Stricter lending conditions have put the brakes on mortgage applications, with many more first home buyers struggling to meet the latest lender requirements. Along with tightened bank lending caps to low deposit borrowers, and a far greater scrutiny on expenditure, some lenders have introduced a minimum committed income for approvals over 80 per cent loan to value ratio (LVR), making it even harder to get home loan approval. Find out what it means for you if the bank declines your home loan application, and what the next steps are in this situation. Why your application might have been declinedBeing a loyal customer to your everyday bank doesn’t necessarily give you a head start when it comes to a mortgage application approval. And it’s not uncommon for banks to approve lending to a new customer, while declining someone who has banked with them for several years. The fact is, there are a number of reasons why the bank may decline a home loan application, but the most common reasons are these:
1. Close curtains and blinds
Windows let in most of the heat in the hot summer months, making rooms – especially those that are north facing – unbearable at times. An easy way to keep the heat out of rooms is to close curtains and blinds from the early afternoon through to the evening. Better yet, invest in block-out blinds or curtains to further shield your home from the harsh summer sun. 2. Open the windows and doors Take advantage of any breezes outside by opening doors and windows in different parts of your home. Opening windows and doors lets fresh air circulate inside and the warmer, stuffy air flow out. Also keep internal doors open to allow the cooler air to flow through your home, and open windows if you do close the curtains or blinds during the day to ensure the heat isn’t trapped inside the rooms. 3. Stop the heat coming inside Invest in window shades or external coverings – like awnings or large potted plants – which can help shade your home from the harsh summer sun, effectively stopping the heat from coming inside. 4. Invest in insulation If your home is older, your insulation may not be up to scratch – or your home could be missing insulation altogether. Insulation works at keeping us warm in winter and cool in summer so it’s a worthwhile investment. A well-insulated home will stay cool, as the insulation acts as a thermal barrier. 5. Switch to cotton Opt for cotton bed linen and remove warm winter blankets and flannel sheets from beds. Change out your heavy winter duvet for something lighter and cooler. And choose a pillow that allows a good airflow, so you don’t overheat at night. 6. Cook outside Warmer evenings make it an ideal time to fire up the BBQ. Move your cooking outdoors to keep the heat out of the kitchen. If you do cook inside, avoid using the oven and keep doors and windows open for ventilation. 7. Dehumidify your home The added moisture in the air during the hot, humid days can really push up the temperatures. Along with ventilating your home by opening windows and doors, try using a dehumidifier to remove excess moisture inside your home. The air is much easier to cool if it’s not humid so you’ll feel more comfortable too. 8. Change your lightbulbs Incandescent lightbulbs produce a lot of heat, so if you haven’t already done so, try switching out all of these older-style lightbulbs for newer, energy-saving bulbs instead. Not only will you save on energy costs, but they’ll help keep your home cooler too. Renovating or buyingSummer is a great time to think about buying a new home or renovating your existing home so that it’s cooler in the hot months and warmer and drier during winter. If you’re in the market for a new home – or you’re considering a renovation –get in touch with our team. Information sourced from or partners at www.mortgage-express.co.nz Harcourts is thrilled to have been awarded the Reader’s Digest Quality Service Gold Award in real estate sales, as voted by the people of New Zealand, for the fourth year in a row.
At Harcourts, our clients tell us they appreciate our expert local knowledge, the way we tailor our services to their needs, and our willingness to go that extra mile to make their property experience enjoyable. “Whether you’re selling, buying, or renting, the process can be stressful at the best of times,” says Harcourts Managing Director Bryan Thomson. “To have been awarded Gold in a year as challenging as this one has certainly been extra special.” “It is Harcourts’ consistent commitment to service excellence that has been instrumental in us retaining the Gold Quality Service Award for four years and the Reader’s Digest Most Trusted Award for eight consecutive years. Our teams around the country always strive to be the best and offer honest, personalised service that our clients tell us they love.” The annual Reader’s Digest Quality Service awards are based on four criteria: providing a personalised customer experience, understanding the customer’s needs, making the process quick and easy, and meeting or exceeding customer expectations. Market research agency, Catalyst, surveyed 1,500 people who were asked to nominate a service provider in a wide range of categories, including real estate sales. To qualify to vote in a category, the respondent must have used a service provider from that industry. Reader’s Digest says it is confident that the Quality Service survey results for 2021 are a truly accurate measurement of New Zealand consumer sentiment. With the release of the latest REINZ property market data for the month of October, it is likely the comments I will make around the report will come as no surprise to anyone. The current buoyant state of the property market is a hot topic across all media outlets and there is no doubt our market has reacted quite differently from what was expected and predicted by the commentators just 6 months ago. But with the underlying strength and the hype that is devel-oping around our market now, there are very few commentators who would pick it is going to change much in the foreseeable future.
