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Pick-up in residential property market expected next year

Fletcher Building expects the residential property market to pick-up next year when rebuilding begins in Canterbury and the government's response to ‘leaky homes' comes into effect.

Friday, October 15th 2010, 12:07PM

by The Landlord

Chief executive Jonathan Ling told analysts that residential rebuilding in Christchurch is expected to accelerate in the second half of 2011 after the 7.1 magnitude earthquake last month caused some $4 billion worth of damage. Fletcher has won the contract to manage the Earthquake Commission's project management office for the rebuilding, though Ling said it probably won't have a significant impact on first-half trading.

The late pick-up from rebuilding Canterbury will combine with the government's ‘leaky home' programme which will see central government put up $1 billion over the next five years, local government offer another $1 billion, and homeowners left to foot the rest of the bill.

Ling said building alterations and additions have been falling for the past two years and the ‘leaky home' remediation is expected to help turn this around.

New Zealand's residential building consents sank 18% in August as households continue to focus on repaying debt as opposed to sinking more money into the homes. The deleveraging has kept the property market under pressure this year with house sales near the trough in 2008 when the global financial was at its worst, after returning expatriates and new migrants underpinned demand through 2009.

Ling said residential property market could improve on the economic recovery lifting consumer confidence and more strength in net migration flows. Personal tax cuts and a low-interest rate environment are also factors underpinning a turnaround in the market, though there will probably be regional variances, with North Island provincial areas overbuilt, he said.

The shares rose 0.4% to $8.41 and have gained 2.4% this year.

(Businesswire)

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

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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 ▼6.69 ▼6.49 6.49
Kiwibank - Offset 7.25 - - -
Kiwibank Special 7.25 ▼5.79 ▼5.59 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 - ▼5.89 ▼5.49 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 4.94 ▼4.89 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.19 6.49 ▼6.39 ▼6.39
TSB Special 7.39 5.69 ▼5.59 ▼5.59
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 7.49 5.84 5.75 5.69

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