Innholdsfortegnelse for February 2021 i NZ Property Investor

Your monthly round up of property investment related events around the country. PROPERTY INVESTOR WEBINAR ONLINE EVENTS ONLY South Island, February 3; Wellington and Auckland February 10; South Island, February 16; Wellington and Auckland, February 24. Property investor live events: Tauranga, February 3; Hamilton, February 17. Bookings via https://positiverealestate.co.nz/property-investment-seminar/ PROPERTY INVESTMENT SEMINAR. ONLINE EVENTS. Wednesday, February 3, 6:30-8:30pm; Wednesday, February 10, 6.30pm-8.30pm; Thursday, February 25, 6:30-8:30pm. Live event at Greenlane office on Saturday, February 20 1-3pm. Book at https://www.propertyapprentice.co.nz/free-property-investment-seminars/ RONOVATIONZ “ON THE ROAD”. OTR Saturday, February 6, 13, 20 9:30am-3:30pm. Join Ron and the team behind the scenes as they spend the day looking at properties. Learn hands-on where the best suburbs are, how to add value and much, much more. Spaces are limited and by invitation only – interested?…

REINZ HOUSE SALES: UP December sales nationwide were the highest ever for the month across the country. Auckland saw an increase in sales of 66% year-on-year, with sales up by 24.4% nationwide (excluding Auckland). INTEREST RATES: DOWN Westpac’s 2.29% one-year special rate is likely to spur other banks on to similarly dramatic lows. There’s now an ongoing mortgage rates war, with rates at unprecedented lows and the situation unlikely to change in the near future. OCR: NO CHANGE The Reserve Bank has held the OCR at its Covid-19 prompted record low of 0.25% since September. IMMIGRATION: DOWN Net migration from October 2019 to October 2020 has been low since the beginning of the year due to border restrictions. Despite this, Stats NZ’s provisional estimates for the year ended October 2020…

At the start of last year the property market had entered a new growth phase and investors were tentatively predicting growth for 2020. Then Covid-19 hit and confidence in the market went through what can only be described as a rollercoaster ride over several months. There was economic uncertainty and market commentators were predicting a dire outcome for the property market on the back of job losses and business instability. Many investors sat on their hands, waiting for an indication of where the market would go. Others invested countercyclically and bagged good deals over lockdown. Then whoosh! The market was off again and was soon hitting record sales prices across the country. The Government’s response to the lockdown was to freeze rents for a period, and when rapidly increasing property…

The lawn was a nightmare in this month’s renovation. Here are some tips for success. 1 CLEAR: A successful lawn needs a great base. This base will typically be clay or gravel on larger site developments, but otherwise topsoil if rejuvenating an existing lawn. In the cases of a gravel or clay base this surface should be at least 15cm below the final surface to allow for topsoil. In the case of rejuvenating an existing lawn, the site should be clear of growth by using a broad spectrum weedkiller. 2 PREPARE: Most seed suppliers recommend at least 15cm of quality, screened topsoil as a medium for growing grass. This will typically be laid over a compacted base. If rejuvenating an existing lawn, the topsoil should be tilled or rotovated to…

Having a clear understanding of the accurate location of your property boundary is critically important when undertaking building developments, in particular when the works are to be located close to your neighbour’s property. The reason for this is that property boundaries are not always obvious. While a fence, hedge or driveway may look as though it defines the edge of a property, the actual boundary locations can be quite different. In many areas the boundary pegs may be missing, eroded by time or previously removed by building works. The consequences of not correctly identifying the property boundaries when undertaking building developments can be significant and costly to rectify. I am aware of projects where the architect assumed that the fence at the property was on the boundary and subsequently designed…

While there is no doubt the market is booming, these figures come as a surprise to NZPIF executive officer Sharon Cullwick. “This is an astonishing figure, but there could be a number of reasons for it. Many expats are returning from very well-paid jobs and investing their money in property. There is also the issue of bank swapping, people changing banks to get the best rates and terms for their investments.” Kris Pedersen financial strategist at Kris Pedersen Mortgages (who specialise in property investing) says there was a lot of activity at the end of 2020. “It was definitely manic towards the end of the year and things have kicked off busy,” he says. He believes that the LVR change will have some effect on investor activity, but that it…

