Hello,
Welcome to the twenty-ninth edition of the West Auckland monthly Residential Landlords Newsletter.
I am a landlord myself and have been for over 30 years. I currently own rental properties in South Auckland, the North Shore and of course West Auckland. Being a high preforming Real Estate Agent (top 1% in New Zealand) for over 26 years and always working in West Auckland I know the real estate market and the rental market very well.
In this and future newsletters I hope to provide ongoing up to date information relevant to landlords who own rental properties in West Auckland.
Regular features will include:
- Current sale prices
- Current mortgage rates
- Current rents
- A monthly suburb spotlight review
- A relevant feature article each month
|
Sale Prices |
|||
| Suburb |
Median selling price |
Median selling price |
Capital Gain |
| Hobsonville |
$840,000 |
$994,000 |
18.3% |
| Titirangi |
$822,000 |
$810,065 |
-1.5% |
| West Harbour |
$837,500 |
$936,000 |
11.8% |
| Glendene |
$674,000 |
$710,000 |
5.3% |
| Henderson |
$655,000 |
$730,000 |
9.8% |
| Massey |
$632,500 |
$727,000 |
15.0% |
| Ranui |
$640,000 |
$590,000 |
-7.8% |
| Sunnyvale |
$740,000 |
$819,000 |
10.7% |
| Swanson |
$720,000 |
$925,500 |
32.3% |
| Te Atatu Peninsula |
$762,000 |
$885,000 |
16.1% |
| Te Atatu South |
$742,500 |
$750,000 |
1.0% |
| Glen Eden |
$680,000 |
$720,000 |
5.9% |
| New Lynn |
$722,500 |
$693,400 |
4.0% |
| Green Bay |
$778,500 |
$900,000 |
15.6% |
| Kelston |
$614,000 |
Not available |
- |
| Waitakere City |
$667,500 |
$760,000 |
13.9% |
Source REINZ
|
Current Mortgage Rates (17/01/2017) |
|||||
|
Float |
1 yr fixed |
2 yr fixed |
3 yr fixed |
5 yr fixed |
|
| ANZ |
5.59% |
4.75% |
4.59% |
5.29% |
5.60% |
| ASB |
5.65% |
4.49% |
4.79% |
5.09% |
5.69% |
| BNZ |
5.64% |
4.49% |
4.79% |
5.09% |
5.79% |
| Westpac |
5.65% |
4.49% |
4.79% |
5.09% |
5.49% |
| Kiwi Bank |
5.40% |
4.35% |
4.54% |
4.95% |
5.55% |
| Best of other lenders |
5.30% |
4.19% |
4.39% |
4.69% |
5.29% |
Source – J Goodrum – Internet search
| Current Rents | |||||
| 1st July – 31st December 16 | |||||
| Glen Eden | Average Rent | Bonds Paid | Royal Heights/Massey | ||
| 1 brm flat | $300.00 | 7 | 1 brm flat | $285.00 | 6 |
| 2 brm flat | $370.00 | 17 | 2 brm flat | $360.00 | 7 |
| 3 brm flat | $450.00 | 5 | 3 brm flat | $457.00 | 16 |
| 2 brm house | $380.00 | 35 | 2 brm house | $407.00 | 20 |
| 3 brm house | $465.00 | 104 | 3 brm house | $480.00 | 183 |
| 4 brm house | $555.00 | 22 | 4 brm house | $555.00 | 48 |
| 5+ brm house | $575.00 | 7 | 5+ brm house | $650.00 | 15 |
| Glendene | Te Atatu South | ||||
| 1 brm flat | $350.00 | 5 | 1 brm flat | $295.00 | 8 |
| 2 brm flat | $370.00 | 11 | 2 brm flat | $410.00 | 11 |
| 3 brm flat | $455.00 | 6 | 1 brm house | $295.00 | 6 |
| 2 brm house | $400.00 | 19 | 2 brm house | $400.00 | 13 |
| 3 brm house | $480.00 | 68 | 3 brm house | $495.00 | 60 |
| 4 brm house | $550.00 | 23 | 4 brm house | $585.00 | 18 |
