Central Unlocked | November 2022

central unl cked

VALUE ADDING HOME IMPROVEMENTS

VOLUMES LEAD VALUES

INSIDE THE MARKET TRENDS, STATS ANDINSIGHTS

A NOTE FROM THE DIRECTOR

Richard Humphreys

There is nothing like crisp spring mornings and warmer days, It just makes you want to go out and tick things off! Our team is looking forward to getting down to Rocky Nook Bowls to take advantage of this great weather, warm evenings with a drink in hand. The team at Rocky Nook Bowls run a fantastic sum mer series so if you are looking for a social event I can’t recom mend this enough. Registration’s are still open so get in touch with the team. Disclaimer: I still can’t bowl

The Spring market is looking like it will be busy with a lot of new properties coming to market before and after Labour weekend. If you have thought about getting on the market the window is beginning to close for 2022. As Benjamin Franklin said “If you fail to plan, you are planning to fail!

ONE TEAMgotWE’VE THIS!

GUMBOOT FRIDAY IS BACK! NOVEMBER 4

The Harcourts Foundation is now a proud supporter of Gumboot Friday, 4 November, and kick started its support with a $20,000 donation which was presented to Mike King on stage at the New Zealand Leadership Conference.

Mike shed light on the mental health crisis in New Zealand and about the positive impact this donation will make to the children who access the free counselling service. Gumboot Friday anticipate that with the money they have and what they will raise over the next few months will pay for a further 20,000 free sessions before the end of 2022. We are incredibly proud and look forward to being part of this initiative that helps get these kids struggling with depression and feeling like they are walking in mud, to build a better, brighter future.

FOCUS Management

INSIDE THEMarket

Bringing you news from the world of New Zealand property management.

Tips for Dealing with Rising Mortgage Rates

Rising interest rates are bad news for first home buyers and borrowers alike, with new homeowners and investors (those who bought homes in the last 18 months) facing much higher mortgage repayments for the first time. With the Reserve Bank of New Zealand signalling further interest rate hikes are on the horizon, how can we avoid placing strain on already tight budgets and stay on top of bigger mortgage repayments?

Here are some options:

1. Check what mortgage you are currently on The first step is to determine how your current mortgage is structured, as interest rate increases will affect the floating portion of your home loan, as well as any fixed interest rate terms that are ending that are going to be refixed.

If you’re not sure how your home loan is structured, contact your lender or mortgage adviser to help you work through the details. It’s worth booking in a home loan restructure checkin with a Mortgage Express branded adviser, to ensure you’re getting the best deal available to you, and that your home loan is structured to fit your requirements.

2. Determine how interest rate increases impact you

Now that you know how your home loan is structured, your mortgage adviser can help you determine the impact any interest rate rises will have on your home loan repayments. You can also use a home loan repayment calculator – like this one – to work out what your repayments are going to look like.

If your fixed rate term is nearing the end, now is a good time to discuss with your mortgage adviser locking in an interest rate. It’s also worthwhile comparing how your interest rates stack up against any other deals in the market, and this is something else your mortgage adviser can help you with.

3. Devise a plan to help you manage higher repayments

The Reserve Bank (RBNZ) has warned that a noticeable number of households that borrowed for the first time in 2021 will find it difficult to pay their mortgages and cover all their other usual expenses. If you’re in this situation, start building up a savings buffer now to help you manage the higher repayments you are going to face in the year ahead.

Take a close look at your budget to identify the expenses you can cut out or ways in which you can boost your income. Check that you’re getting the best deal for utilities – power, internet and phone – and pay down any high interest debt as soon as you can to help free up extra cash to divert into your home loan.

Get expert advice about your financial situation

With more interest rate hikes predicted, it’s important to have a financial plan in place to help you cope with higher mortgage repayments. As well finding ways to cut back on unnecessary spending, building up a savings buffer could help you prepare for higher costs ahead.

If you’re concerned about the impact higher mortgage repayments could have on your financial situation, it’s best to seek help immediately. Contact your mortgage adviser or lender to discuss your situation before you miss any repayments.

Contact a Mortgage Express branded adviser if you have questions about your existing home loan and the impact higher interest rates could have on your financial situation.

