fear was in the air.

"It was the perfect storm of things not going our way," said Nadia Ellis, sales and marketing manager for Cardrona in Wanaka.

"It started with the floods in Queensland, which is a key market for us, then we had the earthquakes in Christchurch, the earthquake in Japan, another key market, then no snow... then there was the volcanic ash cloud... put all those things together and we were all shaking our heads in disbelief!"

International visitor numbers were down in June, the worst since 2003 and the lack of snow simply made things worse. It cost many ski field operators millions of dollars in lost revenue.

Openings were delayed, Coronet Peak by as much as three weeks. The game of catch-up began.

"So far it’s certainly been the most challenging season in our history," said James Coddington, chief executive of NZ Ski which runs the Coronet Peak, Mount Hutt and Remarkables ski areas.

“We have 210 fully-automated snow guns at Coronet Peak, but unfortunately they don’t operate unless you’ve got the optimum temperatures and all through May and June we didn’t have the temperature cold enough.

“Over that period where we couldn’t open the field, many of us didn’t take pay - including myself.”

Luckily, by late July business had improved. There was a decent dump of snow in the middle of the month and the Ministry of Education's decision to move state school holidays back two weeks this year for the Rugby World Cup proved to be a blessing in disguise for the ski fields, with Kiwis making the most of the late snow.

“[It has] been the best school holidays we have ever had’, said Jackie Van Dervoort, Treble Cone general manager.

That’s a view shared by Ruapehu Alpine Lifts. Overall, the North Island operator has certainly had it easier this season than its South Island counterparts as it operates at higher altitudes and gets a greater depth of snow.

“Eighty-five percent of our business is domestic North Island so we haven’t had to worry about ash clouds and the like causing problems,” said the company’s general manager Dave Mazey.

“We are looking nearly as good as 2008 which was our best season for snow cover. We’re starting to get up to those levels now.”

So the more snow, the better but for some the concern remains, at least in the South Island, that the lack of the powdery stuff early in the season will have caused real damage that won’t be apparent for a couple of years..

For NZ Ski, the biggest worry is the effect on the Australian market. In Queenstown, more than 60 percent of its customers are from across the ditch.

"We have built up a lot of confidence in Australia that we have good, reliable predictable conditions early season,” said James Coddington.

"A lot of Australians came out in those first few weeks of the season and there was no skiing because there was no snow.

"The impact that's going to have on not just our business, but skiing as a brand in Australia, is significant. It could take upwards from two years to recover from that.”

There are over 1 million active skiers and snowboarders in Australia. New Zealand currently attracts around 10 percent, so the opportunity is huge.

For the past few years New Zealand has been spending a huge amount of money trying to tempt snow lovers across the ditch.

The Ski Marketing Network, which is made up of some of New Zealand’s premier ski resorts and snow sports playgrounds, the regional tourism operators and the airlines, has all sorts of campaigns running, including a commercial featuring Australian skiers and snowboarders reveling in the New Zealand snow running on prime-time TV in Sydney, Melbourne and Brisbane.

This year though, the competition has been stiff.

Australia’s nine leading ski resort operators and tourism partners have joined forces to encourage their countrymen to visit New South Wales and the Victorian snowfields, rather than look to overseas.

Then there is the issue of the strong Australian dollar, which has attracted other international ski resorts to chase a share of the market.

"Because the Aussie dollar is so high it's never been cheaper for them to go to places like Aspen or Whistler,” said Ms Ellis.

“Those areas and regions were marketing very heavily into the Australian market so all of a sudden we've got all those new competitors for the Aussie dollars.

“When I have a look at the numbers, we’re doing remarkably well given the economic environment and all the challenges.”

On average, Australian ski tourists visit New Zealand for 10 days or more and spend at least AU$3,100 dollars, whereas the average Kiwi tourist spends around four days and half the amount of money.

Eighteen-year-old Zach Griffin, an apprentice carpenter from New South Wales, spent two weeks in Queenstown with five friends at the end of the last month.

It was the first time he’d been snowboarding and he loved it.

"It's been really cheap for us. It cost us $2500 for two weeks. That was accommodation, aeroplanes, shuttle bus, ski pass. Pretty good value, I think."

His friend Jera Burton, a car parts salesman, also enjoyed the experience. He’d previously snowboarded in Canada and Australia.

“We always had the idea in our head to go snowboarding somewhere but we really liked what we got shown of New Zealand and Queenstown so we decided to come here.

“The majority of the people we’ve met while we’ve been here are Australian, which is quite funny. It’s a lot colder but we all love it. It's also almost as cheap as skiing in Australia... but much better."

Too much snow does result in ski field operators having to close fields for a day or two, but plenty of fresh powder is bound to get skiers and snowboarders flooding in.

There are more Australian holidays coming up next month, followed by the Rugby World Cup.  Everyone’s hoping for a late season boost with tens of thousands of extra visitors hitting the slopes.

“We’re feeling really positive,” said Mr Mazey. “We’ve got no doubt the RWC will add value through September and October as we’ve got really good snow cover then.

“We’re expecting lots of people to come and just play in the snow. They don’t have to be ardent skiers. We’ll be offering quite a different experience on snow to what they'd get in their home countries so it’s bound to be popular.”

In Queenstown, tourism and ski field operators are also hopeful, even though the region isn’t hosting any games.

“September, October would be our shoulder period…so in that sense the Rugby World Cup is well timed,” said Destination Queenstown Chief Executive Tony Evritt.

“It recently ran a competition offering 300 room nights, with people able to win a one or two night stay at one of the region’s 19 hotels.

"Some people may think that during the RWC accommodation may be expensive or hard to find but fact, here in Queenstown there is  still very good availability in our hotels and across all accommodation types and price ranges."

The region’s ski field operators have also been working with the airlines to come up with offers to tempt the tourists to travel around.

"People are here to watch the rugby so they'll probably consider skiing as an activity,” said Ms Ellis.

“If there’s enough demand and the snow is good enough, we’ll definitely stay open right through until the final.

"I know when the Lions were here and they were touring the country... the ski industry did really well out of that...  so we’re hopeful, but we're not banking on it."

NZ Ski is also waiting to see.

"People will make decisions to come to New Zealand for the World Cup, but if they're not interested in rugby they're probably going to avoid that time. So it's a positive and a negative,' said Mr Coddington.

“We know the Brits love skiing… we’re going to have plenty of Irish around so that’s an opportunity. We’re not so sure about the Australians.

“I personally think the Australian tourist is going to be here for the rugby. They’re going to be coming in and going out, and with the numerous flight connections it’s going to be so easy for them to do that.

"That said, there will be plenty of tourists in the country generally and I’d like to think that people are going to use places like Queenstown as a base and go up for the games. Let’s hope the good conditions continue.”

Shell joins oil, gas quest in south basin

17th August 2011

Source: The Southland Times

Multinational giant Shell has joined the hunt for Great South Basin oil and gas but has warned Southlanders not to expect a gold rush.

The OMV consortium announced Shell had joined it as a major partner yesterday and said it had given one of its exploration permits back to the Crown, to focus on its other two, which will be mapped in 3-D.

Once the mapping is completed, Shell will take over management of the project.

This may not be good news for Invercargill as Shell could choose to base its rig support operations – should production go ahead – in Dunedin rather than Bluff.

OMV New Zealand managing director Peter Zellinger and Shell New Zealand chairman Robert Jager refused to be drawn on how the decision would affect Invercargill's hopes.

"The next step after seismic will be potential drilling," Mr Zellinger said. "Only then will we think about development of operations ... we'll see where the most productive areas are."

Southlanders should not expect instant payoffs from Shell's investment, he said. "Be realistic. It's not a gold rush. It is a very careful exploration process ... don't have the wrong expectation [that] everything will change."

The companies held a briefing at the Ascot Park Hotel yesterday.

OMV exploration manager Tim Allan said the fact that the briefing was held in Invercargill reflected the respect it has for the community.

The Invercargill City Council, the Southland Energy Consortium and the Chamber of Commerce hope the city will enjoy an economic boom from any potential oil and gas exploration.

Southland Energy Consortium chairman Mark O'Connor said it was positive that OMV had attracted Shell as a partner.

"The area designated for further research is half way between Dunedin and Bluff.

"Whether the region can gain more commercial development depends on the actual drilling commitments ... it's still positive to see."

OMV believe the 3000 square kilometre seismic survey, set to begin this spring, is more likely to find gas than oil.

"We can't exclude oil but the likelihood of gas is high," Mr Zellinger said.

If wells were drilled, they would be around 800m to 1200m deep.

When asked about potential enviromental risks from rigs, Mr Jager said Shell would make sure its safety standards were robust enough for the Great South Basin.

"In the unlikely event [of a pollution threat] we have a number of things we can call on."

However, both companies expect some protests from environmentalists, as were seen off the East Cape in March, when Brazilian company Petrobras was looking for oil.

"We are open to constructive dialogue," Mr Zellinger said.

"Protesting deep-sea drilling leaves very little room for dialogue.

"Being concerned about how we carry out our operation and our [environmental] footprint is constructive."

Far from being a vote of no confidence in the basin, Mr Zellin-ger said OMV's reduced stake showed it was totally committed to the project.

"We could have done it alone ... we are very confident in the next step ... [and] will be ready," he said.

"I would be happy with 18 per cent in a huge stake."

South gets snowed under

16th August 2011

Source: The Southland Times

The Wakatipu Basin was yesterday blanketed in its deepest and most persistent snow dump in 50 years, and MetService warned last night more is coming.

The polar blast adversely affected the whole of the South Island and few parts of New Zealand missed its fury.

Queenstown was among the worst hit, as most suburbs awoke to at least 20cm of snow on front lawns. Drifts piled between half a metre and 80cm in parts of Frankton, Kelvin Heights and Arthurs Point.

Longtime Queenstown weather forecaster David Crow said it would have to be the heaviest snowfall in the district since 1962, having been around for every winter since then. "It certainly beats anything I can remember. I think this will be one of the longest-lasting cold snaps we've had."

The big snow of 1968, when helicopters were landing on central Queenstown's recreation ground ferrying supplies of feed to outlying farms, was no deeper than this fall, Mr Crow said. "I think this will be one to remember, people will be talking about the big snow of 2011 for a while."

Many roads were impassable, the region's schools shut and airports closed as the bitterly cold southerly swept across the country.

In Wanaka, the snowfall was not as pronounced, with about 1cm on the ground at lake level, and little snow in Hawea.

Cromwell, Alexandra and Roxburgh also started the day with a covering of snow, which was enough to have schools cancelled and roads closed.

The Lumsden area also experienced heavy snowfalls.

The Vincent Community Board postponed its Monday meeting until next week.

Weather in Fiordland was described by some as blizzard-like.

Southland District Council Te Anau ward councillor Diane Ridley said she had seen plenty of snow in the area before, but not quite as much in a single day.

"I've lived here forever, like 40 years, but I've never known so many snowfalls in the town in one day," she said.

An Education Ministry spokeswoman said most schools in Southland, Otago and Canterbury had been closed for the day, while the Southern District Health Board also cancelled all outpatient clinics and elective surgery at Dunedin and Wakari hospitals.

The polar blast was also responsible for closing several courts, including Dunedin, Queenstown and Balclutha district courts, and NZ Post cancelled its deliveries in Balclutha, Gore, Alexandra, Queenstown and Wanaka. Power outages occurred across the southern coast, from Waikawa to Fortrose.

Ian Ruddenklau, of Fortrose, said while conditions had improved slightly by yesterday afternoon, with power restored and most of the snow underfoot melting, strong southeasterly breezes were still wreaking havoc.

"Everyone's miserable. The farmers are miserable, the stock's miserable. Bring on the good weather."

Federated Farmers' adverse events spokesman and Southland farmer David Rose said the lambing season was not expected to start until next month.

In Queenstown, a full council meeting scheduled for today was cancelled and Queenstown Airport was closed, grounding scheduled domestic flights and services to Australia.

Queenstown Airport Corporation spokeswoman Nina Crawford said a team was working to clear the runway, but the storm's severity meant reopening was questionable.

Staff would reassess whether the runway and airport could reopen at 7am today, she said.

Arrowtown's Night'N Day dairy ran out of bread, and fresh milk supplies did not get through until 3.45pm. Commercial bread stocks were also getting low at Queenstown's New World but the supermarket's bakery team was busy making bread to replenish the shelves.

At FreshChoice they ran out of bread, but an emergency delivery was on its way from nearby Queenstown Bakery late yesterday.

Fuel pumps ran dry at Frankton's BP Connect, where staff had been rushed off their feet.

BP communications manager Di Papadopoulos said tankers were lined up waiting to get through from Bluff and Christchurch to replenish supplies.

Shell Queenstown had enough petrol for a few days, but had its quietest day in a long time, with not much traffic about.

Banks were closed for trading in Queenstown and Frankton, as staff were unable to get to work.

Most Queenstown and Frankton shops were closed yesterday morning, but many opened with limited staff as the afternoon wore on. Glassons was closed for the day.

The Warehouse, open with limited staff, had a big rush on snowboots, selling at least 40 pairs.

Service manager Caroline Macpherson said heaters and hot-water bottles were also moving fast.

MetService duty forecaster Heath Gullery said the temperature did not get above zero in Queenstown yesterday, and last night's overnight low was expected to be minus 4degC, with minus 5degC forecast overnight tonight.

Snow showers would continue tonight throughout the south, with another front likely to hit today, but easing a little by tomorrow, when the region could look forward to some "very severe frosts" – probably near minus 5degC for the rest of the week, Mr Gullery said.

Motorists throughout the south are again being urged to take again care this morning.

Emergency Management Southland manager Neil Cruikshank yesterday warned that snow was forecast to continue falling today.

Queenstown Lakes District Council chief executive Debra Lawson urged people to check on their neighbours, especially elderly residents, to ensure they had adequate heating and food supplies.

Police in Queenstown and Central Otago urged people to stay indoors and avoid all but essential travel.

A police spokeswoman said some drivers were "idiots", venturing out in vehicles without chains and parking dangerously.

Roads that remained closed in the south last night were State Highway 93 from Clinton to Matarua, and SH94 from Te Anau to Milford Sound.

Motorists on SH8 from Alexandra to Roxburgh, SH6 from Cromwell to Queenstown, SH6 from Kingston to Five Rivers, SH6 from Queenstown to Kingston, SH8 from Raes Junction to Milton, and SH8 from Raes Junction to Roxburgh were warned to use caution and carry chains.

Pak 'n Save Invercargill owner Bryan Dobson said while stocks of essentials such as bread and milk were holding up reasonably well, the picture could look a bit different if delivery trucks were unable to come south again today.

Most people appeared to have stocked up earlier, with sales skyrocketing in the weekend, Mr Dobson said.

Queenstown games draw 1000 athletes

15th August 2011

Source: The Southland Times

More than 1000 athletes from almost 50 countries have descended on the south for 16 days of top international competition at the 2011 100% Pure New Zealand Winter Games.

Catherine Bates, of Tourism New Zealand, said coverage of the 38 events would reach millions globally and help showcase New Zealand as a "world-class alpine playground".

Athletes were introduced to media yesterday and later a VIP opening function was held on Queenstown's Steamer Wharf.

Games chief executive Arthur Klap paid tribute to the vision of Queenstown-based former New Zealand Olympic Committee president Sir Eion Edgar and secretary-general Barry Meister, which led to the first games in 2009.

Mr Klap hoped the second games would involve even greater community contact. "I live in awe of what we as a community do with nothing. We are just ordinary people, doing ordinary jobs to deliver and awesome event."

AFP World Champion halfpipe skier Gus Kenworthy said he was glad to be back for his second games at an amazing event.

Dunedin's darling of the 2010 Paralympics, gold medallist Adam Hall, said he would compete in the slalom, his first love, at Coronet Peak, and later at the Super G at Mt Hutt.

"I like the speed and adrenalin and just getting out there and doing what we do," Hall said.

New school land?

12th August 2011

Source: Scene.co.nz

The Ministry of Education has been secretly eyeing at least eight blocks of land for the Wakatipu’s next school – but some property owners are in the dark. 

Mountain Scene can reveal the MoE has been investigating sites from Arthurs Point to Jack’s Point for the past three years in the painstakingly slow process of expanding education facilities to keep pace with Queenstown’s rapid growth. 

Target sites have never before been made public – the MoE has previously been tight-lipped or non-committal over where new primary and secondary schools may go. 

The site revelations follow last week’s MoE announcement of the resort’s newest school, Remarkables Primary, shrinking its zoning area because of imminent overcrowding. 

The 2008 site selection report requested under the Official Information Act took almost two years for Mountain Scene to obtain, despite the Ombudsman’s intervention. 
 

It reveals:

• The MoE’s No.1 choice for a new primary is a Stalker Road site at Ladies Mile within the Shotover Country plan-change zone 
• A Five Mile site on Frankton Flats is preferred for a new high school 

Official documents also reveal the MoE wrote to a Dunedin iwi consultancy in 2008 about the sites, urging confidentiality: “Under no circumstances release any of it to third parties. Obviously landowners are not to be approached under any circumstances.” 

Queenstown lawyer Warwick Goldsmith, acting for Shotover Country landowners, says the MoE has kept in regular contact but “they haven’t given us an indication that it’s their preferred site”. 

A decision on Shotover Country’s plan change – to turn farmland into a mostly residential zone with community facilities like a primary school – is expected within weeks. 

Remarkables Park and Arthurs Point land are bracketed in second place as primary school sites – but Arthurs Point landowner Chris Streat has never been approached. 

“It’s news to me,” Streat says, adding that much of his family trust’s land is already being developed in his Evening Star subdivision. 

“There’s eight hectares of land left so you could still fit a school in but there are other factors…land covenants and the views of neighbours would definitely affect any decision to build a school there.”
 
Landowners of Remarkables Park and Jack’s Point – two other possible primary sites – have indicated a willingness to sell certain areas inside their boundaries to the MoE.
 
On another primary-school option – the 4ha adjoining Ladies Mile Pet Lodge – “no discussions have taken place with the landowners and therefore their willingness to sell is unknown”, the MoE report says.
 
The official document singles out Five Mile as being the best site for a new Wakatipu High, followed by Remarkables Park – but both have noise problems from Queenstown Airport and SH6. 

Ranked third for Wakatipu High is the option of extending the existing school – once again, property owners haven’t been approached, the report says. 

An extension would only temporarily relieve Wakatipu High’s roll pressure – “further options for relocation may still be required in the future”. 

The fourth-ranked high school site – labelled the “Mee Block” – is on the south side of the Kawarau River. Again, the MoE hasn’t approached landowners. 

Mountain Scene asked the MoE whether any sites had been added to or eliminated from those listed in the report – but MoE officials were unable to provide a detailed answer by deadline. 

The report urges Wellington to secure future school sites for the Wakatipu. 

“It must be acknowledged that developing land for a school will mean competing for land tagged for residential development in one of the most sought-after areas in New Zealand.”

Shotover Country (Stalker Road) - MoE’s preferred site for the Wakatipu’s next primary school - Landowners willing to sell 3ha		Ladies Mile (SH6) - 4ha block by Ladies Mile Pet Lodge - Landowners not yet approached

Five Mile - Best site for new Wakatipu High - But noise problems from airport and SH6		Arthurs Point - MoE’s second-best site for new primary - Landowner not consulted

Work to begin at Five Mile

12th August 2011

Source: Otago Daily Times

The days of abandoned Five Mile site "Hendo's Hole" are numbered: it is hoped work on Gateway Queenstown's proposed $125 million shopping and entertainment complex will start there in October.

New Five Mile developer Tony Gapes yesterday confirmed construction of stage one of the complex, worth $70 million, would begin at the 7.8ha site later this year.

"We are just going through the leasing process at the moment," Mr Gapes said.

"We are talking to tenants, signing people up and we are hoping to start about October."

Confirmed for the 26,000sq m big-box retail complex is a 4200sq m Countdown supermarket. Proposed are a six-screen cinema complex, bulk retail outlets and 40-50 smaller retail and food outlets in a mall based around a two-level department store.

With retail centred around a large car park, the large outlets may include sports, furniture and homeware stores. A glass-enclosed mall sector would comprise mainly fashion and food stores.

Mr Gapes said "probably around 30%" of the retail space had already been leased to a mixture of New Zealand and international businesses. The cinema operator was yet to be confirmed and he would not comment specifically on which retailers had leased space.

The new development will spell the end of the Frankton Flats eyesore, an excavated site intended to be used as a massive underground car park for the original Five Mile development.

It was left uncompleted when developer David Henderson abandoned plans for the 10,000-home Tuscan-style village, which was backed by the failed Hanover Finance.

Mr Gape's company, Gateway Queenstown, bought the land from the receivers in late 2009 for $21 million. It then gained master-plan resource consent approval earlier this year.

If Five Mile eventuates, it will compete with other Frankton developments Remarkables Park and the proposed $100 million Shotover Park complex, which will include a Pak'n Save supermarket and petrol station.

Crystal ball gazing

12th August 2011

Source: The Southland Times

OPINION: Two weeks I ago I wrote in this column that the time had arrived for risk averse borrowers to consider fixing in light of data showing higher than expected inflation and economic growth earlier in the year, writes Tony Alexander this week.

Plus there was evidence of rising fixed interest rate borrowing in the business sector causing the cost to banks to rise sharply.

For example, the key rate which influences the cost to banks of lending fixed for three years to homeowners rose from below 3.8 per cent at the end of June to 4.1 per cent come the third week of July.

In the space of a fortnight the world has turned completely on its head and now there is little chance of a near term tightening of monetary policy and wholesale borrowing costs have plummeted. The three-year wholesale interest rate is now near 3.6 per cent.

Nothing much has changed in New Zealand.

Our latest BNZ Confidence Survey found a fall in the net percentage of people expecting the economy to improve to 22 per cent from 45 per cent in July.

But the result is still quite positive and not suggestive of fresh NZ weakness. We have continued to see a string of weak economic data releases in the United States, Standard & Poor's has cut the US credit rating for the first time, and responding mainly to the first factor but with the second as a trigger, investors have aggressively sold shares.

In addition there has been a fresh surge of concern regarding the debt situation in Europe, this time centred on Italy. That also has led to fresh worries about low economic growth and encouraged more selling of shares.

Whether the weakness in share prices continues or not is impossible to say.

One thing we can be certain of is that the shock of falling asset values will cause householders to pull back on their spending, businesses to ease off on hiring and put on hold their capital spending plans for a tad longer.

These developments will mainly occur overseas but at the margin we will act the same way in New Zealand.

In addition we can anticipate that fewer people will feel inclined to visit our country, therefore the tourism sector's prospects have just become worse. Also we are seeing falls in global commodity prices and that will make NZ farmers delay further their plans for boosting spending in response to strong pastoral incomes.

It all adds up to an environment in which the Reserve Bank is not going to feel the time is yet safe for raising interest rates and the chances are that now rather than raising the cash rate in September it will wait until December.

Thankfully for at least two years now we have commented that this is the most uncertain forecasting environment we have known, that people should not base hedging decisions on a reasonable expectation of any particular set of forecasts proving correct, and that whatever we forecast today the chances are we will not be forecasting the same thing six months down the track.

This time around it has taken less than four weeks for our interest rate forecasts to change back after being altered.

The interesting thing is that this is actually the third time since the end of March 2009 that I have suggested borrowers look at fixing part of their mortgages, then pulled back to suggesting floating after only two to three weeks. The environment we are trying to forecast in and in which you are trying to run your businesses and household budgets has been, is, and is likely to remain for the next three years the most uncertain and volatile we have seen. The message out of that can be nothing other than to try to get debt down, build cash reserves, to monitor cash flows closely and make them robust.

But also keep an eye on the fact that we still see reasonable growth coming in the NZ economy from the Christchurch rebuilding stimulus, housing construction catch-up in Auckland, feed-through of some lift in farm spending, growth in some sectors like film production and some element of household spending catch-up.

Flyer deal could be 'lifesaver' for Kingston economy

12th August 2011

Source: The Southland Times

The vintage Kingston Flyer is back on track and it could be an economic lifesaver, the new owner said yesterday.

Company director David Bryce, of Renwick, in Marlborough, has bought the train and other assets from the receiver for an undisclosed sum.

The deal includes two steam locomotives, carriages, the Kingston Tavern, storage sheds, a 14-kilometre section of track to Fairlight, residential lots and development land.

Queenstown Lakes District Mayor Vanessa van Uden said the deal was fantastic. She said the Flyer was synonymous with Kingston and it was a boon for tourism, businesses and the economy.

Mr Bryce – who grew up in Lumsden – said the next stage of the development plan was steam train licensing and re-opening the tavern, which closed in May.

The tavern was the community hub and one of the assets tied up in the receivership of Kingston Acquisitions, a company run by Auckland-based developer Dan McEwan.

Mr Bryce said the deal was a potential lifesaver for the village economy and the train could be running by October.

"It could be the saviour of Kingston. Kingston has a very strong future with the Flyer operating again and we'd like to get the tavern open as soon as possible.

"(The Flyer) is in very good condition and I see it as a reasonably easy process to get it operating again."

The deal could kickstart the village economy, which has suffered since the train stopped running in 2009.

Tourists and residents lamented the loss of the service, a significant drawcard for the village and one of the most visible Queenstown Lakes district attractions.

Kingston Community Association chairwoman Annette Dalziel said it would be wonderful to see such a beautiful train running again.

"It would be lovely to hear the whistle blow again and wave to the people," she said.

Kingston Motels and Holiday Parks owner John Jones said the news was marvellous.

Previously, the Flyer was a significant employer and the tavern was the community focal point, he said.

"Hopefully, it will increase the number of people stopping off," Mr Jones said.

"It's been a fairly testing time for businesses in the area, particularly any associated with hospitality and tourism."

Mr Bryce said licensing, maintenance and re-opening the tavern were the first steps before a full restoration and resumption of the tourist attraction.

"I feel quite humbled I have been given the opportunity to take ownership of it," he said.

Former Flyer manager and engine driver Russell Glendinning was working with the NZ Transport Agency on licensing to resume operations, Mr Bryce said.

Mr Glendinning was appointed operations manager.

Kingston Flyer may steam again

11th August 2011

Source: The Southland Times

Veteran steam train driver Russell Glendinning is hoping Queenstown's iconic Kingston Flyer will be back on track by Christmas after sitting idle for the last two years.

The vintage steam train has not been fired up  since the company operating it was placed in receivership owing $4.7 million in 2009.

The train attracted thousands of tourists each year on its run between Fairlight and Kingston at the southern end of Queenstown's Lake Wakatipu.

Mr Glendinning, 75, who had been driving the old train for about 40 years, said he hoped meetings would resolve licencing issues with the NZ Transport Agency and that would be another hurdle overcome in the bid to get the train back in business.

He said others were looking at the finances of the train and the debt which led to it going into receivership.

"If the financial situation can be resolved hopefully in the next week or two, then the train should be up and running again ... perhaps by December or something like that," he said.

Mr Glendinning, said he did not anticipate any problem in starting up the engine.

The historic steam train was operated by Kingston Acquisitions Ltd which went into receivership in November 2009 owing Prudential Mortgage $4.7 million.

The train had been stored in a yard in Kingston.

Grab 'cheap' fixed rate now

11th August 2011

Source: The Southland Times

Mortgage rates should remain cheap for a few more months, but homeowners are being urged to take advantage of cheap fixed-term loans before it is too late.

The advice came as New Zealand and global shares staged a strong recovery yesterday on news the United States Federal Reserve will maintain low interest rates for the next two years.

Global economic uncertainty has led to most economists revising their expectation of an increase in the New Zealand official cash rate from next month, to the end of the year instead.

But Roger Kerr, an economist at Asia Pacific Risk Management, said homeowners should grab unrealistically cheap short-term fixed rates "before the herd fixes".

Banks were charging about 6.45 per cent for a two-year fixed rate and up to 6.99 per cent for a three-year term. Based on a floating rate of 5.75 per cent, payments for every $100,000 mortgage on a three-year fixed rate would increase by about $77 a month.

Most homeowners would not switch to fixed rates till the Reserve Bank had lifted the OCR. By then fixed rates would already have moved off their artificially low levels, Mr Kerr said.

Other economists say the environment is too volatile to clearly choose between fixed and floating.

ASB was forced to reverse an across-the-board fixed-rate increase this week but said yesterday that customers who had taken up the higher rates would be able to choose the revised rates.

The New Zealand sharemarket closed up 2.78 per cent, recovering nearly all of its $1 billion losses on Tuesday. But brokers advised that more volatility could be ahead.

Plans proceed for Kingston Village

11th August 2011

Source: The Southland Times

The proposed Kingston Village development will go ahead, the developer says.

Developer Ian Pillans, of Dunedin, said yesterday that withdrawing court proceedings against the Kingston Flyer's mortgagee would not stop the plans.

His firm has consent as part of a plan change for a village development with 740 residential sections, a school, golf course and parks.

Mr Pillans said the overall plan had gained consent and the firm was progressing with planning.

"We've quite a bit of fairly specific survey work to be done for the first stage of the development.

"Given the economic climate, we're happy to be in the planning stage."

The village would unfold as part of a 25-year development in Kingston. Once survey work was finished the company would lodge a subdivision plan for stage one, to include up to 150 lots, landscaping and a walking and cycle track, Mr Pillans said.

He hoped to reach an access agreement with the owner, or owners, of the Kingston Flyer.

The firm was not having discussions with any party related to the Flyer at this stage, he said.

National property values hold steady

9th August 2011

Source: QV

National property values have steadied according to the QV residential property index for July.

“Nationwide property values have steadied over the past month and are now only 0.4% below the same time last year, and remain 5.2% below the market peak of 2007” said QV.co.nz Research Director Jonno Ingerson.

“Over the past three months values have increased in many parts of the country, with particular strength in the Canterbury region and parts of Auckland” said Ingerson.

“Across the wider Auckland area values have increased 2.4 percent since January, and as a result are now 1.9 percent above last year and only 0.6 percent below the previous market peak of late 2007. This growth in values over the past few months has not been evenly spread across the Supercity with the old Auckland City growing the most, modest increases in Rodney, North Shore and Waitakere, while Manukau, Papakura and Franklin have stayed more or less stable” said Ingerson.

 “Values in Hamilton, Tauranga and Dunedin have all been relatively stable for the past six months, although declines in the six months prior to that mean that all three areas remain below the same time last year” said Ingerson.

Ingerson said “Wellington remains the only main centre where values continue to decline in recent months, dropping 1.8 percent since January, and now sitting 2.7 percent lower than the same time last year. Possible Public Sector restructuring remains a dampening factor in the property market”.

“Values in Christchurch have been volatile since the first earthquake in September, first increasing for a few months, then dropping prior the February quake, and since then have been increasing. Over the past three months values across Christchurch have grown 1.1 percent, and are now 0.5 percent above the same time last year. The increase in recent months is due to increased demand for properties in undamaged areas particularly in the West and North of the City” said Ingerson.

Ingerson said “values across the rest of the Canterbury Region have also increased in recent months due in part to demand from displaced Christchurch residents. Values in Ashburton have grown the most at 4.0 percent over the last three months. Waimakariri District immediately North of Christchurch has increased 2.9 percent and Selwyn District immediately to the West has increased 2.1 percent.”

While unrelated to the QV index, and a less reliable measure of value change, the average New Zealand sales price over the last three months is $414,261 up slightly from the $412,746 reported last month.

The provincial centres have seen some variability in values in recent months with some dropping, others rising and others staying flat. However values in most provincial towns remain below the same time last year. Wanganui is the furthest below last year at -6.8 percent, with Gisborne next at -4.6 then Invercargill at -4.0. Whangarei (-2.7), Rotorua (-2.9), Hastings (-1.0%), Napier (-1.5), New Plymouth ( 2.6) and Palmerston North (-1.0) are all down slightly on last year. Nelson values are at the same level as this time last year while in Queenstown Lakes values are 1.5 percent above last year.

Main urban commentary

Auckland

QV’s Residential Price Index for July shows that property values in the Auckland region are 1.9% higher than the same time last year. Values continue to increase although not as quickly as last month.

Ms Glenda Whitehead of QV Valuation said; “Auckland is an extensive region and while values sit 1.9% above a year ago, when you look at each area this reflects too little for some and too much for others. We are seeing local influences at play within each of the former cities, their suburbs, that even go down to street and property level. These are driving much of the shift in value with most of the upward price movement within the former Auckland City.”

“Values for former Auckland City show an annual growth close to 3%. Whilst there has been some steady growth our valuers have seen some spiky values being achieved for individual properties that tick all the boxes. While other more homogenous type properties or those with faults have shown little value movement” Ms Whitehead said.

Ms Whitehead said “we continue to see strong demand based on both locality and building type. This has seen value rises in the older traditional suburbs such as Royal Oak, Epsom, Mt Eden, Mt Albert, and other suburbs in close to proximity to the CBD. These leafy suburbs offer popular school zones, village atmospheres, and large numbers of character homes or homes built with trusted and proven building materials.”

“In terms of other parts of the region there is little to report that was not said in prior months. Values levels remain stable, as reflected by the limited change in the underlying index for the past year to 18 months” Ms Whitehead said.

Ms Whitehead said “There are definitely two distinct speeds prevalent across the region. It is a seller’s market in the leafy inner city suburbs, while elsewhere we have greater balance between listing levels and number of buyers.”

“We are in the depths of winter now, so we expect listing levels to increase from now onwards. We may see some vendors hold off until after the election, somewhat of a pattern noted around previous election years, but realistically, the result is unlikely to have any direct impact on the property market, it’s just another reason to stall” Ms Whitehead said.

QV’s Residential Price Index is calculated using sales data from the 3 months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for the Auckland region in July was $541,357.

Hamilton

QV’s Residential Price Index for July shows that property values in Hamilton are 3.4% lower than the same time last year. Values in recent months are remaining fairly steady.

 
Mr. Richard Allen of QV Valuations said: “Values have oscillated in a very narrow band. Although Hamilton remains subdued there is some evidence to suggest that things may be picking up a little.”

“There are variations in the property growth across the different localities within Hamilton City. Central City/North West decreased slightly, whilst South West Hamilton, which has been fairly static moved in a positive direction this month. The North East and South East Hamilton values also increased” Mr. Allen said.

QV’s Residential Price Index is calculated using sales data from the 3 months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for Hamilton in July was $340,225.

Tauranga

QV’s Residential Price Index for July shows that property values in Tauranga are 1.7% lower than the same time last year. Values in recent months continue to be steady.

 
Mr. Shayne Donovan-Grammer of QV Valuations said; “There has been no significant changes to the Tauranga market over the last month or two. Feedback from real estate agents suggests there is a shortage of listings for central, tidy, lower to mid value properties.”

“I am seeing an uplift in first home buyer activity. They are encouraged by the continuation of low interest rates, a relaxing of credit criteria and the odd seller more than willing to compromise. Second home buyers and investors are more reluctant to enter the market with many not having the appetite to take on more debt in what is a constrained market” Mr. Donovan-Grammer said.

Mr. Donovan-Grammer said “for the buyer who is willing to put in the leg work there are some good buys out there presently.”

QV’s Residential Price Index is calculated using sales data from the 3 months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for Tauranga in July was $432,461.

Wellington

QV’s Residential Price Index for July shows that property values in the Wellington region are 2.7% lower than the same time last year. Values in recent months continue to decrease.

Mr Kerry Buckeridge of QV Valuations said “As has been the case for some time now the Wellington market continues to be very slow. Though there has been a noticeable increase in activity over the last week – coinciding with the end of the school holidays.”

“The busiest segment continues to be at the more modestly priced/first home buyer end of the market. With prices lower than at the market peak and historically low interest rates it can be argued a first home is currently more affordable than it has been for many years” Mr Buckeridge said.

Mr Buckeridge said “More and more are commenting there is a shortage of good stock in the mid to upper price segments. This may be reflective of the fact that those that traditionally looking to upgrade have stayed out of the market over the last twelve months or so. If this situation continues it is possible that good quality offerings may once again begin to attract multiple offers and higher prices – we shall see! Thus far buyers continue to be very cautious.”

QV’s Residential Price Index is calculated using sales data from the 3 months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for Wellington in July was $438,974.

Christchurch

QV’s Residential Price Index for July shows that property values in Christchurch are 0.5% higher than the same time last year. Values have fluctuated over the last year due to the affects of the earthquakes. In recent months values have been growing steadily, probably driven by higher demand in undamaged areas, such as in the North and West of the city.

 
Mrs. Melanie Swallow of QV Valuations said; “House prices appear to have shown a slight recovery in the aftermath of the 13 June earthquake. The delay in activity as a result of earthquakes was expected and now some signs of normality can be seen emerging. There are more buyer enquiries and open home attendance, along with foot traffic through new show homes. Although the signs are encouraging we need to treat it all with some caution due to the fragmented market and low sales volume.”

“An increase in demand for properties in relatively unaffected suburbs is exactly what we expected to see. Overall, sale prices appear to have held, even in the eastern suburbs, however this could be influenced by the low sales volume. We expect to see some traction in the market over the next two months” Mrs. Swallow said.

Mrs. Swallow said “there is strong interest overall for well priced quality homes in suburban Christchurch at present, this continues to be evident in the North West and South West suburbs as well as the main Selwyn and Waimakariri townships and Christchurch’s North and Western suburbs.”

“The increase in activity, particularly buyer enquiry is being driven by those in red zone areas. They will be evaluating their options and testing the waters in anticipation of future property decisions. Whilst this will be a gradual process we expect to see continued pressure in the interim on the affordable housing market” Mrs. Swallow said.

QV’s Residential Price Index is calculated using sales data from the 3 months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for Christchurch in July was $386,279.

Dunedin

QV’s Residential Price Index for July shows that property values in Dunedin are 2.9% lower than the same time last year. Values continue to fluctuate in a narrow band.

Mr. Tim Gibson of QV Valuations said: “The Dunedin residential property market continues to remain subdued. The winter months have traditionally always been a slow period for residential activity as listings and potential purchasers hold off from entering the market until spring.”

“Whilst values are fluctuating slightly from month to month, overall they are holding steady after a period of decline in the latter period of 2010” Mr. Gibson said.

Mr. Gibson said “with new listing volumes and average listing price down combined with lower buyer interest, it appears these conditions may continue in the short term within the Dunedin residential market.”
 
“Overall reasonable demand still exists for well presented properties in sought after localities. It is values for properties with maintenance requirements that are being affected more in the slow market. They often have longer selling periods and greater discounting is required in order to secure a sale. It is typically potential buyers being more selective in their decision making. They are not being rushed with factors such as multiple offers on properties, which was common during better market conditions” Mr. Gibson said.

QV’s Residential Price Index is calculated using sales data from the 3 months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for Dunedin in July was $273,335.

Peak to peak

8th August 2011

An adventure-ready team from hoamz entered one of Queenstown's best-known multi-sport races this week - the North Face Peak to Peak. The race takes competitors on a whirlwind journey from skifield to skifield - from the top of The Remarkables all the way to the top of nearby Coronet Peak. Encompassing a 2km ski, 17km downhill mountain bike, 7km kayak, 9km run and culminating in a 9km uphill bike, the gruelling race was a challenge too tempting for the outdoor-loving hoamz team. Achieving a respectable time in the Business house category of 2hrs 46min 47secs, the team are already keen for next year.

NZ’s premier tourism trade event returns to Queenstown

8th August 2011

Source: scene.co.nz

New Zealand’s largest tourism trade show is returning to Queenstown next year.

Trenz – Tourism Industry Rendezvous – was held for the first time in Queenstown in May, attracting about 900 people, including 562 delegates, and was acclaimed as a huge success.

“Queenstown performed strongly as a location for Trenz, providing us with fantastic new opportunities to showcase both the region and NZ’s top tourism operators to our international delegates,” Tourism Industry Association chairman Norm Thompson says.

“Work has already started to ensure we will make Trenz 2012 even better, with improvements and innovations that will add real value for both international travel buyers and NZ tourism operators.”

Ninety-nine per cent of buyers and exhibitors said their attendance was very successful or successful.

A “famil afternoon”, where Trenz delegates spent an afternoon enjoying local tourism activities – introduced this year for the first time – will be repeated next year.

Next year’s Trenz will start on May 7.

Another school will be built: Minister

8th August 2011

Source: Otago Daily Times

A new primary school could be built in the Wakatipu basin just 19 months after the opening of Remarkables Primary School, which this week confirmed it is adopting an enrolment scheme to control demand.

During a flying visit to Wanaka yesterday to open the new Wanaka Primary School, Education Minister Anne Tolley said the zone changes would keep the Remarkables school "at a reasonable size", and another new school was likely.

"When I made a decision about the size of the Remarkables school, it was made on the understanding that there was going to have to be another school ... [further out of Queenstown] in the future."

Mrs Tolley said setting up a new school was done on "best estimates" of roll growth.

"But I think it's taken everyone by surprise how quickly it [Remarkables Primary School] has filled up." Finding a new campus for Wakatipu High School also remains a high priority for Mrs Tolley.

She recently requested a brief from the Ministry of Education on the situation at the high school, and said it remained her "pet project to get those kids out from underneath those mountains" and to a new site.

Remarkables board of trustees chairman John Stalker said the home zone area changes are a temporary "band-aid fix" and would not solve school-roll woes for the Wakatipu region.

The new proposal would see the Lake Hayes Estate, Quail Rise, Tucker Beach, Marina Heights and the Northern side of Frankton road come "out of the zone".

The board's media spokeswoman for the school, Fiona Woodham, said they had no choice but to address the growing roll by reducing the current zone areas.

"Growth rates have meant we have had to look at zone changes because we can't turn children away if they are in the zone."

Mrs Woodham said the school had 19 unenrolled children they didn't know about show up at the school on Monday.

As it stands, any child in the current zones can show up without pre-enrolling with the school.

"We are trying to get to a position where we have better control over these enrolments."

While Mrs Woodham sympathised with those parents and families affected, she said the ministry needed a plan to cater for the rapid growth as school rolls in Wakatipu continue to climb.

Changes would begin in term two next year, which meant those who would have started after this date would miss out.

Mrs Woodham emphasised that if the zone changes went ahead, present pupils and their families could still attend as long as they lived at their current address. The school was planning to introduce a separate campus to accommodate the extra pupils and so current zone areas remained.

"It's all ideas and options at this stage, but the ministry have said they are willing to discuss it," Mr Stalker said.

The additional campus would be located beside the proposed new high school site and would open the possibility of splitting year groups up, but keeping them under the one umbrella of Remarkables Primary.

"The idea is to keep our community and family we have built together, but the issue we have is the 460-pupil limit."

The proposal to the MOE would outline a "staged" building process of the campus, which would mean it could be built over a period of years.

Sharp rise in auction properties foreshadows tightness in the market

5th August 2011

Source: realestate.co.nz

In a typical month, around 600 properties come onto the market advertised as auction sales. In the months of June and July this number has spiked to 1,168 and 1,132 respectively – in absolute terms these months have seen the highest recorded looking levels going back over the past 4 years.

This spike is even more significant when viewed against the decline in new listings witnessed this year. As a percentage the number of properties brought to the market in June, it was the highest ever seen at 13% – far outstripping the prior high of 9% back in September / October 2009. July has continued this trend with another month with 13% of new listings being marketed as auctions.

The vast majority of properties marketed as auctions are in the Auckland region – in July, Auckland accounted for 56% of all of the 1,132 auction properties marketed across the country in the month.

In general across all property listing categories, Auckland represents around 24% of the total – it would therefore seem that Auckland is the epicenter of NZ property auctions and in June and July over 1 in 5 of all new listings brought to the market across the Auckland market were auctions, far above any prior period.

Whilst this spike in auction listings is significant; it is important to ground the stats by stating that currently on realestate.co.nz there are 1,378 properties on the market as auctions this compares to just over 48,500 properties for sale across NZ in total on the market – that amounts to less than 3% of all properties currently on the website.

Having made that statement; there is no doubt that there is a very clear correlation between the state of the market in terms of inventory of unsold properties and the proportion of new listings being marketed as auctions. When listings are in short supply, as we are seeing at this time we tend to see a rise in the proportion of properties being marketed as auctions. The last time this happened was in 2009 as seen in the chart below:

The message is clear – the level of new listings coming onto the market over the past 3 to 4 months continues to be lean, this is matched to a steady but significant rise in property sales. Such a situation when combined with falling stock of property for sale places the “power” in the hands of sellers. In these circumstances the real estate agent acting on behalf of the seller is clearly recommending taking the property to auction to encourage those motivated buyers to battle it out in the auction rooms and front lawns to grab their chosen home.

For prospective sellers looking to put their property on the market in the coming couple of months, now would seem to be as good a time as any to get ahead of the game and list that property.

Pressure on banks to keep mortgage rates low

5th August 2011

Source: Stuff Business Day

Consumer power and pressure to hold on to customers could keep the brakes on rising fixed-term mortgage rates and even start a new price war, accounting firm PWC says.

ASB on Wednesday became the first bank to break ranks, lifting its fixed-term mortgage rates across the board. Its two-year term was now the most expensive at 6.65 per cent, but was still cheaper than most over three years at 6.95 per cent.

But rivals have yet to follow suit, and the costs of funding fixed-term loans for banks has fallen this week back to where they were about three weeks ago.

BNZ chief economist Tony Alexander said yesterday that the ongoing concerns about the United States economy and the European debt crisis had driven wholesale money markets down again.

Alexander last week advocated fixing half of a mortgage for three years to beat interest rate rises.

Yesterday he said in normal times there was a strong case for fixing and he personally would continue to hedge his bets.

"But these are not normal times. In fact they are the most uncertain times I have ever seen."

PWC financial services partner Sam Shuttleworth said that with more than half of all mortgages now on floating rates rather than fixed, the balance of power had switched to borrowers. Home owners with a floating-rate mortgage could change banks much more easily than those on a fixed term, and if nothing changed, their number could swell to 80 per cent within a year.

"That would mean that competitive pressures would result and put the brakes on fixed rates." There could also be a repeat of the price war that erupted a few years ago as banks sought to protect their customer bases or win new business, Shuttleworth said.

Alexander said "very few people have shifted to a fixed rate from floating".

Shuttleworth said it had been a tough year for the main banks.

ANZ National, ASB, Bank of New Zealand, Westpac and Kiwibank saw their collective core profits rise just 2 per cent to $2.3 billion in the first half of their financial years compared to the previous six months.

Higher income from interest and fees was offset by a rise in operating expenses as well as a halt to the decline in bad debts following the Christchurch earthquakes.

Relief packages for Christchurch businesses and households through special interest rates and adjusted repayments terms also hit profits, Shuttleworth said.

There were also concerns a pending further review of the sector by ratings agency Standard & Poor's could lead to another ratings downgrade for all banks, he said.

All four of the big banks had their credit ratings downgraded one notch by Moody's in May to Aa3, mainly due to their reliance on overseas funding and bringing them into line with Standard & Poor's.

A further one notch downgrade could not be ruled out and two notches was possible in the current volatile financial markets, Shuttleworth said.

If that happened funding costs for banks would increase, putting further pressure on lending profit margins.

Standard & Poor's has revised its ratings model for financial institutions and that would probably affect all banks around the world, not just New Zealand banks and their Australian parents.

But New Zealand banks were ranked among the top 20 in the world for their financial strength, Shuttleworth said.

Frankton’s historic marina base gets facelift – at last

5th August 2011

Maritime history: Wakatipu Community Maritime Preservation Society chairman Tony Butson at the soon-to-be-restored boatshed (left) and shipping office near Frankton

Queenstown’s maritime history will be revived with restoration work on Frankton marina’s dilapidated boatshed and shipping office about to start. 

The project – starting next month with site works – was confirmed by the Wakatipu Community Maritime Preservation Society at its AGM this week. 

The society was initially set up six years ago to save the 1869-78 New Zealand Railways shipping office and a 1930s boatshed from demolition. 

The society this year secured a 33-year lease from Queenstown Lakes District Council and recently completed a $740,000 fundraising campaign. 

The latest grant of $275,000 was approved by the Lottery Grants Board’s environment and heritage committee. Other major funders are Community Trust of Southland and Central Lakes Trust, which both granted $200,000 and First Sovereign Trust, which stumped up $50,000. 

Many local businesses have also provided free consultancy or have volunteered time or materials for the venture. 

A conservation report this year highlighted the buildings’ fragile nature and the need to move quickly or risk them being lost forever. 

Once the project is completed next April, the boatshed will have two working slipways that can be accessed for boat repairs. 

The restored shipping office will document Lake Wakatipu’s maritime history. 

The society also hopes to lease it to a cafe operator to provide revenue for ongoing maintenance of the buildings and slipways. 

“The committee has worked really hard over the past six years to firstly save these buildings from demolition and then raise money for their restoration,” chairman Tony Butson says. 

“Once restored, we will give the community and future generations the opportunity to learn about local maritime heritage. 

“It will be great to see work begin on this project.”

