Innholdsfortegnelse for No 154 Sept 2016 i NZ Property Investor

LAST MONTH THE RESERVE BANK announced their biggest move yet in attempting to stifle a runaway market across New Zealand. Since then it has revised the start date of the proposed changes for a (for a 40% deposit policy for investors nationwide), which will now be effective from October, allowing banks to clear a backlog of pre-approved lending. Naturally, as a result of this strong measure, speculation has been rife of an impending market correction – and a diverse collection of data indicates market conditions may indeed be changing (see our Housing Commentary on p12). Regardless of market conditions, many investors may now be faced with changing tactics due to the new policy. Looking for creative avenues in order to grow a portfolio is, however, nothing new to many investors.…

1 Reserve Bank calls for changes to investor LVRs Readers of Landlords continue to read about the proposed new restrictions on investor lending. The Reserve Bank in July released a consultation paper proposing changes to loan-to-value restrictions (LVRs) to further reduce risks to financial stability arising from the current boom in house prices. If the proposals go ahead no more than 5% of bank lending to residential property investors across New Zealand would be permitted with an LVR of greater than 60% (i.e. a deposit of less than 40%). 2 Auckland’s future is up and out Our readers were keen to find out about recommendations to cope with Auckland's growth. Extensive rezoning to allow 422,000 new dwellings has been recommended for Auckland's Unitary Plan - and that could be good…

EVEN IF YOUR INVESTMENT STRATEGY IS CLEAR, NOW IS A GOOD TIME TO REEVALUATE IT – JEREMY STAPLETON WITH INTEREST RATES at historic lows and lenders trumpeting their low-rate offers, property investors can easily get caught up in the clamour and jump at getting finance at a great rate. But securing the lowest interest rate now may not be in your best interests in the long run. We often see investors whose goal is to grow their property portfolio, but find themselves locked into a long-term fixed-interest agreement with a lender who is not prepared to finance their additional property purchases. Should they want to work with another, more supportive lender so that they can take advantage of current market opportunities, they are forced to pay hefty early repayment charges.…

ACROSS THE RENTAL MARKET YOU’LL FIND THE LOWEST PRICED PROPERTIES ATTRACT THE TRICKIEST TENANTS AND APARTMENTS ARE NO EXCEPTION - AARON TUNSTALL “MAY YOU LIVE IN INTERESTING TIMES”. Whoever put this apocryphal curse on the property market has a lot to answer for. Just as you’re becoming comfortable with new rules and regulations, they are tweaked, scrapped or totally overhauled. If, however, uncertainty means opportunity for the savvy investor, there should be no shortage of opportunities right now. One recent development has been a reopening of the debate about minimum apartment sizes. The Unitary Plan panel recommends removing minimum sizes, once again allowing small apartment sizes in the city. The panel believes there is a place for smaller apartments, which would provide more options at the least expensive end of…

NORTHLAND NEXT MEETING: Wednesday September 28, 7pm at Distinction Whangarei, 7 Riverside Dr. Whangarei. TOPIC: Geoff Phillips from CoreLogic will speak about the online instant access to property information and valuation services that help consumers find out more about property either at a specific address, suburb or regional level. As a result, buyers are able to perform some of their due diligence before making an offer and get an indication of a property's worth in relation to the asking price. As a seller you can get a sense of the local market before working out an appropriate listing price. The entire property cycle is covered. Platforms available are smart, fast and easy to use property information tools that are used by property professionals throughout New Zealand. It can help you…

A SLOWDOWN IN THE AUCKLAND MARKET IS LIKELY AND THIS WILL GRADUALLY PUSH THE MARKET BACK TO FUNDAMENTALS: CASH FLOW. GENERALLY SPEAKING, IT’S FAIR TO say that this round of Reserve Bank rule changes will have a bigger effect than the ones it has rolled out before. Especially given that this is a national change rather than one purely directed at Auckland – the impact in Auckland will be different than through the regions. Already we are seeing the difference with the number of buyers searching for property in Auckland down nearly 5% while the numbers looking outside Auckland are up almost 15% according to Realestate.co.nz figures. Wind-change in City of Sails These trends are likely to continue as there become fewer people looking to sell. It won’t drop house…

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 MARK WITHERS Mark 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 RON HOY FONG As a successful property investor and mentor, Ron has built an impressive portfolio and a wealth of investment strategies and experience. Contact Ron today on 021 888 298 or ronhoyfong@gmail.com 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 KRISTER SAMUEL Krister specialises in selling high yielding apartments for…

THE IRD AREN’T WAITING TO SEE WHETHER THESE TAXPAYERS DO IN FACT INCLUDE THE GAINS IN THEIR RETURNS BEFORE FOLLOWING THEM UP, THEY ARE CONTACTING THEM EVEN BEFORE THE RETURNS FALL DUE! – MARK WITHERS ONE OF THE PLANKS OF TAX enforcement is that there is one rule for all and all must pay their fair share. Many speculative property transactions are conducted by taxpayers who are well intentioned and entirely willing to meet their tax obligations and pay tax on speculative property gains. Reading the newspaper, you could be forgiven for thinking the media believe every gain on a property deal goes undeclared - but this is miles off the mark. This fuels doubts for compliant taxpayers who are often heard voicing concerns that many people don’t declare and…

