Innholdsfortegnelse for Sept 2017 i NZ Property Investor

As the general election draws ever closer the hot-button issues of housing affordability and supply are glowing like stove elements on high. National and Labour are both promising to build tens of thousands of dwellings; to assist councils with building new infrastructure and freeing up land; and to create an agency to oversee housing projects. No big surprises there. How they deal with demand is an entirely different kettle of fish. Labour wants to ban non-resident buyers, while National won’t go down that road. Smaller parties have come up with some innovative schemes; the Greens and United Future are pushing rent-to-buy schemes, while NZ First wants a new housing agency that buys land which first-home buyers can secure and will be able to pay off at a fixed interest rate…

The Wellington City Council announced that the scheme will involve an app that will allow tenants and landlords to check their house against minimum health standards designed by experts. It will also allow landlords to request a full inspection by a professional, which will cost $250, to be certified as meeting the standard. The Rental Warrant inspection has 29 criteria and 63 questions. The assessment covers insulation, heating, ventilation, structural stability, sanitation, and hazard identification. If issued, the WOF will be valid for three years. Wellington mayor Justin Lester says the scheme will give landlords the chance to promote their house as being warm and dry. “It will also give prospective renters an assurance the home they are looking to live in meets the standard.” The Council is working in…

KRIS PEDERSEN Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. Phone 09 486 4719, www.krispedersenmortgages.co.nz NICK ASHFORD Nick and his team specialise in advising on property-related transactions, valuation and restructure services, and tax planning. Withers Tsang & Co Phone 09 376 8860, www.wt.co.nz BERNARD PARKER Bernard is principal of Quinovic – Kapiti-Mana. Quinovic’s outstanding people and systems provide the most professional, effective and reliable residential property management service in the NZ market for over 26 years.www.quinovic.co.nz ALLAN GALLOWAY National Manager Case Management at Ministry of Business, Innovation and Employment Q I have a tenant who is often behind on rent and water payment. On three occasions, I served the tenant with 14 days’ written notice requiring the tenant to…

❝ . The average buyer looks at leasehold apartments the same way most of us look at pet snakes: even if you fully understand the dangers, the rewards aren’t enough to make it seem worthwhile ❞ No new leasehold properties allowed: that’s the upshot of the legal changes being planned in the UK’s property sector. A whopping four million dwellings in the UK are leasehold, including around 170,000 detached homes – and selling new-build homes under a leasehold has become far more popular over the past 20 years. New-build leasehold homes represented 14.6% of all new-build sales in England and Wales last year. But new proposals will put a stop to all that. The government’s communities secretary has described leasehold properties as “exploiting home buyers with unfair agreements and spiralling…

Using a knowledgeable real estate agents to sell your property is very important and can make you a lot of money. On the other hand, if you don’t have a good agent, you can lose a lot of money. I am frustrated to hear stories about sellers who have gone to real estate companies only to be told blunt lies. Last week I was told about a real estate company who was signing a potential client to a short auction program of two weeks and saying that they had to have the property listing with them for three months. Rubbish! Sounds like this real estate company has no confidence in their sale systems or auction process. An auction should be well advertised and prepared for and if it doesn't sell…

Two relatively new tenant advocacy groups pulled a stunt recently aimed at dramatically increasing tenant's rights. They sent out a call to their supporter database and social media channels asking for people’s "stories" about how they found renting and the condition of their rental properties. They then interpreted these stories to produce a report of what renting is like in New Zealand. From these "stories" they estimated that 70% of rental properties in New Zealand are not insulated, when a better quality BRANZ research estimated the complete opposite, that 77% of rental properties were in fact insulated. They fully accepted that this was not scientific research and that they were likely to get negative comments from respondents, which they did. Despite this, they used these findings to paint rental property…

