central unl cked NO 03 OCTOBER / 2022 AUCKLAND’S CHANGING PLANNING RULES GET IT RIGHT THE FIRST TIME WHAT YOU NEED TO KNOW ABOUT THE NEW MEDIUM DENSITY RESIDENTIAL STANDARDS AND THE NATIONAL POLICY STATEMENT ON URBAN DEVEVLOPMENT MORTGAGE ADVISOR NIKKI KAPADIA EXPLAINS HOW YOU CAN GET A BETTER CHANCE TO ENCASH ON THE CURRENT HOUSING MARKET WHAT DRIVES THE PROPERTY CYCLE? KIERAN TRASS PROVIDES INSIGHT ON HOW THE PROPERTY CYCLE IS UTLIMATELY DRIVEN BY A COLLECTIVE COMBINATION OF DRIVERS AND VARIABLES
INSIDE INSIDE THE MARKET TRENDS, STATS ANDINSIGHTS 6 DAYLIGHT SAVINGS SUNDAY 25 SEPTEMBER
4A NOTE FROM THE DIRECTOR RICHARD HUMPHREYS 5HOME BUYERS EVENING 5 OCTOBER 6INSIDE THE MARKET AUGUST 2022 8 WHAT DRIVES THE PROPERTY CYCLE? KIERAN TRASS AUCKLAND’S CHANGING PLANNING RULES WHAT YOU NEED TO KNOW GET IT RIGHT THE FIRST TIME MORTGAGE MARKET WITH NIKKI #PROPERTY SPOTLIGHT 90 KIWITEA SANDRINGHAMSTREET 12 Twentythree Group Ltd Licensed REAA 2008 Business Owners Richard Humphreys 021 893 richard.humphreys@harcourts.co.nz310 Abbey Davis 027 464 abbey.davis@harcourts.co.nz5121 Business & Performance Manager Andrew Simich 021 479 andrew.simich@harcourts.co.nz473 Operations & Marketing Manager Abbey Lucas 021 058 abbey.lucas@harcourts.co.nz5388 95 Manukau Road, AucklandEpsom1023 Central Unlcocked is subject to copyright in its entirety and the contents may not be reproduced in any form, either in whole or part, without written permission. Opinions expressed in Central Unlcoked are those of contributors and not necessarily those of Twentythree Group Ltd. No responsibility is accepted for unsolicitedmaterial. 18 #PROPERTY SPOTLIGHT 90 KIWITEA STREET, SANDRINGHAM SPRING MARKETING PACKAGES PROPERTY MARKETING COMPLIANCE TIMEFRAMES FOR HEALTHY HOMES PROPERTY MANAGEMENT FOCUS 17DISCUSSING IMPLICATIONS FOR LANDLORDS AND THEIR ABILITY TO FIND GOOD TENANTS INDEPENDENT ECONOMIST, TONY ALEXANDER - MARKET UPDATE 10 11 12 16 ROCKY NOOK BOWLS COMMUNITY SPONSORSHIP 19 GUMBOOT FRIDAY HARCOURTS FOUNDATION 20
Heading into Spring, we are looking forward to seeing the activity pick up in the market, but also in our community as we kick off with our annual Twilight Bowls season again with our local community club, Rocky Nook Bowls!
A NOTE FROM THE DIRECTOR
ONE TEAMgotWE’VE THIS
!
Richard Humphreys
I think we can all agree we are on the road to summer, with that sunshine over the last month being more than a welcoming sight! Although the end to the wind, rain and cooler temperatures may not be quite here yet, the team has been busier with an increase in deals being negotiated. We are settling into a ‘normal’ cycle where vendors are selling out of genuine need, as opposed to last year where a lack of properties on the market and price hikes were the driving force!
