MoveNorthShore.co.nz » interest rates

First Home Buyer Mortgage Packages

Tony White — Tue, 12 Oct 2010 03:13:01 +0000

First home buyers and those selling homes are about to benefit from first home buyer packages being offered on the market as of today. The lending market is certainly heating up, with more competition from the banks they are really out there trying to buy your business now which is a complete turnaround from earlier this year.

Mortgage Express, our lending partner reports that ne of the main stream banks launched a new incentive package for First Home Buyers yesterday consisting of:

* up to $1000 towards legal fees
* A voucher for Noel Leeming’s
* Application fees will be waived
* Free AP and bill loading for 3 months
* Credit card fee waived for the first year - specific to new cards only
* True rewards fee is also waived – this is specific to new True Rewards accounts

It is a great time for customers to buy with good packages on offer from the banks, 95% lending, legal fee contribution and great rates and discounts.

We can help you get your first home, cal us and we’ll help you make your move!

Low Deposit Home Loans are Back

Tony White — Wed, 22 Sep 2010 23:53:34 +0000

Mainstream Bank Relaxes Deposit Requirements

Great news for first home buyers, self employed and for people needing assistance with their mortgage!

One of the main stream banks has eased up on its lending policy and will now lend 95% over 25 years for new or existing customers, plus any lending up to 90% can be over a 30 year term making repayments affordable for first home buyers.

We also have a specialist lender that has also opened its policy up for self employed by lending with no income evidence required. Maximum lending 65%.

If you have customers being pushed towards mortgagee sales, we have a lender willing to take them on board at 60% including the option to add marketing costs for you and give the customers 6-12months breathing space to sell the property.

We have some amazing changes to policies taking place with the banks opening up their policies, this is going to create some great competition from the banks with the winners being the customers.

If you are thinking of selling this spring this is great news as buyers will have more money to spend.

Spring Lift in North Shore Real Estate Market

Tony White — Thu, 09 Sep 2010 02:47:24 +0000

Graph from Crockers

So, what’s happening in our real estate market? Real Estate agents have to be positive – it’s our job! I don’t know anyone who would employ a real estate agent who wasn’t positive and enthusiastic! So here’s a little reality..

On the North Shore the real estate market in winter has been quite difficult and patchy – May and July were horrible, June was excellent, and I sold 4 homes in August! But winter is always a bit like that, it’s been wet, wet and wetter, and the post budget blues didn’t help either. But what’s happening right now?

Well I have been checking our year to date sales and, like Barfoot and Thompson, we can see that 2010 is a much better year than 2009, by 20%. Thats right, at least 20% better than last year. Sales Volume is up 20% and values up 24%. Take a look at the REINZ graph above and see what Olly Newland has to say here. Quotable Values, usually a little bearish, report that sales are up 5-6% on an annual basis. I have included their report at the end of this blog.

So what! Well…. if you are thinking of buying, then maybe you should. And if you are thinking of selling, then maybe you should…

Buyers

There have been those in the New Zealand Herald telling buyers to be cautious. Well gee whiz! so buyers should be..in any market. Always good advice! Have a good look around, get a building inspection, make sure you follow the golden rules; location, location, location, and buy the worst house in the best street and then buy the house you like. Make sure you get a good mortgage and pay it off.

This is a good time to buy, interest rates are low, but they are not likely to go lower. Delay a year and you can guarantee that rates will be higher. Right now mortgages are more affordable than they have been for years.

Don’t get caught in the rent trap. It might seem cheaper in the short term, and the likes of Bernard Hickey will tell you it makes more sense to rent than buy, but be careful…you can pay rent all your life and you’ll never even own the letterbox. And if you got off the property ladder during that downturn in 2009, make sure you get back on now….it can be very hard to get back into the market once you are out. Any improvements you make to a house while you are renting is money down the drain, and the landlord can just send you a pink slip and have you out of there at very short notice. If you rent, it is not yours. If you own, it is your own home.

And rents are rising, GST goes up in October, rates will rise too, and now that the government has changed the depreciation allowances we can expect more rises. Again, we are noticing rents are rising – around $20.00 per week and more in our office. Good news!…. if you are thinking of investing in a rental property! (I have bought a block of 3 flats this year and looking to buy another soon). Bad news if you decide not to buy and continue renting.

As Olly Newland says: “Take your courage in both hands so that in the future you will not look back and say “If only I had taken advantage of the market during the recession in 2009/10 instead of hesitating!”

