Innholdsfortegnelse for December 2021 i NZ Property Investor

Well, what a year it’s been! At the time of writing we are waiting for Auckland borders to open, allowing those of us stuck in lockdown the luxury of travelling around the country. It’s a mixed blessing, with Covid-19 set to spread as Aucklanders go to their favourite spots this Christmas. And the other big news is New Zealand Property Investor has a new owner. Opes, a well-known and respected property investment firm, has purchased the magazine from Tarawera Publishing. The team is incredibly excited about the new opportunities this is likely to bring – greater reach via digital channels, fresh ideas, and enthusiastic new owners – and we can’t wait to see what 2022 will hold. We also have a wonderful sister publication, Informed Investor, with which we see…

MATTHEW GILLIGAN Matthew Gilligan is a property investor, developer and tax adviser. He is managing director of chartered accounting firm Gilligan Rowe & Associates, where he heads the specialist property and asset planning divisions. 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 phone 09 376 8860, www.wt.co.nz RYAN WEIR Ryan is owner of Propertyscouts Auckland Metro and has a half share of Propertyscouts NZ. He’s a member of PROMINZ and passionate about the property management industry and in particular raising industry standards. SHANE CAMPBELL A Partner in Wynn Williams’ Dispute Resolution…

Let’s start with a question, should your bank have the right to judge the way you live? The Government has made law changes to protect vulnerable borrowers that come into effect on December 2, but that will have adverse consequences for homeowners and especially first home buyers. This comes at the same time first home buyers are facing minimum deposit restrictions. Most lenders are implementing the changes ahead of the deadline and mortgage decline rates are increasing. As CEO of Squirrel, one of New Zealand’s largest mortgage brokers, I worry that not only do home owners have to show affordability assuming a mortgage rate of 6.50%, they now also face scrutiny of their living expenses. Lenders are now forced to trawl through bank statements in detail looking at every aspect…

They’ve been buy-and-hold investors for over 20 years, but the success of Megan and Bryan Rawiri’s recent renovate-to-flip project was so lucrative it added another string to their investment bow. The couple from Wellington were awarded the prize of runner-up in the NZPIF/Resene Renovation of the Year awards earlier in the year, and it earned them a tidy profit to boot. HIDDEN POTENTIAL As Megan explains, the Porirua house was viewed on a wet and cold wintry day in June 2019. “We walked into the house and could see it was clean and tidy, but everything was damp and cold. The house got no sun and was hidden behind lots of overgrown trees which were just making the house feel wet inside and out. “There was moss on the driveway…

The new tax rules around interest deductibility and the 10-year bright-line for existing stock residential purchasers, combined with revamped planning rules allowing for intensification, has investors considering their options to develop land they might already own – or even make a move to property development rather than sticking with investment. As with anything new, there is much to learn before taking a leap of faith. It’s no different on the tax front. This article seeks to offer some of the important things new developers need to understand before developing or dividing land with the purpose of profiting. Land held by a property development entity is said to be held on “revenue account” for resale and becomes the stock in trade of any development entity. Investment land is held on “capital…

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 The rental market across Rotorua is dominated by houses. Indeed, of the 348 properties recently available for rent, 78% have been houses (273 properties), with 16% flats (54), and 6% apartments –…

The violent de-patching of a gang member at a Tokoroa rental property has led to an eviction for the tenant. Winterson Holdings applied to the tribunal for the eviction of Michelle Tangimataiti from the Manaia St property on the grounds of anti-social behaviour, unlawful activity and assault. One neighbour told the tribunal he and his partner were leaving because they felt unsafe. The landlord provided evidence of anti-social behaviour at the premises, including video footage and photos. Although the videos and photos did not show Tangimataiti assaulting or threatening to assault another person or permitting any other person to do the same, the landlord said that in July he had attempted to serve a second anti-social behaviour notice on her, but was verbally abused and threatened by another person at…

As 2021 draws to a close and we approach the last month of the year, some good news is on the horizon for NZ business being able to open back up and operate from early December. It will be great to get back to some level of normality for New Zealand and, in particular, Auckland. My guess is that we are likely to see a significant spike in spending in the coming month, particularly due to lockdown causing pent-up demand coupled with the Christmas period typically being the busiest time for retail and hospitality businesses. When it comes to mortgage interest rates, however, these are heading up, and have been since the middle of the year. With the recent official cash rate increases, and further expected increases, those who have…

Consider before purchasing: avoid buying into multi-level apartments, units or houses sitting on leasehold land, blocks of four or more units which have a single title or units which are less than 50m2 in floor size because the LVR restriction can be as high as 40% to 60% when you want to refinance your equity during a recession market to buy further opportunities. Successful property investors and mentors Ron Hoy Fong and Jason Tan have built impressive property portfolios and have a wealth of investment strategies to make the Auckland property market accessible for everyday people. For more information on our one-to-one mentoring programmes call Jason today. Jason Tan | 021 410 150 | www.ronovationz.com…

