Auckland’s New Property Millionaires
The residential rental housing market is seldom dull. What an eventful few weeks we have had!
Did you check the new Auckland property revaluations recently? On the first day of online access 120,000 people checked 10.3 million Auckland Council property revaluations.
Auckland Council pre-empted a lot of increases. They announced the average house price rose 46% to $1.076 million since the previous revaluation three years ago.
In June 2018 Auckland Council sets its new rate level. It will be clear then how these increases translate into rent increases. It is likely we will see upward pressure on residential rents. Property owners and investors will attempt to maintain equilibrium in their rental returns.
Those new revaluations may already be out of date
Most property owners are aware the Auckland housing market has been cooling. It also means it is likely some properties may be worth less than their new revaluation.
Real Estate Institute of New Zealand (REINZ) figures released for year ending October 2017 state the Auckland median property sales price fell 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. Yet it might not be as grim as it first seems.
There has been a glut of apartment sales in what was the old Auckland City Council area. This brought down the median value for the whole Super City region. And it depends on how you measure “price”. REINZ also do another calculation using a House Price Index (HPI) formula. For the Auckland City legacy area, this only resulted in a decrease of 0.8% year-on-year. HPI looks at the mix and value of the properties sold, not sales price alone. This 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 properties which didn’t achieve an acceptable sales price, convert to rental properties. Depending on property equity, many reluctant landlords with a well-managed rental were surprised at the achievable returns.
Quinovic Property Management Parnell offers free residential rental appraisals. You might be surprised at what you can achieve. Get in touch with Kerry Kirwan to discuss your circumstances by clicking on the link below:
It’s not always smooth sailing being a residential property landlord. In November 2017 the Dunedin District Court overturned a ruling known as the Vic Inglis Tenancy Tribunal decision. The Tribunal ordered Vic Inglis, the rental property owner, to refund his former tenant over $10,000 in rent. This was due to having non-compliant alterations in his rental property. Common sense prevailed. The District Court ruled that although the technical breach was “unlawful”, as the tenant had not suffered from the breach, she must pay back the sum she had received.
Where a rental property has no full Code of Compliance sign-off, Tenancy Tribunal adjudicators will be able to base their rulings on the degree of unlawfulness and harm caused to tenants. This should help ensure that resolutions are fair to all parties.
We say landlords should ensure their rental property complies with all building regulations and not knowingly take risks.
On a Positive Note for Tenants
Housing Minister, Phil Twyford, announced Government plans to pass the Healthy Homes Guarantee Bill by Christmas. Insulation requirements will be compulsory from 2019. At Quinovic Parnell we have been talking to our rental property owners about insulation requirements for some time.
The Labour Government has indicated there will also be minimum standards for heating which is likely to be in the form of heat pumps. Confirmation of insulation and heating requirements will be within six months of the Bill enacted.