Dear Campbell Live: market price beats Capital Value every time

Did you watch Campbell Live last night? If not, you missed out on a doozy of an article:

Campbell Live Facebook

“Is the Government profiteering from Auckland’s skyrocketing housing market?” their Facebook admin ominously asked yesterday.

The New Zealand Transport Agency recently put up for sale several of their Mt Albert properties. One of them had a Capital Value (CV) of $420,000, and as the above teaser suggests, the NZTA asked for a fair bit more than that.

Here’s a link to the Campbell Live article for your perusal.

So is the Government profiteering from these house sales? We should all jolly well hope so.

There are three important points to consider here.

Firstly, the Government owns assets on behalf of you, me, everyone. Asking for the market price doesn’t rip off the buyer – but asking for less would definitely be ripping off the New Zealand taxpayer.

If this house was sold for what the guy in the article wanted to pay, that means a lower return for us, and less money to spend on public services.

Secondly, to sell the house for lower than market value makes it likely that whoever bought it will on sell it for the higher, market price. Why should the Government let the buyer profit, when they can sell it themselves at that higher price and put the money to use on our behalf?

Thirdly, despite the reporter’s constant, grating referrals to the house’s Capital Value throughout the article, there is plenty of doubt out there that CV is an accurate estimate of a house’s value.

What exactly is CV? According to Quotable Value (QV), CV is based on “the assessment of the probable price that would have been paid for the property if it had sold at the date of the last general revaluation.” CV forms one part of the Council Rating Value (RV) formerly known as Government Valuations (GV), which includes Land Value (LV) and any improvements to the land. So, in short, the media focuses too much on RV, aka GV, which consists of CV plus LV. Ok?

The point is, a house’s Capital Value is worked out by a computer every three years based on what properties of similar size in the area have sold for. It therefore ignores any improvements to the property and is almost always out of date. As anyone involved in real estate can tell you, the Auckland market has shifted big time over the last three years.

Alistair Helm recently shared his views on why CVs should be disregarded – it’s definitely worth a read.

 

Finally, to all those involved in last night’s article, the real estate market is just like any other market; a sale happens when a seller’s asking price matches what a buyer is willing to pay. Of course other factors play a huge part in deciding what that price will be; at the moment it’s a lack of supply that is driving up the price and making it very much a sellers’ market.

If the NZTA had sold the house cheaply they would be doing you, the taxpayer, a grave disservice. Much like the Campbell Live article.

What do you reckon? Let us know below or on Facebook.

Guest post: Scott Hargis’ real estate photography workshop

Scott Hargis

Scott Hargis, as viewed from the third floor.

There has been such a buzz and excitement about the new skills learnt from Scott Hargis’ Sunday workshop on photography and lighting, at the recently held Open2view International Conference, that we thought we would share some attendees’ feedback with you:

Craig Purcell (Open2view Melbourne East/Gippsland):

Twelve astute Open2view photographers spent all day Sunday the 1st of June, some with headaches after the awards night held on Saturday.

Scott and his flashes got the group thinking by utilizing both additive and subtractive lighting techniques in our 3-storey townhouse in Melbourne.

It was a bit of a fitness exercise for Scott running between 3 flights of stairs checking on each group’s progress and making suggestions of where or how many flash heads to place here or there.

Scott was a great communicator, with the group ever on the alert to siphon his brain for that extra piece of advice.

Scott Hargis camera

Lights, camera, Scott in action.

Maarten Grabandt (Open2view Melbourne North):

What a guy, Scott Hargis: a master of his craft, and generously sharing his knowledge!

His Sunday workshop was relaxed and friendly, he had time for everyone and their questions, and above all else, he was sure to make our learning not only informative, but fun too!

I am now only using off-camera flash (determined to make my new learning from Scott work for me!).

Jonas Haag (Open2view Southern Tasmania):

During the Open2view conference in Melbourne I was lucky enough to spend some time with Scott while undertaking his workshop and picking his brain over drinks and sharing a few life stories.

Learning from Scott was ridiculously easy; he explains things in a concise way that immediately sink in. I am generally a compulsive note taker, as I like to have reference points to look back on several months down the track but somehow ended up with only a few written notes and a couple of recordings.

I didn’t make any of his lectures as they clashed with the video workshops but from speaking to those who did, they all gave him rave reviews and I think everyone was inspired to try some new things; I’ve seen a whole lot more one-points and verticals show up on Open2view since the conference.

