Innholdsfortegnelse for Apr 2017 i NZ Property Investor

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…

1 Negative under to go under Labour s game over negative gearing Party wins power in this year’s election but an investor advocate says that it is tenants who will suffer as a result. 2 Airbnb sub-letting breaches RTA – Tribunal Sub-letting a rental property on Airbnb breaches the Residential Tenancies Act, according to a precedent-setting Tenancy Tribunal ruling in favour of the landlord. 3 Values drop in former hotspots Declining property values are now evident in many markets around the country, including Auckland, according to the latest QV data. 4 When to worry about meth Landlords are being told they need to be careful what they believe when it comes to meth contamination of rental properties. 5 Price growth epectations slump Expectations of house price growth have cooled significantly…

REINZ HOUSE SALES: DOWN Once seasonally adjusted, sales volumes were again down around the country, including Auckland, in February. INTEREST RATES: UP Interest rates remain low, but banks are now announcing increases on a regular basis. OCR: DOWN The Reserve Bank left the OCR on hold at the record low of 1.75% in March. IMMIGRATION: NEUTRAL Annual net migration remained at a record high in February, although numbers didn’t increase on January. However, monthly net migration was down in February. BUILDING CONSENTS: DOWN Once seasonally adjusted, building consents were down, both nationwide and in Auckland, in January. Further, the overall consent trend is now on the decline. MORTGAGE APPROVALS: DOWN Reserve Bank data shows that mortgage lending dropped noticeably in January. It was the second month in a row that…

New investors are sometimes dreamers when it comes to renovation and the financial outcome. Those that believe property investment is a get-rich-quick scheme often have jaw dropping moments when they realise what a renovation will cost. This is most often the case says Nick Leko, architect for Refresh Renovations when they think they can whack on an extension and create an extra bedroom or space that way. Extensions are notoriously more expensive than people think. “Extensions are one of the most expensive projects to do because of the economies of scale,” says Leko. “They cost $80,000 upwards. There are much cheaper ways to add extra bedrooms from reconfiguration,” says Leko, rather than extending. What’s more, Leko adds, the assumption that extensions will cost simply a fixed fee per square metre…

SETTING ASIDE HABITUAL AND EMOTIONAL DRIVERS, YOU MIGHT START CONSIDERING A STOCK TYPE YOU HADN’T REALLY INVESTIGATED BEFORE -CAMPBELL VENNING FALLEN IN LOVE WITH THAT RAMBLING old villa with a ‘For Sale’ sign hanging from the clematis hedge? Tempted to put in an offer on that block of flats across the road from where you grew up? If you answer yes to any of the above, beware. Buying a property for investment is an entirely different beast than buying your home. You may love a particular era, a certain look, or prefer a certain size, but the thing is, you’re not actually going to live in your investment. Making decisions about your investment with your emotions, rather than with cold hard mathematics, can lead to trouble. A successful investment depends…

▶ Population is 162,000+ and is projected to grow to 224,800 by 2043. ▶ Hospital is largest employer with 6,600+ employees ▶ House numbers are at 56,385 with an expected growth rate of 1,000 dwellings per year. ▶ Main industries include dairy, agricultural, pastoral and science research. ▶ Auckland investors made up 18% of buyers before the introduction of 60% LVRs last year - that number has dropped to 10%. ▶ There was 25% house value growth in the year to October 2016, when the average house value peaked at $537,000. ▶ A CBD rejuvenation plan is underway with the Council aiming to increase inner-city apartment living.…

THEY MAY SEE IT AS AN ELECTION WINNER, BUT IT WILL BE DREADFUL FOR THEIR TENANT CONSTITUENTS – ANDREW KING LABOUR LEADER ANDREW LITTLE HAS confirmed that in addition to increasing the Bright Line Test for rental property from two to five years, Labour will also remove negative gearing for rental property. Little said these policies were aimed at property speculators, but this just isn't the case. These policies will have no effect on traders or speculators as they turn over the properties quickly. These policies will directly affect people who are providing rental accommodation for tenants. It currently costs around $9,000 a year for someone to buy the average New Zealand property and provide it as a home for a tenant. This is in addition to putting in a…

At Home Property Management 022 303 3449 www.athomepropertymanagement.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.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.nzLPM Property Management 04 805 05 99 www.lpmproperty.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.nzMeth Solutions 0800 638 4522 www.methsolutions.co.nzMaintain to Profit 09 929 4546 www.maintaintprofit.co.nzMinistry of Business, Innovation and Employment www.mbie.govt.nzNZ Property Investors Federation 03 357 9243 www.nzpif.org.nzOxygen Property Management…

 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…

 MUCH OF THE NEWS OF LATE HAS been occupied by the centre right and specifically the decision to increase the retirement age from 65 years up to 67 years. Don’t worry, this isn’t a political article debating whether I think the change is right or wrong! This isn’t the forum for that. MAKE THE RIGHT CHOICES AND WHETHER THE AGE IS 65 OR 67 IT DOESN’T REALLY MATTER - YOU CAN ‘RETIRE’ WHEN YOU’RE GOOD AND READY The important point to note is this change isn’t due to take place until 2040. This means, if you are 43 years old, you have 22 years to sort your own retirement out rather than relying on the Government to fund your last years on a pension which struggles to get you $300…

Tenancy expert Brian Kerr at the 2016 NZPIF conference said that insurance companies are well within their rights to decline paying out on any policy where the tenant has caused accidental damage – no matter how severe or careless. “This is the low point for landlords,” said Kerr. “I don’t think the Court of Appeal realised what they had let out of the bag.” However, he put forward two key ways landlords could combat the situation: 1 Much damage could come under the provision to return the property to a neat and tidy state at the end of a tenancy. He said this would require the landlord to provide the property in immaculate condition at the beginning of a tenancy, with sufficient photo and documented evidence of the pre-tenancy state…