In a nutshell, property is in huge demand right around the country with almost every region ex-periencing either a record median price increase, a record number of sales or a record mini-mum days on market figure. Looking first at the national monthly results, the median sale price is recorded at $725,000 for October 2020, is in comparison to a recorded median of $605,000 in October 2019. The total number of sales recorded across the country in October this year is the largest Octo-ber result recorded for 14 years and the highest monthly total in the last 53 months. The recorded days on market has dropped nationally to 29 days which is the lowest recorded figure in 17 years. When we look at all this, there can be no doubt in anyone’s mind that there is huge pressure on our housing situation across New Zealand. Here in Christchurch the sales figures results reflect what has happened nationally. While the 755 recorded sales in Christchurch isn’t a record, the number is right up there. Our days on mar-ket figure is 28 days which is slightly shorter than the national figure and our median is now a healthy $$526,000 - a new record high. It is reported that close to a quarter of all property sold in NZ was sold by auction in October, here in Christchurch where we lead the way in auction culture, I suspect this figure could be a lot higher. In the case of Harcourts figures for Christchurch, we had a huge listing month throughout October. This is in fact the biggest in the last two years and in our case over 45% of our listings were listed as auctions. Love them or hate them there is no doubt that auction is the simplest and fairest way to sell property in a market like this. When there is so much buyer interest in the marketplace, the ability for someone to transparently see who they are bidding against and as a buyer it gives you the ability to make a conscious decision as to whether you are prepared to offer more than the last bid.. We have lots of feedback from happy clients who say this method of sale is better than the “smoke and mirrors” perception of other marketing methods. So where to from here for the market in Christchurch and in fact in New Zealand? There is no doubt that the commentary and rhetoric is changing from the media commentators. The feel-ing is that we are not in a bubble. The comments definitely suggest we are heading into a sus-tained period of price growth and increasing buyer interest from the existing market. While some of this past buyer activity has been typecast as people having a “fear of missing out “FOMO”, I believe there is in fact a much stronger underlying basis. The expectations long term have changed so that when the world gets back to a little more normality, perhaps borders reo-pen or space is available in quarantine facilities etc, then we will see the “brain gain” back into New Zealand from the returning kiwis and their families. Talk is now that over the next few years we could see as many as 250,000 kiwis and families looking to beat the rest of the world to our door. If this prediction is in fact true or even close to reality, then our current housing market will not be slowing down any time in the near future. Even if it’s not true, have no doubt the pressure from a large number of other people from around the world to get to the safety of New Zealand will be huge. If you are wanting to get into the market for the first time every indicator says now is that time. If your local market is outpricing and outstripping your ability to save, perhaps look further afield and consider the possibility of staying where you are currently but purchasing a property in another area to rent out. This way you can dip your toes in the water and get that start. When you’re looking for a new home, one of the first things you need to consider is the order of events – do you sell your existing property before you buy, or after? The hardest time to buy a home is when you already own one. Many of us don’t have any choice and need to sell, as the equity from your existing house is needed to put into your new home. In a busy ‘sellers’ market, majority of properties attract multiple offers, because of this, the sellers are less inclined to accept a conditional offer, especially if requires a sale of a property. Buyers need to be in a 'cash' position in order to be competitive, which is hard to achieve if you already have house to sell. What you do have is a choice whether you buy or sell first, Here are some factors to consider before taking the plunge. CONDITIONAL PURCHASE Choosing to buy first and make your purchase conditional