Mayor gets ball rolling on convention centre for Queenstown

3rd August 2011

Source: scene.co.nz

A new community group is to investigate establishing a Queenstown convention centre – tipped as a major visitor drawcard. 

Mayor Vanessa van Uden, who’ll chair the Convention Centre Group, says it will allow the issue to be tested “outside the council machine”. 

“Multiple possibilities have been raised over the years. 

“We need to strip everything back and take a fresh look at this issue with an entirely open mind,” Van Uden says.

The group also includes local investor/philanthropist Sir Eion Edgar, Chamber of Commerce board member Miles Wilson, local Hotel Council chair Penny Clark, Destination Queenstown convention bureau boss Kylie Brittain and arts supporter Steve Wilde. 

Edgar told Mountain Scene three weeks ago that Queenstown urgently needs a 500-plus capacity convention facility. 

“I understand we probably turn down at least a quality conference every month of 500-plus people. 

“Everyone wins from it – it spreads out activity through the year, you bring in the top end of the market.” 

Prime Minister/Tourism Minister John Key also told Mountain Scene in June that the Government “might put in a contribution”. 

“People want to come to Queenstown and any excuse we can offer them will encourage them to be here in a flash,” he said at the time. 

Van Uden says that local developer and Christchurch International Airport chief executive Jim Boult – former chair of a performing arts/conference centre working party – will act in an advisory capacity to the group. 

“I don’t think there is any question that the interest around this issue is gaining momentum,” Van Uden says. 

“I would like to think that we will make good progress and be in a position to have some direction on the issue before the end of the year.” 

Local developer John Martin commissioned plans two years ago for a $25 million-$30m convention/arts centre above his Man Street carpark.

Sky's the limit for tourists

3rd August 2011

Source: The Southland Times

Government negotiations for new "open sky" agreements with China, Brazil and other countries could lead to a surge in tourists visiting Queenstown.

Last month Associate Transport Minister Nathan Guy announced the Cabinet had approved the start of air service negotiations with China and Brazil.

New agreements between governments could mean more airlines using international airports in New Zealand, more flights and increased code-sharing.

There are no direct services between New Zealand and Brazil.

With the strategic alliance between Auckland International Airport and Queenstown Airport, any expansion of routes or flight frequency could mean tourism spinoffs and increased passenger numbers into the resort.

Destination Queenstown chief executive Tony Everitt yesterday said any expansion of services was welcome because the available China routes could reach capacity by the end of the year.

"It certainly makes sense."

Air New Zealand uses its allowance of seven China flights a week while China Southern Airlines' quota, also seven per a will be reached by the end of the year, when daily flights start.

China Southern started direct flights three times a week between Guangzhou and Auckland in April.

Despite challenging times, international arrivals from China continued to grow, including the number of visitors to the Southern Lakes, Mr Everitt said.

He said independent Chinese tourists, smaller family groups and organised tour groups were visible in the resort.

Brazil, with its population of 195million, was an emerging market and had potential as one of the world's most populous countries, he said.

Queenstown Airport general manager of commercial Simon Barr said any increase in access offered new opportunities to develop routes between New Zealand and emerging world markets.

Auckland International Airport spokesman Richard Llewellyn said the market could be constrained once airlines reached flight frequency limits.

New agreements could offer airlines more certainty, he said.

"There's potential growth once air rights constraints are uncapped.

"It will allow more flights from high-potential growth markets such as China, Brazil and India."

China was a growth market, while Brazil was emerging, with 12,000 Brazilian nationals arriving in New Zealand last year, he said.

"Brazil is the second-largest trading partner with China.

"New Zealand should be taking a lot of notice and if and when [new agreements] happen we expect to see benefits for Queenstown," he said.

In January, China Southern and Auckland Airport started a $10million campaign using Queenstown imagery to attract tourists to New Zealand.

The airport would consider mounting similar advertising campaigns with any new carriers into Auckland, Mr Llewellyn said.

NZ Property Report – July 2011

2nd August 2011

Source: realestate.co.nz

The July 2011 NZ Property Report published by Realestate.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 July. 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 95% of all property movements in the NZ market as managed by licensed real estate agents.

A full print version of the NZ Property Report – July 2011 is published below and is available for download (1.0MB) and distribution. Alternatively watch the video below for a presentation of this month’s report.

Summary of the market – July 2011

The property market is edging toward the Spring period – a time traditionally when more buyer activity appears at open homes and new properties appear on the market. This year unlike the past couple sees a challenging set of circumstances. New listings are in short supply, not just in the major cities but now right around the country. Matched to this and as a function of this and the upturn in sales the level of inventory of unsold property on the market is edging down – nationally below the long-term average. This low level of supply, if not met by a rise in supply in the short term could result in either or both price pressure upwards or disillusioned buyers exiting the market.

This trend of falling inventory off the back of rising sales and shortages of new listings began a couple of months ago in Auckland and then spread out through the major metropolitan areas into provincial NZ. Auckland remains the epicenter of this trend and now sees a situation where available inventory of property for sale is the lowest seen since this recent property malaise began back in 2007. Auckland currently has just over 5½ months of available inventory based on the recent rate of sale, not since September 2007 has the region seen this level – the highest level of inventory was recorded in June 2008 at just over 13 months.

Whilst shortage of supply matched to low inventory and rising sales usually sees pressure on prices, the asking price for July showed what is a traditional fall – seasonally adjusted it was down 1.6% indicating that sellers new to the market are not being wildly optimistic in their expectations – potentially keener to sell quickly than inflate expectations.

Asking Price

The truncated mean asking price for all new listings in July fell significantly from $415,053 in June to $403,474. On a seasonally adjusted basis the asking price fell 1.6% in the month indicating a continued degree of caution amongst sellers.

The overall trend of the past 2 years continues to show a slow but steady strength in asking price expectation.

New Listings

The level of new listings coming onto the market in July fell again to 8,966. This represented a 15% year-on-year decline but a marginal 1% seasonally adjusted rise from June.

On a 12 month moving basis the number of new listings in the past year totals 124,228 as compared 145,733 for the same period a year ago – a fall of 15%.

Inventory

The level of unsold houses on the market at the end of July continued to fall from prior months. July reported 45,674 down from 47,738 in June and 48,352 in May.

The current inventory is now well below the long term average. The winter season traditionally sees a reduction in new listings, this when seen against a strengthening of sale over the past 3 months is likely to see inventory levels continue to fall as Spring approaches.

Regional Summary – Asking price expectations

The national asking price expectation fell in July by 3.8% vs the recent 3 month average, this performance was mirrored across the regions with 14 regions showing a fall of which 4 reported asking price falls of more than 5%.

Countering this trend were 5 regions showing strength in asking price growth the most significant region being the Central Otago Lakes region including the key center of Queenstown, this saw a 7.4% rise in asking price to $581,666 – this is 10% up on a seasonally adjusted basis which when reviewed against the shortage of listings and low inventory would seem to highlight that the Queenstown property market is gathering pace again with recent 3 months sales volume up 26%.

Regional Summary – Listings

The dominant perspective for the 19 regions of the country is that in terms of new listings the market is definitely skewed to favour sellers. This month there are no regions reporting year-on-year growth in new listings.

There are 7 regions showing year-on-year falls of more than 20%, most notable in size are the Central Otago, Manawatu / Wanganaui and Coromandel. The latter being a region, which has seen a heavy weight of unsold inventory for many months, and has of late seen a significant improvement as these falls in new listings have taken effect.

Two regions saw record lows of new listings – Northland with 335 down from the previous record low of 352 from last month and Marlborough with 101 down from the previous low of 110 back in April 2009.

Regional Summary – Inventory

The NZ property market has markedly changed in the space of 4 months – in April of this year every one of the 19 regions showed an inventory well above long term average indicating that these regions as well as the national picture at 54 weeks of equivalent sales was stuck in a buyers market as it had been for well over 18 months.

Now just 4 months later the picture shows 9 regions as defined as sellers markets, just 4 as definite buyers markets and the remainder balanced markets.

The regions that are seeing the greatest pressure in inventory are the major regions of Auckland, Otago, Nelson, Otago Lakes and the Waikato. These 5 regions are all sitting with inventory well below long term average and based on recent listing shortages will see levels fall further heading into Spring.

Despite the national view there remains a number of regions which have inventory well above long-term average of which the Wairarapa and Northland feature strongly.

Lifestyle

Lifestyle property listings across the country fell significantly in July to a new record low of just 628; this was below the prior low of 727 seen in January of this year. The Auckland region – one of the largest regions for lifestyle property recorded a low of 124, lower than the prior record from January 2010 of 153. Overall listings were down 25% year-on-year and down 10% on a seasonally adjusted basis.

In terms of asking price the national truncated mean asking price at $520,109 was down 5% on a seasonally adjusted basis and down 8% as against recent 3-month average.

Apartments

Listings of apartments showed a 16% decrease on a seasonally adjusted basis, reversing what had been a strong June for new listings of apartments. A total of 443 new apartments came onto the market in the month. The truncated mean asking price for these new listings was $372,983, which was down 4.0% on the recent 3-month average, and up 4.3% as compared to July 2010.

In the Auckland apartment market, which represents over 60% of the market there were 295 new listings with an asking price of $340,344. The new listings shows a fall of 21% on a seasonally adjusted basis, and a 15% fall when judged on a year-on-year basis.

Property Price Index

Comparing the sale price of properties across the country to the asking price expectation is not a perfect comparison; however the trends tend to align. The benefit is that the data for asking price is of the market today, whilst the selling price is reflective of the market active between 4 and 6 weeks ago. The latest comparison is highlighted below:

Realestate.co.nz: data is compiled from asking prices of new residential listings as they come onto the market via subscribers to the realestate.co.nz website. The Realestate.co.nz website currently has over 95% of all licensed real estate offices subscribing and providing all of their listings onto the website. The asking price is presented as a truncated mean price at a 10% interval.

REINZ: data is compiled from reported unconditional residential sales from all members of the Real Estate Institute of New Zealand representing all licensed real estate offices. The sale price is published as a stratified median house price and is developed in association with the Reserve Bank of NZ.

Queenstown property market revives

2nd August 2011

Source: Otago Daily Times

The number of new listings in earthquake-ravaged Canterbury rose 17 percent in July from June but remains 23 percent down on a year ago.

According to a property survey by realestate.co.nz, prices in Canterbury were down 1 percent in July from June and were down 3 percent from the prior three months.

The survey also revealed a 7.4 percent rise in the asking price of properties in the Central Otago lakes region.

The survey's authors said the Queenstown property market was gathering pace again with the three month sales volume up 26 percent. On a seasonally adjusted basis, the asking price is up 10 percent.

"The regions that are seeing the greatest pressure in inventory are the major regions of Auckland, Otago, Nelson, Otago Lakes and the Waikato," the survey said.

"These five regions are all sitting with inventory well below long-term average and based on recent listing shortages will see levels fall further heading into spring."

A trend of falling inventory due to rising sales and shortages of new listings began a couple of months ago in Auckland and is spreading to other major metropolitan areas in provincial New Zealand.

"Auckland remains the epicentre of this trend and now sees a situation where available inventory of property for sale is the lowest seen since this recent property malaise began back in 2007."

Auckland currently has just over 5.5 months of available inventory. The highest level of inventory was recorded in June 2008 at just over 13 months.

"Whilst shortage of supply matched to low inventory and rising sales usually sees pressure on prices, the asking price for July showed what is a traditional fall -- seasonally adjusted it was down 1.6 percent indicating that sellers new to the market are not being wildly optimistic in their expectations -- potentially keener to sell quickly than inflate expectations."

Housing now a 'seller’s market'

2nd August 2011

Source: Stuff Business Day

A continuing slide in new listings has turned New Zealand housing market into a seller's market, says property website Realestate.co.nz.

However, asking prices are continuing to slide - the mean asking price in July was $403,000, nearly $11,000 lower than it was in May.

It reports that the number of new listings - 8966 in July - was 15 per cent below the number listed in July last year.

"Winter is traditionally a slow time for new listings, this year a 15 per cent year on year decline is making this felt more acutely right across the country.

"The stock of unsold houses in the market fell to 38 weeks of equivalent sales as compared to the long-term average of 41 weeks as a result of the lower level of new listings and the slow but steady rise in sales activity.

"In the space of just two months the regional picture of New Zealand has moved from a buyer's to a seller's market. In all but four of the 19 regions sellers now hold the upper hand.''

There was a shortage of new listings right around the country.

"The trend of falling inventory off the back of rising sales and shortages of new listings began a couple of months ago in Auckland and then spread out through the major metropolitan areas into provincial New Zealand.

The 45,674  unsold houses on the market in July was well below the long-term average and the strengthening of sales over the past three months was likely to see inventory levels continuing to fall with the approach of spring.

Average asking prices in Wellington fell 4.4 per cent to $413,000 in the past three months.

The biggest lift was in the Central Otago Lakes region, where listed prices rose 7.4 per cent to an average $582,000.

Megabucks car showroom gears up for Remarkables Park

29th July 2011

Driving business: An artist’s impression of Queenstown Motor Group’s car dealership

Source: scene.co.nz

An upmarket car dealership will form the western entrance to Queenstown’s Remarkables Park Town Centre. 

Work began just last week on a 765sq m showroom for Queenstown Motor Group – part of the long-established Dunedin-based Southern Motor Group. 

The multi-million dollar building, by the Hawthorne Drive/Lucas Place/Riverside Road roundabout, is expected to be finished by Christmas and will carry popular 4WD brands Audi, Volkswagen and Subaru. 

“We’re looking forward to making these brands available right here in Queenstown and to building our existing client base in the town,” Southern Motor Group managing director Ken Cummings says.

Cummings and his brother Pat are directors of property company Kenton Investments, which bought the high-profile site off Remarkables Park developers, Alastair, John and Neville Porter, last year. 

“We’ve enjoyed a good working relationship with Remarkables Park Ltd, with two sets of brothers knocking together a deal that works for everyone,” Pat says. 

“This showroom has been some years in the making – we’ve been watching the market and looking for the right position and right time.” 

Southern Motor Group also operates Southern Motor Court and Southern Honda in Dunedin, as well as Southern Automobiles and Southland Honda in Invercargill. 

It opened a service centre in Frankton’s Glenda Drive two years ago. 

Pat expects the new showroom to employ 12-plus staff, “give or take seasonal highs and lows”. 

He adds he’s delighted with the design by local architect David Stringer. 

Stringer says the three individual roofs “reflect the tectonic movement in the landscape around here”. 

Building the showroom is long-established local company Rilean Construction, whose recent Queenstown projects include part of the Kawarau Falls development and The Mountaineer building. 

“It’s great to get our teeth into a high-profile new commercial building in this market,” director Steve McLean says. 

Alastair Porter believes “it’s a sign of the growth of Queenstown that we are starting to attract high-quality motor vehicle franchise dealers”. 

Porter adds that the showroom will “answer the question that people have had for many years – ‘why do you see the back of the [New World] supermarket when you arrive at Remarkables Park Town Centre?’ 

“The reason is that site was always a development site, and it will now provide a very attractive 
entrance.”

Leaky home relief imminent

28th July 2011

Source: stuff.co.nz

Leaky homeowners can access a financial assistance package from tomorrow, the Government has announced.

The Government and councils would each pay 25 per cent of the cost of repairs, and the homeowner must get a loan from the bank to pay the rest.

But councils who didn't sign off the building work, or  who have not signed up to the compensation deal will not contribute, meaning property owners will have to find 75 per cent.

Signing up to the deal meant homeowners waived the right to sue contributing councils and the Government. They could pursue other liable parties, such as builders.

The New Zealand Bankers Association said eight banks had signed up to lend under the deal.  They were ANZ, ASB, BNZ, HSBC, Kiwibank, SBS, TSB and Westpac.

The Government would underwrite the bank loan, but it was not clear by how much.

NZBA chief executive Sarah Mehrtens said home owners would still need to meet the banks' lending criteria. And she urged homeowners to seek independent legal advice "because the FAP may not be appropriate for everyone".

"Eligibility and affordability are key elements of the package,"  she said. "Banks will work closely with affected home owners to see how they can assist.  It is important to note that lending criteria conditions will still need to be met.''

The Government said the cost of the package would be about $1bn over five years, based on 70 per cent of affected homeowners taking up the deal.

It estimated there were 23,500 households eligible for the deal, but lobby groups and homeowners groups said that figure was under-estimated.

The leaking dwelling had to be a private residence and it had to be up to 10 years since it was built, or altered to cause leaks.

Homeowners who had unresolved claims with the Weathertight Homes Resolution Service would be able to apply for the Financial Assistance Package.

If the inspection or sign-off was done by a private certifier councils would not contribute, but owners could still access the Government contribution of 25 per cent.

OCR unchanged at 2.5 percent

28th July 2011

Source: The Reserve Bank of New Zealand

The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 2.5 percent.

Reserve Bank Governor Alan Bollard said: “The economy has grown more strongly than was expected, and it appears that the recovery is getting back on track, supported by a strong terms of trade.  At the same time, however, current fragility in global financial markets, including the uncertainty around the US Government’s debt ceiling, continues to highlight the downside risk to trading partner activity noted in the June Statement.

“Annual headline CPI inflation continues to be above the Bank’s 1 to 3 percent target band.  However, much of the current spike in inflation has been driven by the October 2010 increase in the rate of GST, and will therefore be temporary.  Wage and price setters should focus on underlying inflation, which is currently estimated to be below 2.5 percent.

“Provided current global financial risks recede and the economy continues to recover, the Bank sees little need for the March 2011 ‘insurance’ cut to remain in place much longer.  The current very high value of the New Zealand dollar is acting as a drag on the New Zealand economy.  If this persists, it is likely to reduce the need for further OCR increases in the short term.”

Snowstorm 'shuts' south

26th July 2011

Source: The Southland Times

Southland and much of Otago was brought to a standstill yesterday when the worst snowstorm in 15 years hit the South Island.

Queenstown was all but shut down by about 30cm of snow to lake level, with the airport, roads and businesses closed.

However, skifields were reporting massive numbers as school holiday visitors flocked to the mountains.

In Invercargill the airport was also closed and motorists were warned to stay off treacherous roads.

Sections of highway closed included State Highway 1 from Dunedin to Christchurch and Dunedin to Gore; State Highway 6, Queenstown to Kingston and Kingston to Five Rivers; State Highway 87, Outram to Middlemarch; State Highway 85, Palmerston to Kyeburn; State Highway 93, Clinton to Mataura; and State Highway 94, Te Anau to Milford.

State Highway 93 between Clinton and Mataura was the only Southland road to remain closed last night, but motorists were urged to drive carefully and to the conditions.

In Otago, State Highway 85, Palmerston to Kyeburn remained closed, as did State Highway 87, Outram to Middlemarch.

Minor crashes were reported throughout the region and tow trucks were kept busy.

Queenstown's Shotover Engineering reported selling close to 50 pairs of snow chains yesterday.

Office manager Zoe Pierce said people were lining up at the door when she arrived at work.

"For the next four hours there was a queue of people at the counter waiting to be served and get chains fitted. It was a pretty dramatic increase in sales."

In Invercargill, Auto Breakdown owner Michael Corson said his company received "just a couple" of callouts early in the day, and the incidents were fairly minor.

The Southern District Health Board postponed all elective procedures yesterday because of road conditions.

Some non-urgent procedures scheduled for today were also postponed because of transport difficulties for many key staff.

Those who planned to travel were also out of luck, with all flights cancelled in and out of Invercargill Airport, and at Queenstown Airport flights were unable to land or takeoff until late in the afternoon.

An Air New Zealand spokeswoman at Invercargill Airport said some early-morning flights today were also cancelled because aircraft were unable to land last night.

Hastings man Stephen Shaw said his partner Lynne Ellingham was bound to find more shopping to do in town as they waited for their flight.

"It's been good for Invercargill so far," he said.

Mail deliveries were also severely affected by the wintry blast.

Invercargill and parts of Southland had limited courier and rural post deliveries yesterday, while postie and rural delivery services in Gore, Queenstown, Alexandra, Balclutha, Clinton and Cromwell and Wanaka were cancelled for the day.

The snow also disrupted banking services across the South Island, with ANZ and National Bank branches closed as far north as Christchurch.

Many shops and businesses also opted to remain closed, or opened later than usual, while in Balclutha the day's court proceedings were postponed until today. In Queenstown, court was postponed yesterday and today.

Difficulties getting into Invercargill also proved troublesome for event centres in the south, with six functions cancelled at the Ascot Park Hotel already. Functions manager Andrea Thomas said most were relatively small.

The weather also effected deliveries of The Southland Times.

In Gore, district roading manager Murray Hasler said graders and grit trucks were out yesterday morning after freezing conditions, followed by heavy snow, made roads deceptively dangerous.

He had considered closing some roads but would have had to close the entire network, he said.

Central Otago was quiet as people heeded advice to stay home. Chains were required to travel between Roxburgh and Alexandra.

Trucks bringing milk, bread and mail from Dunedin did not get through.

Metservice meteorologist media and communications representative Daniel Corbett said New Zealand had not had a cold outbreak like this in 10 to 15 years.

Homeowners face interest rate dilemma

26th July 2011

Source: Stuff Business Day

Homeowners face a dilemma in the coming months, on whether to accept sharply higher mortgage payments now, in the hope of saving money in the future.

The Reserve Bank is expected to leave the official cash rate on hold on Thursday, but expectation is building that the central bank could start raising the rate from its historic low of 2.5 per cent in September.

Stronger-than-expected economic growth and higher-than-forecast inflation have helped push up the funding costs of banks by around 0.3 per cent on two and three-year terms, crimping profit margins and raising the chance of an increase in fixed mortgage rates.

PSIS broke ranks by raising its two, three and four-year fixed term rates yesterday, by between 0.1 per cent and 0.2 per cent.

Bank of New Zealand chief economist Tony Alexander said he believed it was "a matter of time" before fixed-rate mortgage prices increased.

However, banks might delay increases to gain market share or build a reputation that they were slow to increase rates.

Kiwibank spokesman Bruce Thompson said margins had fallen in recent weeks, but he appeared to play down the prospect of an imminent increase. "I would think for Kiwibank, it's a watch and wait.

"We certainly aren't planning a pre-emptive strike to raise rates," he said, although floating-rate customers should "carefully consider" fixed rate deals.

An expected rise in fixed rates poses a dilemma for borrowers on floating rates. At present, average floating rates are more than 1 per cent cheaper than three-year fixed rates.

Hundreds of thousands of households have moved on to floating rates recently, reaching 853,000 in May, an increase of more than 200,000 in a year.

But with OCR increases seeming inevitable, the price of floating rates could rise significantly, and economists have warned that by the time the official rate starts climbing, fixed-rate deals will already cost more.

BNZ has predicted that the OCR will increase from 2.5 per cent to 5 per cent by early 2013, so longer term, fixing now could prove cheaper.

Alexander said that for those who were actively considering a move to fixed rates, now would be a low risk time to do so.

But he conceded that with so much uncertainty about the world and local economy, many mortgage holders could balk at the prospect of voluntarily increasing their repayments now. "It is a hard ask, and that's why I think most people, the overwhelming majority, will stay floating," he said.

Mike Pero Mortgages chief executive Shaun Riley said his staff had seen early signs of a move towards fixed rates, with a 5 per cent to 10 per cent increase in the number of customers wanting to lock in repayments, mainly for two or three years.

"I think when the Reserve Bank gives its outlook on Thursday, that will be a defining event. If there is a strong signal that [governor Alan Bollard] is going to move sooner rather than later, I think you will see a lot more people jumping on to fixed rates."

Mortgage Brokers Association chairman Darren Pratley said mortgage holders were increasingly looking for packages to suit their personal circumstances, such as leaving a portion of their rates floating in case they had the opportunity to make large one-off repayments.

With interest rates expected to rise, he expected an increase in those seeking the certainty of fixed rates, even though short term, repayments could be higher.

"It's more about what the rate's going to be in a year, two years, three years' time that you're basing your decision on today."

'Time's up' for low floating mortgages

25th July 2011

Source: The Southland Times

Homeowners on floating interest rates should quickly look to lock in fixed rates before prices move up in coming months, a leading economist warns.

Tony Alexander, chief economist at the Bank of New Zealand, said that during the past fortnight there had been clear signs that the economy was gathering speed.

Economic growth was rising faster than experts had predicted, and inflation had hit a 21-year high.

This meant interest rates were likely to increase sooner than expected in an effort by the Reserve Bank to stop inflation getting out of control.

"What this means for borrowers is that time has now run out for comfortably sitting floating, planning to fix before fixed rates rise," Mr Alexander said.

"Such rises are probably just around the corner, with some banks' fixed-borrowing costs up 0.3 per cent from just a fortnight ago. If I were a borrower ... planning to fix, then I would see high risk in waiting any longer."

Only a week ago, Mr Alexander said floating rates were likely to offer better value for several months.

An increase in the official cash rate, which looks increasingly likely in September – with even a slim chance of an increase on Thursday – would have an immediate impact on floating rates offered by all of New Zealand's banks.

Floating mortgage rates have become increasingly popular in New Zealand in recent years because the rates offered have been so much lower, averaging 5.9 per cent since March.

According to the Reserve Bank's figures, 853,000 households were on floating rate mortgages in May, up from 629,000 a year ago and 382,000 five years ago.

A few weeks ago, most economists had expected the Reserve Bank to leave interest rates unchanged until at least December, but recent figures have resulted in a big change in thinking.

ANZ chief economist Cameron Bagrie said it was now possible that the Reserve Bank could increase the official cash rate this week, and that it would have to come up with a good reason not to raise them in September.

Buyer inquiry increasing

22nd July 2011

Source: Otago Daily Times

Last month saw a continuing period of "solid inquiry and buyer activity" in the Queenstown housing market, the Real Estate Institute of New Zealand (REINZ) said.

Buyer inquiry increased from the baseline set over the past three years of recessionary market and there was a noticeable shift in buyer attitude, REINZ spokesman Adrian Snow said.

"Buyers are now ready to act and purchase once they have found a suitable property, rather than delay action and spend time in the market place before purchasing, as they have been doing through the last three years.

"There is certainly a shift in the marketplace occurring and it is carrying through in to July's activity."

Mr Snow said the shift in buyer sentiment was not showing up in the sales statistics, with no significant increase in recorded sales being shown.

"Explanations may be that purchases are yet to become unconditional and be recorded in the sales statistics, or may be the Queenstown's market is now following the Auckland market and sales activity is being retarded by decreasing stock levels.

"All real estate offices are recording lower stock levels of properties."

It appeared as though the recessionary phase of the market was being left behind and the early phases of growth were being experienced, he said.

June 2011 recorded 35 dwelling sales compared with 35 dwelling sales for May 2011 and 43 for June 2010 (-19%). June 2011 recorded 13 section sales compared with 10 section sales for May 2011 and compared against five for June 2010.

Value of dwelling plus section sales for June 2011 was $24,527,000 compared with $24,566,500 for May 2011 and being 6% up on June 2010's $23,191,750.

Median sale price of dwellings for June 2011 was $535,000 being 7% up on the $500,000 recorded for both May 2011 and June 2010.

A big shift in median days to sell has occurred for dwellings, with 42 days for June 2011 being 47% down on May 2011's 79 and 40% down on June 2010's 70.

"The decreasing median days to sell does reflect a shorter time on the market for most properties and reflects real estate agents' sentiments that buyers are acting more quickly and that stock levels are decreasing," Mr Snow said.

Shortage of listings is key to the state of the property market

21st July 2011

Source: realestate.co.nz

The monthly sales report from the Real Estate Institute (REINZ) states clearly that “Listings tight in June housing market” – this assessment comes from “strong indications from agents in many regions that the supply of properties is really tightening“.

This perception is reality; the data in the monthly NZ Property Report underpins this with the numbers to show the decline in new listings as detailed in the chart below.

Listing numbers have been falling steadily for over a year, and matched to a slowly rising rate of sales, is beginning to show in the declining stock of homes on the market. This could potentially lead to a demand heavy market which could see price pressure in the medium term.

To better highlight the listings to sales ratios; I have developed these charts to show the picture nationally and regionally. I have assessed the property market based on the first 6 months of 2011 vs the first 6 months of 2010. Nationally this year is showing sales down 1% – however if you remove the Canterbury region the national picture shows a 4% growth in sales. Matched to this is a 14% decline in new listings (17% decline if you include Canterbury).

The chart ably demonstrates why Auckland is most definitely feeling the effect of a tighter property market – sales up 10% and listings down 13%. Wellington sales are sluggish but again listings are down 12% whilst Canterbury is experiencing the unique aspects of the earthquake of February.

Looking around the country the regions that are showing growth in sales year-on-year are grouped in the chart below. Eight of the 19 regions show year-on-year growth in sales – the West Coast of the south island topping out with a sales rise of 14%. All regions though show declines in listings.

The remaining 11 regions of the country presented in the chart below are witnessing year-on-year sales declines, some double digit declines. Equally they all (with the exception of Nelson) are seeing declining listings, largely in line or greater than the decline in sales.

Pressure on Bollard over interest rates

21st July 2011

Source: Stuff Business Day

Interest rates may head higher as early as September, with the Reserve Bank of New Zealand looking to contain inflation pressures in an economy showing signs of life, AMP Capital Investors says.

The fund manager is picking Reserve Bank Governor Alan Bollard will hike the Official Cash Rate (OCR) by 25 basis points at its September meeting after a surprise surge in first-quarter growth and stronger-than-expected inflation.

The risk for Bollard is that if mortgage rates don’t go up faster than he hikes, homeowners may jump into fixed terms and erode his ability to gain traction with future increases, AMP Capital head of fixed interest Grant Hassell told a media briefing in Wellington.

More than half of all mortgages were on floating rates, meaning borrowers are currently susceptible to shifts in the benchmark interest rate.

"By doing 25 basis points, you’ll see a jump up in fixed rate mortgages as the market factors in more and more rate hikes," Hassell said.

Bollard cut the OCR 50 by basis points in March to 2.5 per cent in response to the February earthquake in Christchurch, and said he won't remove that stimulus until he sees signs of the rebuild stoking economic activity. The central bank releases its decision on interest rates next Thursday.

Hassell said two-year-ahead inflation expectations were already near 3 per cent, the top of the Reserve Bank’s target band, and the latest data will probably push that higher.

"That's troubling for the Reserve Bank," Hassell said.

The turnaround in New Zealand's economic fortunes comes as Australia’s central bank is facing a two-speed economy and is tipped to start cutting interest rates.

AMP Capital's Sydney-based chief economist Shane Oliver said the divergence in the two nations' monetary policy would stoke further demand for the New Zealand dollar, which today hit new post-float highs at US85.66c, and that could take the Kiwi even higher.

"It might go through a short-term pause, but I think the odds of it reaching parity are still fairly attractive," Oliver said. However, he didn’t think the Kiwi would catch its Australian dollar counterpart.

Separately, JBWere investment strategist Bernard Doyle said a soft global economy posed risks to New Zealand, and interest rate rises were not a certainty.

"The best thing Dr Bollard can do next week is pull out the poker face and give no hint as to his bias," said Doyle, who suggests too many economists and traders are treating the New Zealand dollar as a "popular one-way bet".

Doyle said Goldman Sach's Leading Global Indicators measure showed a worryingly sharp slowdown in global growth in recent weeks, which could have an impact on the New Zealand economy if it continued.

"Momentum has evaporated," Doyle said. "If things remain this weak, rate hikes will be the last thing on Dr Bollard's mind by year end."

"We've been here before, more than once.

"Those believing higher rates in New Zealand are a lay down misere should consider how finely balanced the world economy is at this juncture."

New Zealand closely following global economic patterns.

Such a growth slowdown would be expected to drop strong global food prices, which have underpinned New Zealand's recent more buoyant trade and farm sectors.

"The usual lag between global growth and NZ commodity prices suggests we should expect falling New Zealand export prices by the end of the year. But we won't have to wait that long - dairy prices are already falling," Doyle observed.

While a rising Kiwi was "fine as long as global growth remains strong and stable", the currency's propensity to rally on any excuse at present made it dangerous for the RBNZ to signal a view on rate rises.

JBWere still believed New Zealand interest rates could still need to rise by the end of this year to cope with higher inflation, but "we are also open to other, somewhat darker outcomes".

Doors open for first-home buyers

21st July 2011

Source: Stuff Business Day

Conditions for first-home buyers continue to improve, and banks are increasingly jostling to get their attention before interest rates rise.

The June home affordability report from mortgage broker Roost said a combination of factors had put younger, double-income households in their best position since November 2004.

Flat prices for starter homes, floating mortgage rates at multi-decade lows and a slight increase in after-tax income had all made entry-level housing the most affordable for seven years.

However, Roost noted that the prospect of higher interest rates later in the year was coming on to home buyers' radar. It was spurring banks to offer discounts on legal or set-up fees and loan to value ratios of up to 95 per cent.

"Banks are competing hard for first-home buyers and investors alike," said Roost spokeswoman Rhonda Maxwell.

"Home loan affordability ratios are the best we've seen in seven years, but the interest rate outlook is beginning to change."

Harcourt's real estate agent Savita Robinson, of Wellington, said she had seen a pick-up in business over the last month, but it was not among first-home buyers. "I'm getting a lot of people with $500,000 to $600,000 [to spend] ... I'm selling a house a week at the moment."

Housing stocks were lower at present because of winter, she said.

According to Roost, a young couple earning the median wage needed 21 per cent of their take-home pay to service an 80 per cent mortgage on a first quartile priced house in June, a very slight improvement since May.

Any level over 30 per cent is considered unaffordable for first-home buyers, but a level near 20 per cent is seen as attractive.

Those on a single median income needed about 52.6 per cent of their after-tax income to service a mortgage on a median house in June, up from 51.3 per cent in May. A figure above 40 per cent is considered unaffordable.

The typical "standard" household with more than one income needed to spend 34.6 per cent of their income on their mortgage, the same as May.

However, house prices were beginning to rise, with the national median house price jumping $10,000 to $360,000 in June.

The median price for a Wellington house in June was $380,000, up $5000 from May but down 6 per cent from $405,000 a year ago.

NZ house prices down 11% since April 2007 in inflation-adjusted terms

20th July 2011

Source: interest.co.nz

House prices have now stagnated for more than four years, their longest period since the 1988-1993 plateau.

And it's not over yet.

On an inflation-adjusted basis, this current period also represents the biggest decline in real house prices in almost 30 years.

Capital gains for most of the market have evaporated. Capital losses are a real prospect.

CPI inflation has risen to over 5.3% per annum in the latest quarter, and we are entering a period where housing debt is being inflated away. Savers are paying the price, but borrowers may also be risking their equity.

For the 51 month period from April 2007, median house prices in New Zealand rose just 3.2% from NZ$349,000 to NZ$360,000.

Over this same period, the CPI index rose from 1010 to 1157, up 14.6% over these 17 quarters.

On this basis, real inflation-adjusted house prices have fallen 11.4%, the second largest fall since records began in 1963, a period of 48 years.

We are probably in the middle of this period of nominal house price stagnation. We also seem to be entering a period of high inflation. The combination will drive real house prices down.

These latest trends are just one third of the fall in real terms that the New Zealand real estate market went through in the seven years from 1974 to 1980. At that earlier time, nominal prices rose more than 6% per year but average inflation over this period was more than 15% per year. The net result was a whopping fall in real house prices of more than one third over seven years - a decline of 36%.

The last time prices stagnated in nominal terms was between January 1997 and July 2001, a 55 month period when national median prices rose 6.3% from NZ$160,000 to NZ$170,000, or just 1.4% per year.

Over this period inflation was especially low and the CPI index rose from 823 to just 876, up 6.4%, which meant that house prices declined -0.1% in real terms in those four and a half years.

For most markets in New Zealand, housing is no longer a hedge against inflation. In fact it hasn't been since mid 2007. Although there is no way to know how long the current stagnation will last, public policy seems to be shifting to accept - even encourage - a shift away from 'investing in real estate'. The current trends may well last as long as, or even longer than, the ten year stretches 40 years ago. We could be less than half-way through the cycle.

* Data on median house prices from 1992 is from the REINZ database. Prior to 1992 the data is based on Statistics NZ long-run data series. CPI data is from Statistics NZ.

University starting classes in resort

19th July 2011

Source: Otago Daily Times

The University of Otago says it is "not ruling out" establishing a campus in Queenstown, as it launches its first programme of classes in the Queenstown Resort College tomorrow.

Academics and staff from both tertiary entities celebrated the long-awaited arrival of the university's presence in the Wakatipu with a reception last night.

A separate set of 10 students enrolled for the University of Otago Master of Entrepreneurship programme's debut in the college building, which also becomes a base for the university's tourism researchers.

Classes for the three-semester qualification will be taught in intensive three-day block courses, which will take place every six weeks.

The Queenstown enrolment was predicated to grow to the Dunedin level of 40 to 50 students in about five years.

There are almost 300 students attending the five-year-old college.

The academic and research-oriented university leased space on the top floor from the privately owned and operated vocational college.

However, it was not offering programmes in conjunction.

The Dean of the School of Business, Prof George Benwell, said yesterday a dedicated university campus in Queenstown was "an aspiration, but only time would tell".

The university was "not ruling it out as a campus if it was financially viable. It's not the easiest logistical place to get to [from Dunedin]".

However, it was a "logical extension" for the national university, he said.

The resort was a "vibrant metropolis" suited to several potential programmes, and students from eastern Australia could take advantage of air links.

The university was looking at programmes such as teacher training, rural health, geography, geology, upskilling for senior executives and a Master of Business Administration (MBA), Prof Benwell said.

Otago was experienced in remote development, such as in Auckland, but Prof Benwell said any such project needed to be approached cautiously and evaluated as it progressed.

College chairman Sir Eion Edgar, of Queenstown, said yesterday he thought the introduction of the university was an "outstanding opportunity" for both Queenstown and Otago.

"Even when I was chancellor in 2003 I was keen Otago should have a beach head here in Queenstown, as it's part of Otago, and, being its highest growth area, it was important we had representation before another university did."

Entrepreneurship was appropriate for Queenstown and he believed it would attract Australian students.

"This course is really just a first.

"They plan to have other courses, not only in commerce.

"Over time, I would think quite a few courses would be run here as part of a larger course based in Dunedin, or some short courses."

Asked if he anticipated the college becoming a campus of the University of Otago, Sir Eion said while they were very different models, there could come a time college students continued to Otago, "which would be fantastic".

"At this stage, we see them as separate entities, but obviously looking to assist each other to give better service to prospective students," he said.

Queenstown flooding may finally be over

19th July 2011

Massive earthworks to reduce the risk of a repeat of the devastating 1999 floods have started near Queenstown.

It is the latest stage of a multimillion-dollar joint Queenstown Lakes District Council and Otago Regional Council project to build a wastewater-to-land disposal scheme at the Shotover delta.

Last year, the Environment Court gave the go-ahead for a $42million Project Shotover wastewater and sewage field near the delta. The new sewerage scheme is designed to end discharge of treated wastewater into the Shotover River from an existing plant.

Construction of a $1m training line to divert the river and a $920,000 revetment line – an 800-metre structure to provide flood protection – runs until September.

Otago Regional Council director of environmental engineering and natural hazards Dr Gavin Palmer said 15,000 cubic metres of rock and gravel would be shifted from the Victoria Flats landfill to build the banks.

The structures would help the passage of floodwaters at the junction of the Shotover and Kawarau rivers and provide protection for the council's proposed wastewater disposal field, he said.

Council strategic project manager Martin O'Malley said the revetment line would reduce erosion of the river's western flank.

Studies show the flood hazard for Lake Wakatipu is increased when the Shotover meets the Kawarau at the western side of the delta. The five-stage works will eventually combine to divert any floodwaters down the eastern branch of the Kawarau River, easing drainage during a flood.

In November 1999, the lake overflowed, flooding businesses in Queenstown and causing about $60million of damage.

Earlier this year the council approved an amendment to the annual plan for extra funding of $676,000 after the cost of preliminary Project Shotover works was underestimated.

Lange set to expand Lakes holdings

19th July 2011

Source: The Southland Times

International music producer Robert "Mutt" Lange is thought to be close to completing a deal to expand an eco-empire near Queenstown by 20,000 hectares.

Lange and top-selling singer Shania Twain, who separated in 2008, bought Motatapu Station and Mt Soho Station in 2005.

In 2009, Lange bought Glencoe Station.

Last month, the Overseas Investment Office granted approval for Soho Property to invest in Coronet Peak Station.

Auckland-based lawyer Willy Sussman said the sale of Coronet Peak Station pastoral lease to Soho Property was imminent.

The company was committed to sustainable farming and the environmental obligations imposed by the Overseas Investment Office, he said.

"There's a serious amount of work that has to go into bettering the property, which has been seriously degraded by animals and plants. I doubt very much whether there are any other farms that are going to the effort Soho Property is," Mr Sussman said.

He said it was inappropriate to comment when asked whether Mr Lange, a Soho Property shareholder, was behind the deal.

The investment decision said the station was mountainous with moderate pastoral value.

"It is seriously degraded ... has a serious feral goat problem, and has significant problems in relation to wilding trees and other unwanted plant species."

Soho plans to farm 4000 merino sheep and extend a pest and noxious plant programme.

The risk of reinfestation was minimal because of the natural boundary formed by the Shotover River, the decision said.

Soho holds pastoral leases on neighbouring Glencoe, Mt Soho and Motatapu Stations, where Lange was responsible for extensive wilding pine eradication.

Coronet Peak Station is west of these tracts with the Shotover River as its western-most boundary.

Soho directors are listed as Stacey Smith, of the US, and Thomas Steinmann, of Switzerland. Coronet Peak Station is owned by Malta-based billionaire Eamon Cleary.

Late school holidays boon for skifields

18th July 2011

Source: Otago Daily Times

The Ministry of Education's decision to move state school holidays back two weeks this year for the Rugby World Cup proved to be a blessing in disguise for Queenstown and Wanaka skifields, which enjoyed their busiest days of the season so far at the weekend.

Usually, the school holidays would have fallen earlier this month, when the district's skifields were battling to open because of a lack of snow. While the district suffered from visitor cancellations during the Australian school holidays over the past fortnight, last week's heavy snowfalls came just in time for the New Zealand school break.

Cardrona sales and marketing manager Nadia Ellis said yesterday's perfect weather, recent snowfalls, the new Valley View Quad chairlift and the start of the school holidays all added up to the field's busiest day yet.

Cardrona opened on July 8, but had to close over two or three days last week because of stormy conditions.

The situation could have been a lot worse if New Zealand's school holidays had fallen at their usual time, Ms Ellis said.

"The Rugby World Cup delay [of the school holidays] has actually really worked to our advantage. We were only two weeks delayed [in opening], so our losses aren't quite as bad as some of the others," she said.

The ski area's new Valley View Quad had "really proved its worth" as the only lift on the mountain where visibility was unaffected by cloud on Saturday.

Jackie van der Voort, general manager of Treble Cone, which opened last Thursday, agreed the school holiday timing had been ideal.

"It's probably the best opening weekend snow-wise and skier visit-wise that we've had ... each day's numbers are picking up," Ms van der Voort said.

"If the school holidays were there every year, I'd be pretty happy. It's great timing for the ski areas."

Snow Farm owner Mary Lee described the delayed school holidays as a "huge blessing".

"I cursed it at the start but now I'm pleased," Mrs Lee said.

"If you have [school] holidays without snow, it's going to affect your bottom line."

Snow Farm opened for a few hours on July 9 before bad weather forced it to close, then opened full-time from last Wednesday.

While other Southern Lakes skifields were struggling to open during recent weeks, Snow Park enjoyed a busy fortnight after a June 30 opening made possible by the field's 29 snow guns.

Snow Park's ski school had been particularly popular with families during the past two days, marketing manager Kristy Quin said.

"In comparison to last year, we're off to a really good start to the school holidays," Ms Quin said.

The Remarkables Ski Area manager Ross Lawrence said a reasonable crowd turned out on Saturday, but yesterday was "the best crowd yet, which is a sign of the Kiwi school holidays".

"The weather makes all the difference. It's been excellent," Mr Lawrence said.

While weather forced the postponement of the first slopestyle series of 2011, which had been planned for Saturday, yesterday the minishred was held as planned, with a large air bag "like a big pillow" erected at the skifield yesterday and today for skiers and boarders to jump on.

The slopestyle series will now be held on Sunday, with Picnic in the Park on Saturday.

The story was much the same at Coronet Peak, with "lots of people, lots of snow and fantastic blue skies", Ski Area manager Hamish McCrostie said yesterday.

Coronet began its annual night skiing on Friday and Saturday, which had once again proved "very popular". Fantastic conditions made all the difference, he said.

Night skiing would continue every Friday and Saturday until mid-September, weather permitting.

The ski area was prepared for a busy week, with numbers expected to increase today due to "arrival patterns" from school holidaymakers.

Listings squeezed as demand grows

18th July 2011

Source: Stuff Business Day

Listings are running short as Christchurch red-zone dwellers begin house-hunting, real estate agents say.

Market activity stalled when the June 13 aftershocks hit but increased "markedly" after the Government's June 27 announcement of a buyout in quake-damaged red-zone suburbs, the Real Estate Institute says.

Harcourts Grenadier auction manager Roger Dawson said demand was already up in some parts of Christchurch and he expected pressure on listings as red-zone residents started buying.

"They are still waiting for details of payouts, but they are definitely out there sniffing around," he said.

"We're getting great open-home attendance, and people are making plans."

Some properties were selling well above rating valuation, Dawson said.

Auction clearance rates had improved, with 14 out of 22 homes selling under the hammer during the company's June auctions. In April, only 10 out of 30 houses sold.

One damaged hillside home attracted four bidders and sold above rating valuation, despite being covered in plywood.

The institute's figures show 262 homes sold in the city last month, down from 473 in June last year, with most sales in the north, west and south of the city.

Most eastern suburbs had just a handful of sales.

The median price paid in the city last month was $330,000, down slightly from May and the same as in June 2007.

The median for Canterbury-Westland was $300,000.

Median prices in other regions included: Nelson-Marlborough $322,750, Central Otago lakes $433,500, Otago $224,000 and Southland $184,500.

The national median was $360,000.

Quotable Value spokesman Jonno Ingerson said Christchurch house sales were still "too patchy" to give a clear picture of values.

"Properties in undamaged parts of Christchurch tend to be selling for around their pre-earthquake values, with little sign that prices are either significantly up or down," he said.

A survey by the BNZ and the Real Estate Institute found increased demand for homes in Christchurch and Auckland, especially from first-time buyers, and house prices picking up in some suburbs.

Rental properties surplus starting to ease

The surplus of rental properties is starting to ease, and supply in some parts of Christchurch is barely meeting demand,  website Trade Me says.   The city's rental listings were down by six6 per cent in the past quarter and tenant demand up by nine 9 per cent, Trade Me head of property Brendon Skipper said. 

"If we drill down into the suburb-by-suburb picture, it's clear that there are areas where both supply and demand is very low,'' he said.

"On the flipside, in less quake-affected parts of the city, demand is extremely high and supply is struggling to keep pace. We expect this will be the case for the foreseeable future.''

The change follows reports from letting agents and property managers that eastern Christchurch homes had been hard to rent for several months, with landlords having to cut rents to find tenants.

Skipper said the tapering-off in listings was seen in cities nationwide and would ease the "lofty heights'' of rental surplus seen three months ago.
He expected the next few months would see more demand as tenants "came out of hibernation'' in spring to look for new accommodation.

House prices on the rise

15th July 2011

Source: The Southland Times

House prices gained nearly 3 per cent in June compared to a year ago, and there was an increase in the number of properties changing hands, the latest figures from the Real Estate Institute show.

The national median sale price rose to $350,000, up $10,000, while 5229 properties changed hands in the month of June, up 654 on the same month last year.

"Activity levels are recovering slowly with prices more or less flat, but we are getting strong indications from agents in many of our regions that the supply of properties is really tightening", said REINZ Chief Executive Helen O'Sullivan.

"Rather than an influx of buyers, we are seeing very low levels of listings as sellers continue to sit on their assets."

There were significant regional variations in the June numbers, O'Sullivan said.

Northland recorded the strongest lift in price, up 13 per cent, while Hawke's Bay fell 5 per cent.

Sales volumes had trended downward since May which was in line with seasonal patterns, O'Sullivan said.

Auckland continued to dominate the market, with the region accounting for 40 per cent of all sales. The region's median price slipped $3000 from May, but was still up $16,000 on June last year.

The shortage of listing had become the main reasons for buyers holding back, O'Sullivan said.

Houses took slightly less time to sell with the national median of 44 days.

The total value of residential sales, including sections was $2.26 billion in June, compared to $1.9b in June last year.

Council commits $7m to cycle track

15th July 2011

Source: Otago Daily Times

The Southland District Council will spend up to $7 million if it is given approval to build a 184km cycle track running from Nicholas Station to Kingston.

A resource consent application for the Around the Mountain cycle trail has been made to the Department of Conservation, Environment Southland, Queenstown Lakes District Council and the Southland District Council.

