The residential rental housing market is never dull, but what an eventful few weeks we have just had …
Were you one of the 120,000 people who checked out 10.3 million properties on the first day of online access to Auckland’s new property revaluations? Of course Auckland Council had already pre-empted a lot of increases by announcing the average house price had risen in value by 46% to $1.076 million since the last revaluation three years ago. But just how these increases translate as far as rate increases are concerned, will not be clear until next June when Auckland Council sets its new rate level. Regardless of how much rates increase, it is likely that we will see upward pressure on residential rents as property owners and investors attempt to maintain equilibrium in their rental returns.
Those new revaluations may already be out of date
It’s not news to most property owners that the Auckland housing market has been cooling for some months, but this also means that it is likely some properties may be worth less than their new revaluation. According to the Real Estate Institute (REINZ), figures just released for the year to the end of October 2017, the Auckland the median property sales price fell by 3.2% year-on-year to $850,000. This is the biggest fall since December 2010, and the lowest median price in the last 16 months. However, it might not be as grim as it first seems, as there has been a glut of apartment sales in what was the old Auckland City Council area, and this has brought down the median value for the whole Super City region. And of course it depends on how you measure ‘price’, as REINZ also do another calculation using a House Price Index (HPI) formula, which for the Auckland City legacy area, only resulted in a decrease of 0.8% year-on-year. HPI looks at the mix and value of the properties sold, not just the sales price, which makes an allowance for all those apartments. Feeling better?
Hold, don’t sell
The slowing down of Auckland residential property sales has seen a lot more previously ‘for sale’ properties that haven’t achieved an acceptable sales price, coming on stream as rental properties. Depending on the amount of equity in the property, many of these initially reluctant landlords have been surprised at the returns that can be achieved with a well-managed rental investment property. Quinovic Parnell and Quinovic Viaduct offer free residential rental appraisals. Give us a call to discuss your particular circumstances. You might be surprised at what you can achieve. To be fair, it’s not always smooth sailing being a residential property landlord. This month the Dunedin District Court overturned a ruling known as the Vic Inglis Tenancy Tribunal decision, where rental property owner Vic Inglis had been ordered by the tribunal to pay his former tenant over $10,000 in rental refunds, due to having non-compliant alternations in his rental property.
Common sense did eventually prevail as the district court stated in its ruling that although what was essentially a technical breach was “unlawful”, as the tenant had not suffered any detriment from the technical breach, she must pay back the amount she had received. Moving forward, this means where a rental property does not have a full Code of Compliance sign-off, the Tenancy Tribunal adjudicators can now make rulings that consider both the degree of unlawfulness and the degree of harm caused to tenants. This should help ensure that resolutions are fair to all parties. We say — landlords don’t knowingly take a risk, make sure your rental property is fully compliant with all building regulations.
On a positive note for tenants
Housing minister Phil Twyford has announced the government plans to pass the Healthy Homes Guarantee Bill by Christmas. At Quinovic Parnell and Viaduct, we have been talking to our property owners about the insulation requirements for their rental properties – compulsory from 2019 – for some time. The Labour government has now clearly indicated there will be a minimum requirement for heating as well. This is likely to be in the form of heat pumps, with the standards for insulation and heating to be confirmed within six months of the bill being enacted.
KERRY KIRWAN | Business development manager| firstname.lastname@example.org
022 010 8005 | quinovicparnell.co.nz
ROBBIE KING | Business development manager | email@example.com | 0275 059 475
09 302 1998 | quinovic-viaduct.co.nz