Innholdsfortegnelse for May 2024 i NZ Property Investor

YOUR HOUSE Listings on the housing market are at a level not seen since 2015. And REINZ data also reveals higher sales counts and higher median sale prices. Listings increased substantially, up 23.9 per cent to 11,455 nationally compared with March last year. Wellington had 32.4 per cent more listings; Auckland 31.4 per cent. Only Nelson (-2.7 per cent) and West Coast (-1.4 per cent) recorded declines in listings compared with March last year. The national median sale price increased 2.7 per cent from $779,000 to $800,000 year-on-year; it also increased 1.1 per cent from February, from $791,500 to $800,000. For New Zealand, excluding Auckland, the median price also increased – it was up 2.3 per cent year-on-year from $695,000 to $711,000, and up 0.1 per cent monthon-month from $710,000…

FEATURE RESIDENTIAL VS COMMERCIAL There is a deep-rooted belief in the long-term rewards that property offers. Although enduring confidence is held in residential investment, the same sentiment does not extend to commercial property. Investors with residential property investments outnumber those with commercial investments by five-to-one, even though both are a store of wealth. Like most investment decisions, investing in either is not “absolutely” or “never”. There are some differences that need a level of understanding before final decisions are made. Both offer enticing investment opportunities, but over the past few years some residential investors, taking exception to the previous Labour government’s tax changes and the legislative war on landlords, have ditched residential in favour of commercial. Former New Zealand Property Investors’ Federation chief executive and Hawke’s Bay Property Association spokeswoman,…

HEALTHY HOMES By July 1, 2025, all private rental properties must comply fully with the Healthy Homes Guarantee Act. The regulations came into tenancy law on July 1, 2021, with all new or renewed tenancies needing to comply with the act within 120 days of the agreement. But landlords with long-term tenants still have until July 1 next year to meet all the standards. Unpackaging the regulations can be tricky. In this, the first in a series that helps landlords understand their obligations around Healthy Homes legislation, New Zealand Property Investor looks at heating. The heating standards are based on the World Health Organisation (WHO) recommendation that the indoor temperature within homes needs to be 18 degrees throughout the year. Many heating options won’t achieve this, and there are very…

FINAL WORD The coalition government has announced the reversal of one of the most controversial tax policies from the previous administration to the delight of property investors. However, many media commentators report this as a tax break for well-off property investors at a time of austerity as many public sector departments face huge cuts. In March 2021, the then-Labour government dropped a tax bombshell for property investors in a range of measures to try and take the heat out of the housing market. A landlord’s ability to offset interest payments against income was to be phased out, resulting in investors being hit with significant tax bills. In many cases, investors would have to find between $50 to $100 a week extra per property to offset the losses they would incur.…

UP FRONT NEWS The enthusiasm that followed the change in government mainly from property investors has waned and is showing up in homeowners and buyers hanging out for interest rate cuts, Kiwibank says. While the government’s housing tax policy changes are a positive, interest rates will play a big role in where the market goes in the next few months. Kiwibank’s chief economist, Jarrod Kerr, says interest rates may rise a little more and then they may fall later in the year. Anecdotes from Kiwibank’s mortgage managers and client base were positive towards the end of last year. “Now we’re all waiting. It’s hard to get too excited when the rampant rise in interest rates is still feeding through,” he says. Kerr expects the market to regain momentum, but it…

UP FRONT PROPERTY MANAGEMENT The onus of denying tenants the right to keep a pet will fall on landlords with the introduction of pet bonds later this year. The policy change will limit landlords’ ability to formally decline pets at rental properties and create an opportunity for tenants with pets to secure a rental and stay in their homes for much longer. It will become more difficult for landlords to stop a tenant keeping a pet, except on reasonable grounds. What those reasonable grounds will be is not yet clear, with the government saying they will be determined partly from Tenancy Tribunal’s rulings and guidance from relevant ministries. But some grounds are a body corporate having a rule that prohibits pets or if a tenant has not complied with bylaws…

NEW BUILDS SPONSORED BY GJ GARDNER HOMES New homes command higher rent, attract careful tenants, meet the new Healthy Homes standards, are less likely to need repairs, and are easier to maintain. As New Zealand’s most trusted home builder, GJ’s are building more properties for the rental market than ever. If you’re thinking of starting your investment property journey, here’s a summary of why building new is a smart strategy. LESS THAN YOU THINK If you can afford an existing property, it’s likely you can afford to build a new property. Contrary to common assumptions, new builds can be cost competitive. They’re often located on the outskirts of older residential zones, where land costs are lower. In other cases, new builds happen within older residential areas where land has been…

