NZ Property Investor August 2019

There’s no escaping it: New Zealanders have a deep and abiding fascination with property investment. They like to talk about it and they like to gather information about it. No matter what the occasion or forum – dinner party or school pick up or bus stop encounter – as soon as I mention what I do, I’m swamped by opinions and, more often, questions about the property market. I guess it’s similar to the way doctors are always asked for personal health advice when they tell people their profession. But here’s the thing: these conversations are very rarely hostile. Even when people have strong feelings about a controversial issue, like the capital gains tax proposal, it’s rare that I’m treated to the type of high octane, aggressive comments that property…

The central bank is reviewing whether all lenders – not just banks – should be subject to loan-to-value ratio (LVR) restrictions, as part of phase two of the review of the Reserve Bank Act. The Reserve Bank says current LVR restrictions “could be undermined” if non-banks “are willing to offer the loans that the Reserve Bank has restricted”. But Southern Cross Financial acting chief executive Terry Butler fears an LVR extension to all lenders could impact on the availability of finance, as well as investment opportunities for P2P investors. He says a widening of the LVRs was symptomatic of a “nanny-state philosophy”. “Individual investors place their funds into individual loans, so if they don’t like the risk profile, for example, if the LVR is too high, they simply do not…

AUGUST PROPERTY INVESTMENT & EDUCATION SEMINAR  Thursday August 8, 6:45pm, Level 6, 135 Broadway, Newmarket, Auckland. Hosted by Gilligan Rowe & Associates. Free to attend. For more information and to register: https://www.gra.co.nz/property-investment-seminars PROPERTY SCHOOL SEVEN-WEEK COURSE BEGINS  Tuesday August 20, 6:30pm, Level 6, 135 Broadway, Newmarket, Auckland. Hosted by Gilligan Rowe & Associates. $450 for one person, $700 for two people. For more information and to register: https://www.gra.co.nz/gra-property-school PROPERTY INVESTOR NIGHT  August 5, Christchurch. August 6, Ellerslie, Auckland. August 12, Napier. August 14, Tauranga. August 19, Wellington, South Auckland and Dunedin. August 26, Hamilton. 6.30pm. Free to attend. Book at www.positiverealestate.co.nz/NZPI RENTING AND YOU SEMINARS  August 6, Napier. August 8, Wellington. August 12, Whangarei. August 14, Manukau. August 15, Auckland. August 26, Hamilton. August 27, Tauranga. 7pm. Seminars are free…

1 10 market predictions for the rest of 2019 It’s been an eventful year for the residential property market so far, but now’s a good time to look at what might be in store for the rest of 2019, declares CoreLogic senior research analyst Kelvin Davidson. 2 Loss ring-fencing ups war on renters and owners New rules around the ring-fencing of rental property losses came into force late in June and Stop the War on Tenancies spokesman Mike Butler believes they’ll have a negative impact on the rental market. 3 Home sellers required to provide IRD numbers Investors who flip properties are currently subject to the bright-line test, but owner-occupiers are not. That is now set to change. 4 LVR rules could be permanent LVR restrictions on mortgage lending could…

After a long investigation, the Commission recently filed High Court proceedings against Ronovation Limited for price fixing in Auckland’s residential real estate market. Ronovation, trading as Ronovationz, was set up in April 2009. It advises its members on how to acquire and improve investment properties in Auckland and by March 2018 it had more than 400 paid members. However, the company ran into problems back in May 2017 after a furore erupted over a tutoring video by owner Ron Hoy Fong became public. The video showed Fong coaching investors to give vendors false names, work in packs to drive down prices and target desperate families or “dummies” who don’t know the value of their home. At the time, Fong denied exploiting people and said nothing he advocated was illegal. But…

The issue of tenant liability for damage is a hugely contentious one. That’s because ever since the infamous 2016 Holler & Rouse v Osaki decision residential landlords have been liable for accidental damage caused by tenants. And while tenants are liable for intentional damage, landlords have found that it’s very difficult to prove if damage is actually intentional. But the tide could be turning: a recent High Court decision has come down in favour of a landlord’s interpretation of “intentional” damage. Guo v Korck [2019] involves a family who moved into a Titirangi house with their two poodles. The landlord, Guo, was reluctant to accept them as tenants because of their dogs. But the family convinced him that the dogs were house-trained and would not soil the house. When they…