Chris Penk's next step: self certifying tradies (Source)

Construction Minister Chris Penk announced on Tuesday that an ‘opt-in’ self-certification scheme for low-risk building will allow building professionals to certify their own work, a move franchise builders and sub-contractors say is a big step in housing reform and has been a long time coming.

The scheme would apply to low-risk builds such as granny flats without the need for inspection, something that electricians and gas fitters can already do.

Larger, franchise homebuilders building hundreds of identical homes will also have a more streamlined process.

Current consenting wait time is on average 569 days, with the changes designed to help speed up the process in order to tackle the housing shortage.

Our View: This is a positive move for the building industry. Red tape has been everywhere in the sector for a long time. There may be the odd issue from these changes along the way, but the benefits should well outweigh this.

House prices still 'around the top' of the Reserve Bank's estimated sustainable level (Source) 

According to the Reserve Bank of New Zealand (RBNZ), house prices remain stretched for prospective buyers and are currently at the upper end of the bank’s estimate of sustainable levels. This means that buying a new house is relatively unfavourable compared to long-term averages (other forms of investment).

Charles Lilly, an RBNZ advisor, explains that to assess the sustainability of house prices, the central bank looks at mortgage servicing costs for new buyers relative to average household incomes, and the alternative option of renting. Both indicators increased rapidly with house prices peaking in 2021, and they have remained at historically high levels.

When comparing New Zealand’s housing market cycle to those overseas, Lilly points out that while New Zealand’s cycle has been rapid, it has also involved less financial system stress. Despite elevated debt-service pressures and a rise in non-performing loans, he believes New Zealand has not faced the same level of household balance sheet distress as other countries experiencing similar boom-bust cycles. He attributes this resilience to banks' stringent assessments of new borrowers' loan servicing capacity, allowing them to absorb significant increases in interest rates.

First home buyers 10 years ago are now sitting pretty (Source) 

According to interest.co.nz’s current Home Loan Affordability Report, even with the housing market challenges over the past decade, first home buyers of 10 years ago should have built up a significant amount of equity in their first home, allowing a significant deposit for their next home.

10 years ago (Sept 2014) New Zealand’s national lower quartile selling price was $279,500 and in Sept 2024 the national lower quartile selling price increased to $595,000.

Our View: The idea for first home buyers is to just get on the property ladder in the best location you can afford. Over time there will be peaks and troughs, but the ultimate result is a lift, which is what this article is showing.

Australian house prices - the PM's dilemma (Source) 

Australian Prime Minister Anthony Albanese caused a stir last week when he purchased a $4.3 million dollar mansion on the cliff above Copacabana Beach north of Sydney.

Some were outraged that he spent that much cash when many Australians are struggling to pay their mortgage or even get on the property ladder.

Others argued there was nothing wrong with the purchase but questioned the timing 6 months before the election, with house prices being an election issue.

ASB figures show that over the last five years, there has been rapid house price growth since the start of the Covid-19 pandemic.

CoreLogic data shows house prices in Australia’s main cities have reached all-time highs with only Melbourne and Hobart as exceptions.

When looking at price-to-income ratios, Sydney has a ratio of 12.8% making it Australia’s most expensive housing market, although it is only marginally more expensive than Auckland.

Interest rate warning from country's biggest bank ANZ (Source) 

With interest rates falling, many people refixing their home loans have chosen to fix for shorter terms such as six months. However, according to ANZ, it is getting closer to the time when locking in longer-term home loans may be worth considering.

Current six-month rates sit between 6.39% and 6.5% at the main banks compared to 5.79% and 5.99% for one year.

ANZ economists believe considering a longer-term rate has some merit in an environment where rates are falling by paying more now in order to fix for a cheaper, longer rate in the future.

ANZ says global rates are rising, and wholesale rates are likely to bottom out fairly soon. Those looking to refix will need to decide if they wish to continue hoping interest rates will keep falling and go for short-term rates or decide to fix for longer.

Our View: Of course they are going to say this – to lock you in and make more profit as rates keep falling. If you aren’t sure what to do when it comes to refixing your mortgage, talk to the experts. Our Mortgage Advisor Wendy Ryan-Kidd is across all the changes daily and has helped many of our clients secure the best deal to suit their situation. We encourage you to reach out if you need to.

Have an enjoyable weekend!

From the team at Erskine Owen.