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    Welcome to the updated Lodge news, your source of fresh real estate news in Hamilton.

Hamilton Real Estate Recovery

As we head into Christmas the Hamilton real estate market’s recovery continues to gather momentum. It is our expectation that November’s volume of 211 house sales will be bettered in December. Of greater interest is the number of contracts written in December but that will become unconditional in January is 35% higher than in the same period last year. This gives us confidence that the market will continue to improve during early 2012.

We have observed that first home buyers are particularly active in the market. Many have delayed their purchase decisions as they were concerned about job security, house price stability and wanted a bigger deposit to get started with. However, many Hamilton businesses have coped well with the recession and are now showing early signs of expansion. Hamilton house prices have also remained relatively stable over the last four years. Couple this with wage growth and bigger deposits and smart young house buyers are sensing that moving early may avoid pitting themselves in competition with a growing number of young house buyers or investors. If they have done their homework they will also be aware of the low number of housing starts Hamilton has experienced during the last few years. This undersupply of new homes looms as an inflationary threat to house prices.

Of even greater importance to the market have been the types of housing that first home buyers have been buying. Earlier in the year there was a large pool of investment housing bought by first home buyers. Investors were exiting residential rentals to rebalance their own balance sheets and therefore did not buy again. Empirical evidence suggests that recently first home buyers have been purchasing the homes of first home sellers. This is freeing these sellers to re-purchase in the city and create greater momentum through the entire Hamilton real estate market.

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Landscaping Trends

Taking care of your gardens and landscaping is one of the key ways you can add street appeal and value to your property. We recently discussed some handy tips and tricks with Lloyd from Hamilton’s Wairere Gardens to help you make the most of your grounds this summer.

Knowing what your garden needs from you in each season is vital to its upkeep. At this time of year the most important thing to remember is to mulch your garden to conserve the moisture during the hotter months and make it easier for weeding. Traditionally trees would have already been planted earlier in the year but if you’re looking to put something down now perennials are great for brightening up your garden.

One of the strongest trends we have seen in recent years has been to fill your garden with bright colours and one of the easiest ways to do this in summer is with rose bushes. Bold pops of colour and trees placed to frame your home are great ways to add street appeal to your property.

If you’re looking for a way to easily maintain your garden throughout the year mass plantings with contrasting foliages is an effective look only requiring low maintenance.

Wairere Gardens have a comprehensive website which you can view here- www.wairere.co.nz that is full of instructions and tips for everything from how to prune, spraying regimes and a catalogue of all their plants.

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Reserve Bank leaves rates unchanged

NEW Zealand’s central bank left the official cash rate unchanged at 2.5 per cent today, saying the economic outlook was improving but only at a modest pace.

Inflation was of less concern to Govenor Allan Bollard despite it being outside the 3% target band. In his statement Bollard said “September quarter inflation data suggest that, once GST and other one-off influences have passed, underlying inflation is settling near 2 percent.” He went on to indicate that there was every chance that interest rates would remain at current levels for the foreseeable future.

This latest review of the OCR should give prospective home buyers confidence that mortgage rates will remain stable. Therefore, they can buy and enjoy traditionally low interest rates while retaining the flexibility of paying off large lump sums if the opportunity presents itself.

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Hamilton Real Estate Sales Lift

Hamilton residential sales volume, as reported by the REINZ, was up again in November compared to the Interest RisesameiStock_000005153709Small_We month a year ago. A total of 217 sales were reported, this was up on October’s 211 sales and well up on the 170 sales of November 2008. However, there has been a small drop in volumes since the winter months.

The median sale price of $328,500 was consistent with the range of monthly median prices since the beginning of the year. The consistency of the median price indicates that prices have stabilised.

Surprisingly, the median time a property takes to sell (called days on market) has lifted for the third consecutive month. This would indicate that sellers may have tried to price creep when listing their property. However, the market is price sensitive. The increasing days on market coupled with lower sales volumes and a consistent median price are a strong indicator of how price sensitive buyers are.

The Lodge sales team have reported renewed buyer interest in the lead up to Christmas. Buyers are increasingly viewing the next three months as a good time to buy.

