NZPIF DISAPPOINTED WITH MINIMAL CHANGES TO RESIDENTIAL TENANCIES AMENDMENT BILL

The NZ Property Investors’ Federation is disappointed that the Residential Tenancies Amendment Bill has been released for its second reading with only minimal changes, writes NZPIF executive officer Sharon Cullwick. https://www.goodreturns.co.nz/article/976517165/comment-disappointment-with-the-residential-tenancies-amendment-bill.html – 13 July:   See also NZPIF Media release – https://www.nzpif.org.nz/news/view/60480 

https://www.scoop.co.nz/stories/PO2007/S00167/disappointment-with-the-residential-tenancies-amendment-bill.htm – 12 July

NZPIF conveys disappointment in latest changes in tenancy law reform https://www.nzadviseronline.co.nz/news/nzpif-conveys-disappointment-in-latest-changes-in-tenancy-law-reform-272329.aspx- 14 July

FALLING RENTS IN SOUTH ISLAND EXCLUDING CANTERBURY

“Survival rates” on rental homes in Queenstown, emptied of tourists by the pandemic, have seen new rental contracts in the South Island settling almost 10 per cent lower than a year earlier. Throughout the South Island, excluding Canterbury, new rental prices dropped 2.5 per cent in June adding to a dramatic 8.6 per cent drop in May — the biggest monthly fall in any region since Stats NZ started collecting the data in 2006. The move has been driven by falling prices in tourism hotspot Queenstown-Lakes District as the border closure has throttled back the region’s economy. Stats NZ’s rental price index now records new tenancies in the region being an average of 9.5 per cent cheaper than in June last year, even while new rental prices nationwide have increased 0.3 per cent. https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12347728 – 13 July

HOUSE PRICES CONTINUE TO RISE IN NELSON

House prices in Nelson have continued their upward trend, despite predictions of post Covid fall in the housing market across New Zealand. The median house price in Nelson rose 13.2 per cent year-on-year, from $531,500, to $601,500, the latest figures from the Real Estate Institute of New Zealand showed. The top sale price was $1,887,000, for a house on Wakefield Quay in Stepneyville, according to the REINZ House Price Index for June. https://www.stuff.co.nz/nelson-mail/news/122126740/rise-in-nelson-house-prices-despite-cliff-edge-forecast 14 July

https://www.goodreturns.co.nz/article/976517170/sales-prices-surge-up-defying-expectations.html – 14 July

https://www.stuff.co.nz/life-style/homed/real-estate/122136888/buyers-are-doing-whatever-it-takes-to-secure-properties – 15 July

https://www.interest.co.nz/property/106040/property-prices-were-probably-bit-stronger-auckland-they-were-many-other-parts – 15 July

https://www.stuff.co.nz/manawatu-standard/news/300056781/house-prices-continue-to-rise-in-palmerston-north-and-wider-region – 15 July

https://www.odt.co.nz/business/house-prices-rise-again-economists-expect-correction – 15 July

PROPERTY VALUES COULD BE AT A TURNING POINT

Property values could be at a turning point and may be heading for a 5%-7% fall, according to property data company CoreLogic.

The company’s latest Market Pulse report says its quarterly housing value index declined 1.5% nationally in the second quarter of this year, with larger falls seen in Auckland (-2.4%) and Dunedin (-2.5%) with smaller falls recorded in Hamilton (-1.1%), Wellington (-0.4%) and Christchurch (-0.4%), while Tauranga went against the trend and was up 1.39%. In regional centres the biggest declines were in holiday hot spots Queenstown (-7.2%) and Thames-Coromandel (-5.3%) with a mix of falls and rises in other centres (see the graphs below). The decline in values is unsurprising, given that housing market activity was severely restricted for much the second quarter and the broader economic repercussions that followed, but the CoreLogic report suggests the Q2 figures may mark a turning point for the market. https://www.interest.co.nz/property/106076/worm-seems-have-turned-property-values-main-centres-corelogic – 16 July

TRIBUNAL UPHOLDS $700 BREAK FEE FOR TENANT WITH DEMENTIA

The landlord agreed that the tenant could end the fixed term tenancy, provided she pay a $700 early release fee and remained liable for the rent until a new tenant was found. The tenant moved out just before lockdown on March 24 and applied to the tribunal for a reduction in her fixed term lease. The landlord, who was unable to relet the flat until June, applied for compensation. However, the adjudicator ordered that the landlord keep the $700 ‘’break fee’’ as compensation for extra costs and advertising. The landlord was also awarded $320 in final rent payments and the tenant was awarded $500 bond. Sharon Cullwick, executive director of the New Zealand Property Investors Federation, said $700 seemed quite a high fee in relation to the $280 weekly rent. She also agreed break fees had to reflect the true cost of replacing a tenant. But replacing tenants was expensive and could include cleaning and final inspections as well as advertising. https://www.stuff.co.nz/business/122135467/tribunal-upholds-700-break-fee-for-tenant-with-dementia – 15 July

