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Mortgage Advice Blog

Get the latest news and tips about mortgage finance and the property market. Scott Miller, mortgage broker from Advanced Mortgage Solutions comments on housing and lending.

The AMS Property Gazette - October

Published by Scott Miller on Tuesday, October 12, 2010 in


 September was quite a month.

Christchurch was hit by a magnitude 7.1earthquake, Southland had the worst snow storms for decades, Wellington witnessed a head-on train crash, and the scariest thing of all.... I had my 42nd birthday. But despite these life changing events there was not a single loss of life, and in fact, it appears something good will come out of all of these events. Along with an already busy month there have been significant changes to New Zealand's lending landscape.

After a long absence it looks as though the old 'bank wars' are back. Over the last month we have seen a number of 'spring' promotions which have resulted in seeing lenders relaxing their existing lending policies and we now have the real possibility of receiving huge contributions to legals when purchasing a property.

Owner Occupied Property

New Zealand lenders are now looking at property  being purchase for home ownership (owner occupied property) to need as little as a 10% deposit (up to 90% loan to value ratio), allowing first time buyers and people looking to upgrade their existing homes an opportunity to place as little as 10% of the purchase price as a deposit. Lenders policy at this level of LVR is still a little more stringent, but when you think that as little as 10 months ago there was only 2 lenders seriously looking at 90% deals (and on a case by case basis) you can see how much change their has been in lenders thinking.

Rental Property

There has also been some relaxing around purchasing rental property. With one lender in New Zealand they will now look at lending up to 90% on standalone rental purchases - Please contact Advanced Mortgage Solutions here to find out more. This is just one example of improved lending criteria. Almost all lenders have shown improvements in their appetite for rental purchases with many now looking at 80%+ LVR's on a case by case basis.

Contributions to legals

To add more good news to the story all the mainstream lenders are now offering contributions to legal costs for people looking to purchase property up to $1,000.00, and in Christchurch as a sign of good faith this is increased to $1,500.00, to help cover structural engineering costs. In all my time as a Mortgage Broker I have never seen so many incentives given in order to attract customers.


As always I am here to workshop deals with you. If you are looking to purchase a house for yourself or looking to purchase a rental property I firmly believe now is a very good time to buy. House prices are low and it appears we are at the bottom of another property cycle, this coupled with low interest rates and a bank war provides the perfect time to purchase property. Please also let me know if you have a home loan coming up for renewal so I can contact the bank and organise a range of discounted rates for you to choose from.

Kind regards

Scott Miller

P.s Find a number of short video's to help with better understanding bank policies, what interest rates are doing and a brief look into some of the different strategies available when looking to invest. Please click on the link below to have a look.

Where is the OCR and Business lending heading?

Published by Scott Miller on Friday, September 24, 2010 in


   Dr Bollards announcement of the official cash rate (OCR) on 16th September came as no surprise. It had been well mooted coming up to the announcement that the OCR would remain unchanged at 3%. What did come as more of a surprise was the tone of his message around where he saw the OCR’s movements in the near future. Some could argue that he had made a complete U-turn on earlier comments he had made. It was only at the July (29th) OCR announcement that it was indicated for the foreseeable future the OCR would rise .25% every 3 out of 4 announcements until the OCR reached a level of around 5.75% - 6.25% where it would stop for a period of time before slowly dropping away again. Now it appears the OCR will not rise again this year (with two announcements left this year: 28th October & 9 December), and will only slowly rise throughout next year stopping at a high point of around 4.5% - 4.75% in the middle of 2012. The reasons given for this change in forecasting was mainly put down to two things 1) A slower than expected improvement in the world’s economy. 2) A slower underlying improvement of the New Zealand export lead recovery.


Business finance has been on the improve for almost a year now. By the end of 2009 we started to see the taps slowly turned on after 18 months of them being firmly shut off. The momentum started with increases in overdrafts and acceptances of top-ups, and then gained further ground with residential purchases off full financials, and has now come almost full circle with finance being found to purchase of existing businesses or to start capital up new ventures. Levels of ‘easy’ money are some way off the crazy days of 2007 and early 2008, but in the same breath are far removed from the dark days of late 2008 and 2009. Now if a deal stacks up it has a good chance of being approved whereas 18 months ago it could have been the deal of the century and declined before it was even looked at.