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Hamilton Real Estate December Report

The Hamilton residential real estate median price soared to new heights during December which, at first glance, indicated that real estate prices in Hamilton were on the way up. However, closer analysis of the REINZ statistics reveals that there was a lack of property available for sale under $250,000. This lead to less properties being sold at this level whilst sales remained strong in other price segments and ultimately had the effect of driving the median price up although house values may not have changed much.

The median time a property remained on the market rose again for the fourth consecutive month. From 27 days in August the days on market median climbed to 35 days by year end. Coupled with falling sales volumes and increased availability of properties for sale buyers took their time deciding on a purchase and focused on value selections. Sellers who may have been a little bullish with their pricing in large were overlooked by buyers until they readjusted their expectations.

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QV Downplays Hamilton Real Estate

Valuation agency QV released its July data that journalists immediately seized upon to sensationalise. Essentially QV’s House Price Index for Hamilton has remained relatively flat over the past year, up only 0.3%. In addition the city’s average price for July was $352,576 up only 2.3% on a year earlier. This was in contrast to the House Price index for New Zealand rising 4.1%. Good news if you have been saving a deposit to enter the market.

However, the news gets better. What the QV figures haven’t yet reflected is that sales have been slowest in the segments that have suffered the biggest price decreases. This has opened terrific buying opportunities in certain sectors. Overseas investors have recognised the value in the market. Wall Street Journal Asia reported last Wednesday that specialist real estate fund manager Du Val Group has launched a $180 million fund to cash in on the depressed property prices in New Zealand.

Contrary to what was reported listings have remained stable over the winter. The market has reacted to well priced listings and salespeople have reported multiple offers on a number of these properties. What QV have highlighted is that now is a good time to consider entering the market.

However, despite the doomy reporting the city’s prospects are thought to be good. Witness the amount of redevelopment in the city.

  • New Zealand Home Loans stunning refit on the corner of Prince’s and Victoria Sts.
  • SBS Bank’s new premises on the corner of Bryce and Victoria St’s.
  • Ricoh copier’s new building on the corner of Anglesea Street and London Street.
  • The expansion of Westfield Chartwell only a short time after the mall was expanded last time.
  • Momento Cafe moving into the refitted 7 Ulster Street.
  • The new BNZ store in Frankton on the Commerce Street / Lake Road corner.
  • The opening of Te Awa to extend the shopping experience of The Base.

The investment in these buildings by their landlords and the confidence of the tenants to secure bigger and better premises is a mark of confidence in the city by some of its most astute business people. This at a time when prospects for Hamilton seem at their worst.

Markets don’t move when economists expect them to. If they did economists would forecast downturns and therefore  avoid recessions. Markets move with peoples’ confidence. Over the past two years home owners have consolidated balance sheets and retired debt as many were fearful of their job prospects. However, as businesses take on new leases and commit to longer term projects confidence will return to employees. This is most likely when we will see an improvement in housing confidence. Given the behavior of businesses recently that may not be that far away.

Traditionally, Hamilton median prices track the New Zealand median. Whenever, there has been a difference between the two the Hamilton median has quickly caught the national median up. Perhaps this is an indicator buyers should be wary of.

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Hamilton Real Estate Report – July 2010

Although sales of Hamilton residential property remained low during July there was increased activity in the lower quartile of the market. Both investors and first home buyers have started to appreciate the value which exists in some of these properties. Sales of properties priced between $200,000 and $300,000 have grown from 28% of the market in April to 35% of the market in July. Interestingly enough there has been strong competition for some properties in this price range. Good examples include Debbie Prime attracting 9 bidders to a property in Chequers Ave which sold for $276,100 while Brian Kneebone had 4 offers on a property in Myrlene Place which sold for $218,000.

The median price drifted back to $335,000 from $350,00 in June reflecting the interest in the market below $300,000.

Despite the falling number of sales the median time it takes to sell a house is also falling. Buyers are showing good interest for properties new to the market. However, much less interest is being given to properties which have spent some time on the market.  To capture this interest it is imperative a property is priced close to market from the outset or a non price marketing strategy such as auction is adopted.