Source: https://www.mortgage-express. co.nz/blog/rising-mortgage-rates

SEPTEMBER 2022 | AUCKLAND CENTRAL MARKET INSIGHTS

“Following an exceptional period of growth last year — spurred by Government stimulus and closed borders seeing Kiwis invest locally — the property market is moderating. Owner occupiers remain a strong buyer pool and agents in some areas report seeing more first home buyers in the market — enticed by easing prices and less competition.” Jen Baird, CEO of REINZ says. Open home numbers have remained in double figures every weekend, auction registrations have been strong with an average of two per auction. As we moved into October, we are feeling an uptick in people looking to transact before Christmas and secure their homes. With the OCR also moving again there is still caution when buying, however well priced properties are transacting. Pipeline stock is also looking good with sellers looking to 2023 and what changes they want to see in their lives, moving out of Auckland, moving school zones, resizing and so on. The Spring market is certainly here.

Richard Humphreys Business Owner | Harcourts Twentythree

AND NEVER STAY LOW FOR LONG

We are living through extraordinary times for the property market. You may have heard the news… monthly property sales volumes are low, really low.

According to the Real Estate Institute of NZ, the September month property sales volumes haven’t been this low since September 2010 when we had a lot less people living in New Zealand. In fact we had 761,400 less people in 2010. That’s a 17% population increase in 12 years and, at an average of say 2.6 people per household, that represents almost 293,000 more dwellings are either owner occupied or rented.

Having a much larger population and by default 293,000 more dwellings we could expect a new low point for sales volumes to be higher than the previous low in 2010. You may recall 2010 was also an extraordinary time for the property market being just 2 years after the Global Financial Crisis which sent economic shockwaves around the globe and plummeting property sales volumes.

Today we have a very different crisis, which is the war. That is the war on inflation. The main weaponry being used to fight this war is interest rates and the first and foremost casualty of this battle was not the enemy, of inflation. It was confidence. Confidence in our economy, confidence in job security, confidence in the property market.

We do not have an economic crisis right now, we have a crisis of confidence. A crisis which is directly impacting on property sales volumes.

Historically when sales volumes reach very low levels property values they always suffer to one degree or another just like they have lately. The adage ‘Volumes lead values’ always proves to be a truism during times like these. This time is no different in that respect. Once volumes start rising, we know values will too, they always do.

There is another truism that is equally valid in times like these. Property sales volumes never stay low for long. We all know that no war lasts forever, and this too shall pass. As it does, property sales volumes will once again rise from the ashes followed by value rises.

Ironically times like right now are often perceived to be amongst the worst times to be buying property yet history has proven they can in fact be some of the very best times to buy.

- KIERAN TRASS

VISIT KIERAN’S WEBSITE FOR MORE

FOCUS Management

VALUE ADDING HOME IMPROVEMENTS

WITH JAMES GOREN FROM THE RENOVATION TEAM

Bringing you news from the world of Zealand property management.

Tips for Dealing with Rising Mortgage Rates

COST EFFECTIVE MAKEOVER

interest rates are bad news for first home buyers and borrowers alike, with new homeowners and investors (those who bought homes in the last 18 months) facing much higher mortgage repayments for the time. With the Reserve Bank of New Zealand signalling further interest rate hikes are on the horizon, can we avoid placing strain on already tight budgets and stay on top of bigger mortgage repayments?

are some options:

Check what mortgage you are currently on step is to determine how your mortgage is structured, as rate increases will affect the portion of your home loan, as any fixed interest rate terms ending that are going to be

not sure how your home loan structured, contact your lender or mortgage adviser to help you work the details. It’s worth booking home loan restructure checka Mortgage Express branded to ensure you’re getting the deal available to you, and that home loan is structured to fit your requirements.

HOW THE RENOVATION TEAM CAN HELP YOU ADD EQUITY

Determine how interest rate increases impact you

For homeowners

that you know how your home structured, your mortgage can help you determine the any interest rate rises will have home loan repayments. You also use a home loan repayment calculator – like this one – to work out your repayments are going to like.

fixed rate term is nearing the now is a good time to discuss your mortgage adviser locking in interest rate. It’s also worthwhile comparing how your interest rates up against any other deals in the and this is something else your mortgage adviser can help you with.

