Property Legals

Today was Luella Martin’s last day at Lateral Lawyers after 8 loyal years. During that time she’s been the best possible employee and even better friend. She’s supported me through all the highs and lows, and we’re going to miss her dearly. She’s gonna kick ass in Perth, and I’m so proud of the woman and lawyer she’s become. Go hard Legend, you’ll always be in our hearts and minds 🙂

"They have been very quick to increase the mortgage lending rates, but deposit rates have lagged behind, and bank margins are holding up," says Adrian Orr, and the proof is in the pudding with Kiwibanks's half-year profit surging by 53% to almost $100 million (see Gareth Vaughn's latest article on Interest.co.nz).

And why is this important? Well "higher deposit rates are a critical part to encourage savings which takes inflation pressure out of the economy".

Click on the link below to read the full article:

Orr jabs at banks on deposit rates and inclusion RBNZ Governor Adrian Orr calls on banks to lift deposit rates as much as mortgage rates; says Gabrielle shows banks haven't done enough on inclusion and resilience in regional areas

"The upshot of all this is that the frantic drive to build tens of thousands more homes wasn’t only unnecessary – but, if we’re not careful, the legacy of it may be a glut in supply in the coming years – which is the last thing we need in a market where prices are already under pressure."

Read the full article below.

Is New Zealand building too many houses?

A house can’t buy your groceries or mend its own roof, and with inflation on the rise, those over 60 may have the option of a reverse mortgage to free up some cash.

A reverse mortgage lets you borrow funds using your home as security. The lender gets its money back (plus interest) when the house is sold, and in the meantime, it frees up some spending money.

You must be at least 60 to qualify, be mortgage free (or close to) and you can only borrow a percentage of your home's value.

You may choose to borrow a lump sum, draw on it as needed or receive regular payments depending on your needs and to keep interest down.

Getting independent legal advice before your loan is finalised is essential to make sure you fully understand how the reverse mortgage works. It's important to consider your personal circumstances and the pros and cons involved.

A house can’t buy your groceries or mend its own roof, and with inflation on the rise, those over 60 may have the option of a reverse mortgage to free up some cash. A reverse mortgage lets you borrow funds using your home as security. The lender gets its money back (plus interest) when the house is sold, and in the meantime, it frees up some spending money. You must be at least 60 to qualify, be mortgage free (or close to) and you can only borrow a percentage of your home's value. You may choose to borrow a lump sum, draw on it as needed or receive regular payments depending on your needs and to keep interest down. Getting independent legal advice before your loan is finalised is essential to make sure you fully understand how the reverse mortgage works. It's important to consider your personal circumstances and the pros and cons involved. #propertylegals #property #Newzealand #mortgage #lending #finance #realestate #housing #retirement #budget #spending #law

Banks are now stress-testing mortgage serviceability at around 8%, a steep increase from the rates used last year which were in the high fives.

Buyers will be looking to tighten their budgets and work closely with their broker to obtain pre-approvals.

Click on the article below for more details.

'Less money sloshing around’: What 8% test rates mean for the housing market Buyers won’t be able to spend as much and homeowners’ finances will be squeezed, warn experts.

Lightening up your Wednesday

Check out the latest post from OneRoof for 5 bite-sized updates on the property market.

While some data points are down others are on the rise and there may be light at the end of the tunnel in 2023.

84% of suburbs in the red as Kiwi exodus continues The five things you need to know about the housing market this week.

From the 1st of October 2022, many of us will see an increase in our house insurance premiums. Your first reaction may be to yell “ah those damn insurance companies are upping their prices like everyone else!”. However, delve a little deeper into your invoice and changes in the insurance market and you’ll see this is not the sole cause.

The Earthquake Commission (EQC) has increased the cap on the amount they will pay out to homeowners in a disaster (such as an earthquake, tsunami, or natural landslip) from $150,000 to $300,000 (excl GST). To do this, they need to increase the annual EQC levy charged as part of your insurance policy from $300 to $480 per year (excl GST).

So why are you paying more if your suburb's natural disaster risk is relatively low?

Historically, earthquake-prone areas such as Wellington, Canterbury and Hawkes Bay have carried the brunt of the costs, with the average earthquake premiums in Wellington coming in at $1,467 compared to Auckland at $308 (see next slide). The cap increase means the Government, through EQC, will take on a greater share of the risk and liability for natural disasters, while also redistributing the costs across the country to ensure private insurance cover remains affordable and sustainable for high seismic areas.

This will see rising insurance premiums for Aucklanders and those in low seismic areas, and potentially decreasing costs for those in high seismic areas such as Wellington. We say potentially, as insurers will still need to factor rising building costs, increasing weather-related claims and record levels of inflation into their premiums.

Want to know more about potential changes to your premiums? We recommend getting in touch with your insurer and you can also check out the full article here:https://mjw.co.nz/wp-content/uploads/2021/10/mjw110-EQC-cap-change-insurer-pricing.pdf

Worried about rising interest rates and re-fixing your mortgage?

Check out the latest episode from the Mortgage Man for some great tips on how to manage the process and what to consider.

https://open.spotify.com/show/6HWLVBmtvx7w7EGQrKCnYA?si=5a78db210ad14cb9

The Mortgage Man - A First Home Buyer Podcast Listen to The Mortgage Man - A First Home Buyer Podcast on Spotify.

According to ANZ's economists, New Zealanders should expect to see continuing house price drops and a slowdown in residential construction.

In their latest NZ Property Focus report, they predicted house prices to decline by 11% over the course of this year but warned that it's possible we may see a bigger decline.

The report also warned that residential construction is due to take a hit. With residential investment already in the firing line as interest rates continue to push higher, house prices fall and shortages in both materials and labour. These factors reduce the construction of new homes and continue to add uncertainty in the near term.

Let us know your thoughts below!

ANZ warns of continuing house price falls & a slowdown in residential construction ANZ's economists warn that the stars are aligned for a slowdown in residential construction

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