Firstly, I wanted to take this opportunity to say keep safe and well during this time. United we stand against this pandemic and together we will prevail against the COVID-19 virus.

It's too early to comment on what impact this will have on the housing market. I know of many people who are motivated to sell and buy once Level 4 has been lifted. I also know of a few who have decided to hold off their plans to sell until there is more certainty and confidence in the economy. Either way, the market will pick up again (as it always does) but in this ever changing landscape it is just a question of when.

It's nice, though, to be able to share some positive news during these times. I am delighted to share with you that I am soon expecting my first child!

Obviously, I am very excited about this, however, you may be wondering:
What does that now mean if you're looking to have your home appraised or listed with me in 2020?

Due date is late April 2020 so I will be on maternity leave until September 2020
I have a network of excellent agents I am happy to recommend who operate at the same level of integrity, skill and care as I do should you decide to sell during this time
I'll still be accessible via email and phone during this time for any property advice

Until then, take care of yourself and stay safe and well.

Warmest regards,

Shannon

So, how is the market?

February was a very buoyant month with the median price across New Zealand increasing by 14.3% to a new record median price of $640,000 - that's up from $560,000 in February 2019 making this the largest percentage increase in 53 months.

The Auckland market saw the biggest annual increase in sales volumes in 88 months with a 41.6% increase in the number of properties sold when compared to the same time last year. All seven districts in Auckland saw double-digit annual increases in sales volumes, the largest of which was Papakura District with an 83.6% annual increase. North Shore City saw a record median price of $1,155,000 and Waitakere City had a record equal median price of $830,000 and Manukau was up 2.2% to $850,000.

The median house prices in Auckland increased by 4.3% to $888,000 – up from $851,000 at the same time last year – the highest price in 35 months and the number of properties sold in February increased by 41.6% year-on-year – the highest number of residential properties sold in the month of February in 5 years.

Regions outside Auckland with the highest percentage increase in annual sales volumes during January were:
• Gisborne – the strongest February in 15 years
• Tasman – the highest for the month of February in 3 years
• Hawke’s Bay – the highest for the month of February in 4 years
• Bay of Plenty – the highest for the month of February in 4 years

Manukau’s statistics

Manukau's average sale price sits at $850,000 which is an increase of 2.2% compared to the same time last year. There were 379 sales in February 2020 compared to February 2019, there were 246 sales - that's an impressive increase of sales volume of 54.1%.

Market highlights

Auckland saw the median number of days to sell a property fall by 17 days from 56 to 39 year-on-year – the lowest days to sell for the month of February in 4 years.

Auckland had the second highest percentage of auctions in the country with 32.4% (637 properties) sold under the hammer, up from 21.4% (298 properties) in February 2019 – the highest percentage of auctions for Auckland in 27 months.

In summary

These statistics highlight that stock levels remain restrained, buyer interest remains strong, fueled by favourable market conditions such as low interest rates.

For two months in a row, every region in the country experienced annual median price increases, showing strong demand across the country. It’s highly likely we’ll see these price rises continue in March unless the economy takes a sudden hit from COVID-19. Whilst there is a strong awareness of the COVID-19, as yet we have seen little impact on the housing market.

Owning property is an excellent way to build wealth. Historically, property has been a less volatile investment with real estate values invariably tracking upwards over time. What’s more, you have the added benefit of being able to “leverage” your existing real estate investment to buy an investment property using borrowed money and grow your property portfolio even further.

Using equity to grow your investment portfolio

How much equity do you have in your home or investment property? Enough to fund your next property purchase and grow your investment portfolio?

If you’ve owned your property for some time and provided you have the means to service a mortgage, you may be able to access the equity in your property to fund the purchase of your next property. Equity is the difference between your property’s value and the amount you still owe on your mortgage. It’s essentially the bit you “own” of the property and it can be used as a deposit to buy another property.

If you’re buying a residential investment property or you’re using a residential investment property you already own as security for a new loan, you’ll generally need at least a 30 per cent deposit. Instead of having to save up the cash for the deposit though, you could use the equity in your existing property to purchase another property.

Calculating the equity in your property

To calculate how much equity you have, you’ll need to know the market value of your property. You can use the valuation on QV or get a registered valuation of the property to determine its market value. You’ll also need to know how much you still owe on any lending secured by the property, which you can obtain from your lender.

Lenders will determine how much you are able to borrow by looking at a combination of your equity and income. Different lenders will have different lending policies and the combination of equity and income may vary from lender to lender.

Your potential rental income from the investment property you’re planning to buy will be included in the lender’s servicing calculations when determining your borrowing capacity. Contact a Harcourts’ Property Manager to arrange a rental appraisal to help you determine the likely rental income from the property.

You’re required to have at least 20 per cent of equity in your existing property after new lending is taken out if you’re using the equity in your family home, or 30 per cent equity if using your existing investment property. That means you could borrow up to 80 per cent of the value of your family home and 70 per cent on any investment properties you own, based on current loan to value restrictions.