The AMS Property Gazette - September

Published by Scott Miller on Tuesday, September 14, 2010 in

  In this month's edition of the AMS Gazette I would like to begin by saying thank you to all the support and well wishes I have received since the earthquake on 4th September. It was a shock to we woken up at 4.30 in the morning to what sounded like a Boeing 747 landing in my driveway while being shaken so hard I thought my fillings would fall out. Thankfully my wife Barbora who is employed by Air New Zealand was working out of Rotorua and missed the original earthquake. Maddison however, our four year old Fox Terrier has not stopped shaking and is ready pack her bags and move to another city.
As the earthquake has mainly affected the Canterbury region I am going to cover some of the things Cantabrians should consider doing in regards to their mortgages and home loans.

So what to do next if you live in Canterbury.

Many of you will have already done the right thing and contacted the EQC to lodge a claim. Don't worry if you have not already done this as the EQC have come out and said you have 3 months from the 4th September to contact them. Just remember that once you have made your claim you cannot add further damage at a later date. So make sure you have a good look around your properties, so when the assessor arrives to look around your properties you can show him/her all the earthquake damage.

Mortgage Holidays - If you feel you need a mortgage holiday contact me and I will help with organising it. I have heard directly from all the major lenders and am fully briefed on how to make an application.

NB - You do not have to have lost your job or have extensive damage to your family home to get a Mortgage Repayment Holiday, if you want one you can have one. Each lender has slight differences in the processes of applying for a repayment holiday. There are also slight differences in the available structures you can use depending on which lender you have your mortgage with. Some for example will allow your mortgages maturity date to be moved out so when you return to paying your mortgage there is no change to amount you pay, other lenders unfortunately do not have this option. Please contact Advanced Mortgage Solutions here to get assistance with your application. Alternatively feel free to call me on 980 4541.

Please be aware these facilities are only available for people who live or have property in Canterbury - outside of this region it is (as far as the banks concerned) business as usual.

News Outside of Canterbury

Interest Rates - This Thursday's Official Cash Rate announcement is expected to see interest rates remain unchanged. With recent world events, namely the speed, or the lack of speed in which the world is recovering from the recession, it is believed interest rates will not go up again this year. There is in fact a good chance of medium to long term interest rates to fall slightly - Watch this space.

House Prices - House prices around New Zealand appear to have come down a little over the last month or so. The number of houses for sale are lower than anticipated for this time of year, with commentators arguing that many people are now holding off to take advantage of the 2011 Rugby World Cup. This is a hard one to call - personally I think if we have a long warm summer we could see house prices recover and feed nicely into the World Cup frenzy. Like with interest rates above time will tell.

As I sign off I would like to wish all of those affected by last week’s earthquake the best of health and wellbeing - if I can be of any assistance please feel free to contact me.

Kind regards

Scott Miller

P.s Find a number of short video's to help with better understanding bank policies, what interest rates are doing and a brief look into some of the different strategies available when looking to invest. Please click on the link below to have a look.

* Please note that at this time this service is only available from landlines.

This publication has been provided for general information only. Although every effort has been made to ensure this publication is accurate the contents should not be relied upon or used as a basis for entering into any products described in this publication.

The AMS Property Gazette - August

Published by Scott Miller on Tuesday, August 10, 2010 in
Get The Best Home Loan - Interest Rates Advice - Mortgage Broker

Recently there has been a large increase in new and existing clients asking for assistance with their home loans and mortgages. With this in mind and to help further assist to our clients outside of Christchurch, Advanced Mortgage Solutions is pleased to announce the introduction of a toll free number.

0508 HOME LOAN or 0508 4663 5626*

If a toll call is required to talk to us please feel free to use this new number at anytime. We are currently updating our logo's and email footers to incorporate the new number so please look out for them.

Interest Rate Outlook

Current Interest Rates

Rates offered are the best of standard, carded interest rates available and do not reflect any discounts your Advisor may be able to obtain for your client. Rates correct as at 01/8/10.



6 Month Fixed


1 Year Fixed


2 Year Fixed


3 Year Fixed


5 Year Fixed


New Zealand is actually making the slow and steady recovery we needed The problem is that media tends to focus on and highlight the negatives that continue to come out, whether it be the small interests rate increases we have expected (published as 'hikes' - far more dramatic!) Or the sluggish real estate market when in fact these factors are normal in a slow, bumpy recovery which looks and feels more like small waves in a bathtub than the negative sentiment the media promotes.

Yes we did get a 0.25% increase in the Official Cash Rate late in July but that was well and truly expected, guess what we will get another two to three similar moves before the end of the year, but remember the world economy was in such 'free fall' eighteen months ago that drastic measures were required and taken to protect us all from a depression like environment whereby rates were slashed to historic lows.

