Innholdsfortegnelse for February/March 2025 i NZ Property Investor

As I sit here writing this prior to the January 22 release of the December inflation numbers, I must admit to more uncertainty than normal around interest rates this year. We finished 2024 with the Reserve Bank all but guaranteeing a further 50 basis point cut at the forthcoming review, which is on February 19, but there are starting to be murmurs in some corners that 25 points will be enough. The general expectation is that inflation is under control at present, which does support further cuts to get what is very clearly a stagnant economy moving forward, but it must be kept in mind that the Reserve Bank tends to look 24-months ahead when making their cash rate decisions. While things look poor at present, business surveys are showing…

Although houses prices typically rise more than apartments over the longterm, the gap is not as wide as many people expect. On average, Kiwis move every fiveand-a-half years. During that period between May 2019 and November 2024, both houses and apartments had similar levels of growth, new data from realestate.co.nz reveals. Over this time, the average asking price of houses increased by 29.6 per cent, from $650,839 to $843,208. Apartments had a rise of 27.1 per cent from $590,720 to $750,611. Looking back 17 years, between November 2007 and November 2024, the national average asking price for houses increased by 102.6 per cent, from $416,173 to $843,208. In comparison, apartments had an 82.8 per cent increase during the same period, rising from $410,516 to $750,611. Realestate.co.nz spokeswoman Vanessa Williams says…

Q A family member is going to rent a house owned by the family trust, potentially at below market rental. The family member is a secondary beneficiary of the trust. Are the expenses reduced by the same percentage as the rent? Are there any tax implications? A The reducing of the rental because the tenant is a family member introduces a private and domestic component to the expenditure. Deductions would not be available, as those costs exceeded the extent to which the income had been discounted. The best policy in my view is to rent the property at full market value as supported by an independent rental assessment. All costs are then fully deductible. The trustees then can make a separate decision whether they wish to distribute trust funds to…

We've taken a look back over the past five years of Builderscrack data to give you a summary of what's shaped home improvement trends, from lockdowns, to the post-Covid renovation boom, and the economic shifts that followed. Since 2007, Builderscrack has facilitated over 800,000 jobs across 78 locations and 420 trade categories, which is why we're able to provide unique insights into the home improvement landscape across New Zealand. Here's what the data tells us about the journey so far and what could be in store for 2025. 2020: Projects came to a standstill With nationwide lockdowns in effect, all projects aside from emergency repairs were put on hold, bringing the industry to a standstill. Intermittent activity between regional lockdowns saw work resuming, but it was far from business as…

What makes the best investment - a new build or an existing property? Let's break down some of the pros and cons. New builds 1 Tax benefits: New builds previously had significant tax advantages. However, this no longer applies now that two-year brightline has been reinstated, and existing properties have full interest deductibility restored from April 1, 2025. 2 Higher initial costs: Purchase prices of new builds are on average 6 per cent higher than existing properties. This can result in lower rental returns which negatively impacts your cash flow, and your ability to obtain lending. 3 Delayed/reduced income: If purchasing off the plan, you may face delays in construction that can affect your surplus cash flow, especially if you have a construction loan with progress payments, rather than a…

The CoreLogic Buyer Classification figures showed that first home buyers (FHBs) accounted for 25.5 per cent of property purchases in November, which was down from 27.7 per cent in October and their lowest share of activity since May (25.1 per cent). At 25.1 per cent of purchases in November, “movers” (ie relocating owner-occupiers) were also less of a presence than they have been in recent months. At the same time, mortgaged multiple property owners (MPOs) have continued to move higher, and took 23.1 per cent of purchases in November, the highest share for more than two years. Of course, it's no major surprise to see mortgaged investors on the comeback trail, given that deposit rules were eased on July 1, the brightline test is shorter, mortgage interest deductibility is nearly…

Q How much of a deposit is needed to buy an investment property? Can I buy one just using the 50 per cent equity I have in my own home valued at $1.3 million? A With bank funding, you are looking at needing a 30 per cent deposit for existing properties and it's generally best to work off a 20 per cent deposit for new builds. Based off you having a $1.3 million personal residence with a $650,000 mortgage you have about $390,000 unutilised equity, which is the usable equity you can use for deposits. This is 80 per cent of the value of your home, minus the existing mortgage. So if you used the $390,000 as a 30 per cent deposit, you potentially could purchase investment properties up to…

In 1993, Shadi Salehpour arrived in Auckland with her parents and siblings … they were Kurdish refugees, fleeing war in Iran, and seeking safety in a tiny country 15,000km away. Shadi spoke no English. Her parents had no education, and could not read or write. And after the family settled in a new home, the 13-year-old was thrown into the maelstrom of teenage life - starting at high school with 1,200 Kiwi kids. “Being at such a large school and not understanding what anyone was saying was incredibly hard,” she says. Shadi had little education; she was taught some basics in Turkey before they moved to New Zealand, but it was limited. But she loved language and soaked up words like a sponge. “My best subjects were English and art.…

Tauranga is becoming an increasingly popular destination for those seeking a better quality of life. It is New Zealand's fifth most populous city, with an urban population of 162,800 or roughly 3 per cent of the national population and is one of the country's main centres for business, international trade, culture, fashion and horticultural science. The Port of Tauranga is New Zealand's largest port in terms of gross export tonnage and efficiency. Tauranga City Council and Bay of Plenty Regional Council are planning to prioritise growth in areas such as aquaculture, wood, energy, freight logistics, and information and communication technology. Bay of Plenty was settled by Māori late in the 13th century, colonised by Europeans in the early 19th century, and Tauranga was constituted as a city in 1963. By…

