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Some Canterbury investors get cold feet

A group of Christchurch property investors are selling up due to high debt levels, unrealised gains and Budget issues.

Monday, June 14th 2010, 12:00AM

by The Landlord

 

A portfolio of 20 suburban homes, inner city apartments and townhouses which includes individual two, three and four-bedroom properties has been put on the market by Bayleys.

Bayleys Canterbury residential manager Phil Hayes says the reasons for selling a varied. Some vendors have put property on the market due to the tax changes in the Budget, others are highly leveraged and have decided to sell as interest rates start to rise.

He says not all the properties are "distressed sales."

"For a number of smaller residential property investors who had factored depreciation rebates into their investment return figures, the removal of this option has now made their holdings less attractive," Hayes says.

He says a number of properties in the auction are highly leveraged and not in a position to ride out debt commitments in the current market and some vendors are under pressure from their banks to reduce debt levels.

He also says some vendors have become disenfranchised with property and they haven't experienced the gains expected, or in some cases the tax benefits promoted to them.

Hayes says in some cases it appears the investors bought property after taking advice from third parties, but the investments haven't turned out as they were promoted.

The properties, which will be sold at an auction, include a block of six flats in Merivale under one title - consisting of five two-bedroom units and a three bedroom dwelling - generating a combined weekly income of at least $1,500 when fully tenanted.

The properties on the market are "mid-range", Hayes says in the high $200,000s - mid' $300,000 range.

Many of the properties are tenanted and would be sold as ‘going concerns' - with weekly income ranging from $215 a week for a two-bedroom flat in the city, through to $400 a week for a three-bedroom home in Merivale.

Hayes says the properties are low maintenance, easily rentable property profile is exactly what investors have on their tick-list. He expects interest from investors as well as first home buyers.

 

 

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Credit Union Baywide 6.15 4.95 4.95 -
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First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
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HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
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HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 ▼4.14 ▲4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▼3.39 ▲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
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Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
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 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.02 4.09 4.39

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