Mortgage lending flows rise
27.9.23 Mortgage lending activity was higher in August than a year ago – the first annual rise for about two years. Part of this early-stage recovery relates to the loosening in the loan to value ratio rules from 1st June, Looking ahead, more growth in lending activity (and property sales volumes and house prices) seems likely, but it might still be fairly subdued by past standards, says CoreLogic NZ Chief Property Economist, Kelvin Davidson. The latest data from the Reserve Bank of New...
Property price falls in June
6.7.23 Property values across New Zealand weakened in June with the monthly rate of decline accelerating, down 1.2% compared to the 0.7% fall in May. CoreLogic’s House Price Index (HPI) shows June’s decline takes the national annual rate of change to -10.6%. The larger monthly decline was led by weaker figures in Auckland, down 3.0% for the month, however none of the other five main centres saw values shift by more than 0.6% either way. Christchurch had the largest increase over the month...
House consents at 2021 level
There were 45,159 new homes consented in the year ended May 2023, down 11% compared with the year ended May 2022, according to figures released by Stats NZ. “The latest annual number was down from the record high of 51,015 new homes consented in the year ended May 2022, but is at a similar level to the same period in 2021,” construction and property statistics manager Michael Heslop said. In the year ended May 2023, there were 18,734 stand-alone houses consented, down 24% compared with the...
Recession query for property market
16.6.23 The highest-profile economic data release this week was the country’s Q1 GDP figures, which confirmed what many suspected, we were in a recession at the start of the year, comments CoreLogic NZ Chief Property Economist Kelvin Davidson The Stats NZ data shows a minor 0.1% drop in GDP in the March quarter, which confirmed a technical recession after Q4’s fall of 0.7%. Education, transport, manufacturing, and retail trade were contributors to the latest drop, although other sectors such...
Kiwi Property selling Aurora Centre
9.6.23 Kiwi Property has agreed the terms for a conditional sale of the Aurora Centre in Wellington to an institutional investor for $142.8m (net). The transaction price represents a 13.5% discount to the asset’s March 2023 valuation and will deliver a property level return from inception of 10.5%. Further details, including the purchaser and settlement date will be provided once key conditions have been met. Kiwi Property Chief Executive Officer, Clive Mackenzie, said “Asset recycling is an...
Strong demand for Auckland space r
18.5.23 Sustained customer demand contributing to significant revenue and earnings growth is reported by Goodman (NZ) Ltd, the manager of Goodman Property Trust (GMT or Trust) for the year ended March 31, 2023. Customer demand for well-located warehouse and logistics space has ensured earnings targets were achieved, while new investment and capital management initiatives have made GMT a more sustainable and resilient business, says Goodman (NZ) chair Keith Smith, Mr Smith said, “While...
Housing market starts to stabilise
18.4.23 March was a somewhat perkier month for the New Zealand housing market, after a particularly weak February, comments Westpac. “With mortgage rates now approaching their peaks, and even falling for some terms, it’s not surprising that we’d see some signs of the market stabilising,” says senior economist Michael Gordon. “Even so, we think that the downward adjustment in prices has a little further to run. “Seasonally adjusted house sales rose 9% in March, though they remain close to the...
Construction material costs slowing
13.4.23 The latest Cordell Construction Cost Index (CCCI) shows construction costs rose 0.6% in the March quarter, well below the average quarterly increases of 2% recorded in 2021 and 2022. Meanwhile, the annual growth rate has dipped from a record high of 10.5%, to 8.5% in the three months to March. CoreLogic Chief Property Economist Kelvin Davidson said the worst of the construction materials crisis was over, with the rate of growth in costs to build a residential home at its lowest since...
Guidance overtakes Fletcher half-year
Convention Centre provision shadows FB half-year 13.3.23 (UPDATED) In an unusual development Fletcher Building this morning produced its expected results for the first half of FY23, which will be released on 15 February 2023, and updated earnings guidance for the full-year FY23 that has been trimmed by the softening in summer activity The half-year result remains subject to final approval by the Board and will be announced in full on Wednesday 15 February. The result includes the effects of...
ARE plans delisting from NZX/ASX
24.1.23 Following consultations with the major investors, Auckland real Estate Trust’s board will be presenting to unitholders a proposal to delist the Trust. Investors will shortly receive a meeting notice for a General Meeting, which will occur in early March, to present and seek investors approval for the proposed delisting. The ASX and NZX have both approved the delisting of the Trust in principle, with the key conditions being; • That investors who hold small unmarketable parcels...
