31 August 2010

Auckland, New Zealand is the 115th densest city in the world and growing.  With a population of close to 1.4 million today (up from 1 million in 1997), the “big little city” is expected to grow to 2 million by 2030.

There is incredible pressure on the current infrastructure of urban Auckland due a lack for foresight for such rapid growth from local and central government as well as the private sector.  As Auckland’s central business district continues to be the dynamic financial and economic centre of New Zealand, the pressure on essential services like transport and housing grows.

Auckland’s urban and outlying districts are currently comprised of eight regional and territorial authorities, each with their own governance and mayors.  Following local body elections on 1 November 2010 these will be merged into one council, colloquially referred to as the “Super City” council.

The new mayor of Auckland city will face the challenging task of working through not only the myriad of difficulties posed by a completely new local government system, but will also be charged with helping Auckland grow and develop at a sustainable level.

Housing shortages in the Auckland urban area continue to be an on-going problem.   Initially developers were encouraged to intensifying construction in the existing area; however that hasn’t worked at all well.  With a severe lack of existing sites with the city limits, and a reluctance to build outside the urban area (due in part to difficulties posed through poor infrastructure and transport); developers are likely to push the new mayor to extend the Metropolitan Urban Limits.

If this can be achieved; good quality, high density housing should spring up around major rail and road points – providing these have been developed to cope with the additional pressure.

The Rugby World Cup comes to New Zealand in 2011 and Auckland will be the hub of the action hosting pool games, both semi-finals and the final.  Many of the 60,000 plus visitors will base themselves in our largest city and therefore truly test the transport and infrastructure.

If Auckland can cope with this massive influx of visitors in little over a year’s time, it is a positive sign for coping with the fast growing city’s urban sprawl far in the future.

Ref: Sunday Star Times, 29.08.2010

24 August 2010

Here in New Zealand we are proud of our nation.  Throughout a series of articles we will be showcasing this wonderful country of ours.

New Zealand has so much to offer for its own residents, tourists and those of you looking to emigrate.   If you are looking at investing in New Zealand property it would be wise to familiarise yourself with the area and anyone considering a visit should take note of the following.

Let’s begin!

#100    Beehive and Parliament Buildings - Wellington 
For those of you unfamiliar with the New Zealand Government building; the Beehive is an interesting piece of architecture to say the least!  As you would think the building is shaped like a beehive and was constructed in the 1970’s.  A controversial design at the time; it is now a New Zealand icon.  Parliament has an ‘open house’ policy and free tours of the buildings are available, including the debating chamber while is session.  For more information please visit www.parliament.nz

#99     New Zealand Rugby Museum – Palmerston North, Manawatu
New Zealand’s national game is rugby union.  The national team (the All Blacks) are the most successful team in the history of the sport and New Zealanders are very proud of their “men in black” so much so the nation goes into mourning if they lose!  The rugby museum in Palmerston North showcases New Zealand as a rugby powerhouse and has a range of interesting and informative displays for the fan and non-fan alike.  To make a booking please visit www.rugbymuseum.co.nz

#98    Stonehenge Aotearoa – Carterton, Wairarapa
Aotearoa is the Maori (indigenous people of this land) name for New Zealand.   It means “Land of the Long White Cloud.”  The structure completed near Carterton in 2005 is a full scale working model of the original Stonehenge situated in Salisbury Plains, England.  Aotearoa Stonehenge is perfectly placed to record seasons; celebrate winter solstice and Matariki (Maori New Year).  Situated on private property, bookings are essential so please visit www.astronomynz.org.nz/stonehenge for more information.