DESPITE HAVING NO CAPITAL GAINS TAX IN NEW ZEALAND, THE FACT THAT AUSTRALIA DOES WILL MEAN THAT THIS TAX IS PAYABLE IN AUSTRALIA IF A GAIN ULTIMATELY IS ACHIEVED – MARK WITHERS FIRSTLY, WHEN INVESTING in Australia you will be required to file a tax return in Australia containing the income derived there. Australia has a June 30 balance date as opposed to our March 31 balance date. For practical purposes the difference in balance date is often ignored when converting financial statements between jurisdictions. That said though, Australia does have some different tax treatments to what we have here, like different depreciation rules as an example so a correct filing on one side of the Tasman will need changes to be correct on the other. Australia also has stamp…

SUCCESSFUL INVESTORS LOVE TO HAVE CONTROL OVER THEIR STRATEGIES AND OBVIOUSLY LOVE RESULTS THAT ARE GUARANTEED – SUE IRONS HAVE YOU MADE THE MISTAKE of thinking that to pay off your home loan you have to forget about investing until later? We talk to so many people who think they need to make a choice between the two. However, the unfortunate irony is that, more often than not, doing both at the same time is faster, easier and less expensive than just doing one of them. Even after I explain this to people, I still get the question: “But... If you had to choose, which one is better?”. Honestly, it should never be a choice. We’d never ask you to prioritise one over the other because they actually work hand…

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 Hamilton, like the rest of the country, is dominated by houses. Four of the ten areas profiled here are exclusively…

NORTHLAND NEXT MEETING: Wednesday April 26, at The Distinction Hotel, Riverside Drive Whangarei TOPIC: TBA 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 April 11, Dorothy Winstone Centre, Auckland Girls Grammar School, 14 Howe Street, Freemans Bay. Admission closes at 7.30pm. Free for APIA members and $75 for non-members with prior registration. TOPIC: Details of this meeting will be posted on www.apia.org.nz. APIA hosts 100+ informative property events throughout the year to further members’ knowledge of the market and confidence in investing MEMBERSHIP: Sign up for an APIA membership at www.apia.org.nzjoin. APIA memberships include a free subscription to the NZ Property Investor, networking…

DAVID TILLMAN SAYS THE AIM OF HIS book Hammer that Mortgage: How to knock hundreds of thousands of dollars off your mortgage could be summed up in just three words - increase your payments. However, as he explains, knowing what you should be doing and then doing it can often be light years apart. Tillman is one of New Zealand’s most experienced home mortgage brokers who brings his knowledge to the table through a variety of real life options. Bite sized chapters, including the aptly named “The bank is not your friend”, guide the reader through the myriad of mortgage choices and the benefits and pitfalls of each. He provides easily relatable examples to demonstrate money savers such as the Latte Mortgage - a $70,000 saving - through to the…

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…

March 19, 2009 Holler and Rouse’s rental is severely damaged by a fire caused by the tenants, the Osakis. October, 2012 The Tenancy Tribunal holds the Osakis liable for the fire damage. April, 2016 The Court of Appeal rules in favour of the Osakis. July 26, 2016 Practice Note 2016/1 was issued, signed by principle tenancy adjudicator Melissa Poole. August 1, 2016 Practice note directives to tribunal adjudicators take effect. September, 2016 A Tenancy Tribunal adjudicator finds in favour of a Foxton tenant who let her dogs urinate in the house of landlord David Russ from Tekoa Trust. October 15, 2016 Nick Smith announces the Government is considering changes to the Residential Tenancy Act in connection with the ruling. February, 2017 Landlord David Russ appeals the Tenancy Tribunal at the…

YOU CAN’T MAKE A CUPBOARD INTO A THIRD BEDROOM AND GET AN EXTRA $250 – RON HOY FONG RENOVATIONS SHOULD ADD VALUE. The reality is if you’re running your property investments as a business, renovations need to bring in a higher weekly rent, or money isn’t being well spent. Well-chosen renovations can add 10 per cent or more to the weekly rent. Others, however, cost an arm and a leg but only add value on paper, not the rent itself. In order to raise the rent, a renovation must deliver tangible value to your tenant – no surprises then that almost every expert we spoke to said the top renovation is adding bedrooms. A three-bedroom property, for example, will rent for more than a two-bedroom, even if the footprint is…

PROVIDED THE BUILDING DOESN’T LEAK IT DOESN’T SEEM ANY RISKIER TO ME THAN A HOUSE.IS LENDER CAUTION PARTLY A HANGOVER FROM DECADES PAST? - AARON TUNSTALL NEWBIE PROPERTY INVESTORS tend to talk a lot about finding the right property, often just to let you know what a cracking deal they got. Fair enough – those first few properties are always the most exciting. But veteran investors prefer to talk about finance. Which banks are lending and what are they lending on? How does each lender do its sums? People who are seriously involved in property investment know that the big question is not what you can buy, but what you can borrow. Finance has always been the stumbling block for those hoping to generate a serious portfolio, with many small-scale…

ROTOTUNA / FLAGSTAFF Commonly referred to as “where the Jones’ live”, Rototuna / Flagstaff continues to attract high calibre tenants on long-term leases. Capital growth here is strong at over 25% over the last 12 months. This is also where you will find the newest and most technologically advanced schools. DINSDALE / WESTERN HEIGHTS Smart city workers flock here to enjoy an easy run into the city or out to Te Rapa business district. Large family homes here and plenty of parks mean inquiry from tenants remains high. CBD CBD has undergone a major transition from commercial to residential over the past few years. Demand for executive dwellings with at least two car parks is high and there are opportunities for residential investors to convert commercial to residential. The City…

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…