First National wonders if SCF investors will deploy their NZ$1.6 billion windfall into property rather than into banks

First National wonders if SCF investors will deploy their NZ$1.6 billion windfall into property rather than into banks

Could South Canterbury Finance (SCF) investors use their NZ$1.6 billion of immediate cash repayments from the government to invest in property?

Real estate agency First National has suggested many investors may choose to invest their cash in property rather than in banks.

"The recent rescue of SCF investors by the Government may provide a much-needed catalyst for the property market," First National Group general manager John Stewart said.

"With the demise of SCF, investors soon to be repaid by the Government will face a new dilemma. Where should they put their money now? "Is their money safer in the bank? Or will they inject it directly into property?," Stewart asked in a statement.

“No doubt both sectors will be waiting for these decisions with bated breath. If the banks have a cash injection from investors that could loosen the mortgage reins, with positive flow on effects to the property market. If investors put it straight into property, it may kick start the building, the buying and the selling," he said.

"Either way, the Government's rescue package may be the catalyst that Spring has not yet provided for the country's property market."

First National also released its monthly survey of around 450 sales people in 70 offices nationwide, including buyer enquiry indicators, sales volumes, listing level measures, and buying and selling trends.

'Prices falling, volumes weak'

It showed prices continued to drop last month in 57% of its offices and that sales volumes were lower in August than First National's 12 month average.

Here are the results below.

August was a very quiet month for sales and although buyers were reported as being in the driver's seat, finance and confidence were both key issues.

Just over 84% of respondents reported buyers’ access to finance was not improving, with around 10% reporting lending conditions were easing for their buyers.

Summary of survey findings:


House prices continued to drop from last month in 57% of the offices.

Some agents reported that vendors were now basing offer acceptance on their ability to service existing mortgages rather than making a profit. In 42% percent of regions prices were the same as they had been in July.

Just 1% of offices reported price increases and these only involved 4 bedroom properties. Volumes: Sales volumes were lower in August than First National’s 12-month average. Fifteen percent of offices sold more properties compared to August last year but 56% of offices sold fewer and 29% sold the same number.


Listing levels continued to tighten as people took their homes off the market. Nationwide, 57% of offices reported having fewer listings compared to this time last year (10 more than last month). However 35% of offices saw an increase of listings compared to the same time last year and listing levels in 13% of offices were unchanged.

Buyer enquiry

Buyer enquiry levels were significantly lower than the same time last year in 58% of the offices and moderately lower in 23% of offices. Buyer enquiry was higher than August last year in just 3% of offices. For the first time since January, website enquiry over the past two weeks had dropped below the same time last year, to 73,000, around 5000 visits below August 2009. In May this year, web visits per day peaked at around 130,000, 45,000 visits per day higher than May 09.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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You gotta love a tryer!

The sad thing is - he might be right!

SCF goes under largely because of bad property loans/investment and their bailed out depositors jump straight back into property.

Some mothers do 'av 'em!

NZ own version of QE.

C'mon ! Under the government guarantee , SCF investors can charge into another high yield product , with impunity . Capital and interest guaranteed ........... Better than trading banks can offer .

Even heard one chap from Timaru , on the radio , whinging that it might take several months before he got his munny back , under the GG . Charming !

John ' Spruiker' Stewart

Roll on up, Roll on Up

"SCF bludgers on the tax teat - have we got a deal for you!!"


Just too funny.

It's no less than what I expected to happen. Will they be dumb enough to believe the RE BS about prices rising and the best time to buy. The ones with brains will slide the loot into a finance company with a GG up to 250K per person until Dec 2011 and then move it again if the GGs are stopped. They might even order gold from the Mint. ....The dumb ones will buy residential property and watch as their investment goes down and down. It is surprising just how bloody stupid people can be.

Yeah, sure you can ask for whatever rent you want on an empty apartment. .

Tried looking for a new flat around a month ago, moving out of a 3 bed house with views, garden, double bathroom etc and significantly downgrading to a grubby 2 bed Wellington  apartment was my only option if I wanted to stay in the same price bracket. Since I'm not stupid enough to take on the inflated rental price of a negatively geared investor, I decided to stay put. And since a significant proportion of the properties available were said absentee owner apartments, its no wonder the bank now treats me like the leper that laid the golden egg. wanna borrow money? Aw hell no, but don't close your accounts and go somewhere else! We love you, just don't ask for anything.

and tenant incomes the obvious next bubble?

John Stewart says - "Could South Canterbury Finance (SCF) investors use their NZ$1.6 billion of immediate cash repayments from the government to invest in property?"

So this was the Governments cunning plan to keep the property market elevated?  

My bet is it will go straight into vanilla bank deposits and stay there until the banks go bust!


Have you been advising them Hugh?

Only in linear fashion. The last thing we need is to keep the mammoth alive - it's what got us into this mess in the first place.

He's urging the putting out of the fire with gasoline.

Of course, do to that, you have to ignore the smell of burning.

You can make diamonds out of ashes now...

 "....Im more than happy to support Jim Anderton - and am looking forward to seeing the end of Bob Parker. Poor Bob the romantic elitist has been a disaster Im afraid ''."'""'

Hugh!!!!!!!! Are you SURE???? Are your meds right these days? I agree wholeheartedly but , you must admit, it's a bit of a turnaround. Or are you standing in Wigram next year?

Some people obviously don't know the difference between property developers and prorperty investors. Same ignorance as saying a property is freehold when they mean paid off.

From Crockers  September 1st  newsletter regarding house prices:

"Median prices have continued the recovery that began in June, and are
now to $450,000"


we're on a road to nowhere..come on in!

Now that they are getting their money back, these investors would probably want to put it under their mattresses.  Next best thing is probably term deposits or government bonds, or both.  But they won't be buying properties.

what about pete sinclair??? maybe he can woo you???


 or for those in 2010 - this is the now...

While we are at it, Why the f..k should ANY of my (or anyone elses) ACC levies go too NZX trading and speculation?

How about getting ACC or that a..hole Nick Smith to explain the 'ethics' and 'legality' behind this one Bernard?

Because thats the way your masters work sonny boy. Now get back to work , its not for you to know!

Stage two Bill....offer govt cpi adjusted 4.5% pa bonds....that way most of the 2 billion will be back in the drawer by lunchtime and the cost to the taxpayer reduced to the interest payout less the tax you steal back as how easy is that!