Depositors in last minute scramble to take advantage of high interest rates (Source)

According to Reserve Bank data, July was a big month for Term Deposits locking away an additional $2.149 billion, the most since June last year. This was inevitably to take advantage of the high interest rates.

The question is where all the money will go when Term Deposits are no longer flavour of the month. Anecdotally we can tell you that an increasing number of our conversations are shifting from “we are just leaving it in the bank to see what happens” – to “we need to find a home for our money when it comes off Term Deposit.”  

The city rail link and 'transit-orientated museums' (Source) 

The long-awaited City Rail Link (CRL) which is to be co funded by the Government and Auckland Council to the tune of $5.5 billion, presents an opportunity for the Auckland housing market. The 3.5km tunnel connects the central station, Britomart/Waitemata, with Mt Eden/Maungawhau station on the western rail line.

The acting chief executive for Infrastructure NZ, Geoff Cooper suggests that council should be zoning for more housing in areas set to benefit from the CRL, by making zoning changes allowing for a six-storey minimum around train stations.

Cooper points out that you can’t have world-class infrastructure and no intensification – the two work together.

CoreLogic data shows residential property values continued sliding in August (Source) 

Median house prices declined for the sixth consecutive month in August to a national median of $811,583. According to CoreLogic, Gisborne experienced the biggest decline, down by 6.5%, Christchurch dopped by 0.3% and Auckland by 3.3%.

This decline is not unexpected. The OCR only reduced recently and there is existing stock for current buyers to secure. It is a buyers’ market with time being on the side of those who already have their funding and are able to purchase great houses at competitive prices.

Jump in sales numbers at the latest property auctions (Source) 

The headline describes this situation nicely. Sellers are meeting the market, and buyers are able to secure properties at auction at what they see to be as an affordable price. Last week overall sales rate was 41%, the highest since February.

Mortgage lenders close up shop on Du Val properties (Source) 

Prospective buyers of Du Val’s finished properties are facing challenges from banks and other lenders with one buyer of a property in the Mountain Vista Estate development having been promised an 80% loan for his investment subject to valuation. Immediately the offer was lowered by the bank to 70% following Du Val being placed into receivership on August 2.

Once four Du Val Entities were placed into statutory management, the bank opted to pull funding altogether despite the buyer having the full deposit. The buyer is now talking to second-tier lenders, one of which has already declined. According to the Financial Services Federation, there is concern that the properties were no longer worth what the buyers paid for them due to the surrounding properties not being able to be completed.

From the team at Erskine Owen.