Hello,
Welcome to the twenty-sixth 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 |
No sold | Days to sell |
| Titirangi |
$887,000 |
16 |
29 |
| West Harbour |
$971,000 |
25 |
30 |
| Glendene |
$830,000 |
11 |
36 |
| Henderson |
$746,000 |
59 |
31 |
| Massey |
$700,000 |
35 |
32 |
| Ranui |
$700,000 |
34 |
34 |
| Royal Heights |
$904,000 |
6 |
32 |
| Sunnyvale |
$699,000 |
9 |
32 |
| Swanson |
$777,500 |
10 |
34 |
| Te Atatu Peninsula |
$980,000 |
21 |
27 |
| Te Atatu South |
$910,000 |
21 |
26 |
| Glen Eden |
$720,000 |
39 |
30 |
| Kelston |
$737,000 |
9 |
30 |
| New Lynn |
$694,000 |
31 |
33 |
| Green Bay |
$1,019,000 |
4 |
44 |
| Laingholm |
$811,175 |
4 |
27 |
Source REINZ
|
Current Mortgage Rates (18/10/2016) |
|||||
|
Float |
1 yr fixed |
2 yr fixed |
3 yr fixed |
5 yr fixed |
|
| ANZ |
5.59% |
4.25% |
4.29% |
5.20% |
5.30% |
| ASB |
5.55% |
4.29% |
4.34% |
4.39% |
5.55% |
| BNZ |
5.64% |
4.29% |
4.39% |
4.49% |
5.15% |
| Westpac |
5.65% |
4.25% |
4.29% |
4.49% |
4.89% |
| Kiwi Bank |
5.25% |
4.29% |
4.29% |
4.39% |
4.99% |
| Best of other lenders |
5.19% |
4.19% |
3.79% |
4.39% |
4.79% |
Source – J Goodrum – Internet search
| Current Rents | |||||
| 1st April – 30th September 16 | |||||
| Glen Eden | Average Rent | Bonds Paid | Royal Heights/Massey | ||
| 1 brm flat | $300.00 | 9 | 2 brm flat | $382.00 | 8 |
| 2 brm flat | $365.00 | 18 | 3 brm flat | $435.00 | 7 |
| 3 brm flat | $450.00 | 7 | 2 brm house | $395.00 | 24 |
| 2 brm house | $385.00 | 27 | 3 brm house | $475.00 | 183 |
| 3 brm house | $460.00 | 115 | 4 brm house | $550.00 | 41 |
| 4 brm house | $540.00 | 19 | 5+ brm house | $655.00 | 14 |
| Glendene | Te Atatu South | ||||
| 1 brm flat | $320.00 | 5 | 1 brm flat | $280.00 | 7 |
| 2 brm flat | $370.00 | 10 | 2 brm flat | $390.00 | 13 |
| 2 brm house | $400.00 | 21 | 2 brm house | $407.00 | 18 |
| 3 brm house | $480.00 | 48 | 3 brm house | $495.00 | 73 |
| 4 brm house | $550.00 | 29 | 4 brm house | $590.00 | 13 |
| 5+ brm house | $750.00 | 8 | 5+ brm house | $740.00 | 7 |
| Henderson | Te Atatu Peninsula | ||||
| 2 brm apartment | $430.00 | 5 | 1 brm flat | $320.00 | 7 |
| 3 brm apartment | $450.00 | 8 | 2 brm flat | $395.00 | 6 |
| 1 brm flat | $305.00 | 14 | 1 brm house | $332.00 | 6 |
| 2 brm flat | $370.00 | 55 | 2 brm house | $420.00 | 30 |
| 3 brm flat | $467.00 | 9 | 3 brm house | $500.00 | 91 |
| 1 brm house | $350.00 | 6 | 4 brm house | $582.00 | 28 |
| 2 brm house | $400.00 | 64 | 5+ brm house | $820.00 | 6 |
| 3 brm house | $480.00 | 244 | Titirangi | ||
| 4 brm house | $575.00 | 115 | 1 brm flat | $320.00 | 15 |
| 5+ brm house | $690.00 | 21 | 2 brm flat | $390.00 | 17 |
| Kelston | 1 brm house | $320.00 | 5 | ||
| 1 brm apartment | $310.00 | 20 | 2 brm house | $400.00 | 36 |