As such the next two or three increases do little other than restore us to a more 'normal' interest rate environment which is required to ensure that we don't return to a debt fueled recovery. Amazingly, we have yet to see the bank's react with an increase to their variable rates by passing on the 0.25% increase but as sure as the sun follows the moon you can expect that to land within the week.

This economic recovery is not about the housing market jumping back out of it's skin, it is being driven by slow, sustainable manufacturing growth, increased productivity and a reduction in household debt.

We continue to be restricted by a lack of available credit with banks remaining extremely conservative, in a bizarre sort of way this actually drives our business as more consumers who historically thought their bank was their friend have found out they are not so friendly and won't lend them the money they want to buy their new house, as such they find themselves at our door with far more options and our clients are constantly amazed that we can turn a bank 'no' into another bank 'yes'.

So, we get you the money, then the question becomes should I fix my interest rate or float? This is certainly a tough question in the current environment but with the difference between the floating rate and the 2 year fixed rate now looking at around 1% we do see more value n the mid- term rates of 2 year and suggest that this is a pretty safe place form many of our clients which may look pretty attractive in one year's time.

If you have a home loan coming up for renewal or just want some help with a loan please contact me by email here or get my contact details from here.

Kind regards

Scott Miller

P.s Find a number of short video's to help with better understanding bank policies, what interest rates are doing and a brief look into some of the different strategies available when looking to invest. Please click on the link below to have a look.

* Please note that at this time this service is only available from landlines.

This publication has been provided for general information only. Although every effort has been made to ensure this publication is accurate the contents should not be relied upon or used as a basis for entering into any products described in this publication.

The AMS Property Gazette - July

Published by Scott Miller on Sunday, July 11, 2010 in

The Budget

The budget has come and gone with little to no affect on existing investing strategies, and for those looking to purchase a family home for themselves nothing has changed at all. The biggest change came with the dismantling of the ability to claim depreciation from the building. Experts in this field have placed a weekly cost to the vendor of investment property to be around $30 - $40 pw for new houses and $20 - $30 for existing or secondhand houses. Of course depreciation is still available on chattels and it is expected the chattel valuers are going to become very popular and extremely busy over the coming years to help compensate the losses mentioned above.


Like above very little has changed here. As long as the property held within an LAQC (Loss Attributing Qualifying Company) is running at a loss ( When the mortgage, rates, insurance, and maintenance costs are higher than the rent received) and you are personally guaranteeing the loan against the property(s), nothing has changed in distributing those losses against your personal income.

Interest Rate Outlook

Current Interest Rates

Rates offered are the best of standard, carded interest rates available and do not reflect any discounts your Advisor may be able to obtain for your client. Rates correct as at 10/7/10.



6 Month Fixed


1 Year Fixed


2 Year Fixed


3 Year Fixed


5 Year Fixed


The easy decisions are over! After an almost continuous easing of interest rates over the past 2 years the worm has finally turned and we are now on the upward spiral.

Up until now it has been relatively easy to read the interest rate market and the majority of consumers have slowly unwound their fixed rates to enjoy the historic interest rate lows of the past year.

Now however, we are faced with the difficult decision of whether to lock interest rates in or stay floating.

Further confusing the matter, recent economic data does suggest that while interest rates will certainly continue to rise it may not be as fast as many first thought.

Consumers continue to look to get their household balance sheet in order, despite a recent spike in spending largely due to people looking to make any 'big ticket' item purchases pre the increase in GST in October.

Our appetite for borrowing remains subdued as where possible consumers look to pay down debt as opposed to increase it.

While this augers well for the future it does contribute to the sluggish recovery the economy is making.

This is further evidenced by the continual slow progress of the housing market which remains soft as the value of residential sections continue to drop, now down by 17% from their peak two years ago. Additionally, migration continues to slow from last years healthy increase of over 20,000.00, currently 2010 sees us on target to only increase by around 8,000 people which could yet be an optimistic figure as the buoyant Australian labour market continues to hold appeal for some Kiwis.

Interestingly, we have seen a substantial easing in long term rates from the major banks over the past week with decreases of as much as 0.65% off five year fixed rates and up to 0.45% off three year rates & two year rates down by around 0.30%. This move certainly sees the interest rate curve flatten substantially and provides far more appeal to the two & three year rate options which are now less than 1% - 1.25% higher than the low variable rate.

Currently a split on variable and two or three year money looks pretty appealing although if you are concerned about rate rises now may be a good time to lock in.

As always please do not hesitate to contact me if I can assist you in finding ways to streamline your mortgage costs. This ranges from purchasing property right through to loan roll overs and top-ups.