ANZ 0800 100 217 anz.co.nz/mmm B&N Property Management 0800 111 252 www.bnproperties.co.nz Bayleys Real Estate 0800 BAYLEYS www.bayleys.co.nz/commercial Click Property Management 0800 1 CLICK www.click4rent.co.nz CoreLogic 0800355355 www.corelogic.co.nz D&D Financial Consultants 09 369 5144 www.dandd.co.nz Discount Property 021 280 6655 www.discountproperty.net.nz G.J. Gardner Homes 0800 424 546 www.gjgardner.co.nz iFindProperty 021 486 000 www.ifindproperty.co.nz Keith Hay Homes 0800 KEITH HAY www.keithhayhomes.co.nz Key Exchange Property Group www.keyexchangepropertygroup.com Kris Pedersen Mortgages 09 476 1199 www.krispedersenmortgages.co.nz Methsafe 0508METHSAFE www.methsafe.co.nz Meth Solutions 09 929 4546 www.methsolutions.co.nz Maintain to Profit 09 929 4546 www.maintaintprofit.co.nz Martin Davidson & Associates Ltd 09 294 6262 www.martindavidson.co.nz Ministry of Business, Innovation and Employment 09 928 2858 www.mbie.govt.nz NZ Property Investors Federation 03 357 9243 www.nzpif.org.nz Oxygen Property Management 04 619 1000 www.oxygen.co.nz Positive Real Estate 0800 746 644 www.positiverealestate.co.nz Property…

Moody’s Investors Services recently downgraded the long term credit ratings of New Zealand’s four big banks – ANZ, ASB, BNZ and Westpac – to A1 from AA3. As the election campaign heats up, housing related issues continue to dominate public discourse – and that means politicians of all stripes are busy touting their policy wares. Since Labour leader Jacinda Ardern suddenly ascended to the top early in August, the spectre of a capital gains tax has again reared its head. That’s because neither Ardern, nor Labour’s finance spokesperson Grant Robertson, will conclusively rule out the possibility of a capital gains tax being introduced. They say it is unfair that property speculators can make profits buying and selling without being taxed. Ardern says that if a Labour-led government come to powers…

After a long period of no changes on the rate front, August saw a succession of banks, including ASB, ANZ and Westpac, cutting various rates. This came as a surprise as when the Reserve Bank put the OCR on hold and market talk turned to the prospect of hikes it was seen as the end of the record low interest rate period. Further, many economists have been talking about the impact of rising interest rates as matching that of the LVRs on the housing market. But now that banks have been cutting rates has the trend started to change? In ANZ’s latest Property Focus, the bank’s chief economist Cameron Bagrie says that the OCR is a material influence on borrowing rates and it is increasingly clear that it is not…

REINZ HOUSE SALES: DOWN Once seasonally adjusted, sales volumes fell once again around the country, and particularly in Auckland, in July. The year-on-year decline was dramatic. INTEREST RATES: UP Interest rates remain low, but banks continue to announce small increases periodically. OCR: DOWN The Reserve Bank left the OCR on hold at the record low of 1.75% in August. IMMIGRATION: UP Annual net migration hit yet another new record high in July. But monthly net migration was down on June. BUILDING CONSENTS: DOWN Once seasonally adjusted, building consents were down in June, after a surprise rise in May. But Statistics NZ still says the overall consent trend is on the increase. MORTGAGE APPROVALS: DOWN Reserve Bank data shows that both mortgage lending overall and the share of lending going to…

❝Security has nothing to do with determining the deductibility of interest❞ In the previous three articles in this five-part series we identified some of the more common questions we are asked by our property investor clients. A large portion of these articles identified key decision-making processes for investors, that in truth only had some accounting/tax considerations. This question however is right up our alley as tax advisors; Can I secure more debt against my property, and will the interest be tax deductible? In answering this question, it is first important to dispel the rumour that interest paid on loans secured against rental properties is automatically tax deductible. This is not true. Security has nothing to do with determining the deductibility of interest. Instead there needs to be a trail showing…

❝You could argue that buying only existing houses but in a variety of locations is diverse enough, but I tend to disagree❞ By diversifying your portfolio, you spread your risk and have a much better chance of maintaining serviceability. Balance your portfolio with a mix of property types, strategies, locations etc. You might aim to buy a mix of strong cash flow properties and negatively-geared properties in high growth locations. You might choose properties in different areas – maybe even different countries – at different stages of the property cycle. One common thing I see with investors is that the type of investment stock they’re buying is all the same: existing standalone houses. Now, you could argue that buying only existing houses but in a variety of locations is diverse…

