We pulled 5 gems from the torrent of property news this week to keep you abreast of the most important insights affecting investors. 25-31 January 2020
In property news this week…
- First-Home Buyers Buying Like Crazy
- Phil Goff Wants Beneficiaries to Occupy Your Vacant Home
- We’d Be Buggered Without Farmers
- Investors Buy NZ Govt Bonds at 1.11% in Latest Tender
- Foreigners Buying Fewer Houses
First-Home Buyers Buying Like Crazy
First-home buyers are having a field day. New bank lending in 2019 to first-home buyers was up +15% on 2018, and the year before was up +24%.
By comparison, new lending to existing home owners moving houses was up a modest +8% in both 2018 and 2019.
And new lending to investors was down -7% in 2019 and only up a mere +2% in 2018.
It’s great to see first-home buyers finally getting into the housing market. It just goes to show how out of line with reality the doom & gloom headlines in mainstream media are.
If anyone tries to tell you that greedy investors are buying up all the cheap houses and destroying first-home buyers dreams of home ownership, just throw this little factoid at them!
Phil Goff Wants Beneficiaries to Occupy Your Vacant Home
Phil Goff is diverting attention away from the Government’s Kiwibuild failure, and play to the people most likely to vote for him, by proposing that empty houses in Auckland should be used for beneficiaries.
In a political masterstroke, Auckland’s empty houses have been cleverly labelled as “ghost houses” – deliberately left vacant long-term by investors who want capital gains without having to manage tenants.
But a large number of empty houses are actually holiday homes and properties that are temporarily vacant.
The council and NGOs say vacant houses could potentially be used for the Housing First programme, which finds shelter for homeless people. Would you want them in your house?
This is a Government social housing issue that should have nothing to do with private property. It is nothing more than a blatant attack on private property rights.
How about fixing Kiwibuild and building more houses instead?
Monte Cecilia Housing Trust CEO Bernie Smith says there is a desperate need for more social housing. “We have now got working-class families who are not only becoming homeless but are forced into poverty because rents are rising,” he said. “Under this government we have gone from a housing crisis to a housing disaster.”
A large contributor to this situation is the Government’s war on landlords. How about fixing the tenancy laws so investment property owners are not so fearful of the consequences of having tenants in their houses? It’s great to protect tenants, but who protects landlords?
We’d Be Buggered Without Farmers
Slightly off topic, but praise be to our farmers…
December trade data was released yesterday showing 2019 goods exports up 4.7% on 2018, while imports were only up 1.3%. Exports are clearly doing well.
On the trade deficit front, 2019 goods exports totalled $59.9 billion and goods imports $64.2 billion. That means the annual trade balance was a deficit of -$4.3 billion.
The great news is that in December 2019 the expected $100 million surplus came in at a surplus of $547 million thanks to exports up 5% and imports down 5% on December 2018.
The leading contributors were exports of milk powder, butter, and cheese, up $228 million (13%) to $2.0 billion, and meat, up $146 million (23%) to $791 million.
This gives credence to farming lobby claims that urban prosperity is underpinned by rural graft. Let’s thank farmers for all their hard work in keeping the country solvent.
Investors Buy NZ Govt Bonds at 1.11% in Latest Tender
The New Zealand Debt Management Office has announced the results of NZ Government Bond tender #710, which closed at 2:00 PM yesterday.
$250 million was being offered, and there were applications for 3.2 times that amount. Successful bidders got a yield of 1.11%, up slightly from 1.07% at the last tender in November. It certainly makes commercial yields look very attractive!
Foreigners Buying Fewer Houses
Stats NZ data out today shows that home transfers to foreigners (people without NZ citizenship or a resident visa) are still trending down.
The percentage of all home transfers going to foreigners is…
- December 2019 quarter: 0.4% (147 home transfers)
- September 2019 quarter: 0.5% (186 home transfers)
- December 2018 quarter: 2.3% (885 home transfers)
Another 8.2% of home transfers in the December 2019 quarter were to NZ-resident-visa holders (migrants who are not yet NZ citizens but can live and work in New Zealand for as long as they like).