Kind regards

Scott Miller

P.s I have started making a few short video's to help with better understanding bank policies, what interest rates are doing and a brief look into some of the different strategies available when looking to invest. Please click on the link below to have a look.

NOW - No Opportunity Wasted

Published by Scott Miller on Wednesday, June 02, 2010 in

                                                                                       Events and Seminars

This is serious... every property owner or investor should watch this video.

Make no mistake if you’re a property investor then after the recent budget you have 3 clear cut choices to make.

  1. You can give up
  2. You can give in
  3. Or you can give it your all!

Sadly most will choose the first 2... What about you though?

Will you quit like the rest? Or will you do whatever it takes to educate yourself on the opportunities the recent budget has given property investor just like you?

If you’re not a quitter then this video message is for you. Go to this website and watch this short video today... 

On this video you’ll discover how some property investing experts are using the financial changes made by National to their advantage already. In fact you’ll discover a strategy that can put $20K in your bank account up front plus pay you $200 per week in positive cash flow?

That’s right $20,000 up front and $200 per week in positive cash flow... sounds interesting doesn’t it?

And the best part is on this video you’ll discover an opportunity to learn how you can do the same from investing in the NZ property market right now. So what are you waiting for? Watch this short video today  

Make no mistake there always has been and always will be financial change. It’s not the financial change that this budget will bring that matters, it’s what you do about it that counts.

This two day event only costs $47.00 Book Now!!

It’s how you react that counts and remember you have 3 choices!

  1. You can give up
  2. You can give in
  3. Or you can give it your all!

If you’re not a quitter then seriously this video is for you

Happy property investing and whatever you do don’t quit!


Scott Miller

P.S. Remember it’s not what the “Government Fat Cats” having taken away from you that counts. What counts is how you deal with it and the opportunities you create from these same financial changes that counts!

Watch this video this video and get even with the “Government Fat Cats”

ALL this for only $47.00!!!

Budget 2010

Published by Scott Miller on Saturday, May 22, 2010 in

There is a good chance you will be thinking - How does the 2010 budget affect me?

In this newsletter I will cover off some of the affects Thursday's budget will have in relation to owning property, both for owner occupiers and for investment property portfolio owners.

The Budget and what does it mean for property owners?

Owner Occupiers:

Basically not a lot has changed if you own your own home. Because home owners are exempt from claiming things like depreciation on their homes, losses against personal income, and don't usually derive an income from their home, most of the changes will not influence your day to day expenses (excluding things like the increase in GST etc).

The IRD still have their task force looking into owners who have placed their ‘principle place of residence’ (their own home) in an LAQC and are claiming loses as an expenses. This is illegal and the IRD/Government is taking this form of tax evasion very seriously. If you find yourself in this position I recommend you seek advice from an accountant immediately - putting one's head in the sand will not make it go away.

Investment Property:

In contrast there have been a number of changes (as expected) for those of us who own an investment property portfolio. However these changes are less dramatic than most of the pre-budget hype, speculation, and downright irresponsible dribble that was being circulated. So let’s cover of the main facts.

1)Depreciation on buildings has been removed unless the building’s life expectancy from new is less than 50 years. A list of such buildings is being made available and an application process for people who believe they fall under this criteria is being established. Personally when talking about residential property I cannot think of a reason where I would want to construct a property that would only last for 50 years. Its resale value for one would not be particularly high. There may be areas where sleep outs or minor dwellings are popular allowing for this kind of building and subsequent depreciation may take place?

2) One of the more annoying ‘the world is coming to an end’ forecasts around the changes to take place in the 2010 budget included ring fencing of losses within an LAQC. This would have meant that any losses incurred through owning a negatively geared property portfolio held in a LAQC could no longer be offset against your personal income tax. Although there has been some suggested changes (this is not law yet and is subject to change) to LAQC’s for the majority of us it will have no effect. This is due to the lenders of New Zealand making it compulsory for the directors of an LAQC to give personal guarantees for the loan the LAQC is being structured over.


The following is from Matthew Gilligan of Gilligan Rowe and Associates - one of New Zealand’s leading property accounting firms.

 Paragraph 5.11 states a member's interest (in the proposed new LAQC regime) would extend to include in the definition of equity the share of any debt guaranteed by the shareholder.

This means that if you are a guarantor, you get to claim losses up to the extent of your equity invested PLUS your guarantee. As shareholders will guarantee (most of the time) all of the debt, the structure will get full flow through of losses up to

100% of the value of the amount of debt they have guaranteed, or cash injected - the higher of the two.

 Therefore effectively existing LAQC users will get the benefit of losses flowing through, provided they are guarantors to the debt.

