6200 Houses, Not Enough Buyers? Inside NZ’s Latest Property Stats

Topic #1:  NZ Herald 1st of April - Green shoots of optimism as number of Kiwis behind on payments falls

Topic #2: The Mortgage Mag 1st of April - RBNZ does a u-turn on bank capital requirements

Topic #3: RNZ 2nd of April - Problems ahead unless government changes retirement policy - report

Topic #4: NZ Herald 2nd of April -Barfoot & Thompson unsold houses hit record: 6200 places available

Topic #5: Oneroof 30th of March - ‘Scary’ trend: Homeowners losing thousands of dollars with short-term mortgage fixes

Chapters

• 1:00 Topic #1: NZ Herald 1st of April - Green shoots of optimism as number of Kiwis behind on payments falls n
• 2:44 Topic #2: The Mortgage Mag 1st of April - RBNZ does a u-turn on bank capital requirements
• 6:37 Topic #3: RNZ 2nd of April - Problems ahead unless government changes retirement policy - report
• 9:20 Topic #4: NZ Herald 2nd of April -Barfoot & Thompson unsold houses hit record: 6200 places available
• 12:24 Topic #5: Oneroof 30th of March - ‘Scary’ trend: Homeowners losing thousands of dollars with short-term mortgage fixes

Transcript

 Hi everyone. I'm Debbie Roberts, owner and financial adviser at Property Apprentice. Join us today for the weekend review where I talk about current events for the everyday investor and home buyer. Our topics for this week,   📍 topic number one, from the New Zealand Herald on the 1st of April. Green shoots of optimism as number of Kiwis behind on payments falls.

 Topic number two from the Mortgage Mag on the   📍 1st of April, RBNZ does a U-turn on bank capital requirements.  Topic number three,   📍 from RNZ on the 2nd of April. Problems ahead unless government changes retirement policy report  topic number four, from the New Zealand Herald on the   📍 2nd of April, Barfoot and Thompson Unsold Houses hit a record.

6,200 places available.  And topic number five for this weekend, review from   📍 Oneroof on the 30th of March. Scary trend, homeowners losing thousands of dollars with short-term mortgage fixes.   

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So first up for this weekend, review from the New Zealand Herald on the 1st of April. Green shoots of optimism is number of Kiwis behind on payments falls.

New data from Centrix indicates a slight improvement in New Zealand's credit landscape with mortgage and consumer arrears declining in February. The number of Kiwis behind on payments dropped by 11,000 From January bringing, bringing the total to 480,000. This marks a 1% year on year, decrease the second consecutive month of decline, suggesting early signs of credit recovery.

Mortgage arrears also improved with 400 fewer home loans passed due totaling 23,000 or 1.55% of active home loans. Centrix reported that the annual growth rate of arrears has slowed indicating stabilization. While new mortgage lending has risen by 22% compared to the previous year. Although the rate of increase has slowed, financial hardship cases are still 16% higher than this time last year.

The data suggests that more individuals are proactively addressing financial difficulties with lenders. In contrast to the improvement in consumer credit business, liquidations have surged increasing by 37% year on year. So still not out of the rough. As far as the economy's concerned. Residential builders, property operators, and food service businesses were among the most affected.

Centrix noted emerging signs of recovery, particularly for growers, dairy and livestock farmers who are benefiting from stronger export returns.  

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 Topic number two from the Mortgage Mag on the 1st of April, RBNZ does a U-turn on bank capital requirements. He's hoping that wasn't an April Fools joke. Well, I don't think it was. The Reserve Bank of New Zealand

the RBNZ has agreed to review its bank capital requirements following pressure from the Commerce Commission, banks, and submissions to Parliament's banking inquiry. Lowering capital requirements could lead to reduced interest rates and improved access to funding for borrowers.  RBNZ Chair Neil Quigley.

Informed Parliament's Finance and Expenditure Committee, the FEC that the board has approved an evidence-based review framework involving international experts and comparisons with other countries, capital regimes. He emphasized that the banking system remains profitable and not capital constrained, meaning that lending could increase if demand rises.

Quigley denied any connection between this decision and the sudden resignation of former Governor Adrian, Orr in early March stating that discussions on a review had been ongoing.  He also noted a shift in international thinking, particularly in Australia towards more flexible capital requirements. Acting

Governor Christian Hawkesby acknowledged criticism of RBNZ's capital rules, and confirmed that adjustments to the standardized risk weights for smaller banks are already under consideration. Currently, the big four Australian owned banks use internally derived risk weightings, giving them a cost advantage over smaller competitors.



