Property Investment Information

The Reserve Bank has today announced that they are looking for more weapons in their fight to control inflation. Unfortunately it is New Zealanders that they are fighting and they will fight us on our beach houses, they will fight us in our Towns and City's. Like Winston Churchill, they will never surrender, especially as their job security rests on keeping inflation within a reasonably narrow band.

With the introduction of the Reserve Bank Act, which was brought about to curb inflation, the Reserve Bank and ordinary New Zealanders have been in a struggle reminiscent of the cold war arms race. The Bank introduced its mighty weapon, altering the Official Cash Rate, which was deployed to influence our spending choices. (more...)

A new study has good news for property Investors. The Centre for Housing Research released a study this week concluding that demand for rental properties is set to substantially increase and significant non-government resources will be required to meet the increase in demand. This means New Zealand needs you to supply more rental properties.

The Research Centre believes that projected growth in demand will require significant capital injection from a range of sources including government, local government, community trusts, private and institutional investors. (more...)

There’s method in my madness when I say there’s risk in your caution.

Many of the clients I see are reasonably cautious and don’t believe in taking large risks. However the actions they may take to avoid risk can often have exactly the opposite effect and place their financial situation into jeopardy.

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An article on rental prices appeared in the NZ Herald last week claiming that Auckland rental prices were dropping. Tenancy Bond Centre figures showed a 23% drop in Takapuna/Milford in February compared to February 2003. Sandringham rentals fell 20% while Ponsonby/St Marys Bay/Herne Bay, and Birkenhead/Northcote Pt both fell by 13%.

However these percentage drops refer to one and two bedroom properties only, not the area as a whole. There are not many one or two bedroom rental properties compared to two and three bedroom rentals. Because of the low number of rentals, the statistics can be quite volatile and lead to incorrect impressions.

When looking at two and three bedroom rental properties, where there is a larger number let each month, a completely different impression is gained. For two bedroom rentals in the 29 Auckland areas, 11 rose, 10 fell and 8 had no change. With three bedroom properties, 15 areas had rental price increases, 7 had decreases and 7 were unchanged.

Looking at New Zealand as a whole, two bedroom median rental prices have increased by just under 5% from $230pw to $240pw. Three bedroom rental properties have also increased by $10pw from $270 to $280.

There is no doubt that rental prices have not kept pace with house prices over the past year and that indeed makes things difficult for investors. However we need to look closely at statistics before we leap to the wrong conclusion of what is happening within our rental market.

No doubt many of you would have spent some time during the Christmas or New Year break contemplating life and where you are going. Its a great time to spend navel gazing. With this in mind, the Auckland Property Investors Association had William Farmer, Managing Director of Dale Carnegie in New Zealand, to speak to members on staying focussed and getting results. It challenged the audience of well over 400 property investors and was an inspirational start to the New Year.

William talked about the essentialness of having a business plan. He asked us to picture someone coming to Auckland without any information and leading a group of people to find the suburb of Henderson. Eventually they would have got there, but how much simpler the task would have been with a map. (more...)