FEATURE RESIDENTIAL VS COMMERCIAL PROS OF COMMERCIAL HIGHER RENTAL YIELDS: Commercial real estate has historically offered higher rental yields than residential real estate. This makes commercial properties attractive to investors seeking regular income streams. LONGER LEASES: Commercial leases tend to have longer terms compared with residential leases. This provides a more predictable rental income with fewer vacancy periods. PROFESSIONAL TENANTS: Commercial properties tend to attract professional tenants, such as businesses and corporations. This typically leads to lower maintenance costs, better property care, and a less emotional tenant-landlord relationship. This can make overall property management much easier. DIVERSIFICATION: Investing in commercial properties can offer more diversification and less risk. This is because their performance is less correlated with the residential market. CONS OF COMMERCIAL HIGHER ENTRY BARRIERS: Commercial property investments typically…

REGIONAL REVIEW MARLBOROUGH Situated at the top of New Zealand’s South Island, with Cook Strait to the north and the Pacific Ocean to the east, the Marloborough region has a maritime climate. This provides a cooling influence which, coupled with some of the highest sunshine hours in the country, creates the perfect environment for grape growing. Marlborough has four main valleys, which are home to the following towns and settlements: Blenheim, Picton, Havelock, Seddon, Wairau Valley, Renwick, Canvastown, Ward, Spring Creek and Grovetown. Each of these towns and settlements have their own community hall as a hub for activities. The region is about world famous sauvignon blanc from the country’s largest winegrowing region and the soils and enviable climate that create it. It’s about fresh seafood sought by the world’s…

NZPIF SPOTLIGHT The Canterbury Property Investors’ Association is extremely proud to be hosting the 2024 NZPIF Annual Conference over the weekend of October 18-20 (Friday to Sunday). The conference theme, Changing Landscapes, is inspired by the Christchurch rebuild. Conference chairperson Mark Revis says property investment is impacted and encompasses many landscapes and environments, ranging from changing political landscapes in government and regulation, constantly changing economic and taxation landscapes with higher interest rates, new DTI rules, interest deductibility, and bright-line changes. It also involves changing property investment landscapes with strategies for residential and commercial investment, old versus new, student and social housing, as well as minor dwellings and subdivisions. “Property investment involves a myriad of activities, services and industries in the pursuit of knowledge to allow investors to make the best…

UP FRONT NEWS The Property Investors’ Association says the proposed changes to the Residential Tenancies Act will provide landlords with necessary flexibility while safeguarding tenants’ rights, ultimately contributing to a more stable rental environment. The changes include reinstating the 90-day termination clause and restoring fixed-term tenancies and allowing landlords to use pet bonds of two weeks’ rent. NZPIF executive member Tim Horsbrugh says the proposed changes will restore balance and mitigate risks for investors and tenants. “It is a step towards addressing the ongoing housing crisis and creating a fairer market,” he says. “Reinstatement of the 90-day termination clause will enable rental property owners to consider a broader range of tenants, promoting inclusivity and making renting more accessible.” He says while the removal of the clause in 2020 aimed to…

OPINION GST If you rent out a property on a short-term stay basis via a platform like Airbnb, you will have been contacted recently to disclose your GST registration status to the platform. This is because from April 1 there is a new regime in place when it comes to the charging and collecting of GST on short-term stay accommodation through platforms like Airbnb. For the sake of completeness, the same rules also apply to the provision of transport and delivery services via the likes of Uber, but for the purposes of this article I will concentrate on the implications for property owners. THE NEW RULES From April 1, 2024, the obligation to charge and pay GST shifts to the platform provider. Moving forward, the likes of Airbnb have to…

Come winter your investment property will be challenged with colder temperatures, heavier rainfall, storms and increased moisture. So, we’ve outlined six ways to protect your property, detailing what’s involved in each job, the dangers of neglect, and which tradie you’ll need for the job. They’re all relatively straightforward and affordable ways to keep your tenants happy over winter, maintain the value of your property, and minimise future repair costs. THE ROOF What’s involved: A thorough inspection of your property’s roof and roof space to check for damage such as loose or missing tiles and fixings, signs of gutter backflow, lichen and water damage. Dangers of neglect: It’s critical that your roof is impermeable, with all leaks fixed immediately. Aside from emergency repairs, neglecting ongoing roof maintenance can introduce additional issues…

Indulge me for a moment, if you will, while I take a trip down memory lane. Back in my whipper-snapper days in Taiwan, I picked up a saying that goes something like this: “Individually, we are lone chopsticks that can easily be snapped. Collectively, we are a bundle of strength that even the strongest of the strong cannot break.” I could have quoted Aristotle and made the same point by saying that the whole is greater than the sum of all parts. But bear with me, I’m getting somewhere with this chopstick metaphor. These little ingenious and humble contraptions are immeasurably functional, low-maintenance and super adaptable (craft project anyone? Sure! Clogged drain? Here’s a stick, jimmy it in and swirl it around a bit). They are also delicate and prone…

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,…