Innholdsfortegnelse for Oct 2017 i NZ Property Investor

As I write this editorial, the General Election is only three days away, so I have no idea yet what the result will be, or whether the toing and fro-ing of cross-party negotiations will carry on for some time to come. The Election appears to have had quite the impact on the buoyancy of the property market this winter (although some experts beg to differ – read our Housing Commentary on p12) and it’s almost as if the murmurings of election jitters have had a compounding effect on buyer confidence: the louder the murmurings, the softer the market, the softer the market, the larger the uncertainty. But investors really shouldn’t lose confidence - as columnist Campbell Venning rightly points out “A good buy is a good buy for a sensible…

There has been a nationwide surge in the popularity of apartments – both for owning and for renting, according to the latest Trade Me Property data. It shows that the average national asking price for an apartment rose by 7.2% year-on-year to $577,650, while the national median weekly rent for an apartment was up by 7% year-on-year to hit a record high of $460. Head of Trade Me Property Nigel Jeffries says as house prices steadily increase, growing numbers of Kiwis are looking at apartments as a more affordable investment or a first foot on the property ladder. “This is a real change of mind-set for a country that’s been obsessed with the quarter-acre dream for generations.” The trend towards apartments is most pronounced in Auckland – and yet the…

1 Bonds failure costs landlord nearly $40k Landlords are being warned not to overlook lodging bonds as a new Tenancy Tribunal ruling shows that failure to do so can cost tens of thousands. 2 Rents set to rise if Labour wins Nearly three quarters of landlords would increase the rents they charge if Labour is elected and enacts its rental market proposals, a new survey reveals. 3 Tribunal refund decision anti-landlord A recent Tenancy Tribunal decision which made a Dunedin landlord refund $10,000 to a former tenant on a legal technicality has been described as landlord bashing and unfair. 4 price Dramatic expectations change in Warnings of mortgage rate rises and the looming election are key to a sea change in sentiment about house price growth, according to the Property…

REINZ HOUSE SALES: DOWN Once seasonally adjusted, sales volumes year-on-year fell once again around the country, and particularly in Auckland, in August. But August sales were up slightly on July. INTEREST RATES: NEUTRAL Interest rates remain low, but banks are announcing both small rises and falls in various rates periodically. OCR: DOWN The Reserve Bank left the OCR on hold at the record low of 1.75% in August. IMMIGRATION: DOWN Annual net migration dropped in August, as compared to July. Meanwhile, monthly net migration continued to ease. BUILDING CONSENTS: DOWN Once seasonally adjusted, building consents were down, both nationally and in Auckland, in July. 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 final question in this five-part series I believe is fairly well timed considering it’s something we’ve all been considering in regards to the recent General Election; What tax am I going to have to pay when I sell my property? At every election the question of capital gains tax is raised and no-one knows what the future holds, therefore the following is a simplified look at the quasi capital gains tax we already have; 1 PROPERTY PURCHASED WITH THE INTENTION TO SELL Simple to understand, very difficult to enforce. If you purchased a property with the intention to sell then the gain is taxable. There is an exemption for most family homes and business premises, unless you have shown a regular pattern of buying and selling these. 2 PROPERTY…

❝We still want to buy at the right time, but time in the market can be a great healer❞ Intelligent financial decisions are based on a number of aspects. Having a clear idea of what you are trying to achieve and being realistic about how property investment performs over time are key to getting this right. This month I would like to address a few of the questions that I am frequently asked by investors. HOW MANY PROPERTIES DO I NEED? A lot of would be investors get caught up in the romantic idea of owning 10 or 20 properties. Why own lots of properties if they aren’t giving you the results you want? Owning 10 or more properties is a lot of work! Most people are better off owning…

❝Tenants should establish their prospective landlord’s intentions so that their expectations for the length of the tenancy are aligned❞ You’ll likely be wondering why I'm not writing about the election result in this article. That is because, as I write this, the election has not yet taken place. However, in the lead up to the election, the NZ Property Investors' Federation undertook a survey of rental property, which revealed interesting information around security of tenure. Security of tenure for tenants was an interesting election topic. There is no doubt that it is difficult for tenants when their rental property is sold. It can be upsetting and disruptive. However, calls from a new tenant lobby group for renters to be given control of how long they stay in a property is…