Sorting out your new house, or renovating your existing one, can be exciting and challenging at the same time. You need a professional, experienced team to handle your precious asset. Our mission is to provide you with a smooth renovation experience, with high-quality products. This gives you years of peace of mind at a very attractive price. Here at The Renovation Team, we specialise in full do-ups, designer bathrooms and kitchens, property flow improvement, creating indoor-outdoor flow and upgrading the overall look and feel of your property. You'll be amazed with the results and enjoy a fresh, warm home for you and your loved ones.

Get expert advice about your financial situation

The Reserve Bank (RBNZ) has warned that a noticeable number of households that borrowed for the first time in 2021 will find it difficult to pay their mortgages and cover all their other usual expenses. If you’re in this situation, start building up a savings buffer now to help you manage the higher repayments you are going to face in the year ahead.

For investors

We are experts in converting homes by optimising space and adding bedrooms. We re-design interior structures and reconfigure homes to create better flow and improved practicality. With our team of experts you can maximise the monetary potential in your property. In other words? Create wealth.

With more interest rate hikes predicted, it’s important to have a financial plan in place to help you cope with higher mortgage repayments. As well finding ways to cut back on unnecessary spending, building up a savings buffer could help you prepare for higher costs ahead.

Renovation for property sale

Take a close look at your budget to identify the expenses you can cut out or ways in which you can boost your income. Check that you’re getting the best deal for utilities – power, internet and phone – and pay down any high interest debt as soon as you can to help free up extra cash to divert into your home loan.

On average, we add $194.000 in equity per project and on average our clients receive an extra $136 per week in rent. As investors ourselves, we understand buy-and-hold strategies and how to help reduce the costs involved in producing maximum rental returns.

If you’re concerned about the impact higher mortgage repayments could have on your financial situation, it’s best to seek help immediately. Contact your mortgage adviser or lender to discuss your situation before you miss any repayments.

In todays challenging market, pre-sale renovation can mean the difference between a standard sale price and winning the auction hammer jackpot. Most homeowners sell their property “as is” and miss the opportunity to maximise the resale potential. A rundown property is bought using logic and numbers. A beautiful. shiny property triggers buyer emotions which are far beyond logic and result in much higher prices.

Contact a Mortgage Express branded adviser if you have questions about your existing home loan and the impact higher interest rates could have on your financial situation.

Source: https://www.mortgage-express. co.nz/blog/rising-mortgage-rates

Here at the Renovation Team, our founder James will work with you to build a cost effective renovation package to maximise your property sale potential and to trigger strong “buy” emotions.

tubes for darker

and a new letterbox

“SPEND $5000 AND YOU COULD ADD $40,000 OR MORE” HE SAYS. “I’VE SEEN MANY HOMEOWNERS PURCHASE PROPERTIES FOR A BARGAIN SIMPLY BECAUSE THEY DON’T BOTHER TO CLEAN IT UP OR DE CLUTTER”. JAMES GOREN

3. Devise a plan to help you manage higher repayments

CASE STUDY TUARANGI RD, GREY LYNN

The vendor, living in a very basic bungalow in Tuarangi Rd Grey Lynn, decided to return back to the UK and sell his property. The agent knew it would be very challenging to sell the bungalow in a run down condition and assumed the vendor could only get a max of $1.3Mil which does not reflect the full potential from such a prime location. A resale value plan was put in place by James Goren focusing on the most cost effective way to max the value of the property. The Renovation Team finished the project in just 6 weeks, the property relisted on the market with new expectation of 1.5 to 1.6 and sold for $1,740,000. The vendor was very happy as he got almost $440,000 more than the expected!

Property Type: Bungalow

Initial value appraisal: $1,300,000

Renovation plan: $120,000 - 6 weeks

Selling price: $1,740,000 (after 3 weeks)

Resale value increase: $440,000

266%

CAN I ADD VALUE TO MY HOME?

ROADPoint

SUN-SWEET, LOCATION A TREAT!

A Point Chev classic that was completely transformed just over twelve months ago, this three-bedroom residence offers modern living in one of the city’s most sought after suburbs.

