Tag Archives: investment
Property prices in New Zealand outside of Auckland reach new record
Property prices and sales in New Zealand increased in December with median home values, excluding Auckland, reaching a new record. Sales were up 3.5% year on year but fell 9.1% compared with November, according to the latest index from the Real Estate Institute of New Zealand. The median prices of a home nationwide increased by 1.2% month on month and 3.3% year on year to $465,000, a rise of $15,000. Excluding Auckland the rise was 8%, taking the median to $379,000. It is the fourth consecutive record median in 2015 and there was also a new record median prices also Waikato/Bay of Plenty, Hawke’s Bay, Wellington, Nelson/Marlborough and Otago. In Auckland median prices increased by 13.6% year on year to $770,000, and increased by 0.7% month on month. REINZ chief executive Colleen Milne pointed out that regional markets, particularly Northland, Waikato/Bay of Plenty, Hawkes Bay and Central Otago Lakes, are now setting the pace for the New Zealand real estate market, with Auckland, in a relative sense, now in the middle of the pack. ‘The decline in sales volume in Auckland, while noticeable, is likely transitory as the region gets to grips with the new LVR rules for investors, although the median price continues to firm,’ she said. ‘Over the past six months regional markets have demonstrated large declines in the levels of inventory, a significant decline in the number of days to sell, and noticeable increases in the median price, with a number of regions setting new median price records more than once over 2015,’ she added. In addition, Wellington, Manawatu /Wanganui and Otago are also seeing positive movements in days to sell and median prices. ‘This breadth of the improvement across New Zealand suggests that there is more is at play than just an Auckland halo effect, although that has contributed in the northern regions,’ Milne explained. Sales volumes excluding Auckland were down 8.1% from November but up 17.5% on December 2014. On a seasonally adjusted basis, Auckland’s sales volumes were up 8.3% compared to November, indicating that while the headline number showed a sharp drop in sales compared to November, after taking into account seasonal effects, sales were in fact stronger than would have been expected. Northland, Waikato/Bay of Plenty and Hawke’s Bay continued to see the most robust sales growth. Aside from Auckland, Hawke’s Bay was the only region to record increased sales volumes compared to November, with volumes growing 0.4%. Year on year nine regions recorded increases in sales volume, with Northland recording the largest increase of 39%, followed by Waikato/Bay of Plenty with 30% and Taranaki with 27%. Continue reading
Farmland values in England down almost 2% in final quarter of 2015
English farmland values fell by almost 2% in the final quarter of 2015 to end the year at £8,165 an acre, according to the latest index report. The data from the Knight Frank Farmland Index shows that it was the first quarterly fall since December 2012. However, the average value of bare agricultural land still rose 4% in the first half of the year and 3% overall during 2015. This compares with a rise of 1% for prime London residential property and falls for the FTSE 100 of 5% and gold down 7%. Looking over a wider period of time farmland in England has increased in price by 41% over five years, by 196% over 10 years and by 5,089% over 50 years. The Knight Frank report suggests that there are a number of reasons why values have come back. ‘The continuing run of low commodity prices had to have an impact on buyer confidence at some point. Feed wheat is worth just half of what it was fetching just a few years ago and many dairy and livestock businesses are struggling to remain profitable,’ said Andrew Shirley, head of rural research at Knight Frank. ‘The fact that land values have held up so well indicates that commodity prices are far from the most important driver of the land market,’ he explained, adding that uncertainty about the outcome of the European Union referendum, likely to be held this year, will also be holding back some potential buyers concerned about the potential impact of a Brexit. The delayed payment of agricultural subsidies to some farmers and a potential hike in interest rates will also have dampened spirits. Currently Knight Frank is not predicting that the fourth quarter fall presages a long run of prices drops. ‘Indeed, assuming the UK votes to remain in the EU, it is entirely possible that 2016 could see prices rise slightly,’ said Shirley. ‘Many farming businesses, particularly those with profitable renewable energy schemes, remain cash generative and are looking to expand. There are also a significant number of farmers who have sold land for development or via compulsory purchase and are looking for agricultural property to reinvest into,’ he pointed out. ‘The market will continue to be extremely localised. Large blocks of investment grade land which were achieving prices of over £13,000 an acre last year may see values come off as investors await the outcome of the EU referendum, but where there is competitive bidding from local farmers, values will remain firm,’ he added. Continue reading
Quarter of UK buyers would consider a home on a flood plain despite recent floods
With the UK again being hit by bad floods this winter new research has found that a quarter of buyers would consider properties on known flood plains. The research from HouseSimple also found that of those who would buy on a flood plain some 65% would want a price discount of at least 21%. The poll asked respondents whether they would buy a home next to one of 17 undesirable locations including a prison, rubbish tip, busy school and electricity pylons. Just 16% said they would buy near or next to a rubbish tip. And of those who would 37% said they would seek a discount of at least 31% on the typical asking price of a property in that area. Some 48% of buyers would consider a property on a busy flight path and 36% would consider a property near a cliff susceptible to erosion. Of those who would, half would expect at least a 31% reduction in the asking price. Blights that buyers were less concerned about included, wind turbines or solar panels, next to or near a school and above a restaurant or take away. ‘We have all seen in vivid detail just how devastating the floods have been over the past month. Flooding seems to becoming a more regular occurrence, and prospective buyers are likely to be more aware of the risks associated with buying a property on a flood plain than maybe they have been in the past,’ said Alex Gosling, the firm’s chief executive officer. ‘Home owners looking to sell a property on a known flood plain may well need to be willing to discount hard if they want to secure a quick sale and it is no surprise that living next to a rubbish tip came out at the bottom of the heap,’ he pointed out. ‘No-one necessarily wants to live next door to a rubbish tip or under a busy flight path, but sometimes budget constraints mean that might be the only option, particularly if you want to buy your dream property or you’re a first time buyer,’ he explained. ‘If you are buying a property that is in an undesirable location, make sure you do your research. The last thing you want to do is buy something that you regret buying soon after and then struggle to sell. Saying that, at the right price, you could get far more for your money than you would a few streets away, if you’re willing to compromise on the undesirability of the location,’ he added. Continue reading