In March the Reserve Bank will re-implement loan-to-value ratio (LVR) restrictions on property investors. This will mean lending for investment properties will be required to have a 70% or possibly 60% loan-to-value ratio. In the meantime, banks have preemptively made the move already, with all banks going up to a maximum of 70% LVR on investment properties and ANZ going a step further to 60% LVR. If the Reserve Bank doesn’t implement 60% as a rule, then I suspect ANZ will step back to 70% alongside the other banks. BANKS WILL BE TAKING A CONSERVATIVE APPROACH  The first and most important thing to understand is that compliance with an LVR restriction is a condition of a bank’s licence. Non-compliance comes with very high risks and serious consequences. As a result,…

Finding Properties: There are many ways you can find properties that are, or could be, for sale. These range from the traditional newspaper ads and real estate agents to cold calling and placing ads yourself. Just because a property doesn’t have a “for sale” sign outside it doesn’t mean there won’t be a motivated vendor lurking within, or somewhere nearby. Successful property investor and mentor Ron Hoy Fong has built an impressive portfolio and has a wealth of investment strategies and wisdom to share with you. For information on his mentoring programmes call Ron today. Ron Hoy Fong | 021 888 298 | www.ronovationz.com…

The retail and hospitality sectors are no strangers to disruption, having had to constantly adapt to technological evolutions and changing customer behaviours. However, even their resilience has been severely tested by a global pandemic which has brought lockdown restrictions and generated fear and anxiety . And yet despite these unprecedented challenges, many commercial investments have retained their tenants and continued to provide strong returns to landlords through 2020. But how? Here are six key principles that can help you attract and retain quality retail and hospitality tenants to protect your investment in these uncertain times. 1 A BOOK IS JUDGED BY ITS COVER First impressions count – and with the majority of new tenants drawn towards modern, clean looking buildings, focus on appealing to their tastes with both the exterior…

Happy new year and welcome to 2021. 2020 was surreal and I hope that in 2021 we see the world start to nudge back to a freer way of life. It is the time of year when many of us think about our goals. I just think it is amazing that New Zealanders are able to do this! If you were in a mid-winter lockdown I can’t imagine how easy it would be to clear your head and engage in big-picture thinking. Most of the world is in some form of virus-related restriction or lockdown and here is little old New Zealand holding music festivals, fireworks shows and beach parties. Anyway, back to reflecting and setting goals. One of the things I hear asked a lot is this idea or…

I first entered the rental industry as a Quinovic franchise owner in 2017. In these last few years, the industry I was first introduced to has changed significantly. Between evolving legislation, soaring house prices and more New Zealanders renting than ever before, residential property investors have entered uncharted territory. The Government’s response has been to drive the industry towards a more professional environment. The 2020 changes to the Residential Tenancies Act (RTA) bolstered this effort with a notable rise in penalties for noncompliance. The age of hands-off property management is pretty much over. So, what’s the best way to navigate this new, increasingly complex industry? The first step every investor should take is to gain an in-depth understanding of their obligations as a property owner. My next recommendation is to…

THE DATA Rental data is sourced from the Ministry of Business, Innovation and Employment based on rental bonds lodged. This data is supplied to us grouped into geographic areas based on statistical area units used by Statistics NZ for the census and as a result do not always match well with common usage suburb names. The rental data for each area is matched to property price information from our database to determine property prices and therefore yield. The yield is calculated as the annualised rental income divided by the median property value calculated using our E-Valuer. MARKET COMPOSITION Central Christchurch’s rental market is dominated by houses, with broadly even shares for apartments and flats. Of the 928 properties recently on the market, 517 have been houses (56%), with 206 flats…

PHASE ONE This has already taken place. There has been an extension of Covid-19 regulations limiting rent increases to once every 12 months and transitional and emergency housing have been removed from the RTA. PHASE TWO Phase two is to be implemented on February 11, 2021. The majority of the reforms of the 2020 Act now come into effect and they are listed here. • Security of tenure The provision allowing landlords to terminate a tenancy with a 90-day no-cause notice has been removed. There has also been a change in the timeframes for different methods of tenant terminations – for example, 63 days for the landlord moving in and 90 days if the property is being sold. Tenants’ notice periods to landlords have also been extended from 21 days…

