House prices will stop falling soon - CoreLogic (Source)

Kalvin Davidson, chief property economist of CoreLogic has said that there are signs of mortgage rates lowering and sentiment rising. However, this has yet to be shown in housing data.

Davidson says Auckland prices are down 7% from January and February, and nationally down 5%. However, prices in Queenstown and Invercargill were holding up. 
 
Sales volumes are rising but are still 15 – 20% below normal. Those with pre-approved finance are in a great position with plenty of stock available to choose from. 

Davidson doesn’t believe prices will fall much further and as for a seller’s market, he has stated that he feels this is unlikely as the economy is still weak and jobs are being lost. The market is proving to be favorable for first-home buyers who have a wide choice of properties and are active in the market.  

Our perspective: We don’t entirely agree. We think there are signs in the data that sentiment is lifting. Check out our latest market commentary. 

Calm before the buying storm, hoteliers eye up Auckland (Source) 

According to Nick Thompson, director of hotels and hospitality at JLL, the reduction in interest rates has sparked interest from hoteliers with high interest from those based in Singapore.  

With a number of deals in the pipeline, Thompson indicates that if each came into fruition the number of hotels changing hands by year-end could exceed the $138.3m in transactions completed last year.  

Development contribution hikes 'won't impact prices' - council (Source) 

Developers in Auckland will be facing higher council development contributions (DC) from March next year. The development contribution charges cover items such as footpaths, drainage, and stormwater systems.  

In Auckland’s inner northwest, the average DC will be increased from $25,000 to $98,000 per home. However, the Tamaki district is higher moving from $32,000 to $119,000 per home.  

Developers hope to pass these costs over to home buyers. However, recent evidence from Hamilton and Waitakere City demonstrates they probably can’t, with this strategy not working in these areas. There is also evidence from research out of Queensland that suggests the same.  

Government ready to take a box cutter to consenting authorities (Source) 

The government is seeking to streamline the building consent process. Paul Bull of Signature Homes has said that of circa 450 home builds they do per year they often operate across three to five different authorities (BCAs) with varied interpretations of the same code, leading to confusion and loss of time with the consent process.  

There are currently 67 different consenting authorities in New Zealand.  

The government is seeking industry feedback on the issue with one proposal being to consolidate the smaller councils to deliver building control functions. The ultimate plan would potentially see a small number of large regional BCAs replacing the current process. 

Mood of the Boardroom: Business leaders' optimism hits highest level since 2016 (Source) 

When looking at the NZ economy, senior business leaders’ optimism has surged according to an NZ Herald survey, with their confidence in the economy showing on a scale of 1(less optimistic) – 5(more optimistic) sitting at 3.23. This is a significant change from last year when the response from those surveyed was 1.82 and the recent rating is also the highest since 2016. 

Ireland hits wealthy with 'mansion tax' (Source) 

In a bid to fund a pre-election spending spree on cost-of-living handouts, Ireland has launched a mansion tax out of the blue, in the form of a new 6% rate of stamp duty on properties worth more than 1.5 million pounds, with immediate effect.  

Current home buyer stamp duty is 1% on properties valued up to 1 million pounds and 2% for those above this.  

The change is expected to raise an additional 80 million pounds per year.  

Have a fabulous weekend!

From the team at Erskine Owen.