Keeping the Dream Alive AMP
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G2 Saturday, April 16, 2011 PROPERTY THE PRESS, Christchurch Market intelligence with Liz McDonald Property’s a game of two halves Eastern Christchurch sales slow to standstill while homes sell, but slowly, in the west Addington, Somerfield, Spreydon Aranui, Linwood, Bexley, Bromley hristchurch’s real estate compared with 595, but prices held Avondale, Avonside, Burwood, Parklands market has become a thing steady despite the earthquake. The Avonhead, Russley of two halves since median price of $320,000 was the same 600 Beaches, Kainga to South Shore February’s earthquake. as a year ago, 3.2 per cent below its 500 On the western side of peak, and in line with early 2007 Belfast, Papanui, Redwood, Bishopdale Ctown, homes are still selling, albeit prices. Bryndwr, Burnside, Harewood 400 more slowly as buyers chase up Institute head Helen O’Sullivan Lower Cashmere, Beckenham, St Martins 300 City Central, inside the four avenues reports for insurers and banks. says the dramatic fall in sales was 200 But on the city’s damaged suburbs, expected because of the quake, and Dallington, Richmond, St Albans, Shirley 100 where both houses and infrastructure she was amazed that 193 homes did Halswell, Hillmorton, Hoon Hay are in need of repair, sales have been sell in the city despite the conditions. 0 Heathcote, Opawa, Woolston Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec few and far between. Many homes have been pulled off the Hill areas, Kennedys Bush to Scarborough Neighbourhoods which may market since the quake, she says. Hornby, Hei Hei, Sockburn, Prebbleton previously have seen 10 or 15 homes Median prices and the number of sell in a month have instead seen sales in other parts of the region Lyttelton, harbour areas maybe one or two. The latest figures were: North Canterbury $343,000 (22), Merivale, Fendalton, Ilam, Strowan from the Real Estate Institute show central Canterbury $338,500 (56), Mid- Redcliffs, McCormacks Bay, Sumner (flat) just one home sold in the south Canterbury $215,500 (38), Timaru Riccarton, Upper Riccarton eastern suburbs of Redcliffs and $220,000 (57), South Canterbury Sydenham, Waltham, Phillipstown Sumner, and none sold at all in the $190,000 (27), and West Coast $209,000 TOTAL Christchurch hill suburbs. (31). Kaiapoi The institute’s records show two- Nationally sales were up when the Rangiora thirds fewer homes sold in Christchurch market was counted Christchurch last month than the out of the equation, with Auckland 0 100,000 200,000 300,000 400,000 500,000 600,000 previous March, at 193 sales showing the biggest rise. COMMENT MORTGAGE RATES VARIABLE Keeping the dream alive AMP ................................6.24% Increase payments ANZ.................................5.74% Property buyers and sellers have been left ASB .................................5.75% Bank Direct...................5.75% pondering many questions since the and build your equity BNZ .................................5.99% Cairns Lockie................6.04% Canterbury earthquakes. RICHARD LANG Mike Columbus CBS Canterbury ...........5.95% and JANINE BALLINGER, of law firm Duncan Global Home Loans.....7.99% s I touched on in my last column, in an environ- Housing Corp................5.75% Cotterill, explore some of the issues. ment such as ours with HSBC ..............................5.99% A uncertainty over the future, Kiwibank .......................5.65% hat happens to a COMMENT especially in the short-term, Manchester Unity .......6.65% property purchase if reviewing what you can control National.........................5.74% the house has been is very prudent. NZ Home Loans............5.85% damaged by an for a reduced sale price, in As a property owner, one Wearthquake? This scenario is practice, the most common thing you can control, often to a Perpetual Trust ...........7.70% happening right now all over approach is for the buyer to pay greater extent than you realise, is PSIS ................................5.70% Canterbury. the full price but to take over the the amount of debt you have and Public Trust ..................5.60% You had finally found your seller’s EQC claim. the period you will have this SBS .................................5.65% dream home, signed up, gone However, this is not provided Counting the cost: Hope is not lost for prospective house buyers committed to debt. Sovereign......................5.85% unconditional and booked the for in most agreements and must purchase before the February 22 earthquake struck. We are sitting in a sub-6 per TSB .................................5.79% moving truck, but then came be agreed with the seller. If you are cent interest rate market and you February 22. buying a property post- is not going to work, then you ❏ The deduction from the should definitely be making the Westpac ........................6.24% Your dream home now looks a earthquake, you should think must go back to the agreement: purchase price is primarily a most of this. Take control: Make the most of low little different. There are cracks about adding special clauses. ❏ The most common form of valuation issue. If the damage is An easy way to take advantage interest rates. 