NATIONAL RENTAL PRICE MOVEMENT This map represents change in the average rental price between the months of December 2019 and December 2020, based on figures from the Ministry of Business, Innovation & Employment. RENTAL SNAPSHOT Median house rents of the dominant dwelling type for the area EXPLANATION OF STATISTICAL TERMS No. of Properties: Total number of residential properties No. of Bonds: Total number of bonds lodged in last three months Median Rent: Weekly rent based on the bonds lodged in the latest three months Rent Quartile Range: Inter-quartile range of weekly rent based on the bonds lodged in the latest three months Median Value: The median value of properties in the group based on estimating the current market value of each property using our E-Valuer at the end of the…

Tenants Te Aorere Wanoa and Taylar Morris rented a property from Cheryl Scott in August 2020 for a fixed term of 18 months. While the tenancy was initially incident free, a property inspection in October last year changed the tone of the relationship. During the inspection, Scott found a note detailing some issues with the property. She took offence to the note, and from this point on the relationship deteriorated. Scott issued a 14-day notice to the tenants a few days later, containing what have been deemed “inappropriate demands” including a breach notice for failing to check smoke alarm batteries, failing to ventilate, failing to remove a baby gate at the entrance of a bedroom, and denying responsibility for rubbish that had been there at the start of the tenancy.…

We’ve started 2021 with rates lower than anyone would have predicted this time last year. The question now is will they continue to trend even lower on the back of further intervention from the Reserve Bank? Or could rates stabilise on the back of the team of five million continuing to keep the virus out, and the potential green shoots of the positivity of the Covid-19 vaccine? December saw the Reserve Bank roll out its Funding for Lending Programme (FLP) which offers eligible banks the ability to borrow directly from them at the official cash rate. Over the last couple of weeks, we have seen this have an immediate effect on the short-term rates, with competition focused around the one-year rate in particular. The large banks Westpac and ANZ at…

• In 2021 68.69% of respondents say their portfolio is currently positively geared, while 8.13% are negatively geared and 15.94% are neutral. • Investors with all of their lending with one lender totalled 60.37%, which is a slight improvement on last year’s survey when 61% were in this position.  • Just 46.43% use a mortgage broker – and 11.18% have switched lenders over the past 12 months. • Respondents citing bank lending criteria as still being one of the bigger barriers to investors growing their portfolios this year was 29.35%, which is an improvement on 2020 when 37% of respondents thought this was an issue.…

‘Original condition” is a jaded euphemism in the property world. But it’s the best way to describe the Casebrook, Christchurch property purchased by Billy Bates and business partner Tiaan Kilian as a do-up in October last year. The pair were looking for a place that was structurally sound where they could hone their reno skills. This would prove ideal and make the pair a tidy profit in the process. They are both tradies (Bates a registered drainlayer and Kilian an electrician) so they had a head start on many new renovators. But there were plenty of skills that they learned on the job, and that was one of the aims of this project. The two-bedroom, one bathroom home was owner-occupied, but hadn’t had any TLC for decades. The pair purchased…

IT’S NOT THE LOAN-TO-VALUE RATIOS (LVRS) The requirement for larger deposits will absolutely take some buyers out of the market for a period of time, but it’s not permanent. If you are a first-home buyer, in addition to continuing to save your deposit, finding a mortgage adviser who works with a variety of banks and non-bank lenders could help you to find a lender who can accept a lower deposit. If you are planning to use equity in a property you already own, then all you need is time to let capital growth increase your available deposit. Remember also that new builds are exempt from the increased deposit requirement with most lenders (although new builds might not be the best choice for you). If you are not affected by the…

For many investors, the dramatic drop in interest rates has meant that their portfolios have made the transition from loss-making to profit-making. Coupled with the fact that from April 1 individuals who earn over $180,000 will be paying 39% income tax on personal incomes, it’s time for many to revisit the way their portfolios are structured. Adding to the complexity is the new Trustees Act which is causing trustees to consider if a trust is the way to go forward. The Government has not signalled any change to the trust tax rate of 33%, so those with trusts the lower tax rate, rather than the high marginal rate for individuals, must be examined in light of rental income that might be taxed personally. Many investors will have look-through companies (LTC)…