Sellers

Right now the spring lift is happening. Open homes I ran during August had 100′s of people attending. Two homes I sold were on the market less than 30 days. At 78a Castor Bay Road one weekend I saw 75 people, many were cashed up buyers who had gotten out of the housing market in 2008/9 or were immigrants or returning expats. Some of these immigrants have been here for a few years and while their pounds and US dollars are not as good as they once were, the value of their currency is not improving, and they can see now is the time to buy. Many had pre-approved mortgages. Mortgage brokers report that enquiry is strong and that the banks are ready to loan. For example, some banks have reduced the deposit required for a home loan from 20% to 10%. You can expect buyers in the market this spring.

Many sellers will wait to see what happens next and there could be a flush of property on the market in November. Meaning there will be lots of competing properties on the market. My advice? If you are thinking of selling in the next 3/6 months, NOW is good. Here’s 12 ideas on how to sell your North Shore house in spring. Christmas is only 100 days away. That is not a lot of time. Get your copy of the 7 Secrets of Getting a Great Price for Your Home when You Sell NOW and then me a call on 0800 61 8888.

I have a particular shortage of family homes with lawns and garden for children and dogs, with space for 3 vehicles or more, in all areas. If you have a 50′s, 60′s or 70′s home give me a call now (Radio Hauraki has some great rock from this era!….great music and great homes go hand in hand, do you think?)

Here are my sources:

Olly Newland has a great blog on the housing market on his website called “Have We Turned the Corner”

and interest.co.nz has a superb overview of the current market here, including the following article by Glenda Whitehead at Quotable Values:

Auckland Market Report

QV’s Residential Price Index for August shows that property values in the Auckland region are just beginning to stabilise, although have dropped by 0.7% since March this year. In contrast, values increased by 6.7% in the 7 months to March. Consequently, values now sit 5.9% above the same time last year, but 2.4% below the market peak of late 2007.

Glenda Whitehead of QV Valuations said; “Values in the Auckland region’s residential market now appear to levelling, although it is too soon to tell whether this is the end of the downward trend which has persevered since March”.

“August activity remained light and caution prevails, but we are seeing early signs that home owners are gearing up to make decisions. We suspect many are assessing their options and actively seeking information, as we have noticed a recent in increase in Market Valuation reports by QV’s registered valuers”

Ms. Whitehead said. “Some home owners are taking advantage of readily available builders, planning extensions and alterations to their existing homes. While this data is not fed into the QV index, it is a sign that home owners view the property market positively enough to believe the cost of renovations will be recouped in the future. Cost and added-value differ, but those we speak to are making long-term decisions whilst enjoying a higher quality home in the short-term. This activity is obviously only being undertaken by those in secure employment and with good levels of equity in their homes” Ms. Whitehead said.

“The North Shore market remains patchy, with no push from buyers. The time taken to sell a property remains extended, with agents reporting low activity levels. However, we believe pre-approvals and requests for refinance are on the rise, a possible signal of a pending bounce in the spring market” Ms. Whitehead said.

“Auckland City is characterised by general lack of confidence. Higher quality properties are still faring reasonably well and some good prices are still being achieved when the right buyer finds the right property. Buyers appear more demanding of quality, and are overlooking properties that have any negatives” Ms. Whitehead said.

“Activity in West Auckland remains subdued and buyers remain cautious, as in other parts of the region. Many home owners are refinancing their existing situation. Of the homes that are selling, those that are upgraded and well located tend to be the ones that find a buyer” Ms. Whitehead said.

“Activity in the South and South East market also remains subdued. Values do however appear to be relatively steady with fewer listings and fewer sales. The lower end of the market, sub $300,000, now appears to have become more attractive to investors, reflecting improved yields. But again, buyers remain cautious. Anecdotally, activity in the $400-600k bracket seems limited.

Uncertain economic conditions continue to dampen confidence” 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 $535,918.

Of Interest | Mortgage Rates in August 2010

Tony White — Fri, 13 Aug 2010 05:11:15 +0000

From Suzanne Isherwood of Mortgage Express:

With the banks economists predicting one thing and the rates doing the opposite, it is quite confusing at the moment to try and understand what the rates might in the future, especially so for first time buyers. The ASB Economists had this to say:

The Reserve Bank of New Zealand (RBNZ) began lifting the OCR by 25 basis points in both June and July, bringing the OCR to 3%. We expect the RBNZ to take a break from lifting the OCR in October and December. We expect rate hikes will resume in January, with the OCR steadily increased by 25 basis points at each meeting until the OCR reaches 4.5%.

