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Nelson Property Investors Newsletter. Meeting next Tuesday
NELSON PROPERTY INVESTORS ASSOCIATION
FEBRUARY 2017 NEWSLETTER
PO Box 198 Nelson
Our first meeting of the year is being held at Absolute Energy 146 Pascoe Street. Paul Brockie the owner of this business joined our association as a result of the MBIE seminar we held last year. They are putting up a marquee and will be supplying drinks and nibbles. Paul and his staff will be demonstrating and explaining the various insulation products and services that Absolute Energy provides. Members and non members are welcome to attend. There is something for everyone. I have frequently used their services and I have always been impressed with the service.
Meet at 7:30 pm Tuesday night 14th February. Note no pre meeting meal this month. No bookings are needed but a confirmation email to me in advance will ensure we have enough nibbles for everyone.
SUMMER HAS ARRIVED BUT IS IT THE SAME AS LAST YEAR?
I always have writerís block before forcing myself to sit down at the computer to write another newsletter. I should be outside enjoying myself on my mountain bike training for another world hiking experience to a mountain top where it is hard to breath. Our last meeting held back in October seems a life time ago. The attendance at that meeting when MBIE came to speak was 200+ which was a record number for us and exceeded the numbers attending in other cities that are many times our size. Why so many in Nelson? Why was MBIE so surprised at the numbers? Why did they try to limit the numbers? Why were so many attendees left stunned by the information that the tribunal now permits tenants to ďaccidentlyĒ damage properties and not be held accountable for their carelessness?
Nelson PIA was delighted that the meeting was such a success which resulted in our membership increasing significantly.
I finished off that meeting with a pointed question to Jenny Leith who is one of New Zealandís most experienced tenancy adjudicators. I made the point that we need some way of getting rid of tenants who have drugs in a property.
She answered that section 40 (2) (b) of the RTA permits landlords to seek a termination. The reality is when section 40 is used a section 56, 14 day notice must be issued. Section 56 says the adjudicator MAY issue a termination order. But there is a requirement for that judgement to be equitable unlike section 55 which states the adjudicator SHALL issue a termination order.
Furthermore whilst section 40 (2) (b) is defined as an unlawful act in the RTA Section 1A schedule of fines for unlawful acts cleverly omits any punishment for committing such unlawful act under section 10 (2) (b).
Over many years I have made repeated submissions to the court on the basis of section 40 re unlawful actions. The consistent rulings, when clear evidence of drug use has been submitted, is that the adjudicators are not trained in drugs and such matters. They say that this is the function of the district court and if a prosecution at the higher court is obtained then I can make a further application to the tribunal. I have supplied a burnt out stove element as evidence which had cannabis oil all over it. I have submitted a bong and a cannabis bullet but each have been rejected and I have even been sternly admonished by the court for bringing such items to the court. I even submitted pictures of a flat splattered in blood from an assault by a tenant against his flat mate as well as numerous lots of evidence for domestic violence. It sickens me to know that the tribunal pretends to be blind to the unlawful actions of tenants.
Since October we now have a new Prime minister, a new Deputy Prime minister, we no longer have a minister of housing, and the 40% LVR restrictions are doing what those in power want the market to do. Despite the changes injustices are still being perpetuated in the Nelson court, there are even less properties to let in Nelson, and property prices in Nelson chug on upward.
The rental vacancies advertised on Trademe for Nelson city slipped below 50 for a few days in January. Property managers tell me that they are all being pickier on choosing tenants. Most are moving to 12 month fixed term tenancies and achieving increased rent levels. Today I bumped into a social worker involved in helping the disabled find flats. His first comment was the rental market is so different from what it was like two years ago when I retired from property management. He is telling his clients that they need to rent together with other people because the rent levels have moved up beyond what can be funded by WINZ for living alone.
Building consents for dwellings present some interesting facts. Before 2015 Nelson city used to be building not a lot less than Tasman but since then it has slipped to around 50% of the numbers in Tasman. Despite what might be said by local and national politicians and media commentators the number of dwellings being consented in Nelson city have still not recovered to the numbers we saw in 2013 and 2014. Meanwhile there is no holding back in Tasman with a new record of 374 in the year ending October being achieved. The limiting factor in Tasman is the availability of sections. The council staff are tearing their hair out trying to keep up with the private sector to provide services to the approved developments. TDC staff tell me they have major funding problems to supply the demand. There is a huge demand for rental accommodation close to Richmond CBD. However the planning requirements make developments unlikely in this area.
CHRISTCHURCH IS THE CLOSEST NEIGHBOURING CITY TO NELSON
Because people (particularly renters) move freely from city to city what is happening down there influences our market. It also impacts on Government department policies because many departments are controlled from Canterbury. The latest Canterbury Property Investors magazine has this article.
Itís clear the boom days of the Christchurch rental market post the earthquakes are over.
High levels of construction, higher-density dwellings and earthquake repairs have boosted the cityís housing supply, so much so that Christchurch rents are at a three-year low and itís taking longer to rent properties. The weekly median rent in Christchurch is now $380; this is 12 percent lower than the high of $435 reached in early 2015, according to government bond figures. There are now some 2000 homes for rent in Christchurch, compared with the low of 540 in February 2013 and about 1300 before the earthquakes. Thatís a far-cry from the post Ė quake rental shortage when people lived in garages, cars, and crowded rooms. This means that landlords face stiff competition when it comes to renting out their properties. Some landlords are resorting to cash incentives and free rent to lure tenants into long-term contracts. Some deals include offering $1000 cash-back, a week or two rent free, or no letting fee. But even thatís not enough to nab tenants for some places.
Of course this situation will get worse because the number of building consents for new dwellings being built in Canterbury is still the highest in New Zealand per head of population.
PLANNING FOR THE YEAR AHEAD
Our committee has come up with some good ideas for the speakers for the year ahead. At the moment I am sending off emails here and there trying to attract the usual range of interesting that we enjoy listening to.
Some of you like to reserve a space in you diary to avoid missing out.
Here are the dates that we have set down for each meeting.
28 March, BNZ economist, 9 May, 20 June, 1 August, 12 September, 24 October. Suggestions for great speakers are always welcome.
Watch this space to see who is coming to town to inform and motivate us.
Regards and happy investing
A last minute update folks. Absolute Energy has sourced lots of free goodies to give away on the night.
Would you believe like $5000 worth of products! This is restricted to those attending.
Do not miss the first meeting of the year. We are off with a BANG.
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