APRIL 2021 Have the new rules had any effect yet?

[Chris W]

I would like to thank Adrian for increasing my net worth and a big shout out to Grant and Cindy for my future NEW cashflow from rents increasing, it will come in handy when my international travel restarts in the next year or so.

15 months ago, people were thanking Adrian, Grant and Cindy for the large increases in net worth due to large rises in house prices ...

[chook]

What's the source?

Tony Alexander

[Frezzinghot]

When all the signage is in Mandarin... for a whole block of shops and factories.

Will I ever see a NZ street sign in Mandarin?, the signs at the airport have already gone that way.





But we digress,

Been to many Auctions lately?

Did you see who's putting down the high bids?

Any inside info that these guys are fronting for overseas interests with overseas capital?

No evidence at all, but I can tell you they have no issue buying a 2mil house and a 2mil house next store to control who they live next to.

another is you notice who brought the house down the road, it’s just human nature to take notice, they do prefer the nicer parts of town, my Eden, Remuera, st heliers, big money streets. So paying 2mil for a house is just meh.

[McDuck]

I can tell you the Chinese are alive and well buying up in my area as well, it seems they are...

When all the signage is in Mandarin... for a whole block of shops and factories.

Will I ever see a NZ street sign in Mandarin?, the signs at the airport have already gone that way.





But we digress,

Been to many Auctions lately?

Did you see who's putting down the high bids?

Any inside info that these guys are fronting for overseas interests with overseas capital?

[Frezzinghot]

You would have to be living under a rock Sanya to not see it.

I assume you are in Auckland Sanya ? - if you are not then you have an excuse.

Go any day to the Barfoot Auctions Bruce Mason to Highbrook, spend an hour there, and tell me I am wrong.

If you dont get out of your comfy lounge chair and actually go to the coal face and get some real life experience then you cant really comment.

After 20 years of experience at auctions, and based on real life events of the last 10 years at auctions.

90% of properties go to Asians with all sorts of names.
Not all Chinese, but 70% of that 90% are.

I am not making comment on whether it is good or bad.
I am just saying its a fact.

Its also a fact that a lof ot money comes from Asian citizens and organisations, through resident networks in NZ.

I am not complaining.
I once accepted a Europeans pre auction offer on my house at 750k, which was about 25k above the agents estimate.
Then had a Zhing, a Zhou, and Zhang, bid it up to 886k.

That 136k is better off in my bank account than somewhere in China.

I can tell you the Chinese are alive and well buying up in my area as well, it seems they are a growing community where I live and I’m ok with that as they seem to increase the value of my property without me doing anything. What can I do to stop them anyway, may as well take the equity to use for more deposits!

[Sanya]

Residential property enquiry has dropped 78% from both investors & first home buyers

What's the source?

[McDuck]

..

I am 100% sure, Labour ...
They just didn't want house prices going up .....

Bit OT, we're looking for facts, not opinion and guessing.

But it will be a week before we get any new data, so a small sidetrack it is..


House prices were inflating at a very unusual rate.

How would you have handled it?

[Bluekiwi]

Yep the longer term and larger investors with older rental properties and less debt, and those with commercial not affected, and those with shares can restructure, and the true speculators have endless offsure funds to shore up finances.

Just the mum and dad investors trying to get ahead in life, and going to get hammered and punished.
Anyone who thought they could buy a rental first instead of a first home, anyone who wanted to get a couple of rentals to pass on to their children.

Policemen, teachers, middle class blue collar workers, office workers, they get punished for working hard and doing extra jobs to get a rental.
Smashed in the face by labour for doing that.

The big fat cat professional investors and commercial business, offshore funded speculators, can now come in and mop up, prey on the small time investors who cant handle the pressure and freak out.

Rentals normally take around 10 years to start making money, so those on neutral positions, will move from not much money, not making much money and losing hundreds of dollars per week, which if they cant afford out of their discretionary income, they are going to have to sell.

Bigger operators will move in, and have the funds to ride it out, or wait till National get back in.

I am 100% sure, Labour has zero idea what they have just done.
They just didnt want house prices going up as it made them look stupid.
Kiwi Build didnt work, so oh, lets look around and try and find something else.

Rent controls 6 to 12 months away, mark my words.

[chook]

Any investors with negative cashflow properties will see huge losses, rent increases would have to be massive to get any where near covering it. Any investors with high NCF percentages are toast.

[chook]

Residential property enquiry has dropped 78% from both investors & first home buyers

[artemis]

Fair enough, but once per year still, so watch this space, some investors I spoke to, with 2 or 3 rentals, are still working out what has happened, how they are affected, and what they are going to do.
One is going to have to sell, as part of their job they cant live in any of the houses they own.
Auctions today very very quiet.

Can increase rents more than once a year if there is a change of tenant in the year. There are rumours that the annual restriction may travel with the property, not with the tenancy as presently. Who knows.

Also, about bond data. Might work to indicate market rent in a slow rental market. Which we don't have in many locations atm. The data can be up to 7 months old, and is incomplete in several ways. Like not increased with rental increases. Like bonds not collected (or not paid in) especially if rented to family or trust beneficiaries.There is a huge number of trusts in New Zealand - maybe about 400,000 - and most will hold at least one home.

Better to use as one input to calculating market rent, not the only one.

Reckon an eye on social housing waiting list and emergency housing numbers and $$$ will start giving a clue about impacts soon.

[Bluekiwi]

Fair enough, but once per year still, so watch this space, some investors I spoke to, with 2 or 3 rentals, are still working out what has happened, how they are affected, and what they are going to do.

One is going to have to sell, as part of their job they cant live in any of the houses they own.

Auctions today very very quiet.

[Sanya]

Rents can only be increased once per year, and rental stats are only bonds paid and reported, which I think is a one month delay.
Ipso facto you will see currently, zero stats in respect of rent increases related to the loss of interest rate deductibility.
You will see 1/12th of that in each of the next 12 months, from May 2021 to April 2022.

Its basic logic and maths really.

The above cited article quoted data from the Trade Me Property website (“Trade Me”) which publishes the median asking price of rentals as advertised on Trade Me Property.

This is obviously different from Tenancy bond data which measures the average rent of actual bonds lodged by private landlords with MBIE.

Asking prices for rentals are up (according to Trade Me) and that will follow through to bonds over the coming months.

[Bluekiwi]

Rents can only be increased once per year, and rental stats are only bonds paid and reported, which I think is a one month delay.
Ipso facto you will see currently, zero stats in respect of rent increases related to the loss of interest rate deductibility.
You will see 1/12th of that in each of the next 12 months, from May 2021 to April 2022.

Its basic logic and maths really.

My prediction is that it will take somewhere between 6 and 12 of those months before Labour realise the impact of what they have done, and start to panic they are going to be booted out of government for creating a crisis for their voters, before rent controls have to be put in.

My guess is February 2022.

In that time, they will likely unwittingly make it worse, by potentially thinking they are on vote winning strategy, as no one cares about property investors, and double down by forcing investors on to principal and interest.

[Sanya]

Rents hit an all-time high last month increasing 6% to a median of $540 a week

To early to say whether this is directly related to the new rules or not.

Perhaps other drivers are at play like the large increases or proposed increases in property tax (council rates) some regions are setting?

Source: https://www.landlords.co.nz/article/...kyrocket-again