Andrew King opened the conference with a brief summary of changes in the property investment area during the last twelve months.
Housing Minister Nick Smith announced that the Government accepts the need to change the RTA in light of the Osaki decision. Their thoughts are to make tenants liable for accidental damage to the property up to the value of the tenants bond or the value of the insurance excess. There may be the option to vary these limits by mutual agreement at the time the tenancy agreement is signed at the start of the tenancy. He made the point that HNZ do not insure their houses so the ruling on insurance cover does not apply to them.
The Government also expects to have the substantive part of the meth standard completed by January 2017.
Australian builder-developer Martin Ayles presented on adding value to existing property by extending, renovating, or redeveloping existing sites. Although probably more of interest to developers/renovators, he made good points about assessing property on its potential rather than on its current use.
Wendy Kerr of Auckland University discussed goal setting and the importance of setting long term and short term goals. Thinking deliberately about your life goals, working out a way to get to them, and overcoming the self-doubt that we all feel were all part of her presentation.
Bryce Barnett started his business life collecting tree fungus and exporting it to a dealer in Singapore while still at school. He is now a major shareholder in a commercial property fund manager and is active in the New Plymouth business world. He talked on adopting the ‘can do’ attitude, the importance of collaboration with others and diversification of your investments. He also pointed out the hazards of being over-leveraged and the importance of maintaining good relations with commercial property tenants.
Bryce also remarked on the apparent paucity of younger investors at the Conference, and recommended that both the Federation and regional associations take active steps to attract and inspire future investors who may now be in their 20s. A point worth considering.
Among the afternoon breakout sessions Martin Ayles continued to present on successful property investment, Bryce Barnett discussed analysing risk, Brian Kerr talked on managing rental properties, Kesh Maharaj worked on how to decide if your property portfolio was a hobby or a business and the elderly gents Darryl Fisher, Peter Lewis and Selwyn Mexted jointly talked on their succession plans for passing their property on to future generations. Each presentation was repeated three times over the afternoon.
Logically I was only able to be at one of these presentations, but both Darryl and Selwyn had life stories and future plans that are quite different to mine, and there it did make for an interesting discussion that our audiences seemed to find quite helpful.
At the evening dinner event the Landlord of the year winner and runner-up were announced, the winner from Otago and the runner-up from Auckland. Sorry, I don’t have names.
The winner of the Harry Lawson Cup for the best-achieving regional association of the year was Hawkes Bay, taking it off last years winner Taranaki.
The early Sunday morning presentations were on creating property wealth in the provinces, Martin Ayles (again) and a local New Plymouth Council planner discussing their future plans for the city. I was not particularly attracted to any of these so settled for a lazy Sunday start to the day.
Mid-morning sociologist Kay Saville-Smith talked of the changes in the residential housing market over the years. She made the point that owner-occupied housing (excluding houses owned by family trusts) now represent under 50% of NZ’s housing stock. The highest level of owner-occupied housing occurred among the generation of NZers born in the years 1927-1931, for whom it reached 87%, and the percentage has steadily dropped over subsequent years.
Thus more people are renting and renting for longer time periods. If someone has not become a home-owner by the age of 40 then it is likely that they will be renting for the rest of their lives. This means that the profile of tenants is changing from younger short-term residencies to long-term tenants who will grow old in their rentals and who may require different facilities in those rentals as they age.
As the proportion of renters in the population increases they become more socially powerful and this will inevitably lead to more regulation and policing of the tenancy process (as we are already experiencing with the latest changes).
MBIE gave a brief outline of the latest regulatory changes, particularly as they now been given an interventionist role. In particular, if landlords are required to carry out repairs or other upgrading work by the Tenancy Tribunal and fail to do so, the tenant can now apply to MBIE for permission to pay their rent directly to MBIE who will then hold it until enough funds have been accumulated for the work to be carried out. Could play hell with your own cashflow.
ANZ mortgage head Glenn Stevenson showed us graphs of the latest movements in the NZ housing markets, and explained the background reasons for the recent Reserve Bank moves and the subsequent actions of the trading banks. Right now, there is a funding shortfall between the amount of money deposited by NZers with the banks and the amount they are lending out. This shortfall must be made up by money borrowed from overseas at a higher cost to the banks.
The RB is trying to get inflation up, household debt down, asset prices to stabilize, and to prevent the NZ dollar from getting too high. A complex balancing act. The short answer is that we can expect more restrictions from the RB including debt-to-income ratio limits and interest rates to move independently from the OCR.
Ultra-marathon runner Lisa Tamati talked of pushing your limits, setting big goals and the drive to achieve them.
The NZPIF 2017 Conference will be held in Napier. The HBPIA made a presentation promoting this event.