A private oasis in the heart of the popular city fringe suburb, the home opens with spacious, open plan living and dining, well-serviced by the chic matte black kitchen. Living flows effortlessly out to north-west facing decking for al fresco entertaining when the warmer months roll around, and is surrounded by lush planting and carefully placed lighting to lend a resort-like feel.

Kids and pets will love the supremely level and secure greenspace, and there is even a

shed for the tools and the toys. All three bedrooms are light and airy, the master with immaculate ensuite and generous walk in robe. There is also a stylish family bathroom with premium fittings and designer touches, just one of many elegant extras that make this home to easy to love.

With central heating throughout and off street parking for two, this fabulous home is also within easy reach of Point Chevalier beach and school, as well as essential bus routes and great local cafes.

With every detail taken care of, you can just move in and enjoy - book your appointment to view today!

FOCUS Management

Bringing you news from the world of New Zealand property management.

Tips for Dealing with Rising Mortgage Rates

RENTAL MARKET ADJUSTMENT CONTINUES

Rising interest rates are bad news for first home buyers and borrowers alike, with new homeowners and investors (those who bought homes in the last 18 months) facing much higher mortgage repayments for the first time. With the Reserve Bank of New Zealand signalling further interest rate hikes are on the horizon, how can we avoid placing strain on already tight budgets and stay on top of bigger mortgage repayments?

Here are some options:

After the latest Investor Insight survey compiled by Tony Alexander, he gauges how things are changing. Over time, he tracks changes in pressures on rents, points of particular concern, plans regarding property purchases and intentions to sell, and shifts in preferences for property types.

Key points of interest from this month’s survey include:

• The downward trend in plans for undertaking one’s own property development has re-established itself.

• Investor interest in purchasing property has strengthened.

1. Check what mortgage you are currently on The first step is to determine how your current mortgage is structured, as interest rate increases will affect the floating portion of your home loan, as well as any fixed interest rate terms that are ending that are going to be refixed.

• Interest in buying an existing property remains stronger than interest in buying new properties, despite the loss of interest deductibility on existing properties.

• Investors are slightly more concerned about interest rates rising.

Biggest concerns regarding returns on your investment

As usual, the three things which continue to cause most concern for residential property investors are

New government regulations

If you’re not sure how your home loan is structured, contact your lender or mortgage adviser to help you work through the details. It’s worth booking in a home loan restructure checkin with a Mortgage Express branded adviser, to ensure you’re getting the best deal available to you, and that your home loan is structured to fit your requirements.

3. Devise a plan to help you manage higher repayments

Loss of interest expense deductibility

Rising interest rates.

2. Determine how interest rate increases impact you

Now that you know how your home

The Reserve Bank (RBNZ) has warned that a noticeable number of households that borrowed for the first time in 2021 will find it difficult to pay their mortgages and cover all

Get expert advice about your financial situation

With more interest rate hikes predicted, it’s important to have a financial plan in place to help you cope with higher mortgage repayments. As well finding ways to cut back on unnecessary

READ MORE

TIPS FOR HANDLING A HIGHER COST OF LIVING INDEPENDENT ECONOMIST TONY ALEXANDER SURVEYS FAMILIES ON HOW THYE ARE MANAGING WITH THE NEWLY ESCALATED COST OF LIVING.

After a recent survey, New Zealanders have provided their thoughts and suggestions on how to best cut back in expenses.

Tony’s summary of the thoughts which people have offered is this. In terms of cutting back, the most popular suggestion was to stop buying café coffees alongside reducing eating out and entertaining at home. Growing one’s own vegetables was frequently suggested alongside reviewing all one’s expenses and subscription services, electricity, and insurance in particular.

The key summary of where youcan make changes

• Sell unwanted items on Trademe

• Ask your employer for a decent wage increase or shift jobs

• Make a budget and stick to it, and don’t deviate from your supermarket shopping list. However, bulk buy groceries ahead of time if on special

• Make your own lunch and do weekly baking for kids’ lunches

• Reconsider buying another pet

• Switch to cheaper holidays

• Calculate expected annual expenses and set up an automatic payment to an account ready to pay them

• Cancel credit cards and avoid buy now pay later schemes

• Go vegetarian

• Take in a boarder or flatmate

• Put bank account money to better use in alternative investments.