#97    Cross Country Skiing – Queenstown/Southern Lakes
New Zealand has world renowned ski fields and breath-taking scenery.   Lake Wanaka has New Zealand’s only dedicated cross-country skiing area, with over 50 kilometres of tracks way up in the Pisa Range.  Cross country skiing can take some mastering but it is an experience like no other on the ski field and the views along the mountains and over the lake are well worth the hard work.  For more information please see www.snowfarmnz.com

#96    Writers Walk – Wellington
This self-tour of the capital city is for those with an avid interest in the arts.  The tour encapsulates musings cast in stone by writers who, at some point in their lives, have called Wellington home.  These include Katherine Mansfield, Robin Hyde, Denis Glover, Bruce Mason and Vincent O’Sullivan.  Look out for James K Baxter’s sculpture, which appears to float on the surface of the Te Papa pool.  For more info see www.wellingtonnz.com/sights_activities/wellington_writers_walk

#95    Hundertwasser Toilets – Kawakawa, Northland
These need to be seen to be believed!  Situated in the picturesque town of Kawakawa; these public conveniences were designed by world renowned artist, ecologist and architect Friedensreich Hundertwasser – the only structure he completed in the southern hemisphere.   Made of recycled coloured glass bottles and old bricks, featuring brightly coloured archways and sculptured columns with a tree growing in the building itself – this is not to be missed if you are visiting Northland! www.eventfinder.co.nz/venue/hundertwasser-public-toilets-kawakawa

#94    Golf in Alpine Splendour – Queenstown/Southern Lakes
Queenstown Golf Club’s 5th hole is said to be one of the most photographed in the world.  Framed by Lake Wakatipu and the majesty of the Southern Alps it can be difficult to concentrate on your drive!  The world class Millbrook Resort and golf club is a short drive from Queenstown and offers similar awe-inspiring views along with luxurious accommodation.  Please visit www.queenstowngolf.co.nz or www.millbrook.co.nz

#93    Port Waikato – Auckland
Situated on Auckland’s West Coast, this is where New Zealand’s longest river meets the sea.  A classic Kiwi beachside town, the beauty and serenity of this area is second to none.  Parts of the Lord of the Rings Trilogy were filmed here and the nearby Nikau Glow Worm caves offer something different.   Peaceful coastal walks on black sand dunes and prime fishing round out this quintessential Kiwi experience. Visit www.portwaikato.com

#92    Central Otago Curling – Alexandra/Maniototo
Parts of Central Otago are seen as thoroughfares to the Queenstown/Southern Lakes District.  However some of these towns and settlements offer a unique beauty and culture all of their own.   The Scottish sport of curling is a big hit in Central Otago and well worth a go!  It involves hurling 20 kilo stones fitted with a handle down a 35 metre strip of groomed ice.  Similar to lawn bowls the aim is to get closest to the markers. www.curling.co.nz

#91    Volcano Treks – Auckland
A little known fact about our biggest city is that much of the urban area sits on dormant volcanoes!  Two of the most popular cones to visit are Mt Eden and One Tree Hill.  Mt Eden is the highest and offer stunning views over the harbour and city.  One Tree Hill was one of the largest Maori settlement complexes in the country at one point and is claimed to be the largest pre0histroic earth fort in the world.  These are both easily accessible by foot or car. See www.tourism.net.nz/region/auckland

Please keep a look out for the next article in our series.  With thanks to AA Travel.

Ref: www.aatravel.co.nz

9 August 2010

The New Zealand Government has recently made a move to this country an even more viable option.  With income tax set to be lowered in October of this year and positive changes being made to new migrant visas; making the transition to the “Aotearoa: The Land of the Long White Cloud” is now an exciting possibility for off shore residents.

New Zealand has weathered the storm of the global financial crisis and is showing signs of economic recovery well ahead of other OECD countries.  By introducing personal income tax cuts and new investment based visas (one of which that doesn’t even have an upper age limit) New Zealand is hoping to capitalise on the brain drain from other parts of the world.

Currently New Zealand’s personal income tax rates are as follows:

• 12.5% for earnings up to $14,000 NZD
• 21% between $14,001 and $48,000 NZD
• 33% between 48,001 and $70,000 NZD and then
• 38% for everything over and above the $70,000 threshold

As of 1 October 2010 these rates will decrease to:

• 10.5% for earnings up to $14,000 NZD
• 17.5% between $14,001 and $48,000 NZD
• 30% between $48,001 and $70,000 NZD and then
• 33% for everything over and above the $70,000 threshold

This compares favourably to the UK and Europe where the top tax rates can be as high at 50%.