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Lifestyle Sales Steady

The lifestyle sector is seeing an explosion in activity as buyers rediscover enthusiasm for the rural option (and sodden, water-logged blocks dry-out!). The sales team report that interest in lifestyle sections is undergoing a dramatic upturn as buyers acknowledge and recognise the terrific selection available to them. A lack of development could, however, result in a sudden narrowing of choice. The only portion of the market that has been relatively soft has been where properties are priced between $500,000 and $1 million. However, recent enquiry suggests this sleepy market segment may quickly wake up.

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Football Gets the Boot From Mangaiti Park – Huntington

Hamilton Mayor Julie Hardaker today praised Council staff, the Huntington residents association and Waikato-Bay of Plenty Football for their professionalism, co-operation and common sense approach as Council unanimously voted to look at new options for the proposed Home of Football facility in Hamilton.

The Mayor said it was an example of successful Council processes at work.

Hamilton City Council has been in consultation with Huntington residents over a proposal to locate a Home of Football at Mangaiti Sports Park.

Waikato Bay of Plenty Football (WaiBOP) originally approached Council with a request to set aside reserve land to establish a regional football facility in Hamilton to provide a much needed base for the code and an area for coaching clinics and youth development to occur.

It was also intended that the facility would act as an important community hub in the neighbourhood it is located in.

Mangaiti Sports Park was proposed as an option as it met the criteria needed to accommodate a regional football facility.

Community consultation was recently undertaken on the proposal including a call for public submissions, the development of a revised proposal to mitigate issues raised and a public open day.

The process drew together a number of Huntington residents who raised concerns over the ‘scale and intensity’ of the proposal and presented Council with an alternative for the development of the park.

The vision for the facility as a community hub rests on the backing of local residents and Council and WaiBOP worked with residents to hear concerns raised and respond to them..

As a result a number of alternative locations will now be considered, with the North City Road Reserve being the preferred alternative site for exploration. This site provides a number of benefits which were not available at the time Mangaiti Sports Park became a proposed location – including the attraction of a road reserve site and potential integration with a proposed swimming pool and new schools in the area.

Mayor Hardaker described recent engagement with Huntington residents as “A shining example of what can be achieved when you are solution focussed.

“Community consultation is really an opportunity for Council to be directed to what the community feels it is important Council should consider. And that is what has happened here.”

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Optimistic Outlook for 2011

At the end of 2009 there was an expectation from most market commentators that there would be a lift in Hamilton residential sales during 2010. However, exactly the opposite eventuated.

The table below graphically illustrates the market’s demise:

End of Nov 09 End of Nov 10 Movement
Sales 2392 1723 28%
Median Price $328,500 $324,000 $4,500
Median Days to Sell 33 49 +16 days
Estimated properties for sale 1155 1338 16%
Top 3 suburbs by volume Rototuna

Hillcrest

Nawton

Rototuna

Nawton

Hillcrest

# of mortgagee sales 97 65 33%

Although for much of 2010 we witnessed market conditions deteriorate October was the bottom. Since then we have seen a strong recovery in November followed by solid sales activity during December.

Our outlook for 2011 is for volumes to continue increasing throughout the year. Our reasoning is based on the following;

  • Hamilton’s population has maintained its growth up 1.7% for the year.
  • Rental demand for accommodation is consistent with some sectors lacking properties to rent. As tenants become frustrated with the lack of choice they can often turn their attention to purchasing.
  • Business activity has lifted and Hamilton businesses are producing good wins. A prime example being WEL Networks $300 million broadband build contract.
  • Providing the rain outside my window continues farmers will benefit from an increase of 30c per kg of milk solids taking the payout into the region of $730 – $7.40 before retentions.
  • Finally, the rugby world cup will add stimulus to the entire country. However, it could also attract immigration as scores of northern hemisphere tourists sample our unique lifestyle first hand.
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December Sales Report

Strong sales volumes in the final month of the year herald a change in market direction.

The number of houses sold in December rose for the second consecutive month. The December tally of 175 house sales was 16% higher than the average number of properties sold per month for the previous 11 months. Market volume fell throughout the year to a low point of 138 house sales in October. Since then month on month growth and strong early January enquiry are positive indicators the market is trending towards recovery.

