Blog: The Landlord says...

One of the reasons we call our property investment website Landlords.co.nz is to remind people that buying a property isn’t just an investment.

People who become property investors are in reality setting up a business providing a service to customers. The service is providing accommodation.

Often these “customers” are the more needy people.

How well this service is provided by New Zealand’s quarter of a million landlords is a moot point. It’s also one I will candidly say I have no idea how they are doing. Looking at the Tenancy Tribunal there are plenty of disputes and there are just as many bad landlords as there are bad tenants.

Keeping this idea of service in mind it is pleasing to see the NZ Property Investors’ Federation (NZPIF) has developed a Code of Practice for its members. I’m all for raising the bar and making sure that the service provided is excellent.

What I do wonder though is why it is made voluntary? Surely if you have a code then all members should abide by it?

A while back there was a proposal that suggested all landlords should belong to a professional body like the NZPIF. This is, after all, no different to what other professions/vocations do, so why not do it with this group of business people?

I understand there is quite a bit of discussion amongst card-carrying NZPIF members about the code.

What would be really good is if they could develop this into some sort of brand so good tenants seek good landlords – these would be NZPIF members which abide by the code.

That would be a win-win situation and one which would encourage people to join associations.

An interesting thought to ponder.

Sunshine. It’s one factor economists don’t look at when they do their predictions, but I reckon it has a part to play in the housing market.

Over the past week I have been out talking to property people in Rotoura as part of a feature we are doing for the October issue of the NZ Property Investor Magazine. What has surprised me, a little, is how positive everyone is feeling.

Through winter, up until July or August things were pretty bleak in the market. Prices were down, properties weren’t selling and people were staying home.
Indeed three real estate offices have disappeared in the city this year – a true sign of how tough the market is.

Yet, the people we spoke to all told similar stories, that in the past few weeks there has been a real turnaround in sentiment and activity. (One even showed a graph supporting the view that the market had picked up a little, so it wasn’t just real estate sweet talk on show!)

More than one of them looked out the window and suggested that better weather and glorious sunshine were helping the market.

Sure things aren’t going gang-busters, but boy it is a lot more cheerful. A view which was interesting is that Rotorua has always been a popular place for property investors as it was affordable, didn’t have the big swings in house prices and generally investors could get good yields.

With characteristics like that you could argue that it will be one of the first places to attract the attention of buyers again as the market slowly gets to its feet.

If the sun is helping to make the Rotorua market more positive, one could expect that the same is happening elsewhere. I’d love to hear your thoughts, send them to thelandlord@landlords.co.nz

PS: We are looking at Rotorua as the NZ Property Investors Federation is holding its annual conference in the city at the end of the month. More details are at http://www.propertyconference.org.nz

Housing is, I predict, a topic which will raise its head more in this election than previous ones.  Why? Well the whole affordable housing issue is one which gets plenty of air time at the moment. With the government getting a bill through Parliament this week it is likely to be something talked about during the campaign.

With households under more pressure from higher costs such as petrol and mortgages, and the two big parties positioning themselves in the middle of the political spectrum, the battle for the mortgage belt is likely to be intense.

For property investors there are a series of areas they should be looking at when considering their vote. This week the Greens and National released some policies worth noting.

The Greens have made it clear they would like a capital gains tax on property.

They say that they would manage “investor demand in the private sector by introducing a capital gains tax on all but the family home and tightening the rules around Loss Attributing Qualifying Companies and equivalent methods of achieving tax deductions.”

Meanwhile the National Party released its immigration policy. You may wonder what this means for the property market. It is clear from research that immigration is one of the key drivers of house price growth.

The logic is simple. If you import more people into the country, then you need more houses. Supply and demand means that prices are then pushed up, this is particularly so in Auckland.

While the latest immigration numbers show the number of people coming into New Zealand is starting to rise, the Nat’s policy looks like it wants to increase immigration levels even further. (Although it is unclear what sort of number they are targeting.)
This policy is, arguably, a plus for people who want house prices to rise. (But may be not so good for first home owners wanting to buy.)

My guess has always been that property investors lean heavily towards the right rather than the left. (This was made clear in an email newsletter I saw from one developer this week.)

The two policies out this week do nothing to change that view.