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Kiwis looking to property again

A second survey out this week confirms the view that people are interested in buying property again and expect house prices to fall further.

Wednesday, December 17th 2008, 12:00AM

by The Landlord

The first survey, conducted by Landlords.co.nz and Mike Pero Mortgages, asked property investors about their buying intentions.

“The survey results showed that 20.5% of property investors expected to buy more property before March 31 next year and another 28.6% expected to buy later in 2009,” Mike Pero chief executive Shaun Riley says.

He also said that 59% of respondents expected house prices to fall further in the next six months.

ASB Bank produced a survey today which supports these findings. Its one shows that a net 24% of respondents believe now is a good time to buy.

It also shows that 44% expect house prices to decrease in the next 12 months.

A key difference between the surveys is that the Landlords.co.nz/Mike Pero one is targeting property investors, while ASB’s audience is more general.

One of the issues for buyers at the moment is that banks tend to only want to do deals where the borrower has at least 20% equity in the deal.

ASB says this higher deposit “gives a bigger buffer in uncertain times.

“These changes do lift the bar a little for potential new borrowers,” the bank says.

However, it also says it is prudent, forcing people to “demonstrate greater thrift and financial discipline”.

It also, hopefully, avoids home buyers getting into a negative equity situation if house prices continue to fall.

Overall it suggests that the fundamentals of the housing market are still unfavourable: prices are high relative to income; migration flows are modest and job security now carries a degree of uncertainty.

“A pick -up in prices remains some way off, and the eventual recovery will be relatively modest,” chief economist Nick Tuffley says.

While that may be the case, investors are increasing their yields by putting up rents.

The Landlords.co.nz/Mike Pero survey shows that 41% of respondents had increased their rents in the past year and the increases had generally been up to 10%.

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Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 4.05 4.49
ANZ Special - 3.55 3.55 3.99
ASB Bank 5.20 3.89 4.05 4.39
ASB Bank Special - 3.39 3.55 3.89
BNZ - Classic - 3.49 3.55 3.89
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 ▼4.65 ▼4.80 -
HSBC Premier 5.24 3.54 3.54 3.69
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 3.97 4.05 4.39
Kiwibank 5.15 4.20 4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.45 3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.45 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.39 3.55 3.89
Sovereign 5.30 3.89 4.05 4.39
Sovereign Special - 3.39 3.55 3.89
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.19 4.35 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.39 3.55 3.89
Wairarapa Building Society 5.50 3.95 4.05 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.39 3.55 3.99
Median 5.34 3.97 4.05 4.39

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