Finance minister Nicola Willis acknowledged concerns about overly conservative capital rules and welcomed a review, noting that strict requirements could hinder competition, raise costs, and impede growth. Previously, all banks were required to maintain at least 8.5% in equity. These regulations delayed by the COVID-19 pandemic are being phased in through to June 30th, 2028.

Westpac recently estimated the new rules would increase costs by 50 basis points higher than RBNZ's projection of 20 to 40 basis points, or $1.2 billion to $2.3 billion. However, some submissions suggest that the financial impact may be even greater. Quigley acknowledged that while some submitted provided analysis to support their claims, others relied on unverified assertions.

So one of the key things about this proposal was that New Zealand banks were going to be required to have enough funds aside for a one in 200 year event, whereas around the world, the. The most common standard is a one in 100 event, one in 100 year event.  So yeah, I think that we're being a bit overly conservative, for our banks here in New Zealand.

So it's good to see some common sense coming back into play there.  Especially if it's gonna mean cheaper lending for people, easier access to it. So   📍  📍 if you'd like to learn more about investing in property or financial information, please feel free to join me at one of our free events called How to Succeed With Property Investment.

I'll discuss strategies for successful investing from my perspective as a financial advisor and experienced property investor. And these events are all available live online. Check out www.propertyapprentice.co.Nz for upcoming dates and register today. We don't sell property, so it's all about increasing your knowledge to reduce your risk.

  📍  📍 If you've already been to one of our free events and you'd like, like to find out more about how we can help you to reach your financial goals, go ahead and book a no obligation phone call or meeting with my husband Paul Roberts via the website. That's www.propertyapprentice.co.Nz.   

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Topic number three for this weekend.

Review from RNZ on the 2nd of April. Problems ahead unless government changes retirement policy. According to a report, New Zealand faces economic challenges if the government doesn't adjust its retirement income policies. According to a report by the Institute of Economic Research commissioned by the Retirement Commission. 

The study projects that by 2050, the number of people under the age of 40 will remain stable. While those over the age of 40 will grow by a third, and the population of people aged over 65 will increase by 50%.  Report author Adrian Katz attributed this demographic shift to declining birth rates and rising life expectancy,  despite expectations that more older workers will remain employed

past 65, the overall workforces sector to shrink. He noted that migration could help sustain population growth and labor force numbers.  But New Zealand's ability to attract skilled workers remains uncertain due to global aging trends. Kat's caution that a diminishing workforce will result in increased government spending on pensions and healthcare, placing a heavier tax burden on younger generations. With fewer taxpayers,

the government will have to make difficult decisions, including raising taxes by five to 10% per worker, cutting other public services, or allowing public debt to exceed a hundred percent of GDP.  Katz suggested that boosting long-term savings and investment in capital markets could improve productivity, reduce reliance on New Zealand superannuation and strengthen KiwiSaver.

Alternatively, maintaining the current retirement system while increasing contributions to the New Zealand Super Fund could help cover future pension costs. Regardless of the approach, Katz emphasized the need for a gradual transition as retirement policy changes influence lifetime consumption and savings decisions.

Shifting from a pay as you go model to a savings based system would place a dual financial burden on the working age population requiring them to support current retirees while also funding their own future retirement.  My advice would be, you know, you should never rely a hundred percent on the government to help fund your retirement.

Always have different plans in place, you know, get good KiwiSaver advice and good investment advice as well, so that you can manage your own retirement without putting yourself under undue pressure financially in the process.  

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 Number four, from the New Zealand Herald on the 2nd of April, Barfoot and Thompson Unsold Houses hit a record

6,200 places available. Auckland's largest real estate agency, Barfoot and Thompson reported a surge in property sales last month, but the number of unsold homes has reached an all time high. The agency's inventory climbed from 5,300 in January to 5,900 in February, reaching 6,200 in March.  Managing director Peter Thompson noted that the market responded strongly to improve buying conditions.

With March, seeing the highest number of sales in over three years. The agency sold 1,213 properties. That's the most since July, 2021. Despite this unsold stock remains elevated with 2,103 new listings entering the market from both new builds and existing homes. Sales activity was strong across all price  segments.

The agency's average residential sale price rose to $1.14 million in March.  The median sale price also increased to $970,000. Westpac's Chief economist Kelly Eckhold indicated expectations that the Reserve Bank may lower the official cash rate to 3.5% in April, though further cuts beyond May are less certain.

