NZ Property Investor Apr 2018

What did you make of the Census question around mould in your dwelling? Did you get that uncomfortable feeling that the question was aimed at landlords? I’m not going to debate whether an A4-sized sheet of mould in your house actually means that it’s unliveable, but I bet many landlords out there had a quick think about the other dwellings they own and whether they could answer ‘no’ to that question, across their portfolio. Regardless, landlords shouldn’t feel uncomfortable about the mould question. The appearance of it in the Census just highlights the fact that people’s right to safe and sanitary housing is at the forefront of regulators’ minds. The lack of rental supply in key areas (especially in Auckland and Wellington) means the Government is acutely aware of the…

The working group, which is chaired by Sir Michael Cullen, recently released a submissions background paper that highlights a capital gains tax as a topic for consideration. Cullen says it’s clear that a capital gains tax and land taxes are among the most contentious issues the working group will look at. “Inheritance taxes or a capital gains tax, on the family home and the land under it, are off the table, but that still leaves plenty of scope to review other ways such taxes might be applied.” Cullen says the working group is only at the discussion phase, that no decisions have been made and that there are no preconceived ideas about where the process will end up. But National Party finance spokesperson Amy Adams says statements from Cullen and…

Property managers have been facing some harsh public scrutiny of late. That’s due to reports of bad behaviour towards tenants, along with the case of a former Ray White property manager accused of scamming multiple landlords. Now a Christchurch man, Luke Chandler, is petitioning Parliament to legislate to set up a professional body to oversee the property management industry and to provide proper training. Currently, property managers are not required to be licensed and there is no compulsory set of standards covering the industry. But Independent Property Managers Association (IPMA) president Karen Withers says the industry should, and will be, regulated at some stage. The IPMA, which has a voluntary membership, runs in a regulated fashion, already has a set of standards for its members to comply with and a…

Tenant advocacy groups continue to push hard for a letting fee ban. But At Home Property Management’s Gregory Young believes that doing so could end up impacting negatively on both landlords and tenants. Property managers not only provide a service that someone has to pay for, but they have costs to cover, he says. “While the bigger property management companies will probably be able to accommodate the costs of the letting fee, smaller ones will end up having to get out of the business. “That means there will be less competition and fewer specialised, niche services in the market as the bigger players will dominate.” Increased property management costs are likely to be passed on to tenants, Young says. “Taking away a one-off letting fee will simply end up with…

In 2017, sales volumes dropped by 30% compared with 2016 and the number of properties flipped decreased by 45%. That equates to 280 properties being bought and sold within a six month period in 2017, as compared with 503 in 2016. The Homes.co.nz analysis comes shortly after CoreLogic released data showing that flipping almost halved between 2015 and 2017. CoreLogic’s data shows that over 2,100 properties nationwide were held for less than 12 months before being sold for a profit in 2017. That is as compared to nearly 4,000 such sales in 2016 and over 4,100 in 2015. Homes.co.nz spokesperson Jeremy O’Hanlon says there is a need for an industry of people to refresh the country’s housing stock. “But it’s hard to justify a return of up to $5,000 a…

1 Extension to bright-line test on the way Legislation which will extend the bright-line test on residential property sales from two years to five years is about to enter Parliament. 2 Shock awaits for tax avoiders Non-compliance with the bright-line test has been high but people shouldn’t take that to mean they can get away with not paying the tax involved. 3 Housing risks to peak in 2018 The risks posed by rampant house price growth and high household borrowing have peaked and the scene is now set for a rebalancing, according to global ratings agency Standard & Poors. 4 No go for rent controls Changes to tenancy law which aim to boost tenants’ rights are on the way – but landlord advocates are relieved to find rent controls won’t…