Hibiscus Coast Market Update – November 2018
The last quarter of 2018 saw quite a few changes and interesting points to keep an eye on.
- The Reserve Bank announced that they have decided to further relax the rules around the Loan to Value Ratio (LVR) lending in a highly anticipated move that should provide a boost for the housing market. From the 1st January 2019 up to 20% of new mortgage loans to owner occupiers can have deposits of less than 20% (increased from 15%), and up to 5% of new mortgage loans to property investors can have deposits of less than 30% (lowered from 35%). It is anticipated that this easing in the LVR will boost the housing market, but only a little, with the restrictions remaining “tight” overall. There is speculation that further easing may take place over the next few years.
- On the 5th of December, the idea to stop ‘ring fencing’ was introduced to Parliament. Currently residential property investors can use losses on their rental properties to offset tax they need to pay on their other sources of income – wages, salaries, business income etc. If this stop is passed, a residential property investor will only be able to offset deductions against income from their property portfolio.
- From the 1st of January 2019, real estate agents will have to comply with increased measures when representing a buyer or seller – some of which means we will require additional information from you, our clients. In reality, the new safeguards will soon become the ‘new normal’, however in the short term it is worthwhile knowing that your chosen real estate agent isn’t asking for additional information to be difficult, we are simply complying with the new legislation and may suffer severe penalties for not doing so. Customer Due Diligence includes sight, copying and signing a) passport, driving license or firearms license and, b) a current utility bill, bank statement or a statement issued by a government agency which is addressed to that homeowner. For trusts, we will require a trust deed and carry out the same process for each trustee as above as well as source of funds/proof of wealth for the trust.
- The Foreign Buyer Ban was introduced on the 22nd of October 2018 and applies to homes that are classed as ‘residential’ or ‘lifestyle’ on the District Valuation Role. All buyers must complete a Residential Land Statement to say whether they are eligible to buy. Your conveyancer can help you do this. If you must apply or cannot buy, it is especially important that you first talk to your conveyancer before you sign the sale and purchase agreement. If you need to sign it urgently, you can make the agreement conditional on the consent of the Overseas Investment Office. If you need consent, but sign an unconditional agreement without it, you may face significant penalties. If you make a false statement, you could be fined up to $300,000.
The national median house price in November for residential properties was a record $575,000 up 6.5% from $540,000 at the same time last year. For New Zealand excluding Auckland, the median house price was a record $485,000 up 7.8% from $450,000 in November 2017. Auckland’s median house price dropped -1.5% to $867,000, down from $880,000 in November 2017, but was up from last month by 0.3%.
“November saw the Auckland market continue on its stable pattern of median prices in the $850,000 – $880,000 bracket. Results varied across the region with Franklin District seeing an 11.3% price uplift, yet Rodney saw an 11% fall in prices annually, highlighting the disparate results across our largest city. Vendors are meeting the market in terms of price, but they are taking their time resulting in longer days on the market, especially in some suburbs. There are very few cash ready buyers and banks’ pre-approvals cannot be relied upon as approved cash, but this only affects the length of the negotiation and not the overall sales.” – Bindi Norwell, REINZ CEO.
To view the Real Estate Institute of New Zealand Monthly Report for November <<< Click here
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If you would like to have a no obligation chat about real estate, please contact Anita Dobson on 021 337 093 or email anita.dobson@harcourts.co.nz. Your #1 choice for real estate on the Hibiscus Coast!