on the sale of your existing property is a fairly standard clause in property sales agreements. It buys you some time to market your home for sale. You’ll need to make sure your offer is appealing. If they’re considering your offer against an offer with no/minimal conditions, there’s a high chance they’ll accept the other offer over yours, as your offer has a higher risk of falling through. As a result, you could keep missing out. SELLING FIRST Selling first, then starting to look for your new house with cash puts you in a competitive position to securing a property at the best possible price. If you haven’t settled on a new property by the time your own home sale settles, you’ll need to rent temporary accommodation (moving twice). One way to get around this is to set a lengthy settlement date on your existing property to give yourself a decent length of time to find your next home. BRIDGING FINANCE Before making a conditional offer on a property, talk to your bank or finance company about the possibility of arranging bridging finance as a back-up option if your house doesn’t sell by the deadline. Bridging finance is an additional short-term home loan that can help you to purchase your new home while your existing one is still being sold. This has some risk, though – if your existing home sells for less than you needed, you could end up with more debt than you’d budgeted. SELL & RENT BEFORE PURCHASING This can take a lot of pressure off the sale and purchase process as it eliminates any time frames and would avoid excepting a less then favorable offer if you were under pressure to make a settlement deadline. Many people chose to rent for a short period which gives them time explore the suburb they intend on buying in. KEEP YOUR HOME AS A RENTAL If you have enough equity, you may be able to keep your existing home as an investment property, with low interest rates and the removal LVR it may not be as difficult as you think, talk to your bank or mortgage adviser to find out if this is a possibility. A property manager will be able to help you will what your property will rent for. At the end of the day, your best course of action is to work with a real estate professional who can provide you with the local knowledge and insights you need to make an informed decision for your specific circumstances. For more information [email protected] | 0800 789 1011 Timing is everything, especially if you want to be settled or moved before Christmas or the new school year.
With plenty of new properties coming to the market, spring is always considered the busy season in real estate. With warmer weather, longer days, properties generally looking their best, convenient time to move and lots of actively looking buyers its no wonder why everybody wants to sell in spring. If you're a prospective seller, here are a few things you can do to prepare for the spring market:
Ensure your documentation is ready before your marketing campaign begins. This should be any earthquake claims on the property and any receipts of completed work on these repairs. Any private insurance claims and any receipts of completed work on these repairs. Any cash settlements for such claims insurance or earthquake claims where applicable, and current insurance evidence. All renovations consents. Also If you are planning to auction you will need to have a LIM report, Title, building reports Clear the clutter & de personalise! There's no way to know for sure how long it will take for your home to sell and while it may seem crazy to start packing up your stuff before a sale occurs, it's best to be prepared for any outcome. PROSPECTIVE BUYERS ARE GOING TO WANT TO STEP INTO YOUR HOME AND SEE A PLACE THEY CAN VISUALISE LIVING IN AND MAKING THEIR OWN. The best way to do that is to create a blank slate. Keep it neat, reduce the amount of clutter you have on shelves and surfaces, and depersonalise as much as you can. The idea is to showcase your home without distracting from it. Make Repairs and Improvements The last thing anyone wants to do before they sell their home is to dump a bunch of money into it for an extensive renovation; however, there are minor repairs and improvements that can be made to make a home look fresher for potential buyers. Here are a few worthwhile improvements that can be made without spending a fortune:
Advise is FREE, for more information [email protected] | 0800 789 1011 The latest release of the real estate market figures for the trading month of August makes for amazing reading in the current climate. There is no doubt that the trading figures nationally were pretty much unpredictable a few months back. But now, as the picture of our current environment starts to solidify, we are in a position to perhaps see more clearly and predict what is likely to happen going forward. The national data reflects, to a greater or lesser extent, what is also happening in our market locally. Looking at national data first, the national Days On Market figure is the lowest seen in an August month for the last 4 years.....Property is selling quickly Inventory levels, that is listing stock across all companies, have been dropping for the last 14 months in a row to the lowest level on record........The industry is selling property quicker than we are able to replace it. Median sale prices are rising month on month in literally all regions......property is getting more expensive. REINZ house price index is at a record high........property is likely to remain expensive. Auction numbers are up to 16% of all sales recorded.......people are realising that auction achieves the best possible price. Here in Christchurch, there were 606 residential sales recorded for the month, our Median Sale Price jumped to $495,000 and days on market are now down to the typical 32 days we come to expect in our city. So, what does all this mean for us here in Christchurch? Two years ago, our August Median Sale Price was $439,000, last year it was $444,000, last month it was $490,000, and now it’s $495,000. Quite simply, the pressure on the housing market across New Zealand is just too strong and, for all sorts of reasons, that pressure will not be going away in the short term. As a country, we were supposedly already 100,000 odd homes short pre Covid. Now it is predicted that, in the next year or two, a few hundred thousand Kiwis are looking to come back from overseas with their families to the relative safety of New Zealand. That is potentially another 100,000 odd homes needed just to house these returnees. Logic makes you ask, where are they all going to go? The media, particularly in the last few weeks, has been full of stories about auctions being on the rise and property being purchased sight unseen. On the news recently I heard that New Zealand has already had close to 50,000 people return since Covid struck, and that’s likely to be the tip of the iceberg. These are the people who are the “Brain Gain” that we as a country are now hearing about. So, what can we expect from here? Logic again tells me that as the pressure mounts, finding stock to sell will be the main issue. People will refrain from selling without having somewhere to go to and this will only mean one thing, prices just have to rise. Property that is placed on the open market and allowed to be marketed properly will sell for a premium. As available stock dries up (and this is already happening nationally), it’s logical that any newly listed property that is marketed properly will attract interest and thereby the premium I am talking about. I will go on record now and say that, in my opinion, it is unlikely that prices will drop soon. We will just see a shortage of stock and increasing numbers of interested buyers. To take advantage of this type of market, a seller needs to utilise the services of a real estate company. If you’re looking to sell, then you might as well use the biggest and the best at auction because that is how you will maximise your return as a seller. Yes, anyone will be able to sell privately, but there is no doubt that you will undersell in the current climate. Jim Davis Christchurch & South Island Regional Manager With so many new rules and changes being implemented to the Residential Tenancy Amendment Act, it's important you know you your rights and obligations. Let’s take a look at the changes,
IN FORCE FROM 12 AUGUST 2020 💲
TAKE EFFECT FROM 11 FEBRUARY 2021
CHANGES TO TAKE EFFECT BY 11 AUGUST 2021
If you would like to know more > https://bit.ly/31wOtPM or give us a call, our doors always open. Information sourced tenancy.govt.nz If you are following our local property market, or are just interested in real estate in general, then you are likely aware that our property market post Covid-19 has not reacted quite as was expected. In the latest release of the REINZ property sales data, Bindi Norwell, Chief Executive at REINZ says: “New Zealand’s property market continued to defy expectations in July with sales volumes increasing by 24.6% when compared to the same time last year. This was the largest annual percentage increase in sales volumes we’ve seen for the country since September 2015, highlighting just how confident the market was during July.”