The median number of days a property spends on the market also fell to 38 days indicating a lift in the confidence buyers have in the market.

Hamilton’s median price consolidated at $326,750. The median price has shown volatility during the year trading in a range between $320,000 and $350,000. However, this was a side effect of the unusually light volume of sales throughout 2010.

As could be expected in a stronger selling month the number of properties available for sale fell. However, the number of properties entering the market in early January would suggest this may have been caused by the shorter month rather than by the higher sales.

The outlook for 2011 is for sales volumes to continue building. Whilst it may be some time before we see price increases the old adage that price follow volume still haunts our thinking.

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Real Estate Marketing Trends

The Hamilton market has started the year with much better enquiry than the same period last year. There are also some particularly evident trends emerging in the process that buyers are using to find property. These changes are particularly important for sellers to understand to give themselves the best possible opportunity to market their home in an increasingly competitive marketplace.

The first trend we have noticed is that buyers are far more informed than ever before when enquiring about a property. Largely due to the significance of the internet buyers now have far more access to information than ever before. They are therefore undertaking more research before contacting a salesperson. Not only are they interested in learning about the property itself they are also interested in the neighbourhood and surrounding values. Suburb profiles are draw-cards for them as are neighbourhood metrics. The more information they can glean about a property the more likely they will confidently enquire about it.

Secondly, the internet is only one source of information. Buyers use a combination of new technology with old style browsing. Lodge has well over 1000 buyers who everyday receive an email alerting them to properties which are new to the market which meet their search criteria. This service is ultra convenient for active buyers. However, our research has shown that properties that have large newspaper ads get a spike in internet viewings in the week after the ad runs. This shows that firstly there are a number of active buyers who still use the newspaper. Secondly it highlights to us that there is a significant number of buyers who are not ‘active’ but are motivated into action when casually browsing the property section of the newspaper. Hence, in this hi-tech world newspaper advertising is still a very important source of enquiry.

The third trend is linked to the lack of time people have today. In a world where often both couples are working convenience and the desire to save time has become a dominant benefit. Tools such as the Lodge open home map or internet tools whereby a custom built open home map can be constructed and optimum route plotted are a necessity for buyers with the means to buy but limited time to look.

Salespeople report that these three trends are having a significant impact on the process that buyers are going through. The buying process is an evolutionary one. Technology is improving the real estate experience for both buyers and sellers. However, it is important to understand the tools that buyers value in order to place your property on their map.

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UNDERSTANDING THE MEDIAN

A number of people have voiced their concern that prices in Hamilton were tumbling after reading media commentary that the 2010 December median price fell 8.4% below that of the December 2009 median. We thought it important to clarify firstly what the median price is and to give a broader picture on its trend.

Firstly the median is the number separating the higher half of a sample from the lower half. The median of a list of numbers is found by arranging all the observations from lowest value to highest value and picking the middle one.

The median house price is one of the most common measurements used to compare real estate prices in different markets, areas, and periods. It is said to be less biased than the mean (average) price since it is not as heavily influenced by extremes such as a small number of very highly priced homes.

Monthly movements in the median are, however, still volatile. This is particularly true when there are fewer houses sold. When there are less sales the distribution of sales can heavily influence the median from one month to the next. Hence, when considering the median as a guide to price it is more useful to examine the trend rather than comparing one isolated month with another.

The December 2009 and December 2010 Hamilton median price is a good example. In the one month between November 2009 and December 2009 the median rose 6.5%. (shown in the accompanying graph) This was primarily the result of a drop in the relative number of properties sold under $350,000 during December rather than any price movement. During the next few months the anomaly corrected itself and the median returned to almost the identical figure by March 2010. It continued to remain at this median for much of the remainder of the year including December.

To identify the trend it is often useful to average the median over a number different periods in an attempt to understand its trend. When this is done, as is shown in green on the accompanying graph, the comparison between December 2009 and December 2010 shows a very stable median rather than one that has fallen dramatically.