Further benefits can include a period of tax free living in New Zealand.  Before the Government considered the lowering of personal income tax rates in a bid to attract the best migrants possible and ensure their kick started economic recovery remains on track, the nation already offered migrants a period of semi-tax-free living.

Those who move to the nation can enjoy up to four years tax-free living from certain types of foreign sourced income which can certainly allow for a smoother transition period all round.

There are also two new (non-skills based) visas available.  Both are investment class visas, with one certainly favouring retirees as it has no upper age limit.  The Investor Plus Visa, as it is known, requires significant investment commitment, but it does allow you to move to live permanently in New Zealand whether you’re retired, skilled or unskilled, well qualified or just wealthy as there is no age limit and no business skills level stipulation.  The requirement is investing 10 million NZ dollars into the nation over 3 years.

If that is too high a sum for you and you’re under 65, you could apply for the straight Investment Visa instead.  You have to have 3 years business experience, invest 1.5 million New Zealand dollars over 4 years (including investment property) and have an additional million in the bank.  Please refer to the New Zealand Immigration Department website for more details, which will also include the requirements for the skills based migrant visas.

All in all, New Zealand is now more than ever an attractive nation for new migrants.  With the added benefits of the excellent lifestyle options, the relatively low cost of living and clean, green eco-friendly status New Zealand should be top of mind for those considering a move to greener pastures.

Ref: http://www.shelteroffshore.com

21 July 2010

For the first time the number of tourists coming to New Zealand over a one year period has topped 2.5 million.  Given the global financial crisis and worldwide H1N1 (“Swine Flu”) pandemic this is especially encouraging for tourism in New Zealand.

According to Statistics New Zealand the total visitor arrivals topped 2.501 million for the year ending June 2010.

Population Statistics manager Bridget Hamilton-Seymour says “This milestone was almost reached in 2008, but the global economic downturn contributed to a decline in visitor numbers after a peak of 2.497 million in the March 2008 year.”

Our Australian neighbours make up 45% or 1.119 million visitors to New Zealand over this period.   Tourists from the UK make up 10% or 248,900 of all visits.  Visitors from the USA account for 8% or 194,000 persons in the June 2010 year.  A further 7.5% of tourists came from China (105,200) and Japan (83,600).

The month of June saw a total of 145,800 visitors to New Zealand; this is up 8% from monthly figures in June 2009.

Visitor numbers from China, Japan, and Korea have recovered from the previous year after the swine flu crisis affected arrivals from these countries.  Australian tourist numbers are also up on 2009 figures.

Ref: www.stuff.co.nz/business/

14 July 2010

The latest Quotable Value survey on the New Zealand housing market shows more people think that it is a good time to buy than when the last quarter research was completed in March 2010. The confidence in the market has also improved since March with 56% of respondents believing prices will stay the same or rise by up to 5% over the next 12 months.

Property values are the main factor for people buying or selling.  The implications of the recent tax changes around property investment have not had the impact some were expecting and this has helped to restore confidence in the market.

A specific set of questions to property investors in the survey yielded some interesting results.  Although the depreciation changes were set to have the most impact on this group, the overall result has seen investors on the whole look to keep and expand existing portfolios.  It is also clear that investors plan to increase rents, with most indicating there will be a 1% to 5% increase over the next 12 months.

These positive results are good news for investors and the property market as a whole.

Ref: www.qv.co.nz

30 June 2010

In the latest Mercer Cost of Living Survey Auckland and Wellington have emerged as two of the cheapest cities in the world to live in.  Auckland came in 149th place and Wellington in 163rd place, beating all Australian cities surveyed in offering value for money.

There were 214 cities in the global study with Tokyo and Osaka (Japan) coming in the top 10 most costly cities and Karachi, Pakistan (214) coming in at the most affordable city to live in.