| Henderson | Te Atatu Peninsula | ||||
| 1 brm apartment | $310.00 | 5 | 1 brm flat | $285.00 | 6 |
| 2 brm apartment | $410.00 | 5 | 2 brm flat | $385.00 | 9 |
| 3 brm apartment | $450.00 | 5 | 3 brm flat | $550.00 | 6 |
| 1 brm flat | $315.00 | 19 | 2 brm house | $420.00 | 20 |
| 2 brm flat | $390.00 | 36 | 3 brm house | $500.00 | 94 |
| 3 brm flat | $485.00 | 9 | 4 brm house | $590.00 | 29 |
| 1 brm house | $330.00 | 10 | 5+ brm house | $750.00 | 5 |
| 2 brm house | $405.00 | 63 | Titirangi | ||
| 3 brm house | $490.00 | 224 | 1 brm flat | $332.00 | 18 |
| 4 brm house | $587.00 | 96 | 2 brm flat | $350.00 | 9 |
| 5+ brm house | $695.00 | 23 | 1 brm house | $330.00 | 7 |
| Kelston | 2 brm house | $400.00 | 33 | ||
| 1 brm apartment | $310.00 | 16 | 3 brm house | $512.00 | 92 |
| 2 brm apartment | $380.00 | 7 | 4 brm house | $650.00 | 26 |
| 1 brm flat | $300.00 | 16 | 5+ brm house | $795.00 | 7 |
| 2 brm flat | $355.00 | 14 | West Harbour | ||
| 3 brm flat | $450.00 | 10 | 1 brm apartment | $430.00 | 5 |
| 2 brm house | $420.00 | 25 | 2 brm apartment | $500.00 | 14 |
| 3 brm house | $480.00 | 73 | 1 brm flat | $292.00 | 8 |
| 4 brm house | $580.00 | 20 | 2 brm flat | $395.00 | 7 |
| 5+ brm house | $650.00 | 5 | 3 brm flat | $490.00 | 6 |
| New Lynn | 1 brm house | $387.00 | 6 | ||
| 1 brm apartment | $320.00 | 19 | 2 brm house | $425.00 | 26 |
| 2 brm apartment | $440.00 | 13 | 3 brm house | $512.00 | 106 |
| 1 brm flat | $300.00 | 19 | 4 brm house | $670.00 | 59 |
| 2 brm flat | $390.00 | 60 | 5+ brm house | $700.00 | 11 |
| 3 brm flat | $485.00 | 8 | Western Beaches / Rural | ||
| 2 brm house | $420.00 | 53 | 1 brm apartment | $270.00 | 5 |
| 3 brm house | $495.00 | 107 | 1 brm flat | $320.00 | 10 |
| 4 brm house | $552.00 | 28 | 1 brm house | $340.00 | 9 |
| 5+ brm house | $750.00 | 5 | 2 brm house | $400.00 | 44 |
| Ranui | 3 brm house | $495.00 | 53 | ||
| 2 brm flat | $380.00 | 6 | 4 brm house | $600.00 | 25 |
| 3 brm flat | $445.00 | 6 | 5+ brm house | $700.00 | 8 |
| 2 brm house | $400.00 | 19 | |||
| 3 brm house | $450.00 | 85 | |||
| 4 brm house | $545.00 | 11 | |||
Source NZ Government building & housing
|
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|
Te Atatu South |
|||
|
Date |
Median selling price |
5 year gain % |
|
| Dec 1996 | $201,000.00 |
- |
|
| Dec 2001 | $203,000.00 |
+ 1.0% |
|
| Dec 2006 | $328,000.00 |
+ 61.6% |
|
| Dec 2011 | $420,000.00 |
+ 28.1% |
|
| Dec 2016 | $750,000.00 |
+ 78.6% |
|
| Over 20 years |
+ 273.1% |
||
|
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|
Glen Eden |
|||
|
Date |
Median selling price |
5 year gain % |
|
| Dec 1996 |
$185,000.00 |
- |
|
| Dec 2001 |
$177,500.00 |
- 4.1% |
|
| Dec 2006 |
$315,000.00 |
+ 77.5% |
|
| Dec 2011 |
$320,000.00 |
+ 1.6% |
|
| Dec 2016 |
$699,000.00 |
+ 118.4% |
|
| Over 20 years |
+ 277.8% |
||
Source NZ department of statistics
2017 – What will happen to rents and property prices this year?