A 3.5% RATES RISE IN AUCKLAND

Auckland councillors have voted to pass its emergency budget – 18 in favour; three against – and impose a rates rise of 3.5 percent. The council had been deliberating between a 2.5 or a 3.5 percent rates increase, and was aimed at repairing a $750m deficit while also funding repairs to the city’s damaged water infrastructure. The council had struggled with the 3.5 percent rates rise, he said, but a 2.5 percent rise would have meant cutting essential services “to the bone” as well as cutting infrastructure spending by $200m, Goff said. https://www.rnz.co.nz/news/national/421372/auckland-councillors-pass-3-point-5-percent-rates-rise-emergency-budget – 16 July

LABOUR’S STATEMENTS NOT TO SELL MORE STATE HOUSES NOW USED AGAINST THEM

Massey University associate professor Grant Duncan, who teaches public policy and political theory, said politicians were known to make statements without providing additional information to qualify it. While it made sense for the Government to sell housing stock that may not be fit for purpose or not geographically suited to demand, it had not done what it said it would and stop the sale of state houses, he said. “They didn’t stop selling, that’s clear,” Duncan said. “What you say today is going to come back to bite you tomorrow if you’re not absolutely correct to the letter. “This whole failure to deliver is being used against them.” https://www.stuff.co.nz/business/industries/122149832/government-sells-30m-worth-of-state-houses-after-labour-promised-to-stop-sales – 17 July

STRONG GEOGRAPHICAL DIFFERENCES IN THE LEVEL OF RENTS THROUGHOUT NZ

Residential rents were mostly higher in the upper North Island in the second quarter of this year and mostly lower in the South Island and lower North Island. Overall, the rises in the north of the country and the falls in the south almost evened each other out, with the national average rent (based on bonds received by Tenancy Services) increasing by just $3 a week (+0.7%), from $461 in Q1 to $464 in Q2. However there were strong geographical differences.  https://www.interest.co.nz/property/106084/average-rents-queenstown-lakes-declined-89-week-second-quarter-year-wellington-city – 17 July

NZPIF CONCERNED ABOUT SECOND READING OF RESIDENTIAL TENANCIES AMENDENT BILL

An update to the Residential Tenancies Act will reduce rental supply and worsen the housing crisis, says the Property Investors Federation. However, the Tenants Protection Association said the Bill just helped even up the balance between landlords and tenants. The Residential Tenancies Amendment Bill has been through the select committee stage, and is headed for its second reading in Parliament, but landlords say their feedback has not been acted on. Sharon Cullwick, executive officer of the Property Investors Federation, said one of the main concerns was the end of 90-day no-cause evictions. https://www.stuff.co.nz/life-style/homed/renting/122123782/landlords-say-concerns-about-residential-tenancies-amendment-bill-ignored – July 18

SERVICING TESTS HINDER HOME LOAN MARKET

Economist Tony Alexander, points to “apparent bank reluctance to ease servicing criteria” in the New Zealand market, in his latest weekly report. However, Alexander believes there could be good news on the way for borrowers, with increased competition in the home loan market, and possible cuts in one and two year rates in Spring. The independent economist’s latest survey of the property valuer market reveals volumes of enquiries for house valuations have risen by 50% in July. The data backs up strong REINZ figures, which revealed a stronger-than-expected property market in June. https://www.goodreturns.co.nz/article/976517192/servicing-tests-hinder-home-loan-market.html – 19 July

POSSIBLE FUTURE OF THE HOUSING MARKET

In April, economists were predicting Covid could cause a 10-20 percent fall in house prices. In June, median prices rose more than 9 percent – much more in some places. What is going on – and will it last? Norwell says September will be a key month in terms of what the medium-term future might be for the housing market. Kiwibank senior economist Jeremy Couchman says unemployment is key. He is expecting jobless figures to rise, with companies cutting the number of workers they have, and an increasing number of businesses going under. He predicts unemployment could potentially rise to around 10 percent, and that would see house prices likely to fall. Jeremy Couchman says internationally, housing affordability is seen as being when median house prices are around three times median incomes. In Auckland, for example, median prices have been closer to nine times median income. “There needs to be a price reset in terms of house prices. I think what Covid is doing is possibly accelerating the pace at which that reset might happen” https://www.newsroom.co.nz/what-becomes-of-the-housing-market – 19 July

ASB EASES LENDING SERVICING CRITERIA

ASB Bank has eased its lending servicing criteria after cutting home loan rates for high LVR borrowers last week. Advisers say the big four bank has slashed its test servicing rate from roughly 7% to about 6.45% for all borrowers, even if they have a deposit of less than 20%. The bank has also adjusted its living costs calculator, making certain costs slightly more expensive, brokers told TMM Online. One adviser said the changes have made it easier for borrowers overall, giving clients a net gain in servicing of about $400-$500 a month, or about $60,000 per $1,000,000.  https://www.landlords.co.nz/article/976517195/asb-eases-servicing-criteria – 20 July