February 2015
www.waterfordpress.co.nz
Millwater Rising Pages 4-10
Institute says price fall not realistic Chris Hutching The Property Institute says homeowners should ignore recent warnings of a house price fall. Institute chief executive Ashley Church says Reserve Bank Governor Graeme Wheeler’s recent warnings are at odds with the reality of the Auckland property market. And Church say these are the reasons: • Auckland’s property boom is driven by demand for an additional 39,000 houses and demand is likely to continue for more than three more years and possibly longer. • There have only been two sharp corrections in the kiwi property market since the 1970’s, the first in the mid-1970’s after New Zealand lost
access to the British export market and a dramatic increase in oil prices. The second after 2007 was the result of a major hit to the world economy and then the fall was only around 5% • The current boom is far more likely to end with a whimper rather than a fall – only to start rising again four or five years later Church said it was Mr Wheeler’s job to “try and dampen the market”. Meanwhile a recent Branz housing report finds that the national average home ownership rate in 2013 was 64.8% down 9 percentage points from 1991. The rate of home ownership is unevenly distributed across the country with the Gisborne region having the lowest rate at 59.2% followed by Auckland (61.5%), and Waikato (62.7).
The South Island, and particularly the top of the South Island, had higher rates of home ownership than the North Island. Younger households are living in rented accommodation for longer and not achieving the same rates of home ownership as previous generations. If these trends continue regional home ownership rates of less than 50% in two decades are possible, Branz says. Over the past 10 years the apartment market has been dominated by investors. The rate of home ownership for households living in multiunit dwellings was 36% in 2013 compared with 72% for households living in standalone houses. New Zealand’s population is projected to continue to increase and number of households
is projected to grow by 14 % between 2013 and 2026. The rate of home ownership is projected to continue to decline over the next 13 years driven in part by the natural progression of the age cohorts with lower rates of home ownership though the population to 2026. The national rate of home ownership is projected to fall another 5.2 percentage points to 59.6% by 2026, Branz says. Meanwhile more Auckland first home buyers are calling on family loans and gifts to help fund their purchases. Barfoot & Thompson commissioned research which found nearly 47% of people who bought their first home in the past five years received some form of financial assistance from a family member.
Auck hotels on “bull run” Chris Hutching New Zealand hotels are running at near-full capacity. Auckland had record occupancy levels of 82.2% last year - up 4% from the previous year. Other regions also showing strong growth include Queenstown, which recorded a 9% increase in occupancy in the last 12 months to reach 73.5%, Rotorua was up 4% to 71% and Wellington reached 74.6%. Dean Humphries, national director of Hotels for Colliers International, says this is the start of “a bull run”. He predicts Auckland’s occupancy rates will increase to more than 85% over the next two to three years. Humphries says there are virtually no new hotels under construction in Auckland – but some hotels are expanding and building more rooms. International visitor numbers to New Zealand reached almost 2.85 million last year - a 5% increase from 2013, and will be swelled further this year when New Zealand hosts a number of major sporting events including the ICC Cricket World cup, the Fifa U-20 Football World Cup and the Volvo Ocean race. “All this translates to significant increases in property values for existing hotel owners and signals the end of an era were guests can stay in four and five star hotels for rates much under $200 per night,” he says. “Average room rates are set to rise significantly. They increased 5% in 2014 and are forecast to increase by the same level again this year.”
INSIDE
Tapping into the luxury market.... The luxury 63-metre Oceanic Discoverer passenger liner undergoing maintenance work recently at Ship Repair NZ’s Whangarei slipway. The vessel has been with the company several times for survey and general repairs recently, reflecting the company’s growing reputation in the marketplace for its work on luxury vessels.
Optimism for Kiwi wool growers - PAGE 2
Timaru Mills eye North Island - PAGE 2
“As we successfully complete more luxury projects we are finding we are getting repeat customers and word of mouth is spreading our reputation,” says Ship Repair NZ project manager Nick Eilering. “In fact last year around 70% of our business was from repeat clients.” Story page 38
Taking NZ clams to the world - PAGE 3
www.waterfordpress.co.nz