Innholdsfortegnelse for April 2024 i NZ Property Investor

About one in three New Zealand households rent and that number is expected to rise as people realise the dream of owning their own home is out of reach. About 28.9 per cent of those renting households pay more than 40 per cent of their income in rent. Rental growth is running at historically high levels, and according to Stats NZ, new tenancy flow growth was 6.8 per cent in the year to January. That is well above the long-term average growth rate of 3.2 per cent and reflects further growth in wages as well as a tightening supply and demand balance. Gross rental yields nationally have edged back up to 3.2 per cent from a trough of 2.6 per cent for much of 2022 and is the highest level…

Auckland's Harbour Bridge is much more than a skyline decoration, it plugs North Shore residents directly into the heart of the city. Enjoying the many perks of North Shore living doesn't require sacrificing access to all that Auckland's CBD has to offer. A wealth of bus routes and easy bridge access for cars gives the best of both worlds. Ferry services from Birkenhead, Northcote Point, Beach Haven and Devonport also provide a great alternative way of commuting to and from the CBD. It has a younger, diverse population, many of who are employed in technology. That came about in the 2010s, a period of significant change for the North Shore. In 2015, business leaders and scholars from Albany and Massey Universities gathered at the Grow North conference. Those at the…

NZPIF SPOTLIGHT A PIE fund is a type of investment entity that can offer tax advantages to investors. You could benefit from investing in a PIE fund because you'll pay tax on any investment income based on your prescribed investor rate (PIR), instead of your personal income tax rate As a property investor in New Zealand, it's crucial to stay informed about any changes in tax laws that could affect your investment returns. One significant change is the increase in trust tax rates, which took effect April 1. This change saw tax rate for trusts rise from 33 per cent to 39 per cent, and potentially impacted the amount of tax you pay on your investment returns. HISTORY OF THE PROPOSED TRUST TAX RATE INCREASE In 2023 the Labour government…

HOW TO USE THIS SECTION The key to any good Investment is Information. NZ Property Investor magazine, with the trusted data supplied by Corelogic would like to show you how you could use this data to optimise your next investment search. 1 COMPARE RENTS AND VALUES FOR 3 AND 4 BEDROOM HOUSES IN A GIVEN SUBURB Then consider what the rent and value increase would be if you renovated a 3 bedroom property into a 4 bedroom property. Example: Manurewa North going from 3 to 4 beds, looks like an increase of about $200,000 and rent of about $80 a week. 2 ESTIMATE AN INCREASE IN RENT FROM A RENOVATION Example: If my house is in Manurewa North and has 3 bedrooms. If it currently rents for $590 and has 3 bedrooms,…

UP FRONT NEWS This is up 16 per cent year-on-year and hit 1.47 per cent last month alone – the highest level before Covid, when mortgage arrears were at 1.49 per cent in March 2020. While mortgage arrears are rising, they are still at historically low levels. And potential homeowners are not willing to take on the huge debt of a few years ago, with new household lending down 8 per cent year-on-year. The latest mortgage lending data from the Reserve Bank shows there was $3.4 billion of mortgage lending in January, down 35.6 per cent from $5.3 billion lent in December. This is historically low. In January 2021 there was $6.4 billion of lending. Centrix data shows the average mortgage loan for first home buyers was $540,000 in the…

UP FRONT NEWS Presenting its arguments to Parliament's Social Services and Community Select Committee, APIA says the exclusion of private landlords who manage their own properties should be retained in the proposed regulatory framework for property managers, while it endorses the implementation of the two-strike rule as a balanced compromise. APIA says the existing proposal, introduced by the previous Labour government, reflects principles of fairness, practicality, and the Kiwi ethos of self-reliance. The association says there are three key reasons for this, as follows. STANDARDS Alignment with established professional standards: The proposed regulatory framework for property managers aligns with existing standards governing other professional services, such as lawyers, accountants and real estate agents. APIA's general manager, Sarina Gibbon, says to regulate landlords as you would a property manager is the…

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 propertyrelated transactions, valuation and restructure services, and tax planning. Withers Tsang, phone 09 376 8860, www.pfkwt.co.nz RYAN WEIR Ryan is managing director and franchisor of Propertyscouts NZ. He's deputy chairman of the RPMA and is passionate about the property management industry, particularly, raising industry standards. SHANE CAMPBELL A partner in Wynn Williams’ Dispute Resolution Team, Shane specialises in complex commercial…

