Innholdsfortegnelse for April 2023 i NZ Property Investor

The past few months (actually, years) have been uniquely challenging for New Zealanders. The havoc wrought by Cyclone Gabrielle is the most recent drama in a period typified by shocks, and the country is still wrestling with the long-term implications of living through climate change. For landlords, recent history has brought additional challenges, many of them based on regulation. Those changes have had a huge effect on the sector, as a recent New Zealand Property Investors Federation survey reveals. A summary outlines what many of us already know: that legislation is adversely affecting rental property owners and tenants of these properties. The key message is this: the removal of interest as a deductible expense is biting landlords hard, and some are thinking of exiting the industry altogether. This is an…

COMMERCIAL SPONSORED BY The pandemic, recent cyclones, flooding, changes in business, lifestyle and living spaces have all unleashed a wave of demand for more self-storage space as well as demand for new sites in an expanding industry. Severe weather events are quickly contributing to the demand for selfstorage. More than 30 per cent of consumers surveyed for last year's Self Storage Association of Australasia's (SSAA) State of the Industry report said they had been impacted by a natural disaster or weather event in the past two years. “The shorter term demand for selfstorage is heightened in times of bad weather in areas where there is a shortage of houses and rentals,” says Makala Ffrench Castelli, SSAA's chief executive. The New Zealand self-storage industry is characterised by a wide range of…

YOUR LAWYER F or years the government has been targeting increasing land supply in an attempt to improve housing affordability. The first attempt was by introducing new national direction under the Resource Management Act 1991 (RMA) with the National Policy Statement on Urban Development Capacity 2016, which shone a spotlight on urban centres with high demand for growth and required councils to identify and plan for urban development capacity. The National Policy Statement on Urban Development Capacity 2016 was quickly replaced by the National Policy Statement on Urban Development 2020 (NPS-UD) as part of government's Urban Growth Agenda. The NPS-UD took a more direct approach. Among other things, it mandated that highest growth (tier 1) councils provide as much development capacity as possible in city centres and allow development of…

YOUR DEVELOPER Natural disasters frequently strike New Zealand, which is a country especially vulnerable to earthquakes, floods and tropical storms. Although we cannot stop these disasters from happening, we can future-proof new builds to endure unexpected events. To safeguard New Zealanders and minimise damage, residential design must prioritise the longevity of Kiwi homes and resilient construction. NZ is located in a seismic zone, meaning the country is vulnerable to earthquakes. Earthquakes have the potential to cause significant damage; the 2011 Christchurch earthquake being the most notable in the country's recent history. This earthquake caused devastating damage to the city, taking the lives of 185 people, with many sustaining serious injuries, much due to the collapse of buildings. The existing homes were not able to withstand the magnitude of the seismic…

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 in North Shore is dominated by houses, with a reasonably even spread of apartments and flats. Of the 1,329 properties recently available for rent, 1,110 (84 per cent) have…

A landlord falsely accused by her tenant of being a drug user has failed in a bid for $2,000 damages. Anne Louisa Mary Haviland claimed the smell of the drug or drugs the landlord, who has name suppression, used every day and night permeated into her apartment. “I have owned my own medical practice so I know what Cannabus [sic] smells like. This is unacceptable behaviour of a landlord and has impacted on my [sic] greatly,” she claimed. The allegation arose when Haviland wanted to terminate the fixed term tenancy from July 2020 to July 2021 early, saying the washing machine was too small and being on the top floor of the premises was either too hot or too cold as well as alleging the landlord used drugs. At the…

HOUSE PRICES: DOWN Nationwide February's median house price was $762,000 down 13.9 per cent compared to the same month last year, REINZ data show. Auckland prices fell 15.2 per cent and Wellington's 20.6 per cent. Just 3,964 houses were sold across the country, down 31.3 per cent from 5,750 in the same month last year. In Auckland sales were down 41.4 per cent compared to February last year. The REINZ House Price Index fell 1.5 per cent in February – one of the larger monthly falls in the past 12-18 months. OCR: UP The Reserve Bank's official cash rate sits at 4.25 per cent, with the bank indicating more rises are to come up to possibly 5.5 per cent. INTEREST RATES: DOWN BNZ and ASB both made special non-carded oneyear…

EDUCATE YOURSELF: Before jumping into property investment, it's important to do your research. Attend seminars, read books and blogs, and speak to experienced investors to get an understanding of the market and the strategies used to achieve success. DEFINE YOUR GOALS: Are you looking for long-term wealth building or short-term cash flow? Do you want to invest for passive income or capital appreciation? Clarifying your goals will help you choose the right investment strategy. ASSESS YOUR FINANCES: Property investment requires significant capital, so it's important to assess your finances carefully. Make sure you have a solid understanding of your income, expenses, debts and credit score. Consider meeting a financial adviser to help you determine whether investing in property is a realistic option for you. CONSIDER YOUR RISK TOLERANCE: Property investment…

DIY PROJECT CALEB AND ALICE PEARSON The exterior paint system over our homes acts like a giant overcoat protecting us from all the elements thrown at it. Rain, wind, snow, sunlight, storms … it safeguards your house, keeping it safe from moisture, mould, and rot, as well as offering a chance to add style or personality through a wide range of colours. However, when you think about property maintenance, keep in mind that paint doesn't last forever. If you're investing for the long term, there's a good chance you will have to undertake an external repaint at some point, so it's prudent to plan in advance for this one. The hands-on DIY approach is possible, but given the amount of time involved it's one that most of us will happily…