B&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.nzD&D Financial Consultants 09 369 5144 www.dandd.co.nzDiscount Property 021 280 6655 www.discountproperty.net.nzG.J. Gardner Homes 0800 424 546 www.gjgardner.co.nziFindProperty 021 486 000 www.ifindproperty.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 09 929 4546 www.methsolutions.co.nzMaintain to Profit 09 929 4546 www.maintaintprofit.co.nzMartin Davidson & Associates Ltd 09 294 6262 www.martindavidson.co.nzMinistry of Business, Innovation and Employment 09 928 2858 www.mbie.govt.nzNZ Property Investors Federation 03 357 9243 www.nzpif.org.nzPositive Real Estate 0800 746 644 www.positiverealestate.co.nzProperty Apprentice 09 575 7736 www.propertyapprentice.comProperty Brokers 0800 FOR LAND www.propertybrokers.co.nzProperty In Depth 0800 INDEPTH www.propertyindepth.co.nzProperty Inspect BOP 07 347 7410 www.propertyinspectbop.co.nzProperty Solutions (BOP) 075723950 www.4propertysolutions.co.nzProperty Ventures 0800 NZ PROPERTY www.propertyventures.co.nzQuinovic 0800 QUINOVIC…

One of the decisions involved an Invercargill landlord’s failure to lodge bond monies from tenants for 54 separate tenancies. Under the Residential Tenancies Act (RTA) landlords have to lodge any bond monies with Tenancy Services within 23 working days of receipt. Murray Baird’s failure to do so prompted an MBIE tenancy compliance team investigation and resulted in the Tribunal ordering him to pay a total of $38,713.76 in damages plus costs. MBIE’s tenancy compliance team manager Steve Watson says the proper handling of bonds is an integral part of maintaining trust in the tenancy system. “Mr Baird’s actions broke that trust 54 times for personal gain, and his repeated and persistent breach of the RTA is unacceptable and reflected in the high damages cost awarded. “This decision should send a…

❝ If you have anything more than three properties – and you are still looking to grow – then I would suggest looking at the option of split-banking to protect yourself ❞Peter Norris Without a doubt, these are some of the hardest lending conditions we’ve faced in a long time. Who knows if anything will improve as a result of the election, I guess only time will tell. For now, the market is slow and banks are making it harder and harder to borrow with constant credit policy changes, meaning investors are constantly needing to strengthen their position as borrowers. Recent changes have meant that some of the banks are looking to capture even more data from you, specifically around your existing lending. Often, this is information you may not…

❝Buy when everybody else is fretting about something that really makes very little difference❞ 'Election uncertainty’. It’s getting the blame for a good chunk of the property slowdown over the past few months, alongside the LVR restrictions and the usual winter slump. Now, if you’re a smart cookie, you know that it really shouldn’t make much difference which party wins the election as to what you buy and when. A good buy is a good buy for a sensible long-term investor. But recently I’ve had otherwise sane-looking people telling me, ‘Nah, I’m not buying in case Labour gets in because then they’ll tax the crap out of everything.’ You don’t want to make more money in case you have to pay more tax on it? You want to miss out…

❝Failure to comply with the Residential Tenancies Act could result in compensation claims by the tenant❞ At the end of a tenancy it’s a common and necessary practice that a bond inspection is carried out. This should be in the form of a written report, accompanied by a full set of photographs. Remembering at the commencement of the tenancy a pre-tenancy report should have been carried out so the bond inspection is therefore a comparison. Often a tenant will accompany a landlord through the property. I personally find this can rush the process and I like to take the time to look and make true comparisons, making sure I get the opportunity to check all areas thoroughly. Certainly, any issues can be raised with the tenant and discussions can be…

How did you get started in property investing? I picked up a copy of Rich Dad, Poor Dad by Robert Kiyosaki in 2002 while staying with relatives in Napier. I ended up reading it all weekend and got inspired to start investing. At that time I met a great mentor who helped us take the leap and do it. We bought three properties in Tauranga within the next 12 months. What are you doing in your portfolio at the moment? Currently paying down debt and monitoring the market. We are also making sure our existing rentals are up-to-date with maintenance. Favourite book that's helped you on your investment journey? Rich Dad, Poor Dad by Robert Kiyosaki definitely got me started in property investment but my favourite book is The Millionaire…

While economists have been warning that mortgage rates are on the rise, in recent weeks ANZ, ASB, SBS and Kiwibank have all made some cuts to rates. This makes the outlook for mortgage rates seem less clear, but economists say that rates are still likely to continue on a rising trend. Kiwibank chief economist Zoe Wallis says that they are seeing upward pressure on mortgage rates, especially on longer term rates (three-to five-year terms). “We will probably start to see that coming through in mortgage rate movements over the next few months. “But with the Reserve Bank keeping the OCR on hold we are not expecting to see a great deal of movement when it comes to the shorter-term rates.” Infometrics economist Mieke Welvaert says the upward pressure on mortgage…

