Real Estate Market June 2020
The residential property market in June 2020 was the first full month of real estate marketing, open homes, auctions and sales under level 1 (border only)
restrictions. The result was the highest number of property sales for a June month in 4 years. Not only did the number of properties sold increase but so did the prices.
Across New Zealand prices increased by 3.8% compared to a month ago and in Auckland increased by 2.8% for the month. The median house price in New Zealand is now $639,000 which is up 9.2% in the last 12 months. In Auckland the median house price is now $928,000 also up 9.2%. Every region in the country has had price increases from 12 months ago.
The highest increase in price was Gisborne at 29.4% and the lowest was Tasman up by 2.4%. The average number of days to sell nationally was down from 58 in May to 45 in June. It seems that Covid19 so far has only caused a temporary pause in the growth of house prices which was underway.
The economists predicting large falls in house prices have so far proved to be totally wrong. Is this just a catch up of higher sales and higher prices because little or no buying / selling / marketing of real estate could take place during level, 4, 3 and 2 lockdowns? At first glance that may seem to be the case – more unemployed, less job security, interest only mortgages and so on.
But and it is a big BUT there are a lot of reasons prices will in fact go up:
- Very low mortgage interest rates.
- No LVR (smaller deposits needed).
- An already big shortage of houses (none built during lockdown) made worse.
- Very low bank deposit interest rates encourages investment elsewhere – property / shares.
- Big influx of immigrants – New Zealand citizens returning to live in NZ (21,000 in April, May and June). In fact numbers have been restricted by quarantine facilities available – more houses needed.
- A large and growing shortage of properties for sale – numbers for sale have fallen 12 months in a row.
For first home buyers with secure employment there has not been a better time to buy – low deposit required and low mortgage rates. For investors there has never been a better time to buy – almost no interest for money in the bank.
Low deposit required to buy and low mortgage rates. We may see a small dip in values close to the election in September when the employment subsidies end. If that even happens at all it is likely to be a very short interruption to the ongoing rise in prices which is underway.
Dampness in Homes – Causes and Cures
Water, in its many forms is an ever present fact of life for a home owner. Households can use hundreds of litres daily. Lots of rainwater must be successfully shed by the roof and cladding during storms. Groundwater moves through the soil beneath the foundations.
Indoor humidity levels are controlled for comfort. Moisture in the form of condensation and water vapour is absorbed and released by the home itself. Uncontrolled water in our homes can cause damage. It can lead to damp unhealthy living conditions and mould growth, rotten wood and structural damage.
The exterior surfaces of a house from roof to foundation make up its envelope which is designed to keep out water. If it fails, expect trouble. When roofs, flashings, foundation walls and cladding are not properly maintained rainwater will find its way into the vulnerable parts of the house. All houses must absorb and release moisture consistently to maintain a healthy balance.
If the house has “breathing problems” many types of moisture problems can develop. Trapped moisture can cause fungus and mould growth causing decay, rot and eventually structural damage. Dampness destroys the value of the insulation and raises heating costs.
The best foundation is a dry foundation, groundwater, floodwater or even rainwater from misdirected downpipes and leaking gutters can undermined the foundations and cause settlement cracks and wet floors and walls. Cracks in the cladding and unsealed penetrations can cause water damage to the walls.
The most common sources of moisture problems at the exterior of a home include: Roof and Flashings – Roofs wear out, rust, shingles become loose, flashing around chimneys, plumbing vents and other penetrations fail. Low pitch roofs are particularly vulnerable.
Gutters and Downpipes – Clogged gutters can cause water to back up and flow inside the walls and collect at the foundations. All downpipes should be connected to the public stormwater system to take water away from the house.
Soffits and Facias – Damaged soffits (horizonal) and facias (vertical) can allow rain to enter the attic which can damage the insulation, ceiling and walls.
Landscape and grading – Installing flower beds up to the base of the cladding can cause surface dampness to suck up the wall and cause wood frames to rot. Grading should always allow water to flow away from a house.
Windows and Door Flashings and Seals – Cracked, torn or damaged seals, flashings, flashings around windows and doors can allow wind borne rain to penetrate your house.
Common Interior Moisture Problems
In the walls and the attic and below the floor are many pipes with many joints or connections. They carry hot and cold water and waste water to, around and away from the house. The effects of leaky pipes inside walls are not always seen for sometime but can cause serious damage.
Poor ventilation of kitchens, bathrooms and laundries can cause mould and dampness inside these and other areas of the house. Always vent to outside, not into the attic. Condensation from many sources – showers, hot baths, drying wet clothes inside.
All these things produce moisture and without good ventilation will cause condensation and damage to surfaces such as window sills.
Regular Inspection and Timely Maintenance. Prevention is better (far cheaper) than cure. Catching a problem early and fixing it can save thousands of dollars.
A Buyer’s Choice Home Inspections offer a full home inspection covering every aspect of moisture (including moisture readings) in your home. A very good investment that could save you thousands.