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Property sector a house divided
Sunday Star Times | Sunday, 25 November 2007
Traders end their 'unholy alliance' with mum-and-dad investors, writes Rob Stock.
Personal and professional conflict has splintered the New Zealand Property Investors' Federation after a schism between traders and buy-and-hold investors.
Ashley Church, former chief executive of the federation's Auckland branch, has formed breakaway group The Traders to promote the interests of property traders, a group he said was ill-served by the federation.
In a communique to members in April, federation president Martin Evans revealed that property traders were a group the organisation had tried to distance itself from over the years.
It was clear, Church said, that the federation saw itself as the representative of the traditional buy-and-hold mum and dad investor, and that another organisation was needed to represent the interests of traders. The "unholy alliance" of property traders and buy-and-hold investors was a sham, he said.
The Traders aims to provide networking, seminars, information and lobbying services for members, though Church says it will be a more commercial venture than the federation, selling services such as mentoring.
But the sidelining of the federation is only half the story.
Church admits he fell out badly with Andrew King, president of the Auckland Property Investors Association, by far the largest of the federation's regional groups.
He and King blame each other for the falling-out, but while Church says the problem was with King's unwillingness to cede control of the association to a professional chief executive, King counters that Church was bent on over-commercialising the association, which risked its independence and its standing as a lobbyist on government initiatives.
Both now insist it is water under the bridge, and will not publicly comment on each other's role in the split.
Church said there was no need for envious competition between the federation and The Traders, and there was room in the market for both. "Looking back, it is clear this was a logical split."
But the association is not taking the challenge from The Traders lying down. New president Sue Tierney said a property traders' group was being founded within the association and was planned before The Traders was created.
Tierney said Church was wrong to compare The Traders with the federation, which was a grouping of independent, member-controlled, not-for-profit organisations.
The Traders was a commercial business owned by a small number of shareholders and designed to make a profit.
Besides, she said, drawing a distinction between property investors and traders was false, as many did both. Tierney, a mortgage broker, said there were very few pure traders.
Church said The Traders was not designed to make big profits, just enough to cover its costs, including staff salaries.
Tierney dismissed that. "It is just another events management company to my mind, like Richmastery or XLR8. They are its competition, not APIA."
Members of The Traders will pay $250 each, or $350 per couple, per year and a $95 joining fee.
Church says work is already under way to create regional networks of traders.
The other shareholders in the company are prominent traders Dean Leftus, John May, and long-time property investment adviser and tax expert Garth Melville, who ultimately owns a third of the shares in Blue Peak a property finding company related to Richmastery, whose founder, Phil Jones, also fell out with King.
Church said that as well as lobbying government on behalf of members, the group intended to improve the grubby public image of property traders.
"Traders have a shonky reputation. But actually they pay tax on all their transactions, unlike buy-and-hold investors who do not pay tax on their capital gains, and are more likely to claim rebates."
They also renewed the housing stock by doing up homes to sell, which raised the value of neighbouring properties and regenerated neighbourhoods.
"Traders don't get the recognition they deserve," Church said. "We are looking to change perceptions and to legitimise what is a legitimate strategy for property investment."
Sunday Star Times | Sunday, 25 November 2007
Traders end their 'unholy alliance' with mum-and-dad investors, writes Rob Stock.
Personal and professional conflict has splintered the New Zealand Property Investors' Federation after a schism between traders and buy-and-hold investors.
Ashley Church, former chief executive of the federation's Auckland branch, has formed breakaway group The Traders to promote the interests of property traders, a group he said was ill-served by the federation.
In a communique to members in April, federation president Martin Evans revealed that property traders were a group the organisation had tried to distance itself from over the years.
It was clear, Church said, that the federation saw itself as the representative of the traditional buy-and-hold mum and dad investor, and that another organisation was needed to represent the interests of traders. The "unholy alliance" of property traders and buy-and-hold investors was a sham, he said.
The Traders aims to provide networking, seminars, information and lobbying services for members, though Church says it will be a more commercial venture than the federation, selling services such as mentoring.
But the sidelining of the federation is only half the story.
Church admits he fell out badly with Andrew King, president of the Auckland Property Investors Association, by far the largest of the federation's regional groups.
He and King blame each other for the falling-out, but while Church says the problem was with King's unwillingness to cede control of the association to a professional chief executive, King counters that Church was bent on over-commercialising the association, which risked its independence and its standing as a lobbyist on government initiatives.
Both now insist it is water under the bridge, and will not publicly comment on each other's role in the split.
Church said there was no need for envious competition between the federation and The Traders, and there was room in the market for both. "Looking back, it is clear this was a logical split."
But the association is not taking the challenge from The Traders lying down. New president Sue Tierney said a property traders' group was being founded within the association and was planned before The Traders was created.
Tierney said Church was wrong to compare The Traders with the federation, which was a grouping of independent, member-controlled, not-for-profit organisations.
The Traders was a commercial business owned by a small number of shareholders and designed to make a profit.
Besides, she said, drawing a distinction between property investors and traders was false, as many did both. Tierney, a mortgage broker, said there were very few pure traders.
Church said The Traders was not designed to make big profits, just enough to cover its costs, including staff salaries.
Tierney dismissed that. "It is just another events management company to my mind, like Richmastery or XLR8. They are its competition, not APIA."
Members of The Traders will pay $250 each, or $350 per couple, per year and a $95 joining fee.
Church says work is already under way to create regional networks of traders.
The other shareholders in the company are prominent traders Dean Leftus, John May, and long-time property investment adviser and tax expert Garth Melville, who ultimately owns a third of the shares in Blue Peak a property finding company related to Richmastery, whose founder, Phil Jones, also fell out with King.
Church said that as well as lobbying government on behalf of members, the group intended to improve the grubby public image of property traders.
"Traders have a shonky reputation. But actually they pay tax on all their transactions, unlike buy-and-hold investors who do not pay tax on their capital gains, and are more likely to claim rebates."
They also renewed the housing stock by doing up homes to sell, which raised the value of neighbouring properties and regenerated neighbourhoods.
"Traders don't get the recognition they deserve," Church said. "We are looking to change perceptions and to legitimise what is a legitimate strategy for property investment."
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