Innholdsfortegnelse for July 2024 i NZ Property Investor

Surveys offer interesting insights into the behaviour and attitudes of the cohort they investigate. This year’s New Zealand Property Investor magazine sentiment survey captures a time and place in property, and the results are enlightening. When we last conducted a survey, the main issue of concern for property investors was government regulation. This year it’s interest rates and lack of yield. There are always challenges for investors, but they change over time. But one thing stands out – property investors in New Zealand are in it for the long haul. Investors who responded to our survey overwhelmingly buy and hold or buyrenovate-and-hold. Many have been investors for more than 20 years (nearly 50 per cent) with a further 25 per cent having invested for more than 10 years. And their…

Managing your investment property or properties can be a full-time job. Apart from the time commitment, landlords need to be up to date with legislation and have a firm but fair demeanour when dealing with tenants. Serious problems can arise from tenants not paying their rent on time, exhibiting anti-social behaviour and damaging your property ... situations many landlords find difficult to cope with. And most landlords don’t have the spare time to field calls about a broken tap or other maintenance issues. Specialist property managers have become the go-to for many landlords over the past few years, particularly since legislation over renters’ rights, Healthy Homes and tax. If issues need to be dealt with at the Tenancy Tribunal, this has also become a major concern for many landlords. So,…

HOUSE PRICES: DOWN REINZ data shows the national median sale price declined slightly by 1.3 per cent year-on-year, from $780,000 to $770,000, and dropped 2.5 per cent compared with April, from $790,000 to $770,000. The seasonally adjusted figures show a 1.2 per cent drop, showing prices performed slightly below usual. Ten of 16 regions had year-on-year price increases with the West Coast leading the way with a 14.1 per cent increase, from $355,000 to $405,000. Compared to April, only three additional regions had median sale price increases (Hawke’s Bay, up 2.3 per cent to $675,000; Manawatu-Wanganui, up 0.9 per cent to $560,000; Canterbury, up 1.5 per cent to $680,000). OCR: STEADY The Reserve Bank’s official cash rate has been held at 5.5 per cent since July last year after the…

Choosing a good real estate agent is key to successful flipping, says Diana Levinzon. It was a big lesson when she started out. She had an agency that struggled to sell the first property and Levinzon ended up going for a conjunctional with the first and a second agency. The other agency managed to deliver. It was difficult because she had built a good relationship with the original agents. “But, with flipping you really need to get things sold. You can’t sit on them for long.” She says the agency that had the property originally was struggling quite a bit to sell it, but the second agency had a buyer and the property was sold for a good price. Having established good relationships with agents, Levinzon often gets a first…

YOUR ACCOUNTANT The latest buzzwords “build to rent” are used to describe large-scale residential developments owned and funded by institutional investors who offer long-term leases and secure tenancies to occupiers who in turn benefit from more certain tenures. But building to rent, in the traditional sense, is nothing new. Changes to planning rules that encourage higher-density housing has offered traditional investors the opportunity to redevelop property to build new dwellings that are intended to be retained as rentals, rather than sold for a developer’s profit. So, while the investor is undertaking a development, they are doing it with an intention to retain for rental rather than an intention to dispose of the development on completion. The properties developed are accounted for as capital account assets of their investment activity rather…

REGIONAL REVIEW SOUTH AUCKLAND Auckland’s south is a melting pot of cultures and the heart of vibrant Māori and Pacific communities. The area of South Auckland is not officially defined ... it’s just something people have come to label and generally agree on. Manukau is the heart of Auckland’s south, a lively cosmopolitan centre, commercial hub and home to the largest Polynesian community in the world as well as Auckland Airport, MIT (Manukau Institute of Technology), the south campus of AUT (Auckland Institute of Technology) and Rainbow’s End. It’s the biggest and most established suburb outside the main city centre. While the South Auckland suburbs are generally in the lower socio-economic bracket, areas such as Mangere Bridge are seeing significant housing and infrastructure development, which is bolstering rents and property…

