The Unqualified Expert: Ben’s Barometer August 2016
Whenever there is hype in a particular sector of the economy, the media approach unqualified experts for their take on what is happening. Real estate is no different. In fact as far as ‘unqualified experts’ go we are probably among the worst offenders. In real estate, companies and agents jump at the chance to offer their two cents. For example, adding fuel to the fire of an overheated real estate market can be very beneficial if the spinoff means an increase in their bottom line.
A topical example of this is the methamphetamine contamination ‘epidemic’ of our housing stock.
Especially those with a rental history. ‘Experts’ in meth contamination testing are popping up everywhere to capitalise on this nationwide problem. The problem doesn’t lie in the fact that testing is rapidly becoming the norm but in the fact that it is hard to get an independent assessment of the problem at hand.
In most cases, the companies who carry out meth testing also provide decontamination services. When there are tens of thousands of dollars to be made in the clean-up, identifying trace elements of the substance is definitely in the best interests of these so called experts. According to scientist Nick Kim, the accepted New Zealand bench mark for remediation is 0.5 micro grams per 100 square centimetres. That level is said to be 24 times lower than the lowest level that could plausibly have a health risk. It has taken months for the ‘real experts’ to debunk thescaremongering created by these companies and expose it for what it really is, which is a bit of a money grab.
If you are considering carrying out meth testing on a property of interest, we recommend
engaging a company which send the swabs away to be analysed by an independent lab. These tests may cost a bit extra, but are reported to be considerably more accurate. In addition, your family can rest assured that the risk to their health has been independently considered by a qualified expert with no stake in the game.
The Wellington Market
It would appear that banks are beginning to have considerable concern over activity in the property market with accelerated growth of prices outside of Auckland not looking to ease any time soon. When banks are in a growth phase, lending is relatively easy. It is when the banks start having concerns about their exposure to lending that it becomes harder for buyers to access debt. At times like this even long term, loyal customers with good lending histories may have trouble acquiring new loans.
One sector under particular scrutiny is investments. Recent changes to LVR for investment property now requires 40% equity. What is even more interesting are the whispers in the industry that a loan to income ratio may soon be introduced. Considering New Zealand has one of the worst home affordability ratings in the world, this could be a real game changer, so we will certainly monitor this with great interest.
For the moment we are still experiencing high demand and good prices with no major changes to stock levels fueling the fire. With significant changes afoot, how long that can continue is anyones guess. So, if you have been thinking of bringing a rental property to market, now would be the time to do that, before the choice is no longer yours.
Click here to see what your rental property is worth in the current market.
Wellington Market Quick Facts
Average sale price by area:
August 2016 Fun Facts
By this time of year, winter temperatures have well and truly set in.
This leaves some of us dreaming of warmer climates. But for many, the lure of the snow beckons… Did you know that:
- The earliest archaeological examples of skis were found in Russia and date to 5000 BCE
- Although modern skiing has evolved from beginnings in Scandinavia, 10,000-year-old wall paintings suggest use of skis in the Xinjiang region of what is now China
- The first recorded public ski competition was in Norway in 1843
- The first “ski resorts” started to pop up in 1868, after the establishment of train lines allowing “city dwellers” to more easily reach the slopes
- Alpine skiing has been part of the Winter Olympics since 1936