The Reserve Bank left the OCR unchanged at 2.5 percent

Mortgage Express shows growth within the Christchurch Region as two new mortgage brokers are announced this week. Tony Falloon joined Phoenix Real Estate Ltd at the end of January and Richard Allan is set to begin with Four Seasons Realty Ltd this week.

Both men have extensive backgrounds in financial advising and mortgage brokering and will make valuable additions to the mortgage express team says Marcus Williams, Mortgage Express CEO.

“Despite the recent challenges Christchurch has faced, it is pleasing to see that with the support of Harcourts we have been able to grow our team to assist more vendors and buyers. We know that buyers are facing additional challenges at the moment and due to our knowledge of the industry and real estate market, by using a Mortgage Express Broker we know they will be getting best advice. With the partnerships we have with a range of lenders, we can provide them with all the options to make informed decisions.”

Tony Falloon has over 10 years experience as a mortgage broker within the Christchurch region. in addition to running his own home loan franchise for the past 6 years, Tony’s wealth of knowledge in both brokering and financial services as well as his customer focused approach will make him a welcome addition to the Phoenix Real Estate Franchise.

Phoenix Real Estate Ltd Business Owner, Bruce Lindsay says Tony’s extensive background provides him with a breath of knowledge allowing him to assist the client in all manner of situations from investment to multimillion dollar property purchases. “Tony is an experienced broker who knows the market and business very well. He is a welcome addition to the team and it’s fantastic to have an in house person on board available to work closely with our agents and clients”.

Richard Allen also brings a solid wealth of knowledge to the table with 20 years experience in the banking and finance industry. Richard comes from working as an independent mortgage adviser and broker however he also has worked in areas such as commercial lending and risk insurance. Richard’s strong and diverse background will be a valuable addition to the Four Seasons Franchise, says Four Seasons Realty Business Owner Kevin McKay “His experience coupled with his firm belief in solid communication will be key to working with our agents to build cliental within the franchise.”

Mortgage Express has been in operation since 1998 and has a team of experienced brokers based all over New Zealand. With recent growth to the team in the Christchurch region, Mortgage Express brokers are now more equipped to assist vendors and buyers during this challenging period.

Based on the general disclosure statements (GDSs) from the last quarter of 2011, the big banks are increasing the number of residential mortgages they are writing up compared with previous quarters. In good news for people entering the property market, New Zealand’s five major banks also posted earnings growth figures of 25 percent in the later half of 2011, so there may be even more room to relax mortgage rules in 2012.

According to these figures, the banks seem increasingly willing to write mortgages with loan to value ratios (LVRs) in excess of 80 percent, with mortgages at LVRs above 90 percent also on the rise at ASB, BNZ, and Westpac. ASB’s residential mortgages at LVRs above 90 percent increased $353 million, BNZ’s increased $81 million, and Westac’s increased $29 million. ASB’s mortgages at LVRs between 80 and 90 percent rose $133 million, Westpac’s increased $152 million, and BNZ’s increased $71 million.

According to international consultancy PricewaterhouseCoopers, renewed growth in the banking sector is due mostly to a long-term move away from fixed-rate mortgages and towards floating-rate mortgages. “This trend has taken a while to go but now it has really kicked in, and it’s coming through in these numbers,” said PwC New Zealand financial services partner Sam Shuttleworth in the latest edition of New Zealand Banking Perspectives.

Over the past few years, borrowers around the country have generally favoured floating rates above fixed rates, with 58 percent of the market now on floating rates compared with only 13 percent in 2007. The banks are now looking for new ways to continue this growth, with a relaxation in mortgage rules one of the ways to keep more money coming in. Weekly mortgage approvals are once again topping $1 billion nationally, with ASB and Westpac the most aggressive institutions.

It’s not all good news however, with residential mortgages at ANZ New Zealand falling in contrast with other banks. At ANZ, mortgages at LVRs between 80 to 90 percent dropped $28 million, with the 90 percent plus category decreasing by a massive $304 million. Overall however, the big five banks now have $14.3 billion worth of mortgages at LVRs above 90 percent, and $20.3 billion at levels between 80 to 90 percent. These figures have increased $300 million and $500 million from the last quarter respectively.

