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Conditions ripe for rent rises

Conditions look set for rents to rise over the coming year, despite overall downward pressure on house prices, according to ANZ’s Property Gauges.

Tuesday, May 4th 2010, 12:00AM 1 Comment

by Maddy Milicich

The 10 gauges are used to measure the state of the property market for signs of emerging changes plus the impact each gauge will have on house prices and the overall balance of April's measures aren't too flash.

Of the April indicators, one shows a positive direction for house prices, two are neutral with a positive bias, two remain neutral, one is neutral with a negative bias and four are likely to have a direct negative impact on prices.

Rents will be the ray of hope this coming year for investors, with conditions set for them to start building. The supply-demand balance remains out of kilter and continuing migration, the one positive indicator in April, support rental rises.

Migration levels remain strong, despite having dropped significantly and are currently sitting at the lowest level since the beginning of 2009. ANZ comments that rising departures to Australia remains a key risk threatening migration to New Zealand this year, but the overall level remains supportive to the property market.

The low levels of consents and house sales will also see pressure for demand remain relatively significant, exacerbating the shortage in the market.

Affordability for new entrants into the housing market has been dented by rising interest rates, which will counteract the affect dropping prices may have had on the market this year.

The negative indicators for price are liquidity, with credit having all but dried up; globalisation, which looks at the relative property price movements between New Zealand, the US, UK and Australia; mortgagee sales, despite having come off their peak remain elevated, and; serviceability/indebtedness (interest payments relative to income and the level of debt relative to income), as de-leveraging continues.

« Momentum building in house market, according to ANZFree Investment Property Showcase Events: Auckland, Wellington and Christchurch »

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Comments from our readers

On 5 May 2010 at 12:25 pm stuart leenstra said:
Pipe dreams, not a realistic view of the market. The realistic view is that a total recessions recovery will years away.I hope you people sleep well at night
I certainly would not invest in property in the near future.adroitly
Commenting is closed

 

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 4.94 - - -
AIA - Go Home Loans 7.49 ▼5.79 ▼5.49 ▼5.59
ANZ 7.39 6.39 6.19 6.19
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.79 5.59 5.59
ASB Bank 7.39 ▼5.79 ▼5.49 ▼5.59
ASB Better Homes Top Up - - - 1.00
Avanti Finance ▼7.90 - - -
Basecorp Finance ▼8.35 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.54 - - -
BNZ - Rapid Repay 7.54 - - -
BNZ - Std 7.44 ▼5.79 ▼5.59 5.69
BNZ - TotalMoney 7.54 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.69 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 6.95 5.79 5.59 5.69
Co-operative Bank - Standard 6.95 6.29 6.09 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - ▼5.99 ▼5.89 -
First Credit Union Standard ▼7.69 ▼6.69 ▼6.39 -
Heartland Bank - Online 6.99 ▼5.49 ▼5.39 ▼5.45
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.60 6.65 6.40 -
ICBC 7.49 ▼5.79 ▼5.59 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.25 6.89 6.59 6.49
Kiwibank - Offset 7.25 - - -
Kiwibank Special 7.25 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 7.94 ▼5.75 ▼5.99 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.49 6.95 6.29 6.29
SBS Bank Special - 6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 4.94 5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.19 6.49 ▼6.39 ▼6.39
TSB Special ▲8.64 ▲6.74 ▲6.49 ▲6.39
Unity 7.64 ▼5.79 ▼5.55 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society ▼7.70 ▼5.95 ▼5.75 -
Westpac 7.39 6.39 6.09 6.19
Westpac Choices Everyday 7.49 - - -
Westpac Offset 7.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 5.79 5.49 5.59
Median 7.54 5.99 5.89 5.69

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