I highly recommend the video series he has on his website, it’s really well thought out and easy to follow.

Another tip I took away from his workshop: Don’t always think about adding light, sometime you need to do some subtractive lighting and then relight the scene.

Scott Hargis and Open2view

Scott and the Open2view team on a well-earned (that’s our story and we’re sticking to it) dinner break.

Cathy Johnson (Open2view East Gippsland):

The workshop was fantastic and Scott was very approachable and generous with his knowledge.

It not only gave me good info about lighting a shoot, but also made me very aware of the ambient light and the direction that comes from, making the shot more natural looking.

Thank you for the day, it was great.

Indeed. And a big thank you to Scott from everyone here at Open2view – your seminars and workshops were fantastic and gave us plenty to think about!

You can read Scott’s account of his time at our conference here.

May Property Report: Auckland’s housing accord, and more bad news for first home buyers

SnowmanOpen homes and cold snaps don’t mix, as this unfortunate house hunter soon discovered.

Winter: the season to put on your coat and sit in front of the real estate market until you’re nice and toasty again. Let’s see what’s causing all the heat, shall we?

 

Insulated or not, housing is still hot

Said realestate.co.nz in their monthly report-back on the property market, “buyers are still out and about and keen to find a home. However, their eagerness to buy is not being met with a consistent and sufficient supply of new listings.”

Having said that, the record high mean asking price of $454,795 is just an increase of 1.7%. Figures just released from Barfoot & Thompson back up this slow upward glide; their house prices are up less than $2000 on April and $1500 less than in March. And figures from REINZ yesterday rate last month as the busiest May in six years (although still quieter than 2004-07, as Alistair Helm pointed out).

As Peter Thompson says, “Auckland remains a market where there are too many people chasing too few properties.” There are fewer listings available than last year, and nationwide the property inventory has fallen 29% to a new low of 25.4 weeks.

Winter is usually a time of partial hibernation for real estate, so it will be interesting to see if the gulf between demand and supply continues to widen.

 

So, how about that local Housing Accord?

The relationship between the Government and Auckland Council is a little frostier than when we last checked in.

After the two signed the Auckland Housing Accord, the government went away and drew up some legislation to rush their stated dreams into reality.

And that’s where the fun begins. The Herald reported yesterday that Auckland will be asking Wellington to remove from the legislation clauses that allow the latter to take control of housing developments in the city. Councillor Mike Lee is even complaining about the use of the word ‘accord’, labeling it “demeaning”.

What they call the agreement is, frankly, the least of most Aucklanders’ worries. The big question is, will the accord work?

Housing Minister Nick Smith reckons it will, and has no plan to remove the override clause from the legislation.

It’s a clause the Government plans to use elsewhere. Areas with urgent housing needs where this could happen were identified by Dr Smith as Tauranga, Christchurch, Wellington, Queenstown, Nelson and Marlborough.

Some will be unhappy about this usurping of power from locals. On the other hand, without this stick to shake, house building may continue to stall – with nationwide implications.

 

Home deposits: more proof that we’re right, darnit

You may recall our earlier post on why loan to value ratio (LVR) limits are ineffective and unfair. If not, have a read then come back.

Welcome back. Now, last week Governor Graeme Wheeler gave a speech where he indicated he was more than willing to use his new tools gifted to him by the government to deal with housing without raising the Official Cash Rate, which would hurt the fragile economy.

The biggie, as ASB might call it, is the LVR limits they’ve already announced. David Hargreaves of interest.co.nz spelled out recently, based on his own experience, why he considers it hurtful for first homebuyers:

The one good thing we had going for us was that we might have been savings and asset-poor but we were strong on cash flow, both earning much higher than the average wage. And that meant we could keep the wolf from the door every month and meet the commitments. We were on the “housing ladder”.

I’ve got no reason to believe the 20-and-30-somethings of today are any different. They will do what it takes to get a house. And that’s what worries me.

…Even if our first-home buyers are able to get in somewhere below the median price, say at NZ$400,000, they might need a deposit of NZ$80,000 under the new LVR limits policy. That sounds like a lot to save.

The worry is that the final composition of that NZ$80,000 for many couples might actually be NZ$40,000 of savings, NZ$20,000 advanced on the never-never from the in-laws, and NZ$20,000 borrowed from some second-tier lender at possibly exorbitant interest rates that the primary lender – the bank – will not be told about.

