Rents rising faster than property values - CoreLogic
Rents are rising faster than property values, according to property data firm CoreLogic.
The median amount charged by landlords rose by an average of 6.5 per cent across the country over the 12 months ended July, CoreLogic said.
This was slightly faster than the average rise in property values, which CoreLogic said were up by 6.4 per cent from this time last year.
Growth in median weekly rents by region was lumpy, rising by 14.2 per cent to $297 in Dunedin, but falling 4.3 per cent in Christchurch to $330.
In Auckland median weekly rent was $505, up by 3.5 per cent in the last 12 months. Rents are up, however, housing activity has slumped - particularly in Auckland and Hamilton.
Market activity, measured by the number of valuations run by banks through CoreLogic's system, was down 32 per cent on August last year in Auckland and 33 per cent in Tauranga.
"The already strong drop in sales volumes combined with market activity now ambling along at seasonally low levels up to 30 per cent below last winter tells us the market slowdown remains," said CoreLogic NZ head of research Nick Goodall.
"Property value change is variable too, with some areas of NZ now showing value decreases".
Goodall expected a prolonged housing slowdown lasting towards the end of the year.
"Leadership changes and variable poll results have created a volatile political environment, the uncertainty of which will be affecting some potential buyers.
"We also expect the reduced availability of credit to continue to affect demand. For these reasons, a prolonged slowdown, lasting towards the end of 2017 is anticipated," he said.
"Ultimately however, even after taking affordability concerns in Auckland and elsewhere into account, strong fundamentals, including a positive economic outlook, remain.
"Property values could therefore rise again in the New Year: albeit at a more modest pace than the previous two".
Rents rising faster than property values - CoreLogic
Rents are rising faster than property values, according to property data firm CoreLogic.
The median amount charged by landlords rose by an average of 6.5 per cent across the country over the 12 months ended July, CoreLogic said.
This was slightly faster than the average rise in property values, which CoreLogic said were up by 6.4 per cent from this time last year.
Growth in median weekly rents by region was lumpy, rising by 14.2 per cent to $297 in Dunedin, but falling 4.3 per cent in Christchurch to $330.
In Auckland median weekly rent was $505, up by 3.5 per cent in the last 12 months. Rents are up, however, housing activity has slumped - particularly in Auckland and Hamilton.
Market activity, measured by the number of valuations run by banks through CoreLogic's system, was down 32 per cent on August last year in Auckland and 33 per cent in Tauranga.
"The already strong drop in sales volumes combined with market activity now ambling along at seasonally low levels up to 30 per cent below last winter tells us the market slowdown remains," said CoreLogic NZ head of research Nick Goodall.
"Property value change is variable too, with some areas of NZ now showing value decreases".
Goodall expected a prolonged housing slowdown lasting towards the end of the year.
"Leadership changes and variable poll results have created a volatile political environment, the uncertainty of which will be affecting some potential buyers.
"We also expect the reduced availability of credit to continue to affect demand. For these reasons, a prolonged slowdown, lasting towards the end of 2017 is anticipated," he said.
"Ultimately however, even after taking affordability concerns in Auckland and elsewhere into account, strong fundamentals, including a positive economic outlook, remain.
"Property values could therefore rise again in the New Year: albeit at a more modest pace than the previous two".
One of the unfortunate aspects of renting highlighted here.
Rental shortage hits South Waikato pensioners
Tokoroa pensioner Jillian, pictured with her dog and great granddaughter, fears she will soon be homeless due to the district's rental shortage.
Caring for her dying husband while raising her one-year-old great granddaughter is stressful enough. Now a Tokoroa pensioner is also facing homelessness.
Despite never missing rent and passing every rental inspection Jillian has been given 90 days to vacate the house she's called home for eight years.
While she respects her landlord's right to do so, the South Waikato's rental shortage and rapidly rising rents has her fearing the worst.