Provided consent is given, construction could be under way as early as mid-August.

Questions about tendering will be addressed this month.

The Southland District Council's senior policy analyst, Wayne Heerdegen, said there was cautious optimism the plan would be approved by his own council next week.

"We still have to obey our own rules," he said.

"So we are getting an independent commissioner to have a look at the paper work."

The cost of the 120km leg of the track running from Walter Peak to Lumsden would be at least $4 million.

It was part of Prime Minister John Key's $50 million cycleway initiative, Mr Heerdegen said.

Mike Barnett, Southland District Council's project manager for the Around the Mountain trail, said work was more likely to begin by early December.

He hoped to see 90% of the track finished by March next year.

Construction of the track will include the building of nine toilets, three shelters, a car park and 41 bridges. This will add more to the total cost.

The track will begin at Walter Peak, run past the Mavora Lakes and, upon reaching Lumsden, will follow State Highway 6 to Kingston.

Cyclists can take a night's rest at any one of the townships of Mavora, Mossburn, Lumsden, Five Rivers, Athol or Garsten before finally reaching Kingston.

There they can either turn back and do it all again, or take a shuttle bus.

Mr Barnett said he was interested in linking up with whoever bought the Kingston Flyer, to add a different dimension to the cyclists' travel.

"I'm not watching too closely ... who gets it [the Flyer]," Mr Barnett said.

"They will come to us, hopefully, once it is all sorted out."

The track had been planned for five years.

It will be built as a moderate-level exercise and recreation track.

Once complete, it will take four or five days to ride.

Mr Barnett said cyclists could continue on to the Queenstown trail from the Walter Peak end by taking the boat.

He said the track targeted the same customers as those who enjoyed the 150km Otago Central Rail Trail.

Queenstown's new five-star $60m lodge

15th July 2011

Source: scene.co.nz

A new $60 million luxury lodge being planned for Jack’s Point will be Queenstown’s largest yet. 

The five-star project, unveiled in Mountain Scene today, is also expected to be Queenstown’s biggest accommodation project during the next three years. 

Construction of the weathered timber/stone buildings, set beside the Jack’s Point golf course’s fifth fairway, is slotted to begin in the second half of next year. 

Eventually, it will boast 120 rooms for international jetsetters and employ more than 200 staff. 

A resource consent application is due to be lodged today. 

Jack’s Point developer John Darby says the trigger for the project is predicted growth in high-end visitor numbers arising from improving trans-Tasman air links. 

“To attract the high-end visitor, we need to have accommodation to justify the journey to Queenstown,” Darby says.

Signs of a property market pick up

14th July 2011

Invercargill property prices drop again

14th July 2011

Source: The Southland Times

Invercargill property values continued to slide last month with the average property value down 3.8 per cent on the same month last year.

The QV residential property indexes for June show the average sale price for houses in the city was $212,140, down 3.8 per cent compared to 2010 and a 0.4 per cent decline on the May figure.

The average sale price for Southland last month was $197,265, down by 0.6 per cent on June last year, while in Gore the average sale price was $194,598, up 1.1 per cent, but because of low sales figures QV warned that may not be accurate.

In Central Otago the average sale price was $279,193, down 5.1 per cent on the same month last year, but 1.9 per cent higher than the decline in May, while in Queenstown the average sale price was $585,561, up 0.1 per cent on last year.

Nationally, the average sale price was $412,746, down 0.9 per cent on last year, but up 0.7 per cent on May .

QV research director Jonno Ingerson said the national figure was an increase on the relatively stable market for the past few months, which was mostly driven by a boost in sales in Auckland.

This was because of several factors, including a strong demand for established character locations, good school zones and the perception purchasing in Auckland was a safe investment, he said.

More first home buyers hit market

13th July 2011

Source: Stuff Business Day

First home buyers are showing increased interest in the real estate market, according to a BNZ-Real Estate Institute of New Zealand survey.

The survey, which has been running for four months, is based on the perceptions of licensed real estate agents.

BNZ chief economist Tony Alexander said over the past four weeks, about 30 per cent of agents reported increased interest from new home buyers, while 1 per cent of agents reported a fall in investor interest.

About 14 per cent of agents believe prices are rising, compared to the previous three months where agents felt prices were falling.

These perceptions of price rises are strongest in Auckland and Christchurch, but there are still perceptions of prices falling in Tauranga, New Plymouth and Invercargill.

The survey is based on the opinions of 742 real estate agents.

Welcome snowfall makes mark

12th July 2011

Source: ODT.co.nz

Queenstown's first major snowfall for the winter left the district a white canvas yesterday, with snow down to lake level, more than 1000 airline passengers affected - and winter sports enthusiasts thrilled.

More snow is forecast for this week. Residents of Queenstown's hill suburbs, Arrowtown and Arthur's Point woke to at least 15cm of snow yesterday and 5cm was deposited on downtown streets.

However, the weather caused havoc at Queenstown Airport over the weekend, with many flights unable to make it in and out of the resort. Air New Zealand alone had to divert or cancel 10 domestic and transtasman flights - affecting about 1000 people who had flights transferred, or in some cases, were bused to Queenstown.

A spokeswoman for Qantas said two incoming and two outgoing services - affecting over 300 people - were cancelled.

Official figures for cancelled Jetstar and Pacific Blue Flights could not be obtained yesterday.

Part of State Highway 94 between Te Anau and Milford Sound was closed by snow yesterday and further north the Lindis Pass, Arthur's Pass, Haast Pass and Porters Pass were last night closed to towing vehicles and motorists without chains.

The only Queenstown skifield to open yesterday, Coronet Peak enjoyed sunny conditions for the best part of the day, before snow fell the afternoon.

By last night, Coronet Peak had gained 25cm to 30cm of new snow, and sister NZSki field the Remarkables, closed by bad weather yesterday , got 45cm over the weekend.

NZSki chief executive James Coddington said Coronet Peak's new snow meant the mountain was now fully operational, with the opening of the Greengates chairlift and Rocky Gully terrain.

Remarkables Ski Area manager Ross Lawrence said that with the snowfall they would " definitely be able to open up a few more trails tomorrow [Monday]".

Veteran Queenstown weather forecaster David Crow predicted snow showers for Queenstown early today then more snow showers tomorrow. "A quite active cold front is going to pass through on Wednesday, continuing until Thursday," Mr Crow said. "Friday is not going to be a hell of a lot better."

Police reported relatively few major traffic incidents caused by the snow.

The worst occurred at 10.15am yesterday when the driver of a car containing two Taiwanese tourists lost control on State Highway 6 along the Nevis Bluff and the car rolled down a bank. The passenger was taken to the Lakes District Hospital for a check-up.

Sergeant Linda Stevens of Queenstown said the driver and sole occupant of a vehicle heading up the Moonlight Track about 5pm yesterday slid down a 2m bank when she reversed to allow another vehicle heading down the track more room. The woman was unhurt.

First-home buyers: Why the time is right

11th July 2011

Usually this news comes too late. We look at the squiggly lines and slap our foreheads for not taking advantage of favourable market conditions back when they

were staring us in the face.

But real estate experts agree - now is a great time for prospective buyers to be splashing out on their first homes.

Reserve Bank interest rates are hovering at around 6 per cent, the lowest they have been since 1965. After the global financial crisis led to a clenching of the purse strings, banks are now relaxing their lending criteria. And sellers are "meeting the market", accepting more realistic prices than the over-valued days when the market peaked four years ago.

But experts say the window of opportunity will not last long, predicting that a shortage of properties in future years will put pressure on existing stock. Building consents declined to 14,611 in the year to March, compared with 25,406 in 2006. That's predicted to cause a long-term housing shortage.

With just 60,000 homes sold throughout the country in the past year, there were half as many transactions as in 2007. And that means fewer homes to choose from. The market has been good for first-home buyers for the past two and a half years, says BNZ chief economist Tony Alexander. In fact, the best time was in 2009, in terms of low house prices.

"That's when the vendors were most panicked," says Alexander. But it's not too late to take advantage of the circumstances now - before they change. Alexander predicts we are at the start of the cyclical upturn in the housing market that is being driven by an improving labour market, increasing rents and a growing awareness of the shortage of houses.

As people get more confident with their employment situation they will get "itchy feet" and move out of home or the shared flats where they have been nervously waiting out the recession for the past three years. These buyers would be wise to negotiate on financing because the loan market is swinging back in their favour, says Alexander.

"Lending growth is relatively weak. There are not all that many businesses and people wanting to borrow out there. It's a competitive environment." House prices are lacklustre throughout the country.

According to figures from QV.co.nz, the average house sale in Tauranga this year is $392,502, $45,000 less than in 2007. Hamilton houses are on average $21,000 cheaper than they were four years ago, going for $368,361 today compared with $389,307.

Meanwhile, house prices in Central Auckland, North Shore and Manukau are showing signs of recovery, steadily approaching similar levels to 2007.

It is Stephen Hart's business to hunt out good buys. The publisher of Where to Live in Auckland also runs Auckland HomeFinders, buying properties for clients. Hart has noticed a big shift over the past four months in the loosening of banks' lending criteria.

"That, more than anything, has led to more first-time buyers in the market," he says. That doesn't make it a cakewalk for potential buyers. Hart says there is huge competition for good properties that tick all the right boxes - weatherboard or brick-and-tile homes in good school zones with flat freehold sections. It is common for Hart to see such properties go for 25 to 30 per cent over CV.

"We are competing pretty full-on to get great properties." Auckland is still relatively unaffordable for first-home buyers, he says. They are forced to move away from the central city to suburbs such as Mt Wellington, Te Atatu and Penrose to find homes in their price range.

Josh Young, a real estate agent for Ray White in Mt Wellington is noticing a scarcity of properties for sale in his area. New online listings are dribbling through at around three or four a week, compared with about 10 weekly a year ago.

Despite this, Young says a number of first-time buyers are looking to break into the market. Three-bedroom homes with outdoor living and do-ups are particularly sought after. Prices across town in the western suburb of Te Atatu are being "kept honest", says real estate agent Leonie Higgins of Barfoot and Thompson.

A creep out from the pricier inner-city suburbs of Pt Chevalier and Mt Albert is seeing young couples and families buying their first homes in the area. Higgins says buyers and sellers are more likely to be making lifestyle decisions at the moment, not speculating on the market. Older people who have raised families are downsizing and moving on, leaving room for younger professional families.

"It's cyclical. It's regenerating," says Higgins. "It's more of the same moving in, but probably slightly more affluent than [the generation who came] in the 1950s and 60s."

Montie Baskett had been toying with the idea of buying a house for six years. This year, the 32-year-old solicitor decided the time was finally right. He had saved a bigger deposit, got a pay rise and the economic environment had swung in his favour.

"The two main things that drove me to look more seriously were the fact that rents were increasing and the overall cost of buying went down, interest rates were lower and you could buy at a better price," says Baskett. It took Baskett and his partner Rosanna Guardamagna, 30, a retail assistant, only a month to find their three-bedroom 1980s townhouse in Kohimarama.

They made a pre-auction offer at Easter and settled in May for $75,000 less than the CV. They now pay about the same in mortgage repayments as they were in rent for a similar three-bedroom home in Epsom. The bank obviously supported his choice.

Baskett was able to get a favourable deal on his mortgage rate, with a 0.4 per cent discount on the floating rate for the next two years. This is a symptom of increasing competition in the home-loan market.

Chairman of the New Zealand Mortgage Brokers Association, Darren Pratley, says money is easier to come by these days. Lenders are moving back towards dishing out loans at 90 and 95 per cent levels - provided borrowers have the right credentials. There is more caution in the loan industry and assessments are on a case-by-case basis.

Baskett says prices were more realistic this year than the last time he was seriously looking in 2007 and 2008. "I felt we weren't competing with a whole lot of speculators, which was what I thought the last time I was looking," he says. Jonno Ingerson, research director at QV.co.nz, agrees it is a good time for first time buyers, as long as they can find what they want in a market that offers only half the number of properties that were available at the peak of the market in 2007.

Alistair Helm, CEO of realestate.co.nz, the official website of the real estate industry, says realistic is the perfect adjective for today's market.

"We've all grown up and learned that you can't bank on property to return to the levels that were almost seen as guaranteed back in 2004 and 2005." Helm says there are still good opportunities available for first-time buyers, provided they do their homework. "They're not being priced out of the market as yet. It's more that they're getting out-manoeuvred by their own competing buyers who are faster on their feet."

Home sweet home

Two years ago, buyers could find their first home in Sandringham for $450,000. Today, prices for a basic, rundown house in the inner west suburb have skyrocketed to more than $500,000, shunting Sandringham on to the list of suburbs alongside Grey Lynn, Westmere and Kingsland that have risen out of an entry-level purchaser's grasp.

So where should they be looking? John Bolton, of mortgage brokering company Squirrel, says Te Atatu Peninsula is "gold" at present but tricky because of the scarcity of properties on the market. Mangere Bridge is a good find and the Penrose end of Onehunga is still good value for money, he says.

Bolton predicts Hillsborough and surrounding areas Lynfield and New Windsor will go up in value once the new Mt Albert motorway is built. On the North Shore, Bolton singles out Birkdale.

The value of properties in the area varies. Nearby coastal Beach Haven is too pricey for most first-time home buyers. Inland Beach Haven is more affordable but considered undesirable because it is too rough.

Similarly Pt England, bordering affluent Glendowie, is often disregarded by first-time home buyers because of perceived problems with security. "You can buy a full-site, little ex-state bungalow for $380,000. The prices are totally deflated there because of who your neighbours are," says Bolton.

Mt Wellington has also had a reputation for being rough but its image is changing, and entry-level properties are still available. For an indication of where a suburb is heading, look to the retailers.

Mt Wellington has a Farro Fresh deli and new supermarket. Yes, the yuppies are moving in. Frances Morton and Jane Phare When Kate and John Sutherland started looking for their first home in January they fancied the idea of a do-up. But as the search dragged on, and with a baby on the way, things got urgent so they narrowed their vision.

In April they snapped up at auction a tidy, 1960s three-bedroom weatherboard home in Green Bay. It's an area becoming increasingly popular for couples such as the Sutherlands or as John, 40, puts it:"Wasps (white Anglo-Saxon Protestants) with kids on the way."

Kate, 37, a graphic designer, had done her research and decided the time was right to get into the market.

"I'd been thinking about it for a long time and I had earmarked this year as the time to buy." It took the couple a few months to find a suitable property and Kate visited up to seven open homes every weekend.

They concentrated on the western suburbs of Titirangi, New Lynn and Glen Eden, which offered more bang for their bucks than areas closer to the city. By the time the Sutherlands turned up for the Green Bay house auction, they were confident they knew how to play the game, having already missed out on other properties.

"It was wonderful," says Scotsman John, an art director. "I started the day off with a dream and a dram." With some aggressive bidding, they sealed the deal at $436,000, $1000 above CV but well below the sellers' asking price of $460,000.

Before becoming homeowners, the couple were renting in Sandringham. Their landlord hiked the rent earlier in the year, which was added motivation to buy.

Now the Sutherlands pay $53 less a week for their mortgage than they did in rent. They live further from work but don't mind the extra commute. Kate says getting away from the city at the end of the day is a good thing. "We have lovely views of the Waitakeres and it's quiet."

Lights bring night flights closer

11th July 2011

Source: Otago Daily Times

Air New Zealand says more infrastructure and consultative work needs to be done at Queenstown Airport, while the Civil Aviation Authority (CAA) says all airlines must satisfy safety requirements, before night flying in Queenstown can be considered.

Queenstown Airport officially switched on its new $2 million runway lights system on Wednesday night.

CAA spokesman Bill Sommer, of Wellington, yesterday said the 124 lights added another layer of safety for operators, especially in poor weather and light conditions.

However, "airlines will have to make an application for [night flying] to be put on their operating specs for them to be cleared to do that, and we would have to be satisfied that they could do it and operate safely", Mr Sommer said.

"It would be a separate consideration for each airline."

Asked what issues carriers faced before they could service the resort at night, Mr Sommer said they included unmarked and unlighted obstacles, approach lighting, and the width of the runway, of which airlines and the airport were aware.

Airlines had to show they could operate aircraft at night, crews were trained correctly and the right equipment was on board, as Queenstown Airport approaches through mountains were complex.

Mr Sommer said he did not know the earliest when night services in Queenstown could start, as it was up to the airlines to lodge a proposal with the CAA. No airlines had done so yet, he said.

Air New Zealand operates between 50 and 70 return domestic services to and from Queenstown a week, depending on the season. International service frequency ranges from none to 15 return services a week, again depending on the season.

In summer, the earliest Air New Zealand departure is 7.35am and 8.25am in winter.

The latest departure is 5.40pm in summer and 4.10pm in winter.

In summer, its earliest arrival is 8am and in winter 9am, while its latest arrival is 8.05pm, or 5.10pm in winter.

Spokeswoman Marie Hosking, of Auckland, yesterday said Air New Zealand welcomed Queenstown Airport's addition of runway lights.

"However, in our view, there is more work to be done, including the installation of taxi and apron lights, as well as consultation with the CAA and airlines to agree operational processes for navigational approaches into Queenstown, before night flying can be considered."

Jetstar Group chief executive Bruce Buchanan said there was "very strong growth" potential for Queenstown and Jetstar's domestic and Australian services.

The lights opened up weekend getaways between Auckland and Queenstown, he said.

Jetstar already operates 22 services into Queenstown a week.

"In winter, six or seven hours is really the limit we can operate. Extending operating hours makes it possible to introduce a new range of services."

Queenstown Airport Corporation chief executive Steve Sanderson said the lights would be on in the evening and switched off when the airport closed for the night. He hoped the lights would open the door for airlines to seek approval to use fully the airport's consented hours of 6am to 10pm.

Relax away holiday homes

8th July 2011

Property investors take note – owning a holiday rental shouldn’t be stressful!  

Brand new to the Queenstown market, Relax away holiday homes are committed to bringing holiday home owners professional property management and marketing services with the personal touch.

As an off-shoot of progressive, Queenstown-based real estate firm hoamz, Relax away identified a niche in the market at the same time as completing their stable of property businesses. Already established as major players in long-term property management through their market-leading hoamz to rent brand, Relax away holiday homes is targeting owners of luxury holiday rentals, and seekers of holidaymakers looking for high-end accommodation. The company has instigated a big emphasis on internet marketing of the properties, both through their own newly-built website www.relaxaway.co.nz and multiple popular portal websites to capture bookings from holidaymakers from around the globe and provide Relax away owners with the maximum income.

The Relax away philosophy is simple, says Managing Partner Fred Bramwell; ‘Relax away – it’s what we encourage our customers to do. Owners can relax away knowing their valuable asset is in the best hands. Guests can relax away on holiday in their luxurious Queenstown holiday home’  

The brand is under management of new hoamz Business Development Manager Neil Martin. As the well-known face of retailer LV Martin, Neil Martin was beamed into the homes of New Zealand on a daily basis. After almost a decade abroad in charge of a major property development, it’s time for a change. He’s committed to making Relax away holiday homes the ‘go to’ brand for holiday home services in the Wakatipu.

Queenstown revels in new snow

8th July 2011

Source: Voxy.co.nz

Skiers and snowboarders in Queenstown, New Zealand, are rejoicing as the snow falls and falls and falls in the mountains surrounding the South Island resort town.

The snow started yesterday (Wednesday 6 July) bringing freezing temperatures and snow to low levels. Forecasts predict a storm pattern that is expected to continue into next week, dumping snow on the picturesque Southern Alps ski areas.

Coronet Peak, The Remarkables and Cardrona ski areas all report snowy conditions today as part of the wintry blast hitting the country. Coronet Peak and The Remarkables both opened for the season within the last week and Cardrona is on schedule to open tomorrow (Friday 8 July).

Destination Queenstown CEO Tony Everitt said the natural snow and promise of more to come had led to an "awesome vibe" around the town.

"The mountains and low lands are turning white and this fall heralds promising snow cover for the New Zealand school holidays which start at the end of next week (16 July). Loads of people are already here enjoying the slopes and with more white gold falling we're delighted our season is now cranking up."

Coronet Peak ski area manager Hamish McCrostie said Coronet Peak and The Remarkables had each received "10cm of snow by this morning and counting" as snowfalls continued throughout the day.

"The forecast is looking very promising with good snowfalls expected from now until Tuesday and the freezing level dropping," he said.

Mr McCrostie said both ski areas were still snowmaking as much as temperatures allowed on all main trails. The new snow meant Coronet Peak would open its six seater Greengates chair on Saturday. More trails would open progressively at all mountains in the region."

Cardrona Marketing Manager Nadia Ellis said mountain staff were excited about welcoming customers to the first day of the 2011 Cardrona season tomorrow.

"We had 10cm of snow overnight and consistent snowfalls today has resulted in at least a further 8cm over the mountain. And there's more forecast," she said.

Mr Everitt said Queenstown is a very attractive short haul winter holiday destination for Australians this year.

"A high Australian dollar combined with regular, direct and inexpensive trans-Tasman access makes for a wonderful break in Queenstown where there's just so much to do on and off the slopes and a range of accommodation to suit all tastes and budgets."

Visitors from Australia can take advantage of 30 trans-Tasman flights from Air New Zealand, Qantas, Pacific Blue and Jetstar flying direct into the resort each week and domestic connections from Air New Zealand and Jetstar.

New Queenstown runway lights turned on

7th July 2011

Source: The Southland Times

Queenstown Airport unveiled its new runway lights last night.

TVNZ weatherman and keen pilot Jim Hickey had the honours of giving the go-ahead to officially switch on the lights, the first set to be installed from scratch in New Zealand in decades.

"It's quite amazing in a sense as there are very few international airports that don't have runway lights. It's a real milestone asbefore the weather conditions were quite prohibitive and limiting but these lights will allow flights that would usually be turned away to land here," Hickey said.

Construction on the $2 million project began on the northern end of the runway in January and meant the airport could maximise its daylight operations and eventually operate night flights, which would allow landings up until 10pm.

However, night flights were not expected to be introduced until next winter, as the airlines would need to put together an operational plan and mitigate some of the identified risk.

Queenstown Airport chief executive Steve Sanderson said he hoped the installation of the lights would not only reduce disruptions, but open the door for airlines to seek approval to fully use the consented hours of 6am to 10pm.

"This is the big prize, where our visitors can arrive and depart in Queenstown in the evenings, giving them a full day or weekend, rather than losing time travelling in the daytime."

The ease of travel would boost visitor days in the region, he said.

Jetstar Group chief executive Bruce Buchanan: "We're very keen on extending flights to and from Queenstown and this destination is somewhere our airline can do well.

"One day we hope to base aircraft here so these lights are critical in making that a reality."

Mr Buchanan said the lack of lights had limited the frequency of holiday flights by Australians.

"When we have runway lights, infrastructure, extended hours etc, people will work a day's work and travel after they finish that night – so they're more willing to come over for a weekend and leave on a Monday morning and that's exciting for us."

In the short term, the lights were good for safety purposes, as Queenstown was the most challenging of the 50 airports Jetstar landed at, he said.

Warning on capital gains tax

7th July 2011

Source: Stuff Business Day

Opponents of a capital gains tax say housing is different to other investments and rent and property prices could rise if such a tax is introduced.

But the leader of the Government-appointed 2009 Tax Working Group says the tax – Labour's rumoured new election policy – had some validity to it.

The Property Investor Federation warned yesterday that Labour's attempt to make houses more affordable could backfire.

President Andrew King said a capital gains tax would simply make investors reluctant to sell, and deter new investment when all signs pointed to a housing and rental property shortage.

"People won't build new homes and people will sit on their properties and not put them on the market, so there could in fact be a reduction for supply and prices could potentially go up."

Mr King said if shortages emerged, rents were sure to rise, locking some people out of home ownership forever. "And a large constituency of Labour, I would have thought, would be tenants."

Another critic, Ernst & Young's head of Oceania, Rob McLeod, opposed a capital gains tax in his 2001 government-appointed review on taxation.

His research assistant, Ernst & Young tax partner Aaron Quintal, said yesterday that their work had shown that returns in the property market were not driven by pure investment decisions.

For example, a four-bedroom rental house was not a pure investment because the price would be dictated by both investors and would-be owner-occupiers, who might place more value on it.

Mr Quintal said any capital gains tax should take out the effect of inflation, which meant there was little tax to be reaped long term. "And if you look at places that had the biggest housing bubbles, Sydney, the US and London, all had capital gains taxes."

Although Prime Minister John Key has deemed a capital gains tax too problematic, the head of 2009's Tax Working Group says a capital gains tax does have some merits.

Professor Bob Buckle, of Victoria University, said international research had shown property tax was less damaging to economic growth than personal or corporate taxes.

It could also make the tax system fairer. Capital gains taxes were also already applied to some financial dealings and intellectual property, and applying it to property would create less distortion. "Particularly those with higher wealth who can put it into property which may not be subject to tax."

But Professor Buckle admitted there could be fishhooks. Exempting the family home could lead to the "mansion effect", through overinvestment in a primary house.

LABOUR'S GAMBLE

Labour has not yet announced its policy but is expected to tout the 15 per cent tax as an alternative to National's plan for asset sales.

The tax would not apply to the family home.

The Tax Working Group estimated a capital gains tax on property excluding the family home could earn the government $4.5 billion a year.

Australia, the United States and Britain all have capital gains taxes, but have also had some of the biggest housing market bubbles in big centres such as London and Sydney.

Property investors face capital gains tax under Labour

6th July 2011

Source: TVNZ

Labour will introduce a capital gains tax on investment properties if it wins the election.

The policy was supposed to be under wraps until next week but ONE News tonight confirmed it.

Sources say the capital gains tax is a key plank in Labour's proposed tax overhaul to be officially unveiled next week.

Property investment is something of a national obsession in New Zealand, encouraged by the fact that when investors sell the property they usually don't pay tax on their profits.

Australia has long had a capital gains tax, and it seems that if elected Labour will follow suit in New Zealand.

Asked by ONE News political editor Guyon Espiner whether he is announcing any new taxes, Labour leader Phil Goff said: "Ah I'm going to leave all comment about the announcement until I make the announcement."

ONE News understands Labour will include a capital gains tax in its tax policy next week, although it will exclude the family home.

Tax experts believe such a tax could raise up to $4.5 billion.

Property investor Kevin McCarthey has seven investment properties and is worried a capital gains tax could hurt his business.

"We employ carpet layers, plumbers, electricians, builders. We employ a lot of people in our business and it's a big business, its a billion dollar business in New Zealand, and we don't think it should be tinkered with or destroyed," he said.

The Greens have long supported a capital gains tax.

"New Zealand's problem over the last decade has been a lot of capital has gone into housing because of the tax incentives when where we really needed it was in the productive sector," said Russel Norman, Greens co-leader.

Prime Minister John Key says the only winners from a capital gains tax will be accountants.

He said capital gains taxes don't raise a lot of money up front for a government.

"People only pay the tax when they sell the asset and so people tend to hang on to those assets for longer. They are hideously complex and people spend their life with their tax accountants," Key said.

Labour has some big spending promises to pay for, including making the first $5000 of income tax free and removing GST from fruit and vegetables, so it will probably also raise the top personal tax rate.

"I'm not ruling anything in or out at this stage. You'll just have to wait for the announcement," Goff said.

That announcement comes next Thursday.

Guyon Espiner says he understands the capital gains tax rate would be set at about 15%. So if an investor had bought an investment property at about $400,000 and sold it for $500,000, making a profit of $100,000, the investor would pay 15% or $15,000 of that to the government in tax.

Espiner said the tax would not be retrospective, so profit that might have been made from buying a property some years before the tax was introduced would not be taxed.

He said no-one likes paying tax, a new tax is difficult to sell, and the approximate 200,000 property investors in New Zealand are not going to like it. But he pointed out most new Zealanders do not have an investment property and will not be hit by the tax.

Also in Labour's favour, he said, is that it's easy to find experts in New Zealand and overseas who say that a capital gains tax is a good way to drive investment away from housing and into the productive side of the economy.

No mysterious spike in mortgagee sales

6th July 2011

Source: realestate.co.nz

Mortgagee sales are still a part of the NZ property market. Currently there are 333 properties being marketed in NZ as mortgagee sales. These properties are being marketed by real estate agents on behalf of the mortgagor (in most cases the bank that loaded the money on the house in the first place).

This total though needs to be placed in perspective. There are today 49,782 properties for sale being marketed by real estate agents (excluding sections) across NZ; that means that a mortgagee listed properties represents just 1 in every 150 properties on the market.

The level of mortgagee sales as measured by the number of mortgagee listings on realestate.co.nz has been declining in the long term trend since the peak in early 2009. There has been some small ups and downs, however the chart below certainly highlights the trend over the past 4 years since the data has been collected.

In respect of this trend this chart which tracks year-on-year comparison of listings on a 3 month moving average basis shows when the emergence of mortgagee sales occurred; when the fall off from the peak occurred; and then just how steady this category has become over the past 6 to 9 months with a steady flow of new mortgagee listings coming onto the market matched to ones that have been sold.

It should be noted that the listings data only relates to properties for sale that are marketed as mortgagee sales and excludes sections. At this time there are some 113 sections which are mortgage sales.

This separation of mortgagee property from mortgagee sections in the presented data could be the reason behind the confusion of data presented in the Sunday paper article titled “Mystery spike in mortgagee sales“.

The article cited the number of mortgagee sales listed on realestate.co.nz as of last week at 435. This total would be for both properties and sections. This was then compared to a figure from October of last year of 321 listings; this lead to a supposition that listings were up 37%. (Our office was not unfortunately contacted to share the mortgagee data we track and thereby a misinterpretation occurred).

I believe that the article writer or researcher may have reviewed the article written on this blog back in October last year which detailed the then latest data of 321 listings for mortgagee properties on the market. The comparison is that the number of mortgagee properties on the market today is very nearly identical to that number on the market last October.

The data shows that there in no mysterious spike in mortgagee properties; they are still a part of the property market and from historical review tend to be a lagging indicator of the economic recessionary times that catch out home owners as unemployment and financial hardship hits home.

NZ Property report

4th July 2011

NZ Property Report – June 2011

Source: realestate.co.nz

The June 2011 NZ Property Report published by Realestate.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 May. 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 95% of all property movements in the NZ market as managed by licensed real estate agents.

A full print version of the NZ Property Report – June 2011 is published below and is available for download (1.0MB) and distribution.

Summary of the market – June 2011

What began last month as an early trend towards a sellers market has taken on a faster pace through June. Nationally whilst the inventory levels hover just above the long-term average of 41 weeks, key regions of the country are now firmly set in a sellers market. This situation has the potential to be exacerbated by the traditional reluctance of property owners to list their homes through the winter period. During the winter, sales per month tend to drop by around 5% as against a normal month, however new listings tend to fall more significantly by up to 15% as compared to a normal month.

Heading into the winter period with a growing number of regions seeing inventory levels below long term average could well result in elevated buyer demand with a potential to see property price appreciation. Those regions are Auckland, Queenstown, Bay of Plenty, Waikato and Otago.

Countering this potential for price appreciation is the fact that in June the asking price expectation of those new listings coming onto the market at $415,053 showed no change as compared to May and in fact represented a 2% fall in price as compared to the recent 3-month period.

Asking Price

The truncated mean asking price for all new listings in June rose very slightly from $414,308 in May to $415,053. On a seasonally adjusted basis the asking price rose just 0.8% in the month indicating a degree of caution amongst sellers.

The overall trend of the past 2 years continues to show a slow but steady strength in asking price expectation.

New Listings

The level of new listings coming onto the market in June fell again to 9,111. This represented a 18% year on year decline but a 2% seasonally adjusted rise from May.

On a 12 month moving basis the number of new listings in the past year totals 125,848 as compared 145,920 for the same period a year ago – a fall of 14%.

Inventory

The level of unsold houses on the market at the end of June continued to fall from prior months. June reported 47,738 down from 48,352 in May and 50,398 in April.

The recent relative strength of sales as seen in March through to May has now stared to see a clearing of what has been a high level of unsold houses on the market over the past 18 months. Heading into Winter, a time of traditionally weaker listing will likely see this inventory level fall further in coming months.

Regional Summary – Asking price expectations

The asking price, having fallen in May barely changed in June. Across the regions there is certainly some variances. A total of just 6 regions saw an increase in asking price expectations as compared to 13 showing falls.

The scale of some of these movements was significant, even outside of the smaller regions, which tend to exhibit large variances. Most noticeable were falls of greater than 5% in Wellington, the Hawkes Bay, Taranaki and Otago. The largest asking price rises of greater than 5% were seen in the Bay of Plenty and Coromandel region, the latter still witnessing high inventory and as such is very much stuck in a buyers market. The biggest movement in asking price this month was seen in Southland with a 6.8% increase as compared to the recent 3-month average.

Regional Summary – Listings

The regional perspective of new listing is very clear this month with one solitary region showing a rise in new listings comparing June 2011 with a year earlier. The Central North Island as well as seeing a rise in new listings is experiencing a buyers market with inventory of unsold properties exceeding long term average.

The majority of regions (13 out of 19) saw double-digit falls of new listings on a year-on-year basis with the biggest falls seen in the West Coast, Gisborne, Bay of Plenty, Marlborough, Canterbury and Wiararapa.

Two regions in June reported the lowest levels of listings going back to Jan 2007, they were Northland with 352 listings and Wiararapa with 117 listings.

Regional Summary – Inventory

The levels of inventory of unsold homes on the market fell further in June. In the space of just 3 months the levels have fallen from significant highs to be very close to long term average for many regions of the country.

For 2 years the predominant look of the regional inventory map has signaled a buyers market. In June there were 7 regions on or below their long-term average for inventory of properties on the market.

The most significant regions experiencing this shift to a seller’s market are Auckland and Queenstown; now joined by the Bay of Plenty, the Waikato and Otago. Not far behind the regions of Nelson, Wellington, Canterbury and the West Coast all of which are edging to a turning point in the market with more balance between buyers and sellers.

That still leaves 9 regions, all of which are provincial NZ firmly in a buyers market with existing inventory well above long term average.

Lifestyle

The level of new listings of lifestyle property coming onto the market in June fell by 4% on a seasonally adjusted basis from May. A total of just 829 new properties were listed with a truncated mean asking price of $554,864. The asking price was down 1% as compared to the recent 3-month average, and down 3% as compared to prior year.

On a rolling 12-month average basis new listings are down 10.5% with 11,346 listed in the past 12 months compared to 12,679 last year.

Apartments

Listings of apartments showed a 21% increase on a seasonally adjusted basis as compared to May with 439 new apartments coming onto the market. The truncated mean asking price for these new listings was $397,747, which was up 4.0% on the recent 3-month average, and up 8.3% as compared to June 2010.

In the Auckland apartment market, which represents over 60% of the market there were 274 new listings with an asking price of $383,980. The new listings shows a rise of 17% on a seasonally adjusted basis, and a 3% rise when judged on a year-on-year basis.

Property Price Index

Comparing the sale price of properties across the country to the asking price expectation is not a perfect comparison; however the trends tend to align. The benefit is that the data for asking price is of the market today, whilst the selling price is reflective of the market active between 4 and 6 weeks ago. The latest comparison is highlighted below:

Realestate.co.nz data is compiled from asking prices of new residential listings as they come onto the market via subscribers to the realestate.co.nz website. The Realestate.co.nz website currently has over 95% of all licensed real estate offices subscribing and providing all of their listings onto the website. The asking price is presented as a truncated mean price at a 10% interval.

REINZ: data is compiled from reported unconditional residential sales from all members of the Real Estate Institute of New Zealand representing all licensed real estate offices. The sale price is published as a stratified median house price and is developed in association with the Reserve Bank of NZ.

Notes:

Grand designs win building awards

4th July 2011

Source: The Southland Times

A Queenstown dream home and a Frankton school with 360-degree views have won top construction design awards.

A property by AJ Saville Builders, of Arrowtown, won the supreme title, and Remarkables Primary School in Frankton, built by Naylor Love Central Otago, won commercial project of the year in the Southern Region Registered Master Builders awards.

The AJ Saville home, off the Crown Range road, won the $2million and over category.

Judges said the house, with five bedrooms, four bathrooms and two living rooms, was architecturally exciting and designed to cope with the region's climate.

"The house features a large living area with tremendous views, and uses a lot of natural cedar work and schist stone, particularly on the large open fireplace and chimney," the judges said.

The 460-pupil school was built to provide impressive panoramic views for youngsters and teaching staff.

Judges said the building was energy efficient, offering shade in the summer and allowing natural light to shine within during winter.

"The architect and builder have created a functional and pleasant environment for the children to learn in," the judges said.

Other winners included Rilean Construction for the renovation of a Queenstown property, Mike Greer Homes for a new property in Wanaka, and Stonewood Homes Dunedin for a show home in Clyde.

Winter festival hailed success

4th July 2011

Source: The Southland Times

The Queenstown Winter Festival wrapped for another year yesterday after 10 days of hard partying.

Despite the lack of snow and unseasonably warm weather three skifields, Coronet Peak, The Remarkables and Snow Park, managed to open.

Winter Festival director Simon Green said this year would be remembered for the late start to the season.

The team behind the scenes, about 130 volunteers and 40 production staff, let loose at an after-party in Revolver club last night.

Mr Green said there was more work to be done, dismantling scaffolding, removing the centrepiece ice rink and paying bills.

"I think this one will be remembered by different people for different reasons.

"2011 will be remembered as the festival with a slow start to the winter and the disruption of the ash cloud."

Fewer Australians were in town after widespread disruptions to trans-Tasman flights caused by the ash cloud from a volcano in Chile.

Ash from Mt Puyehue Cordon Caulle has disrupted flights in New Zealand and Australia for more than two weeks.

Mr Green said the festival team decided to focus on what it could control.

He said opening weekend was busy, with festivalgoers arriving in droves from Otago and Southland.

But fewer punters stayed on for the music after the pre-concert Mardi Gras, he said.

Next year the organisers hope to attract a major headline act for the concert.

Destination Queenstown chief executive Tony Everitt said participation was impressive and this year was a return to the festival's roots.

Winter Festival started in 1975.

"It's interesting because the festival returned to its roots in terms of opening before ski season."

Anecdotally, attendance was on a par with last year and the lack of snow failed to dampen festivalgoers' spirits, Mr Everitt said.

"The lack of snow hasn't put people off, the general feeling is there were more people in town than last year."

Last year a report by the New Zealand Major Events Fund estimated 30,000 visitors took part in festival events and 45,000 people visited Queenstown during the 10-day party. Visitors spent about $58 million, with Australians accounting for more than half of international visitors.

Signs of property shortage

4th July 2011

Source: Stuff Business Day

The number of new property listings continues to fall and shortages are beginning to show in some areas, a monthly property report out today says.

Realestate.co.nz, the real estate industry website, said listings in June slumped 8 per cent from the previous month and 18 per cent year on year.

Some areas, including Auckland, Queenstown, Tauranga and Waikato, had firmly become seller's markets after two and a half years of being buyer friendly.

Realestate.co.nz's chief executive Alistair Helm said it was a ''bit of a concern'' as winter approached and listings traditionally fell further because sales did not always fall to the same degree.

''It might be just the right time to say, why wait until October?'' he said of vendors.

Despite some ''pretty impressive auction prices'' now coming in, the mean vendor's asking price was unchanged from May at $415,053.

''Inventory'' - the number of weeks it would take to clear the backlog of unsold homes on the market - also fell significantly.

It tumbled to 42 weeks, a 10 per cent fall from May and 8 per cent lower than a year ago. The long-term average is 41 weeks.

Fixing creeping back on the radar

1st July 2011

Click here for the current ASB home loan rate report.

Key highlights RBNZ leaves the OCR at 2.5%, but hints at possibility of an interest rate increase  as early as December. We expect interest rates will remain low over 2011, before lifting over 2012. Floating remains the cheaper option for now, but relative cost will depend on exact timing of interest rate increase.

German investors pay $33m for farm

1st July 2011

Source: Stuff Business Day

A German investment management company is now possibly the largest player in rural land in Southland after it spent $33million to buy a dairy farm at Dipton.

Aquila AgrarINVEST Investitions Gmbh was granted approval under the Overseas Investment Act to secure the acquisition of rights or interests in up to 100 per cent of the units of Glencairn Ltd Partnership, which owns or controls a freehold interest in 1401ha of an existing dairy farm.

The company plans to operate three dairy units to increase milking capacity on the farm.

It now has interests in more than 2458ha of land in the south and it has spent $79m buying six farms in the province during the past year.

The vendor was Glencairn Land Company, which has four shareholders.

MyFarm (which handled the sale) director Grant Rowan said Glencairn was an exciting development project.

Following development, Glencairn will employ four more people and during the next 12 months on-farm projects will create 10 fulltime-equivalent jobs.

Mr Rowan said it was the biggest sale in Southland their company had handled. A sale of this size for this type of property was rare and would happen only every five to 10 years.

He said he believed the German investment management company was coming near to the end of its search for land in Southland, but he could not confirm if more sales were pending.

The company had sought land in Southland because it was attractive and gave good returns, he said.

Southland District Mayor Frana Cardno said the investment was good for Southland.

However, family farms were an integral part of Southland, she said.

"I'm nervous about big companies coming in and taking over the land and not looking after it. I hope they can prove to us that they are good community citizens because Southland is all about looking after the community."

The latest sale has come at a time when farmers nationally are questioning the levels of foreign ownership in the country.

Prime Minister John Key, who spoke to farmers at Nokomai Station this month, said foreign investment in New Zealand land was worth more discussion.

"We've got to be careful of the levels of foreign land ownership in New Zealand," he said."We would [be] much better to seek foreign investment in productive assets."

"Foreign investment nationally was less than 3 per cent, which is not that much," Mr Key said.

DID YOU KNOW?

Aquila AgrarINVEST II is a fund comprising more than 1000 small investors from Germany. Milchfarm Investments and Alceda Star are institutional investors, also located in Germany. New plans for Glencairn inject $3.825m capital to create a third dairy unit Production will involve milking 3115 cows on a total of 1170ha. Production is forecast to increase by 530,000kg milksolids to 1.28 million kilograms milksolids by 2015-16.

House construction statistics 'a tale of two cities'

1st July 2011

Source: Stuff Business Day

House-building work is picking up by the barest of margins, and remains "very weak", according to economists.

There are signs of construction in Christchurch, but other regions such as Wellington are weak, with monthly housing consents well down on May last year as planned government spending cuts cast a chill on the market.

National building consents issued in May were down 16 per cent on the same month last year, at just 1139 new homes and apartments, according to Statistics NZ.

Seasonally adjusted, the consent numbers were up 2.3 per cent from April.

But excluding flats, the house consents were up just 1 per cent over the month.

Master Builders Federation chief executive Warwick Quinn said the trend in house consents was flattening out after falling in recent months, and there were "signs of life" in Christchurch.

"It is the tale of two cities ... we are starting to see activity down there and we may see a similar concentration in Auckland as time goes on, but the rest of the country might be quite poor," Mr Quinn said. Work on leaky homes should start to pick up by early next year, but it will be mainly in Auckland.

The prospect of interest rates starting to rise from the end of the year was a "real worry" because they were a key driver for the market, Mr Quinn said.

"The minute rates go up the phones stop. We are hopeful they will stay low as long as possible.

"I'm particularly fearful of Wellington, with the government [sector] continuing to shrink."

There was a chill factor as government workers waited to see what might happen, so they were less likely to build new homes.

Although monthly figures can bounce around, there were just 89 housing consents in the Wellington area in May, down 52 on the same month last year, despite extremely low mortgage rates.

Wellington is also running out of new commercial building, with few cranes on the skyline, though some apartment and office building projects are being planned.

Despite that, it was thought a lot of house additions and alterations work was under way in Wellington, as well as in other parts of the country, such as decorating, decking and fencing that do not need consents.

Nationally planned alterations and additions rose a seasonally adjusted 8 per cent between April and May, but from a low base.

The housing market is also facing a net loss of population, with more people leaving New Zealand than arriving since the February earthquake in Christchurch.

There was a net loss of 400 people in May.

At current monthly consent levels, about 12,000 homes may be built this year, well below the 20,000 a year that ASB Bank economists say is needed in coming years to satisfy housing demand.

If consents remained at such low levels, there was a significant risk of a housing shortage in areas where the population was growing and more homes would be needed in the years ahead, ASB said.

ANZ Bank economists said the Government's announcement last week on the worst-affected homes in Christchurch would give people greater certainty about their future and so consents in the city should be boosted by the end of the year.

If all 5100 homes in the red-zone of Christchurch were replaced, that would equal a third of all national consents last year.

"This is huge," ANZ said, but was only the tip of the iceberg given the scale of damage in Christchurch.

Consents for 68 new homes related to the Canterbury earthquakes were authorised in May and 63 were relocatable units intended to house displaced residents, Statistics New Zealand said.

However, Mr Quinn said builders were still laying off staff in Canterbury because the major work had not started yet.

But now the red-zone homes had been decided, insurance companies could settle claims "and hopefully we will see some action".

On the Friday and Saturday after the Government announcement builders' show homes were full, he said. "People are starting to make inquiries about what they will do and that has not been the case for months."

National building consents issued in May:

1139 new homes and apartments

Down 16 per cent on the same month last year

Seasonally adjusted, the consent numbers were up 2.3 per cent from April.

Compared with May 2010, the value of residential building consents fell $93 million, or 19 per cent

Non-residential consents rose $52m, or 17 per cent, to $350m, seen as encouraging lift.

Regional breakdown of housing consents for May compared with May 2010:

Wellington 89 (down 52)

Auckland 236 (down 85)

Waikato 163 (down 39)

Taranaki 30 (down 37)

Canterbury 251 (up 14)

Otago 85 (up 10)

Annual building consents for homes and non-residential:

$8.7 billion, down 8.2 per cent

Queenstown’s biggest house

1st July 2011

Source: scene.co.nz

Super-sized: Trinity partners (from left) Shane Muir, Wayne Foley and Roy van Leeuwen on the building platform for Queenstown’s biggest mansion

With 1200 square metres of floor space, it’s probably Queenstown’s biggest house – six times the size of an ordinary family home. 

A huge mansion is about to be built high up on Queenstown Hill, with construction being handled by new local consultancy Trinity Development Alliance. 

The new home will be 200sq m larger than Sir Eion and Lady Jan Edgar’s 2003 regional House of the Year in 
Kelvin Heights, Trinity’s partners say, by way of comparison. 

It will also be 250sq m larger than the neighbouring former home of Aussie developer Glen Carless. 

The “who owns it?” question is discreetly fielded by Trinity partner Wayne Foley. 

“It’s an Australian family who absolutely love everything about Queenstown,” he says. 

“I think they’ll probably spend half their year here and half their year in Australia.” 

And the “how much” question? 
 

“We expect the budget will be in the vicinity of $6 million,” Foley says matter-of-factly. 

The 1200sq m of floor space is primarily over two levels, with a substantial garage/basement area below. 

With its five-metre-high ceiling, the garage could house a large launch – or a double-decker bus – with room to spare. 

The home itself is fairly conventionally designed, Foley says – just super-sized. 

“It’s not much different in terms of specification from a house a third the size – except everything’s much bigger.” 

Inside are five bedrooms, five bathrooms and four family rooms, including a stunning two-level library, while the outside will be mostly local stone and timber, he says. 

About 40 per cent of the site will be in landscaped gardens – the largest in town other than Queenstown Gardens, Foley claims. 

Fourteen weeks of earthworks have just been completed, with foundations due to start next month – it’s an 18-month project all up, he estimates. 

The project team echoes that of the $36m Commonage Villas nearby, which Foley co-developed. 

His Trinity partners Shane Muir and Roy van Leeuwen are handling building and quantity surveying respectively, 
and there’s the same architect in Francis Whittaker of Mason & Wales plus the same interiors expert – Foley’s wife Julia. 

Launching Trinity in Mountain Scene just four months ago, Foley gave a strong hint of what is now unfolding. 

“While a lot of large projects have dried up, what’s taken their place is a lot of very high-end premium residential homes,” he said. 

“They’re being built as people’s own residences. 

“They’re not being built for resale and profit,” he added.

Rent-to-own scheme leg-up for aspiring home-owners

29th June 2011

Source: Otago Daily Times

Aspiring home-owners who are committed to the Queenstown Lakes district and willing to save will benefit from $780,000 in Government funding for a rental property pilot scheme with the Queenstown Lakes Community Housing Trust, the chairman says.

The trust announced the funding for Rent Saver, a new market rental programme which it says combines quality, secure tenure and rental accommodation with a built-in savings incentive to help low- and moderate-income households into home ownership after five years.

Chairman David Cole, of Queenstown, said Rent Saver was aimed at householders who did not qualify for its Shared Ownership programme due to low income or negligible deposit.

Mr Cole said Rent Saver stemmed from trust researchers interviewing 250 Queenstown tenants on housing issues in 2009.

Some interesting facts emerged.