 Remember this is all subject to submission and not law yet.

The other major change regarding LAQC’s is around the tax paid when an LAQC starts making a profit. At present if you make a profit in an LAQC the maximum tax rate you will incur is 30% (company tax rate). However proposed changes will see this rate change to match your personal tax rate. So if you (under the new tax rate affective in October) earn $70,000.00+ you will be taxed at 33% and so will your profits from your LAQC. This is seen as making the tax system more fare and will limit tax avoidance through LAQC structures.

Please feel free to contact me if you have any questions or thoughts on what I have written above.

May's Newsletter

Published by Scott Miller on Sunday, May 09, 2010 in

The last two months have seen many interesting developments in regards to property and of course this years budget is just around the corner.

The Budget





The first quarter of 2010 has seen the growth of late 2009 slow quite markedly. The issue is understanding why and how long this slowdown will last.

House prices have flattened this year adding weight to the concept that the growth of late 2009 was driven predominantly by lack of stock on the market not an economic rebound. While this continues to be the case the 'fear' that John Key has generated in the residential investment market due to his proposed tax changes to residential investment property has had a ‘lead weight' effect on property investment.

Our belief is that until budget 2010 is released in May and it is clearly understood what changes are being made to the tax laws around residential investment property most investors are sitting on their hands (and their cash) which will continue to hold the momentum the market had in late 2009 back. As such the average days to sell a property has lengthened to its highest level since June 2009 and is quite indicative of the true state of the housing market.

One highlight was today's unemployment figures announcement. There was an unprecedented 1%+ drop in the unemployment levels in New Zealand for the month of April. This has increased the possibility of an interest rate rise in June 2010 instead of the more widely predicted July increase. However Dr Bollard has indicated that he believes interest rates will rise at a much slower rate in similar situations in the past. I personally don't see this so much as a negative influence as much as I see this as a necessary part of the property sectors recovery.

Kiwis continue to deleverage their asset position (repay debt while interest rates are low) and this puts us in a good position for growth in the not too distant future (as in 2011) as pent up desire to invest and grow will at some stage be unleashed stimulating the economy. We cannot help but believe that the 2011 Ruby World Cup will be a strong catalyst for our 'real' rebound.

Our recommended borrowing strategy has not changed greatly in the past 6 months and at the risk of repeating ourselves we cannot recommend anything else other than floating rates or six - twelve month fixed as a preferred option. Variable rates remain at record lows, while most fixed rates have fallen in the past month they remain very high in relation to floating rates and this is more a sign of the market ‘overpricing' long term rates in the back half of 2009 which was driven by the price war the banks created for term deposits and not improvement in market conditions. Stick with the shorter term funding but keep your payments above the minimum required to repay, perhaps assuming rates of 1% higher than today.

Please find this useful link below and make your vote - it is best your voice is heard.

Do you support tax changes to investment property?        

YES  /   NO

Interest Rates

So with the new unemployment figures and the direction in which they are heading together with the contents of the Budget (which is due to released on 20th May), will impact the Reserve Bank’s review of the Official Cash Rate early next month. The consensus is now that the Reserve Bank will start increasing rates as early as June. Increases are expected to be in small increments of around quarter of a percent.  How many we have will depend on how strong our economic recovery is. 

As mentioned above a drop in unemployment is a strong indication that the economy is improving. The other significant event that is severely affecting the international financial markets, is the debt crisis in Greece and Portugal and whether it will extend to other larger European countries such as Spain, UK and Italy. This crisis has been the cause of the rapid appreciation of our currency particularly against the Euro which is now up over 10% over the past month to 0.56.  This has had a major effect on world equity markets which are wobbling - some are down over 3% this week. Two years ago, as the global financial crisis was unfolding, individual governments were sorting out the banking system. Now the world bankers will have to focus their attention on sorting out some individual countries.

Tip of the month:






{tag_recipientfirstname} if your home loans are on floating I believe it is time to look at your fixing options. Interest rates are going to go up and although Dr Bollards intention is to increase them slowly you never know what might happen. Feel free to contact me or email me to go over the best interest rate solutions for your needs.

~March’s Property Newsletter

Published by Scott Miller on Monday, March 15, 2010 in

Welcome to my newsletter for March 2010.

The response to Advanced Mortgage Solution’s new referral programme released last month has been over whelming. We have been able to help 4 couples into their first homes and helped half a dozen investors purchase further investment properties. The good news doesn’t stop there – because of these referrals $1,820.00 has been paid in commission to the referrers, our way of saying thank you for supporting AMS.