Along with strong overall growth, bad banking debts have also fallen by 35 percent, decreasing $400 million from a year ago. However, despite strong growth, Sam Shuttleworth from PwC still thinks there are many challenges for the banks to meet in 2012. “The banks’ sunny spell since 2010, brought on by improving net interest margins and reducing bad debt expenses, is now threatened by conditions that could be as bad as the 2008 GFC.”

While nothing is ever certain in the ever changing global financial climate, recent increases in mortgage approvals are a good sign for property buyers in 2012. With the banks relaxing mortgage rules and still experiencing strong growth figures across the board, lets hope this trend can continue throughout 2012 and beyond.

As property market analysts publish data from 2011, it’s a good time to see if the New Zealand market really has turned a corner. While 2011 was a definite improvement on 2010 and 2008 in terms of sales volumes, figures are still way down from long term averages. However, December was a particularly strong month for sales, adding to growing speculation that the market is getting back on track.

According to the Real Estate Institute of New Zealand (REINZ), property sales increased 20.1 percent in December when compared to December 2010. Overall, sales volumes for 2011 increased 9 percent compared to 2010, with strong December results suggesting good things to come. REINZ also recorded a drop in national property prices in December.

Some areas experienced much higher sales volumes than others, with Auckland recording its strongest December results since 2006. Overall, six regions; Waikato/Bay of Plenty, Manawatu/Wanganui, Taranaki, Nelson/Marlborough, Canterbury/Westland, and Otago, recorded their strongest December figures since 2007, while only two regions, Hawkes Bay and Wellington, had lower figures than December 2010.

“December has been a strong month for real estate sales in New Zealand, with this being the strongest level of transaction figures in December since 2007, and Auckland having its strongest December since 2006. Across the country sales volume is up by over 20% compared to December last year with some regions such as Manawatu/Wanganui and Taranaki reporting increases of more than 40%,” said REINZ chief executive Helen O’Sullivan in the latest report.

However, while annual sales volumes were up by 9 percent, and 61,269 properties were sold throughout the country, 2011 still struggled to reach half the volume of the 2003 peak. Levels were also well below the average sales volumes recorded in the 90′s, and even more depressing when viewed as moving annual totals against the total number of properties in the country.

So, while we are still a long way from the heady sales volumes experienced during the peak years of 2002 to 2007, there are some indicators that we will see more improvement in 2012. Low interest rates and improved banking conditions are already leading to growth in the first home market, with falling prices in December also likely to enhance the ambitions of first home buyers.

According to REINZ, prices were down 3.4 percent in December on a monthly basis, and just 0.9 percent up when compared with December 2010. “While the number of transactions is rising, prices have eased back from last month’s record highs, with some exceptions in parts of Auckland and the Canterbury/Westland region,” said O’Sullivan.

There are many reasons for the strong growth experienced in the early part of the century, including lots of investor activity and relatively relaxed banking conditions. While low interest rates and falling prices will lead to increased sales over time, a rise in investor market activity will also be necessary for New Zealand to experience sustained, long-term growth.

Many people working nine to five jobs have great ideas for their own small business. Pursuing your own business can be rewarding, bringing both financial gain and personal satisfaction. However, most new ventures fail within their first twelve months. So what is the difference between a small business success and a career flop?

Choosing The Right Business

The primary focus of your business should match your own skill set. For instance, a party planning business will require a highly organised person with excellent interpersonal skills. Running a retail shop takes someone with great customer service, an eye for purchasing, as well as strong management skills. It’s important to consider the day to day tasks your business will involve. Also, it’s important that you will enjoy them, as you’ll be putting in plenty of hours.

Of course, there will likely be a gap to bridge between the skills you do have and those you don’t. For instance, if you’re not sure about things like GST, it may be wise to take a bookkeeping course.

Many businesses fail because they are started for the wrong reasons. Being self-employed is hard: you’ll likely be working more hours and making far less money, at least for the first few years. You’ll need to have plenty of passion and drive.

Do Plenty of Homework

Before you start investing your time and money, it’s important to know that your business can work. If you know someone who has a similar business, ask them for their advice. Even if they are in a different industry, you can learn from other’s mistakes and take on board what they did right.

Plan for Success

Perhaps the most common reason for small business failures is bad planning. Each component of a new business should be well mapped out. Even if you are working alone from home, there are many aspects of running a business that need to be taken into consideration.