For investors buying a new property, it's always a good idea to conduct a “cashflow forecast”, which will give an idea of how the property will perform over the long term. When running these forecasts, ask: “How much do I think the rent will increase per year?” It's not a straightforward answer. Rental increases fluctuate annually and can be affected by economic events. Over the last 30-plus years rents have increased by an average of 4.60 per cent annually. In February 1993, the median rent in NZ was $150 a week. At December 2023, the median rent was $600 a week. Rents have only stagnated twice at a national level. The first, during the 1997 Asian Currency Crisis; the second, in the wake of the 2008 financial crisis. The key…

Diana Levinzon has been an investor for less than a year, but she's already completed six flips and is working on her seventh. And her motivation for investing in property is simple – creating wealth for her family. “Both my husband and I work full time in government jobs,” she says. “We have a toddler and we realised that property investing was the only way we could really get ahead.” Levinzon knew she had the capacity to be hands-on with renovation work and had the ability to turn around flips in a short time, but she needed to partner with people who had the funds to back the work. Through contacts, she discovered just the right person; someone who was keen to start investing and had the money, but wanted…

FINAL WORD In the world of property management, staff turnover can be a persistent challenge. High turnover harms a company's efficiency, performance, and reputation. It can be detrimental to the team's morale, result in higher consumer churn and negatively impact the bottom line. I've witnessed the detrimental effects of frequent staff turnover. So, what are the issues and how do you overcome them? BETTER RECRUITMENT This is a key factor in why companies may need help retaining staff. Panic recruiting often leads to costly mistakes. Companies should follow a structured hiring process, ensuring transparency about the role's challenges and conflicts. It's crucial to assess skills and attitude for better staff retention. TRAINING One of the key contributors to employee dissatisfaction and turnover is inadequate training. With a nonregulated industry, we…

UP FRONT NEWS Although there was no methamphetamine test done at the Frimley, Hastings property before Rosemary Lines signed up about 10 years ago to rent the flat owned by Jeremy and Julia Carlsen and managed by Regent Realty, the Tenancy Tribunal says while it is plausible the photo was photoshopped, Lines did not provide any evidence the photo was edited, whereas the landlord provided evidence the photo had been taken inside the premises. Regent Realty applied to the tribunal for compensation for the costs of meth testing, decontamination and further testing following the decontamination work as well as exemplary damages. Lines’ tenancy had been terminated with urgency on the basis the flat was uninhabitable. Lines lived at the flat throughout the nearly 10 years, but her partner and child…

As it becomes increasingly difficult for people to get on the property ladder, young people no longer believe owning a home represents the “Kiwi dream”. According to a recent Kiwi Property survey, 59 per cent of 18 to 29-year-olds don't consider owning a home as the Kiwi dream, in contrast to 70 per cent of those aged 30-plus. Most of those surveyed, who hadn't yet purchased a house, say residential prices and the cost of living were major obstacles. Renting is on the rise with more than half of Aucklanders over the age of 15 living in rental accommodation. And for many the experience is less than ideal, the survey shows. A lack of quality properties (51 per cent), security of tenure (51 per cent), and inconsistent or unexpected rent…

The combination of high listing numbers, elevated stock and shifts in the median sale price adds up to increased housing activity, REINZ's February data show. Stock levels had a year-on-year increase, resulting in a growing inventory of available properties for sale. Coupled with median sale price growth in some regions, agents are seeing more investors and first-home buyers at open homes. REINZ recorded 5,693 residential sales in February, up 37.9 per cent compared with February last year and up 81.8 per cent compared with January this year. While this is a significant improvement on last year, the latest figures suggest the market remains in a slump as the sales were the second lowest for the month of February since 2011. New Zealand's inventory levels have increased 8.1 per cent from…

Ryan Spearman has come a long way since 2004 when he was sitting in a real estate agent's office signing a sale and purchase agreement without even knowing the price of the Avondale house he was buying. “I just followed what he said I should write down on the agreement. I was probably royally ripped off, but it didn't matter at the time.” These days he scours the country for blocks of under-rented and rundown units he can renovate and add to his portfolio of 19 units in Rotorua, four in Christchurch and four in Dunedin. It's a far cry from when the film industry assistant cameraman started out. It's also good for his pocket as his main income has recently been from making television commercials and that's drying up…

Adding bedrooms is a triedandtrue means by which to increase rental yield. Here's an example: the median rent for a three-bedroom home in the West Auckland suburb of Henderson is $670 a week*; add a bedroom and you're looking at $800. It sounds compelling but adding an extra bedroom (or bedrooms) to existing homes can be slow and expensive. Depending on the size of the room, the build can cost upwards of $50,000. Then you need to factor the expense of a vacant home – tenants won't want to live in a building site. This is where Dreamtime Cabins come in. Their starting rate for a sleepout is just $16,495 (3.6m x 2.4m) and there is also the option to create two rooms in a larger sleepout for around $35,000.…