HOME BUYERS EVENING 05 OCTOBER 2022 5:15-5:45PM 95 MANUKAU RD EPSOM WHAT YOU'LL LEARN Preparing your finances Getting auction savvy with bidding and strategy tips How to research where you're buying Our Mortgage Adviser, Nikki will share her tips to help you have a better chance to encash on the current housing market Hear from our team to understand the right questions to ask when you are completing your research, as well as how to get market relevant information to make an informed purchasing decision Our auctioneer Aaron Davis will help you formulate a plan for bidding on property at auction You'll benefit from his experience and insights so you can walk into an auction room with confidenceHEAR MORE ABOUT THE NIGHT FROM ANDREW
Contact a Mortgage Express branded adviser if you have questions about your existing home loan and the impact higher interest rates could have on your financial situation.
savings buffer now to help you manage the higher repayments you are going to
With more interest rate hikes predicted, it’s important to have a financial plan in place to help you cope with higher mortgage repayments. As well finding ways to cut back on unnecessary spending, building up a savings buffer could help you prepare for higher costs
AUGUST 2022 | AUCKLAND CENTRAL MARKET INSIGHTS
concerned about the impact higher mortgage repayments could have on your financial situation, it’s best to seek help immediately. Contact your mortgage adviser or lender to discuss your situation before you miss any repayments.
Tips for Dealing with Rising Mortgage Rates
INSIDE THEMarket
PROPERTY FOCUS Management ISSUE 6 | 2022
Bringing you news from the world of New Zealand property management.
Harcourts is New Zealand’s largest and most trusted real estate group*, with over 2600 sales consultants across 197 offices and a growing property management team. For more information visit www.harcourts.co.nz. While every effort has been made to ensure that the
Rising interest rates are bad news for first home buyers and borrowers alike, with new homeowners and investors (those who bought homes in the last 18 months) facing much higher mortgage repayments for the first time. With the Reserve Bank of New Zealand signalling further interest rate hikes are on the horizon, how can we avoid placing strain on already tight budgets and stay on top of bigger mortgage repayments?
Source: co.nz/blog/rising-mortgage-rateshttps://www.mortgage-express.
3. Devise a plan to help you manage
Ifahead.you’re
Here are some options:
identify the expenses you can cut out or ways in which you can boost your income. Check that you’re getting the best deal for utilities – power, internet and phone – and pay down any high help free up extra cash to divert into
The REINZ statistics backed up what we have all been seeing, Auckland (-170 sales) recorded the biggest decrease in sales in the period from May to July 2022 compared to the same period in 2021. However July and August did finally have some positivity as open home numbers ramped up. Many agents in our team were reporting a variety of attendees through their open homes, from first home buyers, those looking to upsize, downsize and felt that the reported fall in values meant it was time for them to jump in! This translated into August being a month of not only rain, wind and jackets but buyers engaging on properties and making offers; and while these parties were mostly conditional and needed additional help to complete their contracts, the activity helped get things going leading into Spring! The blossoming of new blooms, compares with the blossoming of stock on the market, shaping up well for buyers choice as we lead up to the end of the year!
a noticeable number of households that borrowed for the first time in 2021 will find it difficult to pay their mortgages and cover all . If you’re
Get expert advice about your financial situation
1. Check what mortgage you are currently on The first step is to determine how your current mortgage is structured, as interest rate increases will affect the floating portion of your home loan, as well as any fixed interest rate terms that are ending that are going to be
concerned about the impact higher mortgage repayments could have on your financial situation, it’s best to seek help immediately. Contact your mortgage adviser or lender to discuss your situation before you miss any repayments.
3. Low Density Residential Zone (qualifying matters apply, limited to two storeys)
With the introduction of the Medium Density Residential Standards and the National Policy Statement on Urban Development, Auckland’s planning rules are changing. Significant changes to Auckland’s planning rules have come into effect, enabling more higher density housing to be built across the region.
FOCUS Management
For many Auckland property owners, this means they will now be allowed to build up to three homes of up to three storeys on their site, such as townhouses and terraced
Tips for Dealing with Rising Mortgage Rates
Source: co.nz/blog/rising-mortgage-rateshttps://www.mortgage-express.
3. Devise a plan to help you manage higher repayments
ISSUE 6 | 2022
Take a close look at your budget to identify the expenses you can cut out or ways in which you can boost your income. Check that you’re getting the best deal for utilities – power, internet and phone – and pay down any high interest debt as soon as you can to help free up extra cash to divert into your home loan.
Ifahead.you’re
is New Zealand’s largest and most trusted real estate group*, with over 2600 sales consultants across 197 offices and a growing management team. For more information visit www.harcourts.co.nz. While every effort has been made to ensure that the information of the publication is accurate, we recommend that before relying on this information you seek independent specialist advice.