"One was that a lot of the rental properties were typically owned by out-of-towners and were holiday cottages originally, occupied once a month by their owners in summer.

"They were poorly insulated and not really designed as long-term rental properties. The quality ... wasn't up to scratch.

"The second thing we learned was it was difficult for these renters to actually get secured tenures of a two-year, or even one-year lease. What would usually happen at the end of 11 months is the owners would want to come up from Invercargill for a holiday, so the renters had to find somewhere else."

Mr Cole said Queenstown renters surveyed were keen to put down roots and own homes.

"If they save $2500 a year, then we'll match that with $2500 as well, so over a five-year period they may have saved $13,000, or $14,000 and we may have put in $13,000, or $14,000, so they've got $28,000 to put by way of a deposit into a shared ownership programme."

The trust was able to help with at least four properties in the district with the approval of Government funding this month, after nine months of lobbying.

"They're giving us $290,000 by way of a cash grant and a further $490,000 by way of an interest-free loan for 10 years to get the programme up and established."

The trust was building a house at Riverside, Wanaka, for a family who will rent it and qualify for Rent Saver. Another one was being built at Nerin Sq, Lake Hayes Estate, for different family.

How to land a property deal

29th June 2011

Source: Stuff Business Day

With any purchase, you like to feel you are getting value for money. That's never more important than when buying a house, because it could well be the biggest financial commitment you make - especially with property prices as high as they are.

Whether you are looking for an investment property or a home to live in, there are two things you need to do to bag a bargain: leave your emotions behind and hone your negotiating skills.

''Good negotiators are good listeners and can pick up on why a property is being sold,'' says the managing director of buyer advocacy specialist Keyhole Property Investments, Melissa Opie.

They also tend to ask a lot of questions ''but keep a lot of information close to their chest''.

Opie says people buying a ''heart home'' - one that they intend to live in - need to be particularly careful not to let their emotions get in the way.

''People will put a price on the quality of life and are more likely to pay more for a heart home but they still need to think with a business mind - like will the banks value the property for what you are prepared to pay,'' Opie says. As an investor, there is always another property, she adds.
Be prepared

If you are buying property as an investment then you should be prepared to work for a better price, says a property and finance adviser with Smartline Personal Mortgage Advisers, Kevin Lee.

And if you are going to negotiate with a vendor, you should do it based on facts.

This means educating yourself on investing in property, being realistic about what you can afford, seeking professional advice and developing an appropriate strategy.

''If you're prepared to learn, you will mitigate the chance of being ripped off because you are so much more in control of the sales process,'' Lee says. ''The dream deal is doing your homework and paying a fair price for a property that fits within your strategy - it's where everybody wins.''

Opie agrees knowledge is power.

''Do your research,'' she says. ''You have to have undergone due diligence in the market and the house in order to know what the right price is. Some of the critical research may be finding out the sale prices of similar properties in the area and finding out why the vendor is selling.''

The chief executive of McGrath Estate Agents, John McGrath, says getting finance approved before making an offer is a powerful demonstration of commitment to buy.

''The best way of showing you're serious is by signing the contract and attaching a cheque for the deposit,'' he says.

''This makes your offer a lot more seductive to the vendor. Alternatively, put your offer in writing and mention you have your finance approved.''

McGrath advises against starting negotiations with your best offer.

Vendors always assume your first offer will not be your last, he says. ''If the property is overpriced, it's OK to start with a cheeky offer as long as you've done your research and can justify it using market information and comparable sales.''

And a professional valuer's appraisal that is much lower than the asking price is also great ammunition, McGrath says.

Understand any quoted prices

Consumer advocate Neil Jenman says experienced buyers know that agents underquote the selling price by about 20 per cent. So when an agent tells you bidding at an auction will start at $300,000, the price is more likely to be about $360,000.

''If your maximum price is $320,000, be careful. You could spend money on inspections, get your heart set on buying the home and all to no avail,'' Jenman says.

His tip for buyers who can't get a straight answer from an agent about the price, or who are certain they are being misled, is to ask the sellers about the price. Either write to them at home or via their lawyer.

The other point about a quoted price is to understand when the price was set.

The sellers understandably want to get the best price they can for their property. But that doesn't mean it is the price it will sell for.

If a property has been on the market for several months or even years, it becomes what is known as ''stale''.

Depending on the desperation of a seller's situation, the price might start dropping to something that is closer to the fair price it probably should have started at.

Months later, all they might want to do is sell the property at whatever price someone is prepared to pay.

Buyers who have done their research will know what the price should be, possibly put in a lower offer and pick up the property for an apparent bargain.

The buying game

Auctions can be a stressful experience for the unprepared, which is why many people engage the services of a professional to do the bidding on their behalf.

''Buying a property is all to do with psychology and affordability,'' Opie says. ''The average person is not a seasoned bidder at auctions. I've seen people put in bids over their own bid and push the price up.''

If a property is going to auction but a buyer wants to put in a bid beforehand, that buyer needs to understand whether he or she is paying too much.

That understanding can only come through doing the research as outlined above.

That knowledge will be equally important if you are the highest bidder at auction but are yet to reach the vendor's reserve price and start entering into negotiations. Stand your ground about what you are prepared - and can afford - to pay.

If you can't get your price, get your conditions, which McGrath says are ''powerful bargaining chips''.

''You can negotiate the length of settlement, inclusions (such as furniture), an early release of the deposit and/or offering to rent the property to the vendors after settlement if they haven't yet bought a new home,'' McGrath says.

Fighting for charity!

28th June 2011

In the middle of one of the most highly-anticipated events of the Queenstown Winterfestival 2011, hoamz joined forces with the

Bruce Grant Youth Trust to raise more than $10,000 for the local charity. The Thriller in the Chiller saw local pitted against local in boxing matches which brought the sell-out crowd to the edge of their

seats. Bloodied noses and exhausted competitors put on a supreme show and ensured the continued success of the event. A number of items including a guided walk on Stewart Island an

d a boat charter on Lake Wakatipu's Pacifc Jemm were sold under the hammer as part of the charity auction. The pace was frantic, the bids were loud and the hoamz team were run off their feet trying to keep track of them! Auctioneer Winterfestival's Simon Green whipped the crowd up into a bidding frenzy culminating in a huge $2100 for a Sugar Ray Leonard signed boxing glove. A great night was had by all!

Developer looking for 'wow' factor in hotel

27th June 2011

Source: The Southland Times

Queenstown developer Lou Gdanitz is going for a unique, "wow factor" in the $10 million, 54-room hotel he's planning on a prime high density site he owns bordering the resort's town centre.

Mr Gdanitz has applied for resource consent for the high-tech six-level development on a 485 sqm site. He plans one of those levels underground and a function room for up to 80 people.

"There'll be nothing like this elsewhere in Australasia, the whole concept is different."

High-tech designs and fittings have enabled him to keep the rooms smaller, offering people a product they can afford in the mid-range hotel market.

"My experience is people don't spend that long in their hotel rooms in Queenstown anyway."

The Italian-designed bathrooms will be manufactured in Britain and feature a unique central console complete with pivoting toilet, hand-basin, shower units, including a lower one for children, and storage units.

Rooms will also feature new smart TV technology, WiFi, makeup tables, lots of LED lighting and plenty of "eco-features".

Mr Gdanitz is keeping his proposed breakfast service under wraps but promised it would be Continental breakfast served like it never has been before in this part of the world. "I've only ever seen it once in the world in Europe last year," he said.

He's expecting the modern, John Blair-designed hotel to appeal to those 25 years and over and in particular the "emerging wealth" of the mid 30's to 40's market.

"We've had a proliferation of backpackers' hostels and I don't agree with pushing that market – I think Queenstown so undersells itself," Mr Gdanitz said.

If granted consent, the hotel, which would sleep 104, would be big enough to hold small conferences.

It would also be ideally situated right in the middle of plans for a large new council civic centre, the Remarkables Centre, if the Queenstown Lakes District Council decided to proceed with those on-hold plans.

Mr Gdanitz, a former longtime Queenstown building contractor, was confident that his new hotel, which he hoped could be open towards the end of next year, would attract a good market share in spite of tough economic times.

Proposed rates rise will be under 3%

27th June 2011

Source: Otago Daily Times

The average proposed rate increase in the Queenstown Lakes District for 2011-12 would stay under 3%, council finance general manager and deputy chief executive Stewart Burns said yesterday.

After consulting on its draft annual plan during April and May, the council deliberated at hearings this month and will now be asked to adopt the plan, with a proposed average rate increase of 2.81%, at its meeting on Tuesday.

A total of 403 submissions were received on this year's draft annual plan, compared with 273 last year.

The "hot" issue this year was gritting, which attracted 280 submissions; road oiling attracted 262; increased user fees for waste management 257; and repayment of debt 237.

Mr Burns said the council also consulted on the issue of debt repayment, with 184 of the submitters (78%) in favour.

Annual plan budgets allowed for "significant" debt repayment over the next year, with just over $8 million provided for, made possible through a "combined approach" of increased rate funding and applying the expected dividend from the Queenstown Airport Corporation of $2.7 million to reduce debt.

"The council is extremely grateful to those members of our community who took the chance to have a say on things that mattered to them," Mr Burns said.

"Every submission was considered by the council, although some tough decisions had to be made."

The council did make several changes to budgets as a result of the submission process. For example, road gritting would be carried out to the same extent as previous years, with an agreement from the New Zealand Transport Association to fund additional costs this year.

Other decisions included: One-off $5000 grant to establish Queenstown Lakes District Heritage Trust; $30,000 over two years to celebrate 150th anniversary of the discovery of gold in Otago; $25,000 to buy a district-wide economic model; $20,000 for maintenance on QLDC mountain-bike trails; one-off $2000 grant to Upper Clutha Historic Records Society towards memorial wall in WanakaCemetery; $25,000 to Shaping Our Future for visioning component; bring forward $180,000 capital budget for Stage 1 of Wanaka Skate park extension (assumes $60,000 to come from local fundraising); bring forward $10,000 for Norski toilet at John Creek, Hawea; bring forward $10,000 for Hawea foreshore improvements; one-off $120,000 capital grant of to extend Hawea Community Centre; allow $200,000 capital budget for possible Cardrona land acquisition.

Other changes had been made to reflect internal submissions, including $25,000 increase in budget for Wanaka Town Centre improvements for the implementation of CCTV in association with the Queenstown project.

"The combined effect of these changes is that the overall average rates increase (after allowing for growth) has increased very slightly from 2.74% to around 2.81%. Holding the rates increase at this level has been difficult because of the many requests for additional funding and the fact that growth in the rating base for the year is less than expected," Mr Burns said.

Widening your house buying options

27th June 2011

Source: Stuff Business Day

Traffic queues. House prices six-times the average yearly salary. Hookers stalking the pavement outside your office. Crime.

Living and working in the city certainly has its drawbacks. So why not pack up and move to a country town?

If house prices are anything to go by, trading in an Auckland or Wellington property and buying in a small town could lead to a Lotto-esque (for the average punter) windfall.

Last year the cheapest house in the country sold for a tiny $7000. And unsurprisingly, it wasn't in one of our major cities. It was down south in Mataura, about 15 minutes drive from Gore.

While there's no doubt that house was a steal, the price of property in some smaller provincial towns seems stuck in a time warp.

If you don't believe me, Check out TradeMe's property listings for properties going for up to $100,000.

Fancy a three-bedroom house bathroom with shower and bath, sunny open plan kitchen and dining area flowing through to lounge with log burner, oh and a conservatory?

You could nab this for exactly six-figures in Featherston, north of Wellington in Wairarapa.

But if you are feeling really scrooge-like you can buy for under $100,000 in Patea, South Taranaki.

I found numerous three-bed houses in the town all priced to sell at around $75,000 including this property which is handily located close to the beach, golf course and school. That compares with $350,000 for a three-bedroom house in the suburb of Beachhaven on Auckland's North Shore.

Yep, that's right, Patea is a beachfront town. And a river town, and a bit of a fishing town too.

Local community board member Shelley Brenda Dew-Hopkins said the fishing was "fantastic". And that's not all Patea had to offer.

"The beaches are beautiful, it's very close to Hawera and other main centres. We have a great little cafe, the people are friendly and there's a new pool being built."

Dew-Hopkins said Patea was primarily a service town for the agriculture sector with sawmills, the farming and energy sectors big employers with Fonterra and Silver Fern Farms among those companies with a presence in the area.

"Housing is cheap, but Patea has all the essential services and everything you need," she said.

It also had free Wi-Fi internet access at the local library, a doctors surgery, Four Square, good weather in summer - it was a temperate winter 15 degrees the day I wrote this story - and no McDonalds or big fast food chains.

So why were houses so darn affordable?

It was bit of a mystery to Allied Farmers First National real estate divisional manager Shawn Gibbon.

He put it down to the commute. He reckoned most people who live in Patea work in Hawera. But they have paid for the privilege of inexpensive housing. These brave souls suffered through a 15 minute commute, each way, every day.

"Local people think a five minute drive is too far," Gibbon said, "they won't even buy on the other side of town."

So what would a drive to the other side of town in Patea be like? Well there are no traffic lights. Nor traffic for that matter, Gibbon said.

It's also about one hour-and-a-half hours from New Plymouth, the region as a whole boasts one of the highest average weekly incomes, at $706, in the country and Patea itself can lay claim to being the home of that most Kiwi of anthems, Poi-E.

And yes, Gibbon said that $100,000 would buy a tidy home in Patea with the top-end properties sold for around $200,000 depending on location ( possibly beachfront) and size.

But if Patea doesn't sound like your cup of tea, what about Mataura, home of the $7000 house?

Motorsport legend and transport operator Inky Tulloch was the mayor of Mataura, population about 2000, for seven years.

While he has now moved out of Mataura to north of Gore, Tulloch said Mataura is well-situated at the crossroads between Invercargill, Dunedin and Queenstown.

"It's an hour-and-a-half from the sea, from the ski fields and from the lakes," Tulloch said.

It was the proud owner of a new community centre, a "very good" swimming complex and great local community feeling, the former mayor said.

It doesn't have a high school, teenagers are bussed to Gore - population 12,108 - and Dunedin University is the closest uni.

But there was work available at the local freezing works for maintenance engineers, electricians, laboratory technicians, seasonal process workers, boners, slaughter men and labourers, according to the Southlandnzjobs website.

And more jobs could well be coming. Tulloch said the freezing works owner, Alliance Group, had announced plans to double capacity at the plant and the area was also becoming known for a growing lignite industry.

"There are a lot of good things happening," Tulloch said.

And in the Southland region as a whole it would seem, with another high weekly average income of $713 and unemployment rates well below the national average at 4.7 per cent for the year ended March 2011. Also with 72 per cent of Southland's working age population gainfully employed - again, better than the national average - it was all positive stuff.

But before you rush off to buy this "neat little three bedroom" house with aluminium windows, new gas hot water and double garage in Mataura, or any of the properties in Patea, you do have to do your research.

"It may seem romantic to move to the country but the fact of the matter is there must also be commensurate work opportunities, with matching incomes," New Zealand Institute of Economic Research principal economist Shamubeel Eaqub said.

"Regional economies, particularly the farming ones like Waikato, have been doing well. But I would suggest we can't all pack up and move to the country. While a few people may be well-placed to milk cows at 5am, the mere mortals out there - people like me - can only ever contribute to a service economy. That requires a big city."

On the flip side, ultra-fast broadband should make life easier for those choosing to work in remote locations.

So if it all gets too much for you in the city, Patea - and its cheap property, beaches, fishing and relaxed golf course -  awaits.

Are property buyers really in the box seat?

24th June 2011

Source: Realestate.co.nz

“There has never been a better time to buy a house” – this was the first line of the Sunday newspaper article this past weekend. A big call some may say, especially when the property market has seen a very sober and lacklustre market over the past 3 years.

It is worth pausing for a moment to reflect on what circumstances arise to cause the property market to be either a great time to buy, or a great time to sell.

These circumstances are usually in opposing territory. However there are always exceptions and most recently in that heady period around 2004 when the pace of the market favoured both buyers and sellers with prices and volumes rising steadily and at such a pace that you almost “had” to buy and sell – or you feared being left behind in the market.

Great time to buy!

Great times to buy are generally when the cost of borrowing (interest rates) are low; when the availability of property on the market is high, and when there are not many other competing buyers in the market.

As to whether falling prices are a great incentive to buy is debatable as a cautious buyer will usually hold off  in these situations to see if prices may in fact falling further.

Great time to sell!

Great times to sell are generally when the cost of borrowing is cheap thereby encouraging a lot of buyers to come into the market. Ideally this is also combined with a shortage of properties on the market therefore forcing buyers to compete with each other to buy your property.

As to price, it is likely sellers are not that concerned. All they want is to sell. The price they sell at will be as the market dictates, which will allow them to move on and buy another property as appropriate.

The newspaper article went on substantiates the claim of it being a great time to buy, by stating that interest rates are currently at the lowest levels for decades. That is certainly true and with the vast majority of property purchased with a mortgage the cost of borrowing is a key driver of the market. The chart below (courtesy of the Reserve Bank) tracks mortgage rates over the past 20 years and clearly shows how low today’s rates are on a historical comparison – especially when you see the peak at over 15% in 1991.

Reserve Bank of New Zealand - Floating & 2yr fixed rates for new borrowers

The article stated that in addition to low mortgage rates the other key driver of a “great time to buy” was the fact that “prices across the country plunging in the past month”. I would challenge this assertion from the standpoint as made earlier that falling prices can in certain circumstances impede buyer motivation. It is also so important to look at house prices not on a one month basis but on a trend perspective.

The recent blog post entitled “NZ property prices continue to ease” highlighted the Stratified mean sales price across the country. This showed no sign whatsoever of “plunging prices”. Property sales price are in all cases below the peak of the property market back in 2007 (with the sole exception of Wellington which has managed to set a peak back in late 2009). Prices would be better described as stable or lacklustre rather than plunging.

One fact the newspaper article omitted completely was the a key driver of the property market – the inventory of unsold homes on the market. As stated earlier this statistic, far more than sale price is likely to impact the state of the market as either a buyers or a sellers market.

Realestate.co.nz publishes its monthly NZ Property Report which tracks this inventory measured as the number of equivalent weeks of sales of unsold properties on the market. In the May report published on the 1st June as well as the regional Property Pulse regional factsheets the data showed that in the Auckland market and now emerging in the Queenstown market the power is moving from buyers to sellers. A lack of new listings and a rise in sales volumes which is helping to clear what has been high inventory is leading the Auckland market to be in a deficit of properties on the market. If as a consequence of these low interest rates, buyers are more active in the Auckland market, then there will be a need for more listings to come onto the market. This then directly favours sellers. Potentially in this seller’s market a consequence of the lack of listings may lead to property appreciation due to more demand than supply.

Outside of these major markets of Auckland, Queenstown and possibly Wellington the rest of the country is still very much in a situation of high inventory of unsold properties. This means that if there are buyers eager to take advantage of low interest rates then in these more provincial areas they will have ample opportunity to pick and choose amongst the properties on the market and allow them to drive a good bargain – maybe these are the areas of the country where buyers may well be “in the box seat”!

Winter party starts minus snow

24th June 2011

Source: The Southland Times

It's finally here.

The annual 2011 Queenstown Winter Festival gets under way tonight, bringing with it 10 days of madness.

It is the first time anyone can remember the festival starting without a skifield open but organisers are putting the emphasis on "winter" and not "snow" as the town prepares for more then 40 scheduled events.

Festival manager Simon Green said everything was coming together.

"We're locked and loaded and ready to go."

The lack of snow would affect the atmosphere and a great marketing opportunity was missed but the thoughts of festival staff were with the about 1000 people without work at the skifields.

"We hope we can play a small part in helping those people by throwing this party."

The first event to get under way would be the opening of the specially built Wonderland ice rink in the middle of Queenstown for use from 10am today.

The outdoor rink is the first of its kind in New Zealand and has taken a week to build at a cost of about $150,000.

Prime Minister John Key will address the crowd at the official opening tonight followed by performances, including Kiwi rocker Jordan Luck, and a spectacular fireworks display.

The American Express Ice Box at Queenstown Memorial Hall will host the Absolut NZ party with New Zealand band the Dukes at centre-stage.

The Queenstown Casino and Reading Cinema are also hosting events.

Three events on Coronet Peak canned at the weekend because of the lack of snow are Mountain Bikes On Snow tomorrow and the Tararua Skin to the Summit and Firefighter Chill Factor Challenge on Sunday.

The popular street parade is on tomorrow followed by the McDonald's Teddy Bears' Picnic.

In the evening many will be glammed up for the burlesque-themed Deutz Masquerade ball while others will pack out the Ice Hockey as the Southern Stampede take on Dunedin Thunder.

On Sunday, the Day on the Bay events include the crazy Birdman, where dressed-up punters throw themselves into icy Wakatipu, and the "Hundy 500".

The festival has been running since 1975 and attracts about 30,000 people, bringing in $50 million to the Queenstown economy.

Queenstown feeling the pinch as snow stays away

23rd June 2011

Source: TVNZ

Organisers of the Queenstown Winter Festival are already counting the cost of a lack of snow two days out from the annual party.

Some festivities are being canned because of the conditions, and the forecast is not getting any better.

Frustration is growing among members of the ski industry as officials wait for enough snow to fall to open the fields.

And in Queenstown hundreds of food parcels are being handed out to help staff cope.

"We're doing our best as a company to ensure that we feed them lunches, dinner, we provide food parcels for them," NZ Ski chief executive James Coddington said.

Coronet Peak, The Remarkables and Mt Hutt planned to open earlier this month, but scientists say winter temperatures are staying unusually warm. Treble Cone near Lake Wanaka is also delaying opening.

And for a town that relies heavily on skiers, it is tough.

"It's very hard to put a dollar figure on it but certainly the skiers are a huge part of our winter season, we really do rely on them," Graham Budd from Destination Queenstown said.

Festival director Simon Green said events scheduled to take place on the mountains will have to be cancelled. It would be the first time in 37 years the ski fields would not be opened.

He said the 10-day event, to start on Friday, usually pumps up to $55 million into the local economy and the lack of snow isn't just concerning for the festival, but for the whole community.

Other skifields throughout the country were due to open this weekend, but most have had to delay.

Scientists say it is very unusual and it looks like the country could be following a record warm May with a near record high June.

"The last time we had a couple of months in a row that were actual all time records for the day was back in the 1930s," Niwa scientist James Renwick said.

"So it's a pretty rare event, maybe happens once every hundred years or so."

And to further challenge the skifields, it is not possible to make snow because of temperature inversion where it is actually colder on the ground than it is up the mountain.

"We're getting inversions of up to 10 degrees from the valley floor up to the top of the mountain," Coddington said.

Coddington told TV ONE's AMP Business this morning he didn't think the industry could have been given any more challenges, with the warm weather combining with continuing aftershocks in Christchurch and flight disruptions due to the Chilean ash cloud.

He said all the factors were out of their control and they just have to wait and hope the weather turns.

He said the delays were costing the industry millions of dollars a week.

"Every day we get closer to school holidays, it costs us more and more."

He said the Australian market, which makes up 60% of visitors, is crucial to the industry, but with Australian school holidays starting this weekend, things are looking uncertain.

"For us not to be open going into Australian school holidays is very significant financially."

Budd said they are "charging ahead" because 85% of the events are in and around town. And locals hope the celebrations might send the vibes to start the snow falling.

Property sales in south up but prices down

20th June 2011

Source: The Southland Times

The Southland real estate market has rebounded 18 per cent in the past year by sales volume, but prices are down and the number of properties on the market has spiralled, according to latest sales figures.

The realestate.co.nz report says the the 160 properties sold in May is up from the 131 sold a year ago – an increase of 18 per cent.

However, the average asking price in the south in May was $228,436 – down 8 per cent on a year ago, and that drop is mirrored in the median sales price of $180,500, down from $195,000.

The number of new listings in May was also down on last year with 272, down 19 per cent.

Meanwhile, the inventory of unsold homes in Southland sits at one of the highest levels recorded, with an average time on market of 50.2 weeks – up 24 per cent on a year ago, a strong indicator that it remains a buyer's market.

This is despite the 18 per cent lift in the number of properties sold.

However, in the Queenstown Lakes region the opposite holds true, with the region getting the results of stronger sales matched with lower levels of new listings leading to it being viewed as a seller's market, the report says.

In Queenstown, this potentially points to a caution over the state of the market with no significant inflation expectation among vendors new to the market.

Central Otago and Queenstown Lakes, and Otago were among five regions showing declines of more than 5 per cent in asking price at a 7.4 and 6.3 per cent reduction respectively.

Otago listings fell 25 per cent to the lowest level recorded in four years, edging to a turning point in the market with a closer balance between buyers and sellers.

The report is produced by industry website realestate.co.nz, run by the Real Estate Institute and six of the largest real estate companies, and gives insight into the state of the New Zealand property market as measured by the supply during the month of May. The key parameters 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 almost 95 per cent of all property movements in the New Zealand market as managed by licensed real estate agents.

The report says the prolonged sluggishness of new property listings, which has been evident for almost two years, has at last seen a tip in the balance of the property market from favouring buyers to favouring sellers.

"At least that is now being seen in two of the major markets around the country, Auckland and Queenstown Lakes," the report says.

The small real estate firm with the big reach - hoamz on TV!

17th June 2011

Source: hoamz.co.nz

Stepping outside the square is nothing new for market-leading independent real estate firm hoamz. They pride themselves on doing things just that little bit differently to offer a service that’s above and beyond the norm.

However their latest move even surprised the staff!

hoamzhave invested significantly to film a series of television ads to tell the world (well, New Zealand’s entire South Island at least) about the brand and the service and advice they can offer. Under the tagline ‘Lets be honest’ the ads offer a series of insights into what makes real estate tick. Set to run on TVNZ as part of an ongoing campaign, the ads are designed to introduce the brand and their professional services to areas outside their current geographical span of Queenstown and Invercargill, and make sure buyers from all over the South Island know which team to turn to for property advice in their specialist areas.

Why television advertising? ‘Simple’, said Managing Partner Fred Bramwell – ‘the cut-through of the ads reaches areas we’d struggle to target through the usual avenues of print media, radio and internet promotion. We offer superior service and advice to buyers and sellers, and want to make sure everyone’s aware of the hoamz way of conducting real estate business. For our property vendors it’s another way of cementing hoamz as the go-to company for Queenstown and Invercargill real estate, which means more buyers through our doors and better prices for them’.

The television campaign commences from mid-June and is anticipated to reach audiences of more than a quarter of a million people on a monthly basis.

Click here to view advert 1

Click here to view advert 2

Click here to view advert 3

The sale of a Queenstown icon – the clock is ticking…

17th June 2011

Source: hoamz.co.nz

Property doesn’t get much hotter than this! A trophy building in one of Queenstown’s most sought-after sites is up for grabs.

The Queenstown Clock Tower has provided locals and visitors with an easy meeting place for more than two decades, and features in promotional and holiday photos the world over. It’s a noted landmark and takes advantage of some of the highest foot and vehicle traffic the New Zealand resort town has to offer.

On the intersection of two of Queenstown’s busiest streets, the north-facing John Blair designed building has a distinctive alpine style and, according to real estate agency hoamz, excellent investment returns. Listing agent Fred Bramwell says ‘we’ve already had exceptional interest in the property before it even hit the market – it’s one of those buildings that everyone recognises and investors can see the potential at a glance.’ Bramwell claims the building lends itself to a flexible range of businesses including prime retail, food and beverage, plus offices and accommodation.

With 515sqm of leasable space, the building covers four rentable areas at street level plus first floor offices and the icing on the cake, an in-demand three bedroom apartment on the top floor. Long term tenancies show high returns to match the high-profile nature of the sale.

A big marketing campaign and the undeniably attractive nature of the building are set to make the next few weeks a busy time for the agents at hoamz!

Queenstown property pulse factsheet

17th June 2011

Queenstown Property Pulse factsheet – May 2011

The Queenstown Lakes district region property pulse factsheet for May 2011 is published using data from Realestate.co.nz and REINZ (Real Estate Institute of NZ).

Property sales across the Queenstown Lake and Central Otago region at 94 in the month fell on a seasonally adjusted basis in May but were up a significant 40% as compared to a year ago. The inventory of unsold houses on the market at 107 weeks fell to edge closer to the long-term average of 100 weeks of equivalent sales.

Median sales price of properties sold in the Queenstown Lakes and Central Otago region at $402,000 was down 7% as compared to a year ago, and down significantly on the prior month. The asking price expectation of new listings remained unchanged as compared to a year ago at $525,073.

The level of new listings coming onto the market in May at 259 rose fell significantly as compared to prior month and was up slightly by 2% as compared to a year ago.

Tenancies without tension – hoamz to rent come to Invercargill

14th June 2011

Source: hoamz

An exciting new offering for property investors and property renters is now available in Invercargill – hoamz to rent. With a catch-cry of ‘tenancies without tension’ the brand launched in Queenstown two years ago with a promise of exceeding expectations of both landlords and tenants. Having made good on this promise, they’ve turned their eyes to the south.

Following on from the hugely successful launch of the hoamz real estate division in August last year, the next step was to bring the powerful hoamz to rent business model to Southland. Having been in the planning stages since the start of the year, the company is delighted to be opening a rentals division in Invercargill. ‘It was a natural progression’ says Managing partner Fred Bramwell. ‘The launch of the real estate brand has been such a success, we decided to bring forward plans for the rental division as it’s something many of our investment buyers have been asking us for’.

The company have invested in a cutting-edge website along with use of all the busiest rental property portals and most popular print advertising to make sure tenants know they’re the place to go for rental property. Behind-the-scenes are software programmes designed specifically for property management to make sure owners receive the best reporting and communication possible.

Under the leadership of award-winning property manager and well-known Invercargill face, Paula New, the hoamz to rent team is off to a flying start. Paula brings with her a decade of property management experience, a wealth of skills and a commitment to growing hoamz to rent into the number one position in Invercargill rentals and property management.

New rules for apartment owners

14th June 2011

Source: Stuff Business Day

The Unit Titles Act doesn't sound like a particularly glamorous piece of legislation but it affects the lives of thousands of apartment owners around the country.

It governs the rules determining activities around apartments and flats where owners have property titles split into smaller individual lots.

The Act dates back to 1972 and since then the proliferation of large apartment blocks now commonplace in our major cities has led to a spate of joint ownership issues and stoushes between apartment owners and the body corporate companies that help maintain the buildings.

That's why the Act has been overhauled and a new version is coming into force next week [June 20].

In New Zealand there were about 18,000 unit title developments as of June 2010. Most are residential - apartment blocks, townhouses and flats.

The new Act, imaginatively entitled the Unit Titles Act 2010, will provide unit title developers and unit title owners with a "modern framework for the joint ownership and management of land, buildings and facilities on a socially and economically sustainable basis by communities of individual owners".

That's a bit of a mouthful, but essentially it aimed to deal with the particular challenges of developing and owning a unit title.

Unit titles by their very nature, as one of many, shared resources, access, and areas with lots of others. 

Owners in these developments have needs that are clearly different to a stand alone property owner.

Because of these joint ownership issues and the need to live alongside each other - and in some cases almost cheek by jowl - unit title properties and their owners need rules which spell out who is responsible for what, who pays what, and what to do if things go wrong.

For example, the act seeks to simplify the calculation of how much you - as an apartment owner - have to pay towards maintaining the building and states that the body corporate owns common property like hallways and lobby areas.

Robbie Muir, the register-general of land, said ownership and utility interests replace the old "unit entitlement calculation" which previously was used to figure out levies.

Under the old act levies were calculated based on the relative capital value of a unit with no opportunity to have your levies reassessed.

Under the new act you can have your apartment reassessed for levies any time you please, as long as three years have elapsed since the last reassessment, Muir said.

So if you are confused as to why you pay more than your neighbour for body corporate levies when your apartments are identical, perhaps it's time to ask for an assessment.

Another change in the act is aimed at the rules which govern body corporates, such as dropping voting thresholds.

There have been reports of body corporate stoushes as long as there have been unit title residential properties, but as apartment buildings have grown so have the issues related to their governance and management.

Central to these disputes has been entrenched body corporate secretaries charging fees and levies which apartment owners found too high or allegations of mismanagement and conflicts of interests with service providers.

Under the old act an incumbent body corporate secretary held the balance of power over apartment owners through body corporate rules (often written by the secretary) which were often well and truly stacked in their favour.

Now the requirement for a body corporate to have to unanimously agree for a resolution to do things like removing a body corporate secretary have been replaced with just a majority of apartment owners voting in favour, Muir said.

All body corporates have 15 months under their old rules before it becomes mandatory to adopt those required under the new Act, AUT property law expert Rod Thomas said.

"But I think it would be better for body corporates to adopt the new rules now."

He had concerns that while the old act was too inflexible in terms of governance and voting thresholds, the new act may have gone too far the other way.

"By a default provision under the new act you could get only ten people turning up at a meeting and 51 per cent of them voting to make changes," Thomas said.

The new act also allowed apartment owners, for the first time, to use the Tenancy Tribunal to settle disputes both with the body corporate, and with each other.

While this change had been welcomed, Thomas had a major issue with the price tag.

While a tenant can head to the tribunal for a nominal fee, filing a dispute related to a unit title could cost as much as $3300.

Thomas said the cost didn't compare favourably with other similar fees. For example, To file with the Disputes Tribunal costs about $100, the District Court $189 and the High Court $1124.

"The scale of these fees will amount to a denial of access to justice, to people simply seeking to sort out a disagreement with people in the flat next door, and are completely over the top,'' Thomas said.

Thinking about selling your apartment?

The Act brought in new disclosure rules for sellers, buyers, developers and bodies corporate.

Among the things sellers would need to disclose was the amount of the body corporate levies, the period covered by the levies, proposed levies for the next 12 months, proposed maintenance and costs for the next 12 months.

If your unit or common property has been subject to a leaky building claim or proceeding under the Watertight Homes Resolution Service you also have to disclose it.

Additional information is available on the Department of Building and Housing's website or Land Information New Zealand.

Check the changes out.

OCR unchanged at 2.5 percent

9th June 2011

Source: Reserve Bank of New Zealand

The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 2.5 percent.

Reserve Bank Governor Alan Bollard said:  “The outlook for the New Zealand economy has improved since the publication of the March Statement.

“Economic activity has been significantly disrupted by the Christchurch earthquake. However, while many firms and households – particularly within Canterbury – continue to be adversely affected, it appears the negative confidence effect of the earthquake on economic activity throughout the rest of the country has been limited.

“The early signs of recovery noted in the March Statement have continued. Despite some continuing signs of weakness in the world economy, commodity prices remain very strong and firms expect to increase their hiring and capital investment. Reconstruction in Canterbury is projected to add about 2 percentage points to GDP growth over 2012, and boost the level of activity for several years thereafter.

“Despite the strong outlook for export earnings, household expenditure is expected to grow only modestly. Household debt remains very high and is expected to constrain retail spending and the housing market for some time. Continued fiscal consolidation will also act to dampen activity.

“The New Zealand dollar has appreciated substantially over the past two months. This appreciation, supported by high export prices for primary producers, is negatively affecting other parts of the tradable sector, constraining rebalancing of the New Zealand economy.

“Headline inflation is currently being boosted by recent increases in indirect taxes, food and petrol prices, and surveyed expectations of future inflation have edged up. Despite this, indicators of capacity usage and core inflation suggest underlying inflation remains constrained.

“As GDP growth picks up, underlying inflation is expected to rise. A gradual increase in the OCR over the next two years will be required to offset this, such that CPI inflation tracks close to the midpoint of the target band over the latter part of the projection. The pace and timing of increases will be guided by the speed of recovery, but for now the OCR remains on hold.”

Floating mortgage rate rise on cards

7th June 2011

Source: Stuff Business Day

THE Reserve Bank will hold the official cash rate this week, but floating mortgage rates at their lowest levels since the early 1960s may not last many more months, economists say.

Some economists suggest the Reserve Bank will make its first move up on the OCR late this year, while others say that because of the still uncertain outlook, rates will be held till March next year.

The Reserve Bank's monetary policy statement will be issued on Thursday, including its first full set of forecasts since the Canterbury earthquake in February.

The central bank slashed the cash rate by 50 basis points in March to 2.5 per cent as an emergency measure after the quake.

Bank of New Zealand chief economist Tony Alexander said there were perhaps only six months left of floating mortgage rates at the lowest levels for four decades and then they would start rising.

Floating mortgage rates are as low as 5.6 per cent – levels last seen in 1964.

BNZ assumed the official cash rate would rise to 5.5 per cent in the middle of 2013 and that floating rates would peak at 8.6 per cent, about 300 points higher than they are now.

But shifting from a low floating rate now to one-year fixed would mean jumping up to about 6 per cent interest rates, with a three-year rate at about 7 per cent. Mr Alexander said that if he were a borrower, his inclination would be to stay floating but aim to fix before the end of the year.

A "key risk" to the economic outlook is the relentless strength of the New Zealand dollar, according to TD Securities head of research Annette Beacher.

The kiwi hit a post-float record above US82c last week and also hit 50 pence against the English pound, hurting exporters not selling high-priced commodities such as dairy products and meat.

ASB said the Reserve Bank was highly unlikely to intervene in currency markets, given that the rise was backed by strong commodity prices.

Ms Beacher said that while there had been a strong rebound in business confidence recently "there is no hard evidence that the recovery is on track and inflation forecasts are threatened to the upside".

While market pricing suggested a high probability of a move by December, the next move was more likely to be early next year, according to Ms Beacher, who is pencilling in a 25 basis point move in the March quarter.

ASB chief economist Nick Tuffley said the official cash rate would be held at 2.5 per cent till March next year.

While business confidence had improved and inflation pressures were creeping up, there was a large degree of uncertainty about the outlook, especially because of the big Canterbury earthquake.

Rebuilding preparations had yet to start in a meaningful way, with aftershocks still happening. A recent survey of architects suggested they did not expect rebuilding to begin until later in 2012, and that rebuilding work was a key plank in the wider economic recovery expected next year.

The Mix

What's good and bad in the economy?

The Good

Business confidence has bounced back strongly

Housing market is improving, at least in Auckland, which will support consumer confidence

Electronic card spending rose in March and April, despite high food and fuel prices

Tourism numbers bounced back in April

Commodity export prices remain high

The Bad

The Christchurch quake did billions of dollars of damage

The timing of the rebuilding effort is unclear

The record high New Zealand dollar is hurting exporters

Farmers remain cautious about spending

Global growth is uncertain, with high oil prices a worry

NZ property report

2nd June 2011

Source: realestate.co.nz

NZ Property Report – May 2011

The May 2011 NZ Property Report published by Realestate.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 May. 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 95% of all property movements in the NZ market as managed by licensed real estate agents.

A full print version of the NZ Property Report – May 2011 is published below and is available for download (1.0MB) and distribution.

Summary of the market – May 2011

The prolonged sluggishness of new property listings, which has been evident for nearly 2 years, has at last seen a tip in the balance of the property market from favouring buyers to favouring sellers. At least that is now being seen in two of the major markets around the country – Auckland and Queenstown lakes.

The Auckland market which saw strong late summer property sales has now as a consequence of these sales matched to the slow flow of new listings, seen inventory levels below long term average. At the end of May the inventory of unsold houses on the market fell to 30 weeks as compared to the long term average of 34 weeks. The last time this level was seen was at the end of 2009.

The asking price expectation of the new listings coming onto the market in May fell back from the peak seen in April. Historically there is always an adjustment seen at this time of year. The seasonally adjusted asking price fell 2% nationally and that was reflected right across the regions indicating that the market still senses no significant property price inflation as yet with new-to-the-market vendors pricing to attract buyers who are still small in number across the regions.

Asking Price

The truncated mean asking price for all new listings in May fell significantly from $429,249 in April to $414,308 in May. On a seasonally adjusted basis the asking price fell just 2% in the month indicating a degree of uncertainty amongst sellers.

The overall trend of the past 2 years continues to show strength in asking price expectation.

New Listings

The level of new listings coming onto the market in May fell to 9,898. This represented a 16% year on year decline but a 1% seasonally adjusted rise from April.

On a 12 month moving basis the number of new listings in the past year totals 127,843 as compared 144,375 for the same period a year ago – a fall of 12%.

Inventory

The level of unsold houses on the market at the end of May continued to fall from prior months. May reported 48,352 down from 50,398 in April and 51,980 in March.

The recent relative strength of sales as seen in March and April has now stared to see a clearing of what has been a high level of unsold houses on the market over the past 18 months. Heading into Winter, a time of traditionally weaker listing will likely see this inventory level fall further in coming months.

Regional Summary – Asking price expectations

After reaching a new peak of asking price in April the national asking price for new listings fell in May. This fall was reflected around the regions with 12 regions reporting falls and just 7 showing any increase. There is seasonal trend behind this which sees the asking prices for May fall significantly as compared to April, likely as a result of the market entering the winter period.

There were 5 regions showing declines of more than 5% in asking price with both Wellington and Queenstown Lakes among them, both of these regions are also showing low levels of inventory. This potentially points to a caution over the state of the market with no significant inflation expectation amongst vendors, new to the market.

Regional Summary – Listings

The continuing trend of new listings as has been the case for over a year is decline in number. Again the chart by region shows a overall trend towards a sellers market with only Marlborough and Central North Island bucking the trend to show year-on-year increases in listings.

Two regions in May recorded the lowest level of monthly listings stretching back 4 years – Northland and Otago.

The level of new listings in the Canterbury region continues to remain weak as a result of the earthquake. In May 1,188 new listings came onto the market, down 29% as compared to last year. Comparing the first 5 months of 2011 with 2010 the number of new listings in the region has fallen from 8,972 to 5,736 a fall of 36%.

Regional Summary – Inventory

The levels of inventory of unsold homes on the market changed markedly in May. For more than a year the predominant view has been that the property market is firmly stuck in a buyer’s market with inventory levels well above long term averages.

Starting in March and now accelerating through May the key markets of Auckland and now Queenstown Lakes are seeing the results of stronger sales matched with lower levels of new listings leading to these two markets now being viewed as seller’s markets.

Not far behind the regions of Otago, West Coast, Waikato and Bay of Plenty are edging to a turning point in the market with more balance between buyers and sellers.

That still leaves the remainder of provincial NZ firmly in a strong buyers market with 11 regions seeing existing inventory well above long term average.

Lifestyle

The level of new listings of lifestyle property coming onto the market in May fell by 12% on a seasonally adjusted basis from April. A total of just 844 new properties were listed with a truncated mean asking price of $567,575. The asking price was up 2% as compared to the recent 3 month average, and up 12% as compared to prior year.

On a rolling 12 month average basis new listings are down 8.6% with 11,462 listed in the past 12 months compared to 12,546 last year.

Apartments

Listings of apartments showed a 17% decline on a seasonally adjusted basis as compared to April with 406 new apartments coming onto the market. The truncated mean asking price for these new listings was $369,834, which was down 3.0% on the recent 3 month average, and down 2.1% as compared to May 2010.

In the Auckland apartment market which represents over 60% of the market there were 267 new listings with an asking price of $328,326. The new listings shows a decline of 20% on a seasonally adjusted basis, and a 27% decline when judged on a year-on-year basis.

Property Price Index

Comparing the sale price of properties across the country to the asking price expectation is not a perfect comparison; however the trends tend to align. The benefit is that the data for asking price is of the market today, whilst the selling price is reflective of the market active between 4 and 6 weeks ago. The latest comparison is highlighted below:

Realestate.co.nz data is compiled from asking prices of new residential listings as they come onto the market via subscribers to the realestate.co.nz website. The Realestate.co.nz website currently has over 95% of all licensed real estate offices subscribing and providing all of their listings onto the website. The asking price is presented as a truncated mean price at a 10% interval.

REINZ data is compiled from reported unconditional residential sales from all members of the Real Estate Institute of New Zealand representing all licensed real estate offices. The sale price is published as a stratified median house price and is developed in association with the Reserve Bank of NZ.

Fewer houses up for sale

2nd June 2011

Source:Stuff Business Day

Auckland and Queenstown are now being viewed as sellers' markets for housing, as stronger sales combine with lower levels of new listings, the realestate.co.nz website says.

"The prolonged sluggishness of new property listings, which has been evident for nearly 2 years, has at last seen a tip in the balance of the property market from favouring buyers to favouring sellers," the website said in its latest NZ Property Report, published today.

Nationwide new listings were down 3 percent from April and 16 percent from a year earlier to 9898 in May, although on a seasonally adjusted basis there was a 1 percent rise from April to May.

On a 12 month moving basis the number of new listings in the past year of 127,843 is down 12 percent from a year earlier.

The inventory of unsold homes was down 12 percent from April and 1 percent from a year earlier to 47 weeks in May.

With the relative strength of sales in March and April, a clearance was starting to be seen of what had been a high level of unsold houses on the market in the past 18 months, realestate.co.nz.

The truncated mean asking price fell 4 percent from a month earlier to $414,308 last month, although seasonally adjusted the fall was 2 percent. That indicated a degree of uncertainty among sellers.

In Auckland, the number of new listings was up 3 percent from April but down 11 percent from a year earlier at 3417, while the inventory was down 11 percent from April and down 20 percent from May 2010 to 30.6 weeks.

New listings in Canterbury remained weak following the February earthquake, with 1188 new listings in May, down 29 percent from a year earlier.

ASB economist Christina Leung said that while new house listings looked to be slowly coming onto the market, the improvement in housing turnover meant the total level of housing inventory remained contained. As a result, house prices continued to hold up reasonably well.

Properties in New Zealand bigger

30th May 2011

Source: Property Wire

The average size of a new property in New Zealand has been getting bigger as more detached homes with more bedrooms were built in recent decades, new research shows.

The size of properties has soared over the last 30 years, but the rate of growth is slowing as home owners are now faced with increased building costs.
 
Latest research from Quotable Value puts the average size of a home built since 2010 at 205 square metres compared with 142.4 square metres in 1980.
 
Quotable Value research director Jonno Ingerson said much of the increase could be put down to a rise in the construction of four bedroom homes, particularly during the last 20 years.
 
The research shows that since 2000 more houses have been built with four bedrooms than three for the first time. Five bedroom homes have also increased from 3% up to 11% per cent.

It also found that four bedroom homes currently account for about half of all new builds in New Zealand and ensuite bathrooms and extra living areas have been high on the wish list for many people.
Many modern houses also tend to have garages under the main roof, and where this is the case they also count as part of the floor area of a house.

The research shows house sizes were relatively stable until the 1930s and 1940s, when the depression and war led to smaller homes being built. Since the 1950s house sizes have steadily increased, with the rate of growth accelerating between 1980 and 2010.

However, significant increases in the cost of building in recent years meant the rate of growth was now slowing, suggesting homes may not get much larger.

‘There is also a push by some of the larger city councils to encourage medium density housing in fringe city suburbs. This type of housing will have smaller floor areas than the traditional suburban family homes that have been built over the last 20 years,’ said Ingerson.
 
The director of Massey University's real estate analysis unit, professor Bob Hargreaves, said there was also evidence that the McMansion type of house was becoming more difficult to sell, and more expensive to heat.
 
‘My feeling is that house sizes will start to level off and may fall in some areas as builders are faced with affordability issues for the end user when building costs are set to increase quite substantially,’ he added.

Qtown Trenz pays real dividends: tourism boss

26th May 2011

Source: The Southland Times

Staging New Zealand's largest tourism trade event in Queenstown again is definitely an option, says the Tourism Industry Association.

The TIA-run Tourism Rendezvous New Zealand expo wrapped last night after four days of multimillion-dollar trade deals between about 300 New Zealand exhibitors and 280 international buyers.

About 900 delegates packed into a large marquee inter-connecting with Tatler, Ballarat and Winnies bars in Queenstown Mall last night for a massive farewell street party. Tickets were sold out for the event, which was filled to capacity for the party. Delegates were then expected to spill over into the resort's other bars and nightclubs to socialise into the wee small hours.

Association chief executive Tim Cossar said the decision to hold Trenz in Queenstown was a major change.

Favourable weather meant 40 tourism operators were able to show 700 delegates what the region offered on Tuesday, he said.

"We decided to stand alone and do something very different in Queenstown and that has paid real dividends."

Booths at the Queenstown Event Centre were significantly smaller than previous Trenz venues but more buyers were interested in this year's expo than previous events, he said.

He said some exhibitors wanted more space but the venue otherwise worked well.

The schedule over four days included 35,000 15-minute appointments between buyers and sellers.

Queenstown as a Trenz venue exceeded expectations, Mr Cossar said.

"We're reluctant to say what we are going to do in 2012 but with the feedback we are getting Queenstown is certainly going to be a very big part of our future thinking. It's clearly a place where we can deliver. There's a really strong vibe," he said.

The Trenz guest speaker was Prime Minister and Tourism Minister John Key, who met a Japanese tourism industry delegation yesterday.

