Wainui may be worth a second look

House prices in Lower Hutt are still on the rise.

This is making things difficult for first home buyers or families wanting to upsize their home.  But there is an area of Lower Hutt that is being developed that has been overlooked for a long time.

This won’t last forever as the rentals are being sold and the new home owners are furiously renovating.

Wainuiomata has very affordable houses compared to the rest of Lower Hutt.  There is a lot of development happening with new homes available for $500k+.  For a new build these are competitive prices.

There is also council investment into Wainui for cycle paths connecting it to the Valley.

Nicholas Boyack for Stuff.co.nz posted the article below regarding the developments.

https://www.stuff.co.nz/business/property/100810548/wainuiomata-finally-ready-to-rise-up-out-of-the-economic-doldrums

When population increases so do services.

Now would be a great time to look at the current homes for sale that are still affordable.  Fairly soon they may not be.

Call us to see what we can do for you.

Things looking up for first home buyers

There is a lot of housing market news out there which is not being spun overly positively by the media of late but there is an upside.

Sales are down and it has been made a lot harder for investors.  Although not amazing news for some it actually could be great news for first home buyers.

Often, first home buyers are in the market for the same properties as investors.  Affordable housing.  With less investors there are now slightly emptier auction rooms and less tender bids and interest in the exact houses younger Kiwi’s are looking at to start their home ownership story.

Tony Alexander BNZ’s Chief Economist mentions exactly this in his weekly commentary this week “For first home buyers the situation is now better in terms of range of properties to chose from ….”.

To read his full weekly commentary follow this link.  http://tonyalexander.co.nz/wp-content/uploads/2017/07/WO-July-6-2017.pdf

So reconsider parking that goal up yet and get in touch to see how we can help.

 

Interest rates on the rise again – get in now to fix your home loan

Big banks are increasing their home loan interest rates again.

The changes so far have been summarised in this interest.co.nz article By David Chaston. https://betterdwelling.com/the-6-6-trillion-dollar-real-estate-bubble-brewing-in-the-commonwealth/

There is still a reasonable variety on offer between the banks though.  What we are suggesting is if you have fixed rates coming up for review soon or you are looking at moving from floating to fixed then get in touch with us.  We are able to cast our net wide to get the best possible offer available to you right now.

Potential new lending rules might stop that renovation

The Reserve Bank of New Zealand (RBNZ) recently released a consultation paper regarding Debt to Income ratios (DTI).  The Reserve Bank have been concerned around the rapid growth in high DTI mortgage leading in New Zealand over the past few years and the financial risks that it poses.

The inclusion of a DTI instrument would limit the amount that people can borrow to a certain multiple of their income.  The DTI consultation paper and cost benefit analysis of the proposed policy indicates that a high number of home owners and first home buyers could be affected should a DTI tool be introduced.

What is a DTI ratio?

Put simply it is a debt to income ratio limit.

Let’s say they decide to make that ratio 4.  That means if your yearly income is $80 000 you can borrow $320 000.

Exact details of how this limit would be applied are not known yet but this is the concept in a nutshell.

What impact could this have on you?

The RBNZ has released the DTI consultation paper to the public for feedback.

RBNZ suggest that they are unlikely to implement the tool at this point in time due to recent evidence of a cooling in the housing market and borrowing activity. However, they believe that if house inflation accompanied by higher DTI lending takes off again, the DTI instrument could be the best tool to employ alongside existing LVR restrictions.

Mortgage Broker Andrew MacKenzie says that the PR communication last year around LVR restrictions was similar to the recent media release for DTI lending, then before you know it LVR restrictions were put in place.  In fact the banks implemented the restrictions before the ruling deadline!

What makes you think they won’t do the exact same with DTI lending?

A lot of New Zealand homeowner’s income is tied up in assets, often without large sums of money in the bank.  They rely on the banks to borrow money to pay for renovations and maintenance on their properties as they don’t have thousands of dollars lying around to pay for larger unexpected costs.

Currently, banks look at each deal on its merits; your assets, ability to repay and whether they are suitable for the lending criteria. With this potential ruling lender discretion may be removed.

Banks will become less flexible

If the new DTI tools came into effect, the banks would not be flexible when it came to lending.

A lot of New Zealand homeowner’s income is tied up in assets, often without large sums of money in the bank.  They rely on the banks to borrow money to pay for renovations and maintenance on their properties as they don’t have thousands of dollars lying around to pay for larger unexpected costs.

Currently, banks look at each deal on its merits; your assets, ability to repay and whether they are suitable for the lending criteria. With this potential ruling lender discretion may be removed.

Banks will become less flexible

If the new DTI tools came into effect, the banks would not be flexible when it came to lending.