Lift in multi-unit consents
13.1.23 There were 50,209 new homes consented in the year ended November 2022, up 3.2% compared with the year ended November 2021, according to Stats NZ. There were 28,364 multi-unit homes consented in the year ended November 2022, up 24% compared with the year ended November 2021. The number of stand-alone houses fell 15% to 21,845 over the same period. "Home consents remain at high levels mainly due to the continued rise in the number of multi-unit homes being consented," construction and...
Window for borrowers open for now
13.1.23 "Those borrowing to buy their first or next home have six weeks of likely interest rate stability so now could be a good time to pounce," says Tim Kearins, Owner of Century 21 New Zealand. His comments come ahead of the Reserve Bank - for the first time in 2023 - reviewing the Official Cash Rate on 22 February. In its last review in November, it hiked the OCR by 75 basis points, taking it to 4.25% - its highest level since 2008 when it reached 8.25%. It has forecasted a peak of 5.5%...
Office vacancy rates rises in Auckland
29.11.22 Auckland metro office space vacancy continued to trend upwards over the six months to September to reach 8.9% from 8.0% recorded in March, reported Colliers International. Prime grade vacancy stood at 7.1% in September while the secondary grade figure increased to 9.5% from the 8.8% reported in March. The figures showed the city fringe and metropolitan office markets to have remained resilient in the face of changes to workplace practices. The overall vacancy rate sits just 110 bps...
Kiwi Property rental income record
28.11.22 Kiwi Property has continued to expand both rental income and profitability in the six months ended 30 September 2022, despite the challenging macro-economic conditions. The results highlight the strong performance of the company’s property portfolio and the evolution into a creator of mixed-use communities at key metropolitan centres and transport hubs. Net rental income rose 6.3% to a record-high $100 million in the first half of FY23, driven by sustained revenue growth at Sylvia...
Property investors staying the course
23.11.22 Property values may be coming down but there are no indications of a wave of selling by property investors according to the latest survey report from Crockers Property Management and economist Tony Alexander. Each month they survey a selection of the many thousands of residential property investors on their databases with a view to gauging how things are changing over time across a wide range of indicators. . Key points of interest from this month’s survey include the following. There...
Housing values ease in October
3.11.22 The housing market downturn slightly eased in October, with values falling by -1.3% over the month after tracking down -1.5% in September. However any shoots of optimism are likely to be cut short by future increases to the Official Cash Rate (OCR), starting with the next Monetary Policy Statement from the RBNZ on 23 November, says CoreLogic NZ Head of Research Nick Goodall. He said the biggest constraint on the housing market right now is affordability, with potential buyers stretched...
Valuation drop for Kiwi Property
10.10.22 Draft valuations for the six months ended 30 September 2022 will see Kiwi Property posting an expected 5.8% decrease in the fair value of its property portfolio. The company’s mixed-use, office, retail and other properties are set to be worth $3.4 billion at the close of the period, down $212.5m from 31.3.22. Kiwi Property CEO Clive Mackenzie said: “The current high inflation, high interest rate environment has led to capitalisation rate softening across the property sector globally,...
Beca signs up for Precinct project
Precinct Properties New Zealand has confirmed that Beca will be relocating to the Wynyard Quarter Innovation Precinct on a 12-year lease term over 14,049m². The leasing to Beca will require Precinct to commit to 117 Pakenham, the last building of the Stage and the Wynyard Quarter Innovation Precinct. Scott Pritchard, Precinct CEO, said “Securing an occupier like Beca so early in the stage of the development highlights the value that businesses continue to place on high-quality,...
Consents tilt towards townhouses
30.9.22 The number of dwelling consents fell slightly in August, dropping 1.6% to a level of 4,164. That result was close to Westpac’s forecast for a broadly flat result. Annual consent issuance remains very elevated with just over 50,600 new dwellings consented over the past year. Satish Ranchhod, senior economist at Westpac comments, “Looking into the details of this month’s result, we’re continuing to see a rotation away from standalone houses and towards medium density developments (like...
House prices drop in August
13.9.22 The rot in the housing market continued in August. House prices fell by another 1.4%, notes Westpac. “That is the ninth monthly fall in a row,” says senior economist Satish Ranchhod. “House prices have now fallen 9% from their peaks in November 2021.” The drop in prices continues to be heavily centred on Wellington in Auckland. Prices in the Capital were down 3.6% in August alone and have now fallen by a total of 17%. Similarly, prices in Auckland have dropped 14% since November 2021....