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January Sales Slow To Start

Promising enquiry levels in early January have been slow to materialise into sales during the month.

Most of the sales team returned from holiday in early January to strong enquiry across all property segments.   Figures released from realestate.co.nz substantiate this as unique browsers for real estate during January 2011 jumped 22% over the same period a year earlier.   This increase is consistent with activity on the lodge.co.nz website.   However, despite the improved activity sales have been markedly slower than last year.

Although there is a more cautious approach to buying much of the apathy can be attributed to a late return from holiday for many buyers rather than a systemic weakness in the market.   Already, as families settle children back into school routines, a greater level of sales is being experienced within the market.

Many people have recognised that whilst the residential and lifestyle markets have been in the doldrums for the past three years the fundamentals have improved.   According to the Roost Home Loan Affordability Index, Hamilton’s affordability has returned to the same level as that of 2005.  This gives a far greater number of buyers the opportunity to enter the market.

Many buyers suspect prices will improve from current levels and with good reason.   The primary argument being that Hamilton’s population continues to expand at a time when building consents are below par and this indicates a looming property shortage within the city.   Typically this excess in demand over supply equation puts upward pressure on prices. As a consequence investors are active within the market sensing a pay off from the mismatch.

Sales volumes are expected to rise throughout 2011 after 2010 volumes fell to their lowest levels since the REINZ started keeping records in 1992.   A surge of properties onto the market gives buyers terrific choice and emphasises the recognition of Hamiltonians that now is a great time to trade up.

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Hamilton Real Estate Quarterly Review

Hamilton residential real estate sales over the March quarter were down 5% on the quarter ending December 2010. Whilst this might suggest a stymied recovery it is a seasonal trend whereby declines in recent years have been as much as 20% between the quarters. The quality of the sales during the quarter was the most encouraging sign. First home buyers and investors were evident within the market. This was reflected in sales below $325,000 jumping to 54% of all sales up from 46% for the previous three quarters. This shift in the distribution of sales moved the median for the quarter from $333,000 to $315,000.

Rototuna was again the top selling suburb for the quarter although its dominance fell from 16.9% of the market back to 15.5%. Sales in Hillcrest boomed as investors showed confidence in the University dominated suburb moving sales in this part of the city to 9.3% up from 8% for the previous three quarters. Nawton held steady at 7.9% of the market while Hamilton East was kicked along by first home buyer and investor interest making up 7.5% of the sales. However, the suburb shed 5.5% from its median sale price as sales were concentrated sub $300,000. Rounding out the top 5 Dinsdale again proved popular particularly with first home buyers capturing 6.7% of the market.

We expect sales numbers to continue to climb throughout 2011 as the market’s 1400 sellers are freed to buy their next home. There is a distinct shortening of available housing entering the market which is good news for current vendors. This can be evidenced from the number of houses listed for sale on realestate.co.nz which fell from 1320 properties at the beginning of March to be 1207 houses available midway through April. As sales rise and the number of properties available for sale drops there is typically talk of a price recovery. However, the market is acutely price sensitive with buyers opting not to purchase (staying put or renting) if they cannot find the right home at the right price. Therefore, there is some way to go before we expect prices will recover.

The first stage to a recovering residential real estate market is to see volumes improve. This is well under way in the Hamilton market and we expect we will see this continue throughout the year.

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Reserve Bank Leaves OCR Unchanged

Good news for homeowners today when The Reserve Bank left the Official Cash Rate (OCR) unchanged at 2.5 percent. Homeowners and those entering the market could take confidence from the Reserve Bank Governor Alan Bollard’s statement that: “The outlook for the New Zealand economy has improved since the publication of the March Statement.” He went on to point out that whilst the Christchurch earthquake had been devastating for the Canterbury region economic recovery throughout the rest of the country appeared not to have been disrupted.

The strong outlook for export earnings and the associated growth in jobs and export lead recovery should serve as further encouragement for those looking to make a property decision.  Bollard did warn of impending rises in the OCR. As the recovery gathered pace he expected interest rates to rise over the next two years. He was not specific about the timing or magnitude of these increases saying that “The pace and timing of increases will be guided by the speed of recovery, but for now the OCR remains on hold.” This may provide impetus for the housing recovery as buyer urgency heightens to take advantage of traditionally low rates.

