NZ Property Investor July 2023

Being a property investor involves a sound understanding of the numbers that lie behind each property. If we get the numbers wrong, it can spell trouble. And so, our lead story this issue focuses on the importance of getting the numbers right. We commissioned financial data service Canstar to run numbers for us: it showed that Bay of Plenty and Auckland investment mortgage holders need to have gross household income of $44,527 and $41,368 (respectively) above the average income to be able to service their debt without slipping into mortgage stress (30 per cent of household income). Of course, rental income needs to be factored into the equation, but it's an interesting exercise and one that reveals how much many of us are paying in the current housing market. Sally…

NZPIF FROM THE PRESIDENT'S DESK SUE HARRISON As investors we play a valuable role in the New Zealand housing system. Around 86 per cent of rental homes are supplied by private owners and this is one of the best examples of a public/private housing system in the world. Privately-owned rental homes have been the first and fastest to comply with Healthy Homes legislation, most of which our property investor associations supported as good for our tenants. Owners are eager to keep good tenants who look after their home and aspire to fix any issues quickly for them. Our network of owner-investors care about knowing the rules and complying and, more importantly, care about providing good accommodation for tenants. One of New Zealand Property Investors Federation's key functions is to advocate…

October's election will have the biggest impact on property investors in decades. The difference in housing policies between Labour and National is a divide so deep it will take years to untangle. During the past six years of Labour's turn at the helm, it has taken away the ability for investors to use mortgage interest payments against rental income for tax deduction purposes, extended the bright-line test to 10 years, banned “no-cause” rental terminations, limited rent increases to once a year, introduced Healthy Homes legislation, increased tax on trusts, which many investors use to hold property assets, and allowed three units of three-storeys high each on almost any residential section across the country without resource consent. National has vowed if it is elected it will reinstate the tax deduction on…

THE RENTRAL BUREAU Calling all private landlords in Auckland. If you are a handson self-managing Auckland property owner who wants to meet and choose your prospective tenants, but doesn't want the hassle of all the admin, this is the service for you. We're sorry it took us so long. WHAT WE DO • Arrange professional photos • Arrange viewings • Vet and summarise tenants that you shortlist • Create the tenancy and bond lodgement forms for you and your tenants to sign electronically. WHAT YOU DO • Meet and greet the prospective tenants at the viewings • Tell us who you like • Approve an application • Take over the relationship once the tenancy agreement is signed. TWO-WAY INTERVIEW The revolution is here. Have you ever used a casual letting…

With net migration surging to new highs and the residential construction sector slowing on the back of rising interest rates, new demand for housing is now significantly outstripping new supply, ANZ says in its latest Property Focus report. “In other words, New Zealand has a widening housing deficit,” says Sharon Zollner, ANZ's chief economist. By ANZ's estimates the housing deficit had largely been eroded by the third quarter of last year. HOUSE PRICES However, new demand for housing outstripped new supply in both the fourth quarter of last year and the first quarter of this year. Together, over these two quarters alone, the shortfall between new housing supply and demand has come in at around 5,500 dwellings, taking the net migration numbers of 72,000 people arriving in New Zealand on…

Auckland University Associate Professor of Economics, Ryan Greenaway-McGrevy, says in a paper published last week that if Auckland Council had not introduced zoning reforms through the Unitary Plan in 2016, rental costs for three-bedroom houses would be between 28-54 per cent higher and two-bedroom homes 16-28 per cent more expensive. The paper compared rents in Auckland to a weighted average of rents from other urban areas that were similar to the city prior to zoning reform. The Unitary Plan precipitated a construction boom and gave Greenaway-McGrevy six years of data to examine the impact of the reforms on housing costs. The findings suggest large-scale zoning reforms in Auckland enhanced affordability of family-sized housing when evaluated by rents. FOCUS ON RENTS Greenaway-McGrevy chose rents for the paper rather than house prices,…