Peter Lewis
Executive Board Member, NZPIF
Housing Minister Nick Smith announced that the Government accepts the need to change the RTA in light of the Osaki decision. Their thoughts are to make tenants liable for accidental damage to the property up to the value of the tenants bond or the value of the insurance excess. There may be the option to vary these limits by mutual agreement at the time the tenancy agreement is signed at the start of the tenancy. He made the point that HNZ do not insure their houses so the ruling on insurance cover does not apply to them.
The Government also expects to have the substantive part of the meth standard completed by January 2017.
Australian builder-developer Martin Ayles presented on adding value to existing property by extending, renovating, or redeveloping existing sites. Although probably more of interest to developers/renovators, he made good points about assessing property on its potential rather than on its current use.
Wendy Kerr of Auckland University discussed goal setting and the importance of setting long term and short term goals. Thinking deliberately about your life goals, working out a way to get to them, and overcoming the self-doubt that we all feel were all part of her presentation.
Bryce Barnett started his business life collecting tree fungus and exporting it to a dealer in Singapore while still at school. He is now a major shareholder in a commercial property fund manager and is active in the New Plymouth business world. He talked on adopting the ‘can do’ attitude, the importance of collaboration with others and diversification of your investments. He also pointed out the hazards of being over-leveraged and the importance of maintaining good relations with commercial property tenants.
Bryce also remarked on the apparent paucity of younger investors at the Conference, and recommended that both the Federation and regional associations take active steps to attract and inspire future investors who may now be in their 20s. A point worth considering.
Among the afternoon breakout sessions Martin Ayles continued to present on successful property investment, Bryce Barnett discussed analysing risk, Brian Kerr talked on managing rental properties, Kesh Maharaj worked on how to decide if your property portfolio was a hobby or a business and the elderly gents Darryl Fisher, Peter Lewis and Selwyn Mexted jointly talked on their succession plans for passing their property on to future generations. Each presentation was repeated three times over the afternoon.
Logically I was only able to be at one of these presentations, but both Darryl and Selwyn had life stories and future plans that are quite different to mine, and there it did make for an interesting discussion that our audiences seemed to find quite helpful.
At the evening dinner event the Landlord of the year winner and runner-up were announced, the winner from Otago and the runner-up from Auckland. Sorry, I don’t have names.
The winner of the Harry Lawson Cup for the best-achieving regional association of the year was Hawkes Bay, taking it off last years winner Taranaki.
The early Sunday morning presentations were on creating property wealth in the provinces, Martin Ayles (again) and a local New Plymouth Council planner discussing their future plans for the city. I was not particularly attracted to any of these so settled for a lazy Sunday start to the day.
Mid-morning sociologist Kay Saville-Smith talked of the changes in the residential housing market over the years. She made the point that owner-occupied housing (excluding houses owned by family trusts) now represent under 50% of NZ’s housing stock. The highest level of owner-occupied housing occurred among the generation of NZers born in the years 1927-1931, for whom it reached 87%, and the percentage has steadily dropped over subsequent years.
Thus more people are renting and renting for longer time periods. If someone has not become a home-owner by the age of 40 then it is likely that they will be renting for the rest of their lives. This means that the profile of tenants is changing from younger short-term residencies to long-term tenants who will grow old in their rentals and who may require different facilities in those rentals as they age.
As the proportion of renters in the population increases they become more socially powerful and this will inevitably lead to more regulation and policing of the tenancy process (as we are already experiencing with the latest changes).
MBIE gave a brief outline of the latest regulatory changes, particularly as they now been given an interventionist role. In particular, if landlords are required to carry out repairs or other upgrading work by the Tenancy Tribunal and fail to do so, the tenant can now apply to MBIE for permission to pay their rent directly to MBIE who will then hold it until enough funds have been accumulated for the work to be carried out. Could play hell with your own cashflow.
ANZ mortgage head Glenn Stevenson showed us graphs of the latest movements in the NZ housing markets, and explained the background reasons for the recent Reserve Bank moves and the subsequent actions of the trading banks. Right now, there is a funding shortfall between the amount of money deposited by NZers with the banks and the amount they are lending out. This shortfall must be made up by money borrowed from overseas at a higher cost to the banks.
The RB is trying to get inflation up, household debt down, asset prices to stabilize, and to prevent the NZ dollar from getting too high. A complex balancing act. The short answer is that we can expect more restrictions from the RB including debt-to-income ratio limits and interest rates to move independently from the OCR.
Ultra-marathon runner Lisa Tamati talked of pushing your limits, setting big goals and the drive to achieve them.
The NZPIF 2017 Conference will be held in Napier. The HBPIA made a presentation promoting this event.
Peter Lewis
Executive Board Member, NZPIF
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