Property is New Zealand's largest industry. As a sector, we employ 10 per cent of New Zealand's workforce and contribute over $50.2 billion to GDP. Yet embarking on even the simplest development project often feels like herding cats. If property drives our economy, how can we make development easier, more sustainable, and beneficial for all? It's a fact; we are a small country at the bottom of the world. Such isolation and sanctuary might look good on a postcard, but it also complicates supply chains, inflates costs for imported building products, and makes it harder to find skilled staff. Critics might say we're not “good” at building at scale, but affordability and scalability are complex issues tied to our unique location and population size. Add to this, the cyclical nature…

It is the best of times; it is the worst of times. Meta's supposed commitment to freedom of expression by ditching professional fact-checkers leaves New Zealand property investors facing a paradox: making it easier to share information online inevitably makes it harder to trust what we see online. The only way to preserve and maximise our interests is to become more intentional about how we navigate the internet, especially when our rental portfolios are at stake. With Meta's shift to Community Notes, your Facebook feed is about to get messier than a student flat after orientation week #nohate. With 3.5 million Kiwis (72 per cent of us) scrolling Facebook monthly, we meet the moment by having a deliberate strategy for consuming and verifying property investment information. Community moderation Community moderation…

The Residential Tenancies Amendment Bill 2024 is set to bring a significant shift to New Zealand's rental landscape, particularly in the realm of pet ownership. Once enacted, landlords will face stricter limitations on declining tenant requests to keep pets, making it more difficult to issue blanket ‘no pets’ policies. This legislation seeks to enhance housing stability for tenants with pets while considering landlords’ interests. We cover the new law, valid reasons for declining pets, and the risks and benefits for landlords and tenants. A paradigm shift The amendment presumes tenants can keep pets unless landlords provide valid reasons to refuse, replacing blanket bans driven by concerns over damage, noise, or allergens. Finding pet-friendly rentals poses significant challenges for many tenants, especially those with pets. The government aims to improve quality…

Sally Lindsay explores the drivers influencing property in Aotearoa. Buyers leave the market in droves Demand from home buyers has weakened markedly. Both Trade Me and realestate.co.nz say December ended with little interest from buyers. It was more than just the seasonal pullback, realestate.co.nz says. In their terms it was “exceptionally lukewarm”. New listings were low, and the national average asking price was almost its lowest since February 2021 at just $820,250, down $34,500 for the year. The website says despite the low new listing level, there were still 29,500 properties for sale at the end of the year, after peaking at almost 34,000 in November. Yearon-year that is 18 per cent “more choice” than a year ago, which itself was near a recent high. Meanwhile Trade Me had a…

A Canterbury University study has shown the density of cycleways around houses is becoming a subtle but important factor for homebuyers. Buyers who value active transport options and local connectivity feel cycleways are an asset to urban areas, both economically and socially. The research done by students of the Research for Resilient Environments and Communities paper led by professor Simon Kingham were provided with the question, which the community raised. Student Caleb Sullivan was part of a research team that worked with a local planner to see what impact cycleways had on property prices. They then used an internationally recognised hedonic pricing model, which figures out how different features of a house, like its size, location, or amenities, affect its overall price, using this model they found cycleways had a…

A Since the house was built in the 90s, it's important to determine if it was constructed before or after the 1992 Building Code change, which increased the required railing height to 1000mm. Railings built prior to this could still comply with the older standard of 800mm. You can confirm the construction date by contacting your local council or obtaining the property's file. Regardless of compliance with past regulations, as a landlord, you have a duty under the Health and Safety at Work Act (HSWA) to ensure the safety of your tenants. If the 800mm railing poses a risk, it's advisable to upgrade it to meet modern safety standards. If you assess the railing as safe but your tenants are still concerned, you can encourage them to formally request a…

Happy new year everybody, I would like to wish you all a prosperous 2025. One thing Kiwis like to do is to try and guess where things will move in the short term. Which way will mortgage rates go in the next six months, which property market will perform the best in the next 12 months? This is ironic, because property is a 10-20 year ‘bet’ for most buy-andhold investors, and you will go through some inevitable ups and downs. When you're in a down market, the fact that there was a nice boom five years earlier does not cheer you up, and when you're on the up, the slump of yesteryear quickly fades in memory. More than that, a property market could be performing great, and you wouldn't know…

If ever there was a grey area for property investors, it's the question of whether work done to a property constitutes tax-deductible repair work or non-deductible capital expenditure. There is a general permission in the act that allows a deduction for repair costs where there is a link between the cost incurred and the ongoing generation of assessable rental income. This general permission is tempered by the capital limitation that says that where works are capital in nature, essentially amounting to improvements or betterment of the property, those works are non-deductible capital costs. This means costs can either be fully tax deductible or non-deductible and non-depreciable if they amount to improvements to the building. Deductibility tests Most investors are familiar with the concept that improvements are non-deductible, but the specific…

Summer is here, bringing with it long, sunny days and the familiar scent of barbecues wafting through the air. For many of us, barbecues are more than just meals; they're an opportunity to reconnect with family and friends, reflect on the year gone by, and share plans for the months ahead. If the topic of property investing arises in these casual conversations, you might find yourself fielding some tough questions. To help you handle these discussions with confidence, here are a few handy facts about property investing and the recent changes introduced by the coalition government. How many private landlords are there in New Zealand? Over 304,000*! That's a lot of voters, especially if you include their family members. How many private rental properties are there in New Zealand? According…