In issue number 17 of the Landlord’s Newsletter (12 months ago), I predicted that rents and house prices would increase in 2016. My forecast for property values were for an increase of between 12 – 16%.
Here’s what happened: For Waitakere City the median selling price increased by 13.9% – see table on the front page.
| Larger West Auckland Suburbs | Dec 2015 average rent p.w 3 bdrm home | Dec 2016 average rent p.w 3 bdrm home | Increase $ | Increase % |
| Glen Eden | $450.00 | $465.00 | $15.00 | 3.33% |
| Henderson | $450.00 | $490.00 | $40.00 | 8.88% |
| New Lynn | $475.00 | $495.00 | $20.00 | 4.21% |
| Te Atatu South | $467.00 | $495.00 | $28.00 | 5.99% |
| Te Atatu Peninsula | $490.00 | $500.00 | $10.00 | 2.04% |
| West Harbour | $495.00 | $512.00 | $17.00 | 3.43% |
| Waitakere City | $471.17 | $492.83 | $21.67 | 4.65% |
So what about 2017? There is a lot more uncertainty this year so predictions are harder but here goes:
| Factor | Probably effect on house prices | Probably effect on house rents |
| Supply of houses (shortage) | Increased prices | Increased rents |
| Demand (growing) | Increased prices | Increased rents |
| LVR restrictions | Reduced prices | Reduced rents |
| Rising interest rates | Reduced prices | Reduced rents |
| Economic growth | Increased prices | Increased rents |
| General election | Steady 1-2 months prior to election | Steady |
| Change of government | Reduced prices | Decreased rents |
| Same government | Increased prices | Increased rents |
| Difficulty for NZ exportors | Reduced prices | Reduced rents |
Factors to consider:
If the market were left alone by the reserve bank (not imposing borrowing restrictions) prices would certainly rise and so would rents. More houses would be built more quickly to meet the demand and prices would stabilise. Supply (short) V Demand (high) = Increases (prices and rents).
The reserve bank is attempting (and succeeding) in reducing demand which is why price rises are slowing. If they overdo it demand could fall away badly and prices would fall. It is highly probable that interest rates for mortgages will rise in 2017 as the cost of overseas borrowing is increasing. This in itself will reduce the demand.
We could end up with a situation where there is a “true” demand for houses (ie people who would like to buy and under free market conditions could buy) but demand has been squashed artificially at the same time we have a shortage of house. The result will be less houses being built as the demand (from people who can buy) is not there.
What could that mean?
- Developers / builders not willing to build more
- The shortage of houses gets larger
Now add in a change of government, a Labour / Green government propose increasing tax, introducing a capital gains (property) tax and more spending on welfare.
The result will be a poorer preforming economy and a drop in house prices certainly and with that falling rent prices. If a Labour / Green coalition becomes the government landlords may be hit with a 5 x whammy:
- Falling house prices
- Falling rents
- Increased income tax
- Capital gains
- Increased mortgage rates
I believe voters will say no to a coalition that would increase income tax and seriously risk the growth in our economy and say yes to a proven government that will cut tax AND grow the economy! House prices are likely to increase 5-7% in 2017 and rents by perhaps 2-3%. With a change of government I would not like to predict by how much house prices could fall.
If you would like to discuss your rental property situation please call me for a confidential discussion.
Until next time,
Best wishes,
John Goodrum
Licensee Agent REAA 2008
021945140
09 838 8895