A lot of New Zealand homeowner’s income is tied up in assets, often without large sums of money in the bank.  They rely on the banks to borrow money to pay for renovations and maintenance on their properties as they don’t have thousands of dollars lying around to pay for larger unexpected costs.

Currently, banks look at each deal on its merits; your assets, ability to repay and whether they are suitable for the lending criteria. With this potential ruling lender discretion may be removed.

Banks will become less flexible

If the new DTI tools came into effect, the banks would not be flexible when it came to lending.

The following link is to a recent article on stuff.co.nz by Susan Edmunds regarding the possible plan and the potential risks faced if it was to be implemented.

http://www.stuff.co.nz/business/93473314/debttoincome-ratio-would-cut-house-price-risk

 

Things are slowing down…..

 

Numbers of sales are lowering and the number of days to sell are lengthening.  Wellington is still holding on but nationally the trends are changing.

This is good news for first time buyers and savvy investors.

With prices dropping it will take some people out of the market leaving more room for first home buyers and investors who have been playing the long game that have been sitting and waiting for the opportunities to start coming back.

As usual quite interesting reading from Tony Alexander, Chief Economist for BNZ and his weekly overview regarding housing and our retail spending.

The link is here if you would like a look http://tonyalexander.co.nz/wp-content/uploads/2017/05/WO-May-18-2017.pdf

Want to know if it’s your time to get in the game?  Call me today.

Get sorted to get moving!

We’ve heard a few sad stories lately of people selling their home and then looking to gain finance for their next property only to find that the rules have changed and banks aren’t as generous in their lending as they previously have been.

The result of this is that some sellers are unable to get the home loan they thought they could or even the loan amount they had previously.

Imagine their disappointment!

Don’t let this happen to you. Make sure you have your mortgage lending assessed BEFORE selling your existing property.

Lending approval is getting tougher and you need to speak to an expert.

Different lenders have different criteria and we know the banks that you will best suit you and your circumstances.

No longer does longevity with your bank mean that they will show you loyalty in return.

Our service is free and impartial; we’d love to help you find a lender you can move forward with.  Call us today.

 

 

Wellington house prices still on the up

 

Susan Edmonds’ article for Stuff.co.nz today discusses the continued increases to house prices in the regions.  http://www.stuff.co.nz/business/91206321/regional-prices-soar-as-auckland-levels-off

The article specifically discusses Wellington and how year on year we are still seeing increases of over 20% especially in Upper Hutt and the Hutt Valley.

So….. if you’re thinking of buying, in Wellington prices are continuing to rise!  If you already own in Wellington it could be a great time to relook at your home and with rates still super low and your house worth more it could be a great time to build that garage or add that extra room on.

Call us to see how we can help today.

First home buyer options, hard work required

Great article from Colleen Hawkes on Stuff.co.nz today.

http://www.stuff.co.nz/life-style/home-property/90810160/firsthome-buyers-there-is-no-magic-bullet-just-hard-work

Several first home owners situations looked at, all different, all with the same result of getting into their first home but none without hardwork – your first home is an investment after all.

It is good to see real life examples of this working in varying ways from buying the worst house on the best street, to buying tiny, or moving to cheaper areas but all achieved without a major handout.

Also mentioned is to use a broker – Colleen says “Just as the name suggests, mortgage brokers can often broker you a better deal.”

Call us to discuss your situation today.

Think its tough now? It’s going to get a lot tougher

Interesting read this week from BNZ’s Tony Alexander.

http://tonyalexander.co.nz/wp-content/uploads/2017/03/WO-March-9-2017.pdf

The Reserve Bank is looking to bring in measures to ration credit.  The strategy being talked about currently is bringing in debt to income ratios.

Banks are no longer giving such large cash backs or incentives to get your business and more emphasis is being placed on higher commitment to savings and reduced personal debt so overall income to debt ratio meets their requirements.

If you plan on buying a house in the near future these are things to seriously consider when setting a timeframe and budget plan.

 

 

Banks easing up?

 

We are starting to see a lightening of the tough stance taken by the banks in recent times not only for home buyers but investors also.

Since the LVR rule changes, banks were allowed 10% of their lending to be to those who had less than 20% deposit to buy a home.

In an effort to get their books in order banks were tough on borrowers and approval criteria tightened.  Now, we can only assume they are back on the right side of the ledger sheet because they are starting to look more favourably on clients under the 20% deposit line.

Either that, or they are watching the non bank credit unions step up and fill the void and meet the needs of clients in this space and they are not enjoying their potential profits going elsewhere – whatever the reason, enjoy it while it lasts.

If you have applied for a loan and had an approval below what you required….. Give us a call and we may be able to help.