We pulled 9 gems from the torrent of property news this week to keep you abreast of the most important insights affecting investors. 9-15 November 2019
No capital gains in Auckland with median prices there lower than they were two years ago – REINZ
Housing prices are increasing at a slower rate than they were 12 months ago, according to the latest Capital Gains Report from the Real Estate Institute of New Zealand.
The biggest gains compared to last year were in Manawatu-Whanganui +23.0%, Southland +20.5% and Gisborne +15.6%. However, in the majority of regions the rate of growth had slowed compared to last year.
The market was particularly weak in Auckland with the region-wide median price in the three months to August lower than it was in the same three month period of both 2018 and 2017.
New Zealand net migration rate remains high
Despite the Government’s anti-immigrant electioneering, annual net migration in the year ended April 2019 was provisionally estimated at 55,700 compared with 49,600 in the previous year. That’s a 12.3% gain.
New Zealand’s net migration rate of 11.4 per 1,000 people is similar to Australia’s in 2017-18 but more than triple recent migration rates in the United States and United Kingdom.
The most common citizenships on arrival for non-New Zealand citizens were:
- China (17,300)
- India (13,200)
- Philippines (9,000)
- Australia (8,900)
Source: StatsNZ media release
Selling out to foreign tax farmers
The switch in land use from pastoral farming to forestry, much of it tax-advantaged and foreign-owned, is happening fast now. And Wellington is turning a wilful blind-eye to the implications.
The ANZ Truckometer data shows annual economic growth signalled in both the light and heavy truck indexes remains tepid, suggesting the expansion will be unimpressive for a while yet. But the indexes are far from ringing any recession alarm bells, says ANZ.
How To ‘Cellar’ Commercial Property Investments For Big Returns
Great wines get better in the cellar, but drinking them too early is a disappointing experience. Here’s how that applies to commercial property investments…
Lucia graduated from our Commercial Property Masterclass and set about looking at commercial property investments. We reviewed dozens of properties on her behalf before the right one came along.
Auckland ports move questionable
Given the flight of both money & people from troubles around the globe, we can expect New Zealand, and Auckland, to stay in demand.
At the same time, Queen City dominance has been questioned through the ports study, whose authors favour a shift to Marsden Point, out of Whangarei. I haven’t seen the final report yet, but want to go through the economic reasoning thoroughly because I have difficulty seeing how it would stack up.
Source: Bob Dey Property Newsletter
Rental price indexes: October 2019
The rental price indexes measure the changes in prices that households pay for housing rentals. In October 2019 compared with October 2018, the index for the stock measure of rental property prices increased 3.3 percent.
Low Interest Rates Here To Stay; Yields Go Crazy Low
On Wednesday a property investor asked others, “What plans do you have in place if interest rates suddenly go up to 7-10%?” Curiously, earlier that day…
The Reserve Bank of New Zealand (RBNZ) surprised the market with its decision to hold the official cash rate (OCR) at 1.0%. Most economists were expecting a cut to 0.75%.
The Reserve Bank’s monetary policy committee decided there had been no major change in the economic outlook since the 0.5% cut in August. But it said it was monitoring economic developments and further monetary stimulus (i.e. more cuts) would be added if needed. It said…
Maybe things are looking up
It was only a month or two ago that investors were fretting over an inverted yield curve, waning economic growth, and a looming recession in some parts of the world. Recently, we’ve seen a turnaround in sentiment that has pushed US shares to new record highs, while the talk of recession has subsided. So what’s changed?
Job creation in the US has been better than expected, the services sector in the world’s biggest economy is in good shape, while the US consumer remains strong. The manufacturing sector is still in the doldrums across the world, particularly for the automotive industry, but things appear to have stabilised. In China, a private manufacturing survey improved for the third consecutive time last month, with new orders rising at the quickest rate since January 2013.
Corporate earnings growth has surpassed expectations over the last few weeks. With 70% of US companies having now reported results for the September quarter, more than three quarters have posted higher earnings than expected. Trade tensions have also eased a little, with signs of a thawing in relations between President Trump and his Chinese counterparts.
The growing rivalry between the US and China won’t disappear anytime soon, although there is a strong incentive for both sides to make some progress over the coming months. The 2020 US election is now less than 12 months away, and Trump will want to solidify his position as a master negotiator.
Brexit has been kicked to touch until next year, and the chance of a messy no deal seems more difficult to envisage given the opposition to such an outcome.