Finance and Bank Rates.
Things have been changing quite quickly in finance circles recently. What the banks have been asked to abide by now is:
- 60% max LVR(Loan to Value Ratio) for investment properties.
- 80% for owner occupied properties (10% of the new lending can be for those with less than a 20% deposit).
- ANZ and SBS max LVR for owner occupied properties is 85%.
There are other aspects to these that Alan Billington of Loan Market can explain for you – 021 800 105 – or you can contact your financial person.
| How some others see the market.
An investor – noticed an attitude change from Banks when loan renewals are being discussed. Investors now looking for longer terms and to maintain the cash flow.
A property valuer – working with some 1st Home buyers and new builds.
A trader – money becoming tighter and feels the market is likely to come back 5%.
A developer – recently spent $12M on land purchase and sees sales as being yield governed, moving into building bigger homes/higher value/higher specs and in better areas.
The “Unitary Plan”
There is plenty of information out now on the Auckland Council web site. For some people it might mean that you are now in an area where you can subdivide to a smaller land size, and so fit more homes on it. The homes will be smaller and so cost less, and you may therefore be doing your bit to provide “More Affordable” housing.
Residential Land Withholding Tax
When does the RLWT apply? If these criteria apply then RLWT will also apply ( unless there is an exemption).
How is it calculated? The amount of RLWT will be the lesser of (a) RLWT rate(33% individuals,28% companies) x vendors net gain on sale (b) 10% of purchase price or (c) Purchase price – security discharge amount (for mortgages etc) – outstanding rates.
It is going to change – but it will do it slowly. There are still not enough products to meet demand, and the additional supplies are not going to happen over-night, the land is not going to become available over-night, and the infrastructure for new areas is not going to happen over-night.
What could happen more quickly is that owners who have properties that are big enough to subdivide could start building extra properties on their land. The infrastructure for these places is already there so enables homes to appear more quickly.
If you are thinking of selling, you should still be able to get a reasonable price while this market exists, and it may last for 6 months to a year.
But there are other introduced factors to quell the market flames that will start having their effect. The LVR rates, the increase of deposits required by different purchasers, the Bright Line test, Banks becoming less generous…will all cause prices to change, adjust, and start dropping.
Building Code Updates
The Government is proposing changes to 32 Building Code compliance documents to ensure standards keep pace with industry developments, best practice and new research, Building and Housing Minister Dr Nick Smith says.
The proposals involve adding two new Acceptable Solutions around waterproofing, and amending 32 existing Acceptable Solutions and Verification Methods. These include changes to the requirements for glass barriers, safety glass, foil insulation and slip resistance of walking surfaces.
Tenancy Tribunal: Practice Note issued re Tenants’ Liability for Damage
The Tenancy Tribunal has issued a Practice Note in relation to ‘Tenants’ Liability for Damage’ in response to the recent Osaki decision in the Court of Appeal. The Practice Note takes effect from 1 August 2016 and relates to applications where the landlord claims damages compensation for damage done to the premises that is more than ‘fair wear and tear.’
Salespeople Must Recognise ‘Issues’ with Titles
As Licensee’s we must make sure that we are aware of, and have some understanding of, the Certificate of Title for properties. This includes seeking clarification about significant issues with the title relating to several things like easements, rights, covenants, restrictions and right of ways. This is so that we are able to inform potential purchasers of the significant issues with a title, or draw their attention to items, so that they are able to seek professional advice if they require it.
This is just one of the very many things licensees need to know, be aware of, understand and inform people – both buyers and sellers – about.