| 1 brm flat | $300.00 | 17 | 3 brm house | $525.00 | 88 |
| 2 brm flat | $340.00 | 9 | 4 brm house | $600.00 | 27 |
| 3 brm flat | $400.00 | 8 | West Harbour | ||
| 2 brm house | $415.00 | 30 | 2 brm apartment | $482.00 | 10 |
| 3 brm house | $470.00 | 90 | 1 brm flat | $337.00 | 10 |
| 4 brm house | $570.00 | 19 | 2 brm flat | $400.00 | 7 |
| 5+ brm house | $640.00 | 6 | 1 brm house | $400.00 | 7 |
| New Lynn | 2 brm house | $430.00 | 21 | ||
| 1 brm apartment | $330.00 | 34 | 3 brm house | $510.00 | 131 |
| 2 brm apartment | $430.00 | 16 | 4 brm house | $675.00 | 65 |
| 1 brm flat | $310.00 | 17 | 5+ brm house | $720.00 | 17 |
| 2 brm flat | $390.00 | 62 | Western Beaches/Rural | ||
| 3 brm flat | $445.00 | 10 | 1 brm flat | $300.00 | 13 |
| 2 brm house | $430.00 | 44 | 1 brm house | $340.00 | 9 |
| 3 brm house | $495.00 | 122 | 2 brm house | $400.00 | 37 |
| 4 brm house | $560.00 | 34 | 3 brm house | $482.00 | 62 |
| 5+ brm house | $650.00 | 5 | 4 brm house | $560.00 | 29 |
| Ranui | 5+ brm house | $662.00 | 8 | ||
| 2 brm house | $400.00 | 20 | |||
| 3 brm house | $450.00 | 76 | |||
| 4 brm house | $545.00 | 17 | |||
Source NZ Government building & housing
|
|||
|
Royal Heights |
|||
|
Date |
Median selling price |
5 year gain % |
|
| Sep 1996 | $203,500.00 |
- |
|
| Sep 2001 | $276,000.00 |
+ 35.6% |
|
| Sep 2006 | $330,000.00 |
+ 19.6% |
|
| Sep 2011 | $382,500.00 |
+ 15.9% |
|
| Sep 2016 | $904,500.00 |
+ 136.4% |
|
| Over 20 years |
+ 344.5% |
||
|
|||
|
Green Bay |
|||
|
Date |
Median selling price |
5 year gain % |
|
| Sep 1996 |
$204,300.00 |
- |
|
| Sep 2001 |
$222,000.00 |
+ 8.7% |
|
| Sep 2006 |
$369,000.00 |
+ 66.2% |
|
| Sep 2011 |
$485,500.00 |
+ 31.6% |
|
| Sep 2016 |
$1,019,000.00 |
+ 109.9% |
|
| Over 20 years |
+ 398.8% |
||
Source NZ department of statistics
The Big Picture Update
Let’s have an updated look at the world economies, events, the N.Z economy and the events that may affect rental properties.
Having an understanding of world events and how they are likely to affect rental investments can be every bit as important as local happenings. Once again I will produce a list of events and probable future events which I believe may impact on world economies and in turn the N.Z economy and our rental property investments.
- World-wide
- New Zealand
- Auckland
- World-wide:
1. Europe and Brexit – That was not even on my radar 14 months ago when I did my first Big Picture article in issue 12 of this newsletter. Brexit has certainly shook up Europe. More financial and political uncertainty. Not good for the world economy or N.Z except it may present extra export opportunities to Britain. Britain is still the world’s 5th largest economy behind USA, China, Japan and Germany.