The Mercer survey measures the comparative cost of more than 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.  It is used to help multinational companies and governments determine compensation allowance for their expatriate employees.

New Zealand was ranked more affordable than Australian cities in the study, including Sydney (24) Melbourne (33), Brisbane (55), Perth (60) and Canberra (74).

Mercer senior researcher Nathalie Constantin-Metral said New Zealand and Australia remain cost competitive countries for companies sending staff to the Asia Pacific region for expansion; particularly when compared to the cost of living in Japan, China, Hong Kong and Singapore (all in the top 20 most costly cities).

Costly cities
1 Luanda, Angola
2 Tokyo, Japan
3 Ndjamena, Chad
4 Moscow, Russia
5 Geneva, Switzerland
6 Osaka, Japan
7 Libreville, Gabon
8 Zurich, Switzerland
8= Hong Kong
9 Copenhagen, Denmark

Most affordable
205 Windhoek, Namibia
206 Tegucigalpa, Honduras
207 Kolkata/Calcutta, India
208 Addis Ababa, Ethiopia
209 Bishkek, Kyrgyztan
210 Ashkhabad, Turkmenistan
211 La Paz, Bolivia
212 Islamabad, Pakistan
212 Mangua, Nicaragua
214 Karachi, Pakistan

Ref: www.nzherald.co.nz/business/news/article

30 June 2010

An increase in the Official Cash Rate (OCR) this month had some investors concerned about the stability of the property market and property prices moving forward.

However Reserve Bank Governor Dr. Alan Bollard has said that because more than 30% of mortgage debt is on floating rates and the long term rates are now higher than short term, the OCR will not need to be increased at the same speed as previous recoveries.

The Real Estate Institute of New Zealand (REINZ) President Mr. Peter McDonald says “Interest rates are only one of many factors which influence the property market.  While Dr. Bollard notes that households continue to be cautious about investing in homes, median prices are still up on a year ago as we have not yet caught up on the supply shortage caused by the fall in the building of new houses during the recession.”

Mr. McDonald goes on to say that the Reserve Bank has found clear signs that the New Zealand economy is well into recovery, which should be reassuring for first home buyer and investors.

Ref: www.reinz.co.nz

29 June 2010

The Mercer Quality of Living Survey rates over 220 cities throughout the world on variety of factors including the current political, social and economic environment.   Housing, schools, public services and access to consumer goods are also considerations for the rankings.

Auckland topped the Asia Pacific category (coming in ahead of Sydney and Melbourne) and rated 4th equal overall, tied with Vancouver and coming in behind Vienna, Zurich and Geneva.

Wellington rated well in the Eco City category, coming in at 5th Placed overall in the world; number 1 in Asia Pacific.  The eco ranking relates to water availability and drinkability, waste removal and quality of sewerage systems, air pollution and traffic congestion.

Baghdad remains the worst city on the index, placed last out of the 221 cities surveyed this year and London, Tokyo and New York came in at 39, 40 and 49 respectively.  Australia fared well on the index with Sydney coming in at 10, Melbourne (18) and Perth (21).

Mr Slagin Parakatil, a representative from Mercer (a leading global provider of consulting, outsourcing and investment services) said that “Quality of living standards remained relatively stable on a global level throughout 2009 and the first half of 2010, but in certain regions and countries the economic recession had a noticeable impact on the business climate.”  He went on to say “though a high standard of living may be taken for granted in certain cities, a lack thereof is much more noticeable and can even lead to severe hardship.”

Top 5 cities: Quality of living ranking

• Vienna, Austria (1st)
• Zurich, Switzerland (2nd)
• Geneva, Switzerland (3rd)
• Vancouver, Canada (tied 4th)
• Auckland, New Zealand (tied 4th)

Top 5 cities: Eco-city ranking

• Calgary, Canada (1st)
• Honolulu, United States (2nd)
• Ottawa, Canada (tied 3rd)
• Helsinki, Finland (tied 3rd)
• Wellington, New Zealand (5th)

Ref: www.mercer.com/qualityofliving

25 June 2010

 Source: NZ Herald

About 10,000 new homes need to be built in New Zealand to keep pace with population growth and ease the current housing squeeze, a report released by Westpac shows.