There seems to be a vacuum of property related news around New Zealand as many analysts and investors take a collective breath on hearing John Keys pre-budget announcements last month. It appears many people are waiting to hear confirmation of what exactly is going to become law on May 20th Budget.

Please click on the links below for this month’s points of interest:

1 – OCR remains unchanged

Yesterday the Governor of the Reserve Bank left the official cash rate (OCR) unchanged at 2.5%. The reasons for this are that the economy remains subdued, unemployment is at a 17 year high, building consents are down and credit card growth is sluggish.

Business confidence appears to be improving but for all intents and purposes we are still in a recession. What is unusual is that we are a full 1.5% below Australia’s overnight cash rate of 4.0%. This is why our exchange rate has been depreciating against their currency. This is positive for those exporting to Australia as still remains our largest market. The earliest the commentators are suggesting that rates will start to rise is around the middle of the year. We believe, due to the state of the market, that it may be later than this - around September.

This is positive for those with mortgages, as each month more and more people are coming off expensive fix rate mortgages and getting the benefits of lower rates.

2 – Opposition to tax announcements finds voice

Finally there is some real noise being made from property groups, property educators, solicitors, and accountants about the dangers of proposed tax changes outlined by John Key last month. As I indicated in last month’s newsletter I believe there are some real downsides to the proposed changes.

3 - House prices continue to increase but at a slower rate

QV figures out on Wednesday show that although house prices have continued to raise they are doing so at a slower rate. They go onto say…….

“Property values are above the same time last year according to the QV residential property indices for February released today. While the year on year change has increased further to 5.5 percent, values in the last few months have flattened in many areas. Nationally, values are now 3.9 percent below the peak of the market in late 2007.

The National average sales price also increased to $416,074 in February, up from $409,807 in January. While roughly indicative of value, the average sales price is a less reliable measure of change than the QV index as averages can be biased depending on which part of the market is active.

Glenda Whitehead of QV Valuations said “the annual change in values across New Zealand has continued to increase from last month, but this is masking what has happened in the most recent months. In the main urban areas, values have grown since mid 2009, but that rate of growth has recently begun to slow. In the provincial areas, this growth has slowed even more, and across the rural residential areas house values decreased slightly over the last month”.

Whitehead said “after a relatively quiet January, things seem to be returning to normal. Sales activity picked up over February and is back to similar levels to that observed throughout 2009. There has also been a significant increase in new listings, and we would expect this to convert to higher sales numbers in the coming months. The increase in sales and listings are both to be expected as February and March are typically the busiest months of the year”.

“The market remains patchy and buyers cautious. Well presented, good quality properties are continuing to sell quickly and at healthy values, whereas those with less desirable attributes are proving hard to shift. There is activity at the lower end of the market, driven mostly by first home buyers. Fewer investors are actively buying, and some are selling their investment properties now rather than waiting for the changes in property tax to be announced in the May budget” said Whitehead.

“The banks continue to take a cautious approach to lending, with property valuations required where the borrower has a relatively low deposit” said Whitehead.

Whitehead said “there is an increase in the number of new houses being built, but many of these are for clients under contract. Builders are still struggling to secure finance if they do not have these underlying sale agreements. Demand for new houses is steady but still nowhere near the boom levels of a few years ago when they couldn’t be built quickly enough”.

“We expect values to stabilise over the coming months reflecting the ongoing uncertainty around economic factors such as employment, pending interest rate rises and continued tight lending criteria. We may see more certainty in the market after the May budget announcement when personal tax cuts are known, changes to property taxation are specified, and interest rate changes are clearer” said Whitehead.

Values in the Auckland Region have continued to increase in recent months and are now 8.7 percent up on the same time last year. The Wellington Area is 6.7 percent up, and Christchurch 6.9 percent up. Values in the other main centres have been stable in recent months, but still remain above last year by 4.3 percent in Hamilton, 1.0 percent in Tauranga, and 6.2 percent in Dunedin.

Unlike the main centres, values in the provincial centres have been more variable over recent months, although values are still above the same time last year in almost all areas. Rotorua is 2.5 percent up, Gisborne 2.6, Napier 5.9, New Plymouth 7.9, Wanganui 1.1, Palmerston North 6.1, Nelson 5.5, Queenstown Lakes 0.8, and Invercargill 4.3 percent. Whangarei is the only centre still below last year at 1.8 percent although this has improved since last month.”

4) Aussies – coming then going

Here’s a boo hoo story about poor Aussie who feel they are being overcharged for accommodation when coming to New Zealand to watch the Rugby World Cup.

