Property

Thursday news in brief

Life is busy and it’s easy to miss some of the stories that hit the news. So here’s a brief rundown of some of the stories that might have slipped by you this week…

Thursday, April 06th 2017

Price softening bad news for supply

Recent price softening in the Auckland market will help to make the city’s housing supply problem much worse, the Property Institute has warned.

The Institute’s chief executive, Ashley Church, said rising interest rates combined with the LVR-induced market slowdown could reduce price pressure and scare people chasing capital gain out of the market – but that wasn’t necessarily good news.

“Auckland still needs over 40,000 new houses and we’ve long been of the view that the way to get those built quickly was to divert property investors away from existing dwellings and into investing in new homes. Unfortunately, it now looks even less likely that that will happen”.

The focus on strangling speculation rather than increasing supply means many investors will now disappear from the market, which could kill market activity and leave the supply deficit unresolved, he said.

Read more: Market slowdown different this time 

First state house sales completed

The first large scale transfer of state houses to a community housing provider (CHP) has now taken place, marking a major milestone in the government’s controversial social housing reform programme.

As of April 1, Accessible Properties has taken over the ownership and management of more than 1100 former Housing New Zealand properties in Tauranga.

Social housing minister Amy Adams said the ownership of the properties may have changed, but they remain social houses and nothing has changed for the tenants. “But the sale proceeds can be used to build even more social houses in the areas of most demand.”

To date, the programme has been chequered – thanks to the failure of plans to sell state houses in Invercargill and Horowhenua – but the government still plans to try and sell up to 2,500 state houses in Christchurch.

Read more: More state house sales on the agenda 

Rental yield pressure could deter investors

Upward pressure on rents nationwide could end up acting as a deterrent to investors entering the market, according to new forecasting research from Crockers and Infometrics.

It showed that rents outside Auckland and Canterbury rose by an average of 8.9% in 2016, although rental growth in the Auckland region slipped to just 3.3% per annum in November 2016.

This is impacting on gross rental yields and signs of a renewed pick-up in house price growth suggest there will be further downward pressure on rental yields in 2017 – which could deter investors from buying property.

“But any significant improvement in rental yields is unlikely before 2018, when a possible correction in house prices could be accompanied by steady or rising rents, enabling rental yields to recover from their current very low levels,” the forecast said.

Read more: Rent for “typical” New Zealand house hits all time high 

Comments

No comments yet

Heartland Bank - Online 6.69
SBS FirstHome Combo 6.74
Wairarapa Building Society 6.95
Unity 6.99
Co-operative Bank - First Home Special 7.04
ICBC 7.05
China Construction Bank 7.09
BNZ - Classic 7.24
ASB Bank 7.24
ANZ Special 7.24
TSB Special 7.24
Unity First Home Buyer special 6.45
Heartland Bank - Online 6.45
China Construction Bank 6.75
TSB Special 6.75
ICBC 6.75
ANZ Special 6.79
ASB Bank 6.79
AIA - Go Home Loans 6.79
Kiwibank Special 6.79
BNZ - Classic 6.79
Unity 6.79
Westpac Special 6.39
China Construction Bank 6.40
ICBC 6.49
SBS Bank Special 6.55
Kiwibank Special 6.55
BNZ - Classic 6.55
Co-operative Bank - Owner Occ 6.55
ASB Bank 6.55
AIA - Go Home Loans 6.55
TSB Special 6.59
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Owner Occ 8.40
Co-operative Bank - Standard 8.40
First Credit Union Standard 8.50
Kiwibank 8.50

More Stories

Support for regulation

Monday, March 18th 2024

Support for regulation

REINZ has emphasised the need for property management regulation to Parliament’s Social Services and Community Committee.

A better investment market

Thursday, March 14th 2024

A better investment market

“Reinstatement of interest deductibility starting from the new tax year on 1 April brings property investors back in line with every other business in the country, where interest costs are a legitimate deductible expense," Tim Horsbrugh, New Zealand Property Investors Federation (NZPIF) executive committee member says.

[OPINION] Recessionary times

Thursday, March 14th 2024

[OPINION] Recessionary times

It is not the best out there for many businesses and property sector people. Sales are down across the board, our clients’ confidence is falling, and there is a lot of uncertainty.

Interest rate expectations: It’s not over yet

Thursday, March 07th 2024

Interest rate expectations: It’s not over yet

Most Kiwis think interest rate increases have peaked.