3. Offshore islands (e.g Waiheke)
change is proposing to change some of Auckland’s residential zones. Most residential properties in Auckland’s urban areas are proposed to come under one of three zones:
Centralhousing.government
PROPERTY
you’re not sure how your home loan structured, contact your lender or mortgage adviser to help you work through the details. It’s worth booking home loan restructure checka Mortgage Express branded adviser, to ensure you’re getting the deal available to you, and that home loan is structured to fit your requirements.
AUCKLAND’S CHANGING PLANNING RULES
The density rules apply to most properties in residential zones that are not subject to a ‘qualifying matter’, or exemption to limit building heights and density in some
The new central government rules, the Medium Density Residential Standards (MDRS), require high-growth councils across New Zealand to introduce new standards that will ease planning rules for what can be built without a resource consent.
are some options:
Get expert advice about your financial situation
The Reserve Bank (RBNZ) has warned that a noticeable number of households that borrowed for the first time in 2021 will find it difficult to pay their mortgages and cover all their other usual expenses. If you’re in this situation, start building up a savings buffer now to help you manage the higher repayments you are going to face in the year ahead.
Digest Most Trusted Brand Survey 2013-2022.
interest rates are bad news for first home buyers and borrowers alike, with new homeowners and investors (those who bought homes in the last 18 months) facing much higher mortgage repayments for the time. With the Reserve Bank of New Zealand signalling further interest rate hikes are on the horizon, can we avoid placing strain on already tight budgets and stay on top of bigger mortgage repayments?
Contact a Mortgage Express branded adviser if you have questions about your existing home loan and the impact higher interest rates could have on your financial situation.
Determine how interest rate increases impact you that you know how your home structured, your mortgage can help you determine the any interest rate rises will have your home loan repayments. You also use a home loan repayment calculator – like this one – to work out your repayments are going to like.fixed rate term is nearing the now is a good time to discuss your mortgage adviser locking in interest rate. It’s also worthwhile comparing how your interest rates up against any other deals in the market, and this is something else your mortgage adviser can help you with.
Theareas.plan
2. Mixed Housing Urban Zone (now allowing for three buildings of up to three storeys)
The following zones are excluded from the new Medium Density Residential Standards:
Bringing you news from the world of Zealand property management.
WHAT’S MY NEW ZONING?
With more interest rate hikes predicted, it’s important to have a financial plan in place to help you cope with higher mortgage repayments. As well finding ways to cut back on unnecessary spending, building up a savings buffer could help you prepare for higher costs
has introduced two big planning reforms to enable more higher density housing – the National Policy Statement on Urban Development (NPS-UD) and the new Medium Density Residential Standards.
4. Single House Zone and Mixed Housing Suburban Zone in small settlements where 2018 census recorded population as less than 5,000 (e.g. Wellsford)
1. Terrace Housing and Apartment Buildings Zone (now allowing for buildings of six storeys or more)
Check what mortgage you are currently on first step is to determine how your mortgage is structured, as interest rate increases will affect the floating portion of your home loan, as any fixed interest rate terms are ending that are going to be
2. Rural Coastal and Settlement Zone
WHAT YOU NEED TO KNOW
1. Large Lot Zone
Who benefits from the new Medium Density Residential Standards from today?
Limits to density – the qualifying matters
Although the new medium density standards remove the need for most property owners to seek resource consent to develop their properties for up to three dwellings, there are other resource consenting requirements that remain as part of the Auckland Unitary Plan and Resource Management
Building four or more
Some areas can be exempt from the six and three-storey requirements and the new design standards based on quali fying
ItAct.istherefore
What stays the same
The new medium density residential standards will not apply to properties with a proposed qualifying matter until final decisions are made in 2024 at the conclusion of the de cision-making process. At that point, a proposed qualifying matter could be confirmed, removed or adjusted.
within some areas that allow for intensification to be limited, such as protecting sites of cultural, historic, or ecological significance or avoiding development in areas with natural hazards or where there are certain infrastructure constraints. However, a qualifying matter can only apply if there is strong evidence provided to justify an exemption.
For developments of four or more dwellings, the new standards do not take immediate effect. This means anyone looking to develop four or more dwellings on a site will still require resource consent approval under the current operative standards of the Auckland Unitary Plan.
As with any new development, there is potential impact on the environment and other people. It therefore remains a requirement that new developments comply with all other rules and standards before construction begins.