SETTING ASIDE HABITUAL AND EMOTIONAL DRIVERS, YOU MIGHT START CONSIDERING A STOCK TYPE YOU HADN’T REALLY INVESTIGATED BEFORE - CAMPBELL VENNING THE BIGGEST CHANGE we have seen since 2010 - when depreciation on buildings was revoked - has just hit the residential investment market. Fallen in love with that rambling old villa with a For Sale sign hanging from the clematis hedge? Tempted to put in an offer on that block of flats across the road from where you grew up? Wowed by the tiny cottage’s magazine – quality roses because it reminds you of your first home’s garden? If you answer yes to any of the above, beware. Buying a property for investment is an entirely different beast than buying your home. You may love a particular era, a…

MARKET COMPOSITION The rental market across Christchurch North comprises predominantly houses, with a few flats and no rental apartments. Unsurprisingly for a rural area, Waimakariri is made up of exclusively houses, while Sawyers Arms/Northcote/ Belfast and Rangiora/Kaiapoi have the greatest percentage of flats at 16% and 15% respectively. HOUSE SIZE, BY BEDROOM COUNT In terms of size of houses, three and four bedroom houses are the most common across the Christchurch North rental market. In Sawyers Arms/Northcote/Belfast and Rangiora/Kaiapoi roughly two-thirds of the rental house market is three bedrooms while Styx/Parklands and Rural Waimakariri offer the greatest percentage of larger four-bedroom houses. In Rural Waimakariri three and four-bedroom houses are an equal share of the market at 39%. Both Marshland/Redwood and Rural Waimakariri offer a small percentage of five (or…

IT SEEMS A HOLDING PATTERN is settling over both the national and the Auckland housing market. After months of social frenzy about the results of overheated markets, a diverse collection of data in July indicates conditions might be changing. Price rises continue and the increasingly limited supply in markets around the country is considered to be a key factor. Meanwhile, talk is many property buyers are holding back because of the sky-high prices, the Reserve Bank’s latest LVR rules and uncertainty over Auckland’s Unitary Plan. There are reports of declining yields, a decline in the national average asking price and a mixed bag of average asking prices from markets around the country. Could this mean the market is starting to correct, realestate.co.nz asks. Their July data shows the national average…

IF YOU HAD THE CHOICE OF AN EXTRA $100 PER WEEK NOW, VERSUS A DEBT-FREE PROPERTY PORTFOLIO IN THE FUTURE PROVIDING A PASSIVE INCOME OF $100,000 I KNOW WHAT YOU WOULD PICK – SUE IRONS SINCE MID-JULY WHEN WE heard the LVR on existing property would be rolled back to 60%, I have been inundated with questions from my clients. By far the best question has been: “How do we move forward with these new rules in place?” If you read my recent articles, there has been an underlying theme. In summary I have talked about the value of a coach and getting the basics right, which includes finance, structures and having a very clear understanding of your goals. I talked about being realistic about the time you have available,…

COMMUNICATION IS CENTRAL TO EVERY ASPECT OF THE BUSINESS AND THE CLOUD HAS COME IN AS A MAJOR PANACEA FOR REAL ESTATE COMMUNICATION WOES – SARAH DAWSON MANY PEOPLE WILL GET BEHIND the idea that success - particularly in the realm of real estate - is about quality of service. Deliver something that customers like and you might just be the force to reckon with in this increasingly competitive sector. New innovations are helping players in real estate make great strides. They make agents and other realtors more responsive to customer queries and demands. Here are three technologies that are transforming New Zealand’s real estate industry. Cloud technology Indian IT and business consulting conglomerate Infosys and US-based Verizon Enterprise Solutions reported in 2014 that cloud computing was already mainstream. New…

TO PROTECT THEMSELVES, RENTAL PROPERTY OWNERS COULD BE FORCED TO CHANGE THEIR INSURANCE POLICIES AND LOWER THE EXCESS TO ZERO AND APPLY THE EXTRA PREMIUM COST ONTO THE RENTAL PRICE - ANDREW KING IN 2009, TENANT MRS OSAKI left a pot of oil unattended on the stove. A fire broke out, causing over $200,000 damage. The property was repaired through the owner’s insurance, but the insurance company decided to seek the cost of the damage from the Osakis. The Tenancy Tribunal held that the Osakis were liable for damage. However, the case went to the district court and court of appeal, which decided that tenants should have the protection of the Property Law Act (PLA), which says that commercial tenants cannot be held responsible for damage they cause if the…

IT’S ALWAYS BEEN HARD. HOUSE PRICES MAY BE HIGHER NOW, BUT FINANCE IS MORE AFFORDABLE Self-made “invisible millionaire” Jonathan Bidmead went from earning $17 an hour as a storeman to owning a 20+ property portfolio with a net worth of over $7 million. To achieve this, he has only invested $4,000 of his own money. Now, Bidmead has written a book – The Invisible Millionaire: A Guide to Real Estate Wealth – in a bid to inspire others to do the same. Bidmead’s book is concise, easy to read and accessible. It is not a detailed or complex strategic missive. Rather it cuts straight to the chase with simple and practical “nuts and bolts” advice. Bidmead includes tales of his own experiences and mistakes – as well as some motivational…