Innholdsfortegnelse for Feb 2017 i NZ Property Investor

I’VE HEARD MUCH DISCUSSION recently on where we are in the property cycle. Well, it really depends on where you own property doesn’t it? The latest market reports and data show subdued sales activity and dampened demand in many markets – but not all, around the country. It begs the question: ‘Is the quieter market due to the traditional summer slowdown?’ or, ‘Is it just a temporary impact from the latest LVRs?’ A recent economic update from BNZ chief economist Tony Alexander states that this cycle – if we can call it that – is historically different to previous cycles. He points to unusually high population growth; low interest rates; construction costs; baby boomers retiring; insufficient levels of construction since the mid-2000s; New Zealand’s open economy attracting overseas investors; and…

IF INTEREST RATES CONTINUE TO RISE DURING 2017 THIS MAY FURTHER REDUCE DEMAND FROM INVESTORS AND LEAD TO A LONGER PERIOD OF LOWER VALUE GROWTH - ANDREA RUSH IT’S A CONUNDRUM. MARKET REPORTS and data indicate more subdued sales activity and less demand in many markets, around the country. Yet house prices just keep rising. And the ongoing supply shortage is still far exceeded by demand. So is the quieter market due to the traditional summer slowdown? Is it a temporary impact from the latest LVRs? Or could it be the start of a turning point for the recently supercharged market? The latest data is a mixed bag and renders easy assessments difficult. The future is unclear. But the data does highlight one thing consistently: Auckland’s market has fallen far…

FOR THOSE OF YOU WITH YOUR EYE ON BACHES, BE AWARE OF THE MIXED-USE ASSET RULES THAT WILL ONLY ALLOW DEDUCTIONS FOR DAYS RENTED RELATIVE TO TOTAL DAYS OF USE – MARK WITHERS TO FIX OR NOT? Investors are beginning to consider fixing interest rates as the banks external funding costs rise and the longer-term fixed rates continue to increase. When fixing rates, all flexibility is lost due to the high cost of break penalties if fixed rates are then broken. Interestingly though, IRD will allow break costs to be deducted regardless of whether the break has occurred as a result of a refinance or the actual sale of the property. To claim the full deduction for the penalty when the break actually occurs though, requires the debt instrument to…

THE REAL CONCERN IS WITH THOSE INVESTORS WHO DON’T UNDERSTAND THE NUANCES OF PICKING OUT CAPITAL GROWTH IN A LOCALISED MARKET – SUE IRONS THERE’S BEEN A LOT OF TALK ABOUT the direction of the national property market from now onwards. Will values keep going up? Will Auckland’s softening market gradually ripple through the country as the year goes on? The general consensus is that the market still has a bit of steam going into 2017, but from around the end of this year onwards, we could be in a completely different growth game. Experienced investors are unfazed by the ups and downs of the market – it’s just the natural cycle, and they always have a plan in the back burner for when the market takes a turn. The…

THE DATA Rental data is sourced from the Ministry of Building Innovation and Employment (formerly the Department of Building and Housing) based on rental bonds lodged. This rental data is supplied to us grouped into geographic areas based on statistical area units used by Statistics NZ for the census and as a result do not always match well with common usage suburb names. The rental data for each area is matched to house price information from our database to determine property prices and therefore yield. The yield is calculated as the annualised rental income divided by the median house value calculated using our E-Valuer. MARKET COMPOSITION The rental market in Auckland Central is almost exclusively made up of apartments. Only in Newton/Grafton is there any other type of rental property…

NORTHLAND NEXT MEETING: Wednesday February 22, 7.00 at Distinction Whangarei, 7 Riverside Drive. Whangarei TOPIC: The speaker will be Andrew Bruce, President of Auckland Property Investors Assn - APIA. As an investor and developer, Andrew will be sharing his wealth of knowledge on Wednesday night and will be available for a breakfast meeting with members, Thursday morning. MEMBERSHIP: $180 single or $210 couple; includes subscription to the NZ Property Investor and NZPIF discount card, plus local trade discounts. Please email npiacontact@gmail.com for more information. PO Box 1640, Whangarei.. AUCKLAND NEXT MEETING: Tuesday February 7, at the Dorothy Winstone Centre, Auckland Girls Grammar School, 14 Howe Street Freemans Bay Auckland. TOPIC: How to invest successfully in 2017 Come along to this free public event to hear from experienced investors and leading…

Does anyone rent out their properties short-term via Airbnb or holiday accommodation providers like Bookabach or Bachcare? If so, we'd love to hear about your experiences doing so - be they good, bad or funny. COMMENTS ▶ Yes, with Bachcare on one place as it's a way away from me and the management is great. The other I manage myself on Airbnb and Bookabach. Good returns and we use both ourselves. Quite a bit more work than long term tenancy though. ▶ Put a house on Bookabach over 12 months ago. After a small reno and tidy up, the house is returning more than as a long-term rental, plus we get to use it too. There are of course more costs associated such as power, sky, wifi, cleaning, lawn mowing,…

