Oi! Oi! Oi! Strewth mate ! The kiwi population just keeps getting bigger !

Our net annual gain in migrants is increasing pace with an annual gain of 58,300 migrants.

This shows an increasing trend as more people arrive in New Zealand than depart. This is a far cry from the old 1970,s political slogan “Would the last person to leave New Zealand please turn out the lights”

When the month of June figures are broken down we see some interesting trends

Aussie diggerThe largest single category of 24,100 people, were from Australia with two thirds of those being New Zealanders returning. When you combine that with the fact that 64% of total migrants were between 15 and 35 years of age we can see that it’s our young returning. The great Aussie dream seems to be over. It’s the third month in a row where there have been more people coming into the country from Australia than are leaving. We haven’t seen this happen for 20 years. However before we read too much into that, it is a paper thin net gain of only 100 people. Let’s face it we still have 24,000 people leaving the country for Australia so the 100 net gain looks pretty slim.

The next biggest group are from the United Kingdom at 13,500 with a high percentage of these being Kiwis returning to our shores. . Very close behind them are the Indians with 13,300 and the Chinese with 10,300. Half of the Chinese migrants have student visas so are here to study.

Most of the Kiwi’s returning will be bringing some money back with them and will want to get onto the property ladder. These returning Kiwis are less likely to gravitate to Auckland as they know more about the rest of the country , so may help move property demand to the provinces where the returnees can align themselves with proper winning  Rugby teams .

(Researched from Statistic NZ June 2015 press release)

July update… The good news just keeps on coming!

 

money treeJust when I thought I was done, some new bit of news comes along that gets me excited again. Excited because I own property and like most of you, property is my key asset. If it’s worth more money I’m happy as it increases my wealth. I know it’s supposed to be bad for the economy but seriously I question the logic behind that. 

So for the great news… Core logic have released their June figures. Growth in Auckland year on year has now hit 17%. Ya! Boo! Sucks not to be an Aucklander. Tauranga has now hit 7.3% up on last month’s 6.75%. But the really exciting news is good old Whangarei has leap frogged Hamilton in growth hitting 4.6% year on year. Last month we had 3.9%. So just as predicted the growth rate is accelerating. What I did not see was Whangarei’s’ growth rate passing Hamilton’s. Whangarei now has the third fastest residential housing growth rate in the North Island. 

The most likely cause is Aucklanders! They are to blame for everything good and bad that happens in New Zealand. Earlier in the year we discussed the ripple effect as Aucklanders took advantage of the record prices in their city and moved out of Auckland and purchased in the provinces. It made sense that Tauranga would grow faster than Hamilton as it is a smaller version of Auckland with its harbour location. However the same logic applies to Whangarei. It has the harbour location and therefore logically should appeal to Aucklanders, more than the complete change in geography that Hamilton provides. And although the Aucklanders leave the big city for a quieter provincial life they do bring some of the city with them , which is great for the cafes and businesses in town that benefit from the different spending patterns of city folk! Not so good for the tractor salesmen and fertilizer merchants but good for the boat shops and real estate agents.
The long and the short of it is that the property growth rate in Whangarei is going quicker than I had anticipated and I now think my earlier prediction that property growth would hit 7-8% by Christmas is conservative and a figure of 9-10 % is more likely. 

Tip! If you are thinking of buying, factor this in... That property you are looking at for say $400,000 now is likely to be $450,000 in December. So rather than risking losing the property by beating the owners up with tough negotiating, you are better to pay their price, secure the property , and rely on capital gains to get you that bargain. Come Christmas the price you paid will look cheap.

Tell us, are you moving on the property market? Buying, selling or both? 

Are property price rises bad for the economy? 

price risesI met John key for a few brief moments after a conference. He really didn’t have time to speak to me but as we walked down a corridor flanked by his entourage I did get to ask him a question. I asked, “If small business is the biggest employer in New Zealand, and the banks want housing collateral to lend to small business, isn’t property growth a good thing as it funds small business?”

For me this comes from owning a small business. When I wanted money to expand or even to cover a cash shortfall the only thing the banks were interested in was how much real estate I owned and what my equity in it was. That was the only security that counted for a business loan.

They wanted to know how the business was going, but the business was worth nothing in terms of a security. The only security they valued was the equity in my private house or houses. Therefore as far as I was concerned my residential housing funded my business. The more my house was worth the more secure my business was.

I’m still not sure if John Key was really answering the question or just trying to get rid of a pesky business owner in his rush to get to his next appointment… The brief answer he gave suggested he agreed. “Yes! I get that, residential housing funds small business.”

I have always felt comforted by his reply as it suggests there is agreement in top circles that the two are linked. A healthy rising real estate market bodes well for small business as it makes small business more secure. I have heard figures that around 90% of jobs are in small business. I always wonder if the softly softly approach the government seems to take to residential investment isn’t tied in with this concept…

What are your thoughts?