Following the lifts in the OCR, floating rate mortgages have started to increase, and we expect the floating mortgage rate to continue to rise over the next year in line with future OCR rate increases. This may prompt some borrowers to move to fix the floating part of their debts. Our calculations suggest there is not much cost difference over a 2-year horizon between floating and fixing. This means the certainty of short-term fixed rates now comes at very little cost. In addition, the recent decline in the 2-year rate does marginally increase its attractiveness, although we do emphasise a large degree of uncertainty remains around the pace of OCR increases over the next year.
Beyond the 3-year mark, fixing remains expensive (despite recent declines in rates) but there is the benefit of more certainty if that is an important factor in the decision. Indeed, if this is something you are willing to pay a premium for, then now is an opportune time to fix as there is no guarantee 3 to 5 year rates will remain this low for long.
The trend over the next year will be for shorter-term mortgage rates to start lifting back to average, or slightly above-average rates. With long-term fixed rates relatively high, it is really only the floating or short-term fixed rates that offer value. Priority will be dictated by borrowers’ preference for maximising the chance of low debt servicing costs or smoothing the inevitable increase in mortgage rates.

Current rates:

Floating   6.10%   Westpac Choices
6 months   6.25% Wpac
1 year   6.45%   All banks
2 year   6.85%   All banks
3 year   7.15%   National Bank
4 year   7.45%   ASB & Wpac
5 year   7.75%   All banks

Of Interest

Suzanne Isherwood — Wed, 02 Jun 2010 22:34:05 +0000

In the BNZ Weekly Overview the BNZ economist says banks are having more difficulty borrowing funds in the European market with the cost of doing so increasing which is likely to manifest itself in New Zealand.
BNZ remains of the opinion that unless sharemarkets collapse another 20% in the next fortnight the Reserve Bank will raise the official cash rate (OCR) 0.25% on June 10 and indicate plans to raise the rate steadily from then on.
“But with an eye to changing the pace if conditions turn out to be weaker or stronger than they expect,” he says.
The advice for borrowers is to

still toss a coin between staying floating and opportunistically hopping into a one to three year fixed rate.
Alexander says at the margin the risk remains that the Reserve Bank does not take the official cash rate in a straight line manner to the 6% level it has pencilled in for early 2012 and that suggests those choosing to stay floating won’t necessarily be worse off than fixing out to then.
“Note as ever however that no-one can avoid higher funding costs if they face a fixing decision now because of the risk floating rates are near their peaks in three years time,” he says.

Our advice at this stage is to hedge your bets and split your loan. If you would like some of advice or have a question please just ask Suzanne Isherwood on 0800 226 226!

Of Interest

Suzanne Isherwood — Fri, 19 Feb 2010 22:13:39 +0000

The million dollar question that

we are asked at the moment is

“what do you think will happen to the interest rates

this year, how high will they go?”

A lot of people are uncertain about what’s happening with interest rates so they are going on the floating rate to watch and wait. People are doing a mixture of variable and fixed rates and we want to make sure when they look at what’s available they see they get a good rate.

One of the major banks says most people are looking to fix because it is perceived that rates will go up in the middle of the year, however there is still strong demand for the floating rate with 40% of drawdown’s on the floating rate.

Another economist says we are seeing a change in the floating rate now because of weak data and unemployment numbers which suggest the official cash rate, which is at a record low of 2.5%, won’t rise until June. Previously many economists were expecting a rise in March or April. He says if any other banks make movements he expects them to be minor because there has not been much of a change in 90-day bank bill yields and it is more expectations of them changing rather than the immediate cost of borrowing changing.

He believes the option of floating looks best for most people and as we approach the time when floating rates start rising – mid-year – for a while the optimal thing may be to fix one year, as many are still choosing to do at the moment. His advice for borrowers is to budget for about a 3% rise in floating rate borrowing costs between the middle of this year and the end of 2011.

No change from last week with Interest Rates of the week:

6 months 5.69%

12 months 6.15%

18 months 6.60%

24 months 7.20%

36 months 7.79%

48 months 8.49%

60 months 8.60%

ASB however did move down their rates this week, which is a welcome change as they have been leading the charge with rates going up!

Is it the Right Time to Sell?

