New record House Prices Set in March 2017
In March there was a big surge in the number of house and apartment sales in New Zealand with an increase of 36% over February.
Prices increased setting a new New Zealand median price record of $546,000 with 8 out of 12 regions setting new record high median sale prices.
These regions were:
Bay of Plenty
The slowing effect of the LVR (loan to value ratio) borrowing restrictions seems as expected to be wearing off.
There is still a shortage of houses in Auckland and as a city it is growing quicker than new houses can be built. Queenstown and some other cities have similar problems.
Whether buying a home to live in or as an investment to rent out it pays to ensure you are not buying a “leaky home”. Nationally there are estimated to be between 42,000 and 89,000 leaky homes or homes with weather tightness issues. The number depends of which set of information you believe.
Either way it is a lot of leaky homes with repair cost estimates between $11,300,000 and $23,000,000! When buying a property you need to be sure you don’t get caught with one and a massive repair bill.
What can cause the problem?
There were many factors involved but a major one was the big increase in “monolithic” cladding such as fibre cement sheet with joints and textured paint on top and EFIS (exterior foam insulation systems) – the so called “chilli bin” polystyrene system with polystyrene sheeting overlaid with fibre reinforcing and plaster and then paint.
These systems were difficult to install correctly and prone to problems as they relied heavily on joint sealants and waterproof paint. A lot of other factors were involved too such as the building code allowing the use of untreated framing timber and the absence of a cavity through which water could drain.
Risky design features also added to the problem for example – no eaves, flat roofs, many roof angles and balconies over living areas. Most of these factors were in play between 1992 and 2003.
Here are a few tips / things to watch out for when buying a home:
- Be extra careful if buying a property built between 1992 and 2004.
- Be extra vigilant if buying a monolithic clad home.
- Be aware of the risks if the home has a flat roof.
- Be aware of the risk of lots of sharp angles and changes in roof pitch.
- Be aware of the risk a home with no eaves poses.
- Remember not just monolithic type houses pose a problem as other types of cladding can still produce a leaky home.
- Have a professional building inspection including – weather tightness and moisture testing conducted by an experienced, fully insured (including professional indemnity and public liability insurance) professional such as A Buyer’s Choice Home Inspections.