The latest report to hit the headlines was produced by tenant advocacy groups, Renters United and Action Station, and calls for sweeping changes to tenancy laws. Campaigning politicians have also jumped on the band wagon with the Green Party and The Opportunities Party (TOP) promoting particularly tenant-friendly rental market policies. Much of the changes championed by the Greens and TOP and tenant advocacy groups hinges around the introduction of a mandatory warrant of fitness for rental properties and legislating for longer term, more secure tenancies. However, landlord advocates have come out swinging. NZ Property Investors Federation executive officer Andrew King says that too much heavy-handed tenancy regulation will lead to a drop in the supply of rental property and make renting harder for tenants. “The system can’t be altered to…

1 Minimum standards for insulation and heating a step closer National claims Labour’s Healthy Homes Bill would push back the deadline for property investors to insulate their rentals. 2 Ten future boom towns Keen to identify hotspot areas to invest in? This month, we reveal areas with future growth potential – due to planned infrastructure projects. 3 Supply shortage will counter cooler market Auckland’s severe supply shortage remains the heavy counterweight to arguments that the Super City’s housing market is heading for a major correction. 4 DTI cull good news for property investors A lack of liquidity in the Auckland housing market is getting in the way of “everyday business” of buying and selling houses, one broker says. 5 Stalling market no reason to panic There is no point in…

❝This isn’t about loop holes, it’s about understanding the rules of the game and using them to your advantage❞Peter Norris Don’t get me wrong, it’s tough being a borrower in this market! Particularly when every article you read in the media is doom and gloom about property prices and LVR restrictions. Without a doubt, it’s a hard time to be a borrower but at the same time, now is the time to strike. The need to have quality expert assistance, such as a broker, is getting more and more important. Banks are unwilling to take risks and internal credit policies have successfully slowed the market. Whether or not this continues post-election remains to be seen. Obtaining approvals from lenders is getting harder and there are a number of reasons for…

❝The big problem is that if an investor wants to get out of a syndicate, they can’t often do it very easily and that can be an issue❞Olly Newland Longer leases and greater tenant responsibility might make commercial property management seem like an easier game than that involved in residential property. But it’s not necessarily the case. Owning bricks and mortar is a powerful lure for New Zealanders. For many investors, that lure extends into the realm of signficant public buildings – be they a prestige office building or an on-trend business park. However, for most the costs involved with buying such properties mean they are out of reach. Unless they go down the syndicate path. Property syndicates are a way for a group of smaller investors to pool their…

❝Anyone finding property for a fee without a real estate agent’s licence should be held accountable❞ The worlds of finance and property are closely linked – but that doesn’t mean that the same person can necessarily help you with both. There are too many cowboys in New Zealand giving financial advice they’re not qualified to give, and even a few property traders who find properties for other investors without being licenced real estate agents as they should be. CHOOSING YOUR ADVISER Financial advice is the main area where property mentoring companies often step beyond what they’re qualified to provide. There are two levels of financial advice that you can get. You can get advice from an RFA, a registered financial adviser. That person can give you advice on what are…

❝A lack of attending to maintenance by landlords can result in upset tenants❞ “It’s just a rental”. So often I hear this phrase and every time it makes me cringe. This attitude can get landlords into trouble - whether it be damages to the property or cause for compensation claims from the tenant. Remember that property investment is a business and in order to keep the business running smoothly and efficiently you need to attend to general upkeep. When you present a property to prospective tenants in a nice and tidy condition, it sets a standard that you expect the tenants to keep to. If you rent out a property green with mould and algae growth, peeling paint everywhere and unruly lawns and gardens you can bet your bottom dollar…

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 Tauranga is dominated by houses, with all five areas having more than 70% of the market made up of them.…

How did you get started in property investing? Daryl Fisher: Back in the late 80s I was fortunate enough to meet a large investor in Rotorua by the name of Gary Wood. I asked him how he made all his money. He proceeded to tell me about his time as a property investor. Years later my brother-in-law, Brian Hancock, talked to me about his interest in property investing, introduced me to the Property Investors’ Association and the portfolio grew from there. What are you doing in your portfolio at the moment? Currently we are renovating, moving our way through a block of 16 flats. A $20,000 spend on a one-bedroom is increasing the rent by $80 per week and increasing the value by around $70,000. So, based on the $20,000…