REINZ HOUSE SALES: DOWN Once seasonally adjusted, sales volumes were down around the country in December. While the national decline was slight, it was pronounced in a number of markets, notably Auckland. INTEREST RATES: UP Interest rates remain low, but banks have started to increase them. OCR: DOWN The Reserve Bank cut the OCR to a new record low of 1.75% in November. RENTS: UP For the second month in a row, rents were up nationwide in December. Auckland rents dropped slightly, but Wellington rents rose strongly once again.…

IN THIS INDUSTRY IT IS VERY TOUGH AND CASH FLOW IS KEY - ELLIOT JONES WITH HIS DEEP TAN AND THATCH of wiry hair peppered in a haze of plaster dust from his morning site visit, 25 year-old Elliot Askew Jones doesn’t fit the usual property investor mould. And he’s not. For starters, he’s much younger than most investors and he is still in the process of acquiring his own unit in Wellington – his first property. However, he has completed over 50 property deals and more than 20 renovations in Auckland, Hamilton and Wellington – most of which were part of a successful joint venture with an angel investor who was willing to share a 50/50 split of the profits made. Other deals completed were negotiated to help friends…

IF YOU’RE LOOKING AT THIS TYPE OF PROPERTY, MAKE SURE YOU’RE NOT IN DANGER OF BEING DAZZLED BY PLUSH ACCESSORIES AND OPULENT FURNITURE PACKAGES - AARON TUNSTALL IF YOU’D TOLD ME 10 YEARS AGO that an Auckland development project would have a starting price of $1 million for a one-bedroom apartment, I’d have thought you were pulling my leg. But this is how far the market has come: ‘The International’ is a conversion of the old Fonterra office into 88 luxury apartments and the penthouse apartment has been presold for a record $15.3 million. You may well think this has no relevance for investors, but one of the beautiful things about investing in property is that there’s something for everyone. I recently spoke to a client who was about to…

IF YOU’RE INTO REAL ESTATE FOR THE LONG HAUL THEN TIME IN THE MARKET WILL TRUMP TIMING THE MARKET - MICHAEL YARDNEY IF YOU’RE INTO REAL ESTATE for the long haul (and that’s really the only way to play the property game) then time in the market (owning a property that will outperform the averages in the long term) will trump timing the market If you're looking to get into property or move up to the next rung of the property ladder, here are some words of advice. Property investment is simple, but not easy and that’s not a play on words. It’s not something you should enter into lightly, but for some reason, that’s what a lot of people who have dreams of making millions in real estate do.…

HARBOURSIDE The Viaduct area appeals to a wide range of corporate and professional tenants and offers high quality apartments for short or long term accommodation. The apartments, which often have brilliant sea views, carparks and are in some cases fully serviced, are located within walking distance of restaurants, bars and the Queen Street shopping district. Quinovic Viaduct CENTRAL WEST Encompasses the Beaumont quarter and Ponsonby. This area appeals to corporate tenants wishing to live close to the city but also within an easy walk of Ponsonby shopping and dining. Rents are generally in the upper quartile. Quinovic Ponsonby NEWTON Located on the city fringe neighbouring Mt Eden and central to Auckland University, Auckland Hospital, Karangahape Road and Symonds Street. This area attracts a range of tenants who seek quality accommodation…

RENTAL SNAPSHOT Median house rents of the dominant dwelling type for the area EXPLANATION OF STATISTICAL TERMS No. of Properties: Total number of residential properties No of Bonds: Total number of bonds lodged in last three months Median Rent: Weekly rent based on the bonds lodged in the latest three months Rent Quartile Range: Inter-quartile range of weekly rent based on the bonds lodged in the latest three months Median value: The median value of properties in the group based on estimating the current market value of each property using our E-Valuer at the end of the latest month Gross Yield: Annualised median rent as a percentage of median property value for specified time period NORTHLAND AUCKLAND WAIKATO / BAY OF PLENTY HAWKES BAY / GISBORNE TARANAKI MANAWATU / WANGANUI…

THE GUIDE WILL APPEAL PRIMARILY TO NEW OR WANNABE PROPERTY INVESTORS WHO ARE TRYING TO FIGURE OUT HOW TO SCRAPE TOGETHER SOME DOUGH FOR A 40% DEPOSIT SCOTT PAPE IS THE BAREFOOT INVESTOR – he’s a familiar face in the Australian media and has been offering financial advice through newspaper columns, television appearances and his online newsletter, The Barefoot Blueprint, to Australians in need of a financial shake-up for well over a decade. His goal is simple: to help you unlace those tight corporate shoes in favour of a financially stress-free, barefoot future. His latest book The Barefoot Investor: The Only Money Guide You’ll Ever Need is a simple three-step guide, outlining how to take charge of your finances and set yourself up for long term financial security. The guide…

