NZ Property Investor Apr 2017

DATA SHOWING A COOLING OF THE market and of property values has been streaming in over the past couple of months. So how do we know how long the frostier climate will persist? For those looking at buying in the current market, it’s a predicament; if you invest counter-cyclically then a dip in the market is a great time to buy, on the other hand if values are set to plummet then you’d be better to hold off. In a recent article published by CoreLogic, director of research Jonno Ingerson warns investors to expect a slow winter. In his analysis of the main centres, house values had dropped or slowed across New Zealand since late last year. Ingerson looks to history to explain the cooling values and finds some interesting…

 UNDERQUOTING IS WHEN A PROPERTY’S price is deliberately understated to attract as many bidders as possible. IN A FLAT MARKET AGENTS WILL PLAY UP THE PRICE POTENTIAL OF PROPERTIES TO GET THE SALE AND THEN CONDITION THE VENDORS TO EXPECT LESS. -ASHLEY CHURCH It can result in potential buyers wasting significant time and money on a property that was always above their budget. In Australia underquoting is such a problem that the states of New South Wales and Victoria have laws against it. While the practice has not attracted as much attention in New Zealand, Real Estate Agents Authority chairman John Auld was grilled about it at a recent Select Committee hearing. Auld says the REAA has had complaints about it, but that it is not just agents who market…

SATYA SILAN WAS ORDERED TO refund $15,840 in rent to the family who rented the garage and to pay $750 in exemplary damages by the Tenancy Tribunal. The Tribunal’s ruling followed an investigation by the Ministry of Business, Innovation and Employment’s new Tenancy Compliance and Investigations Team. Silan, who is the first landlord to be successfully prosecuted under the revamped Residential Tenancies Act, had been renting out an unconsented garage to a family with a young child. After Auckland Council issued Silan with notices to cease doing so, the MBIE’s tenancy team got involved – and they found that Silan was not a first time offender in this area. The team’s manager, Steve Watson says that allowing a family to live in an unlawfully converted garage is unacceptable as it…

THE OECD HAS RELEASED ITS THIRD environmental performance review of New Zealand and housing insulation issues are flagged as a problem in the section on sustainable urban development. It states that about 30% of New Zealand homes are poorly insulated - but while 25% of homeowners report problems with dampness or mould, 50% of renters do. New Zealand Centre for Sustainable Cities director Philippa Howden-Chapman says that properly insulating houses benefits the environment by helping to reduce carbon emissions. The OECD report identifies the Warm Up New Zealand programme, which offers insulation subsidies for houses built before 2000, as a flagship programme that improves energy efficiency and public health. However, the Government plans to end the programme next year. Howden-Chapman says the OECD does not directly raise the perverse consequences…

TWO OF NEW ZEALAND'S MAJOR cities have been jointly ranked in the 16th spot by the Economist Intelligence Unit's twice-yearly Worldwide Cost of Living survey. Both have climbed over 20 places in the rankings since the last survey. There are considered to be three key drivers to the cost of living in most countries. They are the exchange rate, government policies and commodity prices. Survey editor Jon Copestake said the rise of Australian and New Zealand cities up the rankings was to be expected, given both countries' currencies have appreciated in value in the last year or so. "This movement is in sync with a number of other Asian cities, which have come to dominate at the top of the rankings." Asia is now home to five out of the…

ASB CHIEF ECONOMIST NICK TUFFLEY says the Reserve Bank’s recent decision to leave the OCR on hold at 1.75% was widely expected. They also maintained a neutral bias on the outlook, he says. “There have been a few subtle changes since the February Monetary Policy Statement (MPS), but nothing too different. Overall, their message is the same.” The Reserve Bank noted there are signs the global economy has a bit of momentum, but they also highlighted the global risks of which there are many. "Macroeconomic indicators in advanced economies have been positive over the past two months. However, major challenges remain with on-going surplus capacity in the global economy and extensive geopolitical uncertainty.” However, Tuffey says on the domestic front they are downplaying the weakness in GDP growth seen at…