2 YEARS around the doorways, the lounge As a buyer, you must ensure agreement for sale and purchase of quite extensive, you will need an of this is to put yourself into the AMP ................................6.40% door doesn’t shut, the kitchen and that the seller has lodged a claim property (the Auckland District independent valuation to deter- habit of paying normal interest only the minimum payments had ANZ.................................6.49% bathroom tiles have cracked, the with the EQC – that claim will then Law Society/Real Estate Institute mine the property’s loss in value. rates and using the current been made. The difference is ❏ ASB .................................6.40% front fence is on a bit of a lean and be transferred to you on the of New Zealand agreement) If the damage not covered by the interest savings to pay off debt. $12,203. the cobblestone pathway is out of settlement of your house purchase. contains provisions for this sort of vendor’s EQC claim is only minor, Of course you must have a This saving would be even Bank Direct...................6.40% alignment. This means that when EQC situation. it may easily be resolved by getting loan structure and system that greater if the low interest rate BNZ .................................6.45% The settlement date is looming inspectors call at the property and ❏ Essentially, the fine print in the quotes to fix the damage and to will allow you to maximise your market continued. Cairns Lockie................6.69% and you are not happy about either pay compensation or agreement says that where the have that amount deducted on gains. Let’s look at a scenario You can build up a significant CBS Canterbury ...........6.50% paying the full price of the arrange remedial work, that property has been damaged but settlement. Either way, you should that allows this. amount of equity over time by Housing Corp................6.40% property on settlement. You could payment or work will be for your can be lived in on the settlement have the money to fix the damage Take as an example a couple making use of an effective loan HSBC ..............................6.35% easily live in the house, but it is in benefit. date, the buyer still has to after you have moved in. with a 30-year mortgage of structure. a different condition from when However, the EQC claim will complete the purchase. Don’t panic if you are a buyer $260,000 with an average interest Unfortunately most lenders do Kiwibank .......................6.40% you signed up. cover only specific areas of the ❏ However, the purchase price is caught up in the fallout of the rate over time of 7.5 per cent. not highlight this, so the onus is Manchester Unity .......6.45% So what happens now? Most property. As a buyer, you need to reduced by a sum equal to the February earthquake. While you Their minimum monthly on you to do the research. National.........................6.49% agreements for sale and purchase know what earthquake damage ‘‘diminution in value’’ of the are required to complete the repayments are $1817, but at a NZ Home Loans............6.55% do not allow you to cancel and the EQC will not be covering. For property. The amount that can be purchase of your new home, with current interest rate of 5.75 per ■ Mike Columbus works for New PSIS ................................6.40% walk away, but there are a couple example, it will not cover the deducted from the purchase price good advice and by working with cent monthly repayments would Zealand Home Loans and is a Public Trust ..................6.20% of ways to compensate you, as the leaning fence or cobblestone path. on settlement must be determined the vendor, you should be be $1517. This difference of $300 a commentator on bestuseofmoney buyer, for the change in the The EQC claim will only cover as provided for in the fine print of adequately compensated. month could be channelled .co.nz. For a free copy of his guide SBS .................................6.45% property’s condition. claims up to $100,000 plus GST. If the contract. It should be noted through a loan to reduce how ‘‘Best Use Of Money’’ email Sovereign......................6.55% The first is through the seller’s the claim is for more, then you that the agreement doesn’t provide ■ For further information, email much is owed. mike.columbus@nzhomeloans TSB .................................6.28% Earthquake Commission (EQC) need to take an assignment of the for you to deduct the cost of [email protected]. The In two years’ time the loan .co.nz. This advice is of a general Westpac ........................6.40% claim, as well as the agreement for seller’s insurance claim as well, repairing the earthquake damage, content of this article is general in balance outstanding would be nature only and before acting on it sale and purchase itself.