While he was still Minister of Housing in late 2020, Minister Kris Faafoi confirmed that the Government wanted to regulate the property management industry and introduce a licensing regime. Contrary to what many would believe, this is what the industry wants. In 2019, REINZ launched the A Call for Change campaign to lobby the government to review the industry and address the long-standing frustration that property management (against the advice of industry leaders) was left out of the Real Estate Agents Act (REAA) 2008. With the benefit of hindsight, bringing accountability into the industry could potentially be more effective than anything done so far in New Zealand. So what could this look like for the industry and stakeholders? As we see it, there are two components to address. One area…

HOUSE PRICES: UP Median prices increased 23.4% to $895,000 compared with $725,000 in October last year. Ten out of 16 regions reached median price records, and one had an equal price record – the most since March 2021, according to latest data from REINZ. INTEREST RATES: UP Mortgage interest rates are climbing quickly. The three-year rate at ANZ is 4.45%;, ASB 4.69%; BNZ 4.39%%; Kiwibank 4.49%; Westpac 4.69%; and Heartland Bank 3.60%. OCR: UP The Reserve Bank has raised the OCR by 25 basis points to 0.75 and says it intends to raise it more. IMMIGRATION: DOWN The number of people in New Zealand on work visas has dropped 20% since the country’s international borders were closed. The latest MBIE figures show the number of people on work visas peaked…

The Government has made changes to two areas of legislation that affect property investors. TAX CHANGES In October the Government finally introduced legislation into Parliament setting out the proposed interest deduction rules. a) We still do not have finalised legislation. Even these draft rules are yet to go through select committee. I do not expect it to be finalised until around March next year and there could still be changes to come. Highly unsatisfactory. b) The definition of new build is different to expectations. Any property where CCC is issued on or after March 27 2020 qualifies. This broadens the catchment of the new build definition, which was previously expected to apply to dwellings where CCC was issued after the announcement in March 2021. c) Interest can be claimed on…

In her years as a property manager and investor, Claire has been involved in numerous tribunal cases. She has some simple advice for investors in this position. • “The adjudicator expects you to know your stuff. Make sure you are educated around the rules of the RTA before you arrive at the tribunal. • “Take as much evidence as you can. You won’t get a second chance and you need to be prepared. I’ve had tenants turn up with evidence at the last minute, so it’s great to have as much documentation as possible.” • “Keep a cool head. It feels really imposing because you are going into a courtroom, but the adjudicator is there to solve issues.”…

• HEIGHT – up to 11m high + an additional 1m for a qualifying pitched roof • HEIGHT IN RELATION TO BOUNDARY – up to 6m high at site boundary + 60° recession • SETBACKS – as close as 2.5m of the front yard boundary; 1m of the side yard boundaries; 1m of the rear boundary (except on corner sites) • BUILDING COVERAGE – up to 50% coverage of the site area • IMPERVIOUS SURFACE – up to 60% coverage of the site are (ie 50% building coverage plus 10% for pavement) • OUTDOOR LIVING SPACE (ONE PER UNIT) – or at least 15m2 for houses at ground floor, with a minimum dimension of 3m; 8m2 for houses with no ground floor, with a minimum dimension of 1.8m • OUTLOOK…

‘Don’t rely on things you have no control over, such as capital growth and tax benefits’ OPINIONS ARE LIKE BELLY BUTTONS Everybody has one, and a lot of the time they are pretty useless. Why would you listen to someone’s advice about property investment if they’ve never owned a rental property before? Your friends and family will most likely have your best interests at heart, but without the background knowledge required they are not likely to be in the best position to give you the guidance you need, and buying a home is vastly different to buying an investment property. The media is full of doom and gloom horror stories about bad tenants and bad landlords, not to mention commentary about whether it’s a good time to buy, and talk…

The Privacy Commission has released its updated guidelines for the rental accommodation sector. Here are its guidelines around information you may request at each of the five steps involved in selecting a tenant and managing a rental property. VIEWING THE PROPERTY • Name and contact phone number only. • You may give prospective tenants an application form before viewing the property, but they shouldn’t be required to fill it in beforehand. APPLYING FOR TENANCY (AFTER SELECTING PREFERRED TENANT) • Name and contact information. • Proof of identity. • Whether the applicant is aged 18 or older. • Number of occupants who will reside at the property. • Names of other occupants, such as children. • Contact details of references e.g., landlord and non-landlord references. • Signed consent that you may…

NATIONAL RENTAL PRICE MOVEMENT This map represents change in the average rental price between the months of October 2020 and October 2021, 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…