Kiwi Property to sell Northlands
7.9.22 As part of its ongoing strategy to focus on the development of mixed-use town centres, Kiwi Property has secured a conditional agreement to sell Northlands Shopping Centre and 43 Langdons Road (Northlands) in Christchurch. The acquirer is MP Holdings 5 Ltd, an entity managed by Mackersy Property (Mackersy), for $160m. The final sale price represents a property level internal rate of return of 10.9% since inception. The purchaser will retain $9m to complete seismic works (noting that...
Retail vacancy rates stabilising
2.9.22 Despite significant headwinds, there are reasons for optimism within the country’s largest CBD retail markets, according to Colliers International in a new report on the retail property sector. Their research cites a stabilisation in vacancy rates, the return of key support fundamentals, following the reopening of the border, and the adaptability of building owners and retailers. Strip retail vacancy within Auckland’s CBD stood at 13.8% in June 2022 according to the results of the...
NZ housing downturn deepens -CoreLogic
1.9.22 New Zealand’s housing market downturn has accelerated in the past month with the rate of falls in property values doubling month-on-month in August. CoreLogic’s House Price Index (HPI), which is the most robust measure of property value change in the market, shows the national measure of property values fell a further -1.8% in August, twice the rate of that seen in July (-0.9%). CoreLogic NZ Head of Research, Nick Goodall said restricted, more expensive credit continued to impact...
Winton Land exceeds forecasts
24.8.22 Winton Land’s inaugural full June year result as an NZX listed company is slightly ahead of its PFI forecasts at $159.5 million in revenue and net profit after tax of $31.7 million. Winton’s gross profit was $72.4m, 2.7% ahead of the company’s PFI and 26.1% ahead of FY21. During FY22, the timing of development and construction programmes resulted in Winton settling 18.8% fewer units than FY21, which saw FY22 revenue 9.9% lower than in FY21, while cost of sales were 27.1% down on FY21....
House prices in descent
The latest REINZ report revealed a further cooling in the housing market. House sales (July month): 4,822* Monthly % change: -3.1% (Prev month -11.2%) Annual % change: -36.7% (Prev month -36.1% House Price index* Monthly % change: -1.7% (Prev month -1.0%) Annual % change: -2.9% (Prev month +0.7%) The REINZ house price index fell another 1.7% over the month and prices are now down 3% compared to the same month last year. “We have not seen year-on-year house price falls since 2011, when the...
CDL notes change in trading climate
10.8.22 NZX-listed property development and investment company CDL Investments New Zealand (NZX:CDI) reported an operating profit after tax of $22.90 million (2021: $20.75 million) in the June six months. This is on revenue of $47.81 million (2021: $61.27 million). “The last six months have seen a dramatic change in the trading environment”, said CDI’s chair Colin Sim. “The irony is that those changes have been caused by external factors totally outside of our control and have nothing to do...
Building activity rising
The volume of building activity in New Zealand rose 3.2% in the March 2022 quarter, compared with the December 2021 quarter, according to Stats NZ. Residential building activity rose 3.5% in the March 2022 quarter, while non-residential building activity rose 2.7% "Residential building activity has risen over the past two years, except in quarters impacted by alert level 4 lockdowns. “This reflects the large number of consented new homes in the construction pipeline,"...
SBS Bank has solid year
SBS Bank has delivered another strong result for the 2021-2022 financial year, finding innovative ways to support members through the challenges of the Covid-19 pandemic. The SBS Group, which includes subsidiaries Finance Now, FANZ and SBS Insurance (Southsure), reported an operating surplus of $61.3 million for the year ending March 2022, up from $55.2 million the previous year. The bank’s lending rose $365 million to $4.4 billion during the period and SBS Bank members’ equity increased $74...
Investore has strong year in large format
Large format retail has boosted Investore's valuation 18.5.22 The market for large format retail properties has remained strong during the last year and this has benefited Investore in the year FY22. Evidencing this demand, Investore’s portfolio is independently valued at $1.2 billion as at 31.3.22, a net valuation increase of $91.0 million or 8.2% over the 12 months from 31.3.,21. This increase has been driven primarily by capitalisation rate compression which evidences the continued...
‘Debt vs Equity split opens up
Corelogic has highlighted a ‘debt vs equity’ split in the property market, with mortgaged investors and first home buyers seeing low/falling shares of property purchases, but cash investors and movers having a rising presence. In a Market Pulse column CoreLogic’s Chief Property Economist, Kelvin Davidson, says, “To be fair, these changes in market share need to be viewed in the context of lower overall numbers of transactions. “But with loan to value ratio rules still pretty tight and mortgage...
