23 01 2015 | Summer 2015 Edition
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Happy Birthday NZINVEST! 

 

This month NZINVEST celebrates our 13th year creating successful property investors and would like to take this opportunity to thank our clients and business partners for their loyal support over this time.
Our very first investor purchased a 4 bedroom GJ Gardners house in Manurewa for $207,000. Today it’s worth almost $500k; one of our first clients now has 13 investment properties and we still have 5 of our foundation staff working here.
The property prices and rents might have changed, but our objective has remained the same: assisting people to create wealth through residential property.

 

Year in review -
What happened in 2014 

 

It was a stop start year for residential property values with some flat periods due to uncertainty associated with the LVR speed limits, interest rate hikes and an election, along with periods of rapid value increases in some areas and decreasing values in others.

Overall the nationwide average shows residential property values increased 4.9% or $22,652 during 2014 from $466,022 in December 2013 to $488,674 in December 2014, according to the latest statistics from Quotable Value (QV).
The average national value increased 1.5% over the final three months of 2014 and nationwide values overall are now 17.9% higher than the previous market peak reached in late 2007.

Values in the Auckland region increased 9.8% or $68,309 from $693,549 at December 2013 to $761,858 at December 2014. They rose 4.2% over the past three months and are now 39.4% higher than the previous peak of 2007.

Once the election was over and interest rates rises were put on hold, there was a surge of new listings and activity with the coming of spring and values began to tick upwards again in most of the main centres.”
“The return of relatively low interest rates offered by the banks with cash incentives coupled with record migration levels has since led to a strong reacceleration of values in the Auckland.”

 


 

Fixed vs Floating for Mortgages 

 

Among the current standard fixed rates, the best value for borrowers with a deposit of 20% or more probably lies in the two year and three-year terms. However, there is a possibility that fixed mortgage rates will fall even further over the weeks ahead.

Waiting a while before fixing might offer even better value; rour- and five-year rates seem high relative to where we think shorter-term rates are going to go over the coming four or five years, though they do offer stability.
Floating mortgage rates usually work out to be more expensive for borrowers than short-term fixed rates, such as the six-month rate. However, floating may still be the preferred option for those who require flexibility in their repayments.

 

The Outlook For 2015 

 

Expectation is that sales turnover will remain buoyant in the first few months of 2015. However the lack of listings will continue to constrain the market.
“While there was a usual seasonal increase in new listings from August through to November, this dropped away in December as people waited until the New Year to list their properties,” said Jonno Ingerson from Quotable Value (QV)
“The increased sales activity at the end of the year outstripped this new supply meaning that total listings have once again dropped back, making it lean pickings for buyers. New listing activity typically picks up from mid-January but unless there are far more than we saw last year then supply is likely to remain less than demand.

“Given strong migration, continuing low interest rates, a shortage of housing and good consumer confidence, values are likely to keep increasing in Auckland throughout this year. There may be modest increases in some of the other main centres, but most smaller centres are likely to remain steady.”

We at NZINVEST are very optimistic about opportunities and activity in the residential property market this year; it seems as though rates will stay low for a while yet, while upwards pressure on the property market will continue. We invite you to take this opportunity to speak to one of our team about how we can help you to build a property portfolio by contacting our office on (09) 966-5560. We wish you all the best for 2015.

Sources: QV January newsletter, Westpac NZ weekly commentary.

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NZINVEST offers clients a convenient approach to rental property ownership by providing a suite of professional services under one roof.

  • Property Investment Advice and
    Portfolio building
  • Property Analysis
  • Finance Advice and Broking Services
  • Risk Management strategies
  • Insurance broking services
  • Property Management
  • Tenant Selection (letting services)
  • Property maintenance services (landscaping, painting and general maintenance work)
  • Specialist property Accountancy advice
  • Annual tax returns



 

T +649 966-5560

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po box 1790, shortland street

auckland 1140, new zealand

www.nzinvest.co.nz

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Disclaimer: Information contained in this document is gathered from various third party sources and is believed by NZINVEST to be true and correct at the time of publication.

 

NZINVEST accepts no liability for any decisions made as a result of the information contained within this document The contents of this publications may not be reproduced without the permission of NZINVEST. Property investments are not free from risk. Returns are not guaranteed. Seek professional advice before investing. A disclosure statement is available, on request and free of charge.