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Colour Trends for 2011

Mel Oliver from Turton/Oliver in the Queenwood Village gives us her insight into the interior decor trends shaping Hamilton houses this winter.

This years colour trends tends to be a variation from 2010, with only a few surprises. Greys are a more neutral colour this year being used to balance deeper more saturated colour shades. Ranging from almost white to very dark and shades in between. Purples while exciting a couple of years ago have now moved into the mainstream and will be as common as blue was in the 80’s & 90’s. Lighter shades of raisin tones, darkened mauves and blue/purple tones will be standard & common in all interior decorating elements.

Making a big comeback Blues —ice blues, turquoise have been popular for a while now but the shades of moody blues are finding their way back into our décor. When it comes to interior decorating green, is taking two different directions, look for green that moves into olive hues or leans into the browns and in the opposite direction greens that head towards shades of teal. For accent colours as mentioned true purples and yellow, becoming darker and richer finds its way inside the home and pink although popular for a while is still growing in its acceptance.

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Hamilton Real Estate Quarterly Review

June residential real estate sales in Hamilton show the road to recovery is well underway. The quarter averaged around 200 sales per month compared to 157 sales per month for the same quarter a year ago. First home buyers and investors are key driver in the market. Their influence, particularly in the segment under $320,000, has dropped the June quarter median price from $340,000 in 2010 to $324,500 this year. Prices remain stable and it is anticipated they will remain so in the foreseeable future. Both first home buyers and investors are price sensitive and their reluctance to be drawn into paying more has restricted the budgets of buyers as they move up the property ladder.

At first glance the median time to sell of 48 days being up on the 38 days at the start of the year might point to market weakness. However, the cause of the blowout is the decline in the number of properties available for sale. The number of properties available for sale by agents shifted from around 1300 properties at the end of March to about 1000 properties by the end of June. Typically, if a property is over priced in a market with excess listings when it is re-priced the market can fail to notice the change in value. It can get lost in the clutter as buyers focus on properties which are new to the market. However, as more properties sell and fewer properties are listed for sale all properties become more obvious to buyers. Hence, when properties that have been sitting for some time are re-priced they get noticed by the market and sell. This elongates the time on market measure yet reflects a recovering or strengthening market.

The change in the market is made obvious in the sales to month’s stock ratio which measures how many months worth of houses are on the market or how quickly the market is selling all the houses available. This has fallen from 8 months in February to 5 months by the end of June. Anecdotally, the market experiences upward price pressure when this measure reaches 3, which if the number of houses listed remained low and sales continued could conceivably occur in the next few months. However, typically the market experiences a surge in houses new to the market in the spring so pressure in the area is expected to ease.

Overall the market is well on its way to recovery. Hamilton’s population continues to grow. People new to the city, first home buyers and investors are beginning to see value, and have confidence, in the housing market.

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Design Direction

We asked renowned Hamilton architect Peter Chibnall where the team at  Chibnall Buckell Marovic Team Architects foresaw architectural trends progressing.  They should know having delivered projects across New Zealand from low to national high end residential and commercial, and internationally with Office, Apartment and University Design and Build in Goa, Mumbai and Pune in India.

Peter points to design sustainability (Green Design), best cost value and efficient use of building materials, clever space planning, change of building use as the occupants’ themselves change their lives, examining the life cycles of actual buildings, are all becoming more and more part of the modern architectural design “journey”.

The national and international movement in the residential design marketplace is currently progressing with a huge leap forward. Every user group situation, from young families starting out on their house “journey”, empty nesters that need to down size, family “units” who spend the weekend at the beach/lake/mountain, to the “mature” market who need comfort, security and accessibility, are part of the current design scene when working with an architect, sufficient to create the best possible residential design solution.

Building cost “control” is very important as is the onsite buildability. Council/Territorial Authority and Building Code compliance factors are becoming stricter, as are build time frames. These factors are all an essential part of the team based design approach when working with a Registered Architect. To this extent, an “Architect Design and Chosen Contractor Build” strategy is becoming a common build delivery, with agreement and parameters around a fixed lump sum and fixed time line.