It is a recipe for disaster, potentially.

Amen to that.

 

What do you reckon?

Is the market stalling? Who knows best – local or central government? Will LVR limits mess with your house buying aspirations? Should we just invest that money into beanies and socks instead? Let us know below or on our Facebook page.

FOCUS 2013: Open2view’s latest International Conference

The 2013 Open2view International Conference was held in Melbourne last Friday and Saturday. An every-two-year-event, we always look forward to the chance to exchange ideas and techniques with our friends across the Tasman.

Over 150 photographers packed into the Rydges Hotel to hear from a range of experts in their fields, including Photoshop and Lightroom expert David Harradine, real estate sales guru Claudio Encina, Brad Tonini – aka ‘The Sales Strategist’ – and Scott Hargis – one of the very best real estate photographers in the world.

After two days at the learning tree, and one fantastic awards evening, we’re all now back at work and putting to good use what we’ve learned.

Every year we give out awards to the very best performers, and this year’s lot have much to be proud of. To single out one milestone in particular, this year Bev Snyders became the first Open2viewer to photograph 10,000 properties. Bev’s area, North Shore/Rodney, had just over 106,000 dwellings as at the 2006 Census – and she has photographed what amounts to one in ten of them. Amazing stuff!

Other award winners include:

5000 Properties Photographed

Phil Armitage (NZ)

Rob Arlow (NZ)

 

10,000 Properties(!!!) Photographed

Bev Snyders (NZ)

 

Most Improved Photographer

New Zealand: John Gin

Victoria: Annette Jolley

New South Wales: Lex Paterson

Queensland: Edith Veilleux

Western Australia: Padraig Halpin

South Australia: Steve Lindqvist

 

Photographer of the Year

NZ: Jason Tregurtha

VIC: Simon and Heather Wittingslow

NSW: Dave Tozer

QLD: Adrienne Dufficy

WA: Frank Biundo

SA: Charles Lynch

 

Rookie of the Year

NZ: Chris Botha

VIC: Jonas Haag

NSW: Tina Berg

 

Area of the Year

NZ: Taranaki

VIC: Geelong, Otway and Melbourne South West

NSW: Illawarra, South Coast

QLD: Brisbane South

WA: Perth North

SA: Southern Adelaide

 

Area Franchisee of the Year

NZ: Nathan Sanders

VIC: Craig and Karen Purcell

NSW: Alan Cottee

SA: Don McKenzie

 

Most Improved Area of the Year

NZ: Auckland Central

VIC: Tasmania

QLD: Gold Coast

WA: Perth North

SA: Northern Adelaide

 

Signboard Franchisee of the Year

NZ: Liz Evans

VIC: Guy Le Page and Neville Wright

 

Most Valuable Person

NZ: Alta van Blerk and Kym Raubenheimer

NSW: Les Herbert

QLD: Lisa MacKenzie

WA: Samantha Vallet

SA: Steve Lindqvist

VIC: Dave Temple

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Bev Synders receives her pin for 10,000 properties photographed – the first person to reach this milestone – from Kym Raubenheimer. 

 

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Rookie of the Year winners flanked by Ken Greeff and Open2view founder and Managing Director Chris Bates: Tina Berg, Chris Botha and Jonas Haag.

 

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Area Franchisee of the Year winners with Brian Childs (far left) and Ken Greeff: Don McKenzie, Karen Purcell, Craig Purcell and Alan Cottee.

 

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Australia’s Signboard of the Year winners with Ken Greeff: Neville Wright and Guy Le Page.

 

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Most Improved Photographer award winners with Chris Bates and State Franchisees Ken and Elana Greff, Sue Dilena and John Peacock: Lex Paterson, Annette Jolley, Steve Lindqvist, Padraig Halpin and John Gin.

 

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Photographer of the Year award winners with Scott Hargis: Frank Biundo, Charles Lynch, Dave Tozer, Heather Whittingslow, Simon Whittingslow and Adrienne Dufficy.

 

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Area of the Year winners with Chris Bates, Ken Greeff, Sue Dilena and John Peacock: Don McKenzie, Chris Wright, Neville Wright, Josie Suarez, Michelle Hofmans, Becky Allen-Riddick, Deane Riddick, Peter Evans, Lisa MacKenzie and John Wilton.