Hanmer Springs is a hidden gem on our doorstep. We are lucky to have such a great holiday destination only 1.5 hours from Christchurch. As a town it is the perfect getaway for the family, offering great activities for the kids and plenty of great places to eat and drink for the adults. As I have discovered on numerous occasions the weather is often much better than the Garden City.
The real estate market in Hanmer has been extremely active over the past twelve months with visitor numbers at all-time highs. The commercial centre of Hanmer is flying, we have seen a number of commercial developments under construction. Those that are completed have generally sold or leased prior to completion. In addition, residential housing on the market today offers extremely good value with most properties offering positive returns for those willing to buy and rent through the local holiday letting services.
Throw in the easy drive to Hanmer and you have a brilliant place to buy both commercial and residential properties. With strong returns, potential for capital gains I can only see the values increasing in Hanmer. Demand for good homes particularly close into the centre of the township is not subsiding and won’t for some time.
There are still some key elements required for the town to offer a full spectrum of activities with cinema being an obvious requirement, but given Hanmer has around 1000 permanent residents the town is extremely well equipped. With record immigration numbers looking likely to increase over the next few years one can Hanmer Springs appeal only increasing and along with it house prices.
If you are heading to Hanmer please do drop in to say hi to Jackie and the team at Harcourts and get their take on the exciting town of Hanmer Springs. It will be well worth your while.
At Harcourts we are always looking at different ideas to assist us to list properties and service our client’s needs. This month sees the beginning of our most recent promotion “Travel the World”. Running for the months of September until November, we are offering everyone who lists with us the opportunity to go in the draw for one of seven trips to destinations around the world.
It is a fantastic promotion and given we are timing it for spring we are expecting vendors will take up the offering in record numbers. If you are thinking of listing please call one of our award winning team 0800 789 1011 and be in with a chance of winning a trip to one of seven incredible destinations.
The Farmers Rangiora Winter Fest took place last weekend. It was great to see the local initiative to celebrate the opening of Farmers new store with a festival that has been roundly supported by the business community. The festival has been put together by local businesses to attract people to their businesses and I think it great.
Rangiora as a town is the hub of North Canterbury and has always been supported by the rural communities surrounding it. Post-earthquake many new businesses sprung up in the newly built commercial precincts around the town and are now in need of more patronage. The town is a little off the beaten track being inland of State Highway 1 so to throw a celebration is a great way to bring customers from outside the normal catchment and give them a reason to come and visit the great town of Rangiora.
The celebration will hopefully form part of the local event calendar for years to come. Certainly from our perspective we would love to support the cause again as we have seen the strong social media campaign combine really well with a radio campaign to give Harcourts Twiss-Keir some great exposure in the cluttered business environment that is Rangiora today.
It is in our blood as much as selling houses is. We have been doing it for some time now and have, in my opinion become good at it. Thing is with Property Management it is a thankless task that requires many long difficult hours to become proficient. We have seen over the years many companies come into our market place and fail because they think it is easy but let me tell you it is not.
Over the years we have made the decision to push our Property Management as a source of income. It has meant we have had to invest in resources both human and physical at some cost. Over the years we have grown to be the largest dedicated team in North Canterbury with 9 people in our team. They work extremely hard and do a great job for our landlords and tenants a like. We know what we are doing, we know what works.
Currently, after five years of good trading we are seeing a shortage of tenants and a few properties not renting quickly. This hasn’t happened for some time and people start to get nervous and questioning our experience asking why their houses haven’t rented. We know why and will work extremely hard to get properties filled but when there is more supply than demand not all properties are going to be rented within a week. Landlords need to understand rents post-earthquake no longer exist and prices may need to drop to attract the right tenant. Landlords need to understand presentation of a property will make it more attractive and to spend some money tidying a house up might just make all the difference and landlords need to understand that spending money on marketing your property will make it stick out in today’s market and just might get you that tenant.
What is unusual at present is the number of stories of rental shortages around the country. Yet if you were to go on trademe today you will find around 100 properties for rent currently in North Canterbury and Hurunui, around three times more than normal over the past few years. In my opinion those properties presented well, marketed well and with a realistic rental price will always rent in any market and what we are seeing today is landlords not responding to the market and simply not doing what is required to get a tenant. This market may be here for some time so if you have a property you can’t seem to rent give one of our award winning property management team a call – they will welcome the call.
With changes to banks lending coming into effect over the past couple of weeks I thought it pertinent to pass on some useful information from Corcoran French solicitors regarding first home buyers;
‘Purchasing your first home can be a very daunting prospect, especially trying to save enough money for a deposit. Luckily there are some options out there to assist first home buyers with this. The Government has just this week announced changes in this area that we wanted you to be aware of.
KiwiSaver First Home Withdrawal
This enables a first home buyer to withdraw their KiwiSaver Funds to purchase if they have been contributing for at least 3 years and intend to live in the property. A recent law change now allows all funds to be withdrawn, except for $1000 which must be left in the KiwiSaver account. The funds are able to be used for the deposit on a property or on settlement.