AUCKLAND NEXT MEETING: Go to www.apia.org.nz/events for details on upcoming meetings. APIA hosts 100 events and presentations for its members each year. WAIKATO NEXT MEETING: Wednesday, July 10, 7.30-9pm. TOPIC: Contact admin@waikatopia.org.nz for more information. TARANAKI NEXT MEETING: July 16 at Plymouth International Hotel, 220 Courtney Street, New Plymouth. TOPIC: Are new builds still a good choice? MANAWATU NEXT MEETING: July 3 at SALT Auditorium 35 Matipo Street, Palmerston North. TOPIC: Ilse Wolfe, Property Investment Coach. WELLINGTON NEXT MEETING: July 11, 2024 at Lifepoint Church, 61 Hopper Street, Mount Cook, Wellington 6011. TOPIC: Property Development: Palmer & Cook Developments - Details TBA. NELSON NEXT MEETING: TBA. TOPIC: Contact nelson@nzpif.org.nz for more information. CANTERBURY NEXT MEETING: July 23 at CPIA Office, 22 Buchan Street, Christchurch. TOPIC: CPIA AGM - the Executive…

FINAL WORD At Property Brokers we run our financial year from July to June, and at the time of writing I am finalising our budgets for the next financial year. I enjoy this task; it’s a time of reflection as I review our budgets for the current fiscal year and assess how accurate I’ve been. When I calculate our budgets, I review several factors. • How many new properties will come on board? • How many properties will we lose? • What will happen with rents? For the 2023-2024 fiscal year I predicted an approximate 10 per cent increase in our average rent. This doesn’t mean all rents will rise by this amount. Typically, properties leaving the rental market have lower values than new ones. However, pressures on the rental…

In its monthly series of new lending fully secured by residential mortgages, the RBNZ’s figures show residential investor mortgage lending rose to $1.5 billion in April, with one-year fixed terms making up 45 per cent, or $666 million, of new lending, down from 45.7 per cent in March. Of the total $1.5 billion taken out, $1.2 billion was on fixed interest terms. The share of new investor lending on six-month fixed terms rose from 16.9 to 18.7 per cent, or $276 million. The share of three-year and four-year fixed terms dropped from 2.2 to 1.6 per cent and from 0.3 to 0.1 per cent, respectively. These figures are at historical lows. NEW LENDING Total monthly new residential lending was $6 billion in April, up 4.4 per cent on March’s $5.7…

OUR EXPERT PANEL 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 Withers and his team specialise in advising on property-related transactions, valuation and restructure services, and tax planning. Withers Tsang, phone 09 376 8860, www.pfkwt.co.nz RYAN WEIR Ryan Weir 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,…

YOUR RATES While the Reserve Bank continues to jawbone and claim we will be well into the 2025 calendar year before we see a cut to the official cash rate (OCR), it’s questionable how many people actually believe them. ANZ economists recently pulled their expectation on the first cut forward from May next year to February and others, such as former BNZ chief economist Tony Alexander, says we’ll see the first cut in November this year. The 525 basis points (5.25 per cent) of tightening we have seen this cycle is clearly doing what the bank wants. It’s apparent we have moved to the complete opposite of where we were a couple of years ago when employees were demanding high pay rises to stay on. Now, many are just happy…

YOUR LAWYER The development community is often frustrated by the time it takes for consent authorities to process resource consents and fulfil their obligations in respect of subdivision consents. Consent authorities typically hold the power and there are no prescribed timeframes once a consent has been granted. However, the tide may be turning on the balance of power after a recent decision of the Environment Court in the Queenstown-Lakes District. Hensman v Queenstown Lakes District Council concerned a subdivision in Queenstown. The property owners sought resource consent to subdivide two allotments into three. Conditions required that the works be carried out in accordance with the council’s land and development code of practice (code condition 8) and that certain engineering works were certified by council prior to the works being undertaken…