YOUR SHORT-TERM RENTAL While city centre apartments are prime real estate for short stays in Auckland, you can also earn profitable rental returns across Greater Auckland, not only driven by location, and not just in the places you might expect. Outside the CBD top-performing locations from The Stay Hub's portfolio include suburbs on the city fringe and coastal areas. A benefit to shortterm renting in these locations is that there are fewer listings, meaning less competition and higher average daily rates where demand outstrips supply. ATTRACTIVE AMENITIES Sought-after amenities, including off-street parking and gardens, are more prevalent outside the CBD and hold strong appeal, particularly for families. Houses with backyards can also accommodate the family dog, with petfriendly accommodation being the mostsearched amenity on Airbnb this year. In 2022, family…

YOUR ACCOUNTANT The notion of wealth tax has again come to the fore – results from a recent governmentcommissioned survey suggest respondents prefer wealth tax over fuel tax or road-user charges. Maybe it is time to refresh our minds on this subject … it is election year after all. First, we should understand the motivation behind it. There has been a push recently imploring governments to address social inequality. In fact, The Tax Working Group considered this possibility back in March 2018 when they released their discussion paper on how to tax wealth. Interestingly, China has the same idea, openly sharing the rhetoric of their “common prosperity strategy” in the midst of the pandemic. MIXED MESSAGES Wealth tax is usually a tax on an individual's accumulated wealth, including assets such…

YOUR REVIEW Two parents, aged in their 30s, were on one income and crippled under the weight of two mortgages. So much so, they hadn't even considered investing for retirement. Here's how the pair became mortgage-free at 37, and planned for their retirement. THE INVESTORS Married couple Kris and Leanne have three young kids, and are living in their family home in Waikato. The couple relocated from Taupo eight years ago, but instead of selling their property there they chose to rent it out as an investment. Kris earns $100,000 a year in a management role, which enables Leanne to stay at home and look after their young family. When the couple came to see Opes Property partner Kathy they didn't have a retirement plan or goal in place, but…

NZPIF FROM THE PRESIDENT'S DESK SUE HARRISON In times of crisis property investors and landlords with well located, good homes come into their own. We applaud our North Island property investor associations for ongoing support stewarding members through the weather events and being there in good times and bad. Beyond the financial risks of property investing there are a multitude of environmental risks such as earthquakes, pandemics, weather events such as floods, explosions and tornadoes which are risks and add extra stress on homeowners. The safety net property investor associations provide in each location is a unique and valuable source of support. This is a network of likeminded people who want to succeed in life by increasing their knowledge base and caring about their properties and tenants' welfare. Information and…

Q Our tenant has approached us asking if we would enter into a rent-to-buy agreement. Are these common and are there any fish hooks? A Rent-to-buy (or rent-to-own) agreements have been gaining popularity in recent years. There are some scheme providers who offer them, but private arrangements are less common. As the property owner there are several things you should watch out for. In rent-to-buy arrangements, the tenant usually pays a deposit and then pays rent which includes some proportionate amount which will be applied towards the purchase price. Some rent-to-buy agreements provide that, if the tenant is unable to complete the purchase at the end of the specified period, any money paid in rent and towards the purchase is not refundable. This is a clear benefit to the landlord but…

YOUR RATES Another month passes and another month of huge volatility over interest rates. We started March with all the talk being around BNZ's hushed offer of a 4.99 per cent interest rate for new borrowers. This caused rampant price competition, with other banks competing instead with rates around 5.99 per cent but offering cash contributions. That frenzy has dissipated since BNZ took their offer off the table early in March and we have noticed better pricing from the New Zealand banks and other challenger banks such as Bank of China. The Australian banks, who control close to 90 per cent of the mortgage market here, have backed off competing as much. The other news is related to offshore banking issues where we have seen firstly Silicon Valley Bank and…

YOUR PROPERTY MANAGER At the time of writing I am sitting in our Gisborne office after spending time with our team helping and supporting them as they deal with the fallout of Cyclone Gabrielle. It is just over a week since the cyclone hit and caused widespread disruption and damage across much of Hawke's Bay and Tairawhiti region, where we manage many properties. It has been upsetting as well as inspiring to see these communities rally around each other in the post-cyclone clean-up. Wairoa is particularly affected, with much of the township north of the river flooded, leaving a trail of silt and destruction. One feels for the thousands of people who have borne the brunt of such a devastating disaster. From a property management point of view it is…

YOUR SURVEYOR It's hard to believe Cyclone Gabrielle was less than two months ago; for many Kiwis the impacts are still fresh and will be felt for some time. The infrastructure rebuild costs are estimated by Grant Robertson to come in at around $13 billion, a similar price tag to the Christchurch rebuild after the 2011 quakes. Robertson blames the high costs on a lack of investment in climatechange resilient infrastructure and suggests our current approach to adapt “has not been significantly robust”. We saw properties lost due to slips and landslides, and torrents of water swept through forestry harvested areas with flood-plain communities destroyed. With environmentalists predicting New Zealand is falling short of the emissions target of zero carbon 2050, we can expect to see weather events with increased…