For Buying or Selling Nelson Property

What’s Life Like in Nelson New Zealand and What is the Property Market Like?

What is our market like right now?

There‘s been some interesting news on the economic front since last week that we should be talking about, if for no other reason to allay any misconceptions about what‘s happening right now.

Yesterday‘s Dominion Post reports that all the major trading banks have dropped their lending rates, with rates as low as 4.99% (Kiwibank), 5.1% (BNZ), and 5.25% (ANZ, National, Westpac).

As an aside, I‘m old enough to recall buying my first home on an 18% first mortgage (comprising 40% of the purchase price), with a 21% second mortgage (comprising 20% of the purchase price). And yet we did it, our homes appreciated strongly in value, we thrived, and we lived to tell the tale.

Back to yesterday‘s article - ANZ national managing director of retail is quoted as saying “ There‘s currently a window for cheaper long-term wholesale interest rates that ANZ is taking advantage of and we‘re passing on to customers. We‘re not sure how long this window will remain open. We hope to be able to keep it open for a while but we\'ll be reviewing it daily.”,

In a separate article banks are reporting there has been 5 billion dollars deposited into banks as a result of insurance payouts in Christchurch, and of course banks only make any money when they lend it out. As a result they are being very competitive not only with their interest rates, but also with their lending criteria.

On that subject, in a separate Sunday Star Times article four days ago, the incoming governor of the Reserve bank announced his consideration towards legislating to restrict banks‘ lending to 80% of the purchase price of a property. He takes office in September, and its my guess that a significant number of first home buyers will take advantage of the opportunity currently presented to them to buy before anything changes.

What then do you think will happen after September if the proposed legislation is enacted?

Investors, like me, see a fantastic opportunity ahead. That‘s because if the lending criteria becomes stricter, it will definitely be harder for the younger generation to save the required desposit. Since this will increase the proportion of renters in New Zealand, I would expect higher rent returns as it alters the supply/demand dynamic.

Here‘s the point I‘m working towards - all of this activity will see an increase in buyer demand and all other things being equal, I expect it will translate into a rise in property sale prices. Already we have a 2.7% rise in median sales price for Nelson over the last 12 months and I would expect that to continue.

Even an increased number of sales to investors has a flow-on effect to the rest of the market and the higher price ranges, as the sellers of those types of property cash up and look for something else to buy.

That‘s my take on it - I‘m interested in hearing yours.

What is Nelson Like?

Nelson is internationally renowned for its unsurpassed natural beauty‚ its pleasant Mediterranean-style climate - sheltered from cold southerly weather, varied recreational activities and diverse cultural opportunities. Taken together‚ these provide a quality of life in Nelson unexcelled by any area of its size in the world.

It is less expensive to live in Nelson than in most metropolitan areas in New Zealand, and the proportion of families who live in their own home and of adults with tertiary qualifications is higher than the national average (2006 NZ Census).

Hailed as one of New Zealand’s most ‘liveable’ cities by Lonely Planet, Nelson is a bright, optimistic, worldly town, arranged around a flat grid on Tasman Bay. Nelson’s streets are dotted with beautiful Victorian houses, with a selection of Buddhist centres, naturopaths, yoga studios and galleries. Artsy wanderers mooch between cafés and coffee-carts, ducking into the Bridge St bars or poetry readings in bookshops. Beyond the urban fringe the coast and hills offer a plethora of activities, both relaxed and adrenalin-charged.

The Nelson region, extending west into the Tasman region, is a top destination for travellers to New Zealand – and for locals too. With more sunny days than anywhere else in the country, brilliant beaches and superb national parks (Kahurangi, Nelson Lakes and Abel Tasman) there’s plenty here to keep you occupied (or to lull you into sun-soaked sedation). The region is also home to a progressive, offbeat community of artists and winemakers.

It is the people that make Nelson the appealing city it really is. Family values and a strong sense of local community underpin day-to-day life in the region. We value our history and tradition, but we also welcome newcomers and the rich diversity they bring to our lives.

I am a relative newcomer myself, having lived most of my 54 years in the North Island. However I am also convinced that Nelson is the best city in New Zealand for the ideal quality of life.