Before you do anything else, have a business plan in place. If you are looking at borrowing money, this is the first thing a bank will want to see. Target markets, operations, human resources and financial projections could all make up part of a business plan.

Another important part of your business plan is where your business is going to be located, and how people will find you. If your business depends on people coming into a shop, suite or factory, then location is everything. It’s well worth researching the right kind of spaces, their cost and availability.

Knowing your target market and how you will reach them is also important. There are a range of ways you can market your business, consider which ones will work for you.

Making Your Start

While not possible in every situation, many people choose to start building their business while still working in a full time job. The benefit of this is that when you make the plunge you will already have some clients and income to get you started. The downside is that your time is limited, and burning the candle at both ends can quickly wear you down.

There are many aspects of making your small business plans become a reality. No matter how great your ideas are, you’ll need the right skills, planning and marketing to see them come to fruition.

Australian and New Zealand cities are well known for their low housing density, especially in comparison to major European centres. However, as housing pressures continue to intensify in places like Sydney and Auckland, denser housing projects are likely to play an increasing role in our urban environment. With implications for housing affordability, sustainability, quality of life, and the environment, the issue of housing density is likely to affect us all over the next few years.

Multi-unit housing developments have long suffered from negative stigma in this part of the world, which has become famous for its wide open spaces and outdoor lifestyle. However, with increasing pressure on housing, ever-expanding suburbs, rising rents, and increasing commute times, some residents are taking renewed interest in high density living. A number of local governments have also come out in support of high density living, as a way to improve traffic congestion and reduce pollution.

While high density housing is widely accepted throughout Europe, parts of the United States, and much of the developing world, it has always had trouble being accepted in Australia and New Zealand. There are a number of cultural reasons for the great suburban sprawl, including a dream of home ownership that is linked to an outdoor lifestyle and fuelled by the availability of endless suburban land releases.

While dense housing projects are often the result of shear necessity, especially in the developing world, there are also many places where high density living is more of a choice. Barcelona is one of the best examples of a highly centralised urban space, with a population of 4.5 million living in an area that is only 803 square kilometres. While this kind of density is not unheard of in Europe, it seems difficult for many people in Australia and New Zealand to accept movement in this direction.

There are also a number of practical reasons for this resistance however, with power, water, and sewage infrastructure in local cities generally not designed for high density living. In another interesting take on the possible negative implications of high density housing in Sydney, Professor Joel Kotkin spoke of the potential links between lower fertility rates and denser living conditions.

At the Property Council of Australia’s Cities Summit last year, Kotkin said: “Why, in a city like Sydney, where you had wonderful inner ring suburbs, with single family homes, very pleasant places, places you want to raise kids, do they want to densify them and turn them into places people don’t want to raise kids? Where you have high amounts of high-density housing you have very low birth rates … where you have density, you tend to have very few children.”

With increasing pressure on the housing market in many of our largest cities, some experts are suggesting it is time to lose our inbuilt fear of high density urban living. While infrastructure issues and quality of life concerns still have to be overcome, for many people, it is high time to focus our energies on the improved design and regulation of high density housing projects rather than their outright rejection.

The New Zealand dollar experienced a roller-coaster ride in 2011, due to earthquakes, funding deadlocks, and international concerns. The credit rating downgrade for the United States and the turmoil in Europe both had a big effect on the local currency, and with the euro crisis not going away any time soon, it will be interesting to see what 2012 has in store.

After experiencing a 16 percent trading range in 2011, it is remarkable that the dollar closed the year only 2.7 percent down from the start of 2011. However, while the local currency may have faired quite well in a year of local natural and global economic disasters, there are many questions still plaguing the markets for 2012. Depending on how the euro crisis is managed, the New Zealand dollar could steer in either direction.

According to Derek Rankin, a director at Rankin Treasury Advisory, Europe will pull itself up by the bootstraps and enjoy stable growth as the euro zone deleverages. In a statement to stuff.co.nz, Rankin said “We know that the New Zealand dollar moves about 17.5 per cent per year (on a long term average basis), meaning if we see a plan tabled that the market can accept we could finish the year in the US80c range.”