Organised by Tourism New Zealand and Air New Zealand, the trip by a 12-strong Japanese Association of Travel Agents delegation aimed to rejuvenate outbound tourism from Japan after the earthquake and tsunami in March.

Air New Zealand deputy chief executive Norm Thompson said the visit showed commitment to Japanese tourism in New Zealand.

"This is an extraordinary opportunity to really showcase our beautiful country and represents a huge opportunity for growth of Japanese tourism."

Earlier this week Air New Zealand announced increased capacity on its Auckland to Tokyo and Auckland to Osaka routes.

The Japanese delegation itinerary included visits to the Skyline Gondola, Millbrook Resort, Matakauri Lodge and Amisfield Winery.

MP Bill says Queenstown broadband benefits are coming

25th May 2011

Source: Scene.co.nz

Queenstown businesses, schools and health providers plus consumers will benefit from the introduction of ultra-fast broadband, announced today (Tuesday).

The Government’s Crown Fibre Holdings will roll out the eight-year programme in a deal with Telecom, local MP Bill English – also the deputy prime minister - says.

Six Queenstown schools, 30 healthcare providers and 570 local businesses will be connected between August this year and May 2019, as part of the Government’s $1.5 billion ultra-fast broadband initiative.

Internet speeds will be up to 10 times faster than current broadband speeds.

“Professions like accountants, lawyers and advisors will be able to offer their services from the comfort of their homes,” English says.

“Queenstown’s children will benefit from shared resources like physics and IT teachers.”

Ultra-fast broadband would also help universities provide extramural studies.

English also spells out benefits for health consumers: “There’ll be a greater ability to engage with specialists remotely, either at home or at a GP clinic, without having to travel to the main centres.”

Where's the snow?

25th May 2011

Source: The Southland Times

With Queenstown's Winter Festival fast approaching and tickets selling like hot cakes, the lack of snow has become a burning question.

Only a month out from the festival's kickoff on June 24, Coronet Peak, the base of many Winter Festival activities, displays a scarce amount of white gold.

But festival director Simon Green has been in the game long enough to know that you just wait for the snow to arrive.

When asked whether the warmer weather during the past few days was a worry, he said it meant colder weather would follow straight after, so he was not fazed.

The latest snow-making generators did not need much cold weather to allow Coronet Peak to open, but conditions still had to be right.

He still had a few weeks before he would start to worry, he said.

In 2007, he faced the opposite problem when there was so much snow around Queenstown that the opening party was cancelled for safety reasons.

The last snowfall reported at Coronet Peak was a depth of 1cm on May 18. The NZSki website updated yesterday that they would turn on their automated snowmaking system to full auto this weekend and would make snow as conditions allowed.

Ticket sales for the festival, now in its 37th year, were going well and some events were close to selling out.

Perennial favourites such as the Birdman competition and the Undy 500 will join other festivities such as the Thriller in the Chiller charity boxing match and a comedy gala featuring the cast of popular television show 7 Days.

Last year 30,000 visitors were believed to have taken part in festival events, while tourists in the area during the 10-day party spent almost $58 million.

The festival was ranked in the top-10 must-see festivals across the globe by a major Australian website in 2010, beating out serious contenders such as the New Orleans Jazz Festival, Oktoberfest and Pamplona's Running of the Bulls.

This year's festival will run until July 3.

The Banks want to lend you More Money

24th May 2011

More visitors expected from China

24th May 2011

Source: Otago Daily Times

Menus in Mandarin, staff learning phrases, adding congee (rice porridge) to breakfast buffets and maintaining "good old southern friendliness and smiles", were some of the tips offered to about 150 Queenstown tourism operators looking for a share of the booming Chinese market.

Destination Queenstown organised a China Forum, in the Crowne Plaza hotel, on Friday, in response to members' interest in what is expected to become the world's largest tourism market in 10 years and New Zealand's largest long-haul market in the next few years.

Members heard Chinese tourists were expected to extend their average two-day stay in Queenstown to three days or more, due to the aftermath of the Christchurch earthquakes. Wakatipu imagery continued to be used extensively in Chinese travel advertising and New Zealand had a very good word-of-mouth reputation in China.

Casinos, pubs, nightlife, activities and scenery were said to be in Queenstown's favour. Chinese had an appetite for local social, ecological and historical stories and Arrowtown had its Chinese gold-mining heritage attraction.

Shopping, personal connections and Western cuisine were sought after by Chinese, who were more likely to have a grasp of English the younger they were, and enjoyed the fellowship of travelling in small groups.

Tourism New Zealand (TNZ) Asia-Japan general manager Mark Frood, on Skype, said TNZ was developing the free independent traveller market in China, helped by Immigration New Zealand speeding up the processing of individual visa applications in Shanghai.

The organisations would update travel traders during a roadshow in late June or July, which would also relay survey results of Chinese likes and dislikes regarding New Zealand.

Mr Ireland said the 14 direct flights a week by China Southern Airlines and Air New Zealand, by August this year, meant "big capacity and big potential."

DQ convention bureau manager Kylie Brittain said the meetings, incentives, conferences and exhibitions market had huge potential for New Zealand. Dual-destination trips would increase - Auckland for business, Queenstown for fun.

Education was another lucrative market, with 4500 educational visas granted for Chinese to travel to New Zealand each year and an average of 21,000 Chinese studying in the country at any one time.

Mr Ireland said the average middle-aged Chinese was not overly adventurous and preferred softer activities, but "anything goes" for younger generations, keen to spend their money.

Auckland International Airport aeronautical business development general manager Glenn Wedlock said a trip to New Zealand was more expensive for Chinese than a trip to Australia, so affluent travellers were visiting Queenstown.

Chinese were always looking for the best of everything and networking was held in high regard. Chinese had a culture of buying gifts for family and friends and Australian data showed they spent more on shopping to take home than anything else.

THE CHINA SYNDROME
• China replaced the United States as New Zealand's second-largest export market, at $US2.66 billion.
• 57 million outbound trips by Chinese in 2010. New Zealand has 0.2% of current market.
• One in every 175 people in Shanghai has personal wealth of $US1.5 million.
• 30% luxury goods sales in London made to Chinese travellers.
• Meetings, incentives, conferences and exhibitions (mice) market increasing 20% every year since 2004 and accounted for 39.9% of total travel in 2010.
• 38.5% of mice travel is for conferences and 34.6% is for incentives.
• 13.6% of mice to New Zealand and Australia in the past two years.
• Queenstown receives 15% of Chinese visitors to New Zealand.

Buying at auction

23rd May 2011

Some great information from realestate.co.nz on buying a property at auction. What to do and what to avoid - call the specialised hoamz auctioneering team on 03 441 8858 for Queenstown or 03 214 6269 for Invercargill for more information.

Auction video

Big-money deals in Qtown

23rd May 2011

Source: The Southland Times

Millions of dollars of crucial trade deals will be made in Queenstown during the next few days as 300 New Zealand tourism exhibitors vie for business from 300 of the world's leading travel buyers.

Trenz, the country's largest and most important tourism event, is being held in the resort for the first time, with business deals to be struck in 300 schist stone-lined booths – the North Island taking over the Queenstown Events Centre indoor venue and the South Island spread across a giant 2200 square metre marquee set up in the centre's car park.

Operators pay an average $4000 for a small booth space, with larger corporates such as Air New Zealand, Qantas and Tourism New Zealand taking larger centre stage space. Exhibitors spent yesterday afternoon setting up their eye-catching displays in an effort to woo business from the high-powered buyers.

New Zealand Tourism Industry Association chief executive Tim Cossar said most exhibitors will jam pack 55 separate 15-minute appointments with buyers into the next two and a half days, leaving a half day on Tuesday for familiarisation trips around the wider Southern Lakes taking in Queenstown and Wanaka attractions as well as Milford Sound. Hang-gliding from the Remarkables was already proving popular with many of the 1000 delegates.

"We're doing things differently this year, because it's Queenstown – we wanted delegates to get out and do a meet and greet throughout the Southern Lakes."Guest speakers will kick off each morning covering everything from the impact of social media as a marketing tool to cultural awareness in emerging markets.

Specially-designed flax weaves and ferns were in place yesterday while Flying Trestles catering company prepared to feed the 1000 people.

Overseas buyers, particularly from Asia, were already gobsmacked with the southern scenery after Air New Zealand pilots flew special diverts to circle a snow-capped sparkling Mt Cook in clear skies on Saturday and Sunday.

Passengers were scrambling from their seats for better views of the lakes and mountains.

And after the negotiating is over there will be a huge street party in downtown Queenstown on Wednesday evening so the delegates can spill from a series of marquees into downtown restaurants and bars.

Asian opportunities

23rd May 2011

Source: The Southland Times

The New Zealand tourism industry is facing significant challenges at present, but at the same time there are some enormous opportunities, Tourism New Zealand chief executive Kevin Bowler said in Queenstown yesterday.

The industry was still emerging from the global financial crisis, which had particularly affected markets, such as North America, the United Kingdom and Japan, then the Christchurch earthquake and Japanese tsunami dealt a further blow. Mr Bowler said the industry was focusing on the positives ahead.

"We're part of the Asian marketplace and no doubt that's an economic strength. Asia will be a big feature of tourism business in this and all parts of the world."

Strong growth out of emerging markets, such as China, and a resurgence from Korea and southeast Asia, including India, would buoy tourism spirits.

Queenstown had been quick to capitalise on opportunities presented by the Indian market and Mr Bowler said he expected it would follow suit taking advantage of the massive growth anticipated from China.

Operators needed to be aware of the different distribution channels, language, service expectations and food in these emerging markets.

"There's a whole raft to learn – it's not a lot different to seeing our first Japanese tourists years ago."

Chinese visitors to New Zealand had been up by 30 per cent, and Koreans a similar amount, just before the Christchurch earthquake hit. Malaysian visitors were up almost 100 per cent last month compared with April last year.

Expanding Asian air links between Kuala Lumpar and Christchurch, Singapore and Auckland and Guangzhou had placed New Zealand at the "confluence of great economic growth".

Other saviours would include the Rugby World Cup and an influx in November of 500 of America's most influential travel writers for their annual conference.

"Nine out of 10 of them will be doing `famils' (tourism familiarisations) and first to sell out was Milford Sound."

While the rest of the South Island may have been benefiting as Christchurch had less accommodation after the earthquake, it was important to get an accurate message out that the airport and much of the city, such as the Antarctic Centre and nearby Akaroa was unaffected.

"We're trying to keep that balance ... while being careful not to oversell it."

It could be later in the year before the Japanese started travelling again, as there was a cultural preference not to travel while others were suffering, Mr Bowler said.

It appeared some Queenslanders may also be holding back on travel plans as they rebuilt their lives after serious flooding earlier in the year.

However, a very strong Australian dollar meant their spending power here was "extraordinarily good".

Despite this Australian ski wholesalers were noticing a later booking pattern this year.

"We're optimistic they're travelling independently and just not booking packages.

"Snow is the main priority for us at this stage."

Mr Bowler met NZSki chief executive James Coddington yesterday to discuss this year's ski booking trends.

Prime Minister and Tourism Minister John Key would be in Queenstown to address delegates on Wednesday and Mr Bowler would be travelling to India with Mr Key as part of a trade and tourism delegation next month.

The Government has allocated $84 million of baseline funding to tourism for the next financial year in last week's Budget.

Airport payout for Queenstown

23rd May 2011

Source: The Southland Times

The Wakatipu community is set to receive a pay-out of $1.5 million-plus next year from Queenstown Airport Corporation.

Queenstown Lakes District Council has today (Friday) released details of its annual dividend policy for airport shareholders – QLDC and Auckland International Airport Ltd.

Under the policy, QLDC – as 75.1 per cent shareholder – stands to receive $1.5m each year as a fixed amount, plus 75.1 per cent of a variable component according to the level of QAC’s profitability. Auckland Airport, as a 24.99 per cent shareholder, gets $500,000, plus 24.99 per cent of the variable amount.

The variable dividend will be 50 per cent of any net profit after tax above $2m, QLDC regulatory and corporate services manager Roger Taylor explains.

“So if the profit after tax in any given year was $6m, then there would be a $2m base dividend,” he says.

“The variable component would be half of the amount between the actual profit of $6m and the base of $2m – that’s $4m – so half of that is $2m.”

For the year ended June 2012, the forecast net profit after tax is just over $5m, climbing to just over $6m in June 2012, and in June 2014 up to $7.5m.

QAC’s total debt forecast at June 2012 is $29m, peaking at $37m in 2014 and then reduces, while assets increase to $195m.

The dividend arrangement – sparked after Auckland Airport bought its shareholding in secret for $27.7m in June last year – is the first time the community will receive a pay-out.

“Previously the profits from QAC were retained in the company to fund the ongoing development,” Taylor says.

Further development is able to be paid for thanks to Auckland Airport’s buy-in.

It’s unclear what the money will be spent on for the community – there’ll be public workshops to discuss options in the near future.

Hilton enters New Zealand's South Island

23rd May 2011

Hilton marked its entry into New Zealand's South Island with the opening of Hilton Queenstown.

The opulent 178-room Hilton Queenstown features the first New Zealand location of eforea: spa at Hilton, the rapidly growing global spa introduced by Hilton Hotels & Resorts in late 2010. Hilton Queenstown joins the 98-room boutique Kawarau Hotel, managed by Hilton in the Hilton Worldwide-managed Kawarau Village retail and dining precinct set within the year-round international resort town.

 "We identified Queenstown as a strategically significant location for Hilton Worldwide and feel this project represents a development of the highest quality and world-class design. In addition to our award winning properties in key gateway cities such as Auckland and Taupo, this development will form an essential part of our growing network of hotels in New Zealand," said Martin Rinck, area president, Hilton Worldwide, Asia Pacific.

The newly-built properties will be two of the most anticipated hotel openings in New Zealand this year. The exceptionally designed hotels are the only ones in Queenstown positioned directly on the shores of Lake Wakatipu. Both Hilton Queenstown and Kawarau Hotel managed by Hilton deliver glorious views of the lake or surrounding mountains, including the landmark The Remarkables Mountain Range. 

Each Hilton Queenstown guestroom includes Schist fireplaces, floor-to-ceiling window, a separate lounge area and private balcony or deck. There are 12 Relaxation Rooms featuring hot tubs on private lakefront decks, and 18 one bedroom Suites. Pieces of art by New Zealand artists on display throughout the hotel evoke the spirit of local culture.

Hilton Queenstown offers four dining options; Signature restaurant the Wakatipu Grill, overlooking the lake and helmed by renowned Chef Peter Thornley  features  the drama of an open kitchen and rotisserie,  two magnificent circular fireplaces and outdoor fire pit.  Cru Wine Bar & Lounge is an iconic destination for après-ski or an intimate evening. Beyond the hotel, Kawarau Village boasts restaurants, cafes, bars and specialty stores at your doorstep and is where you will find the hotel's The Lake Counter (specialty grocer, café and deli) and Stacks Pub.

"The expansion of our brand and continued growth of Hilton Worldwide in Australasia now brings a world class Hilton hotel and our innovative eforea: spa at Hilton concept to vacationers exploring New Zealand's South Island. We continue to set the standard through thoughtful design, signature amenities and our authentic Hilton hospitality," said Dave Horton, global head, Hilton Hotels & Resorts.

Part of the central Otago region, Queenstown is known for its majestic alpine setting and is recognized as one of New Zealand's premier domestic and international leisure destinations. A center for adventure tourism, it boasts a vibrant nightlife and an exciting food and wine scene. Queenstown is also rapidly gaining popularity as a destination for luxury travelers and honeymooners. Four world-class golf courses and five ski fields are in close proximity.

General manager Hilton Queenstown, Kawarau Hotel Managed by Hilton, and the Kawarau Village, Marlene Poynder, said: "Our properties' incredible location in the Kawarau Village will add a new and exciting dimension to the South Island hotel offering. The irresistible style, sophistication and comfort of Hilton combined with the iconic beauty of Queenstown is unsurpassable."

Trenz show critical for competition

23rd May 2011

Source: Otago Daily Times

Tough markets challenging New Zealand tourism operators make the Tourism Rendezvous New Zealand (Trenz) especially important, the manager of the trade show says.

On the eve of the most significant and lucrative annual international trade event on the New Zealand tourism industry calendar, Tourism Industry Association (TIA) chief executive Tim Cossar said Trenz this year was even more critical, in terms of the opportunities for domestic operators to promote products to more than 300 influential international travel buyers and media.

The four-day event, being held in Queenstown for the first time, begins tomorrow. It has attracted 292 travel and tourism buyers from all over the world and 280 New Zealand exhibitors, including about 50 Southern Lakes tourism operators. About 60 national and international media representatives are attending.

Exhibitors are based in the Queenstown Events Centre and in an adjacent 900-person marquee.

Mr Cossar told the Otago Daily Times the converging series of national and international natural disasters in the past few months had created "very big tests" for New Zealand tourism. Yet tourism had the Sars virus and bird flu emergencies thrown at it in the past and survived, he said.

Mr Cossar said the fundamental reason why Trenz chose Queenstown, instead of traditional venues in Auckland, Rotorua or Christchurch, was to stand alone from Trenz' usual partner event, the Australian Tourism Exchange.

"We've certainly got more buyers registered than we did last year, which is encouraging, and certainly there hasn't been a lack of visitor interest."

The Southern Lakes venue also enabled travel buyers and media to experience many tourism products first-hand. Windows in the programme allowed for familiarisations, he said.

Prime Minister and Tourism Minister John Key was scheduled speak to media at the show on Wednesday.

When asked if the TIA would take the opportunity to urge Mr Key to help the industry in this election year, Mr Cossar said the association was working on its election manifesto, to be released before the poll on November 26.

"One of the key things the industry would generally get in behind is that Tourism New Zealand funding needs to be retained in a time when market forces are so competitive," Mr Cossar said.

Queenstown Lakes Property Pulse factsheet – April 2011

20th May 2011

The Queenstown Lakes district region property pulse factsheet for April 2011 is published using data from Realestate.co.nz and REINZ (Real Estate Institute of NZ).

Property sales across the Queenstown Lake and Central Otago region at 106 in the month rose significantly on a seasonally adjusted basis in April and were up 6% as compared to a year ago. The inventory of unsold houses on the market at 143 weeks fell to remain well above the long-term average of 100 weeks of equivalent sales.

Median sales price of properties sold in the Queenstown Lakes and Central Otago region at $479,000 was up 12% as compared to a year ago, and up on the prior month. The asking price expectation of new listings rose by 7% as compared to a year ago at $563,685.

The level of new listings coming onto the market in April at 505 rose significantly as compared to prior month and was up 104% as compared to a year ago.

Queenstown’s 2011 Budget commentary

20th May 2011

Source: Scene.co.nz

WHK Queenstown’s senior tax specialist Wendy Duncan, who has previously worked in Treasury, sheds some light on Budget 2011 for Queenstowners

After the usual pre-budget comments, our expectations for an interesting 2011 budget were not high, and we were not disappointed. Despite the fact the election year budgets are traditionally a “lolly scramble”, the 2011 budget lived up to its billing of fiscal prudence.

For Queenstown, the two critical areas of the budget were undoubtedly the signalled changes to Kiwisaver and Working For Families.

The Kiwisaver Regime on first brush seemed to get off lightly with both the expected scrapping of the $20 per week contribution being softened to a reduction to $10 (from July 1, 2011), and the maintenance of the $1000 kick-start.

However, the removal of the Employer Superannuation Contribution Tax exemption for the minimum contributions (currently two per cent) from April 1, 2012 means that not all of your employer contributions will arrive in your Kiwisaver accounts. Rather, some will be diverted as tax, the degree depending on your marginal tax rate (up to 33 per cent). This means the two per cent employer contribution could become as low as 1.34 per cent in reality. The expected increase in the minimum contribution rate to three per cent has been deferred until 2013.

Changes to Working for Families Tax Credits were in line with expectations – a very minor change in the threshold (now $35,000) and a quicker abatement rate (25 per cent, rather than 20 per cent, for every dollar of income), meaning that higher income persons will receive either less, or no, WFFTC.

Finally, pre-budget there was some urban-driven chatter around farmers, their level of tax payments and tax avoidance. This was, in my opinion, a lot of hot air over nothing, although Peter Dunne did indicate today that there would be a review of some tax matters affecting farmers such as livestock valuation schemes and the taxation of mix-use (private/business) assets. This will happen over the next year.

All in all, not a lot to get excited about. Bring on the Rugby World Cup.

Budget 2011: What the budget means for borrowers, savers and home owners

20th May 2011

Source: Bernard Hickey - interest.co.nz

So what does Budget 2011 mean for borrowers, savers, KiwiSavers and home owners?

Budget 2011 doesn't contain the same major taxation reform seen in Budget 2010. Last year income taxes were lowered, the GST rate was increased and changes were made to taxation rules for property investors.

This year's budget contains more tinkering than reform.

It contains a few tweaks to the tax rules for KiwiSavers and student loan borrowers. See Alex Tarrant's article with details of the KiwiSaver changes.

It also makes some marginal changes for Working For Families that actually increases payments for those on lower incomes but 7,000 families will see their payments cut. See Alex Tarrant's article with more detail on Working for Families changes.

The biggest impact over the longer term will come from much stronger economic growth will be on interest rates and on house prices.

The government is forecasting economic growth of 4.0% in 2012/13 and a rise in the 90 day bill rate to 5% from under 3% now.

That implies floating mortgage rates of around 8% by then.

The risk, however, is that economic growth is lower than the Treasury has forecast.

If growth is lower than is forecast then the budget deficit and borrowing will be higher than expected.

Standard and Poor's commented after the budget that it wouldn't change New Zealand's current AA+ rating with a negative outlook, as long as the outlook for borrowing and the deficit did not worsen.

If it does worsen this will increase the cost of borrowing for New Zealand through higher long term interest rates.

The problem for homeowners and borrowers is that interest rates have fallen as far as they will. If they do fall further, it's because the economy is in dire straights and unemployment is rising. That will also suppress demand and prices in the housing market.

The surge in activity in central Auckland in March was sparked by the March 10 cut in the Official Cash Rate after the February 22 earthquake.

Economists expect the Reserve Bank to begin reversing that cut from December or early in 2012.

That is what will hold back the housing market -- the likelihood of future interest rate increases.

More savings options

Meanwhile, the government also announced details of its plans to part privatise the big four state owned energy companies (Mighty River Power, Genesis Energy, Meridian Energy and Solid Energy) and sell down its Air New Zealand stake. 

It hopes to sell these stakes to raise NZ$5-7 billion over 3 to 5 years from 2012 through initial public offerings on the NZX. It aims to give fund managers and individuals more options for savings.

Also, the government plans to offer Earthquake Kiwi Bonds to help build a NZ$5.5 billion earlthquake fund. These will be available for individual investors and offer similar rates to wholesale rates, initially around 4%.

My view

My view is this budget does nothing to fix the government's structural deficit and eventually it will have to cut spending harder and tax more to ensure New Zealand's foreign borrowing is bought under control.

Hilton provides boost for Queenstown

20th May 2011

Source: Newstalk ZB

A boost for Queenstown as the Hilton Hotel group opens its first South Island venture.

The Hilton group has taken over the failed billion dollar Kawarau Falls luxury resort complex close to Queenstown Airport, on the shores of Lake Wakatipu.

Complex general manager Marlene Poynder says the Hilton brand will add more marketing value to Queenstown.

"Because we are being promoted globally as a new opening hotel, the focus globally will be on the resort destination of Queenstown as well as of course our Hilton branded products."

About 130 are employed at the complex and are mainly locals. That number will increase in peak season.

Queenstown skifields welcome new snow

18th May 2011

Source: Otago Daily Times

The Remarkables skifield was freshened with up to 10cm of snow on Sunday night, ski area manager Ross Lawrence said yesterday.

"It's good to see a turn for winter here and it is always expected to be coming on this time of year," Mr Lawrence said.

The light and dry snow was very much wind-affected and the wind was gusty yesterday.

The ground was cooling, gullies were filling, but there was no snow on the ridgeline yet.

Mr Lawrence said trail development and snow-making system installation on the skifield were completed in good time over summer.

The 2011 season at the Remarkables opens on June 18 and at Coronet Peak on June 4.

"The snow's a good reminder of winter's coming and we're ready for it," he said.

Coronet Peak ski area received 4cm over the weekend, with more snow and a cold snap forecast over the next two days.

The snowfall and cooler air temperatures combined to help cool the ground and make for good snow-making conditions.

Ski area manager Hamish McCrostie said if the weather pattern continued, the snow-making system would be switched to "full automatic" this weekend.

"This weather is perfect timing for us and it's fantastic if we can get our snow-making systems blasting out the white stuff two weeks from opening day.

"We've finished off the work on our new trails, our staff are on board and all we're waiting for are our first skiers and snowboarders and we're under way."

Queenstown has big chunk of incentive market

13th May 2011

Source: The Southland Times

Queenstown is cleaning up in the lucrative New Zealand incentive market stakes, taking the lion's share of the market and outstripping even Auckland for multi-day incentive events.

The latest Conventions Activity Survey shows that for the year ending March 2011, Queenstown hosted 43 per cent of the country's "delegate days" recorded for multi-day incentive holiday events.

Auckland, the next-highest destination and often a major stopover for incentive market groups, took only 22 per cent of the multi-day market for the year.

Destination Queenstown convention bureau manager Kylie Brittain said this showed that Queenstown had "all the toys" for the incentive market.

The resort took a 21 per cent total share of all incentive delegate days in the country, both single day and multi-day, the same as Auckland's total incentive share.

Queenstown also scooped 36 per cent of all multi-day Australian incentive delegate days for the year and 35 per cent of all New Zealand's Australian incentive delegate days.

Canterbury was next scoring 28 per cent of the total Aussie incentive delegate days for the year, the full effects of the February earthquake not yet showing through.

Auckland had 25 per cent of the total Aussie incentive delegate days for the year.

Queenstown was likely to continue to pick up some of Christchurch's smaller incentive business but had already missed the major Meetings event, an annual conference and incentive trade show. The June 22-23 event had to be relocated from Christchurch, but went to Rotorua because that city had a larger multi-purpose convention centre.

Australia and North America were New Zealand's biggest incentive customers.

Incentive holidays were "reward holidays you can't buy off the rack", attracting anything from 10 to 800 delegates. Companies treated their top-performing employees to everything from cocktail parties and heli-transfer buffet banquets in the wilderness, to adventure thrills.

They often went for high-end accommodation, helicopters and "wow products", Ms Brittain said.

"They may fly you in a helicopter and go where no-one else goes to a full buffet lunch or theatre experience ..." Ms Brittain said.

Some companies had unlimited budgets and there was no expense spared. The Southland Times understands that some large corporations, which may select their top 100 employees to live it up on a reward programme in Queenstown, actually spend millions of dollars.

"They do pretty much all the activities while they're here, it's purely a reward trip, they're saying thanks to their staff for being in that top percentage."

Tourism New Zealand was about to appoint a convention incentive representative to represent the country in North America, which was even more exciting for Queenstown when these latest figures were taken into account, Ms Brittain said.

It was hoped that would add weight to New Zealand's image and stimulate even more American businesses, something that had dropped off slightly during the recent recession, she said.

Property sales rise, prices fall - REINZ

12th May 2011

Source: TVNZ

New Zealand property sales rose in April, though the median price fell and houses took longer to sell, according to the Real Estate Institute.

The volume of sales rose 3% to 4,987 last month, seasonally adjusted, compared to March, the institute said in a statement. The national median house price fell to $360,000 from $365,000 in March, and was up from $356,000 in April 2010.

The data showed continued strength in Auckland, where the median price rose to a record $479,500, though the volume of sales slipped 0.3% from March and was up 11.4% from April 2010. Days to sell in New Zealand's biggest city fell to 34 from 35 in March and were the lowest of any region.

Auckland continues to lead the national statistics "reflecting the continued tightening conditions in the Auckland market," REINZ chief executive Helen O'Sullivan said.

Nationally, the median days to sell lengthened to 43 days from 41 days in March and were up from 40 days in April last year. Northland was the laggard, at a median 73 days to sell, still an improvement on March at 94 days.

The REINZ Housing Price Index rose 1.1% in April from March and was down 0.4% from April 2010. The index is 4% below its peak of November 2007.

The median price in Northland fell almost 12$ to $292,000, the lowest since June last year. The number of properties sold fell to 98 from 122 in March and from 156 in April 2010.

In Auckland, 1,854 houses sold last month, down from 2,437 in March.

In the Waikato/Bay of Plenty/Gisborne the median price rose 2.6% to $312,875, though was down 0.7% from April; last year. There were 708 sales, down from 798 sales in March.

Hawkes Bay prices rose 4.4% to $271,500 to be 1.5% down on the same month last year. Properties sold fell to 118 from 195 in March.

In the Manawatu/Wanganui the median price rose almost 1% to $220,000, with 219 properties selling, down from 250 in March.

Taranaki's median price rose 3.3% to $279,500 and sales fell to 142 from 166.

In Wellington, the median house price dropped almost 7% to $386,500 and sales fell to 574 from 710 in March.

Nelson/Marlborough recorded a 3% increase in prices to $339,000 and 191 sales in April, down from 214 in March.

Canterbury/Westland prices rose 4.7% to $310,000, with 626 homes selling, up from 477 in March.

Central Otago Lakes had an 8.2% gain in prices to $479,000 and an increase to 106 sales from 84 in March.

Otago's median price rose 9.3% to $235,000 and sales fell to 225 from 259. Southland recorded a 4% increase in median price to $193,250, with 126 homes sold, down from 136 in March.

Housing market showing improvements

12th May 2011

Source: Stuff Business Day

Latest data suggests the property market has reached a trough, and the Reserve Bank appears to agree.

Reserve Bank Governor Alan Bollard today said he thought the housing cycle had bottomed out and was gradually strengthening.

"We don't put too much stress on month by month data in one particular region, but what we've been seeing in Auckland is broadly symptomatic of the sort of gradual recovery we're expecting to see across the country. Part of which is made more uncertain and more unclear, of course, by the Christchurch situation."

He made the comments shortly before the Real Estate Institute of New Zealand (REINZ) released its sales figures for April, which recorded 4987 unconditional sales last month, down from 5848 in March and 5207 in April 2010.

The national median house price eased by $5000 from March, to $360,000, but was up $4000 compared to a year earlier.

Auckland reached a new all time high median house price of $479,500, up 2 percent from both March and from a year earlier, while the region also led the country in the number of days to sell which eased from 35 to 34 days in April, reflecting a shortage of listings.

Nationally, the median days to sell in April was 43 days, up from 41 in March and 40 a year earlier. All regions other than Wellington, Southland and Nelson/Marlborough recorded a fall in days to sell.

The REINZ housing price index was up 1.1 percent in April compared to March, with the stratified median house price at just under $365,600.

Compared to April 2010, the index fell 0.4 percent, and it is now 4 percent below the peak of November 2007.

ASB economist Chris Tennent-Brown said ASB expected nationwide prices were troughing now, and should rise by about 3 percent in the year ahead.

Behind that lift would be a range of experiences, from stronger price appreciation in areas such as Auckland, and ongoing weakness in areas where population and income growth were less supportive.

ASB calculated nationwide sales were up a seasonally adjusted 0.4 percent in April from March, with the big driver of the lift coming from Canterbury. When the Canterbury figures were stripped out, turnover was down a seasonally adjusted 3.7 percent.

As well as the damage and disruption caused by the February earthquake in Christchurch itself, insurance difficulties had held up sales. There were only 193 sales in Christchurch in March, compared to 315 last month and 511 a year earlier.

Goldman Sachs economist Philip Borkin said the market appeared to be consolidating after recent improvements, although the level of activity remained low.

He did not expect large increases in house prices, largely due to affordability headwinds.

But the stabilisation in prices opened the door for households to potentially begin slowing the pace of deleveraging, resulting in modestly improved household consumption growth.

Designer for bridge

11th May 2011

Source: Otago Daily Times

Designers have been appointed for the Kawarau Falls double lane bridge, which the New Zealand Transport Agency has dubbed "the southern gateway to Queenstown", despite it not getting construction approval.

The NZTA has awarded the design contract for the $19 million project to Australian-based global engineering firm Sinclair Knight Merz (SKM).

"The contract covers the initial design of a proposed two-lane bridge to be built alongside the existing single-lane Kawarau Falls bridge at Frankton on State Highway 6 near Queenstown," NZTA southern regional director Jim Harland said.

The Queenstown Lakes District Council would be involved in the process.

Consultation, the initial design and resource consent applications are all expected to be completed by the end of the year.

Mr Harland said the bridge was not in NZTA's three-year state highway plan launched last month.

"This plan will be reviewed annually. To get the construction to go ahead, this project has to compete in a very tight funding environment with other priority state highway bridges and road projects nationwide."

April sales lift a 'turnaround'

11th May 2011

Source: Stuff Business Day

A "very strong" lift in retail sales in April, following a similar rise in March, is seen as a clear turnaround in consumer spending from the gloom of last year, according to Westpac.

Retail sales picked up 1.7 per cent in April, led by food and hospitality businesses, though the rise was across the board, aside from service sector firms, according to Statistics NZ figures.

The Reserve Bank cut the official cash rate sharply early in March, with floating rate mortgages down 50 basis point immediately, which economists say has probably bolstered shop spending.

Westpac chief economist Dominick Stephens said the turning point for retail sales came in January, but was disrupted by the February quake in Christchurch, though this was short-lived.

"It's clear consumers are in a better mood than at the end of 2010," he said, and were willing to spend more rather than save so hard.

The emergency rate cut in March might have helped spark the lift in spending in April, other than for Christchurch.

The situation was "very depressed" at the end of 2010, but Westpac had picked a lift in consumer spending, contingent on a stronger housing market and stronger commodity prices lifting rural incomes.

"Even before the March rate cut, interest rates had been falling," Mr Stephens said. There had been very little disruption to consumer spending, outside Christchurch, since the quake.

At the same time, there was little inflation pressure, with room for the economy to grow rapidly in what was a "sweet spot" without hitting inflationary speed limits.

"There is no need for the Reserve Bank to hike interest rates just yet," he said.

ASB economist Christina Leung said the retail sales rise in April was encouraging, building on the strength seen in the previous month.

The rise in April was fuelled by higher spending on food and eating out, which suggested an improvement in discretionary spending as consumers became more optimistic, she said.

The lift in mood might reflect improving demand for workers and a pickup in house sales volumes. The 6c-a-litre drop in petrol prices on Monday was also a "welcome development".

But the recovery in retail spending would be gradual and there was no urgency for the Reserve Bank to lift the OCR, ASB said, with the first move upward likely to be in March next year.

ANZ economist Sharon Zollner said a continuing rebound in Canterbury retail sales probably explained more than half of the national rise in April.

But a strong second month in a row might indicate growing momentum in consumer spending more generally. Income growth had been good for wage earners and farmers recently and repaying debt was becoming a choice rather than a necessity, she said.

"We are not expecting a boom in spending. The days of borrowing-led growth are gone for years yet."

To see a marked and more sustained pickup in retail spending would require a turnaround in the housing market, Ms Zollner said.

Skifields halt tourism freefall

9th May 2011

Source: The Southland Times

A consortium of tourism operators and airlines is working hard to ensure this year's ski season does not suffer unduly from the Christchurch earthquake and to tell the world – and especially Australia – that Queenstown is "open for business".

Bookings for the season died almost totally in the 10 days after the earthquake, said NZSki chief executive James Coddington, but has crept back after a concerted advertising campaign in Australia.

Last week, Statistics New Zealand announced international arrivals fell by 27,710 (down 11.4%) in March 2011, compared to the same month in 2010.

Arrivals from Australia, a key market for New Zealand's winter ski season, were down 11.3%.

Coddington, whose NZSki operates the Coronet Peak, Mt Hutt and Remarkables skifields, said there are a number of external factors that could damage the season, including a strong Australian dollar which could lead some to take the opportunity to travel to destinations such as the US.

"We're competing against other locations, not other snow products," he said.

However, the cross rate with the New Zealand dollar is also very strong and Queenstown is a very competitive market, offering accommodation and activities for everyone from backpackers to elite helicopter skiers.

It is rare not to see a private jet at Queenstown airport and there are often three or four, Coddington said.

Queenstown now receives 32 international flights a week, up from 21 last year and just seven four years ago, Coddington said. It also offer the largest number of beds (1.3 million a year) of any centre in New Zealand apart from Auckland (1.9 million).

The conference business in Queenstown is up too, though may be hampered by the lack of a full conference facility, just about the only thing missing in the mix right now, Coddington said.

The area offers all-round appeal, as those not interested in skiing can enjoy spas and wine tours.

NZSki bought the three skifields, very run down, from Air New Zealand in 2002 and over 10 years has invested $100m, said sales and marketing manager Craig Douglas. One major investment was in snowmaking machinery which can transform slopes without snow into skiable areas in just three days and which guarantee a full and extended season of 135 days, up from 70 to 80 days.

Base buildings have also been redeveloped, world-leading smart pass technology introduced and fast lifts installed, which mean skiers get the maximum number of runs a day.

NZSki has also invested in buses to overcome parking constraints on the mountain, Douglas said. Over the past three years, business has grown 62%.

One clear upside this year is the Rugby World Cup. While not hosting any games, Queenstown is hosting four teams including England and Ireland. There will be three games in Dunedin and many who go to those will also be attracted to New Zealand's largest ski area.

With six direct flights to Auckland each day, and prices as low as $89 one way, some may use Queenstown as a base for the tournament.

Last week the government launched the latest campaign to bring visitors, the Great Kiwi Invite, encouraging Kiwis to invite friends and family to visit.

The Great Kiwi Invite will run for four weeks, pushing Kiwis to use a website to send personalised email invitations and go into a draw for one of 15 trips for two with Air New Zealand.

Queenstown airport passenger numbers rise

6th May 2011

Source: Otago Daily Times

Queenstown Airport handled 13,186 international passengers in March, up 77.9 percent on the same month last year, while domestic passenger numbers grew by 3.1 percent.

The figures were released by part owner Auckland Airport, which itself experienced a 1.4 percent rise in international passenger numbers in March from a year ago and a 0.6 percent fall in domestic passenger numbers.

Additional Jetstar capacity has contributed to the lift in passenger numbers at Queenstown.

The international passenger numbers at Auckland Airport were seen as firm, post the Christchurch earthquake on February 22.

Queenstown rates as world-class destination with millions

6th May 2011

Source: Scoop.co.nz

Queenstown’s staggering beauty and heart-pumping thrills have earned international accolades at this year’s Travellers Choice Awards run by the world's biggest travel website.

Based on millions of Trip Advisor traveller reviews and opinions, New Zealand’s premier four-season lake and alpine resort ranked second among the top 25 destinations in the South Pacific. Queenstown came in just behind Sydney, moving up two places from last year.

The only New Zealand location to make Trip Advisor’s list of top 25 destinations in the world, Queenstown ranked 12th - three places higher than last year.

Destination Queenstown CEO Tony Everitt is absolutely thrilled with the result and says it’s testament to the quality of Queenstown’s offering.

“It puts us right up there with some of the world’s major cities including Cape Town, Paris, London, Rio de Janiero, Hong Kong and Barcelona, showing the level of our international appeal.

“It’s a fantastic achievement which acknowledges our world-class operators, spectacular alpine setting and diversity of experiences which hundreds of thousands of visitors from around the globe come to enjoy each year.”

$13m upgrade for Queenstown airport

5th May 2011

Source: Otago Daily Times

More space for private jets will be provided in a $13 million upgrade at Queenstown Airport to be completed by the end of next month.

The construction is being finished in time for the busy winter and an expected increase in private jets during the Rugby World Cup this year.

Work on the apron extension for an extra jet stand, more space for parking private jets and an area for possible expansion of the terminal began last Monday.

Queenstown Airport Corporation commercial manager Simon Barr said part of the reason for the development now was to create extra capacity to handle corporate jets ahead of the Rugby World Cup. Following the apron extension, the airport would be be able to park five or six large and four smaller jets, double the present capacity, he said.

Corporate and private jets are already common visitors to Queenstown. Celebrities to have used them to fly in and out include John Travolta, Robin Williams, Bill Gates, Tiger Woods, Tom Cruise and America's Next Top Model contestants, including some of the judges.

Meanwhile, the $7 million 45m-high infill to create a level runway end safety area, started in February last year, would be finished "within June".

Contractor Fulton Hogan had entered the night construction phase, necessary so flights were not disrupted, Mr Barr said.

The $2 million runway lights project, funded by the Airways Corporation, was also on track to be finished in June, "well ahead" of the October deadline imposed the the Civil Aviation Authority.

The 118 runway lights which will operate this winter, should help reduce the number of flights diverted because of bad weather.

Eventually, the lights would be used to maximise the airport's daylight operations, allowing aircraft to land until 10pm.That, however, was not expected to occur before next winter.

New official study looks at how we’re growing–and growing

5th May 2011

Source: scene.co.nz

A 20-year growth study released this week by Queenstown Lakes District Council predicts the changing shape of the Wakatipu. 

After Queenstown and Wanaka’s 30 per cent population and housing boom between 2001-06, there’s more modest growth projected out to 2031. 

The Wakatipu’s population is still tipped to grow by 54 per cent over two decades – from this year’s 19,150 to 29,543 – but the pace isn’t as heady. 

Housing growth climbs more steeply – by 59 per cent – to a predicted total of 15,042 dwellings. 

A notable change in the new stats is a revision of projected visitor numbers by the Tourism Strategy Group, reducing annual increases from 2.9 per cent to 2.2 per cent. 

Nevertheless, Wakatipu visitor nights are projected to increase 35 per cent by 2031 – to 5.4 million bed-nights annually. 

“Visitor units” of accommodation should therefore grow from about 6750 now to around 8500. A “unit” is anything from a campervan site to a backpacker bunk or a motel or hotel room. 

QLDC number-crunching contractor Rationale tabled the new report at Tuesday’s strategy committee meeting. 

The stats will be pored over by developers, realtors and even small-fry spec builders. With this year’s census cancelled after the Christchurch quake, Rationale used the 2006 census for baseline data then fed in updates to arrive at five-year bands between now and 2031. 

Does the Wakatipu have enough vacant land on which to build houses and visitor units for all these extra residents and globetrotters? 

Yes, Rationale says, citing QLDC’s “Wakatipu Dwelling Capacity Model”. 

Zoned land could apparently take a total of 31,145 dwellings, three-and-a-half times the present number. 

Some areas can handle more growth than others – Kelvin Heights has spare land for 72 per cent more dwellings while Arrowtown could only cope with 9.5 per cent. 

How accurate will this new growth study be? As the saying goes, don’t bet your house on it.

Temporary ice skating rink for Queenstown

4th May 2011

Source: Otago Daily Times

A temporary ice skating rink is to be built in central Queenstown and organisers of this year's winter festival hope it will provide a "wonderful, magical atmosphere."

Organisers of the American Express Queenstown Winter Festival are applying for resource consent to construct the temporary ice skating rink - complete with a glass carriage - over Horne Creek in the central business district.

Festival director Simon Green said his father-in-law first gave him the idea, having seen a similar structure set up in Times Square, New York during winter.

Mr Green had the idea of establishing an ice rink for Queenstown Winter Festival four or five years ago "but everyone said 'you can't do that"'. However, after speaking to Spars on Ice, an Australian-based company specialising in temporary ice rinks, the dream has become a reality.

A scaffolding structure would be erected over the Village Green, covering Horne Creek, at the entrance to the CBD on the corner of Athol St, Ballarat St and Camp St, and the ice rink established on it.

Mr Green said refrigeration pads would be laid on the platform and water gradually frozen on top.

The glass carriage was on its way from India and would be used to set the scene and available for people to have photographs taken, he said.

"The spirit behind the whole thing is to inject ... this wonderful, magical atmosphere that we have never been able to establish."

Two marquees would be erected on the Village Green, one with an inflatable air roof to provide entertainment, the other to cover the refrigeration units and generator providing power to keep the ice frozen.

Noise levels were not expected to be high.

The rink could cater for between 80 and 110 people at any time. Skating awould be vailable from 10am to 9pm daily , with sessions lasting 45 minutes.

It would be staffed by Spars on Ice, which would also provide skating demonstrations daily.

Providing consent was approved, scaffolding would start to go up on June 17 and the work would be complete by June 20.

While festival organisers initially applied for an extension for the ice rink to remain in place until July 31 to cater for the New Zealand school holidays, Mr Green said a decision had been made to stick only to the festival period for the first year.

"It's going to be pretty exciting.

"It's nothing like the Queenstown Ice Arena. We're hoping it will introduce [ice skating] to a lot of people."

NZ Property Report – April 2011

2nd May 2011

The April 2011 NZ Property Report published by Realestate.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 95% 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 2011 is published below and is available for download (1.3MB) and distribution.

Summary of the market – April 2011

The NZ Property market certainly is showing signs of renewed activity, far from the levels of the mid 2000’s the current activity is measured and very much centered on the Auckland region. Whilst in overall terms the level of inventory weighs heavy on all regions the levels of sales reported in March show that buyers are certainly back in the market and beginning to clear some of this high inventory.

By the nature of the way inventory is reported (actual stock divided by 3 month average sales) the very low levels of sales in January and February is in some way holding back the reporting of this trend of greater activity. It is likely that with the reporting of the April sales that the next inventory report for May will show a significant fall in inventory levels of unsold houses.

The market amongst sellers is certainly not showing any impact of inventory levels, as a function of such seller confidence the national truncated mean asking price has risen in April to a new record high of recorded stats going back to the start of 2007.

As a further lead indicator to the market, the levels of new listings continue to track well below prior year. In fact we have seen 10 consecutive months of falls in listings numbers year-on-year.

Asking Price

The truncated mean asking price for all new listings in April rose to establish a new peak at $429,249 up from $421,940 in March. On a seasonally adjusted basis the asking price rose 2% in the month indicating a continued confidence amongst sellers.

The trend of the past 2 years shows continued strength in asking price expectation.

New Listings

The level of new listings coming onto the market in April fell to 10,181 in April. This represented a 17% year on year decline and an 8% seasonally adjusted decline from March.

On a 12 month moving basis the number of new listings in the past year totals 129,678 as compared 142,635 for the same period a year ago – a fall of 9%.

Inventory

The level of unsold houses on the market at the end of April continued to fall from prior months. April reported 50,398 down from 51,980 in March and 52,672 in February.

This steady decline in the physical number of new listings is not being reflected in the representation of inventory as measured in rate of sales as the recent 3 month period (Jan – March 2011) contained two of the lowest sales months recorded.

Regional Summary – Asking price expectations

The national asking price rising to a new peak at $429,249 was mirrored across the country as can be seen from the chart with a significant growth in all but 2 regions. The highest rising region was Otago which with a 12.5% increase to $298,817 has itself hit a new peak of asking price.

The Auckland market at $555,572 whilst not quite hitting the peak, continues to track at all time highs close to the peak set in December 2010 at $564,853. The April asking price was up 5% on April last year and showed a 1% seasonally adjusted rise from March.

Those regions that showed falls, Bay of Plenty with a 3% fall and the Central North Island with a 7% fall, both had seen strong asking prices through the latter part of 2010 and into early 2011.

Regional Summary – Listings

The picture for new listings across the country continues to show that there is weakness in bringing new properties to the market. There were 13 of the 19 regions that reported new listing down on prior year with 6 reporting falls of over 20%; both Coromandel and Southland over 40%. The former region has been suffering under a significant weight of inventory of unsold houses for many months.

In the main metro areas listings are low with the impact of the earthquake restricting new listings in Canterbury (down 32%), Wellington was weak with just 741 new listings, down 29% and Auckland down 17% with 3,325 new listings.

Two regions did see very strong growth in listings; of particular note was the Queenstown Lakes area which saw a raft of new listings including a large collection of apartments.

Regional Summary – Inventory

The regional map of inventory of unsold houses shows a very consistent picture of high inventory in all but the one region that of Auckland. This scale of inventory at levels well above long term average is very much a function of very low sales at the start of the year which despite the actual fall in properties on the market is making the evaluation of the market point to very high inventory based on rate of sale.

The Auckland market is very much on the boundary of moving from a buyer’s market to one favouring sellers. The Auckland market has seen a reduction of properties on the market from around 14,100 just before Christmas to currently 12,376.

Around the rest of the country the inventory levels reached new peaks in the Hawkes Bay, Manawatu/Wanganui, Northland, Otago and Southland.

Lifestyle

The level of new listings of lifestyle property coming onto the market in April fell just 1% on a seasonally adjusted basis from March. A total of 1,032 new properties were listed with a truncated mean asking price of $571,611. The asking price was up 5% as compared to the recent 3 month average, but up just 1% as compared to prior year.

On a rolling 12 month average basis new listings are down 4.5% with 11,764 listed in the past 12 months compared to 12,314 last year.

Apartments

Listings of apartments showed a 9% rise on a seasonally adjusted basis as compared to March with 452 new apartments coming onto the market. The truncated mean asking price for these new listings was $399,927 which was up 8.5% on the recent 3 month average, but down 4.1% as compared to April 2010.