Tony White — Tue, 15 Sep 2009 23:56:37 +0000

The Three Auctioneers

During the week I met a client of mine who is considering whether to sell. We have talked about this sale over the last two or three years. She asked me, “Is now the right time?”, and then she said ” Stop being a real estate agent and tell me what you really think”.

I laughed- real estate agents are so full of bluff and bluster, (I’m being polite)-it sometimes is hard to know when we are being real or just spouting a line to get a listing! So I said, “You want me to be enthusiastic and positive, don’t you?!”

So, Is it really the right time to sell? Well, it’s your house, your land, and it really is up to you. I can only help you get the very best price for your house when you decide the time is right for you.

However, there are market factors, right now, that indicate that it is a good time to go to the market. Let’s look at the evidence on a national basis, locally and how it might affect you, today.

After two years of the ball being very firmly in the buyers court, real estate commentator Alistair Helm of realestate.co.nz says the market is stable and swinging towards a sellers market, but there is a real danger of lack of stock driving up prices. The NZ Property Report, dated 1 Sept 2009, shows a clear lack of houses on the market, especially in the main centres. Auckland is the worst off, there are 45% (almost half) the number of homes on the market as there were a year ago. And this shortage of property for sale will drive up prices. One of the really scary things is that there are few homes being built, and little land being subdivided. Watch out!

Yet Auckland is New Zealand’s biggest city and the landing pad for most immigrants and returning ex pats. These buyers have cash and they are actively in the market buying homes with British Pounds and Chinese Yuan. Often this money is secured against overseas assets and borrowed with low interest rates. It is one of the reasons why the New Zealand Dollar is high. Overseas buyers have always valued New Zealand land and property highly, often higher than the locals ( think of British migrants in 1840, buying land from the locals for a few blankets!). And while local interest rates are the lowest we have seen for decades, they are forecast to rise in the New Year, so buyers are buying and fixing their rates. Remember a loan in 2009 costs a third less than the same loan did a year ago.

So, locally, on the North Shore, there is a boom. How long will it last? I don’t know, you tell me. The auctions I have attended have been active and exciting. At 89 Forrest Hill Road, Forrest Hill about 200 people witnessed a battle royal. 3 bidders fought over an 1800m2 section with an original 1950′s weatherboard bungalow. It sold for $1,200,000. I have attached the bid sheet for you to see. 7 Trafalgar Road, Milford, a brick and tile 1960′s home, nicely renovated, with a pool, sold after a fiercely contested bidding war, for $900000. And 60 Kowhai Road, Mairangi Bay, sold for $855,000 3 weeks before the auction. The buyer made the sellers an offer they could not refuse, to avoid missing out (again).

Not every home is right for auction however, and some are more difficult to sell than others. If you are needing some advice, without bluff and bluster, call me.

Is now the right time to sell? The market evidence says YES.

Is it the right time for you? Only you can answer that.

If the answer is YES, give me a call on 0800618888.

The Worm Has Turned

Tony White — Wed, 19 Aug 2009 23:17:59 +0000

andrea z @ flickr

Wasn’t it interesting that a week or so ago both the Prime Minister, Mr John Key and the Governor of the Reserve Bank, Mr Alan Bollard independently stated that they thought the worst of the recession was over. Perhaps we have had the major earthquake, and may yet still experience some after shocks. Staggering when months ago they were talking Armageddon and Great Depression.

Confidence has been evident in our real estate market for quite some time. We are noticing people coming back to the market in all areas. Investors are back buying investment property. fist home buyers have been back for a while.

Recently I attend the auction of a 1200m2 development site in Quebec Road in Milford. It sold for $803,000with very competitive bidding. This is an outstanding result and shows confidence in future demand and higher prices for homes. Auckland needs 21,000 new houses every year, yet over the last two years there have been few building permits issued, little subdivision and many builders have hung up their tools. Soon there will be demand for new homes and long lead times to build them. At Harcourts we are noticing a significant rise in section sales, see our CEO’s report here as builders prepare to start building again.

Immigration is on the rise, a huge number of Kiwis have been repatriating so very soon we will have a lack of housing stock. This is further pressure on the market and another reason for the fence sitting buyers to take action.

With lower prices, lower interest rates and an easing of banks terms and conditions there are many reasons to buy right now. It’s almost like a perfect storm, so what do you want to do? Buy or sell? Watch from the sidelines or get involved? Call me right away on Freephone 0800 61 88 88!