In a bid to address the city’s housing pressures before they escalate further, the council’s strategy committee recently adopted the recommendations of the Mayor’s Taskforce on Housing. The recommendations include incentivising affordable housing developments, releasing council land for development, refurbishing central city buildings into affordable apartments, increasing building height limits, simplifying the consents process and raising rental standards. Wellington mayor Justin Lester says Wellington is growing strongly and the council needs to make sure they are providing opportunities for new homes to match that growth. While it won’t be easy they want to see every Wellingtonian well housed and the plan leaves no stone unturned, he says. “There will be greater leadership from the Council. We’re not going to sit on the sidelines and leave it to the market. “We’re…

Number of listings: approximately 29,000 Average host age: 47 years old Average length of stay per guest: 3 nights Top five international markets Airbnb travellers to New Zealand originate from: Sydney, Melbourne, London, Singapore and Brisbane Business travel in New Zealand Average number of nights booked in NZ by business travellers: 4.2 Average price per guest per night: US$62.33 (NZD$84) Some of the top destinations for Airbnb business travellers in New Zealand include: Auckland, Wellington, Christchurch, Queenstown and Hamilton. Around 34% of business travellers to New Zealand are from overseas while 66% are domestic business travellers. Average number of guests: 1.69 AIRBNB IN QUEENSTOWN Number of listings: 2,000 Average host age: 43 years old Average length of stay per guest: 3 nights AIRBNB IN AUCKLAND Number of listings: 9,000 Average…

The humble home unit has been a great money spinner for investors in all four corners of the country. Buy and renovate is a common strategy to squeeze good profits from these small boxy blocks of flats built mainly in the 1960s and 1970s. Changing tastes and lifestyles are making them easier to rent and buyers are appreciating their good bones in ever greater numbers. Waikato Property Investors’ Association president Daryl Fisher has always had a few units in his portfolio, but didn’t concentrate on them. “I chased yield, bought anything that had a good yield and I knew that capital gain would happen along the way.” In the past two years, however, it has been nigh on impossible to buy a good yielding property in Hamilton, which got Fisher…

❝ . We often find that the owners who are not putting money into their properties are the same owners who most need to❞ Wellington has launched a voluntary $250 rental warrant of fitness. This has been two decades in the making, opposed by many and in my opinion it’s definitely a positive move. Unless this scheme fails dramatically, it seems likely to be the first step toward a nationwide WoF – and eventually I imagine it will become compulsory. That seems necessary; common sense suggests the kind of landlord who pays a voluntary $250 to help ensure their property is up to scratch is probably the nice caring kind with a reasonably decent property. The really cheapskate landlords who let their houses fall apart aren’t going to be falling…

❝If you know more than people on your team you may want to ask yourself whether they should be in it ❞ In life it’s important to surround yourself with people you can trust and rely on and equally, in your property ventures it’s crucial to find a great real estate investment team to help and support you. Some investors (especially new ones) may take time finding a good team and sometimes not get it right at first - but mistakes can provide valuable lessons. Don’t give up and be sure to surround yourself with people who know more than you. If you know more than people on your team you may want to ask yourself whether they should be in it. Move on and find someone who can bring…

Ross Davidson Quinovic Hastings Phone 06 878 7910 Email enquiries@quinovic-hastings.co.nz Address 810 Karamu Rd, North Hastings Martin Easthope Quinovic Napier Phone 06 833 7487 Email enquiries@quinovic-napier.co.nz Address 94 Station St, Napier South BAY VIEW A charming village atmosphere, easy to tenant. Handy to the Napier-Taupo road for commuters, and particularly sought-after by young families. PANDORA/AHURIRI A lovely seaside area with beautiful views and good amenities. Popular for its village atmosphere, this is where most of Napier's apartments are located. NAPIER HILL Position on the hill is important. Older houses in spots that lack sun may suffer from problems with damp. Investors should look for off-street parking. MARAENUI A low socio-economic area dominated by state housing but affordable with good yields. Tenancies will need to be carefully managed. TARADALE…

NORTHLAND NEXT MEETING: Wednesday October 25, 7.00pm – 9.00pm at the Distinction Hotel, Riverside Drive, Whangarei. TOPIC: Aaron Hooper, Regional Partner, RightWay Ltd, Northland will be speaking on accounting for rental property owners. RightWay translates accounting-speak into straight up, meaningful information, allowing you to get back to what you do best. Their team of Business Partners draws on their wide-ranging knowledge and experience to give you the right advice for your business. All welcome. 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 October 10, Dorothy Winstone Centre, Auckland Girls Grammar School, 14 Howe Street, Freemans Bay. Admission from 18:30 to 19:30. Free for…