The national and international movement in the commercial design real estate sector has indeed been challenging over the past years, as the recession has the recent marketplace hunkering down to ride out the economic “storm”. Recently though, the commercial marketplace has begun to move forward, with architects skilfully examining cost efficient reuse of existing building stock, creating new commercial, conceiving new and upgraded retail and tourist based spaces, and with that, has come new building forms and new material technologies inside that delivery.

These trends are reflected in CBM Architect’s recent “design joy”, which includes;

  • creating the upcoming National Velodrome near Cambridge,
  • delivering the Lake Karapiro Community Centre and Control Tower for the 2010 World Rowing Championships,
  • extending The Ferrybank for Hamilton Rowing, and
  • delivering several low and high end residential projects. More “joy” has emerged in this challenging economic recession with a new Eye Clinic in Hamilton, University of Waikato projects, a luxury car showroom in Mount Maunganui, and even a medical centre created from the conversion of an old car showroom in Takapuna, Auckland.

Part of the CBM Architect’s support system is Team Architects, www.teamarchitects.co.nz, made up of nine practices around New Zealand, with seventy skilled people, who are changing the face of New Zealand’s architectural stage.

Have a cruise through www.cbmarchitects.co.nz during your busy day, and if you are game enough, link up with them on Facebook, at www.facebook.com/ChibnallBuckellMarovicTeamArchitects, to see their many projects emerge onto the building design and delivery scene.

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Residential Investing

To date in 2011, investors have re-entered residential real estate with increasing enthusiasm. Of course, individual investors approach the market in different ways – some seek higher cash flow yields, others look for potential capital gains, or they may be among those that seek to secure land for future development.

But just what is a ‘lucrative investment’? Below is the opinion one of Hamilton’s most experienced property managers (himself a ‘perennial investor of 26 years’), David Kneebone, general manager of Lodge City Rentals.

David says while yield is important the true windfall comes when you identify a ‘hyper-growth’ area through solid research, observation, and calculated risk.

David’s investment tactics:

  1. Wealth generation is a combination of capital gains and cash flow.
  2. You’re better paying fair value in a blue chip suburb than paying less for a property in a suburb that no-one wants.
  3. Buy long term – so buy when you can afford to hold on.
  4. Invest in expert advice – save on paying for mistakes.
  5. Debt magnifies returns: Unpopular today, but don’t confuse debt that used to buy consumer products with debt that is used to generate income. Manageable and prudent levels of debt will leverage your investment returns over time.
  6. Specialise in growing your portfolio – thereby growing your wealth potential. Let an expert take care of the day-to-day management.

David has helped a number of investors develop their own criteria for residential investment. If you would like to discuss your entry or expansion in the investment property market, give him a call.

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Commercial Sense

In line with the economic recovery throughout New Zealand’s various business sectors, we’re now experiencing the beginning of Waikato’s commercial property recovery. The commercial property sector has seen significant change since the recession took a tight grip on our economy in 2008; vacancies increased throughout the retail office and industrial markets as many businesses either downsized, or downgraded, their accommodation.

As the recovery unfolds it is evident that some retailers and office tenants are being enticed away from the CBD to newer buildings (to Te Rapa in particular), and RD1 is a typical recent example of this trend.

In the CBD, this has led to widespread refurbishment of older, dated premises, as landlords look to retain existing tenants or attract new ones. The building on the corner of Princess and Victoria Streets is one of the latest properties to undergo such an upgrade.

Owners of retail space are conscious of the need to keep their CBD properties vibrant and competitive. Kiwi Income Properties is revamping both the Downtown Plaza and Centreplace; this includes the addition of a north-facing boutique eatery strip along Bryce St. The consolidation of retail around this area further delineates the CBD between a distinctive restaurant precinct in the south and a retail precinct in the city’s heart.

Further afield, cases of renewed confidence are evident in the city’s north. Tainui recently sold down its shareholding in Ryman Healthcare to bolster its investment in Te Awa retail, which includes funding for the planned Ruakura transport hub. The positive sentiment in Hamilton’s commercial property prospects is hugely encouraging for the local business environment.