Source: ONE News

An Australian travel agent is accusing Auckland hoteliers of being greedy in their pricing for the Rugby World Cup.

Australian Sports Tours says hotel rates during next year’s World Cup will be about three times what they’re during the Bledisloe Cup.

General manager Sam Harrison says a night at the Hilton Hotel could set people back by $1700 and he says this is pushing people to consider alternatives like travelling early or flying in and out on the same day. He says even some two and three star hotels are tripling their prices, believing demand will outstrip supply.

Harrison says hotels in cities not hosting the cup could offer competitive prices, but they are jacking their prices up too. He says there’s a danger of alienating markets like the United Kingdom, which has been hit hard by the global recession. Harrison says staying on a cruise ship looks like a good value option compared to the Auckland hotels.

5) Phoenix - two to go

Being more of a traditional rugby union fan I have not really followed the progress of how the Phoenix has got on during the season. But since they made the play off I’ve been hooked. Just this weekend’s game against Sydney and we are in the final.

Go the gold and black!!

February’s Property Newsletter

Published by Scott Miller on Friday, February 12, 2010 in

Well hasn’t a lot happened in the space of one month, we have had a power packed month of news and announcements. I have listed a few I think are worth looking at in a little more detail.
1) AMS releases it’s highly anticipated referral scheme
2) John Key outlining tax reform
3) Please read a little light humour on how the new tax system will work.
4) New housing data from QV
Let’s have a look at these points of interest.

AMS releases it’s highly anticipated referral scheme!!!

We have had a number of referral schemes ideas over the years, and though all of them were good, somehow they lacked in clarity and ease of understanding.

But now we are pleased to announce that Advanced Mortgage Solutions Ltd is offering a referral scheme that is second to none and is open to all those who refer business to us.

Starting this month if you refer family, friends, or work colleagues to Advanced Mortgage Solutions and they settle a loan no matter how big or small you receive 10% of our commission. All you have to do is introduce us to people who you think can benefit from our wealth of experience and we will do the rest.

One of our referrers has already referred 2 clients to us this month and although she doesn’t know it yet is up for a commission cheque of $581.00!!!!!!

This is a great opportunity to enjoy a little extra bonus every now and then, whilst knowing the person you referred is in the best possible hands.

We look forward to hearing from you and helping with you referees needs.

If you would like to know more or have someone who needs our help please click HERE.

John Key outlining tax reform

This week John Key outlined guidelines on what he thinks the National party are likely to announce at this year’s budget on May 20th. I have summarised how this will affect home owners and property investors below.

Proposed Tax Changes for Homeowners

Those with their own homes (and those planning to buy), can breathe a sigh of relief that the proposed tax changes will not affect owner occupied properties. A land tax has been ruled out. This would have been levied in much the same way as rates - a blunt form of tax, hitting hard all those that own their homes as opposed to those who rent. A land tax would have had a negative impact on those on lower incomes, our farming sectors and property owning charities. A capital gains tax has similarly been rejected. A rise in GST is negative for homeowners as any alterations and improvements will cost more. There will be relief from lower marginal tax rates.

Likely Tax Changes for Investment Properties

The big news in the Government’s opening parliamentary speech is the comments about trying to extract extra revenue from the residential property sector, which they believe, unfairly is not paying its way. After ruling out capital gains, land taxes and the notional return, the two areas the Government is likely to target is depreciation and how much in the way of losses can be claimed. There are two types of depreciation, one on buildings or improvements and the other for chattels The change, we understand, will only apply to buildings or improvements. The second change, hinted at, may be ring fencing losses to a certain level or restricting their offset to property income. The Government must be careful in changing of the rules regarding property investment as many people have their only form of superannuation tied up in this sector. Secondly the Government should be encouraging the landlords to continue improving their properties and so improving our housing stock. These changes will not do this. If this sector is made unattractive to invest in, there will be fewer investors - this may well lead to a rental accommodation shortage and hence higher rents, not to mention the real chance of properties devaluing.

Is it a Good Time to Buy?

The property market was quieter in January and agents have put this down to two factors- the number of people on holiday and the uncertainty regarding new property taxes. For potential owner occupiers, this has been removed and they can now consider whether it is a good time to buy. This is always a difficult decision but there are a number of positives out there. We are still in a recession with higher than anticipated unemployment figures being released last month. It can be assumed that interest rates will remain lower for longer. If GST goes up this will cause an increase in the costs of new houses may cause existing stock to rise in price as well. Properties still tend to be priced below their 2007 peaks - it is cheaper to buy today than three years ago. Due to tax anticipated tax changes with residential investments we may see a few more rental properties coming onto the market, which in the short term will increase available supply which is always good for potential home buyers.