• Adopt a less cluttered lifestyle not focussed on acquisitions.

Suggestions from fellow New Zealanders

• Stop buying cups of tea or coffee. It’s almost as bad as being an alcoholic.

• Talk to your employer about working from home instead of spending money on transportation costs.

• Take advantage of community recycling centres where you can find some high quality products at bargain prices.

• Rather than the posh cafe for coffee and panini, how about the lovely family bakery for a $3.50 sandwich? Saves huge money and you still get the convenience of eating out.

• Making soups and freezing them to use up a chicken carcass rather than throwing it out?

• Assess your fixed costs and look at whether there are other providers that do it cheaper. In particular, mobile plans, internet, power, and insurance. You might even benefit from considering moving to a cheaper area, particularly if you’re now able to work from home more.

• Check if there are any ongoing subscriptions that you could live without.

• Restructure/refinance your debts - if you’re really squeezed, putting everything into one loan over a longer period can help.

• Sell car & use bike and public transport more/ try and increase your rates for any contract consultancy work.

• Get a veg garden going.

• Eating less meat, buying from PaknSave, cutting takeaways and subscription services, keeping track of budget more tightly, selling unwanted possessions on TradeMe, getting part time work on the side.

• Something we implemented several years ago was to have a “cheap week”, where we basically commit to spending a quarter of our regular amount on groceries. We found there was actually a lot of wastage and overages within our regular shop, plus if you dig around the pantry and freezer, there were meals upon meals of food stashed away. It takes a lot of forward planning for the week’s meals, and some very boring old fashion stodge for dinner, but the excitement of spending $100 rather the $400 is huge.

• Less eating out and takeaways and buying more used products where we would buy new - e.g., coffee maker on Trademe.

• Go shopping 1x/wk instead of several, less days a week using car, potluck dinners & make your own coffees.

• Just purchased hybrid vehicle to reduce petrol costs.

• Meal planning to only buy needed items and avoid food waste and overindulgence and get groceries once a week to reduce opportunity to buy more unneeded food.

• Sell unneeded items that have not been used in the last year.

FOR MORE TIPS ON HOW TO HANDLE LIVING COSTS READ THE FULL SURVEY REPORT HERE

PRO'S for the borrower

THE PRO’S & CONS OF BEING A GUARANTOR

With the cost of New Zealand property at an all-time high, many prospective first home buyers struggle to save a big enough deposit to enter the property market. One way around this issue is to have a family member be guarantor, using their own home as security for the borrower’s loan or for their deposit. But before agreeing to be a guarantor, it’s important to understand what the pros and cons are.

Understanding Guarantors

Getting help from a family member could mean the difference between buying a first home now or having to wait several years while saving a bigger deposit or increasing earnings. For borrowers with no credit history or bad credit issues, having a family member be guarantor could help get loan approval over the line.

A guarantor is someone – usually a family member - who commits to being a back-up for someone else’s loan –either for the full loan amount or for the deposit. Most often, the guarantor will use their own assets – such as the family home or an investment property – as collateral for the loan. Should the borrower stop repaying the loan, the lender may recover the loan from the guarantor.

While being guarantor could help a borrower into their own home as guarantors face a real threat of losing their own home if the borrower fails to repay the loan.

Pros

for the borrower

• Help getting onto the property ladder – for first home buyers struggling to save a big enough deposit, or for those who don’t meet lending requirements, having a guarantor could be the step up needed to buy a first home.

• Increased borrowing capacity – with a guarantor, some lenders may view a borrower’s application as a lower risk and be more inclined to lend, or they may lend a higher amount.

• Buy without a deposit – if a guarantor guarantees the deposit, a borrower may be able to buy a first home without waiting until they’ve saved a big enough deposit. Most lenders will require proof that at least 5 per cent of the borrower’s deposit comes from their own savings.

• Avoid lender’s mortgage insurance or a low equity margin – borrowers with less than a 20 per cent deposit may be able to avoid being charged a low equity margin or having to pay lender’s mortgage insurance, charged by the lender to cover perceived risk for borrowers with low deposits.

Kapadia

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