While Bindi’s comments reflect the situation generally around the country, here in Christchurch our market was in effect little different. The latest sales figures for Christchurch city tell us that there were some 610 confirmed sales. Our median sale price was $491,000 and the days on market sits at 31 days on average. When we compare these Christchurch results to the same period last year, we see our sales have increased by 17% compared to the previous July, still a hugely strong result which shows that even our relatively stable market is not immune to the current interest in property. It is the value of our property that most people like to see staying positive, as this directly impacts on our perceived wealth and wellbeing. But as we all know, as property gets more expensive, it can be harder for some to get into the property market. Our current median sale price of $491,000 is a huge lift over the recorded value for July last year of $450,000, but it does underline the pressure on prices our market is experiencing. Even with this price pressure, there is no doubt that the first home buyer is active and taking advantage of the opportunity that low interest rates and available monies now offer. A recent affordability graph we saw relating to several of the major population centres around the country still rated Christchurch as the most affordable major city to buy in, and the results are indicating that buyers are well aware of this. Auction is increasingly favoured by clients as a preferred method of sale and this is reflected in Bindi’s comment about the rise in auction numbers nationally. “Every auctioneer we speak to has said how buoyant the market is right now and how unusually busy auction rooms are for this time of the year – both in terms of the number of registered bidders and people just getting a feel for where the market is at,” says Norwell. Here in Christchurch, Harcourts continues to prefer this method of sale and we had a 36% increase in auction listings when compared to July 2019. We commented last month that I expected to see the days on market figure drop as we get further away from our lockdown period here in Christchurch, and in fact that is exactly what has happened. The quoted 31 days brings the days on market back to what is the typically expected period for property sales in our current market conditions. As a seller, if you have been exposed to the market for a time period longer than this, perhaps you need to re-address your pricing expectations, or your marketing, or even the company you are using to sell your property. Another indication of how strong a market we are experiencing currently is the House Price Index. This is a computer algorithm that generates an all-encompassing number, taking into account every factor that could conceivably impact on the market. When you think of what is happening both globally and nationally, we might expect that this index would experience some softening, but in fact the opposite is happening. The REINZ House Price Index for New Zealand, which measures the changing value of property in the market, increased 9.4% year-on-year to 3,021. The HPI for Christchurch sits at 2,539, an increase of 8.6% on the index of a year ago. Overall, we are currently experiencing a very healthy market and expectations are that it is likely to continue. Personally I don’t feel the looming elections will have any effect or create a slow down as the current pressure on our housing stock shows no sign of abating in the near future, especially with the prospect of more Kiwis returning home once global restrictions ease. Additionally, I think any future government has more than enough on its plate to ensure the country is employed, safe, housed and fed. So, it is unlikely there will be too much tinkering with the housing market in the short term. Source: Jim Davis - Harcourts South Island Regional Manager By Bryan Thomson, Managing Director Harcourts New Zealand The period leading up to making a decision regarding buying
or selling property is always a time flooded with competing and conflicting information and opinions being promoted by seemingly qualified individuals and outlets. Who is right and who is wrong and who do we believe, are questions we all ask. Put simply, especially in 2020, when we have even more information to assess or circumstances to consider than normal, our view is that facts are what should be relied on rather than opinions. The facts right now are simple. We have a typical winter market where listings are lower than buyer demand. This supply/demand imbalance is seeing good competition between buyers for available stock in almost every marketplace in New Zealand. The current and historically low mortgage interest rates available are adding to buyer confidence and competition. In addition, as a country we have a shortage of housing stock for our population. This is a population that loves to own their own home, and also to invest in property. These underlying facts all add up to a recipe for confidence in the future of the real estate market in New Zealand. In 2020 we can’t ignore the fact that the world is battling a pandemic, and on top of that in New Zealand we are facing a general election in the spring. So, what impact will be felt from this, and what should buyers and sellers of real estate consider in their decision making? Reality is that the pandemic response within New Zealand has put us in an envious position of almost normal life, (aside from missing our beloved overseas travel), and is driving Kiwis with a need for somewhere to live and invest. The lockdown period has also led many of us to review the style of home we live in, thus encouraging further selling and buying decisions to be made. Election time can sometimes create a hesitation in the market while people wait and see what might happen post-election night. This year, given the supply/demand imbalance, any hesitation may be reduced. In addition, the Covid-19 pandemic has generated a let’s get on with life attitude across the world. Based on all the facts above, our advice is simple; if you’re considering a sale in the spring, we would strongly suggest you list right now. We know the market is strong and buyer demand is active so why wait to compete in a spring market when historically there has always been a flush of new listings to offer buyers choice? If you are looking to buy, do your sums well, consider your employment or business status and go to the market and secure your new piece of New Zealand with confidence. Put simply - this isn’t an opinion, just sound advice based on facts. This blog was originally published on the Harcourts New Zealand Property Focus Newsletter July 2020 |
James Twiss
Licensed Business Owner of Harcourts Four Seasons Realty 2017 Ltd Greg Roberts
Licensed Business Owner of Harcourts Four Seasons Realty 2017 Ltd Archives
September 2020
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