Please read a little light humour on how the new tax system will work.

The tax system explained in layman’s terms; explained in beer.

Suppose that every day, ten men go out for beer and the bill for all ten comes to$100.

If they paid their bill the way we pay our taxes, it would go something like this…

  • * The first four men (the poorest) would pay nothing.
  • * The fifth would pay $1.
  • * The sixth would pay $3.
  • * The seventh would pay $7.
  • * The eighth would pay $12.
  • * The ninth would pay $18.
  • * The tenth man (the richest) would pay$59.

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.

“Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20.” Drinks for the ten now cost just$80.

The group still wanted to pay their bill the way we pay our taxes.

So the first four men were unaffected.

They would still drink for free.

But what about the other six men? The paying customers?

How could they divide the$20 windfall so that everyone would get his fair share?

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so the fifth man, like the first four, now paid nothing (100% savings)

  • * The sixth now paid $2 instead of $3 (33% savings).
  • * The seventh now pay $5 instead of $7 (28% savings).
  • * The eighth now paid $9 instead of $12 (25% savings).
  • * The ninth now paid $14 instead of $18 (22% savings).
  • * The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

“I only got a dollar out of the $20,”declared the sixth man.

He pointed to the tenth man,” but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more than I!”

“That’s true!!” shouted the seventh man. “Why should he get $10 back when I got only two? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works.

The people who pay the highest taxes get the most benefit from a tax reduction.

Tax them too much, attack them for being wealthy, and they just may not show up anymore.

In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.

Professor of Economics.

New housing data from QV

Property values have increased further according to the QV residential property indices for January released today. Nationally, values are 4.4 percent above the same time last year, and 4.3 percent below the peak of the market in late 2007.



Auckland Region








New Plymouth




Palmerston Nth






























Wellington Rgn









New Zealand



Annual Property Value Change
Average Sales Price

View FAQs on the Property ValueMap

The average sales price across New Zealand also increased to $409,807 in January, up from the $404,671 in December. However, the average sales price is a less reliable measure of value change than the QV index as the average can be skewed depending on which part of the market is active.

Glenda Whitehead of QV Valuations said “market activity in January appears to have been patchy. Overall, activity was lower than expected, although our valuers are seeing an increase in activity in some sectors of the market and a decrease in others. While it is normal for sales activity to be at its lowest over the Christmas period, there is usually an increase in listings activity in January leading into the busiest time of the year in February and March. This January the expected increase appears to be absent”.

Whitehead said “this lower level of market activity in January could be due to more people being forced to take additional leave this Christmas, and only recently returned from holidays. There are also signs of increasing indecision in the market, fuelled by uncertainty over interest rates, employment, which direction property prices are likely to move, and the recently announced tax working group recommendations”.

“The majority of the market activity, particularly in the main centres, is being driven more by existing homeowners and first home buyers rather than investors. Those currently entering the market appear to be taking a cautious approach to their decisions, and are doing their research thoroughly. Some of the frantic market activity of 2009, when there were multiple buyers competing for a property, appears to have eased, at least for the time being” said Whitehead.

“It is still too early in the year to conclude the likely pace of the market in the coming months. There is increasing debate around the likely impact of the options put forward by the tax working group, but movements in property market are driven by a combination of factors, and while any tax changes implemented will impact, that change will be alongside other market factors such as interest rates, employment security, and bank lending policies prevalent at the time any of those tax changes come into effect” said Whitehead.

Values in most of the main centres have continued to increase in recent months and are now all above the same time last year. Values in the Auckland Region are now 7.3 percent up, the Wellington Area is 5.7 percent up, and Christchurch 6.3 percent up. Values in the other main centres have fluctuated in recent months, but still remain above last year by 3.5 percent in Hamilton, 0.6 percent in Tauranga, and 5.0 percent in Dunedin.

In the provincial centres values have been more variable over recent months. However, values in nearly all areas are now above the same time last year. Rotorua is 3.3 percent up, Napier 5.1, New Plymouth 7.1, Wanganui 0.1, Palmerston North 5.6, Nelson 3.6, and Invercargill 4.6 percent. Whangarei is the only centre still below last year at 3.9 percent. Queenstown Lakes is 0.5 percent above last year and this is the first time it has shown year on year growth since May 2008. This is due to an increase in values in the last few months after a relatively flat 2009.

We trust you have found this information to be helpful and at times humours. As always we love to hear your feed back and look forward to hearing your thoughts and observations.

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