Each KiwiSaver provider has their own withdrawal forms to be completed and require these applications at least 10 working days before the KiwiSaver funds are required. This means first home buyers need to be very organised and have all the documentation sorted if the Agreement for Sale and Purchase contains short time frames from confirmation of conditions to settlement, or if they need the funds for the deposit.
Housing New Zealand Home Start Grant
This is a grant of up to $5,000 for individuals and up to $10,000 for couples purchasing an older/existing home.
A recent law change also means that first home buyers who are building or buying a brand new property with a Code Compliance Certificate issued in the last six months are eligible for a grant of up to $10,000 for individuals and $20,000 for couples. The amounts depend on how long the first home buyer has been contributing towards Kiwisaver.
Further information is found on Housing New Zealand's website: www.hnzc.co.nz
There is certain eligibility criteria that must be met and this is available on Housing New Zealand's website for any purchases, but we mention specifically the following:
1. Income thresholds - individual $85,000 or less, couple $130,000 or less (before tax) in the last 12 months.
2. 10% deposit available (with proof available) - this can include KiwiSaver First Home Withdrawal and the Home Start Grant funds.
3. The purchase price of the property must be within the price cap - in Christchurch City, Waimakariri and Selwyn District it is $500,000.
There are further rules if a first home buyer is buying land and planning to build. Again, this information can be found on Housing New Zealand's website.
Housing New Zealand require the applications for the New Zealand Home Start Grant to be provided to them at least 4 weeks before settlement. Pre-approval is available and a first home buyer should obtain this as the paperwork is extensive. Pre-approval will last for 6 months.
If a first home buyer does not have pre-approval, they need to be conscious of this time frame when they find a property and sign an Agreement for Sale and Purchase so as to ensure there is enough time before settlement for their application to be processed.
One fact a lot of first home buyers are unaware of is that the Grant monies will not be paid until the day of settlement. This means they cannot be used for the deposit (as per the Agreement for Sale and Purchase).
Should you wish to know more, please contact Caitlin Stack on (03) 379 4660 or email: firstname.lastname@example.org’
School holidays were last week and the office was exceedingly quiet. It is funny I notice even those without kids seem to take school holidays as a time to wind down. It is almost a time when everyone has a holiday. I can’t quite figure it out but maybe the reason is that most of the clients are actually away so work slows. If that is the case then isn’t this a good time to snag a great buy in the property market. This must especially be the case if equity in a property purchase has just been increased to 40%? Maybe over the next week as people slowly get back from holiday the market will again get busy.
As mentioned above it is imperative with the complex lending environment at present that clients are educated on what they need to be doing to get their finances in order when purchasing. Our Mortgage Express brokers are very good and we should be encouraging every client to use them. Below is an update from Anthony Woolcott from Mortgage Express;
‘As requested by the Reserve Bank – in the spirit of the proposals, we’re seeing the banks start to implement the LVR changes already even though they don’t take effect till 1st September. So far we’ve seen a number of banks advise that their maximum LVR for investment properties is 60% effective immediately – and we expect the others to follow suit. Existing approvals are being honoured.. but won’t be rolled over (use it or lose it!).
Owner-occupied lending – the LVR threshold remains at 80% LVR. However, the banks can’t write as many of them now. So we expect they will ration them accordingly…..and getting an over 80% loan will get a little harder again.
The good news – non-bank lenders are not bound by these restrictions. I’ve just got an approval home today from Liberty Finance for an investor loan at 80% LVR that the banks wouldn’t touch. 30 year term and Floating rate 5.59% - that’s about as good as the advertised rates at the banks! We’ve now got a few long-term lenders in the non-bank space. Generally happy to lend to 80% for investors…. but also will look at other loans behind them (even maybe vendor finance). Fixed rates not as sharp as the banks….but they’re not too bad all the same. Also got one home last week for owner-occupiers at 85%. Lender was happy to use all the clients overtime in the application (which main banks won’t do for over 80% LVR’s) and were happy for the clients to borrow some money from another finance company towards their deposit (a big no-no for the banks!).
The non-bank lenders generally don’t have branches and shop-fronts. So a little plug for the mortgage advisers with access to non-bank lenders - and importantly experience in working with them! At the moment they’re a good option for investors wanting to borrow over 60% LVR.
Sounds complicated so anyone thinking of buying or selling for that matter should be talking to one of either Anthony Woolcott or Sarah Langley at Mortgage Express.
What do they actually mean? Most of us are aware of these terms and are unaffected by their introduction into the property market. Essentially the Government and the Reserve Bank are concerned with strong house prices driving internal economic activity in NZ, increasing debt and straining through too much debt. Add to this a feeling house prices are causing homelessness and you have a few reasons for these two parties to control the housing market activity.