The new Medium Density Residential Standards:
Thesematters.arecharacteristics
likely that any property owner who intends to utilise the new medium density standards will require resource consent approval to subdivide the site, as well as assess the earthworks needed for construction of the new dwellings.All building plans will still be subject to a building consent process, and as part of this assessment, Auckland Council will consider if any resource consents are also required. If any are needed, the building consent will be paused until resource consent has been obtained.
Auckland Council’s resource consents team advises anyone looking to develop their property to discuss with their indus try professional (planner, architect, draftsperson, builder) what regulatory requirements they can expect.
Given that the new standards will enable significantly higher density development in many locations, Auckland Council has introduced new policies through the plan change to strengthen urban design outcomes. These design considerations include a greater focus on architec tural form and detail. This is to ensure that we see ‘density done well’.
Without the context of decade long cycles considered it is easy to blame skyrocketing property prices incorrectly on just one or two factors like property investors and/or rising interest rates. At first glance these factors may well appear to be the obvious main culprits and so get the blame. However, there may be less obvious reasons to justify higher property values. Reasons that may have created a fundamental shift in the underlying value of land, like the Auckland Unitary Plan did.
- KIERAN TRASS
KIERAN’S WEBSITE FOR MORE
The property cycle is a repetitive long-term cycle that the property market follows, cycle in and cycle out. It gives us clues as to what’s in store for the property market and the ability to look past short-term trends. Many people gauge what is likely to happen to the property market from opinions expressed in news media or social media. These opinions can sometimes be based on a limited understanding of the big picture of the property cycles typical progression or give no consideration to the cyclical nature of the property market at all. We all know media, by its very nature, gravitates towards sensational, emotionally charged, short term views.
There is often confusion around the expected direction of the property market and property prices. Why? Unless the context of the long-term property cycle is considered, it is easy to confuse short term price trends as being a cyclical Boom, i.e. when prices rise for some time, or a Slump i.e. when prices stall or fall for some time. In fact, property prices sometimes rise during a cyclical property slump just like they sometimes stall or fall during a cyclical property Ironicallyboom.theoften-confusing mixed messages in the media about the direction or magnitude of property price movements creates opportunities for the cyclically informed.
The property cycle is ultimately driven, by a collective combination of Key Drivers and variables which impact on the property market. Just like a combination lock the property cycle requires a collective alignment of the Key Drivers for the lock to be opened and drive the cycle through its traditional phases of Boom, Slump and Recovery.
VISIT
When values are soft or fall this can also be misinterpreted because of property prices simply being too high or unaffordable. However, demand can be negatively impacted, leading to lower values temporarily, by a credit crunch like the December 2021 CCCFA regulations caused therefore restricting the number of potential buyers. Taking into consideration the last four property cycles it becomes clear that credit crunches never last and are often followed by a credit boom.
It is important to account for the collective impact of the many ‘Key Drivers’ of the property cycle at any given time. It also helps to consider current legislative changes, cyclical patterns, and trends considering historic information.
#PROPERTY SPOTLIGHT 90 KIWITEA STREETSandringham
HEART-STOPPING CLASSIC
Favourably nestled on one of Sandringham’s topmost streets, this compelling cutie on a full site is ready to lavish the city-side lifestyle on a lucky budding family!
The layout of one bathroom, two bedrooms, a rumpus/ gym room and a detached flexi-room provide a dynamic blend of living options. You can work from home, give a teen privacy, set up a gym, and enjoy a master bedroom complete with double robes and alfresco connection. A signature feature, the whitewashed brick-surround fireplace takes centre stage in the lounge, dining and high-performance kitchen.
With double the outdoor flow, you can entertain friends on the sunset-featured westward deck or show off epic views of Mt Eden and glimpses of the Sky Tower on the east-facing deck!
At this revamped 1940s cottage home, life is about making every moment count. Masterfully achieving an indoor/outdoor vibe, cool-calm style, and charmed with hallmarks such as polished floors and lattice windows, this heart-stopping classic has certainly grown into its modern wings!