The report says the number of houses built halved in the two years to 2009, while population grew 0.4 per cent as fewer Kiwis crossed the Tasman.

The resulting squeeze on housing - only the third since reliable data began in the 1960s - had boosted the average number of people per house in New Zealand from 2.52 to 2.55 during 2009.

A rapid growth in construction activity was needed to ease the squeeze, the report says.

“By our calculations the current rate of house building will be enough to keep the number of people per house constant through 2010, but will not be enough to bring it down,” the report says.

Westpac is picking a 23 per cent growth in residential construction for 2011, and even that would only just be enough to keep up with population growth.

Even more would be required during 2012 to make inroads into the shortage.

“Those forecasting lesser increases would have a job to explain exactly where people were going to live,” the report says.

Earlier this year the Salvation Army said the slowdown in the building sector had left Auckland short of at least 6000 homes, with the greatest pressure going on South Auckland households.

Population growth in Auckland had far outstripped residential construction, which had plunged to a 20-year low, forcing more than 20,000 Aucklanders to live in overcrowded conditions, the organisation’s 2010 State of the Nation report, A Road to Recovery said.

Westpac said one way to consider the current situation was to compare the number of people per house to its estimated trend.

“That suggests that New Zealand has a housing shortage of about 10,000 houses,” the report says.

Historically every time New Zealand has gotten into a housing shortage situation, the residential building industry had responded by ramping up production to restore balance, the report says.

“We expect this time will be no exception.”

Fears that difficulty obtaining finance will prevent a pick-up in residential construction, like it had following previous recessions, ignored the lessons of history and economics.

“Market economies tend to find ways of getting around obstacles, normally by throwing up new price signals.

“In this case developers who relied on cheap finance have been forced to sell land, pushing the price of undeveloped residential sections down by 15 per cent since 2008,” the report says.

Over the same period house prices have remained unchanged, therefore the margin on offer for successful property development was now much wider than it was during the boom.

“There is a juicy profit opportunity on offer for larger firms that are less reliant on finance to get involved in residential property development which is precisely what we think will happen,” the report says.

18 June 2010

Auckland’s housing market is humming through the winter, with prices up in most suburban areas.

Data out yesterday from the Real Estate Institute showed increases.

The institute said the median house price was down $6000 nationally.

Wendy Alexander, Barfoot & Thompson chief executive, said the long summer meant people relaxed, stayed in their summer clothes longer, avoided shopping malls and traded their houses.

“Now we’re all going brrrrrr. Everyone is burrowing in. We’re having a very quiet June. But in April and May, there was tremendous demand,” she said. Barfoot’s wanted more listings to satisfy buyer demand.

Glorianne Campbell of the institute said a combination of more demand and more expensive houses selling probably pushed up Auckland prices.

North Shore’s median rose to $550,000 in May from April’s $540,000 and was a big jump on the May 2009 median of $505,500, the institute found.

Waitakere’s median increased to $400,500 from $394,000 in April and May 2009’s $357,500, although Papakura’s median dropped by $31,000 from April to May on the back of 54 sales last month.

Medians within Auckland City Council’s territorial limits increased to $520,000, from April’s $518,000 and May 2009’s $519,750.

Manukau’s median rose from $432,000 in April to $438,000 in May.

The institute said the market was still holding up well. Tax changes and rising mortgage interest rates could have taken a higher toll.

“It is good to see the market retain its strength and prices stay stable during a period when some buyers would have been concerned about potential tax and interest rate changes,” he said. Agents sold 5206 residential properties last month and 5207 in April.

“The May median is still 3.7 per cent up on the median price of $337,500 in the same month in 2009, so we are still not seeing any significant fall in property values. With tax changes and interest rates now settled, property investors are already talking about returning to the market to cater for the growing demand for domestic rentals.