House prices continue to surge in New Zealand. The average value of homes in New Zealand increased by 6.8% over the three months, with the average value now sitting at $856,835, according to Quotable Value (QV).   The latest QV House Price Index (HPI) stated that the current average house value represents a 15.9% increase year-on-year. “The larger centres were generally the first parts of the country to experience the very rapid value growth we’ve seen over the past 12 to 18 months, and this was primarily driven by both first-home buyers and investors competing for the very limited supp ..read more

Interest rates drop, again. Local home loan rate offers continue to fall.   HSBC has cut rate offers sharply for fixed one year and 18 month home loans to 1.99%. That matches Heartland Bank’s online offer for one year, and makes the HSBC 18 month offer the lowest of any institution for that term. In December last year, they expanded their local Premier eligibility to include income as a qualifying criteria. Now a household income of $125,000 or more can be used as a qualification point. Premier eligibility is for new clients who borrow $500,000 or more, or existing customers who borrow ..read more

"Incredibly high" house prices to "press higher" over 2021 The Reserve Bank (RBNZ) is cracking down on bank lending to residential property investors, announcing it’ll reinstate tougher loan-to-value ratio (LVR) restrictions than were in place last year.   From May 1, at least 95% of new bank lending to residential property investors has to go to borrowers with deposits of at least 40%. As an interim measure, from March 1 to April 30, the deposit requirement for at least 95% of new investor lending is being set at 30%. From 1 March 2021: LVR restrictions for owner-occupiers will be rein ..read more

"Incredibly high" house prices to "press higher" over 2021 Other banks are expected to follow Westpac’s new 2.29% mortgage rate, and ASB economist Chris Tennent-Brown says he’s expecting already high prices nationwide to “press a bit higher” over the next six to 12 months.   He says that with ANZ, BNZ and ASB all offering a one-year rate not too far behind that of Westpac – 2.49% – and Heartland Bank sitting at 1.99%, the low interest rate environment will almost certainly maintain ‘buoyancy’ in the housing market. “We have already seen some pretty big movements in house prices and this ..read more

Westpac mortgage rate drops again Westpac has launched a new ‘special’ one year fixed-term rate of 2.29% per annum – one of the lowest one-year terms currently being offered on the market.   The rate is the lowest being offered among New Zealand’s main banks, and is beaten only by Heartland Bank – Online’s 1.99% rate, and HSBC Premier’s 2.25% rate. There’s a catch – The new rate is available to owner-occupiers with a minimum 20% equity, and general manager of consumer banking and wealth Gina Dellabarca says interest payments have dropped dramatically since as little as two years ago. “T ..read more

Deposit criteria doubles: 40% now required The country’s largest home lender ANZ says from now it will require investors to have 40% deposits.   This goes further than the recommendations of the Reserve Bank, which is moving to have 30% deposits for investors in place by March. It comes as the housing market has absolutely taken off with prices having risen by 18.5% in the past 12 months. The proposal from the RBNZ is to reinstall the restrictions exactly as they were when removed in May. This means 30% deposits for investors and 20% for owner-occupiers. Most major banks have already ad ..read more

The Top Three Basic Investment Strategies Any sensible investment should be about managing risk and cash flow, looking for maximum upside, but also having an exit strategy.   How many rental properties do you need? Should you make principal or interest only payments? Finally, when should you sell? These are common questions, but the right answer is not the same for all. With interest rates so low, there are plenty of great property investment options with positive cash returns, but most don’t generate enough cash profit to cover all your expenses, interest payments and principal. In oth ..read more

Interest rates below 2% just announced! Heartland Bank released the lowest home loan rate in New Zealand history yesterday, announcing a one-year fixed loan rate at 1.99 per cent. In addition to the record-low rate, they’re also offering a fixed two-year rate of 2.35 per cent and a three-year rate of 2.45 per cent. To be eligible, customers must be refinancing or buying a standalone house on a single section, have a deposit or equity of at least 20 per cent – and intend to live in the home.  With the Official Cash Rate currently sitting at a record low of 0.25 per cent, banks have ..read more

NZ housing market has reached an eight-year high Confidence in the housing market has reached an eight-year high, according to ASB bank’s latest housing confidence survey. The survey, which covers the three months ended June, shows a net 21 per cent of respondents thought it was a good time to buy a house, compared with a net negative 1 per cent in the previous survey. The bank’s chief economist Nick Tuffley said it’s the strongest quarterly result since late 2012, when the housing boom was getting started. “What we’ve seen over the last six months is a real swing in people’s views aro ..read more

Property of the week Here’s a sneak peek at what’s on our watchlist today  7 Warden Street, Richmond   Price  $555,000 Bedrooms 3 bedrooms Bathrooms 2 bathroom Property type Townhouse Floor area 126m² Land area 118m² Parking Single garage These homes are full turn-key house and land packages, meaning you only pay a 10% deposit and then nothing further until the date you move in! No progress payments, PC sums or hidden extras! Featuring: 126m² each single garage architectural features Juliet balcony 3 double bedrooms 2.5 bathrooms ensuite & walk ..read more