"Our property manager has been okay and given us a decent testimonial but the problem is there are no houses," she said.
"I have tried Putaruru but prices are around $300 a week for a basic three bedroom house and we are on pensions."
"Our departure date is November 1 so we have now got less than eight weeks to find a house. We are totally stuck, I don't know what will happen to us," she said.
She said as a reliable tenant she feels let down by the system which doesn't require landlords to give a reason for serving a vacate notice.
"Landlords don't have to give a reason, just a 90 day vacate notice which can be shorter if you don't pay your rent," she said.
"I don't know but I think our landlord probably wants to put the rent up as they are quite huge around here now. In all reality that is his right but I don't think it is very ethical."
"My husband has a terminal heart condition and he would have liked to have died in this house but now he won't be able to," she said.
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Age Concern's Lyndsay Benefield said the impact of the rental shortage on elderly in the South Waikato was only getting worse.
"I've been working with the elder abuse response service in this area and over the last few months I've noticed a trend with adult children moving back into the home with their parents because there is nowhere else for them to go," she said.
"Older parents feel obliged but sometimes they are not even asking permission or contributing."
She said the Salvation Army's three emergency accommodation houses were also full.
"There is accommodation down at the camp-ground and last year I had an elderly lady who was there but it is very unsuitable for elderly people. She has gone now but often there is just nowhere else for them to go," she said.
South Waikato District Council communications manager Kerry Fabrie said there were more than 100 pensioners on the council's pensioner unit waiting lists. There are 12 one bedroom units in Tirau, 16 one bedroom units in Putaruru and 51 units in Tokoroa.
"As the housing market becomes tighter in regards to rental availability, the council has noted a huge increase in demand over the last three years," she said.
"Due to this demand the council will very soon be doing a review of our current pensioner housing policy to seek the most effective means to cater for demand and ensure that those with the highest need are identified."
Fabrie said the council committed $950,000 in 2014 towards construction of more pensioner housing units.
"The council is adding units to its pensioner housing stock. Four of these units (Kindergarten Street) are nearing completion with one more to start construction at the same site," she said.
National promises to double first-home buyer grants
National is promising to boost the grants offered to first-home buyers and builders.
The first-home buyers' grant, currently $10,000, would double to $20,000. The grant offered to builders would rise from $20,000 to $30,000.
National leader Bill English made the announcement at the Hobsonville development in Auckland, which is expected to provide 4,000 new homes when it is completed.
"In the last few years we've seen some real pressure in the housing market," he said on Sunday morning, flanked by high-ranking MPs Amy Adams and Jonathan Coleman, and National housing spokesperson Nick Smith.
"It's been a challenge for first-home buyers, it's put pressure on families that have been looking for the right kind of housing."
Lorde admits she's partly to blame for the Auckland housing crisis Housing capital gains are soaring in New Zealand Govt admits it had 'no idea' of emergency housing costs He said the Government has "attacked it from every angle we can find", and as a result fewer investors are getting loans, with a slight rise in first-time buyers.
The boosted grant would help a further 80,000 people into their first home over the next four years, National claims.
"Take a couple on the average wage in Auckland who have been in KiwiSaver for five years and are looking to buy their first home," Dr Smith said. "Between the $20,000 HomeStart Grant and their KiwiSaver withdrawal, they will have around $60,000 for a deposit for an existing home. Add in a Government-backed Welcome Home Loan, which means they only need a 10 percent deposit, and they have enough for a house worth up to $600,000 - the Auckland HomeStart cap for existing homes - without needing other savings.
"That's significant support for those New Zealanders."
It would cost $74 million a year, and come into force from January 1, 2018.
Labour's housing spokesperson Phil Twyford said it was a "bandaid response to a crisis they have no answer to".
"Without dealing to supply, homebuyer subsidies risk driving prices higher," he wrote on Twitter.
Economist Bernard Hickey had similar views, citing Treasury's findings and Australian research that shows they only push prices higher.
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