NZPIF FROM THE PRESIDENT’S DESK SUE HARRISON All PIAs are affiliated to the New Zealand Property Investors’ Federation (NZPIF) and contribute to essential national advocacy, education, networking and supplier benefits. Here are the top five benefits of joining your local PIA: 1. Advocacy and representation: One of the foremost benefits of PIA membership is the robust advocacy and representation the organisation provides. NZPIF actively engages with government bodies, policymakers, and regulatory authorities to ensure the interests of property investors are represented. This advocacy work is crucial in influencing legislation and policies that affect property investors, such as tax regulations, tenancy laws, and housing policies. By being a member, property investors have their voices amplified through a collective body, ensuring that your concerns and suggestions are heard and considered in parliament…

UP FRONT NEWS CoreLogic’s Buyer Classification figures show mortgaged multiple property owners – MPOs, including investors – accounted for around 21 per cent of property purchases in May, a continuation of the historical lows for this buyer group’s market share that we’ve seen since mid to late 2022. For cash MPOs, the same figure has been running at around 14 per cent (with some variability from month to month) since it climbed up from a 12 per cent trough in 2021. Of course, the number of purchases involving investors has been rising as the wider property market has slowly started to become more active in the past six to nine months, while it’s also important to note that a market share of 21 per cent for mortgaged MPOs isn’t an…

Disagreements between landlord and tenants in a Browns Bay rental have led to what adjudicator K Tan called an extremely sad ending. “I did not understand, and still do not, how a sixand-a-half-year good landlord/tenant relationship could turn so bad and end up in the tribunal. “I hope both parties can move on from here. I am probably wishful because my decision will not keep both parties happy. It is not uncommon for the losing party to say my decision is wrong or unfair, but I sincerely hope they can move on from here.” Tenants Zoran Ivanovic and Vanja Zivkovic have to pay landlord Michelle Robinson $14,354.44 in rent arrears. The arrears totalled more than $20,000, but they won some aspects of the tribunal hearing and the awards against Robinson…

An inviting and well-designed living space will create a place where people want to be. Whether that’s to sell, rent or live in yourself, a good design will make your property desirable as this is the area where its occupants will live. With most homes now having open plan living areas, living spaces include your lounge, family or rumpus rooms, and dining areas, which often flow into kitchens. And while size and scale matter, size isn’t everything ... a well-designed layout will provide a more functional space than just making it bigger. THE LAYOUT Start by taking stock of what’s in your living spaces, how they work, what works and what doesn’t. Where are the doors and thoroughfares, connections to other spaces, natural lighting? This all helps provide a clear…

YOUR DEVELOPER When we look into the demographic of new home buyers we can see their priorities are changing with the times. What the buyer wants now is different from what buyers wanted 20 years ago. There are trending design elements proving popular with current buyers, making them attractive features for developers to include. SUSTAINABILITY Sustainability in the construction industry continues to push through as a leading trend buyers care about. People are increasingly conscious about their carbon footprint and what they can do to reduce their impact on the environment. Marketing a build constructed from eco-friendly materials is a fantastic way to appeal to buyers as well as contributing towards a greener future for residential construction. To select an eco-friendly system it’s wise to compare construction types by performance…

YOUR REVIEW Wellingtonians Mark and Adalynn didn’t feel they were too young to think about retirement at 30. They had big dreams and they wanted a $150,000 annual passive income by the time they hit 56. Here’s how Mark and Adalynn used property investment to make this dream a reality. GETTING STARTED When Adalynn read an article about how superannuation was likely to change in the future, it scared her. She got her husband on board and they decided to invest in property. “We went to the bank and asked how much we could borrow for an investment property,” Mark says. Up until then, the couple had been investing in funds and shares, but Adalynn said she wanted to make use of the bank’s money as well as their own.…

NZPIF SPOTLIGHT Tim Calder’s journey into property investment began early. As a teenager, he read about wealth creation through property and pursued relevant studies in high school and university. Despite his strong theoretical knowledge, he realised that real-world property management required more than just academic skills. He needed effective communication skills to manage tenant-landlord relationships. In 2002, Tim made his first significant step into property investment by purchasing a student flat. His initial tenants were friends, and his leadership skills ensured a smooth experience. However, dealing with tenants outside his personal circle presented new challenges. Establishing a professional yet supportive tone with new tenants was crucial, and this was an area where he needed to improve. Early in his career, Tim was mentored by two property developers who provided guidance.…