In the Auckland apartment market which represents over 60% of the market there were 285 new listings with an asking price of $350,306. The new listings shows a rise of 24% on a seasonally adjusted basis, although when judged on a year-on-year basis they are down 22%.

Property Price Index

Comparing the sale price of properties across the country to the asking price expectation is not a perfect comparison; however the trends tend to align. The benefit is that the data for asking price is of the market today, whilst the selling price is reflective of the market active between 4 and 6 weeks ago. The latest comparison is highlighted below:

Realestate.co.nz data is compiled from asking prices of new residential listings as they come onto the market via subscribers to the realestate.co.nz website. The Realestate.co.nz website currently has over 95% of all licensed real estate offices subscribing and providing all of their listings onto the website. The asking price is presented as a truncated mean price at a 10% interval.

REINZ: data is compiled from reported unconditional residential sales from all members of the Real Estate Institute of New Zealand representing all licensed real estate offices. The sale price is published as a stratified median house price and is developed in association with the Reserve Bank of NZ.

House prices tipped to lift

28th April 2011

House prices are set to rise 4 per cent this year, with the market led by Auckland, but borrowers should expect floating mortgage rates to rise sharply over the next three years, according to Westpac Bank forecasts.

The drop in mortgage interest rates last month was adding "zing" to the housing market, Westpac says, but floating rates would start rising early next year and may rise 200 basis points or more by 2014, as the Reserve Bank eventually pushes up the official cash rate to 6 per cent.

"There could mean substantially higher business and [floating] retail interest rates in three years from now," said Westpac chief economist Dominick Stephens.

The markets were not pricing in rising interest rates in 2013 and 2014, which were part of Westpac's view, he said. "The official cash rate hikes won't start until there are cranes on the skyline in Christchurch. But once interest rates do start rising, they could rise rapidly."

With the expected building boom in Christchurch, the Reserve Bank would keep pushing up rates through 2012 and 2013 to keep inflation in check.

Rising interest rates would crimp activity elsewhere, but the economy was expected to grow 4.6 per cent in 2012, according to Westpac's forecasts.

Despite an expected 4 per cent lift in house prices in the coming year, the long-run outlook for prices was "fairly flat", Mr Stephens said, as mortgage rates rates rose next year.

House prices are still relatively high compared with incomes, but fell about 20 per cent after adjusting for inflation between the peak in 2007 and the end of 2010. That adjustment was needed after house prices became "a bit over-valued" in the past decade, he said.

"The end of declining house prices is a positive sign for retailers, though nobody is talking of a return to the helter-skelter [spending] of the last decade."

Retailing was miserable last year and there should be a lift this year from that subdued level. Sales had risen about 1 per cent a month in the past few months, but that was unlikely to be sustained.

Overall household spending was expected to rise about 3.8 per cent, after inflation, for the year to June 2012, including both shop sales and services. "That's a decent increase and the strongest since 2007," Mr Stephens said.

House prices have been flat for some time, hit by tax changes and weak net migration last year. As mortgage rates fell and migration improved the market steadied, and sales volumes had improved from extremely low levels.

"Prices are rising now in Auckland, [are] stable in many parts and falling in others," Mr Stephens said, but the big cut in mortgage rates in March would add zing to the market.

"The reduction in rates makes life easier for first-home buyers, makes property more attractive for investors and makes upgrading the house more affordable."

In the past decade, Auckland, Wellington and Christchurch have led the rest of the property market.

Auckland's recent lift was a "leading signal" for the rest of the market.

However, Wellington faces government retrenching and public servants receiving low or no pay rises, leading to "under-performance" in the city's property market.

The Christchurch market's future was also highly uncertain since the February quake.

On balance, house prices were expected to fall there. "Prices will probably be down a bit in both Wellington and Christchurch," Mr Stephens said.

The regional housing market would be boosted eventually by "very strong returns for farmers" from high commodity prices.

Key Forecasts

In its latest quarterly economic overview, Westpac predicts overall economic growth of just 1.3 per cent this year after the $4 billion disruption to the economy caused by the quake in Christchurch.

Economic growth:

1.3 per cent this year

4.6 per cent in 2012

House prices: up 4 per cent this year

Reserve Bank to start lifting official cash rate early in 2012

Cash rate to rise from 2.5 per cent now to 6 per cent in March 2014

Bargain hunters on the decline

26th April 2011

Source: Stuff Business Day

Call it Murphy's Law but a real estate website says the number of desperate sellers is increasing while the number of people searching for "must sell" bargains is decreasing.

Realestate.co.nz chief executive Alistair Helm has monitored how many of his approximately 110,000 listings reflect a degree of seller urgency over the last two years.

He says in January 2009 the phrase "must sell" was attached to 3269 listings, but fell six months later to 2527 only to rise again to stand even higher at 3444 in today's market.

Properties with the key word "motivated" attached are also up on their January 2009 level, from 1377 to 1477.

"Urgent" sellers currently number at 386 and "desperate" sellers are steady at the July 2009 level of 67 listings.

But Helm says online property searchers using the four key terms reached its highest level - almost two percent of all searches - in mid-2009 and has declined steadily ever since.

House hunters quoting motivated, must sell, desperate or urgent in their online research now only make up 0.5 percent of all searches.

"The high level of searches for those keywords indicates that property is distressed and vulnerable from vendors or owners who need to get out and liquidate, either because the bank's about to foreclose or because they've lost their jobs," says Helm.

"Having the data looking back all that time we can look at what happened around the global financial crisis and the extent to which people were looking for the opportunity to grab what might've been perceived as bargains back in 2009."

He says the current lower level of searching for desperate vendors was in fact "a steady norm" for the market.

Head of Trademe Property Brendan Skipper says none of those key words featured in its top ten search terms, although "mortgagee" came in at sixth place.

The top three were "garage", "pool" and "home and income". Skipper says Trademe property has about 1.3m unique browsers per month.

RealEstate.co.nz claims to display 93 percent of all agency advertised listings in New Zealand and says it has about 360,000 unique browsers per month.

Not so tough at the top!

26th April 2011

High-end property sales in Queenstown are surging say one of the resort’s leading real estate companies. hoamz are reporting a significant increase in enquiry from buyers in the $1million plus range. In two weeks of April alone hoamz transacted four sales in excess of $1million.  Compared to the result of 5 sales for all agencies in the entire Queenstown area in both March 2011 and April 2010, it’s a high-end bonanza!

hoamz managing partner Fred Bramwell reports the bulk of enquiry and sales involve international purchasers, in particular from Australia and Singapore. ‘The optimism created by Singapore’s buoyant real estate market has led to people looking further afield for investments. Queenstown lifestyle property is seriously popular’ says Bramwell.

The only problem now is keeping up with demand. The top-selling company explains that they’re still working with multiple active buyers produced by the campaigns for the properties which sold, and need increasing numbers of prestige properties to match to their quality-seeking purchasers.

Consistency seen in property market

26th April 2011

Source: Otago Daily Times

Consistency in sales records in March was being viewed optimistically by real estate agents and was expected to be one of the key indicators of an "improving market," Real Estate Institute of New Zealand Queenstown spokesman Adrian Snow said.

Inquiries from buyers had been relatively strong and consistent over the past two months, indicating good numbers of active buyers in the market. However, they were acting "very prudently" and taking a relatively long time to research the market and make their buying decisions, he said.

"As a result, buyers are typically choosing not to interact with vendors whom they perceive to have overpriced properties and negotiations are often longer than would otherwise be expected.

"As shown in this month's sales records, good numbers of properties are changing hands, indicating a relatively healthy market, although a relatively slow travelling one."

Forty-one residential dwellings sold in March, 8% up on February (38) and 2% up on the 40 recorded in March 2010.

Five apartments sold in March, the same number as in February and two down on March 2010.

Mr Snow said apartment sales appeared to be "transacting consistently" around that number for the past two years.

There were 11 residential section sales recorded in March, consistent with the past seven months' activity, with sale numbers ranging between 11 and 15 since September 2010, excluding the "very poor month of January".

Nine of the 11 sections sold were from the recent bulk Jacks Point auctions, which left a "relatively poor number from the balance of Queenstown".

The value of sales was 14% down on February but 10% up on March 2010, with the median dwelling price down 10% from February, but showing no significant change when compared to March 2010.

The median days to sell had decreased 16% from 64 days for February to 54 days for March, which was also a decrease of 4% compared to March 2010.

"This indicates an increase in the speed at which buyers are meeting sellers, being either buyers being prepared to purchase sooner or vendors becoming more realistic with prices, or a combination of both."

"Eighty-three percent of the recorded dwelling sales were below $700,000, which indicates a definite bias in the market to the lower value properties," Mr Snow said.

Value of Winter Games assessed

19th April 2011

This year's New Zealand Winter Games could have an "economic impact" of $50 million for the areas involved, not counting the $4 million budget spent mainly in the region, event organisers say.

The Otago Daily Times spoke to games chief executive Arthur Klap after the Winter Games NZ 2011 lunch for Queenstown Chamber of Commerce members last week.

"We have a $4 million budget that's primarily spent in the region," Mr Klap said.

"We don't have to pay anything offshore."

He said because the organisers were a charitable trust as opposed to a commercial operation, they had a policy of where they could, spending locally "so everything flows back into the community".

Source: Otago Daily Times

Speakers at the luncheon included Mr Klap, Jucy Rentals chief executive Tim Alpe and Michael Hill Jewellers chief executive Sir Michael Hill, who are both games patrons, and Winter Games NZ Trust chairman Eion Edgar. They talked about engaging communities both on and off the mountains.

Mr Klap said the winter festival trust had a 25-year vision of the games attracting 25,000 non-competing visitors to the South Island, but at the inaugural games in 2009, you could walk around Queenstown and Dunedin "and not know the games were on".

"We can never lose sight of the fact that it's a winter sport festival, but what we need to do is build something around it so ...there's things off the hill, or away from the stadiums that are of interest or are entertaining."

This year's programme will include festivals in Dunedin, Naseby, Queenstown, Wanaka and Methven.

"We will have things like an adventure film festival, music events, comedy festivals, sports events that are not snow-based, and downtown snow-based sports, such as a rail jam in the Octagon," Mr Klap said.

While organisers were being constantly contacted by groups in the community wanting to do something, he said they were mindful of not taking on too much.

"The beauty of the Winter Games is that you can add things next time around."

Mr Klap said other key elements of the 25-year plan were for the games to be recognised nationally as the premier event in the country, and to be financially self-sustainable as a regular event - "whether that is every two years or every one year".

One of the goals of the games was to be in a financial position where they could provide scholarships for local athletes, but that stage was "still a long way off".

It was on this financial point that the question of how often the games would run hinged, and he said the games could become an annual event.

"I wouldn't have said so two years ago, but now I think it could be ... We've got a plan of being financially self-sustainable in five events - 10 years - and when you're at that point, that's when you can make an assessment of whether it's annual, biennial and so on."

The Wakatipu’s home to the world’s best golf resort – and that’s official, folks

19th April 2011

Source: Scene.co.nz

A Queenstown golf resort has been named the world’s best by a top travel magazine. 

Australia’s Luxury Travel Magazine awarded five-star Millbrook Resort, near Arrowtown, the prestigious title in its 2011 Gold List Awards for international golf resorts. 

The awards are decided by a survey of tens of thousands of frequent travellers. Millbrook came fourth last year. 

This year it beat The Farm at New Zealand’s Cape Kidnappers, which was second, and third-placed Kauri Cliffs at Matauri Bay. 

Mission Hills Resort in Shenzhen, China, was fourth and Sun City Resort in South Africa was fifth. 

Millbrook general manager David Onions says the wonderful accolade comes at an ideal time – when many Australians are booking their ski holidays. 

“We have a unique ‘green valley’ situation where you can ski in the morning and have a round of golf in the afternoon.”

In the past three years, the resort has made a significant $30 million investment in an innovative, covered driving range converted from a former woolshed, a new nine-hole golf course known as the Coronet Nine, upgrades to the existing 18-hole championship golf course, and housing development in the western extension of Millbrook. 

The newly-structured, award-winning 27-hole configuration at Millbrook has proved hugely popular with local, New Zealand and international golfers.

Hilton opening timed for big tourism forum

13th April 2011

Source: The Southland Times

An opening date for the Hilton Hotel in Queenstown is expected in a fortnight.

Kawarau Village general manager Marlene Poynder said everything was on schedule for a mid-May opening to coincide with Trenz – New Zealand's biggest tourism industry expo.

The hotel and apartment complex will contain a thousand-seat conference venue, gourmet grocer and deli, a gastro pub and noodle bar, plus other eateries.

The plethora of groundbreaking additions to a usual hotel complex would open simultaneously with the accommodation side of business, Ms Poynder said.

"An opening date will probably be announced in around two weeks' time," she said.

"Landscaping has begun on the neighbouring stage two and three sites of the development, and a lot of rock is being moved out of there. A lot happens within the last few weeks of opening, and the progress will be evident to local people."

A floating pontoon linked to hotel grounds by a large gang-plank is also in place. A contractor said all structural work was complete, and the two large columns securing the pontoon needed only paint before the job was finished.

The pontoon will service water taxis and will also be available for private boats to berth at.

Chinese visit hints at huge tourist potential

13th April 2011

Source: The Southland Times

Queenstown tourism operators are confident of a $20 million windfall from Chinese visitors over the next 12 months.

A 70-strong Chinese delegation arrived in the resort early yesterday morning in a trip that coincided with the first China Southern Airlines direct flight from the southern Chinese city of Guangzhou to Auckland on Saturday.

China Southern Airlines is the world's fourth biggest airline and the introduction of the direct flight to Auckland, three times a week, could bring an additional 25,000 visitors annually to New Zealand.

The airlines was considering introducing daily flights to Auckland, which could bring in 50,000 extra visitors each year.

Destination Queenstown chief executive Tony Everitt said that, if 10,000 Chinese visitors came to the resort, and spent $2000 each, then it would bring in $20 million to the region in 12 months.

"Research shows they are great spending visitors and they do like to shop so it's a great opportunity," Mr Everitt said.

Hosting Government officials, media and travel agents was a wonderful chance for Queenstown tourism firms and operators to promote themselves, he said.

"It's very important ... We are very pleased about the progress that's been made."

Queenstown tourism and Government officials have certainly gone all-out to impress the Chinese delegation, who enjoyed a Shotover jetboat ride, a trip on the Earnslaw and lunch at the Botswana Butchery yesterday.

Early indications suggest Queenstown has impressed the delegation, who leave the resort today.

The delegates refused to be interviewed, but China Southern Air Holdings president Si Xianmin, said in a statement: "I am sure with the promotion activities China Southern is doing, there will be many travellers on China Southern Airlines coming through Auckland to Queenstown."

Recessionary stress still felt in number of mortgagee properties for sale

12th April 2011

Source: Unconditional blog

Whilst there maybe some signs of the recovery that most people have been longing for, one of the well known “lag” indicators – mortgagee property repossessions continues to make its presence felt in the NZ property market.

At this time there are around 280 properties on the market in NZ  (covering both residential and lifestyle properties) identified as being in foreclosure where the lender is forcing a sale as a result of the borrower being in arrears on the repayment of the loan or the borrower has signaled to the lender their inability to continue to pay and is therefore looking to exit the property.

There has not been any recent statistics released as to the scale of mortgagee sales since late last year, so in an attempt to shed light onto this sector of the property market we have examined key data from the website of realestate.co.nz.

Reviewing the current state of the market, the absolute scale of mortgagee properties is well below the peak of 2008 and 2009 when close on 400 properties were being marketed in this manner as shown from the chart below.

In absolute terms 280 properties is a significant number, however when put into context it represents less than one half of one percent of all the properties on the market in NZ for sale today – put another way it is only 1 in every 200 properties is a mortgagee sale. Even at the height of the recession the total only ever reached 0.75% of all listings.

This figure is far lower than the close to 10% of US properties that were in foreclosure in the peak recession period of 2008/9 – a situation that is yet to be resolved in many US states where the continuing levels of mortgagee listings and sales continues to drive down the sale prices.

Examining the past 3 years it would be fair to say that the trend for mortgagee listings is on a slow decline. It will likely take a considerable period for all the effect of the Global Financial Crisis and its impact on the NZ property market to work its way out of the system as far as mortgagee listings and for the level to return to the rate of around 100 at anyone time.

Another key indicator of the mortgagee sector of the property market is the use of the keyword search terms on realestate.co.nz as a means to locate mortgagee property. Over the past 3 years we have tracked this each week and the latest chart below shows the recent year.

Clearly the  peak of activity of keyword searching for terms such as mortgagee sale / mortgagee auction / mortgagee properties was back in 2008 and into early 2009. The recent 12 to 15 months has seen this fall away to a fairly steady level. That level is still resulting in these terms being in the top 5 terms searched on the site.

Now's the time to fix mortgages: Tower

12th April 2011

Source: Stuff Business Day

It is still a good time to buy a house, but mortgage holders should now look to fix their interest rates long-term to avoid "severe rate rises" brought about by inflation, Tower Investment CEO Sam Stubbs says.

Speaking in Auckland today, Stubbs said housing affordability is at a 7-year low and Tower's view is that will continue, especially in Auckland.

But inflation is the "100-pound gorilla in the room" that will impact the investment markets in the next 12 months, he said, and will rise sooner than expected.

Keeping interest rates low can cause inflation to rise which would work against the role of our Reserve Bank to meet its mandate of keeping inflation to between 1 and 3 per cent.

It's currently around 4 per cent following last year's GST rise but the Reserve Bank is forecasting the rate rising to 5.4 per cent in the June quarter before starting to fall back to 2 per cent by year's end.

Stubbs says central banks and governments have been "effectively working in collusion to keep interest rates lower than we normally would for longer than we normally would" because what really matters to them coming out of the global financial crisis is growth and employment.

"That is a legitimate strategy but the longer it goes on, the riskier the strategy becomes in terms of inflation coming out at the other end.

"It means that you'd likely to see interest rates go up sooner than later all around the world. You just saw that in the European central banks last week."

Mortgage holders should now take fixed longer-term rate mortgages, he says, because although floating rates look more attractive currently, "ultimately if interest rates go up, the severity of these rate rises and the speed by which they could come on would potentially make five-year-plus fixed mortgage look attractive right now".

On the other hand, investors and superannuitants should not keep long-term fixed-interest investments.

"We think you should be investing out in something like zero to 2 years because as attractive as [fixed] long-term interest rates may seem to you now, they'd look very unattractive when interest rates go up."

Stubbs says over the long-term there is only two ways for governments to deal with high debt - one is to default of keep inflation high. As a rule, they'd only default when inflation ceases to be an option.

"We think the majority of Western nations will choose to inflate their way to solve their debt problems and that's going to be bad news for fixed-interest investors and very good news for people who are on houses on mortgages.

Resort property ray of hope

11th April 2011

Source: Scene.co.nz

A new report offers hope for the Queenstown economy despite the gloomy state of the international financial environment. 

Colliers International argues the resort is well-placed for the future because it has continued growing in the face of the global economic crisis. 

The conclusion comes in the property consultancy’s “Queenstown Market Overview 2010-2011” being launched tomorrow. 

“The Queenstown area continues to grow in the face of a difficult economic environment, which puts the market in a strong position to grow as domestic and international economies recover,” the report states. 

“This year we see some very positive indicators towards a faster rate of recovery for the Queenstown economy and property market.” 

Examples at Frankton Flats are the $50 million stage one of the Five Mile shopping centre, $24m of airport work over the next two years, the final stage of the Remarkables Park retail development and rezoned commercial and industrial land.

The report also cites that Queenstown Lakes District Council is budgeting to spend about $42m on infrastructure, building consents have risen $30m last year, there’s upward pressure on CBD ground-floor rentals and also continued high growth in the resort’s permanent and visitor populations. 

“All of that stuff leads to economic growth even though it’s been a bloody tough time”, local Colliers sales broker Mark Simpson says. 

“We’ve been smacked over the knuckles on a couple of big development projects but that doesn’t reflect the nature of our economy as a whole.” 

Simpson’s colleague John Scobie also says low land, funding and construction costs – assuming builders are available – are encouraging house construction. 

But the report also touches on the low volume of residential property sales. 

Sales last year were about 50 per cent of those recorded in the peak years of 2002 and 2003. 

Some apartments were now selling at 50 per cent of prices achieved a few years ago. 

The report predicts managed apartment returns will fall further. 

But there should be “a small increase” in total sales levels, it says, with investors re-entering the market due to 
lower prices, lower funding costs and clearer Government policies. 

“Encouraging signs are starting to emerge out of Auckland with investor confidence returning for good quality investment property, which we anticipate will flow through to our market this year.” 

In the accommodation sector, the report notes an average five per cent increase in occupancy and yields. 

But for the first time in years the budget sector shows a small decline, blamed on new supply, especially the 390-bed Nomads hostel. 

With key events throughout the year, including the Rugby World Cup, “the next 12 months will show a solid improvement across the board”.

Positive signs for Queenstown 

- Renewed large-scale commercial building activity including Five Mile, Queenstown Airport and Remarkables Park 

- Council’s budgeted infrastructure spend of $42m for 2010-11 

- Building consents on the up - $98m worth for 2010, $68m in 2009 

- Prime ground-floor retail vacancies in the CBD are nil 

- Continued growth in permanent and visitor populations

Proposed rates rise small

11th April 2011

Source: scene.co.nz

Queenstown Lakes ratepayers could face an appreciably lower rates rise this year.
 
The first draft annual plan under cost-cutting mayor Vanessa van Uden delivers a proposed average rate increase of 2.74 per cent. 

Rates rose an average 7.7 per cent last year. 

Initially, Queenstown Lakes District Council planned an average 0.88 per cent decrease, financial manager Stewart Burns says. 

QLDC then opted to reduce debt by $1.9 million and fund it through rates. 

The rates rise, or in some cases decrease, differs according to location and land use. 

Proposed residential rates range from a 0.88 per cent decrease at Arthurs Point to an increase of 3.3 per cent in Glenorchy. 

The commercial range is from 2.23 per cent in Arrowtown to 3.92 per cent in Queenstown. 

The accommodation range is from 2.41 per cent in Wanaka to 5.27 per cent in Queenstown. 

Rural property owners are slugged a little more – their proposed rise ranges from 4.15 per cent to 8.06 per cent. 

QLDC chief executive Debra Lawson says community feedback is being sought on some key issues. 

For example, it’s proposed there’ll be less winter road-gritting due to reduced New Zealand Transport Agency funding, and an end to ratepayer-funded oiling of unsealed roads. 

“Council is looking for a firm guide on these issues, and others, including a proposal to lower the waste management rate but residents paying more according to the amount of rubbish they make,” Lawson says. 

The draft annual plan can be viewed on QLDC’s website. 

Councillors will be asked to adopt the plan next Tuesday.

Queenstown gets five-star rating from Rugby World Cup 2011

8th April 2011

Source: Scoop.co.nz

Queenstown gets five-star rating from Rugby World Cup 2011 superstars

Some of the world’s leading Rugby players have given Queenstown a ‘five-star’ tourism rating ahead of Rugby World Cup 2011.

Last year’s Super 14 champions the South African Bulls, training in Queenstown this week ahead of their clash with the Crusaders in Timaru, have given the resort town a unanimous ‘thumbs up’ as a training destination and a ‘must do’ for fans coming to New Zealand for Rugby World Cup 2011 (RWC 2011).

Of the 26-strong Bulls squad in Queenstown, up to 13 of them are expected to be named in the Springboks squad for the world cup competition.

Bulls Captain and Springbok mainstay Victor Matfield, widely considered to be one of the best locks in the world, described Queenstown as “just beautiful”.

“If there’s one destination Rugby fans have to come and experience, it’s Queenstown,” he said.

Matfield, the most capped Springbok ever, is looking forward to returning to New Zealand for RWC 2011 and although he may not get to return to the resort then, said fans should not miss out on a destination with such a wide range of activities, beautiful scenery and high energy levels.

His sentiments were echoed by fellow Springboks and Bulls players Fourie du Preez and Bakkies Botha.

“Every time we come to Queenstown it gets better. This is my fourth time here and I still haven’t done everything I want to do,” said du Preez.

Blue Bulls head conditioning coach Basil Carzis is also hoping to return to New Zealand with the Springboks for the Rugby World Cup and is on his fourth visit to Queenstown with the Bulls. He said Queenstown offered great training facilities for teams and was an “awesome” destination for visitors.

“Rugby World Cup 2011 is a festivity, not just a competition,” he said. “For training teams there’s a great vibe and buzz in the town and all your facilities are so close it makes life easy for us. For visitors, you have great activities, restaurants and bars. Everything we want is here.”

Queenstown will welcome four Rugby World Cup 2011 teams for training – England, Ireland, Georgia and Romania - for a total of 22 nights later this year.

Already rated as one of the world’s most desirable holiday destinations, Queenstown also has a growing reputation as a training playground for international sportspersons and teams.

Olympic winter athletes have been flocking to the resort town from around the world for off-season Southern Hemisphere training for many years, and this year the Southern Lakes region will host the premier events of the 100% Pure New Zealand Winter Games.

For more information about Queenstown please visit www.queenstown-nz.co.nz.

Resort aims for $1b from tourism

6th April 2011

Source: Otago Daily Times

Destination Queenstown (DQ) yesterday unveiled its 2012 draft business plan, which focuses on achieving $1 billion in annual visitor spending in the resort by 2015.

The plan also covers Queenstown's hosting of the Trenz tourism conference in May and the uncertainty of the global market in the wake of three recent Pacific rim disasters.

In his executive summary presented to about 100 DQ members yesterday, DQ chief executive Tony Everitt said the Queensland floods, Christchurch earthquakes and Japanese earthquake and tsunami had added "pressure and uncertainty" in the post-global financial crisis era.

However, with a resurgent US market, three new air links from Asia and a host of upcoming events including the Rugby World Cup, the resort - which attracts nearly a million visitors per year and $800 million in visitor spending - was a key part of the country's GDP and an internationally mainstream tourism destination, Mr Everitt said.

'We're big and we're significant in global terms," he said.

Via an internet feed, Tourism New Zealand (TNZ) tourism operation general manager Paul Yeo spoke from the Australian Tourism Exchange conference in Sydney about the industry's response to the Christchurch earthquake and TNZ's "roadmap for recovery."

Just after the February quake, many people in the northern hemisphere thought "the South Island - the whole of New Zealand - had been devastated" with the Christchurch state of emergency being misinterpreted as being national, he said.

Changing that "perception of scale" to those not familiar with the country's geography was one of the first challenges.

Another challenge had been settling on a delicate marketing approach in Japan, a nation reeling in the aftermath of disaster and which lost some of its own citizens in Christchurch.

Mr Yeo said there was a feeling Australians would be late to book snow-season holidays in the resort this year and TNZ would try to counter this by quadrupling its 2010 advertising budget.

DQ planned to target early bookings through focused campaigns in Australia.

Other marketing opportunities included the upcoming Trenz conference - to be staged for the first time in the resort in May - the two Hobbit movies and the Asian economic boom, Mr Yeo said.

DQ would look to have Trenz event back and had also floated the idea of a new role dedicated to snaring "iconic events" for the resort, a market many members thought had been overlooked.

The draft plan goes out for member consultation before a final version is presented to the Queenstown Lakes District Council in May.

Dusting primes skifield for big revamp

5th April 2011

Source: The Southland Times

One of the first snowfalls indicates summer is over as Remarkables skifield works on a major terrain makeover for the coming season.

Remarkables Ski Area manager Ross Lawrence yesterday said the 4cm dusting overnight on Sunday was not unusual.

However, the temporary transformation from schist-covered mountains to white-clad slopes is a precursor to another big transformation.

"It's been a very busy summer for us," he said.

"We've moved 60,000 cubic metres of rock and soil during extensive summer earthworks and dynamite blasting, and are putting in 12 new snowmaking guns."

The earthworks mean beginner and intermediate skiers and snowboarders will have a lot more terrain to take advantage of.

`... We're moving the beginner terrain park to Castaway Trail, which assembles all the terrain parks into a similar area, and have some major changes on the Shadow Basin chairlift," Mr Lawrence said.

The sheer amount of earth moved could lead to alarm in some quarters, but people could be assured the Department of Conservation reserve remained pristine, Mr Lawrence said.

"Some people could be worried that we've created a mess, but our revegetation programme is very important. Any tussock or flora that gets moved is replanted, and part of our relationship with DOC is minimising our visual and environmental impact.

"It's a great landscape that is very accessible ... and we don't want to change it without maintaining it," he said

NZ Property Report

4th April 2011

NZ Property Report – March 2011

The March 2011 NZ Property Report published by Realestate.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 February. 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 95% of all property movements in the NZ market as managed by licensed real estate agents.

A full print version of the NZ Property Report – March 2011 is published below and is available for download (1.3MB) and distribution.

Summary of the market – March 2011

Any analysis of the NZ property market for March would be incomplete without reference to the impact of the Christchurch earthquake. The Canterbury region is the second biggest property region representing around 15% of the market. In March the level of new listings in the region fell 36% compared to a year ago, whilst the country excluding Canterbury fell only 11%. Based on a representation of the national total it is likely that around 480 less properties were listed in the Canterbury region in the month than would have been anticipated at this time of year.

Nationally the rise in asking price was the most significant single piece of data from the overall report. The asking price nationally is now hovering close to all time highs and is particularly strong in the major cities. Auckland at $551,720 is up 1% as compared to prior month and prior year; with Wellington at $453,021 up 2.5% on last year and 1% from last month. Canterbury at this time shows no significant change in price in line with recent 3 month average.

The level of inventory of unsold homes on the market continues to grow, recording its 3rd consecutive month of rise to break through the psychological level of one year, reaching 53 weeks. Given this high level of inventory, matched to slow levels of new listings it is becoming clear that the high asking price is more likely to be the result of keen interest focused purely on new listings; leaving older listings somewhat “languishing on the shelf” at what could be unrealistic prices or presentation that needs refreshing to attract buyers.

Asking Price

The truncated mean asking price for all new listings in March rose again to $421,940 up from $420,265 in February. On a seasonally adjusted basis the asking price rose 1% indicating a continued confidence amongst sellers.

The trend of the past 2 years shows continued strength in asking price expectation.

New Listings

The level of new listings whilst rising in March was still 15% down compared to March last year. The current 12 month moving average total shows 131,722 new listings down 6% as compared to the prior 12 month period. The market continues to remain quiet in terms of listings and sales as has been seen in the REINZ sales reports for the last few months with both January and February reporting record lows. February sales totaled 4,502.

Inventory

The level of unsold houses on the market at the end of March actually fell from 52,672 in February to 51,980 in March. This represented the equivalent of 53.1 weeks of equivalent sales, as assessed on a seasonally adjusted basis.

The key driver of this rising inventory is more a reflection of somewhat lackluster sales than excessive new listings. The absolute level though at over a year of equivalent sales will continue to impact the market and maintain the “buyers-market” perspective.

Regional Summary – Asking price expectations

With a strong national asking price growth of 1.9% as compared to the recent 3 month average, the expectation would be to see a consistent trend across the country. The fact is that 11 regions of the 19 did post rises in asking price, however there were some significant falls. The majority of the falls were in provincial regions.

Both Wellington and Auckland saw asking price rise close to peak, with Wellington particularly strong with a 4.1% increase to come within $2,500 of the peak asking price indicating confidence in vendor expectations.

By contrast the situation in Northland and Marlborough, which both showed significant falls in asking prices taking those regions to record low asking price levels.

Regional Summary – Listings

Recent months has seen a consistent decline in listing numbers when judged on a year-on-year basis, this month of March shows some change.

Four regions posted an increase in new listings with Waikato the standout showing a 9% increase to 994 new listings, the highest level in over 3 years.

As previously noted the Canterbury region saw a 36% fall. Over the past 7 months since September a total of 8,558 new listings have been brought to the market across the region. This is down 30% from the 12,232 recorded in the same period in the prior year.

Wellington regions showed a strong performance with a 6% increase. This region has been active with increases consistently over recent months taking the 12 month average up 6% on the prior year.

Regional Summary – Inventory

A consistent picture of high inventory of unsold house on the market pervades the region map. There are pockets where levels are moderate, particularly in Bay of Plenty and Central North Island, however the remainder sit well above long term average.

Of the 19 regions a full 8 of them are now sitting at record high levels of inventory – Central Otago, Hawkes Bay, Manawatu / Wanganui, Nelson, Northland, Otago, Taranaki and the Wiakato.

In total provincial NZ which comprises all of the regions excluding the main centres of Auckland, Wellington and Canterbury reached a record peak of inventory of 76.7 weeks which compares with 36.6 weeks in the metropolitan areas.

These record highs as noted earlier are as much a factor of slows sales, are clearly offering a broad range of options to buyers active in the market.

Lifestyle

Lifestyle property performed fairly strongly in respect of new listings with a total of 1,096 coming onto the market in March up 17% from February and in line with March last year. The asking price expectation fell by 2% in the month from $552,591 to $542,975 which was down 8% as compared to March 2010.

Despite the overall levels in Canterbury lifestyle listings remained steady with 130 new listings as compared to 144 in March 2010, the reality would be that almost all of the lifestyle properties in the region would be well outside of the immediate vicinity of Christchurch city.

Apartments

Apartment listings grew in March but at 516 failed to reach the level of 613 seen a year ago. Based on a 12 month moving average volumes of apartment listings continue to fall with 6,216 in the most recent year down 9%. In Auckland the trend is down with 5% decline on a 12 month moving average basis. March saw 332 new apartment listings in Auckland down 8% from a year earlier.

The asking price expectation rose 4% in March from $365,150 to $378,494. This level though is down 3% as compared to a year ago and down 4% as compared to the recent 3 month average. Auckland apartment listings reflected a similar trend down 4% year-on-year.

Property Price Index

Comparing the sale price of properties across the country to the asking price expectation is not a perfect comparison; however the trends tend to align. The benefit is that the data for asking price is of the market today, whilst the selling price is reflective of the market active between 4 and 6 weeks ago. The latest comparison is highlighted below:

Realestate.co.nz data is compiled from asking prices of new residential listings as they come onto the market via subscribers to the realestate.co.nz website. The Realestate.co.nz website currently has over 95% of all licensed real estate offices subscribing and providing all of their listings onto the website. The asking price is presented as a truncated mean price at a 10% interval.

REINZ: data is compiled from reported unconditional residential sales from all members of the Real Estate Institute of New Zealand representing all licensed real estate offices. The sale price is published as a stratified median house price and is developed in association with the Reserve Bank of NZ.

Quake, Cup lift Qtown bookings

4th April 2011

Source: The Southland Times

Queenstown hotels are already fielding more inquiries for rooms during the Rugby World Cup, with one hotel already likely to score a mass 200-strong group booking of overseas supporters.

Rydges Queenstown general manager John McIlwain said yesterday there had been a big increase in the number of inquiries, especially since Wednesday's announcement about the reallocation of pool games to Dunedin and Invercargill. Queenstown will also now host an extra team, Georgia, expected to spend six nights in the resort, while Ireland will spend seven nights and Romania four.

A 200-plus group of supporters was likely to relocate from Rydges Christchurch to Queenstown, and Mr McIlwain was confident other "interest" in bookings would firm up within the next week.

Crowne Plaza general manager Matt Anderson said the Rugby World Cup changes had already generated good inquiry, with "a few decent ones" from groups already.

Heritage Queenstown general manager Carey Norton said he had had "some substantial inquiry" since Wednesday, including from overseas teams, and he expected things "may hot up" in a fortnight. The hotel already had one overseas team booked in before Wednesday's announcements.

Queenstown Convention Bureau manager Kylie Brittain said Queenstown had also picked up between four and five confirmed conferences, of 80 to 300 delegates, during the next six months that have had to relocate after the Christchurch earthquake.

Mr Norton said he had one booking for almost 100 rooms. He had also received some "colossal ones" – one of potentially 900 room-nights and one of potentially more than 600 room-nights – spread throughout a week early next year. Both of those would probably bring about 200 overseas delegates each. He did not know whether these were directly because of the earthquake but they had been "fairly sudden".

There were likely to be more conference bookings diverted from Christchurch in the future and it was just unfortunate they would come "off the back of such a horrific event", Mr Norton said.

Rydges Queenstown would now host the relocated Motel Association of New Zealand conference in late May, early June, bringing several hundred delegates, and Mr McIlwain said he had quoted for about five others.

Hoteliers said while the resort has picked up a few conferences, the majority have gone to the North Island, with Rotorua faring well because of its new purpose-built convention centre.

Millennium Queenstown expected to pick up three conferences from July to September, ranging from 80 to 200 delegates and inquiries were still coming in.

Christchurch housing market 'getting on with it'

4th April 2011

Source: Stuff Business Day

The real estate industry is seeing signs of resilience in the Christchurch property market following the devastating February 22 earthquake, although nationwide the inventory of houses for sale topped one year.

In March, the number of new listings in Canterbury was 36 percent lower than a year earlier, while for the rest of the country the decline was 11 percent, according to industry website Realestate.co.nz.

The 1297 new properties that came onto the Canterbury market in March was 10 percent up from the previous month.

Realestate.co.nz chief executive Alistair Helm said that while Canterbury's listings were down an annual 36 percent, the figures showed business and people were already picking themselves up and working to resume some state of normality.

"Property is still being listed, marketed, viewed online, researched, inquired about, negotiated and sold," Mr Helm said.

The truncated mean asking price for Canterbury homes was down 2 percent from the previous month to $357,986, while the inventory of unsold homes rose to 41.2 weeks, up 7 percent from a year earlier and up 16 percent from February.

Nearly 1400 people worked in real estate in the Canterbury region, operating from 120 offices, 87 of which were based in Christchurch, Mr Helm said.

"While there was some damage to a number of real estate offices in the city, many have found temporary offices or consolidated operations in an existing office that hasn't been affected."

Nationally, the 12,247 new listings in March was 8 percent up on the previous month, but still 15 percent down on the number of listings at the same time last year.

With sales remaining low, the national inventory of unsold homes rose to 53 weeks - close to the highest level ever recorded. The average asking price also crept up 2 percent to $421,940, just 1.7 percent below the market peak of October 2007.

While there was traditionally a surge of new listings at this time of year, the latest figures were the lowest March numbers recorded by Realestate.co.nz in three years, Mr Helm said.

Realestate.co.nz's latest NZ Property Report, published today, showed the inventory in Auckland up 1 percent from a month earlier but 2 percent down on a year earlier at 38 weeks, and in Wellington the inventory was 27.9 weeks.

In provincial New Zealand - which excludes Auckland, Wellington, and Canterbury - the inventory level reached a peak of 76.7 weeks, compared with 36.6 weeks in metropolitan areas.

Given the high level of inventory, matched to slow levels of new listings it was becoming clear that the high asking price was more likely to be the result of keen interest focused purely on new listings, the report said.

Older listings were being left somewhat languishing on the shelf at what could be unrealistic prices, or with a presentation that needed refreshing to attract buyers.

Queenstown Barmy Army bonanza

1st April 2011

Source: Stuff.co.nz

Queenstown is gearing up to welcome a big-spending Barmy Army invasion during this year's Rugby World Cup after yesterday's news that Dunedin will now host three England matches.

Destination Queenstown chief executive Tony Everitt said yesterday although Queenstown sympathised with Christchurch in its disappointment at losing matches, the additional England v Argentina match at Otago Stadium would be a big boost to Queenstown.

The resort was now also hosting a fourth rugby team, Georgia, as well as Ireland, Romania and England.

Ireland will spend seven nights in Queenstown, while Romania (four), England (five) and Georgia (six) will also spend significant time in the town.

Otago hosting an extra English pool game was "very significant", Mr Everitt said.

"This means the England team and fan base will be in Otago for a full three-week period," Mr Everitt said.

"Of all the fan bases to get, the one to get is England, they will be quite significant in numbers, second only to Australia in terms of size of international supporter groups coming. They will almost definitely be the longest staying visitors in New Zealand [for the Rugby World Cup]."

Australian supporters would probably come and go as it was easy for them to return home, he said.

"But the England fans will come and camp here so there will be lots of spare time to come and explore Queenstown."

This would be great for the resort's economy and for all of Otago, as England rugby supporters tended to be at the "high net worth end" of the market, he said.

"It tends to be a rich gentleman's and lady's sport – it's great for Queenstown."

The additional match meant the English supporters would be in the region for longer and Queenstown operators would be focusing on pushing the resort's "knockout" everyday visitor offering out in front of them leading up to the event.

It was still hoped Queenstown would also host an All Blacks Classics match during the Rugby World Cup.

Invercargill's Rugby Park will now also be the venue for the Scotland v Romania game on September 14, meaning there will be three games in the space of eight days in the city.

Invercargill was already hosting Scotland v Romania on September 10 and Argentina v Romania on September 17.

SOUTHERN POOL GAMES

DUNEDIN: Sept 10: Argentina v England Sept 18: England v Georgia Sept 24: England v Romania Oct 2: Ireland v Italy

INVERCARGILL Sept 10: Scotland v Romania Sept 14: Scotland v Georgia Sept 17: Argentina v Romania

Queenstown set for Barmy Army bonanza

31st March 2011

Source: stuff.co.nz

Queenstown is gearing up to welcome a big-spending Barmy Army invasion during this year's Rugby World Cup after yesterday's news that Dunedin will now host three England matches.

Destination Queenstown chief executive Tony Everitt said yesterday although Queenstown sympathised with Christchurch in its disappointment at losing matches, the additional England v Argentina match at Otago Stadium would be a big boost to Queenstown.

The resort was now also hosting a fourth rugby team, Georgia, as well as Ireland, Romania and England.

Ireland will spend seven nights in Queenstown, while Romania (four), England (five) and Georgia (six) will also spend significant time in the town.

Otago hosting an extra English pool game was "very significant", Mr Everitt said.

"This means the England team and fan base will be in Otago for a full three-week period," Mr Everitt said.

"Of all the fan bases to get, the one to get is England, they will be quite significant in numbers, second only to Australia in terms of size of international supporter groups coming. They will almost definitely be the longest staying visitors in New Zealand [for the Rugby World Cup]."

Australian supporters would probably come and go as it was easy for them to return home, he said.

"But the England fans will come and camp here so there will be lots of spare time to come and explore Queenstown."

This would be great for the resort's economy and for all of Otago, as England rugby supporters tended to be at the "high net worth end" of the market, he said.

"It tends to be a rich gentleman's and lady's sport – it's great for Queenstown."

The additional match meant the English supporters would be in the region for longer and Queenstown operators would be focusing on pushing the resort's "knockout" everyday visitor offering out in front of them leading up to the event.

It was still hoped Queenstown would also host an All Blacks Classics match during the Rugby World Cup.

Invercargill's Rugby Park will now also be the venue for the Scotland v Romania game on September 14, meaning there will be three games in the space of eight days in the city.

Invercargill was already hosting Scotland v Romania on September 10 and Argentina v Romania on September 17.

SOUTHERN POOL GAMES

DUNEDIN: Sept 10: Argentina v England Sept 18: England v Georgia Sept 24: England v Romania Oct 2: Ireland v Italy

INVERCARGILL Sept 10: Scotland v Romania Sept 14: Scotland v Georgia Sept 17: Argentina v Romania

Relocated World Cup match venues named

30th March 2011

Source: stuff.co.nz

Rugby World Cup matches originally scheduled for Christchurch have been allocated to another three South Island cities in the wake of last month's devastating earthquake.

Nelson, Dunedin and Invercargill will host pool games set down for Christchurch while two other matches have been reallocated to Wellington and Albany.

Organisers confirmed a fortnight ago that two quarterfinals earmarked for Christchurch will instead be played in Auckland on October 8 and 9.

Rugby New Zealand 2011 (RNZ 2011) today announced a raft of changes to the original tournament schedule forced upon it by major infrastructural damage inflicted on Christchurch by the February 22 earthquake which killed an estimated 182 people.

Rugby World Cup Ltd chairman Bernard Lapasset said that all tournament stakeholders had been supportive throughout the rescheduling process.

"Following the difficult decision to transfer the Christchurch matches all involved have worked hard to confirm the new venues as quickly as possible. We are pleased that three of the five matches will remain in the South Island."

RNZ 2011 chief executive Martin Snedden said today's decisions provided certainty for the affected seven teams.

RNZ 2011 also announced that the new fully enclosed Otago Stadium in Dunedin, which is nearing completion, has met the criteria to be confirmed as a World Cup match venue.

"The Otago Stadium operators have provided us with the assurances we need for us to now be confident that the new venue will be ready to deliver on its tournament obligations," Snedden said.

The rescheduled matches will see Argentina play England in Dunedin on September 10, Australia play Italy at Albany on September 11, England play Georgia in Dunedin on September 18, Argentina play Scotland in Wellington on September 25 and Australia play Russia at Nelson on October 1.

Also, as part of the rescheduling, operational reasons have necessitated the transfer of one non-Christchurch match, Scotland against Georgia, from Dunedin to Invercargill on September 14.

"Our desire was always to transfer as many of the Christchurch pool matches as was reasonably possible to other existing South Island venues," Snedden said.

Organisers also said that ticket purchasers for all Christchurch matches and Scotland's game against Georgia match will receive a refund and the opportunity to secure replacement tickets to the rescheduled matches during a priority purchase period.

As well, the rescheduling decisions have also meant a number of changes to team bases.

Queenstown will now host Georgia as well as Ireland, Romania and England while Hanmer Springs in north Canterbury becomes a new team base and will host Australia over four nights.

Construction turnaround looms

29th March 2011

Source: Stuff.co.nz Business Day

BNZ economists are anticipating a "massive" rise in housing construction, as the rebuilding of Christchurch gets under way, and as leaky building problems add to demand.

While forecasting just 15,000 new housing consents nationally this year, they expect 21,000 a year from 2012 to 2014.

Adding in renovation work, they estimate residential construction rising 41 percent next year after a 7.7 percent drop this year and then 22.4 percent in 2013 before a return to normality begins to set in.

"The housing and construction markets have been through a torrid time over the last four years," BNZ head of research Stephen Toplis said today.

"We believe that the worm will soon turn and turn dramatically in the case of residential construction. It's just unfortunate that the key driver of this transition was such a terrible tragedy."

Mr Toplis cautioned that estimates for Christchurch were back-of-the-envelope for now, while there was no guarantee of full replacement, and the timing was extremely uncertain and likely to take a number of years.

Best estimates suggested that as many as 10,000 homes would need to be demolished and that total damage to the housing stock would total around $9 billion.

Even before the earthquake, too few new houses were being built nationally to meet future demand. By itself that would tend to suggest significant upward pressure on rents, property prices and construction activity - in that order.

Before investors were willing to re-enter the housing market they were likely to require positive cash earnings flows, and for that to happen rents would need to rise or property prices fall, Mr Toplis said.

Anecdotal evidence supported a view that rents had started to push higher, while official data on rents from Statistics New Zealand indicated that was not yet happening nationwide.

Assuming roughly 2-1/2 people per household, enough houses were being built to cope with 35,000 more people each year, but annual population growth of 1.2 percent for the past decade was adding around 52,000 a year. As a start, that left a shortfall of 7000 houses a year.

On top of that, it had been estimated the cost of dealing with the leaky building debacle could be $10b to $15b.

There was a risk that if demand did pick up, the supply response would be so constrained that the result would be house price inflation, but BNZ's central scenario was for an appropriate supply.

Searches for Property Increasing

18th March 2011

Source: emigrationgroup.co.uk

The UK has recently experienced one of the coldest winters on record and thanks to the long dark days of winter it seems that the yearning for warmer climates has increased throughout the country. While the number of “dreamers” who search for living space and visa options in Australia always increasing in January, an overwhelming number of these searchers are turning their dream into reality.

During the past two months the number of searches on the Rightmove Overseas website has increased by more than 50 per cent and the most popular emigration destinations have fuelled this growth. The number of searches for homes in New Zealand has increased by 91 per cent and searches for Australian homes have increased by a staggering 114 per cent.

Robin Wilson, the head of Rightmove Overseas, has said that searches “always pick up in January and February but nothing on this scale”. Searches for countries such as Spain and Portugal seem to have fall when compared to previous years with the majority of people looking to buy property in Australia or New Zealand.

National and world events greatly affect the number of searches to a specific region. With the recent earthquakes in New Zealand Mr Wilson expects searches for the country will decrease, however the number of searches for homes in Australia is expected to increase due to the high number of TV programmes on relocating to the country.

Property prices in New Zealand increase for first time in a year

18th March 2011

Source: ibtimes.com

New Zealand house values rose slightly last month for the first time since last March, due to continued sales of good quality houses in larger locations, according to the latest figures from valuer QV.

Property values in February were down 1.7% on a year earlier, following a similar sized decline in January, but were 0.13% higher than in January, the report also shows.

