Posts tagged real estate
How to turn your homes value into dollars...

Depending on your circumstances and provided you’ve paid enough of your mortgage, you may be able to access some of the equity in your home to do that home renovation you need to do, buy a new car, or even travel.


Home equity loans
Depending on how much equity you’ve built up in your home, you may be able to access that equity through a home equity loan. Typically, this type of loan is set up as a line of credit loan which allows you to withdraw funds up to a set limit, as and when you need to.

It’s a convenient and easy to manage type of lending as your loan repayments are all rolled into one, and the interest rate charged will usually be lower than that of a personal loan or a credit card. The downside is that if house prices go down you could end up with a loan that is more than what your home is worth.

In most instances, provided you owe less on your home than its market value and you have at least 20% equity in your house after you’ve taken out the loan, you can apply for this type of lending.

You can help build equity in your home by paying off your home loan faster, either by topping up your monthly payments or by switching to fortnightly payments so you effectively make an extra payment each year. Improvements to your home could also increase its value and subsequently your equity.

Reverse mortgages
Designed to help home owners over the age of 60 maintain a standard of living by releasing equity out of the home, a reverse mortgage lets you borrow funds using your home as security, effectively freeing up part of the value of your home without you having to sell it.

To qualify for this type of loan you must be at least 60 or 65, depending on the lender’s requirements, and you can only borrow a percentage of your home’s value. Your home must be mortgage-free, although you may be able to borrow if you only have a small amount left to pay towards your mortgage.

Generally, reverse mortgages come with a lifetime occupancy guarantee, which means you can live in your home for as long as you choose, and the lender gets the money you borrow back when your house is sold.  This type of loan also usually offers a “no negative equity” guarantee which means that you – or your estate – won’t have to repay more than what your house sells for. So you won’t be leaving your children with a debt if your house sells for less than the amount of the outstanding loan.

The money you borrow can be taken as a lump sum, drawn on as you need it, or paid out to you as regular payments; by only drawing the money as you need it though, you help keep the interest down.

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How have the new RV's effected the property market?

The big talk recently is most certainly about the new CVs (council valuations), or RVs as they are also referred to (rating valuations).

I’ve already seen articles in the media reporting that, as some houses aren’t worth as much as their new CV, it’s a clear indicator of the market being down. This is not the case. 

The last time the CVs  were updated was in 2014 when the market was skyrocketing. We had the same issue then — some valuations were too high, some were too low, and the rest were about right. 
Remember that the CVs are a rates assessing tool for the council — they're not a market valuation. For example, the home I sold recently at 17 Rotoma Rise, Clover Park sold $118,000 above the new CV. I took another home to auction which had a new CV of $980,000 yet the market interest stopped in the high $700,000s.

Auction performance

In the past four weeks of auctions, Harcourts has called 150 auctions, selling 70 under the hammer with a clearance rate of 47%. Compared to October, this is a small decrease of about 10% — but there was a 50% increase in the number of auctions called over the last four weeks.

Market Performance Post Election

No significant change has been noticed at this point and what we are seeing is more of the same: an increase in listings consistent with seasonality and volumes being typical of this time of year.  We haven’t seen panic selling but, at the same time, any hopes home owners may have had of prices increasing at stratospheric rates have evaporated.

The general consensus seems to be that prices will continue to remain firm for the foreseeable future — so long as there are no drastic changes in net migration flows, sharp sustained changes in interest rates, radical shifts in the New Zealand and Australian labour markets, or a sudden big change in Reserve Bank rules.

''Something I have observed about human behaviour after 33 years in real estate...''

Martin Cooper, owner of the largest Harcourts franchise on the North Shore — Cooper & Co — sums it up well when he says, ''Something I have observed about human behaviour after 33 years in real estate, is that when people are making major buying or selling decisions they do not like uncertainty. In uncertain times, people tend to hold off until they know what is happening. The usual phrase I hear — and you may have heard it before too — is, ‘We’ll just wait and see.’

“Now that we have certainty, I’m certain we are going to see a big uplift in the number of sales as we progress through to Christmas and the New year.''

The graph below tracks the number of residential sales from the 2014 election year to the present, where we can see a dramatic increase in the numbers post-election (2015–2016).

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This past decade has seen a steady increase in asking prices while the total stock for sale continues to fall. In fact, the latest report in shows the number of homes for sale has gone down by nearly 50% compared to 10 years ago. In Auckland, the number of new listings fell 9.3% compared to October 2016.

This is also reflected in Auckland’s property asking price, which has been largely static over the past year (between zero and one 1% change in asking price each month). The average Auckland region asking price in October 2017 is $937,922.

We are finding that Auckland home owners are being realistic with price expectations now that we are in a  balanced, normal market.

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You may have seen an article in the NZ Herald mentioning Auckland house values have dipped for the first time in six years.

I would like to highlight that this dip was very marginal at 0.6% compared to this time last year, and values in Auckland are 90% higher than they were in 2007.

The previous rises were not sustainable and we are simply seeing the housing market stabilising.

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