Solar panelling and heat pumps keep this home and your kitty happy in all seasons. Plus, kids get their own domain: a huge, fully fenced back lawn and Footstepsgarden.away,
Sandringham and Dominion Road are a world in themselves with eateries, cafes, bars, and shops. St Lukes Westfield Mall is close by, the CBD is a straight shot down Dominion, and Mt Albert Grammar and Balmoral School will make the kids’ school years the best years. We’ve got more to tell you at the open home; we can’t wait to see you there!
Click here for more information Property Features E: richard.humphreys@harcourts.co.nz M: 021 893 310 Auction Wednesday 5 October, 6pm Viewing As advertised or by appointment Abbey + Richard E: lisa.westerby@harcourts.co.nz M: 027 383 7191 Lisa Westerby
1. Check what mortgage you are currently on
Rising interest rates are bad news for first home buyers and borrowers alike, with new homeowners and investors (those who bought homes in the last 18 months) facing much higher mortgage repayments for the first time. With the Reserve Bank of New Zealand signalling further interest rate hikes are on the horizon, how can we avoid placing strain on already tight budgets and stay on top of bigger mortgage repayments?
Here are some options:
The first step is to determine how your
The Reserve Bank (RBNZ) has a noticeable number of households that borrowed for the first time in 2021 will find it difficult to pay their mortgages and cover all
increases impact you Now that you know how your home
Tips for Dealing with Rising Mortgage Rates
With more interest rate hikes predicted, it’s important to have a financial plan in place to help you cope with higher mortgage repayments. As well finding ways to cut back on unnecessary
PROPERTY FOCUS Management
As a landlord, it’s important to understand the timeframes to be compliant. The deadlines for landlords to comply with the Healthy Homes Standards are dependent on numerous circumstances, as well as being dependent on the type of tenancy.
information of the publication is accurate, we recommend that before relying on this information you seek independent specialist advice. *Readers Digest Most Trusted Brand Survey 2013-2022.
COMPLIANCE TIMEFRAMES
3. Devise a plan to help you manage higher repayments
HEALTHY HOMES STANDARDS
USE THE COMPLIANCE TIMEFRAME TOOL
Bringing you news from the world of New Zealand property management.
DISCUSSING THE IMPLICATIONS FOR LANDLORDS AND THEIR ABILITY TO FIND GOOD TENANTS.
As an economist, I don’t have all that much interest in the structure of the housing market. What I am interested in is how things are Thesechanging.changes
Signs suggest some are willing to buy in the next few months while the market is firmly in their favour. Particularly if the political polls suggest a good chance of National winning next year.
There is no wave of investors selling,
But from my monthly survey of mortgage advisors, we have received anecdotes of some investors making tentative enquiries for finance. Especially ahead of next year’s general election.
That has implications for rent rises and that is something you will see for yourself next week.
INDEPENDENT ECONOMIST,TONY ALEXANDER, PROVIDES AMARKET UPDATE
The rental market is moving infavour of tenants,
I’ve been making this point for over a year. Since the tax announcement of March 23 last year investors have stepped back from their buying. But they have not stepped forward to sell in any identifiable numbers. Over the past three months, there has been a noticeable decline in the proportion of agents seeing investors looking to sell.
Over the past three months, there has been a noticeable decline in the proportion of agents saying that they are seeing investors looking to sell.
National has said they will fully restore the deductibility of interest expenses and take the bright line test back to two years.
The rent implications are one of the early things which will soon start feeding into scaling back of inflation forecasts in coming months and solidify a view of mortgage rates for most fixed terms being at or near their cyclical peaks.
Before the end of this year there is a good chance that the Reserve Bank will ease up LVR rules. Plus mortgage rates will probably be assessed to have started falling as evidence accrues of inflation pulling back. But I won’t be calling an end to falling prices and the potential for some average gains until some other things happen. One of those is evidence of vendors capitulating to the new pricing reality and accepting first-up offers from buyers rather than continuing to hold off in case they can get the price they could have got late last year.
At the margin, we are seeing some investors showing an increased interest in purchasing properties. One source of evidence for this comes from my monthly survey of real estate agents alongside REINZ.
We’re seeing a strong shift in the proportion of investors saying they’re finding it easy to get good tenants. The net proportion is now firmly negative. Landlords are less able to pick and choose amongst many good tenants now.
This is not a widespread trend yet of investors coming out of the woodwork.
We’re not quite there yet. People are fixating on the level of the cost of living annual change now – not where it is headed. Their views and their emotions are backwards-looking, not forward.