Must Read

U.S. Troops, Civilians Help Japan's Quake-Tsunami Response

The Health Effects Of Radioactive Elements

Sponsorship Link

Profitable forex trading - only 5 minutes a day

More ads being shot in Queenstown

11th March 2011

Source: stuff.co.nz

The filming of TV commercials in the Central Otago and Southern Lakes region has boomed since the new year, bringing millions of dollars into the local economy.

Film Otago Southland executive manager KJ Jennings said film projects brought up to $37 million into the Otago-Southland region last year.

Big-budget TV commercials shot in the Queenstown region were the "bread and butter" of the industry, Mr Jennings said.

Although he would not discuss individual budgets or details because of confidentiality in the tight-knit advertising industry, he could confirm 34 commercials had been shot in the Queenstown region this year.

"We're absolutely pumping, and this has been the best start to a new year in a long time," he said.

"TV commercials bring in a lot of money, which stays in the region, and the reach of the industry goes well beyond the film sector itself."

Making the 34 TV ads had taken 150 shooting days, meaning more than two commercials were being shot on any given day this year.

An industry insider said a big-budget commercial could reach a shooting budget of $300,000 a day.

Mr Jennings stressed budgets could vary immensely, but any shoot would have pre-production time that could stretch to one month. Considering varied budgets and pre-production timeframes it was very difficult to put a figure on how much money the industry had brought into the region so far this year.

The industry insider said commercials for luxury car brands Audi and Porsche had been shot in the region, as well as for international beer giant Heineken.

It is also believed a big-budget commercial for Carlsberg beer was shot at various locations, including the Snow Farm in Cardrona Valley, in February.

A commercial shot for popular United States soft drink Mountain Dew featured base-jumping in Glenorchy, while an ad for Great Wall Wines, a Chinese wine company, featured international models cavorting through a Gibbston Valley winery.

The TV commercial industry supported about 120 film freelancers in the Wakatipu, Mr Jennings said. Queenstown's talent agencies and catering companies, which provided actors, models and on-set meals, had been built around the industry.

Bollard slashes OCR, banks cut rates

10th March 2011

Source: New Zealand Herald

Reserve Bank Governor Alan Bollard has cut the official cash rate half a percentage point to 2.5 per cent in what he termed an "insurance measure" to stave off a severe downturn in the wake of the 6.3 magnitude Christchurch earthquake.

The move has already prompted four banks to slash their interest rates and one economist to pick the Reserve Bank will not move on the rate until next year.

Westpac was the first to move dropping its everyday floating rate 5.60 per cent and its floating rate to 6.24 per cent. ASB followed suit shortly after dropping its floating rate by 0.50 per cent to 5.75.

Kiwibank and BNZ have also now lowered their floating rates - Kiwibank to 5.65 per cent and BNZ's standard variable rate to 5.99 per cent.

"We have acted pre-emptively in reducing the OCR to lessen the economic impact of the earthquake and to guard against the risk of this impact becoming especially severe," Bollard told reporters in Wellington. "While it is difficult to know exactly how large or long-lasting these effects will be, it is clear that economic activity, most certainly in Christchurch but also nationwide, will be negatively impacted."

The statement confirms the widespread anticipation of a cut to stem the blow to economic confidence after last month's quake, which killed at least 166 people and wreaked some $15 billion worth of damage. About $9 billion of that is assumed to be on residential property, with commercial property and public infrastructure assets costing $3 billion each.

Read the Monetary Policy Statement here.

ASB chief economist Nick Tuffley said it was unlikely the Reserve Bank would cut the rate further in the short term.

The timing of future OCR increases would be closely influenced by the timing of Christchurch reconstruction along with signs of broader economic recovery, he said.

"We judge the RBNZ will be on hold until March 2012," Tuffley said.

ANZ economist Mark Smith said he is anticipating the first rate hike to come as early as December.

This was based on the view that inflation would prove less benign than what the Reserve Bank had projected, and that reconstruction efforts will begin by the end of quarter three, he said.

Today's statement suggests official interest rates will rise steeply next year, as reconstruction takes hold in Christchurch, with economic growth seen peaking at close 6 per cent in 2013. The bank expects the high proportion of floating rate mortgage lending to mean today's cut will create a swift improvement, while making a reversal quicker in a year or so.

Prime Minister John Key stepped on constitutional niceties last week when he told Bloomberg he expected a rate cut and would welcome such a move, while major lenders have already pre-empted a reduction in the OCR, shaving half a percentage point from their one-year mortgage rates.

Bollard had to weigh up whether the impact of the quake was so great as to warrant a cut that wasn't focused solely on price targets, and would have the effect of shoring up business confidence.

The quake is expected to push up prices as resources are mobilised to rebuild Christchurch, and it would be inappropriate for stimulatory rates during the rebuild, the statement said.

Earlier this week, the Treasury said there were inflationary pressures throughout the global economy, and the Christchurch reconstruction was so large it would inevitably have an impact on inflation. The faster the rebuild, the greater the pressure on prices, it said.

The central bank expects inflation will come back within its target band of between 1 per cent and 3 per cent once the effects of last year's hike in consumption tax flow through, and forecasts 4.4 per cent growth in the consumer price index in the March 2011 year, slowing to a pace of 2.1 per cent in 2012 and 2.4 per cent in 2013.

The bank offered uncharacteristically limited economic projections in today's statement as it struggled to come to grips with the size and scope of the quake. "Readers should view the forecasts as a thematic representation of the thinking behind the policy decision, rather than a strict prediction of the future," it said. Full projections will be included in the June MPS.

Bollard pushed out the expected track of rate hikes even further, having already trimmed the forecast. The 90-day bank rate is expected to be 3 per cent in the 2012 March year, 0.7 percentage points lower than forecast in the December statement.

Traders had been betting he would hike the OCR by 50 basis points over the coming 12 months before the quake, and were expecting the rate to be just 7 points higher in a year's time before the release, according to the Overnight Index Swap curve.

The move puts New Zealand at odds with other central banks, which are looking at removing the extraordinary stimulus put in place to cope with the collapse of the global financial system in 2008 and tightening monetary policy.

Bollard stopped tightening monetary policy after two increases in the middle of last year as the economic recovery struggled to take hold, with an unexpected contraction in the third quarter and minimal growth in the second.

The quake has made the prospect of a double-dip recession a reality on the central bank forecasts, with annual growth in the March 2011 year trimmed by 0.8 percentage points to 0.9 per cent. Much of that comes from the quake, which will shave 0.6 percentage points from economic growth in the first quarter, in an economy that was already flat-lining.

The Treasury's expecting economic growth of just 2 per cent this year, down from the 3.5 per cent forecast in the half-year update, but still stronger than the 0.5 per cent predicted by the New Zealand Institute of Economic Research.

Before the disaster, there were signs of the economy was picking itself back up, with sentiment surveys showing increasing numbers of firms optimistic about the future, while Fonterra hiked its forecast pay-out to farmers on the day of the quake on the back of record high prices for locally produced commodities.

"The earthquake has dealt the economy a serious blow. Limited information to date quantifying the extent of the earthquake damage suggests around 2 per cent will be knocked off national GDP in 2011 leaving growth at only 1.5 per cent, but surging to 5.1 per cent in 2012 during reconstruction," said Imre Speizer, market strategist at Westpac Bank, in a note before the announcement.

Small rise stops property value drop: QV

8th March 2011

Source: Stuff.co.nz

New Zealand house values rose slightly last month for the first time since last March, due to continued sales of good quality houses in larger centres, according to valuer QV.

Property values in February were down 1.7 percent on a year earlier, following a similar-sized decline in January, but were 0.13 percent higher than in January, QV.co.nz research director Jonno Ingerson said.

National values gradually declined throughout most of 2010 and then flattened for several months before their small increase. Values remain 5.6 percent below the market peak in late 2007.

"Although the volume is pretty low, the type of properties that are selling at the moment - which tend to be quality family-type properties in good areas - they are still selling strongly and for good prices," Mr Ingerson told NZPA.

"Because of that you're seeing across the main centres prices holding or increasing slightly, and because of that it's pushing up the New Zealand number."

Buyers were going for safe bets, and provincial and rural areas in contrast were consistently sliding backwards.

"All of that speculative investment stuff's gone, people at the lower end of the market aren't buying anymore, so you're left more with middle New Zealand doing what they need to do, moving house because they're moving jobs or they need to upsize because of the family or whatever it is," he said.

The devastating earthquake in Christchurch on February 22 did not affect the data, which was based on the three months to the end of February, but its effects on the housing market would start showing up next month.

Canterbury values would slump as Christchurch sales stopped, but it was impossible to pick the impact at a national level.

The Christchurch market had begun to show some positive signs after a slow recovery from the original earthquake in September, and February values were 0.3 percent above the same time last year.

There was anecdotal evidence that the level of enquiry in Auckland about property had dropped right back for a week or two after the quake, possibly because people were worried about the impact on the national economy, he said.

Values across the Auckland area increased last month, driven by central Auckland with the rest of Auckland remaining steady.

Values across wider Wellington were steady, increasing in Lower Hutt and Upper Hutt, declining in Porirua and holding flat in Wellington city.

In contrast, values in Hamilton and Tauranga continued to decline.

The average New Zealand sales price over the last three months rose to $411,712 from $409,067 last month.

200 Christchurch pupils enrolled

7th March 2011

Source: odt.co.nz

About 200 Christchurch primary and secondary school pupils are now enrolled in Queenstown and Arrowtown schools as families continue to leave Christchurch after last month's earthquake.

Queenstown Primary School now has 45 Christchurch children enrolled, St Joseph's School 15, Kingsview School 2, and there are about 60 at Arrowtown School, 34 at Remarkables Primary School and 45 at Wakatipu High School.

Almost all the schools said they had more enrolments pending, or were expecting more pupils to enrol in the coming weeks.

The Queenstown Lakes District Council met community representatives on Friday to discuss the effects of the disaster and gauge the impact of the large numbers of displaced people being welcomed into the community.

Findings from the meeting are expected to be released today.

School principals said it was unknown how long the pupils, whose ages span all levels from primary new entrants to the last year of high school, will attend Queenstown schools.

"It's hard to tell," Queenstown Primary School principal John Western said.

"Two children have already returned to Christchurch, and some other children's families have entered into long-term rental agreements."

Wakatipu High School deputy principal Grant Adolph said, while some people indicated they would stay, some were here short term and some pupils were returning to Queenstown from boarding schools. Everything depended on what happened in Christchurch, he said.

"We don't know and the families don't know, and our approach is that we are here for as long as what they feel is needed."

The general consensus among schools was that pupils were settling in well, although some were reported to be anxious, upset and "a bit lost".

"Their parents have said that it's a blessing that children are back at school and they have something to focus on," Arrowtown School principal Robin Harris said regarding his Christchurch pupils.

"It certainly has made them more relaxed. There obviously have been tears and people upset, and that's totally understandable, but by and large they are settling in well and seem to be making friends."

Some schools have been making counselling support available to pupils who request it, and Wakatipu High School has set up a "buddy programme" to help new pupils get to know the school.

"There are a number of students who were right in the thick of it in the town square, and people that were on their way home," Mr Adolph said.

"We are enrolling them and treating them as our own and endeavouring to put together a personalised education plan for each student so that they can normalise life as much as they can, so they can continue learning."

Principal of St Joseph's School Trisch Inders also reported, in addition to Parent Teacher Association and Strengthening Families Trust support, the Ministry of Education had been of great assistance.

Primary School Becomes First in NZ to Wear a Green roof

6th March 2011

Source: scoop.co.nz

Remarkables Primary School Press Release

A New Zealand green roof company has put a small Queenstown Primary School on the international map by becoming the first school in New Zealand to wear a ‘green roof’.

Remarkables Primary School, a newly built enviro school, is one of a handful of schools throughout the world who can boast a green roof, which doubles as an outdoor classroom.

The green roof, which was planted and designed by Auckland-based Greenroofs Ltd was included as part of the original construction of the school, by architect Babbage Consultants.

Greenroofs Ltd designed the school’s green roof with multiple tasks in mind.

As well as reducing stormwater runoff and providing insulation to the school, the roof provides much-needed further outdoor space. The school site is approximately half the size of a typical NZ primary school site so the need to utilise the space to the best of its potential was paramount. This green roof enables the children to have a further outdoor learning and playing space.

The school’s green roof will be seen and utilised by children, parents and teachers every day as they walk into the school through its unique entrance way, over the roof.

The school is set in a valley and overlooked by neighbouring houses so its green roof is not only aesthetically pleasing but helps merge the building into the landscape not-to-mention helping absorb the aircraft noise from the nearby airport.

Greenroofs Ltd Director Will Thorne is thrilled with the final roof. “Not only is this school the first of its kind here in New Zealand, but I am proud of how it will be used to educate future generations on sustainability. I hope that this green roof is the first of many here in our clean, green country.”

Indeed, this is something that Headmistress, Deborah Dickson is most proud of: “Not only will our green roof enable our children to have a further outdoor learning space, but, as an Enviro School we plan to use the roof as a tool to educate and promote sustainable practice through the paper 4 trees programme, composting, gardens and worm farm.” Produced by Jacqueline Lockington Photographs available on request

Green roofs have grown hugely worldwide in the last few years. They are seen as having significant effects on minimising pollution, reducing infrastructure requirements in cities, especially stormwater, encouraging wildlife as well as huge energy cost savings. Some of the more famous green roofs include the Vancouver Trade Centre and the California Academy of Sciences. They are now starting to become more popular in New Zealand as our country realises the benefits.

Remarkables Park forge ahead with medical centre plans

4th March 2011

Source: scoop.co.nz

Remarkables Park and Queenstown Medical Centre forge ahead with plans for integrated medical services facility

Queenstown's Remarkables Park Ltd (RPL) and the Queenstown Medical Centre (QMC) are forging ahead with plans for an integrated medical services facility on a site fully zoned for Hospitals and Healthcare Services in the 150-hectare Remarkables Park Zone.

RPL's co-director Alastair Porter today (March 3) announced plans for a multi-million-dollar, large scale, modern, integrated medical facility starting at 3200sqm but with capacity to more than double in size.

RPL said that in 2009 a resource consent had already been granted for a hospital and medical centre within the Remarkables Park Zone. The now proposed facility was a modification of the earlier facility recognising changing healthcare demands. They said the integrated facility would provide a wide range of medical service providers.

It will incorporate radiology services run by Pacific Radiology, owners of Otago Radiology. James Fulton of Otago Radiology said "it is committed to providing a comprehensive radiology service to the Central Otago community and welcomes the opportunity to work with Remarkables Park in the planning for the provision of these services to be included in this new integrated medical facility".

Queenstown Medical Centre will offer 'across the board' medical services including observation beds and a fully-accredited accident and emergency clinic. Within the new campus Queenstown's first specialist suites will cater for orthopaedic and surgical consultants. Full integration with pharmacists and physiotherapists will provide a new level of medical services to the Wakatipu community.

A consortium of local and national surgical service providers will be involved in a purpose designed theatre facility. Initially a two-theatre day-stay hospital will cater for most surgical specialities with more complex services added at a later stage as demand grows. Recovery and overnight facilities will significantly increase the complexity of operations able to be provided in Queenstown.

Dr Hans Raetz of Queenstown Medical Centre said the Skin Institute was also moving to the new site, introducing its current surgical workload into the state-of-the-art theatres. He also said a new Medical Spa would continue to provide the highest standard of services in cosmetic medicine and cosmetic surgery.

"The integrated facility will be part of a Queenstown Health Campus at Remarkables Park which will also be capable of housing a pharmacy and dental facilities, with Southern Communities Laboratory also able to move into purpose built facilities on site," he said.

The Dunedin School of Medicine at the University of Otago has expressed interest in developing teaching facilities for medical students within this health campus; in keeping with a worldwide shift to teaching undergraduate medical students and early graduates in community settings.

RPL said the company was delighted to be announcing the development to provide improved healthcare services to the Queenstown region in conjunction with QMC and other specialist providers.

"We have an outstanding site available that will initially be accessed from an extension of Hawthorne Drive which will be complemented in the future by the Eastern Access Road which is currently being developed. This road will join Remarkables Park to the northern Frankton Flats and the State Highway-Ladies Mile close to the Queenstown Garden Centre," said Mr Porter.

"We've worked towards providing a facility that will best serve the needs and wishes of the growing district, including exploring options to provide improved maternity services and work alongside aged care providers on an adjoining site.

"There has been much debate over the past two years about the provision of public health services in Queenstown and the surrounding district, so we have left the option open for public facilities to take advantage of the scale of what we're proposing on a flexible site.

"We've kept the Southern District Health Board fully appraised of our plans and have made it clear to them that they have that option."

Dr Raetz said that while the private facility would "stand on its own two feet", it would make sense for there to be sustainable integrated private and public services within the same Health Campus.

"Workforce synergy and utilisation of auxiliary services such as radiology, CT, laboratory and pharmacy are all integral to the delivery of health care at all levels. Outpatient clinics currently provided by Queenstown Medical Centre cover 26 specialities and could easily be augmented with public appointments in the new facility, greatly enhancing private and public access for our community," he said.

Dr Raetz said that knowing the RP site was zoned for hospital facilities and that the site and buildings would be designed to enable future extension were all "significant advantages."

Dr Raetz said it was hoped the new facility could open by mid-2013.

RPL said it was confident that a Public/Private partnership in a new health centre at Remarkables Park would be totally in line with the government's policy direction of 'Better, sooner, more convenient healthcare'.

Mr Porter said the policy recognised the reality -- now further emphasized by the Christchurch earthquake -- that the government did not have unlimited funds and there was significant national benefit in leveraging private capital to fund public facilities.

He said Remarkables Park was committed to the Queenstown community and was making sure the facility and site was designed to enable expansion as demand for health services in the district increased.

"We expect a facility of this quality will give older residents the confidence to stay longer in the district, which will in time change our demographic and lead to more demand for health services, which this large site will be able to expand to accommodate."

Paraparaumu to Queenstown flights

3rd March 2011

Source: stuff.co.nz (abbreviated)

Paraparaumu's airport upgrade has been doubled to cope with likely increased commercial flights to new destinations including Napier and tourist mecca Queenstown.

The news comes as Paraparaumu Airport Ltd director Sir Noel Robinson revealed deals are imminent to fill a business complex creating about 300 new jobs.

Sir Noel told the Kapiti Observer the number of flights out of the airport could rapidly triple after the start of services in October.

New destinations could include flights from Paraparaumu to Queenstown as well as Napier and Christchurch, he said.

Sir Noel is so confident in services expanding he has doubled the budget for a runway upgrade, starting this month, to $3 million to increase parking space for planes.

"Air New Zealand are now talking a lot more flights, and they want it [Paraparaumu] as an alternative to Wellington when there's fog or rain, so we've decided to invest the extra $1.5 million."

The planned airport terminal, now consented, will double in size to about 450 square metres to take the increased flights and passengers.

Banks slash rates for fixed interest terms

2nd March 2011

Source: Stuff Business Day

Banks are slashing their fixed interest rates by up to half a per cent as the Christchurch earthquake sends shockwaves through the money markets.

ANZ National Bank led the market by reducing its one-year fixed rate to 5.95 per cent, down 50 basis points. The two-year rate has reduced by 16 basis points to 6.49 per cent and the three-year rate by 11 points to 6.99 per cent.

ASB Bank matched the one-year rate, but undercut the market on all other terms out to five years, except for Westpac's new 5.75 per cent rate for a six-month term. BNZ and Kiwibank were not planning to follow suit yesterday.

The new one-year rate would save nearly $31 a month for every $100,000 of mortgage over 25 years and beats all floating rates in the market.

ANZ National chief economist Cameron Bagrie said the earthquake was a "big, massive shock" to the economy which called for leadership from the Government, businesses to look after staff, and banks to play their roles by lowering the cost of borrowing.

"The Reserve Bank should step up to the plate and cut interest rates so that even more benefits can be passed on to the consumers," Mr Bagrie said. "The spirit of what New Zealand needs here is decisive action across the whole spectrum, everybody needs to play their part."

Most economists now expect the Reserve Bank to lower interest rates by 25 basis points when it next reviews them on March 10 to help soften the impact of the earthquake on the economy. Mr Bagrie said that would be immediately passed on through lower floating rates.

There has been a steady flow of homeowners shifting from fixed-term rates to cheaper floating rates since the middle of 2009. At that point, floating mortgages accounted for just over a quarter of all mortgages. Since last September they have made up more than half, and climbing.

Homeowners have been lured by expectations that floating rates will not rise till later this year while the Reserve Bank waits for stronger signals that the economy is recovering before raising the official interest rate.

Last week BNZ chief economist Tony Alexander advised homeowners to stick with the floating rate. "There will probably not be another increase in the official cash rate till January next year at the earliest."

But while borrowers would be better off, those with savings in term deposits would earn between 25 basis points and 60 basis points less interest on their investment for terms up to two years.

NZ Property Report – February 2011

2nd March 2011

Source: realestate.co.nz

The February 2011 NZ Property Report published by Realestate.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 February. 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 95% of all property movements in the NZ market as managed by licensed real estate agents.

The February 2011 report covering the final month of summer shows an active level of new listings coming onto the market. The total of 11,395 is up 37% as compared to January, but down 20% as compared to February last year. The seasonally adjusted number of new listings for February shows a 9.5% increase. All of these numbers show that in the context of recent market activity the property market in NZ is somewhat more active, however when assessed over the recent couple of years the market continues to be weak and the recent 12 months is the lowest level of activity with just 133,883 new listings in the recent 12 months, down 3% as compared to the same period 12 months ago.

The expectation of vendors remains confident despite the low level of sales volume. The truncated mean asking price rose in February by 3.3% to $420,265. There is a traditional seasonal lift in asking price at this time of year and allowing for the seasonal adjustment the asking price actually fell slightly by 1.1% to $412,128. This February asking price of $420,265 does come within 2% of the peak of the market asking price from back in November 2007.

The inventory of unsold houses rose slightly in the month, having fallen for the past 3 months. The level of 48.9 weeks of equivalent sales still sits well above long term average at 40 weeks. The key factor for this continual high level of inventory is the weak sales volumes which with just 3,252 property sales in January, places the past 3 months of sales as amongst the lowest 3 month period on record with just 13,438 total sales.

In overall terms the NZ property market continues to turnover at a slow rate. The relative levels of inventory as matched to sales volumes is high indicating a buyers market. However the actual level of new listings continue low which is resulting in specific markets seeing a genuine shortage of listings which is stimulating price as a function of unsatisfied demand. This is most conspicuously seen in the major cities. Auckland especially is showing this with an asking price expectation which peaked in December and in February continues at high levels. Equally the level of new listings in the Auckland market is amongst the highest in the country with over 34% of all listings coming from this region, the highest share seen over the 4 years of this report

Summary of the market – February 2011

After seeing the first two months of summer result in record low levels of new listings the month of February saw a strong rise with 11,395 new listings come onto the market. This level, whilst up a seasonally adjusted 9.5% as compared to January was still well down on the February levels of 2010 (14,329) and 2009 (12,164). This clearly shows that the overall sentiment in the market is quiet as was witnessed by the January sales levels reported by REINZ of 3,252, the lowest month on record.

The rise in new listings coupled with the low sales saw the inventory of unsold homes on the market rise again as measured on an equivalent number of weeks of sale basis. Having fallen for 3 months in a row the inventory levels rose to 48.9 weeks – well over 11 months supply. This level as compared to a long term average of 40 weeks means the property market is still very much in the camp of a buyer’s market with ample selection of properties to review.

Asking Price

The truncated mean asking price for all new listings coming onto the market in February rose by over $13,000 from $406,525 to $420,265.

On a seasonally adjusted basis the asking price actually fell by 1.1% to $412,128. The summer peak of new listings traditionally sees a rise in asking price.

The current asking price edged closer to the peak of asking price back in October 2007, it is currently just 2% below that peak.

New Listings

The record lows seen in the months of December and January when in total 17,224 new listings came onto the market, have been replaced by a surge in listings in February with 11,395 new listings coming onto the market. This level whilst relatively strong as judged by recent months, is significantly lower than prior years. The February total shows a 20% decline as compared to February last year.

On the most recent 12 month period a total of 133,883 new listings have come onto the market which represents a 3% decline compared to the same period last year.

Inventory

The level of unsold houses on the market at the end of February fell slightly to 52,673 from 53,297 at the end of January. This represented the equivalent of 48.9 weeks of equivalent sales, as assessed on a seasonally adjusted basis.

The inventory of unsold houses remains high in absolute terms as the level of sales activity continues to be so weak.

At the current level the inventory still remains well above the long term average of 40 weeks.

Regional Summary – Asking price expectations

In spite of the overall rise in asking price nationally from $406,525 to $420,265 the regional picture shows significant variance. Just 7 of the 19 regions are showing increases in asking price. Of the remaining 12, four regions are showing falls in asking price of greater than 5% when judged against the recent 3 month average.

The significance in the price movement in the national asking price is the fact that the 3 major metro areas of Canterbury, Wellington and Auckland collectively representing 54% of all listings and in the month all saw increases in asking prices of up to 3%. In the case of Auckland and Wellington the February asking price was within 3% of the peak pricing which was reached towards the end of last year, this would indicate that the local markets in these key cities are more active with pressure on prices more noticeable than in provincial areas of the country.

Regional Summary – Listings

Judging the regional property market based on the number of new listings and the change over the past 12 months potentially presents a misleading picture as all regions are showing a significant year-on-year decline. This picture presented in the chart would normally indicate a move to a sellers’ market when listings are in short supply, however at this time the governing factor is the weakness of sales. So despite the low volume of listings the rate of sale still means that inventory of unsold properties in overall terms is growing.

In total 9 of the 19 regions are showing volumes of new listings over 20% down as compared to February last year. The issue could arise in the coming months when if sales were to be stimulated by seasonal factors matched to favourable lending rates the lack of new listings may result in pressure in local markets.

Regional Summary – Inventory

The inventory of unsold houses on the market rose in February after seeing 3 consecutive months of falls through the new year period. At 48.9 weeks this represents over 11 months of equivalent sales of property on the market. This results in 52,673 properties on the market (excluding sections).

Across the country there are just 2 regions (Central North Island and Bay of Plenty) that have a fair balance between inventory and sales. The remaining 17 regions comprise 10, which are significantly having an inventory well above long term average with the remaining 7 regions having level just above long term average. Such levels of inventory above long term average highlight a buyers market with ample selection of property for sale.

It is now over 12 months since the market last showed an inventory level below long term average as was seen through the 2009 year.

Lifestyle Property

A total of 936 new listings of lifestyle properties came onto the market in February. This represented a 6% increase on a seasonally adjusted basis from the prior month, when seen against February last year it represents a 17% decline indicating that the lifestyle sector is performing in line with the overall property market.

The truncated mean asking price rose by 2.2% from January to a level of $552,591. This level still remains well below the peak of asking price seen in February 2009 at $633,811

Apartments

The number of new apartment listings coming onto the market in February totaled 478 a rise of 32% as compared to January although on a seasonally adjusted basis it represented a 4% fall. As with other sectors the relative level of new apartment listings remains subdued with the February 2011 level showing a 36% year on year decline.

The truncated mean asking price rose very slightly to $365,150 from $362,041 in January, this level is down 8% as compared to the recent 3 month average.

The representation of Auckland listings for apartment of the total for the country rose to over two thirds with 321 new listings with an asking price expectation of $324,716.

Property Price Index

Comparing the sale price of properties across the country to the asking price expectation is not a perfect comparison; however the trends tend to align. The benefit is that the data for asking price is of the market today, whilst the selling price is reflective of the market active between 4 and 6 weeks ago. The latest comparison is highlighted below:

Realestate.co.nz data is compiled from asking prices of new residential listings as they come onto the market via subscribers to the realestate.co.nz website. The Realestate.co.nz website currently has over 95% of all licensed real estate offices subscribing and providing all of their listings onto the website. The asking price is presented as a truncated mean price at a 10% interval.

REINZ: data is compiled from reported unconditional residential sales from all members of the Real Estate Institute of New Zealand representing all licensed real estate offices. The sale price is published as a stratified median house price and is developed in association with the Reserve Bank of NZ.

Notes:

Truncated mean

The monthly asking price for new listings presented in this report utilises the measure of ‘truncated mean’. This measure is judged to be a more accurate measure of the market price than average price as it statistically removes the extremes that exist within any property market that can so easily introduce a skew to traditional average price figures.

The truncated mean used in this report removes the upper 10% and the lower 10% of listings in each data set. An average or mean of the balance of listings is then calculated.

Methodology

With the largest database of properties for sale in NZ, realestate.co.nz is uniquely placed to immediately identify any changes in the marketplace. The realestate.co.nz NZ Property Report is compiled from new listings coming onto the market from the more than 1,050 licensed real estate offices across NZ, representing more than 95% of all offices.

With an average monthly level of over 10,000 new listings, the realestate.co.nz NZ Property Report provides the largest monthly sample report on the residential property market, as well as a more timely view of the property market than any other property report. The data is collated and analysed at the close of each month, and the Report is compiled for the 1st day of the following month. This provides a feedback mechanism as to the immediate state of the market, well in advance of sales statistics which by the very nature of the selling process can reflect activity with a lag of between 2 and 4 months.

In analysing the details of the 11,395 new listings in the month of January a total of 133 listings have been excluded due to anomalies. The categorisation of Lifestyle property is defined by the land area of the property. The criterion is a property having in excess of 0.3 hectares and being situated outside metropolitan areas.

The full NZ Property Report for February 2011 can be downloaded here (1.3MB pdf document). Additionally the raw data is accessible here as an Excel spreadsheet enabling anyone to analyse the raw data and establish any trends or observations.

Land required for terminal expansion

28th February 2011

Source: Otago Daily Times

Queenstown airport needs 19.1ha of land owned by Remarkables Park Ltd to free up space for its terminal expansion and allow it to develop an aviation park for 10 commercial operators and corporate jets, the airport's chief says.

However, unwilling seller Remarkables Park wants the land for an estimated 45ha, multimillion-dollar "generous nine-hole golf course with a driving range", available for public use, director Alastair Porter said yesterday.

Queenstown Airport Corporation (QAC) chief executive Steve Sanderson told the Otago Daily Times this week it was "by no means a surprise" QAC wanted to move its fixed-wing general aviation, helicopters and corporate area to "lot 6", south-side of the runway, as part of its masterplan up to 2037.

The proposed move featured in the corporation's 2009 annual report.

Relocation allowed the extension of the terminal building, jet stands, car parking and rental parking where the general aviation and helicopters were now, Mr Sanderson said.

"We've been talking to Remarkables Park about where the airport could succeed in developing this general aviation park, plus have the least impact on Remarkables Park and their development aspirations."

Mr Sanderson said there was very limited terminal-side land available and the terminal building was exceeding its peak hourly capacity at certain times of the year.

Operators had been against an earlier masterplan to relocate them to the north-side of the runway, as it would expose hangars to southerly wind, create congestion and cross-traffic on the main runway.

A south-side aviation park would improve flight paths for helicopters and access for general aviation.

South-side would move aviation noise away from Frankton residences.

"Feedback from our users is they all want to expand their facilities and want new hangers," Mr Sanderson said.

Corporate jet parking was constrained and it was not uncommon for corporate jets to drop off guests in Queenstown, then fly to Invercargill Airport to park due to lack of space.

"Car parking and rental car parking is very constrained and people notice the number of rental cars that are parked outside the airport. People want to bring all the businesses on to the airport grounds."

When asked for his response to the airport's reasons for a south-side aviation park, Mr Porter said yesterday the matter was to be dealt with by the Environment Court and he did not think he was entitled to discuss the case through the media.

"All the points they make are simply their points of view and not agreed to by our equally competent international aviation consultant," he said.

Once the airport finished its use of the nearby unsealed road for runway end safety area (Resa) construction vehicles, and if the airport lifted its notice of requirement, development of the proposed golf course could begin this spring, at the latest, he said.

The course could be open in spring, 2012.

Christchurch earthquake

23rd February 2011

To all those living and working in Christchurch and suffering in the aftermath of tuesday's earthquake, our thoughts are with you.

This event has impacted people the length and breadth of the country, and will continue to do so for a long time to come.

Stay strong Christchurch.

Mortgages most affordable for seven years

23rd February 2011

Source: Stuff Business Day

A mortgage became the most affordable in seven years in January as house prices fell and low interest rates lifted home buyers' purchasing power, a report shows.

A slight rise in weekly wages and the benefits of last year's income tax cuts for those on higher incomes boosted affordability to its best levels since February 2004, according to the latest Roost Home Loan Affordability report.

The proportion of a single median after-tax income needed to service an 80 per cent mortgage on a median-price house has improved to 51.7 per cent from 53.8 per cent.

For the Wellington region mortgage payments took up 52 per cent of the median weekly take-home pay, compared with 61.8 per cent a year ago and 81 per cent in January 2008.

The Hutt Valley was the most affordable at 45.7 per cent of take-home pay, and the Kapiti Coast became less affordable than in December at 58.1 per cent.

However, Roost Home Loans spokeswoman Rhonda Maxwell said there were renewed signs of a "two-speed housing market" with prices of more expensive homes in Auckland, and Wellington firmer than entry level investment properties in other centres.

"Home buyers have the upper hand in many areas where house prices are flat to falling."

A first home had become dramatically more affordable for young couples over the last five years. It now cost less than a quarter of the median wage to pay for an 80 per cent mortgage on a house worth $245,000.

The average price of a house in the lowest quartile of home values has come down from its peak of $257,100 in March last year.

The national median house price fell to $340,000 in January, compared with $352,000 in December. Affordability has been improving since the end of 2009.

Queenstown is the most expensive place in New Zealand while Whanganui has replaced Invercargill as the cheapest.

High Court gives nod to affordable housing in pricey Queenstown

21st February 2011

Source: scene.co.nz

The High Court has given the nod to a need for affordable housing in the pricey Queenstown Lakes district.
 
The decision by Judge Chisholm upholds a previous plan change allowing Queenstown’s council to run the ruler over new developments in the tourism boom town and see if there is any effect on housing affordability. 

The Environment Court had earlier ruled the council could address housing affordability under the Resource Management Act but three parties appealed that decision. 

Queenstown Lakes District Council's Mr Affordable Housing Scott Figenshow, a senior policy analyst, hails this latest High Court decision as an important milestone. 

“For the council and the community it’s a way to ensure that a portion of the new housing supply meets the needs of the local workforce,” Figenshow says. 

The High Court decision says if any new development pushes up land prices – impacting affordable housing – the council can control this via its district plan. 

The latest High Court move is not the final hurdle for the plan change, which now returns to the Environment Court for a further hearing. 

Figenshow says in the past eight years, nine affordable housing stakeholder agreements had been volunteered by developments in Queenstown, Wanaka, Albert Town, Kingston and Cardrona. 

“These deeds have secured the delivery of over 260 affordable homes over the next 15 or more years, in partnership with the Community Housing Trust and make it possible to leverage government funding,” he says.

Queenstown voted best Incentive destination

17th February 2011

Source: Destination Queenstown

Queenstown has struck gold within the Conference and Incentive industry, receiving global recognition as ‘Best Incentive Destination’ at the micenet AUSTRALIA awards in Melbourne today (16 February).

New Zealand’s premier four season lake and alpine resort was voted number 1 by the readers of micenet AUSTRALIA*, the leading bi-monthly publication for event planners in Australia.  The award was presented during the three-day Asia Pacific Incentives and Meeting Expo(AIME) in Melbourne which was attended by corporate and conference organisers from all over the world. 

Queenstown ticked all the boxes as an inspirational and motivational destination by offering stunning scenery, easy international flight access, high quality accommodation and conference venues, reliable and expert destination management companies, exciting group and adventure activities, a variety of award-winning food and wine.

Destination Queenstown’s (DQ) Convention Bureau Manager Kylie Brittain and Melbourne-based Business Development Manager Jana Kingston were representing Queenstown at AIME along with some DQ members and accepted the award on the town’s behalf.

Ms Brittain said she was delighted with the win for Queenstown and paid tribute to all of the operators who contributed to its success.

“We all work together to deliver a memorable experience to every group, every time, so we’re absolutely thrilled to be recognised by the very market we’re aiming to attract.  This acknowledgement is highly valuable both to Queenstown and New Zealand as a world-class incentive destination.”

Full awards results will be published in the March micenet e-newsletter and the April edition of micenet magazine.

Visitor nights up but tough times ahead

15th February 2011

Source: Otago Daily Times

Queenstown's total visitor nights were up by almost 3% in December 2010, compared with the previous December, but testing business conditions seem set to continue through summer, Destination Queenstown (DQ) chief executive Tony Everitt says.

According to Statistics New Zealand's December Commercial Accommodation Monitor, released on Thursday, total visitor nights were up 2.9% 224,493.

International guest visitor nights were up 2.9% to 161,783 and domestic visitors up 2.8% to 62,710.

Mr Everitt said overall, results for the whole year of 2010 compared to 2009 showed some significant increases.

Total guest nights were up 7.3% to 2,514,785.

International guest nights were up 11.3% to 1,763,226, while domestic guest nights were down 0.9% to 751,559.

Mr Everitt said the figures were a pleasing result in a challenging business environment.

"Ever-increasing flight capacity and the hard work by our local tourism industry and DQ to motivate visitors to travel to Queenstown have been significant contributors to our year-on-year increase.

"Our December figures are quite robust considering we were still experiencing some knock-on effects of the Canterbury earthquake and two of our key markets, the United Kingdom and United States, were in the midst of severe snow and travel disruptions,," he said.

However, he said that while guest nights were up in December the industry was still seeing considerable variability among accommodation types - hotels and backpackers had done comparatively well but it was still a challenging time for motels.

Queenstown Top 10 Holiday Park Creeksyde director and DQ board member Erna Spijkerbosch believed holiday park visitors last December were on a par with those in December 2009.

"Response rates from the holiday park sector to the Commercial Accommodation Monitor are down, which has resulted in a slight skewing of figures."

Mr Everitt said based on anecdotal feedback, testing business conditions looked set to continue through the summer months.

"Major weather events around the globe, particularly in Australia which is our biggest market, are impacting on travelling interest."

Airport arrivals up 75pc

15th February 2011

Source: The Southland Times

The number of international arrivals at Queenstown Airport last month was up by almost 8000 – an increase of 75 per cent in a year.

Figures from Queenstown Airport show 140,009 international passengers arrived in the resort in the 12 months to January, compared with 93,836 passengers who arrived the previous year.

Last month 18,105 international visitors passed through the airport, compared with 10,320 in January last year.

Queenstown Airport chief executive Steve Sanderson said the introduction of additional domestic and international Jetstar flights was the main reason for the increase.

Jetstar introduced twice-weekly Melbourne-to-Queenstown services and twice-weekly Gold Coast-to-Queenstown services in December.

The Qantas-owned budget airline also increased domestic services between Queenstown and Auckland.

Mr Sanderson said the Jetstar Auckland route converted to an international service to Melbourne or the Gold Coast on arrival in Queenstown.

Three years ago the airport welcomed about 64,000 international visitors during 12 months, he said.

Last year, 887,000 visitors passed through the airport and last month was a domestic record, with 72,925 passengers.

Earthworks to protect Qtown

15th February 2011

Source: The Southland Times

The Environment Court has granted consents for massive earthworks designed to reduce the risk of a repeat of the devastating 1999 Lake Wakatipu flood.

Judge Gordon Whiting says the potential for choking Wakatipu waterways is low and granted gravel extraction and diversion bank consents to the Otago Regional Council in a decision last month.

Consents were granted for mining and earthworks to extract 1.2 million cubic metres of gravel from the confluence of the Shotover River delta and the Kawarau River.

The council applied to extract gravel from riverbeds and build diversion banks, to reduce the risk of flooding by changing the flow of the river.

An interim decision was issued last year, granting consents subject to further evidence on the potential for choking effects downstream in the Kawarau River.

Choking – in hydrological terms – refers to the blocking of a river channel and a substantial increase in water during a large flood.

Judge Whiting and commissioners found the potential for choking at the Rastus Burn and Owen Creek deltas was extremely low.

Conditions stipulate regular surveys and the council must provide detailed protocols for site safety, communication with commercial jet boat operators and the Queenstown Lakes District Council.

Queenstown Lakes District Council emergency management officer Brenden Winder said the works would help in a flood.

However, work must stop immediately if archaeological materials, Maori artefacts or human remains are unearthed.The five-stage works will eventually combine to divert any floodwaters down the eastern branch of the Kawarau River, easing drainage of Lake Wakatipu during a flood.

On November 17, 1999, the lake overflowed, flooding businesses in Queenstown and causing about $60 million of damage.

Queenstown joins New Zealand’s iconic scenic tourist route

10th February 2011

Source: Scoop.co.nz

Queenstown joins New Zealand’s iconic scenic tourist route

One of New Zealand’s top tourist routes, renowned for its stunning coastal and inland scenery, has now been extended to include Queenstown.

Destination Queenstown was invited to join the Southern Scenic Route Steering Group by current members Venture Southland, Tourism Dunedin, Destination Fiordland, Clutha District Council, the Department of Conservation and New Zealand Transport Agency.

The 440km road trip was previously a half loop between Dunedin and Te Anau through Balclutha, the Catlins, Invercargill, Bluff, Riverton and Tuatapere. It will now extend an extra 161 km to Queenstown, taking in the townships of Mossburn, Five Rivers, Athol, Garston and Kingston along the way.

Destination Queenstown CEO Tony Everitt is pleased to officially put Queenstown on the Southern Scenic Route map and believes it will provide another strong proposition to attract visitors.

“The Southern Scenic Route brings together the best of the south and is a fantastic way to promote and showcase our natural environment and scenery, wildlife, heritage, and people.  As New Zealand’s oldest touring route, it’s a truly iconic experience.

“We hope that extending the route to start or finish in Queenstown will enhance the southern experience and add our spectacular alpine scenery to the mix. 

“Queenstown’s addition at this time reflects the growth of the region as a tourism hub.  By providing visitors with an international airport at each end of the route, in Queenstown and Dunedin, it’s even easier for visitors to access.  

“The Southern Scenic Route allows our international visitors a chance to explore on their own, to find hidden lakes and side roads, to meet local characters and experience southern hospitality – to find the real New Zealand.  It’s also the perfect motivation for Kiwis to come and rediscover the south.

“The Southern Scenic Route is an example of Kiwi ingenuity and collaboration and we’re looking forward to working closely with our partners to maximise benefits for all participating regions.”

The idea for the Southern Scenic Route was born in 1985 by Tuatapere locals John Fraser and Les Hutchins.  John and Les were ironically not working together on the idea but came up with it almost simultaneously.

After much hard work and lobbying, the Southern Scenic Route officially opened in 1988 and has since firmly established itself as a ‘must do’ New Zealand tourism experience.

Mr Fraser is delighted the route will now extend to Queenstown and believes it’s great news for tourism in the south.

“Our original concept was for the Southern Scenic Route to be between Queenstown and Dunedin but it proved to be a logistical nightmare at the time.  It’s fantastic that it’s finally come to fruition.”

The diverse scenery of the Southern Scenic Route ranges from the rugged coastline of the Catlins to the ancient forests and glaciers of Fiordland to the majestic lake and alpine scenery of the Wakatipu Basin. 

Highlights along the route can include seeing albatross, penguins, fur seals, and Hooker sealions in their natural habitat, swimming with dolphins, bush walks, exploring waterfalls, caves, glaciers, and the southern part of the Te Wahipounamu World Heritage Area.

New Southern Scenic Route signage has been erected in Frankton and further along the route at Five Rivers and Mossburn. The official Southern Scenic Route website and brochure have been completely refreshed and updated to include the route extension. Around 60,000 copies of the brochure will be distributed to i-SITES and key tourism destinations around New Zealand over the next 12 months.

For more information about the Southern Scenic Route please visit www.southernscenicroute.co.nz.

Signs that house prices are steadying

8th February 2011

Source: Stuff Business Day

Residential property values stabilised in January after nine months of decline, according to government valuer Quotable Value.

Average property values in January were 1.5 per cent lower than the same month a year ago when property values were still climbing, although they were unchanged when compared to December's 0.9 per cent decline.

Values are now 5.8 per cent below the market peak of late 2007.

"Despite overall New Zealand values stabilising in recent months, there is considerable variability between areas," said research director Jonno Ingerson.

"Values across the combined main centres have been stabilising, while across combined provincial and rural areas values have continued to slide."

Of New Zealand's three main urban areas, Christchurch was the only centre to record any growth in January, with demand for housing undamaged by the September 4 earthquake helping to lift prices 0.3 per cent higher when compared to the same month last year.

In January, Auckland's values were stable, down 0.6 per cent on 2010 levels, while in Wellington values have been rising since October after declining steadily in the six months prior, and are now 2.5 per cent below last year.

The remaining centres all declined in January as economic uncertainty and lack of confidence sap demand, with values in Hamilton down 3.4 per cent on the same month last year, Dunedin values down 3.7 per cent, and Tauranga down 2.2 per cent.

New Zealand's property market has been struggling to haul itself out the slump it fell into last year as households focused on repaying debt amid historically low interest rates.

In December the median house price fell 2.2 per cent to $352,000 compared to the same month in the previous year, according to sales data from the Real Estate Institute.

The record low volumes of property sales have kept new construction in a rut, with building consents falling to their lowest level of issuance since April 2009 in December.

"Sales activity slowed down over December and January as is usually the case," Ingerson said.

"With the Christmas holidays over and people settling back into their routines, some will now be considering their plans for the year and beginning to act on them. However it is still too early to tell whether the property market in
2011 will be any different to 2010."

Jetstar brings more international travellers to Queenstown

8th February 2011

Source: TVNZ.co.nz

The number of international passengers using Queenstown Airport in December nearly doubled from a year earlier after Jetstar started services to Melbourne and the Gold Coast.

The airport handled 13,340 international passengers in December, up from 7024 in December 2009. It handled 110 international aircraft movements in December 2010, up from 64 in December 2009.

Total domestic passenger movements at Queenstown Airport rose 9.5% to 67,838 in December from a year earlier.

The numbers were contained in an operational update by Auckland Airport because Auckland Airport is now a part owner of Queenstown Airport.

Auckland Airport suffered a 0.6% fall in domestic passenger numbers in December, which it attributed to the exit of Pacific Blue from the market.

The number of international passengers through the airport in December rose 6.1 percent. The number of travellers from Europe fell but the number from China rose.

Demand for new houses tipped to rise

8th February 2011

Source: Stuff Business Day

House prices could rise quickly next year as an expected pick-up in demand and a shortage of building activity causes a squeeze in supply.

New forecasts by building industry analyst BIS Shrapnel predict that demand for new houses will increase towards the end of this year as the economy improves.

Coupled with the lower than average number of houses being built – building consents last year were around half of the peak reached in 2004 – increased demand would cause a squeeze on supply and push up prices.

BIS Shrapnel senior analyst Adeline Wong said Auckland in particular had seen "severe under-building" of new houses in recent years, which was likely to lead to a shortage as a strengthening economy increased demand.

"When demand starts to come back then the price levels will start to grow quickly again because you have a tight supply on one hand and greater demand on the other."

House prices in December were 0.9 per cent down on a year ago, and 5.8 per cent below the peak in 2007.

Ms Wong predicted prices, which have been flat in recent months, would begin to turn towards the end of this year, with "strong growth" in 2012 of 4 per cent to 6 per cent.

A rise in demand is also likely to drive an increase in building consent applications, which fell below 1000 in December for the first time since 1965.

Ms Wong predicted a strong pick-up in consent applications in the latter months of the year to the end of March 2012, before more gradual growth over the next two years to around 25,000 dwellings a year.

Registered Master Builders Federation chief executive Warwick Quinn said that after several years of falling activity there were concerns in the building industry about its ability to cope with a return to the levels of a few years ago.

Building consent applications hit 30,000 in 2004 but were just over 15,000 last year. Thousands have left the industry or moved overseas to work.

"We're concerned with our long-term capacity because we have lost a lot of apprenticeships and tradespeople."

This, coupled with increased licensing for the industry which come into place in March 2012, would further hit capacity.

Mr Quinn said forecasts of a return to new build consents of 25,000 would be welcomed. That level was more sustainable than the 30,000 peak which had strained the industry.

"We think anything between 20,000 and 25,000 is quite manageable. Anything less than that puts pressure on our capacity in the sector and anything more than that we struggle to get resources."

Tourist spending could be $1 billion

4th February 2011

Source: Otago Daily Times

Destination Queenstown estimates that by 2015, money spent by visitors to the Queenstown area could grow to $1 billion a year.

At yesterday's Queenstown Lakes District Council strategy committee meeting, DQ chief executive Tony Everitt said visitors to the resort last year spent about $800 million, a slight improvement on 2009.

"Therefore we believe that Destination Queenstown's target of $1 billion from visitor spend by 2015 is achievable, and it it represents about 4 or 5% compound per annum growth over the next four years."

He presented the data as part of the tourism monitoring and prediction report for the committee.

