NZ Property Investor June 2019

Back in August 2015, it was the height of the Auckland market’s spectacular bull-run. Prices were climbing steeply upwards and investors were reaping the capital gain benefits. It was, I wrote in an article, the best of times and the worst of times. That’s because there were profits and gains on one hand - but affordability issues and unsustainability on the other. Times have changed dramatically. These days the Auckland market has cooled significantly, prices have dipped and sales activity is subdued. There are still pockets of growth in other markets around the country, but they are slowing too and the recent golden age looks to be over. And yet, in many ways, the phrase “the best of times, the worst of times” could still be applied to the market.…

The Reserve Bank introduced the existing LVR restrictions on mortgage lending back when New Zealand’s housing market was on hyper-inflated overdrive. But times have changed, the housing market has cooled and most commentators don’t expect it to take off in a spectacular fashion again – even though the OCR has now been cut to 1.5%. The Reserve Bank has already relaxed the LVRs slightly twice, at the start of this year and last year, but many investors would like to see further easing. And they might be in luck. According to Reserve Bank Governor Adrian Orr, that prospect is definitely on the cards. In a Good Returns TV interview with NZ Property Investor magazine publisher Philip Macalister, Orr says that the Reserve Bank would like to be heading back to…

JUNE PROPERTY INVESTMENT AND EDUCATION SEMINAR June 12 and June 25 Hosted by Gilligan Rowe & Associates, Newmarket, Auckland. 6.45pm. Free to attend. For more information and to register: https://www.gra.co.nz/property-investment-seminars PROPERTY INVESTOR NIGHT June 5, Christchurch, June 10, Auckland, June 12, Tauranga, June 17, Napier and South Auckland, June 24, Wellington, Hamilton & Dunedin. Free to attend. Book at www.positiverealestate.co.nz/NZPI For more information about listing your event, please contact Lisa Wise lisa@tarawera.co.nz. Last date for entries for July 2019 issue, June 10. Correction. In the May issue, a quote by Lorraine Rishworth was wrongly attributed to Nick Irons. We apologise for this production mistake.…

1 Revealed: Auckland hotspots. Auckland’s price growth might be flatlining overall but new data shows the Super City still has some hot spots where prices are on the rise. 2 Capital gains battle heats up. There are now two declared armies in the battle over taxing capital gains, with the launch of a new pro-capital gains tax campaign on Monday. 3 New flames to fan housing market. The demise of the capital gains tax proposal and record low mortgage rates will lead to a pick-up in housing demand and boost the market, ASB economists say. 4 Low mortgage rates versus CGT. Plunging mortgage rates will stimulate the housing market but it is the prospect of tax change that will have the bigger market impact, Westpac’s chief economist says. 5 Ditching…

That’s largely because when Prime Minister Jacinda Ardern announced there would be no CGT, she also said the Government would be working to tighten the rules around land speculation and land banking. Further, the NZ Property Investors’ Federation was left concerned that the Government might opt to apply a virtual CGT on rental property – like another extension to the bright-line test. NZPIF president Sharon Cullwick says that representatives of the NZPIF have now met with Housing Minister Phil Twyford to discuss the situation. She says they think there is something further to come on land banking. “There is no timeframe for it and we don’t know what might be planned. But we didn’t get the feeling that a further extension to the bright line test is on the cards.”…

Good landlords know it’s well worth acting quickly when a rental property needs repairs. That’s not only because it keeps tenants happy but it will keep the costs down. And two recent Tenancy Tribunal decisions make it clear that inaction will be frowned upon. In one case, Lincoln Darling Real Estate & Futcher v Ministry of Business, Innovation and Employment [2019], slow action on a leaky roof earned a property management company and an absentee landlord a fine and a reprimand from the Tribunal. Dunedin property management company, Lincoln Darling Real Estate, and Matthew Futcher, who lives overseas, rented a property to the tenant in early January 2017. Shortly after moving in, the tenant found several issues with the house. These included rotting window frames, draughty windows and ceiling panels,…