2. Refugee crisis in Europe – The Syrian war and the massive flood of refugees to Europe is putting a strain on the economy of Europe (as a group of countries the EU economy is larger than that of China). It is also causing rifts between EU member countries because many are refusing to keep taking more and more refugees. Very bad for political stability and economies world-wide.
3. USA- The world’s largest economy, a solid labour market with rising levels of employment and rising wages plus buoyant consumer confidence. On the other hand business is nervous about the election in November. The Fed (USA central bank) is predicted to raise interest rates soon. That has been predicted for more than a year however and has not happened yet. An increase would probably mean higher borrowing costs for N.Z and probably upwards pressure on N.Z mortgage rates.
4. China- The Chinese economy is still growing and even though it is slower than before the growth is still strong. China is N.Z largest export market. A serious slowdown in China would significantly affect the N.Z economy, house prices and interest rates.
5. Australia- Is still N.Z 2nd largest export market and the $NZ is strongly linked to the $AU. The unemployment in Australia is currently 5.6% compared to NZ at 5.1%. Much of the very high net migration to NZ is made up of kiwis returning to NZ and lesser numbers leaving. Australia is the largest overseas destination for immigrating kiwis. As the Australian economy improves and unemployment falls the net migration numbers to NZ will begin to fall and that will dampen house prices.
6. Germany- The German economy is slowing despite the strong exports. Having accepted close to 1M refugees it remains to be seen how the economy will copy and preform in the next 12 months.
7. Rest of the world-
India- Economic growth has slowed but at 7.1% is still ahead of China and one of the world best in terms of growth.
Russia- The recession (since 2009) seems to be nearing an end. The major concern relative to Russia will be political concerns from other countries about Russia’s support for Syria. Any instability can affect major economies and affect interest rates and house prices in NZ.
Latin America- Peru, Columbia and some others are growing rapidly but Brazil is still in recession with an unemployment rate of 8.5%. Strong economies anywhere in the world are good for world stability, weak economies the opposite.
- New Zealand:
1. Dairy Prices- Perhaps the price slump is over as prices have steadily improved in recent months.
2. Christchurch Rebuild- The build has peaked but there are still years of building and infrastructure renewal ahead.
3. Net Migration figures- Latest figures in September showed a net migration gain of 70,000, a new record high for N.Z. Most will settle in Auckland so increasing housing demand and putting upward pressure on prices. There are no signs of net migration gains falling away.
4. Earthquake Strengthening- This will cost billions over a large number of years and exert upwards pressure on house prices.
5. N.Z Economy- Just like 14 months ago in Newsletter Issue 12, 2.8% seems to be the GDP growth figure. Almost a rock star economy – and a massive government surplus ahead of forecast figures too.
6. Tourism- Still very strong and rising, very good for the economy and in turn house prices.
7. OCR- I predicted 14 months ago mortgage rates below 4.5%- they are currently around 4.25%. I think 4.0% is possible but that will probably be the bottom.
8. TPP- Trans Pacific Partnership – I don’t fancy its chances – Clinton – for it / against it, will move as the political wind blows – Trump – against it. It could be fantastic for N.Z but I now doubt it will ever come into being.
9. El Nino- What El Nino? We can’t predict the weather accurately 1 year out so how can we possibly predict global warming 50 – 100 years ahead?
- Auckland:
1. The housing shortage – Probably worse than 14 months ago. Despite all the LVR and other restrictions prices are likely to keep increasing for at least another year but at a slower rate.
2. Auckland Infrastructure- Still a massive amount of expenditure being committed which will be good for house price growth.
2. 40% Investor Deposit in Auckland Now- It was 30% 12 months ago, prices have increased by 13.7% in that time. I predict a slow or no price rise for a month or two and then continued increases thereafter.
Conclusion: Supply = short AND demand = high = price increases. The 2 major drivers are still-
- A shortage of homes
- Strong (and increasing) demand
Prices will continue to increase perhaps at 7-10% over the next year. Interest rates will probably remain under 5% for some years to come.
Until next time,
Best wishes,
John Goodrum
Licensee Agent REAA 2008, 021945140, 09 838 8895