The increase in visitors to Queenstown by 2016 is expected to be up 12.8% from 2009, and 8.4% for Wanaka, and Mr Everitt said DQ was exploring opportunities for more flights to the resort, and also looking at new Asian markets.

It would maintain its focus on the core markets of the Australian eastern seaboard and New Zealand domestic tourism, he said.

Although guest nights for Queenstown were up 9.3% last year, the Canterbury earthquake resulted in cancellations in the September-October period, which was down 0.8% on October the previous year, but performing better than the national total ( down 2%) and the South Island total (down 11%).

Mr Everitt said these cancellations were particularly from risk-sensitive Asian markets and DQ would have to work with Christchurch Tourism to ensure northern-hemisphere markets were not discouraged from visiting, as well.

" [It is] less for Australians, who can see they can fly to Christchurch, or fly to Queenstown."

But it was unlikely northern-hemisphere visitors would visit only Queenstown.

"If they don't feel confident to coming to Christchurch, they won't come to Queenstown, either," Mr Everitt said.

With the projected increase in visitors to the area, the subject of how much tourists cost ratepayers was raised by Cr Lex Perkins.

"We are a tourist-driven town, there's no doubt about that.

"I just hope it does keep going up, but it does put tremendous pressure on this council that supplies services for us ...

"Do we do a study on how much money we offer tourists through rates?

"How much do the tourists cost us annually for roading, sewerage and infrastructure?" he asked.

The committee agreed that further discussion on the matter should take place this year.

Fewer NZ visitors expected
While overall tourist visits to the Queenstown and Wanaka areas are predicted to increase by 2016, the number of nights domestic visitors stay is expected to drop.

Domestic visitor nights to Queenstown are forecast to drop by 1.2% (11,000 over five years), while Wanaka is expected to see 2.7% fewer visitors and is already showing very low occupancy levels.

When DQ chief executive Tony Everitt announced the figures at yesterday's QLDC strategy committee meeting, Cr Cath Gilmore asked why there would be such a big loss in such an important tourism market, and what could be done to turn it around.

Mr Everitt said the downturn, which was relatively small considering the numbers were spread over a five-year period, could be partially explained by the state of the New Zealand economy.

"It is partly an extrapolation of what's happening at the moment, of what's happened over the last two or three years.

"The domestic market is soft ... and the reason it's soft is because New Zealanders don't have the discretionary income ... they've enjoyed over the last decade [due to growth]."

The Wanaka occupancy levels provided by Statistics New Zealand in Wanaka, which showed a fall from 24% to 18.7% in October 2010 compared with October 2009, did not include all of the hospitality operators in the resort, Mr Everitt said.

NZ Property Report – January 2011

2nd February 2011

Source: realestate.co.nz

The January 2011 NZ Property Report published by Realestate.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 January. 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 95% of all property movements in the NZ market as managed by licensed real estate agents.

The January 2011 report shows a new record low level of new listings coming onto the market. This was matched with a significant drop in asking price expectation. Whilst the level of new listings would normally push the market in favour of sellers given the dearth of new listings, the significant level of unsold property still on the market presents an opportunity for buyers.

The market as it enters the key summer period is opening up some opportunities with vendors considering putting their house on the market able to take advantage of an uncluttered position in the portfolio of new listings, ready able to attract the buyers that are out there. Existing property owners who have a property for sale as part of the current unsold inventory may need to review their asking price expectations as the new listings may be more reflective of the market today.

Buyers have a varied and diverse selection of property to review before making buying decisions with 48 weeks of inventory of unsold houses presenting a level considerably above the long term average of 40 weeks.

Summary of the market – January 2011

The first month of the year is traditionally a quiet period with significantly less business days and therefore listings coming onto the market tend to be subdued. The level of new listings for January 2011 is significantly low as compared to long term averages. Back at the start of 2008 as the Global Financial Crisis was just starting and the property market was turning down, a total of 26,097 new listings came onto the market in the combined months of December 2007 and January 2008; a year later as the market abruptly slowed the number in Dec/Jan had fallen to19,313. In 2009/2010 a year ago, there had been a degree of pick up to 20,621. This year over the same period the total is 17,224.

The market situation is unusual. Such low level of listings would normally reflect in a tight market where sellers would have the upper hand; however the scale of the unsold inventory, matched to still relatively low levels of sales, means that buyers have a great selection to research and a strong buyer advantage. It strangely would seem to be a market where the needs of buyers and sellers can be met. New listings tend to attract most interest in a property market and with such a recent shortage; new listings in the coming months will likely attract buyer interest. Recent new vendors with new listings are setting realistic price expectations as shown by the truncated mean asking price down to $406,525 this month.

Set against these statistics is the news that in terms of buyer interest online it could not be more active. As measured by Nielsen Online January saw over 2,000,000 browser visits to all the real estate websites in NZ, up 25% from 2010.

Asking Price

The truncated mean asking price for all new listings coming onto the market in January fell by over $9,000 from $415,750 to $406,525. On a seasonally adjusted basis the asking price remained unchanged from December at $416,666. There is traditionally a fall in asking price in January.

The current asking price slipped further from the peak of asking price back in October 2007, it is currently off 5.2%.

New Listings

Traditionally January is a weak month as it is a short business month; however the fall from the record low of new listing in December is significant. Just 8,300 new listings compares to 10,272 a year ago and 9,942 in January 2009.

On a moving annual basis the past 12 months have seen 136,817 new listings, just up on the 135,746 in the prior 12 month period, an increase of just 0.8%.

Inventory

The level of unsold houses on the market at the end of January rose slightly to 53,297 from 53,077 in December. This represented the equivalent of 47.9 weeks of equivalent sales, as assessed on a seasonally adjusted basis.

The inventory of unsold houses remains high in absolute terms as the sales activity impact is not being felt, even allowing for the significant lower level of new listings.

At the current level the inventory still remains well above the long term average of 40 weeks.

Regional Summary – Asking price expectations

The very clear message from the chart below showing all of the 19 regions is that the asking price expectation of sellers with new listings right around the country is that asking prices are slipping lower. Nationally asking prices are down 2.7% as compared to the recent 3 month average. The only regions bucking the trend are the three east coast regions of Coromandel, Bay of Plenty and Gisborne, together with Southland.

Significant slippage in asking prices are being seen in 5 regions – Waikato, Central North Island, Queenstown Lakes, Otago and the largest fall of 8.4% in the Hawkes Bay. The three main metropolitan regions of Auckland, Wellington and Canterbury are all showing weaker asking prices of between 3% and 4%.

Regional Summary – Listings

The national low record level of new listings for January was reflected right across the country with all but 2 of the 19 regions showing new listings down as compared to January 2010.

There were 7 regions reporting a record low of listings – Waikato and the Bay of Plenty, Central North Island and Manawatu / Wanganui. Then in the South Island, Otago, Canterbury and the Central Otago Queenstown Lakes district.

Such low levels of listings pushes the market into a situation with a shortage of new properties to attract buyer, for despite the high inventory levels the attraction of new listings remain the lifeblood of the industry.

Regional Summary – Inventory

The inventory of unsold property on the market continues to ease since the latest peak in November last year when the inventory stood at 53.2 weeks of equivalent sales. It has now fallen to 47.9 weeks. Whilst this is a continuing trend of easing, the level of inventory remains stubbornly above the level at the same time last year and the long term average.

This level of inventory leads to an assessment of the market being a buyer’s market; however the shortage of new listings is lessening this effect given the dearth of new properties to attract such buyers.

Set against this overall high level of inventory there are key markets where inventory levels are pretty much now at long term averages – Auckland and Wellington as 2 key markets are fairly balances and the Central North Island is now below long term average establishing this region as being in a seller’s market situation.

Lifestyle

Lifestyle property listings fell significantly in January. At 727 new listings, the month represented a new record low. As compared to January last year the level of new listings is down 22%.

The asking price expectation for the new listings was up slightly at $540,825 from $537,368 in December. This represents a 3.2% decline as compared to January last year and a 3.5% decline in asking price as compared to the recent 3 month average.

Apartments

January new listings of apartments came close to beating the prior low record of 352 in January 2009. For January just 363 new apartment listings came onto the market. This represents a 16% year on year decline. The asking price expectation for apartments remains low with a figure of $362,041 in January down 8.3% as compared to the recent 3 month average and only just up on the record low of $356,306 in October 2010.

In Auckland just 238 new apartment listings came onto the market which represented a 5.2% year on year decline. The asking price for Auckland apartments in the month was $342,250 which was 7% down on the recent 3 month average, but identical to the asking price expectation of a year ago.

Property Price Index

Comparing the sale price of properties across the country to the asking price expectation is not a perfect comparison; however the trends tend to align. The benefit is that the data for asking price is of the market today, whilst the selling price is reflective of the market active between 4 and 6 weeks ago. The latest comparison is highlighted below:

Realestate.co.nz data is compiled from asking prices of new residential listings as they come onto the market via subscribers to the realestate.co.nz website. The Realestate.co.nz website currently has over 94% of all licensed real estate offices subscribing and providing all of their listings onto the website. The asking price is presented as a truncated mean price at a 10% interval.

REINZ: data is compiled from reported unconditional residential sales from all members of the Real Estate Institute of New Zealand representing all licensed real estate offices. The sale price is published as a stratified median house price and is developed in association with the Reserve Bank of NZ.

Brighter times ahead

31st January 2011

Source: Stuff Business Day

Cheer up Kiwis, because 2011 is looking like the brightest economic year since the global financial crisis plunged the world into recession three years ago.

Treasury has this afternoon released a series of figures and commentary on the state of the economy so far this year.

It's hardly a cause for celebration, with growth expected to be 0.9 per cent less than earlier forecast, but its growth all the same.

Treasury said it expected real economic growth in 2011 of around 3 per cent, which was better than the 1.5 per cent recorded in 2010 and the -1.7 per cent decline in 2009.

The good news stemmed mainly from historically high food prices and a one-off hit from the Rugby World Cup.

New Zealand commodity prices continued to climb, the Treasury found, with one measure, the ANZ Commodity Price Index, at its highest since it began in 1986.

Further increases were possible early this year as dairy prices in two global DairyTrade auctions showing a combined increase in sale price of 8.5 per cent.

Rugby World Cup - "a key one-off event" - would boost the economy across the September and December quarters.

On the down side, the recovery from the recession had ''undershot expectations'' and December had failed to bring out much Christmas cheer.

''Domestic demand has been softer than we expected, despite the incentive for a pre-GST spend-up, owing to greater caution being shown by households, farms and firms,'' the Treasury report said.

Homes still largely out of reach

31st January 2011

Source: Otago Daily Times

Queenstown houses are slightly more affordable, thanks to a slide in prices in December, according to the Roost Home Loan Affordability report.

But it is still tough for typical buyers to get into the market, the report says.

Home loan affordability improved nationally in December because of falling house prices, but remained very difficult in Auckland Central and Auckland's North Shore, which were now more expensive than Queenstown for the first time.

The report showed the median Queenstown house price in December was $429,000, down 10.8% on the December 2009 price of $481,000.

It now took 73% of one median income to pay the mortgage on a median-priced Queenstown house bought in December, down from November's 81.9%. A typical buyer is assumed to be in the 30-34 age group.

The index was 91.2% a year ago. The affordability index reached its highest point of 154% in December 2005.

Dwelling sales in December were 40, unchanged from November and lower than the 42 sales 12 months ago.

Essentially, the median income for the typical buyer is not high enough to buy a median-priced house, even with a 20% deposit. However, buyers might find the lower-quartile priced houses are affordable. A couple or family with more than one income might find the median house price is affordable.

Based on current income and house prices, it would take an individual 11 years to save the 20% deposit now required by most banks.

The median weekly take-home pay for a typical buyer was $742.14 in December, up 6% from the $700.06 in December 2009.

Roost says weekly disposable income in Queenstown was $200.25 in December, which is $138.61 higher than the $61.64 in December 2009.

This measure shows the typical buyers' income is too low by itself to afford the mortgage payments on the median-priced home.

Based on the standard household profile, it now takes 88.3% of the median household take-home pay to service a mortgage of a Queenstown home purchased in December.

Median-priced housing is still not affordable for families in Queenstown, even when both adults work.

Shift to fixed mortgage rates, economists say

28th January 2011

Source: Stuff Business Day

When the Reserve Bank begins cranking up the official cash rate later this year, mortgage holders on floating rates may be wise to look to fix their rates, economists say, but there is no hurry yet.

Bank of New Zealand chief economist Tony Alexander said the fixed versus floating question would become more serious later in the year, but for now the advice was to stay floating.

"At some stage people will be wanting to go fixed but I think we're still months away from that. Stay floating, take the low rate to get your principal down and somewhere down the track, maybe towards the middle of the year, you'll look at the issue more seriously."

Felix Delbruck, senior economist at Westpac, said there was no urgency for people on floating rates to lock into fixed rates yet. "The Reserve Bank's been articulating a pretty cautious stance and that means floating rates should stay on hold for quite a few more months. Because of that there's no urgency to fix at the moment."

According to Reserve Bank data the average size of all New Zealand mortgages, based on when they were drawn down, was $120,654, although the figure ignores subsequent repayments.

The average size of the 4756 mortgages drawn down in the week to January 21 in New Zealand was $129,478.

Bollard keeps interest rates on hold

27th January 2011

Source: mortgagerates.co.nz

Bollard kept his official cash rate (OCR) steady at 3% and said "it seems prudent" to keep it there "until the recovery becomes more robust." However, Bollard maintained his tightening stance, saying the OCR is likely to rise "modestly" over the next two years.

Bollard did acknowledge economic data through the second half of 2010 was weaker than expected but said forward indicators are more promising.

"They (the Reserve Bank) were focusing on the positives rather than pointing out the downside risks," says Chris Tennent-Brown, Commonwealth Bank of Australia's New Zealand economist.

"They will be on hold for several more meetings and eventually hiking later this year."

Doug Steel at Bank of New Zealand says the local dollar had been pushed down ahead of the statement for fear of the statement being more dovish than it turned out to be and the currency jumped from about 76.55 US cents before the statement to more than 77 cents afterwards, but that was still within its recent trading range.

"Going in to it, there was a risk they might give a little ground from their December forecasts on the back of the weaker data we've seen, but they've held firm," Steel says.

Among the positives such as higher commodity prices and improving business confidence, Bollard said "there are tentative signs that housing market activity has stabilised after having trended lower for some months.

Darren Gibbs at Deutsche Bank says while we've had two months of improving house sales since the particularly weak October figures but the housing market is still very weak.

"Housing is thrown in there because it's a big one that everyone knows they focus on," Gibbs says. "If you look on a chart, it's (the improvement) still barely perceptible but at least it means it's not going lower."

NZ high on global prosperity list

25th January 2011

Source: Stuff Business Day

New Zealand has been ranked fifth on an international scale of the prosperity, with its education system rating as the best in the world.

The ratings have been published by Britain's Legatum Institute which has been attempting to produce different kinds of indices to mainstream economic scales.

Its Prosperity Index ranks 110 nations, and includes both material wealth and quality of life.

Norway headed the index, followed by Denmark, Finland, Australia and New Zealand.

The indices said New Zealand rated only 19th in the health rankings and 17th in economic.

It was first in education and third in ranks of personal freedom and social capital. It was fourth in governance and seventh in safety and security. It was 14th in entrepreneurship and opportunity.

New Zealand would have been higher than Australia had it not been for Australia's much stronger economy.

On the overall scale, the US was 10th, Britain 13th, Japan 18th , China 58th and India 88th.

At the other end of the scale, Zimbabwe came in at the bottom. Pakistan was second to last and the Central African Republic third to last.

No Pacific country is listed because Legatum said there was insufficient data on them.

It said their research showed a falling away among developed countries for scores on the economy.

"The data shows that public confidence in financial institutions is declining," the institute says.

China eyes Queenstown

24th January 2011

Source: Stuff Business Day

China's largest airline has started a $10 million campaign using Queenstown imagery to attract tourists to New Zealand.

Earlier this month China Southern Airlines announced three direct flights between Guangzhou – a major transit hub 120km north-west of Hong Kong – to Auckland International Airport starting in April.

The airline is the largest in China, operating a fleet of more than 300 aircraft to 121 destinations worldwide.

Auckland Airport general manager aeronautical business development Glenn Wedlock said the inbound Chinese tourism market was emerging rapidly.

Auckland Airport was working with Chinese counterparts on the campaign, which includes TV ads, in-flight magazines and airport billboards.

Some New Zealand flights were already fully booked and the aim was to provide itineraries that included return Queenstown flights from Auckland, Mr Wedlock said.

"We already have programmes in place for Guangzhou, with onward flights to Queenstown," he said.

"Certainly in Guangzhou Tourism New Zealand is spending more money.''

With its fast-growing economy and increasing wealth China's urban classes were enjoying the benefits of disposable incomes.

The ad campaign extended from the major southern hubs to regional cities, such as Shenzhen, a city north of Hong Kong with an urban population of 4 million.

The city's airport, Shenzhen Bao'an International Airport, is the fifth busiest in China.

"Queenstown can offer contrasting imagery, different colours, experiences and destinations," Mr Wedlock said.

"Australia has its iconic destinations but we have four seasons and can offer mountains and glaciers in a short space of time."

Itineraries to Queenstown could include add-ons with, for example, visits to Fiordland and Southland.

Mr Wedlock said Tourism New Zealand forecast around 14 per cent of the visitor market was Chinese.

The hope was this market would grow to compare with the number of Japanese and South Korean visitors.

Most Chinese visitors arrived on tour groups but, increasingly, independent travellers were venturing to New Zealand from China, he said.

China Southern Airlines previously announced flights to Auckland via Melbourne but the latest direct flights bypassed Australia, offering a boost to the New Zealand market.

The three times a week service using 284-seater Airbus A330s is scheduled to start on April 8.

Investment properties a stepping stone

20th January 2011

Source: Stuff.co.nz

Soaring property prices have made it difficult for many first home buyers, but there is another way to enter the property market. Buying an investment property before your first home is a good way to start building an asset portfolio to help you get ahead.

Michael Furlong, director of MAP real estate, was renting until last year, when he bought his first home at the age of 39. However, his first home was not his first time in the property market; he had bought and sold 18 properties before finally buying his dream home. He says there is a big difference between being a renter and a renter who is also an investor.

"The way you win is to have all of your money work for you throughout that phase that you’re still renting. The term I use is a 'professional renter'," he says.

Furlong says there are many reasons why it can be a good strategy to buy an investment property before your home.

"You’ll be able to afford to live in a much better property as a tenant than what you could if you were to buy it – we were living in a A$700,000 or A$800,000 property and only paying A$550 a week [in rent]. As a professional renter you’ve got a much better property for a smaller amount of money for your own personal use."

Furlong says it also doesn’t suit many people to solidify their first home until their late 30s.

"Renting is a great option in your 20s and 30s if your lifecycle is still in that changing period, if you haven’t met a partner or haven’t had children. You’ll probably move every two to three years anyway and if you were to buy and sell every two to three years the transaction costs would be horrendous," Furlong says.

By instead building a portfolio over this time, the end result is likely to be much better. "I could almost guarantee that the home someone would buy in their late 30s would be much better than in their 20s – and they’ve got these assets off to the side. Ten years of full tax benefits, gearing and depreciation will set you up for the future far better than [buying a first home earlier in life]."

Treasha Lim, a strategic property adviser at financial advisers KlearPicture, says many people are raised with a strong mantra to buy their home and not pay rent.

"Parents struggle through their mortgage and always say, 'don’t buy anything unless it’s your home, don’t pay dead money on rent'. The kids see it as such a hard task so that is ingrained in them," Lim says.

Lim has six properties around Melbourne and has mainly chosen to purchase off-the-plan where she saves money on stamp duty and doesn’t need to pay the full purchase price until a future date, and rents tend to rise in the meantime.

"I was fortunate that I had a few friends in the same boat; we all paired up and rented so we could keep investing so we could use as much of our tax dollars as possible. My rent has never exceeded A$850 a month and even though my pay was rising a lot every year, I didn’t change my spending. With some people the more they earn the more they spend, whereas the more I earned, the more I invested," Lim says.

Lim says the key to success is the compounding growth of property, compared to holding cash in the bank – which is not only tempting to spend, but also grows at a smaller rate than property.

"If you leave A$45,000 in the bank and you’re only earning 5 per cent, then you earn A$2250 a year and you have to pay tax on that at the end of the day. Whereas if I use that A$45,000 on a 10 per cent deposit on a A$450,000 property, let’s say it grows at 6 per cent, then you’re growing your net worth by A$27,000 a year not A$2000 a year."

She says this size of investment is possible for many investors, as the shortfall to be paid each month, after rent is paid and taxes and depreciation benefits are deducted, is often as small as a monthly car loan repayment.

Once people realise what is possible, it becomes easier to build a portfolio of multiple investment properties, Lim says. Even with two properties, she says, you could be growing your net worth at a rate of A$54,000 a year – which, after five years, is an increase of A$270,000, assuming 6 per cent growth.

"And then you can get your dream home."

CONCEPTS TO OVERCOME

1. Fear of debt – distinguish between productive and non-productive debt.
2. 'Rent is dead money' – ideas from past generations may not work today.
3. Property is too expensive – only if you live in it and do not enjoy cash injections from tenants and tax benefits.
4. I want a lifestyle NOW – but don't expect it to be long-term if you don't have a plan that allows for rising costs of living. Learn to spend less and save hard.
5. It's too high a risk – not if you choose a property that matches your financial capabilities and have a cash buffer.

DOs

1. Allocate spending rather than spend willy nilly.
2. Pay into a savings pot monthly no matter how small the contribution.
3. Invest as soon as you can under proper guidance. Stop finding reasons to procrastinate.
4. Save now spend later, rather than the other way around.
5. Make practical, calculated choices rather than impatient, emotional ones.
6. Keep it simple – you don't need a degree or complex plans. Just a CONSISTENT savings plan into a vehicle that appreciates in value over time.
7. Search for stepping stones rather than the dream home today.
8. Make it fun and light-hearted.
9. Determine what you really want in life. Don't feel guilty for trying to make money. It does not make you look materialistic. It's being smart.

A good time to own a house

20th January 2011

Source: Stuff Business Day

Buying or owning a house right now is a "pretty good idea" with inflation risk rising around the world, says New Zealand's Tower Investments.

Chief executive Sam Stubbs told a media briefing on investment markets in times of rising inflation housing investment has proved a good decision for Kiwis.

His team believes mortgage rates will rise this year but not nearly as high as the Reserve Bank could lift the Official Cash Rate (OCR) because banks had large enough margins to absorb these rises and still lend on first mortgages. The OCR is currently at 3 per cent and the central bank is not forecast to lift it more than 65 basis points in the next 12 months.

Asked if suggesting buying a house as a hedge against inflation contradicted Reserve Bank and Government advice to Kiwis to quit their obsession with residential property and get saving, Stubbs said the central bank was trying to avoid another property market bubble burst.

"There's no indication that will come along but equally, our argument goes that if you have the option of buying a house and you are worried about what will happen to the value of that house over the long term....we think that with rising interest rates and inflation...it will get ever more expensive for you to buy this thing if inflation comes along and we believe it will."

Housing as an investment "doesn't look like bad value right now", he says.

Mortgage rates looked like being "reasonable" for the short to medium term because banks were keen to lend on mortgages, the lowest-risk form of lending.

"We've been through the global financial crisis now, if banks wanted to exit the mortgage markets in New Zealand they've had plenty of opportunity but they chose not to. They've chosen to withdrawn from commercial and industrial (lending), that's why so many small and medium enterprises are hurting."

The price of a house does not go down in inflationary times, it goes up, says Stubbs.

"Make no mistake, the great value destroyer of the 1970s and early 80s in New Zealand and globally was inflation. Those who had mortgages and houses protected themselves against a lot of that. Those who had a lot of fixed interest deposits in banks ended up suffering in terms of diminution of the real value of their investment portfolios."

Tower is "quite bullish" on New Zealand's economic prospects for the next year.

"We don't see New Zealand in a perilous state economically, relatively we are in a good place."

&lt;SCRIPT SRC="http://inl.adbureau.net/jnserver/acc_random=7480048732/site=s/area=s.stuff.business.money/aamsz=300x250/POS=STORYBODY/SOURCEDOMAIN=www.stuff.co.nz/KEYWORD=HOUSE+TOWER+Inflation+world+New+Investment+CashRate+Cash+BUILDINGS+GOVERNMENT+HISTORY+GLOBALFINANCIALCRISIS+INTERESTRATES+CURRENCY+Financial/pageid=5982647133"&gt;&lt;/SCRIPT&gt;

Inflation is one of three ways countries deal with an uncomfortable load of debt, Stubbs says.

"You can grow your way out of it; restructure your way out of it; or inflate your way out of it. We think this year there will be a combination of debt restructuring and inflation.

"We think the majority of reserve banks will be quite happy for inflation to overshoot (targets) because it solves a lot of the problem of global indebtedness as long as it doesn't get out of control."

On a positive note, "ordinary" Kiwis should be able to tap into a supply of inflation-linked fixed interest securities, he says.

Other global investment trends this year would include "ever more borrowing". Governments which had promised fiscal stimulatory packages will be printing money, Stubbs says. Currency wars will continue and there are mountains of cash in the world still be invested.

Inflation risk is already being priced into financial markets as evidenced by the rise of long-term bond rates, Stubbs says.

Normally money printing such as has been seen post-financial crisis would quickly lead to inflation, he says. But inflationary pressure has been soaked up by "empty factories, empty buildings and overbuilding".

Now with signs of growth and money still being printed, inflation is on the rise.

History teaches us that three asset classes are natural inflation hedges - property, equities and commodities, Stubbs says.

Norman: Nevis dam makes no sense

19th January 2011

Source: The Southland Times

Proposals to dam the Nevis River could destroy the region's landscape and its back-country tourism economy, Green Party co-leader Russel Norman said.

The Nevis Valley has been the focus of a fight between environmental groups and Pioneer Generation over the energy firm's plans to dam the river at two points below the Nevis Crossing.

Dr Norman, who rafted a 6km section of the river near the Crossing to highlight the plight of threatened waterways in New Zealand, yesterday said hydro scheme plans made no sense.

Pioneer appealed against a special tribunal decision prohibiting damming on the river, which is home to a rare native fish, the Gollum galaxiid.

Mr Norman said his first visit to the remote Central Otago valley was phenomenal.

New Zealand was sold to tourists as a country with wild places to visit and damming the Nevis made no sense, he said.

"Even if the focus is on the economy then you're undermining the natural capital (by damming), which this part of the economy is absolutely dependent on.

"It doesn't make sense economically, we have to think how we get electricity without damming another river."

The Nevis offered goldmining relics, kayaking, fishing and native flora and fauna, he said.

Otago Fish and Game chief executive Niall Watson, who accompanied Mr Norman, said there was new evidence for the Environment Court hearing expected later this year.

The river offered outstanding back-country fishing but information about how anglers perceived the Nevis and the river's fishing characteristics was not considered at the original hearings, he said.

"There's a mass of new information on the biological values of the river.

"That's certainly worth going to court over," he said.

Mr Watson said the Nevis was an extraordinary river, offering mining remnants, indigenous flora and fauna, landscape, trout fishing and kayaking.

Last year the New Zealand Historic Places Trust formally recognised the Lower Nevis Valley as nationally significant.

Queenstown Airport taking off

17th January 2011

Source: Otago Daily Times

A new $10 million international arrivals hall and baggage reclaim area are among several developments planned for Queenstown Airport to cater for phenomenal growth in passenger numbers.

The Queenstown Times was on Friday given an exclusive tour of one of the lower South Island's most important commercial assets, and given an update on its latest enhancements and $40 million worth of infrastructure projects planned for the next three years, by Queenstown Airport Corporation chief executive Steve Sanderson.

"We're building a temporary extension of the international arrivals hall this winter and during the next six months we're going through a planning phase of designing the new international arrivals area and baggage receiving area," he said.

"To expand the international arrivals hall, we're building an extension veranda which will be enclosed.

The temporary veranda and permanent hall will together double the existing capacity.

"Currently, we can only fit 170 people into our international arrivals hall at a time and we now receive multiple jets. Those aircraft have to keep their on-time performance, and we've got to disembark those passengers so they can prepare for their departures."

The hall project would be built within the airport's designation and only building consent would need to be applied for.

Construction would start immediately after the winter season and take three to six months.

Mr Sanderson said the design of the new hall was modular, so it could be extended quite easily as required.

"The benefits will include less congestion and it's really important for our customers as we are the first impression of Queenstown and the region, and we are also the last impression."

The airport now has six jet stands, but up to seven jet airliners are on the ground during peak times.

The stands were definitely at capacity, Mr Sanderson said.

Three jet stands will be realigned and one jet stand will be built in the next couple of months, as the airlines had requested.

The stands are designed to be "power in, power out" - which should prove to be more efficient, as aircraft will be able to reverse out without the need for a tug vehicle.

Hold on interest rates on the cards

17th January 2011

Source: Stuff Business Day

Cash-strapped homeowners will see some relief this year, with experts predicting the Reserve Bank will keep official interest rates low until at least September.

However, some experts say even that may be too early.

After two rises of 0.25 percentage points in June and July, the Reserve Bank has held the official cash rate steady at 3 per cent, as economic growth stalled.

Economists still expect a recovery this year, but there is a growing view that Reserve Bank governor Alan Bollard will leave rates on hold for another eight months.

The good news is coupled with predictions the stalled housing market will get a boost because of a property shortage.

At present, banks are charging between 6.15 per cent and 6.74 per cent for floating rates. A 0.25 per cent increase to mortgage interest rates means an extra cost of $250 a year for homeowners with a $100,000 mortgage, or $750 for those with a loan of $300,000.

With house prices remaining flat, unemployment above average and low longer-term inflation pressures, economists have been gradually pushing back when they expect the Reserve Bank to raise the official cash rate. It is well below the 5.9 per cent average of the past decade.

Economists at ASB and Deutsche Bank have moved their rate-rise predictions from June to September, and Westpac chief economist Brendon O'Donovan said even that may be too soon.

"It's been an environment where shocks seem to be the norm. If that continues, then the Reserve Bank's view will be fluid. At the moment it's looking like September but that's probably at the earliest."

Bank of New Zealand chief economist Tony Alexander said BNZ was still predicting a rise in July, but there was a growing shift towards a later date.

BNZ head of research Stephen Toplis agreed official data "suggests that there's a reasonable likelihood that that will be pushed back to September".

For the past two years, the official cash rate has been hovering around its lowest levels since it was introduced in 1999, but Mr Alexander said it was likely to return to about 5 or 6 per cent in the next two years. "We think in 2012, we'll be looking at around 5 per cent, but it depends.

"We keep pushing it out further and further, but it's extremely unlikely to go down – the next move will be upward unless the world goes into another meltdown."

At present, floating mortgages attract lower interest rates than fixed rates, but the key for homeowners will be picking the right time to switch to a fixed rate.

If they waited too long, rising interest rates would see the floating option become less attractive.

Mr Alexander said only a small percentage of mortgage holders would be lucky enough to pick the optimal time to fix.

"Most won't, because one thing that causes it to go up is everyone taking the fixed option. So, for example, in March 2009, people switched to fixed all at once and boom, fixed went up. Most will not fix at the current low rates."

Mr Alexander said the property market was likely to become more competitive because not enough houses were being built.

"About 16,000 a year when nationally we need about 23,000."

That, combined with a predicted shortage of builders because of the rebuilding needed in Christchurch and Queensland, would give the housing market a boost.

"At the moment, it's a buyer's market, but it will start turning around later this year."

Airline agreement likely to help resort

13th January 2011

Source: Otago Daily Times

New direct commercial flights between China and Auckland are expected to mean more tourists for "strategic alliance" partner Queenstown Airport and the wider resort, airport and tourism chiefs say.

Air New Zealand and Virgin Atlantic passengers between Queenstown Airport and the United Kingdom, via Auckland Airport, are also promised "more flexibility and choice on routings", following the separate announcement of the signing of a code-sharing agreement between the two carriers yesterday.

The introduction of three direct China Southern Airlines flights between Guangzhou and Auckland a week, from April 8 extended earlier plans by the airline to fly to Melbourne, which were announced on December 13.

A familiarisation tour of New Zealand by a China Southern Airlines delegation before Christmas - a trip which included Queenstown - was "pivotal to the airline's decision to move immediately to direct services", China Southern president Tan Wangeng said in a statement.

Queenstown Airport Corporation (QAC) chief executive Steve Sanderson said yesterday the delegation "clearly saw great potential" in the resort.

"Their decision to elevate the new service reinforces the influence of Auckland as an important conduit for tourist traffic into the country and especially into Queenstown.

"Already, we know that Chinese tour operators are working up New Zealand packages, including a trip to Queenstown. We see this as the next step in getting a slice of the over 88,000 additional seats on offer each year via these Auckland-mainland China flights."

Destination Queenstown chief executive Tony Everitt said the flights were a "significant milestone" in further developing the China visitor market.

"It's a strong testament to both Queenstown's appeal and local tourism businesses involved that the pre-Christmas inspection of the resort had such an impact," he said.

"We are now working with China Southern Airlines and airports on marketing strategies to support the new services and bring more Chinese visitors to Queenstown," Mr Everitt said.

Air New Zealand and Virgin Atlantic passengers are expected to start experiencing the smoother booking benefits of the code-share agreement from February 28, after the relevant Government approvals are gained.

Customers should be able to book with Virgin Atlantic to travel on connecting journeys on nine international and domestic Air New Zealand routes, including Auckland and Queenstown, using Virgin's VS flight code.

Air New Zealand customers should be able to book on Virgin Atlantic's services between London Heathrow and San Francisco, and between Hong Kong and Sydney for connecting journeys using Air New Zealand's NZ flight code.

Hotel 'will boost our economy'

13th January 2011

Source: The Southland Times

The opening of Queenstown's Hilton Hotel would lead to an influx of skilled staff that would have great spin-offs for the local economy, a Queenstown hotel expert says.

New Zealand Hotel Association Queenstown chairwoman and veteran hotel general manager Penny Clark yesterday said advertisements for at least 20 management positions would attract interest from far and wide.

"They could undoubtedly find many of these people in Queenstown, but whether they would be willing to leave the environments they are already in is another question," she said. "Ostensibly that means they may have to import many people in from outside the area, because we are lucky enough to have a very low unemployment rate in Queenstown."

The advertisements state the hotel will be opening in March.

The positions advertised were for skilled people, who would need to be at the top of their game because of the five-star requirements of the Hilton brand, Ms Clark said.

"They will be sought-after positions, but hotel industry staff are very portable, and will move from other parts of the country – or other countries, to take these positions. These people will need accommodation, so in turn it means the influx of staff will be very good for the local economy."

Queenstown Chamber of Commerce chief executive officer Ann Lockhart agreed an influx of staff would only mean good things for the resort's economy.

"The staff needed for the Hilton will absolutely be another vehicle to drive Queenstown's economy forward," she said. "It'll be good for general business, including landlords, retailers, Queenstown's hospitality trade and goods and services providers."

Queenstown Job Agency owner Chris Major said he had already been in contact with the Hilton.

"We've got a good pool of people here in Queenstown and Wanaka who could certainly fill some permanent and part-time roles at the Hilton," he said.

Slump in home building consents in November

12th January 2011

Source: New Zealand Herald

The value of non-residential building work reached an 18-month high during November, against a slump in activity across the residential sector.

Latest figures from Statistics New Zealand (SNZ) show the value of consents issued for non-residential buildings was $479 million during November, up 23 per cent on the same period in 2009.

The main contributors were education buildings, factories and industrial buildings, SNZ said.

The value of residential buildings fell by 4.4 per cent to $514 million across the same period.

The seasonally adjusted number of new housing units authorised, excluding apartments, fell 2.6 per cent in November 2010, the fifth consecutive monthly fall.

When the volatile apartment category was included, the number of new housing units authorised rose 8.8 per cent, following a 1.8 per cent fall in October 2010.

Goldman Sachs economist Philip Borkin said the 'lumpy nature' of apartment and non-residential issuance meant it was difficult to know what the implications from today's numbers might be for monetary policy.

"We still believe it is too early to warrant a review of our expectations, but at this stage we see upside risk to our forecasts."

During November consents were issued for; 1470 new housing units (including apartments), 1244 new housing units, (excluding apartments), 226 new apartments (154 were assisted-living apartments associated with retirement villages).

Meanwhile the total value of earthquake-related consents in Canterbury during November was $2.3 million.

Two of these were for new dwellings, Statistics New Zealand said.

Building consent values include goods and services tax (GST), which increased from 12.5 per cent to 15 per cent from 1 October 2010.

It was not possible to separate the impact of this change on consents, SNZ said.

South rises again

12th January 2011

Source: The Southland Times

Invercargill is on the up and up as a top destination in New Zealand after moving up two places become the 18th most popular place to visit in 2010.

Wotif.com revealed the results from its top 20 places to stay yesterday that were booked through its website.

Queenstown was unchanged from last year at No 4, while Wanaka was up two places at 14 and Te Anau down three at 15.

Auckland again topped the list and Wellington pushed quake-ravaged Christchurch into third.

TOP 20 NZ DESTINATIONS

1. Auckland
2. Wellington
3. Christchurch
4. Queenstown
5. Rotorua 
6. Dunedin 
7. Taupo 
8. Hamilton
9. Napier 
10. Palmerston North
11. Nelson
12. Paihia 
13. Tauranga 
14. Wanaka 
15. Te Anau 
16. New Plymouth
17. Hanmer Springs
18. Invercargill 
19. Blenheim
20. Franz Josef Glacier

New rental housing law clears up grey areas

11th January 2011

Source: Stuff Business Day

A grey area in rental housing legislation has been cleared up so that tenants cannot be kicked out or leave with no notice if their fixed-term tenancy is over.

The Residential Tenancies Amendment Act (RTAA) took effect from October last year and landlords organisations are urging members to do their homework as people begin to shift around in the new year.

Key changes in the act include the process for terminating tenancies and new penalties for tenants who harass neighbours.

Under the old act, people whose fixed-term tenancies had expired were in a no-man's land for three months until they became an open-ended or "periodic" tenant".

"During that 90 days there was no minimum-notice period required," said a Building and Housing Department spokeswoman, Maria Robertson.

"Tenants theoretically could be told to leave, or could choose to leave, with no notice."

She said now fixed-term tenancies immediately became periodic when they expired, giving much more certainty to everyone.

Jackie Thomas-Teague, president of Wellington Property Investors Association, said 85 per cent of landlords were managing their own rentals and it was important they got a handle on the new act. Changes included rules about fire safety, disposal of leftover belongings and penalties for substandard or unmaintained housing.

Landlords are liable for damages of up to $3000 for poor housing, although spurious claims by tenants can result in them being forced to pay for wasting the Tenancy Tribunal's time.

Tenants also have some new responsibilities. It is now unlawful for tenants to harass neighbours or have too many residents on the property, with a fine of up to $2000.

Tenants who abandon or fail to vacate a property can also be fined $1000.

But Ms Thomas-Teague said heaping penalties on those who already owed money was not always effective. "Enforcement is going to be the big catch on this."

Landlords also had to appoint a property manager if they were going to be out of the country for more than 21 days, which was a "brilliant idea".

"A lot of tenants have problems contacting their landlord if something goes wrong, even if they're in the country but if they're out of the country, it's impossible."

She said the new act also made tenants more responsible for leaving properties clean and tidy, although this was not easily defined.

Landlords could also now dump goods left by a tenant if their market value was lower than the cost of storing and selling them.

This was an area which had been fraught with danger for landlords who in rare cases had been challenged for throwing out something of value. "It used to be really difficult because they used to have to get an order from the Tenancy Tribunal and go through a bit of rigmarole as to proving they had indeed tried everything to get hold of the tenant."

Recovering residential sales create optimism

10th January 2011

Source: Otago Daily Times

Queenstown's property market is lifting on the back of strong pre-Christmas residential sales and the most inquiries since the credit crunch sparked the global recession in 2007, says REINZ Queenstown spokesman Adrian Snow.

"There's been a very good lift in activity for the last six weeks of the year. If that trend continues, real estate agents will be cautiously optimistic for 2011," Mr Snow said.

Industry publication Property Press was full to capacity - another sign that vendors' more sober expectations were buoying the market.

Media reports of a Queenstown property "nosedive" based on a report from valuer Hamish Goldfinch, of Queenstown, were inconsistent with trends now and probably largely reflected sluggish winter activity, which he said was worse than in previous years because of a "subdued" Australian market and because "recessionary effects were starting to show through".

In some cases, apartment values in the resort had dropped 40% to 50% - a phenomenon Mr Snow said reflected the market's isolation from the general residential market.

He said the apartment market was a speculation bubble that had now burst, revealing the "true market value" of apartments as owners dropped asking prices or simply took their properties off the market. Apartment sales were now "stable" at six to eight a month.

That seller realism was matched in the residential market. "Vendors are waiting to see the recession come to an end - vendors are realistic. The key to getting a property sold is getting it priced properly to match the market."

People selling houses had come to realise reduced house values were "hypothetical paper loss" that were a hangover from the pre-recession market.

"I think we can be confident that the worst of the downward movement has occurred - very likely we've passed through the lowest point of value," he said.

A marked improvement in section sales over the past eight months was also cause for optimism.

"It tells us people are buying sections to build on - that's very important for Queenstown because it flows through to the building industry in general. It tells us that, fundamentally, our property market is in shape," he said.

HOAMZ Real Estate Queenstown manager Fred Bramwell said the company sold 17 residential properties in December - well up on the same time the previous year.

"The market is OK; we've got lots of inquiries. It's as big as it's ever been. It's not all doom and gloom."

Mr Bramwell also agreed with Mr Snow's evaluation of vendors' changed expectations.

"Vendors who are realistic about where the market is will sell their property - those that aren't, won't," he said.

"People still like Queenstown ... there's plenty of people with money prepared to buy."

Tourism booms in Qtown

6th January 2011

Source: The Southland Times

Queenstown tourism operators have been busy during Christmas-New Year with some reporting business up 5 to 10 per cent compared with the same time last year.

Milford Sound flightseeing operators at Queenstown Airport say they were swamped by visitors between Christmas and New Year.

Air Milford owner Hank Sproull said it had experienced some record days, especially on December 29, which was a "huge day", as was December 31.

Early December had been quiet when the weather was perfect, then "all of a sudden the floodgates opened ... there are a lot of people, a lot of Aussies here," Mr Sproull said.

American, United Kingdom and Auckland visitor numbers were also strong.

Other Milford Sound flight operators said they had been extremely busy.

Airways New Zealand staff said there were 251 aircraft movements recorded at Milford Sound on December 29 – the busiest day for several years.

There were 215 movements on Tuesday.

The busiest day for tourist traffic was believed to be 265 movements in either 2002 or 2003.

Real Journeysoperations manager Tracey MacLaren said business had been great throughout the holiday period.

"Overall we're tracking positively – better than we'd forecast, mostly [because of] domestic holidaymakers."

Ms MacLaren said daily cruise numbers throughout the Southern Lakes were probably up by between 6 and 10 per cent compared with last year.

Rydges Queenstown general manager John McIlwain said the hotel had been "flat out", running on 92 to 93 per cent occupancy this week.

More rooms would become available towards the end of the month.

This January was definitely busier than a year ago.

February bookings were also up about 7 per cent compared with last year and March also looked strong, Mr McIlwain said.

Mid-December had brought in a mixture of visitors, including Indian honeymooners, but Australians were still the biggest market during Christmas and New Year, diluted by healthy numbers of Kiwis.

New Zealand Hotel Council Queenstown chairwoman Penny Clark said most hoteliers were reporting numbers "marginally up on last year" with great Christmas-New Year numbers.

Forward bookings were strong, but most hoteliers did not think they would surpass January last year.

The Station information centre manager Kris Barrs said it had been much busier than last year and during wet weather days people were "here wanting to spend money but couldn't".

Business at Base Backpackers was "awesome", with all 406 beds booked out during the holiday period, as they were last year, general manager Nikki Money said.

Moteliers reported numbers "on a par with last year", but with fewer Cantabrians and more Invercargill visitors.

Restaurateurs were happy, too, with many rushed off their feet during the holiday break.

Liquor sales were stronger than the previous Christmas-New Year period for Goodbars in Queenstown, Arrowtown and Wanaka, as was business at their Botswana Butchery and bars.

Homeowners warned on interest rates

5th January 2011

Source: Stuff Business Day

A leading bank economist is warning home buyers that current below-average fixed term mortgage rates could start rising "quite rapidly".

Westpac senior economist Dominick Stephens said people had flocked to the value of low interest floating rates, in the wake of the global economic crisis and subsequent slow recovery.

But it would be prudent to keep a close eye on some key economic indicators in the short to medium term to see if floating rates still provided the best value, he said.

Consumers preferring a floating rate now might find they ended up paying more over the next two years or so than if they took a fixed rate, Mr Stephens said.

Fixed term rates represented good value now as consumers were able to lock in below-average mortgage rates for a long period, but the fixed rates could rise earlier and faster than floating rates if the economy performed better than expected this year.

Westpac expected the Reserve Bank's expectation of subdued growth during the next 12 months would be exceeded.

Mr Stephens said the Reserve Bank might have to raise the official cash rate earlier than the end of 2011, which was its plan for now.

Consumers should keep an eye on four key factors.

Those were whether the housing market stabilised sooner than the Reserve Bank anticipated, the economic impact of the Rugby World Cup, earthquake reconstruction activity in Christchurch, and high commodity prices for farmers.

The Reserve Bank and Westpac had contrary views on whether farmers would spend the cash or use it to reduce debt, Mr Stephens said.

The housing market, particularly in Auckland, was already showing some signs of stabilising. If maintained, pressure would go on the Reserve Bank's prediction of a 2 percent decline in house prices in the first half of 2011.

Farmgate returns would be excellent, and while the Reserve Bank expected farmers to use the cash to pay down debt, Mr Stephens believed farmers would spend more freely than in 2010 although they would not return to the heady spending of last decade.

Coupled with the rebuilding of Christchurch and the Rugby World Cup's predicted $1.15 billion in total economic activity, fixed rates could rise earlier and faster than floating rates, Mr Stephens said.

"Those factors would force the markets to reassess the outlook and fixed term mortgage rates could rise quite rapidly."

Many variable floating rates are now between 6.2 percent and 6.5 percent, with fixed two-year mortgages around 6.6 percent and three-year around 7.1 percent.

NZ Property Report – December 2010

5th January 2011

The December 2010 NZ Property Report published by Realestate.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 December. 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 95% of all property movements in the NZ market as managed by licensed real estate agents.

The December 2010 report shows a record low level of new listings coming onto the market. This was matched with a slight drop in asking price expectation. The constant factor in the market is the scale of the inventory of unsold houses which in absolute number began to decline this month as somewhat stronger sales began to clear some of the inventory. When judged against the rate of sale of property, which continues to be weak, the inventory in number of weeks of sales continues to sit well above long term average, currently at 50 weeks.

Summary of the market – December 2010

December traditionally is the quietest month of the year for listing of new properties for sale. The run up to Christmas tends to curtail the listing period to a part-month rather than a full-month with the consequential lower listing count. On a seasonally adjusted basis December this year shows no percentage change as compared to November, indicating the seasonal trend was expected, however the absolute level of listings is significant at this new low level.

The 2010 year has seen a consistent lower level of listings as the sales of properties has slowed through the year. In the full year 138,789 new listings were added to the market which began the year with 52,817 listings (at the time equivalent to 37 weeks of sales). The year ended with 53,077 barely a discernible difference in absolute number of properties on the market yet with a lower rate of sale the inventory of unsold houses now amounts to 50 weeks.

The recent sales report for from REINZ for November of 5,138 properties sold, did show a significant increase of 28% on a seasonally adjusted basis indicating that the market was showing some signs of life as the stability of interest rates and economic indicators moved into more positive territory.

The indicator of asking price expectation has shown a repetition of 2009 with a couple of peaks; currently returning down to a midpoint reflecting the fact that in the past 3 years vendors expectations of price increases have as yet not found a firm footing.

Asking Price

The truncated mean asking price for all new listings coming onto the market in December fell very slightly from $417,660 to $415,750. On a seasonally adjusted basis the asking price actually rose by 1.3%. Asking prices seem to be showing volatility especially with such low levels of listings coming onto the market.

The current asking price continues to drift down below the peak of Oct 2007, currently off 3.1%.

New Listings

The traditional seasonal fall in December was as expected, but when coming off a slower level of preceding months the actual level of 8,924 hit a record low. No single month since Jan 2007 has seen a total of less than 9,000 per month.

On a moving annual basis the past 12 months have seen 138,789 new listings compared to 135,416 in the prior year an increase of just 2.5%.

Inventory

The level of unsold houses on the market at the end of December fell to 53,077 from 54,365 in November. This represented the equivalent of 50.1 weeks of equivalent sales, as assessed on a seasonally adjusted basis.