Not everyone is so optimistic however, with Imre Speizer, a market strategist at Westpac, expecting a much rougher six months ahead for the euro zone. “Our best guess is that over the first half of the year we’re looking at fairly bleak outcomes to the euro zone crisis. We think it will get worse rather than better,” said Speizer in a statement to stuff.co.nz.

While it is difficult to quantify the impact of the euro crisis and its flow-on effects within Asia and the Pacific, there are some things we do know. Europeans will generally have less money to spend, which will affect both the export and tourism sectors in New Zealand. If the local currency appreciates against the Euro, like many analysts are forecasting, there will also be a strong impact on our ability to compete in global markets.

There are also likely to be follow-on effects in terms of access to credit, with credit packages for Greece, Italy, Ireland, and Portugal reducing the availability of credit to other nations. Even small increases to the cost of borrowing will have an adverse effect on the local New Zealand economy, which is heavily dependent on the rest of the world for its long term growth prospects.

While there will certainly be many challenges to meet over the next 12 months, it remains to be seen how much the ongoing crisis in Europe will affect the New Zealand dollar. The currency markets are likely to remain volatile for at least the medium term however, as policy-makers in Europe attempt to manage the ongoing sovereign debt crisis in the coming months.

With 2011 now over, it is only natural to wonder what 2012 has in store for the property market. While crystal balls are hard to come by at this time of year, the analysts at Quotable Value (QV), the state owned valuer, have been brave enough to offer some predictions for property values over the next 12 months.

Before we forecast property prices for 2012 however, it is important to take a look at current values in context with 2011. According to QV, New Zealand residential property values rose 2.4 percent over 2011, making them 3.5 percent lower than the market peak of 2007. However, while values were mostly on the rise throughout the year, the market also experienced very low sales volume that was 20 percent lower than the long term average.

According to Jonno Ingerson in the latest QV report, “Despite national values moving upwards during the year, the property market continued to be characterised by lower-than-normal sales volumes. First home buyers came back into the market in 2011, encouraged by low interest rates, while investors were largely on the sidelines.” According to Ingerson, the outlook for 2012 is largely mixed, with different parts of the country expecting very different conditions.

Property values in Christchurch are highly dependent on ongoing seismic activity and rebuilding efforts, with Hamilton and Tauranga values expected to remain stable. Property values in Wellington and Dunedin are more difficult to forecast, as are conditions in regional centres. “A strong rural sector typically has a positive impact on the property values in towns supporting those areas, likewise the coming or going of large local industries can have a significant impact,” said Ingerson in the QV report.

Auckland is likely to experience the most movement over the next 12 months, and continue the strong growth seen in late 2011. During the last few months, Auckland property values have risen to record highs above the 2007 figures, a situation many analysts think will continue. Weak building activity, fewer new listings, and a growing population are all signifiers of high property prices, which some analysts forecast will rise by almost 30 percent in the next three years.

According to the latest Infometrics study forecast, Auckland will see an annual price growth of 9.2 percent in 2012 when compared to 2011. “Auckland house price growth is forecast to be the fastest in the country at 9.2 per cent per annum. The persistently low level of residential construction activity in Auckland over the past few years has led to a shortage of property in the region. These under-supply issues are set to provide good support for property prices over the next 12 months.”

With property prices also influenced by international economic conditions and consumer confidence, it will be interesting to see what lies in store for 2012. While the strong growth in Auckland is likely to continue throughout the year, and other markets should remain stable, it remains to be seen how well the local economy reacts to the euro crisis and how this will affect the domestic property market.

The QV price indices for December show that New Zealand residential property values continued to gradually increase, rising 2.4% over the past twelve months. Nationwide values are now 3.5% below the previous market peak of late 2007.

For the first few months of 2011 values across New Zealand were stable with rising values in Auckland and Christchurch being balanced by falling values in many other areas. From April onwards national values began to increase as most of the main centres, apart from Wellington, began to stabilise. By September values were increasing in all the main centres, including Wellington, as well as in many of the provincial and rural towns, suggesting a nationwide improvement in the property market.

The year ended with the first signs that this apparently nationwide recovery may be faltering. National values increased from November to December, as they continued to do in Auckland, Wellington, Christchurch and Dunedin. However values flattened in Hamilton and Tauranga, and dropped in several provincial towns that previously had been recovering, notably Gisborne and Rotorua.