1 Looking Towards 2017 There’s widespread agreement that the Reserve Bank’s new investor-focused LVRs have slowed down the market – for now. But there is some divergence of expert opinion over how long that might last and what exactly the market might do next. So, what could the new year have in store for investors? Auckland Property Investors Association president Andrew Bruce said he was cautiously optimistic about the Auckland market in 2017 - although not gung-ho 2 No More Lending Restrictions The latest QV data shows that residential property value growth is slowing while activity and demand has declined in markets around the country This change has led one real estate agency head to call for an end to macro-prudential restrictions on the market. Century 21 national manager Geoff…

I WOULDN’T BE SELLING UNLESS IT IS TO PAY DOWN DEBT OR TO REPLACE THE PROPERTY WITH A BETTER PERFORMER OVER THE CHRISTMAS holiday period I had the luxury and privilege of travelling to the UK and Paris. Eye opening to say the least. It was like Auckland on extreme steroids with everything fast paced yet efficient. It’s something I've been wanting to do for some time and can finally say that I have! While in London, I spent most of my time staying in a two-bedroom apartment in Elephant & Castle, a lower decile suburb in the center of London. That apartment would have a price tag of circa £500,000, so not too dissimilar to Auckland. London is quite clearly more advanced in terms of how a city operates…

THE PROPERTY CYCLE WORKS IN mysterious ways and the assumption that all suburbs in a given city increase and decrease value at the same time has been proven wrong time and again. So, can the same be said for streets in individual suburbs? What other factors are at play? By locating the suburbs across New Zealand with the greatest value range we pinpoint great suburbs where you can still find affordable properties – much like finding the worst house on the best street. We also get commentary from local experts and investors to find out what types of properties you should be looking for in these suburbs. THE DATA It’s very difficult to create a simple and meaningful measure of undervalued areas; we’ve worked with CoreLogic to decipher which suburbs…

IN ALL OF THE OTHER PROPERTY BOOMS I HAVE EXPERIENCED, THIS HASN’T HAPPENED TO WANAKA BEFORE - CAMPBELL VENNING WHETHER WE WANT IT or not, New Zealand continues to experience unprecedented population growth. Statistics NZ’s 12-month migration figures from October 2015 to October 2016 show an increase of 70,300 new human beings entering our shores and if we use the October 2016 numbers of net arrivals (less departures) of 7,000, that equates to a per annum run rate of 84,000 new people hitting Aotearoa every year. In the old days, it was easy to assume that these new arrivals would stay in Auckland and never make it further south than the Bombay hills, but that is no longer the case; Central Otago is a case in point. It’s a quintessential…

THE COST OF SERVICING THE MORTGAGE IS ACTUALLY CHEAPER NOW THAN FORTY YEARS AGO – ANDREW KING FOR THE LAST FEW YEARS WE HAVE been inundated with media articles and opinion pieces on how we have a housing crisis and how the young are doomed to be tenants for life. People who believe this are focusing on the cost of housing relative to incomes. House prices have increased at more than twice the rate of incomes, with the ratio of house prices to incomes increasing from 3.4 in 1985 to 7.5 in 2015. On the face of it, this looks like a crisis. However, a look at some other numbers involved in housing affordability paints a different picture. The NZPIF has looked at the situation of a first home buyer…

Atticman 021 716 779 www.atticman.co.nzAngel Property Management 09 281 35 47 www.angelpropertymanagers.nzAccessible Properties 022 043 5995 www.accessibleproperties.co.nzB&N Property Management 0800 111 252 www.bnproperties.co.nzBayleys Real Estate 0800 BAYLEYS www.bayleys.co.nz/commercialClick Property Management 0800 1 CLICK www.click4rent.co.nzConnect Realty 0800 333 221 www.connectrealty.co.nzCoreLogic 0800 355 355 www.corelogic.co.nzCrombie Lockwood Insurance 0800 276 6243 www.crombielockwood.co.nzD&D Financial Consultants 09 369 5144 www.dandd.co.nzDiamond Ideas Ltd 0800 164 461 www.healthandsafetycompliance.co.nzDiscount Property 021 280 6655 www.discountproperty.net.nzEnviroCheck 0800 378 483 www.envirocheck.co.nzFresh Tax 0800 18 18 19 www.freshtax.co.nzG.J. Gardner Homes 0800 424 546 www.gjgardner.co.nzIFindProperty 021 486 000 www.ifindproperty.co.nzImpression Real Estate Ltd 09 300 5001 www.impression.co.nzKeith Hay Homes 0800 KEITH HAY www.keithhayhomes.co.nzKey Exchange Property Group www.keyexchangepropertygroup.comKris Pedersen Mortgages 09 476 1199 www.krispedersenmortgages.co.nzMethsafe 0508METHSAFE www.methsafe.co.nzMaintain to Profit 09 929 4546 www.maintaintoprofit.co.nzMeth Solutions 0800 638 4522 www.methsolutions.co.nzMinistry of Business, Innovation and Employment www.mbie.govt.nzNZ Property Investors…