The gross per cent of agents saying that investors looking to buy are doing so because they hope to get a bargain has risen to a two-year high of 45% from 40% in June and 34% at the start of the year.
are what we need to know if we are to pick where the housing market is headed. Static cross-sectional insights give no directional guides.
Note that this is not the same thing as saying these investors expect prices to rise.
The results of my latest survey of portfolio investors will be released at the end of the month. They also show a mild downward trend in the proportion of people looking to sell their residential property. Given that consumer confidence is already slammed, mortgage rates have about peaked, and house prices on average have probably completed over half their likely declines, the factors which would encourage investors to sell are not strengthening. Soon they will be easing. I look at these very early indications of changes at the margin then add in a few other things.
Investors are sniffing around
Mortgage Market with Nikki
Meeting with a mortgage adviser
nterest w Test var your loa ng part o fixed rat vings.
Honesty and full disclosure gets you the best outcomes
intended to b ng as Mortga
A good adviser can save you time and money
A good adviser can save you time and money by helping you pick out a property that meets the bank’s/ lender’s requirements. Alternatively, they can advise you on what measures can be taken to remedy those shortfalls for lenders to accept that property.
Getting a pre approval
Be sure to make full disclosure to your adviser as they can present your case effectively by mitigating barriers that could otherwise cause you grief.
The first meeting is a bit like a “meet and greet” chance for to get to know each other We’ll go o your goals, talk about the type of property you w to buy, and assess how much you have to spend We’ll also give you an indication of which lende think would be right for you, and let you know if you ’ re ready to buy now or if you need to boost deposit, pay down some debt, or bump up your savings ahead of your application We can answ any questions, help you prepare a solid home lo application, and present it to the right lender
To find out how much you could borrow and wh your repayments could look like using different interest rates, loan terms, and repayment frequencies
Engage a Mortgage Advsior that knows the different lenders’ policies GET IT RIGHT THE FIRST TIME
Each lender has a slightly different evaluating measure based on their guidelines, policies and appetite for risk. E.g., Different income types are assessed differently by different lenders. Your adviser can help you navigate these and compare the options amongst the different lenders, giving you a better chance of getting that approval.
Crunching your numbers
Home Loan Repayment Calculator
It’s been a while since New Zealanders have experienced a housing market that favours buyers. So, getting the bank to say yes is really important. Between the RBNZ regulations, CCCFA, lenders policies, the rising cost of living etc. lenders are being very cautious and not a lot is being approved. It’s getting harder and harder to get that Yes. An experienced mortgage adviser can help you get it right the first time, giving you a better chance to encash on the current housing market.
Before you start house hunting, it’s a good idea get mortgage pre approval With a mortgage pr approval, you’ll know how much a lender is prepared to lend to you provided certain condit are met So you won’t waste time looking at properties you can’t afford to buy!
We can use our easy loan tools to make understanding your finances easier.
We are excited to be back supporting Rocky Nook Bowls again this season for their Spring series ‘Twilight Bowls3Five’. Our team love joining our community bowling club and love the friendly competiton (until it gets serious). With drinks and a food truck on a Thursday evening there will be no better way to see summer in! WE’RE PROUDLY SPONSORING ROCKY NOOK BOWLS EVERY THURSDAY 6-8PM 20OCTTO 24NOV REGISTER HERE ROCKY NOOK BOWLS FOWLDS PARK,MT ALBERT IN Y UR COMMUNITY
The Harcourts Foundation is now a proud supporter of Gumboot Friday, 4 November, and kick started its support with a $20,000 donation which was presented to Mike King on stage at the New Zealand Leadership Conference.
GUMBOOT FRIDAY IS BACK! NOVEMBER 4
Mike shed light on the mental health crisis in New Zealand and about the positive impact this donation will make to the children who access the free counselling service. Gumboot Friday anticipate that with the money they have and what they will raise over the next few months will pay for a further 20,000 free sessions before the end of 2022. We are incredibly proud and look forward to being part of this initiative that helps get these kids struggling with depression and feeling like they are walking in mud, to build a better, brighter future.
central unl cked Harcourts Epsom 95 Manukau Road, Epsom Auckland www.harcourtstwentythree.co.nzTwentythreetwentythree@harcourts.co.nz10230800232323GroupLtdLicensedREAA2008