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Property Management Review

There has been renewed interest in property management over the past six months or so. Legislative changes that were highlighted in the media, together with more awareness of the financial dangers of poor property management, have no doubt contributed to the excellent activity levels of late.

Changes to the Residential Tenancy Act have introduced new responsibilities for landlords and property managers when operating rental homes. These include: provisions that landlords appoint a New Zealand-based agent when leaving the country for more than 21 days; regulations about ending fixed-term tenancies, and; increased responsibilities regarding tenancy bonds.

The changes give both tenants and landlords an ability to pursue monetary redress if certain obligations are not fulfilled by either party.

Also of interest to landlords would have been the case of two start-up property managers that were profiled in the Waikato Times for ‘inappropriate handling of client funds’.  Unfortunately these are not isolated cases, as similar offences have occurred in other centres.

Take care when selecting a property manager. Consider the following:

1.   The property manager’s track-record and time in business.

2.  The security of your funds (away from the general day-to-day accounts of the business).

3.  The solidity and security of the systems of the property management business, and its ability to cover staff absences or other disruptions.

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Hamilton Real Estate Review July 2011

Hamilton house sales during July fell marginally from the numbers recorded in June. The 8% drop to 191 sales was still a 26% improvement on July 2010. The median price continued to bounce around, jumping to $338,000 from $315,000, fluctuating with the changes in the distribution of sales. More importantly, as shown in the accompanying graph, the 6 month median price trend line has been steady at $325,000 for over 7 months. The number of houses available for sale has been falling rapidly over the first half of the year. However, the number of houses entering the market rose during July which, when coupled with the slight pullback in sales, flattened the decline in stock. Clearance rate of all auction properties, selling prior to, under the hammer or post auction, during the June/July period exceeded 75% by the start of August.

Buyers to this point have remained price sensitive and patient. However, the availability of properties under $300,000 is diminishing and this is causing concern for first home buyers who have been fuelling the market’s recovery. Waiting on the sidelines may no longer be a prudent option for those who have been disciplined to this point.

The popularity of suburbs Rototuna, Hillcrest and Nawton continued during July. However, a surge in activity in Fairview Downs surprised the market. Buyers began to recognise the value of the affordable properties with access to open recreation spaces and easy access into the central city or Westfield Shopping Centre.

The top end of the market roared into life after struggling for the first half of the year. There were a mere 19 sales above $650,000 for the first six months of 2011. By comparison there were 10 sales recorded above $650,000 during July.  Highlights in this segment during the month included;

Louis Lin’s sale of a Rangiwari home for $1,000,000

Warwick Johnson’s sale of a Beerescourt river property for $745,000 and

Glenn Collins and Sonia Christison’s sale of a River Road character property for $949,000.

Early indications for August point to a growth in the number of sales as children head back to school and parents refocus on buying their next home.

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Carpet Trends

We’ve been talking to Karen McGill from Carpet Court to learn more about Smart Strand, the next generation of carpet innovation that delivers fashion without fear.

Smart Strand from Mohawk is the carpet that lets you feel at ease in your own home, whether you’re entertaining dinner guests, letting the children and their friends run around or having the pets out to play.

Designed to fit the way you live, Smart Strand takes the every day fear out of owning carpet by bringing together better stain protection, durability and softness in a modern and trendy package.

What sets it apart from other carpets is the unique stain protection built into every fibre, giving it a permanent built in resistance – even against stains that have set in for days.

Smart Strand also offers crush resistance and appearance retention enabling your carpet more resiliency due to the unique “spring like” molecular structure of the polymer.

With Smart Strand you don’t have to compromise on appearance or style to enjoy a carpet that can withstand the effects of everyday life. Made from natural and eco friendly resources, customers are praising its stylish look and soft feel.

More features and benefits include soil resistance, abrasive resistance, anti static and a fade resistance, all which come with a 25 year quality warranty.

Smart Strand is a carpet that can stand up to all the spills and stains that life has to offer, so instead of worrying about your carpet, you can enjoy life on  it- glass of red wine in hand!

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