Auckland

Values in the Auckland area increased by 4.3% during 2011 and ended the year at their highest level ever, 1.4% above the previous peak of late 2007. The Auckland market in 2011 was generally characterised by a lack of new listings and quality stock. This led to increased demand for the good quality properties that did come to the market. The central suburbs performed particularly well and consequently the old Auckland City area increased 5.8% during the year and values are now 3.3% above the previous market peak.

Wellington

Values in the Wellington area varied throughout the year, beginning by increasing slightly for the first couple of months then falling through until September before beginning to increase again. As a result, values at the end of the year were just 0.4% below the previous year, and 6.5% below the previous market peak.

Christchurch

The Christchurch property market is still significantly disrupted as a result of the earthquakes. Values in the undamaged parts of the city have increased due to demand from displaced residents or workers from outside the region assisting with the recovery. Values overall in Christchurch City ended the year 4.3% up and just 0.9% below the 2007 market peak. The areas immediately surrounding Christchurch have picked up strongly with Waimakariri District 9.1% up over the year and 2.6% above the 2007 peak, and Selwyn District 7.5% up over the year and 5.0% above the 2007 peak.

Hamilton, Tauranga, Dunedin

In Hamilton values dropped for the first couple of months of 2011, then steadied for most of the year before rising a little in the last few months. As a result values remain unchanged from a year earlier, and are 11.1% below the peak. Tauranga followed a similar pattern to Hamilton and finished 2011 0.7% up for the year and 11.3% below peak. Dunedin values varied throughout the year but increased steadily from August onwards to finish the year 1.6% up and 5.2% below peak.

Provincial centres

Of the main provincial centres, four of them ended the year up on the previous year, Whangarei by 0.6%, Palmerston North 0.1%, Nelson 2.5% and Queenstown Lakes1.5%. The other main provincial centres all dropped, Hastings by -0.7%, Napier -1.6%, New Plymouth -2.1%, Gisborne -2.8%, Rotorua -3.7% and Wanganui -4.3%.

These changes over the past 12 months don’t necessarily reflect which direction values are currently moving. Many provincial centres were relatively stable for much of the year before beginning to recover in late winter and early spring. However most have begun to level or decline again in the last couple of months of the year.

Low sales volumes in 2011

Despite national values moving upwards during the year, the property market continued to be characterised by lower than normal sales volumes. Sales numbers in 2011 were more than 20% below the long term average, and while up a few percent on the sales volumes of 2008 and 2010, both of those years were the lowest since the early 1980’s, so outside of those two years 2011 is the lowest for 20 years.

Buyer behaviour

Buyers were generally acting cautiously throughout the year, taking their time to do their research before making offers. First home buyers came back into the market in 2011 encouraged by low interest rates, while investors were largely on the sidelines.

This increase in activity at the lower end of the market was reflected in the average sales price of $398,411 for properties sold in the last three months of the year. This was nearly $12,000 less than the average sales price a year earlier, a drop of nearly 3%. This change in sales price is in contrast to the QV index, which is not based on average sales prices, which rose over 4% over the same period. The QV index is a better reflection of the change in market value, not just the value of those properties that happened to sell.

2012 outlook

The property market is heavily influenced by consumer confidence, so it will be fascinating to see how 2012 pans out. Auckland values are likely to increase further, especially given that the population continues to grow, building activity has been weak, and if a lack of new listings of quality properties keeps supply below demand.

Whether values continue to increase in Christchurch depends on a number of factors including the re-zoning of properties to red or green, decisions on the nature and timing of CBD redevelopment, and of course any further significant earthquake events.

Values in Hamilton, Tauranga are likely to stay fairly stable, and whether values continue to rise in Wellington and Dunedin is difficult to pick.

The property markets in the provincial and rural areas are heavily dependent on the strength of the local economies in those areas. A strong rural sector typically has a positive impact on the property values in towns supporting those areas, likewise the coming or going of large local industries can have a significant impact.

While business and consumer confidence seems to be on the increase, there is still some concern about the financial situation in Europe, and what may happen to the New Zealand economy if events there take a turn for the worse. 2012 is likely to be another interesting year for the property market.