Whangarei’s population growth is booming and an increasing housing shortage is threatening…

whangarei

If you don’t want to wade through the arguments below, what I am predicting is, as the Whangarei District is discovered by Aucklanders, there is going to increasing pressure on our prices from a shortage of properties. New housing is not keeping up with growing population demand and Auckland’s housing shortage is about to move up here.

The last census figures done in 2013 tell us that the Whangarei District has a population of 74,463 (Whangarei City 54,400). We are ranked 13th in size of all the districts in New Zealand and equate to 1.8% of the total New Zealand population. Basically we are a very small part of the country’s population.

However the census always undercounts the actual population because people are either overseas or don’t fill in a census. The tested figure for this undercount is 8.7%. So our actual real population in 2013 is around 83,000. The W.D.C. estimates that our population rises by around 1.0 % per annum. (830 more people per year). Therefore we should currently have an existing district population of around 84,500 people as of 2015

However a senior health official, who tracks the district population very closely, has provided information that shows the district population has grown by around 1000 persons in the last three months. (April to June this year.) That’s over a years’ worth of growth in three months. This indicates faster growth for the district than expected. From the sales evidence we would confirm this growth. A large part of this growth is retirement aged people.

The 2013 census also tells us that we have 28,149 occupied dwellings. The WDC have this figure at 30,204 occupied dwellings. There has been a lot of building activity since then so let’s take a guess (supported by WDC building consent figures) that the current level of occupied dwellings is around 31,000. Statistics NZ say the average number of people in each occupied Whangarei household is 2.5 people per household. WDC has a higher figure of 2.77 as they have factored in the empty holiday homes. 84,500 divided by 2.77 people is 30,505 dwellings required and 84,500 divided by 2.5 people per household is 33,800 dwelling required. Based on these two calculations, we are either currently keeping up with demand or we could be around 2,500 dwellings short. If we support the WDC figures (and I do) then we are currently sitting about right. However if we see the kind of growth rate that is being suggested by the Hospital research, then we are facing a looming housing shortage starting about now. We need 361 new houses per 1000 new people and residential resource consents for new homes are running at about 350 per year (WDC resource consent monitoring 2014). Inadvertently these Aucklanders may be driving their housing shortage north to our sunny shores . Its great news for builders. Of concern the same report says there was a large drop off in resource consents for subdivisions so it looks like sections are going to be harder to find as they are not many on the drawing board.

Talking to the rental team they are not experiencing a shortfall of houses. They are in the midst of the traditional winter slow down . This is cyclical and involves people moving out of drafty, uninsulated homes into warmer properties. It happens every year over winter. But the indicators are we heading into a shortfall and this should show in the rental market in about 4-6 months.

Harcourts Just Rentals… 

Are just about to secure a luxury $1,000,000 plus house coming up for rent in Mangatapere for $650 per week. Great if you work at the hospital and want that executive lifestyle. Call Mel on 021347355 for details!

 

The Cheapest Rates in the country! 

The new district council plan has an interesting graph on it’s page 24. It’s a breakdown of how our rates compare to similar councils across New Zealand. The table shows a sample of Districts and city councils with a population of over 30,000. We come out very well with the only District to have average rates of under $1,500. The next nearest is Christchurch and Napier at around $1,700. The national average is just over $2,000 and the worst two are our cousin in the Far North and the Western Bay of Plenty with an average of over $3,000 per annum. I think the council have been a bit selective in their figures, as when I tried to find the original research I came across an article from the Timaru Herald claiming they had the cheapest rates in the country.

But never the less our rates are a credit to past councils going back to Stan Semmenoff and the Progress team who first introduced the concept of Councils actually living within their means . A rare concept in these days of Super Cities. The effect this group had flows through to today’s low rates compared to other councils. I do hope the current councillors keep this in mind.

Step back in time with this beautiful home…

305 Whananaki North Road
305 Whananaki North Road

Step Back in Time $659,000

Its hard to describe a property in mere words that pushes so many emotional buttons. This one has the WOW FACTOR ! in capital letters. From the secret forested sanctuary of the park like grounds to the historical significance of the dwelling.

Originally built as the school house in 1980 the central living room surrounds you in a sense of space that only 14 foot high ceilings can do. Soft pastel shades greet the senses while you sit in comfort with gas under floor heating while enjoying the visual soft warmth that only a fire can create.

Step back in time as you enjoy the timber country kitchen, or the polished timber floors. All living areas plus some bedrooms open through covered decks to embrace the country gardens with their pergolas and roses. Paved courtyards and brightly coloured autumnal trees invite you outside to soak in the quiet country surrounds .

Just have a look