Homes in Auckland took a median of 55 days to sell. That's longer than the 10-year February average of 47 days. Nationally, sales outside Auckland increased 5.6% year on year with notable growth on the West Coast and in Taranaki. Inventory levels across New Zealand Rose, 13.6% annually to 35,712. A N Z's latest property focus report described the housing market as gradually warming with prices continuing to rise and seasonally adjusted sales volumes improving.

However, an influx of new listings may limit price growth in the short-term. While early signs of labor market stabilization could support future momentum, cautious consumer sentiment may keep growth subdued in the coming months.  Like I've been saying,  I sound a little bit like a broken record at the moment.

This is a buyer's market. There's so many properties for sale at the moment. You've got an abundance of choice. And although the number of sales has started to increase, which means that there are more buyers coming into the market, we're still, we are a long way off being in a booming property market. 

That means that there's really good opportunities there for you to get a good deal in the current property market and then reap the rewards of the increasing values as prices do start to pick up moving forward. So, you know, if you're not sure about how to get your foot onto the property ladder in New Zealand, or how to climb up the property ladder, come along to one of our free events and I'll give you some free tips to get you started in the right direction. 

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Topic number five, from one roof on the 30th of March. A scary trend. Homeowners losing thousands of dollars with short-term mortgage fixes. Homeowners opting for floating or short-term mortgage rates risk losing money, warns Andrew Chambers, CEO of tele home loans. He advises considering two or three year fixed rates, currently around 4.99%.

Recent data shows that in January, 90% of borrowers who refinanced chose short term rates, despite banks offering sub 5% longer term options. Chambers expressed concern over this trend emphasizing that floating rates can be significantly coster than fixing for one year. He noted that two months on a floating rate could equate to the cost of a one year fixed term.

While many borrowers are hoping for additional rate cuts, chambers advises against making this assumption due to the unpredictable nature. Here's the cat of the global economy. Cat's giving her input into today's  podcast as well. He warns that banks  may prioritize maintaining their profit margins, which could lead to uncertainty surrounding future rate reductions. 

Chambers also points out that factors such as the Strengthening New Zealand dollar could contribute to inflationary pressures potentially causing rates to rise. Instead of fall . Chambers highlighted that current two and three year fixed rates are particularly competitive. He pointed out that floating rates were at 6.89% while six month rates stood at 5.79%, significantly higher than the 4.99% available for longer terms.

This difference translates to roughly $8,000 more per year on a floating rate compared to a two year fixed option. Encouraging a long-term perspective, chambers advised against attempting to time the market, noting that borrowers who consistently choose one year fixed rates over the lifespan of their loan often see similar financial outcomes to those trying to optimize interest rate movements.

The lending environment is shifting with banks lowering their serviceability assessment rates from 9% at peak levels to about seven to 7.5% at current moment. This change increases borrowing capacity, benefiting first time buyers, and those looking to upgrade properties.  Core Logic's chief economist Kelvin Davidson, noted that the emergence of rate wars could soon influence borrowing trends with 71% of existing mortgages set for repricing and another 12% on floating rates.

Davidson predicts a shift back towards longer term fixed rates as lenders offer more competitive deals.  My recommendation would be to talk to your mortgage advisor because it could be a really good time to look at splitting your mortgage. So you might have some of it on a floating rate or a short term interest rate.

And the hope that interest rates do continue to come down, especially with expectations that they will continue to come down over the next couple of announcements from the Reserve Bank with the OCR,  the longer term interest rates are starting to look. Pretty attractive. So if you split part of your mortgage on short term or floating, and then have some more fixed for a bit longer term, that can reduce your risk of, you know, missing the market.   📍  📍 

With interest rates fluctuating and global uncertainty impacting borrowing costs, making the right mortgage decision is more crucial than ever. So join me at one of our free events called How to Succeed With Property Investing, and these events are available online so it doesn't matter where you live.

You can join me free online for some valuable insights and strategy tips, and these are all tailored to today's current market conditions.  Whether you're an experienced property investor or just getting started, this free session will help equip you with the key tools and insights to make confident, informed decisions.

Don't miss out. Register today and take the next step towards achieving your financial success. In our free events, I'll also tell you more about how we help our clients to achieve their investing goals. So if you are interested in finding out more about what we do. Visit www.propertyapprentice.co.Nz today and sign up for one of those free events   📍  📍 if you've already been to one and you wanna know more about how we can help you on your journey book a no obligation phone call or meeting with my husband Paul Roberts through our website.

And that's www.propertyapprentice.co.Nz.  Thanks for listening.