Data sourced from a comprehensive market report on the 2011 Residential Property Market from QV informative

Throughout human history, people have bought and traded objects from other people who specialise in their production. While normally taken for granted, this situation of mutual exchange is one of the foundations of the global economy. All of this might be about to change however, with the recent development of affordable 3D printers. We may soon be able to reproduce solid objects in our own homes, which will have a number of economic, social, and environmental implications.

3D printers, also known as a stereolithography machines or additive manufacturing devices, are capable of making three dimensional solid objects one layer at a time. While this technology is still too expensive for most home users and small businesses, costs are coming down all the time. This technology could eventually reduce or eliminate the need for assembly lines and distribution networks in certain situations, while testing intellectual property laws in the process.

The first patent for 3D printing was granted to Wyn Kelly in 1977, for a system that described object manufacture using a combination of a laser and a liquid monomer. In recent years, 3D printing has also become known as rapid prototyping, due to its use in one-off production and product testing. By completely eliminating the use of tool path calculations, many objects can now be built quicker than ever before.

While the cost of 3D printing systems is still prohibitive for most people, like all computer hardware, costs are coming down fast. Many analysts think 3D printing will become available to everyday people in the next few years, effectively allowing people to manufacture small objects in their own home for the cost of raw materials alone. Imagine the implications if a $1000 machine becomes capable of making any plastic or polymer object up to a certain size.

With the continuing development of additive manufacturing, designs will take the place of products and information will become key. In many ways, this trend has been taking place ever since the birth of the computer, and 3D printers are simply the latest example of this process. It is quite possible that in a few years time, the entire manufacturing industry will be suffering from the intellectual property and piracy problems now plaguing the music, movie, and software industries.

Despite these problems however, many people see 3D printing as a way to free people from the negative elements of commerce. Put simply, once the price of this technology gets to a certain level, it will enable poor people to get increased access to physical goods. There are also a number of environmental advantages to additive manufacturing, mostly because of the links between product distribution and pollution.

Transformative technologies like the steam engine and the light bulb have long been the catalysts of human history, with the invention of computers enabling change to happen faster than ever before. While the initial impact of 3D printing is likely to be gradual, this technology could eventually lead to big changes in the manufacturing economy and the very nature of global society.

Finding time to fit in your weekly food shop can be a hassle. After organising kids, work commitments and whatever else your busy life may throw at you, spending an hour or so in a busy shopping centre is probably the last thing you want to do. If you’re sick of pushing a squeaky trolley up and down aisles every week, you may like to try online grocery shopping as an alternative.

If you’ve every considered buying your groceries online, you may have wondered if it would save you any time or money. Is it any cheaper that the old-fashioned way, and can you be assured of quality?

Nearly all the large grocery chains now have an online store where you can do your shopping online. Most offer delivery the next day, and allow you to select your preferred delivery time. Some smaller outlets and specialist stores also offer online ordering and home delivery.

Shopping online is a convenient option if you feel short on time. You can order whenever you like, the shops don’t need to be open. Do it on commercial breaks when watching TV, on your lunch break, or just when you find a bit of spare time. There’s no fighting for a car space or lugging heavy bags to the car.

While for most people online shopping is a time saver, this can vary person to person. For instance, one shopper with a fast internet connection could complete their shop in less then twenty minutes, while another may take over an hour. Many online grocery sites have the facility to save favourites, this is big time saver if your weekly shops are usually quite similar. If you’re internet savvy and no stranger to online shopping, then it’s likely that you will save time with the online option.

As far as saving money goes, most items are priced as they are in store, and the same specials usually apply. Where you will likely save money is in that you can stick to your list and avoid the impulse buys you might have picked up in store.

Customers who purchase from the big chains report a good level of satisfaction in the quality of their goods. It’s still a good idea to check used by dates, as well as the quality of meat, fruit and vegetables. Most retailers will offer to replace any damaged or poor quality items.

Smaller online retailers are also a good shopping alternative. Many organic grocers offer a weekly delivery of fresh produce which changes seasonally. Bread, milk and dairy are also available for delivery, often by companies who source their products directly from local farms. Some independent supermarkets are setting up online operations, but so far this is not available in all areas.

If you’re looking for an alternative to your local grocery store, online shopping is a great way to save a bit of time and also enjoy the convenience of having your weekly food shop delivered to your door.