Road blocks is pretty restricting borrowing through an increase in deposits required by a purchaser. At present that is restricted to 20% and the Reserve Bank are threatening 30%. Lending restrictions refer to the Government wanting to link lending to incomes so a person can only borrow a certain multiplier of their income.
The housing market issues being discussed are Auckland issues. Immigration is at record levels and the bulk of those entering the country are entering and staying in Auckland. House prices out of control is an Auckland problem and a housing shortage and homelessness is an Auckland problem. So why is the Government and the Reserve Bank putting national controls in place? It makes no sense.
Think about it, if there is a shortage of housing in Auckland and house prices are out of normal peoples league then place restrictions on Auckland buyers and sellers which may force these people further afield and into the regions. Regional New Zealand has a buoyant real estate market in most places but is certainly not out of control. There are houses to purchase at prices that are within most people’s range. With people moving into the regions there will be a need for more labour, more people equal more jobs.
I have said it before and will say it again, common sense needs to apply here and keep Auckland’s housing problem in Auckland not in the regions. Fingers crossed this happens but judging by past history I can’t see it happening sadly.
Either way we are confident in what we are doing at present. There is a shortage of houses for sale and plenty of buyers in the market. Prices are not out of control, now is a great time to be selling so if you are thinking about it call one of our award winning team.
This week has been one of learning for us, particularly in our Property Management business. There have been a number of new issues to be aware of that as a property owner you should understand.
Firstly, the Residential Tenancies Act, from the 1st of July requires owners of rental properties to have enough working smoke alarms as described in the current building act. The number is determined by the number of bedrooms, number of levels and size of a house. The basic rule of thumb is one smoke alarm within three metres of a bedroom. On behalf of the large number of owners we have negotiated a very good contract rate with Smoke Alarm Professionals who will install the correct number of alarms and service them for an annual fee. It is an excellent service and one that will bring all our managed properties into line with the new legislation.
Second, from the 1st of July owners will have to state the type and condition of insulation on a separate statement at signing of the management authority. Owners will then have three years to bring the insulation in their properties into line with existing building codes. With smoke alarms being the current priority and due to the slow nature of information coming from the Ministry of Building and Housing, we have little information but will be sharing it as soon as we know.
Third, there has been a lot made of the methamphetamine manufacture and use in rental properties over the past few months. It is a problem for some parts of the country and rather than take a reactive approach we are now adding to all tenancy agreements an addendum outlining the owner’s right to sampling properties mid tenancy.
Additionally we are recommending owners undertake sampling for methamphetamine between tenancies as we are seeing examples of tenants being compensated by owners who have accused tenants of meth contamination of a property without having a base test to work from, so not having proof it was the current tenants who contaminated the home.
Meth is very real, but what we are hearing is the guideline around safe and unsafe levels, the difference between producing and smoking and the quality of testing is completely unregulated so is open to rather broad interpretation. Regulation should arrive pre-Christmas according to government sources so again when we know anything we will pass it on to our clients as soon as possible.
The quality of homes in NZ has needed a shake up for some time and with new legislation pushing for better quality of housing and healthier warmer homes for tenants. As experts in the field of Property Management please do give us a call if you have a property you want managed as the current rental environment is very complex and you need only the best working on your behalf.
Life has become more complicated over the past few years, I hear people say this all the time. But what is it that has made life some much busier and complicated? I am not entirely sure of all the elements that have made us busy but I can point to one as a good example of why we are busier than ever and our lives are so much more complicated. That example is the new changes to the Work Health and Safety Act.
The changes rolled out on April 1st this year and obviously they are designed to make workplaces safer, stop injury and death at work and generally make us safer. I understand the need for safety in the workplace, we are big on it but I am not sure a great deal of thought has gone into the impact such changes in legislation have on low risk businesses such as ours. By impact I mean energy, time and resources focussed on creating, implementing, training and rolling out of the changes. This has been a mammoth task for us as a business and has cost many thousands of dollars and many hours of work. Most people would scoff at us spending so much time and money on the changes to the act but as a responsible corporate we have a duty to our staff and clients to ensure we have done what is required. Personally I think we have gone beyond what is necessary which we are comfortable with. The outcome is a raft of new forms, more time spent filling forms and generally more complexity in our lives – making us busier.
We are proud of what we have achieved with our new Health and Safety Procedures, but add to this the concern recently about Methamphetamine use in homes, new smoke alarm requirements and the looming need for adequate insulation in rental properties, not to mention the extremely complex process of selling a house these days and it is no wonder we are busier than we ever have been. I can’t see this changing a great deal when there are industries set up around legislative changes and jobs created. What I do see is increased costs in living and business that at some point will have to be on charged to clients. When I think about it I think we chose where we live and what we do so we must take these sort changes in our stride – as long as the kids are healthy and happy does it really matter?
Licensed Business Owner of Harcourts Twiss-Keir Realty
Licensed Business Owner of Harcourts Twiss-Keir Realty