Rental Property Focus Investors sit in wait New Zealand real estate sales figures A recent survey has found the changes announced by the According to the latest figures released by the Real Estate Institute of New Zealand Government in Budget 2010 have had little impact on the the median residential property price in June increased on both the previous month and on June 2009, lifting to $352,500. Sales however continued to trend confidence of property investors. down, with only 4575 properties sold - 631 fewer than in the previous month and The recent quarterly survey by QV, which for the first time included a set of 1465 less (-24%) than in June 2009. questions specifically for property investors, showed that despite the taxation changes few are planning to sell. REINZ has also reported the median number of days to sell a property rose to 45 in June. In fact, over half of property investors said they intend to keep their current portfolio and a total of 20% intend to buy investment properties - 12% intend Month Median price No. of sales Median days to sell to buy more and 8% are intending to sell then re-buy. June 10 $352,500 4575 45 May 10 $350,000 5206 43 Of the few that said they are intending to sell, most are either going to do so April 10 $356,000 5207 40 quickly or not for at least six months. March 10 $360,500 6161 35 Meanwhile of those planning to buy, few intend to do so within three months, February 10 $350,000 5029 46 with 31% saying they intend to buy in three to six months, 31% saying it January 10 $350,000 3666 43 would be in six to 12 months and 29% indicating they intend to wait at least December 09 $360,000 4957 33 six months. November 09 $355,000 6056 33 October 09 $355,000 6091 31 The survey also found that while 39% of property investors intend to leave September 09 $350,000 6464 33 rents unchanged over the next six months the majority of landlords (53%) August 09 $342,250 5878 34 intend increasing rents in that period, mostly by 1% to 5%. July 09 $340,000 6014 37 In terms of the changes announced in the Budget, some 35% of the property June 09 $340,000 6040 41 investors who responded to the survey said they considered the biggest Source: Real Estate Institute of New Zealand financial impact to be from changes to depreciation rules, 27% cited the GST increase, 24% said lower personal income tax while only 10% said changes to LAQCs and the use of Trusts would have the biggest financial impact. Rental prices (New Zealand totals) Frank Newman, a property investor and the author of numerous books on The latest data available shows a decline in the volume of properties let, with property investment, says the survey confirms investors remain optimistic only 8734 properties let in June compared to 9709 for the same time last year about the outlook for property investment but most are taking a cautious (down 10%). However, there has been an increase in median rents between approach, at least in the short-term. June 2010 and the same month last year, with the biggest gain (4.9%) in the “Clearly most see little need to buy properties while prices are flat or even four-bedroom category. falling, preferring to wait knowing that negative cash flow is unlikely to be recovered by rising property values,” he says. JUNE Median Rental Range Number let No. of rooms 2010 2009 2010 2009 2010 2009 “They are instead taking a cautious approach, keeping their funds and credit One $227 $220 $169 – 285 $170 – 280 1383 1456 lines in reserve and waiting to re-enter the market. Two $285 $280 $235 – 350 $230 – 340 2856 3185 “Further, while thinking about increasing rents it seems most do not intend to Three $340 $330 $290 – 400 $285 – 390 3545 4011 aggressively pursue this course.” Four $430 $410 $350 – 530 $340 – 500 950 1057 Source: Department of Housing and Building Harcourts is New Zealand’s largest real estate group with around 180 offices nationwide, more than 1800 sales consultants and a property management team of more than 150 staff who together manage in excess of 11,000 properties. Harcourts also has offices in Australia, Fiji, Asia and Africa, and is entering the USA. Visit www.harcourts.co.nz for more information. New industry-leading landlords insurance RTA changes now law Clients of Harcourts’ New Zealand property management team can now benefit The Residential Tenancies Amendment from two industry-leading insurance products available exclusively to them. Bill has now become law. The new Landlords Dwelling Insurance and Landlords Advantageous features of the Insurance Express The bill, which according to the Government Protection Insurance products have been developed policy include: aimed to better meet the needs of landlords and by Harcourts’ specialist division Insurance Express • claims for loss of rent due to malicious damage are tenants in today’s rental market, was passed in association with Ansvar Insurance Limited. paid from day one; into law by Parliament on 21 July with no last- • there is only one excess for damage (rather than minute changes. Exclusively available to landlords with property one excess per room) managed by Harcourts, the new insurance Amendments to the original 1986 Act include clearer • there is no excess for broken glass or lost key products are believed to be the best in the market, and fairer processes for terminating and renewing claims. says Mortgage Express and Insurance Express CEO tenancies, measures to encourage landlords and Andrew L’Almont. Mr L’Almont says the Insurance Express team is so tenants to comply with their statutory obligations, confident about the cover it offers, underwritten by and enhancements to dispute resolution. “Like Harcourts Property Management team we Ansvar Insurance Limited, that there is 30-day money know how important it is for landlords to protect their The Act has also been extended to cover boarding back guarantee (providing no claim has been made investment and to ensure they are covered for loss of houses. during that period). rent or malicious damage for example, and we wanted to be able to provide Harcourts’ clients with a product Harcourts New Zealand Property Management Business A key change for landlords is that abandoning superior to those on offer through other channels. Operations Manager Carol Benny says the initial tenancies with rent arrears and no reasonable excuse feedback on the unique new offering has been positive. will be unlawful, and tenants could be required to pay “So, having researched what was already available up to $1000 compensation. in the marketplace, we have put together two “I’d encourage all landlords to talk to their Harcourts products that combine the best of all of the existing Property Manager about the new insurance products The new laws will come into force later this year, options to create what we believe is industry-leading available exclusively to them as I’m sure they’ll find once supporting regulations have been approved landlord cover.” what is on offer is definitely the best on the market.” and published. Did you know? largest commercial real estate service providers has entered Australasia. Combining the best of both, • In recent weeks new Harcourts offices have opened in Auckland’s Greenlane suburb and in the city’s • Harcourts is entering the USA in a joint venture with NAI Harcourts will provide world-class commercial Westgate Shopping Centre, plus in Canterbury’s Altera Real Estate which has 21 offices in California, and industrial real estate services in New Zealand Pegasus Town and in Wairoa on the East Coast. A one in Oregon and one in Hawaii and a total of 700 and Australia. new property management office has also opened sales consultants. • At the 2010 REINZ National Real Estate Auctioneers in Lower Hutt. • In the most significant development in the Championships Harcourts’ auctioneers were named • More than $660,000 has been raised for The commercial property market in years a new joint winner and runner-up in both the senior and novice Harcourts Foundation and over $350,000 donated to venture formed by Harcourts and one of the world’s competitions. 81 charities in New Zealand and Australia to date. While every effort has been made to ensure that the information in the publication is accurate we recommend that, before relying on this information, you seek independent specialist advice.