Over the years Dame Rosanne Meo has lobbied for a law change so all Property Managers are regulated. The Real Estate Agency Authority (REAA) is arguably doing a great job with the Real Estate Agency Act and while property managers within a Licensed Agency are regulated under this Act there are hundreds of property management managers that are not.
Property asking prices in the provinces grew by a higher percentage than properties in Auckland. According to Trade Me Sales Price Index for October 2015 asking prices in Auckland increased by 2 percent compared to 3.8 percent in the provinces.
Traditionally property investors bought property for the rental yield and potential capital gain was considered a bonus rather than the core reason for the purchase. Nowadays with property values making headlines almost weekly there has been a notable shift in what’s important to a growing number of investors.
Tenants will be happy – the latest news on rent rises is they’ve plateaued. Trade Me’s Rent Price Index reports rents are up just $20 per week compared to the same time last year.
Head of Trade Me Property Nigel Jeffries says:
There as been no change in the OCR however another cut is expected in 2015 and there maybe a further cut in 2016. Future movement in the OCR is said to be linked to the value of the NZ Dollar and right now the NZD is too high to maintain inflation at the target rate of 2%. A lower OCR will provide some upside for home owners with lower interest rates.
Regional towns like Te Kuiti are often overlooked by investors mainly due their size. The town of Te Kuiti does have permanent population of less than five thousand people however it’s here to stay as the administrative and main trading centre in the Waitomo District which has the popular tourist attraction – Waitomo caves.
Investors are making their own luck in the regions and in the least popular suburbs of Auckland. Property values have sky-rocketed pretty much everywhere in Auckland however there are investors still buying properties under market value. They are just not in the popular suburbs and the properties need a bit of work.
Auckland rents have increased by 28 percent in last 5 years, while property values in this region have sprinted ahead at 63 percent. In the regions, rent increases over the same period from August 2010 have also moved upwards by 20 percent. Property values outside of Auckland have also increased by the same amount – 20 percent.
The bright-line rule and LVR restrictions come in this week, but don’t expect any major change in investor behaviour. Investors who have been actively buying rental properties over the last few months have already changed their behaviour so they can continue investing in property.
The new RBNZ LVR restrictions have been in play for some time and many property investors in Auckland and around the country are slowly getting on board with them. However it’s clear there are still a lot more questions being asked about this rule and the ‘bright-line’ test than there are answers.
Auckland is New Zealand’s economic hub and with our economy set to continue to grow over the next couple of years demand for housing in Auckland will remain high. Property values in New Zealand have increased by more than 25 percent in 3 years and NZHerald also reports Auckland’s the median house has risen by 46.5% however there are investors buying Auckland residential property for less than market value.
Is it now ‘business as usual’ in America for the ‘liar loans’ i.e. sub prime mortgages? These mortgages were responsible for the global financial crisis that crashed financial markets around the world and left thousands of people homeless and jobless in America and other countries.