The number of sales of dwellings including apartments in Waitakere City for August was 284. There were 11 sections sold. The median selling price was $762,000. The average days to sell was 37.

Capital Gains August 2012 – 2017 Median Prices

Green Bay            64.3%

New Lynn             86.7%

Royal Heights     109.2%

The number of sales of homes in Waitakere City for August was 284, this was up from last month. Prices also increased by 3.8% over July prices. These figures reflect increased prices and sales numbers across Auckland as a whole. Sellers are not willing it seems to sell below the prices they saw similar properties to theirs sell for a few months ago. There is little doubt that the shortage of houses is getting worse in Auckland as demand is exceeding the rate of building new ones.

On that basis prices would be expected to rise. Factors likely to hinder price rises however are (1) the tight lending requirements from banks mainly  because of the LVR (loan to value ratio) restrictions imposed by the reserve bank. (2) A change of government as a Labour led government would:

A. Restrict immigration which would reduce demand and slow many sectors of the economy such as hospitality and horticulture which are already short of workers and rely heavily on temporary immigrants / seasonal workers.

B. It is clear that there are not enough construction trades workers and immigration restrictions would prevent more houses been built.

C. Capital gains tax rise on any rental house purchase would mean less buyers for rental properties so prices would be inclined to fall. At the same time a sever shortage of rental properties could ensue. This rental shortage would tend to drive up rents but the government could well put restrictions on rent increases.

D. It looks likely that when a deceased estate property is sold it would not then be classed as a family home and so could be subject to capital gains tax. This is what people are calling an inheritance tax. If that became the case a properties market value would be less. Nothing is certain in life and this is especially true of the 2017 general election.

Do you want to know the value of your property? Its probably worth more than you think. Contact me for a free no obligation value update.

Best wishes,

John Goodrum

Licensee Agent REAA 2008

021945140

thelegendofthewest@gmail.com

Welcome to the thirty-third edition of the West Auckland monthly Residential Landlords Newsletter.

I am a landlord myself and have been for over 30 years. I currently own rental properties in South Auckland, the North Shore and of course West Auckland. Being a high preforming Real Estate Agent (top 1% in New Zealand) for over 26 years and always working in West Auckland I know the real estate market and the rental market very well.  

In this and future newsletters I hope to provide ongoing up to date information relevant to landlords who own rental properties in West Auckland.  

Regular features will include: 

• Current sale prices
• Current mortgage rates
• Current rents
• A monthly suburb spotlight review
• A relevant feature article each month

 Source REINZ

Source – J Goodrum – Internet search

 Source NZ Government building & housing 

Source NZ department of statistics 

The Benefits of a Regular Home Inspection

There are very few rental properties in West Auckland with a market value of less than $500,000, that’s half a million dollars! 

Few, if any West Auckland landlords will be driving a car worth $500,000 yet they would consider it foolish not to have their car maintained and serviced on a regular basis, even if it cost 1 / 10^th of the price of their rental property. So why it is that most don’t have a regular professional home maintenance inspection on their much more valuable rental property?  

Beyond cleaning and painting most landlords only fix problems as they arise. At that point the cost to fix could be many times the cost that would have been required to maintain the property before it needed fixing. Let me give you an example. A small rust hole in a roof may mean that water drips into the ceiling over a period of weeks or months until the ceiling falls into the lounge. 

What happened was that the un-noticed water was soaked up by the loft insulation which became heavier and eventually saturated until the gib ceiling became soaked, lost its strength and collapsed into the lounge. The repair cost is now substantial – probably several thousands of dollars. What is now required to repair? 

1. Cleaning up the mess and drying the lounge carpet.
2. Removing the insulation from the loft and paying “tip” fees to dump it.
3. Drying out the loft.
4. Installing a new gib ceiling.
5. Gib stopping and sanding a new ceiling.
6. Gib sealing and painting the new ceiling.
7. Possible light fitting electrical repairs.
8. Installing new loft insulation.
9. Fix the hole in the roof. 

A regular say 5 yearly professional home inspection would pick up such potential problems that could then be maintained at a fraction of the repair cost. The typical cost of a professional home inspection depending on the size of the house would be $400 – $800. That is $80 – $160 per year if done every 5 years. A very good investment that could save thousands, a lot of inconvenience and possible lost rent. For a good home inspector look online at www.nocowboys.co.nz/ and check out the reviews. 

Until next time,
Best wishes,

John Goodrum
Licensee Agent REAA 2008
021945140
thelegendofthewest@gmail.com
09 838 8895

Welcome to the thirty-second edition of the West Auckland monthly Residential Landlords Newsletter.

I am a landlord myself and have been for over 30 years. I currently own rental properties in South Auckland, the North Shore and of course West Auckland. Being a high preforming Real Estate Agent (top 1% in New Zealand) for over 26 years and always working in West Auckland I know the real estate market and the rental market very well.  

In this and future newsletters I hope to provide ongoing up to date information relevant to landlords who own rental properties in West Auckland.  

Regular features will include: 

• Current sale prices
• Current mortgage rates
• Current rents
• A monthly suburb spotlight review
• A relevant feature article each month
  

 Source REINZ

Source – J Goodrum – Internet search

Source NZ Government building & housing

Source NZ department of statistics

 Insurance of Rental Properties

As well as having insurance for the building it is often desirable for a landlord to have landlords insurance. This typically covers such things as loss of rent, intentional or malicious damage, vandalism or theft by a tenant or their guests. It also covers illegal drug use by tenants or their guests causing the need to test for drugs and the cost to decontaminate the property.

Insurance policies do have limits on the amount that will be paid for such events. Typically loss of rent would be 8 weeks (less any rent paid in advance or any bond held). For illegal drug use and decontamination a typical limit would be $30,000. In order to qualify for a claim for many of the above events the landlord must fulfil a number of conditions, such as: 

1. Take care and check references when selecting a tenant.
2. The property must not be empty for longer than 60 days.
3. Have a written legal tenancy agreement.
4. Collect at least 2 weeks bond and register it with tenancy services.
5. Collect at least 2 weeks rent in advance.
6. Keep photographs and a written inspection report at the start of the tenancy.
7. Notify the tenant in writing if the rent becomes 7 days in arrears.
8. Personally deliver a second letter to the tenant when the rent is 14 days in arears.
9. Apply to the tenancy tribunal for a termination order when the rent is 21 days in arears.
10. Inspect the property at the beginning and end of a tenancy.
11. Conduct 3 monthly internal and external inspections on the property and keep written records / photographs. 

Failure to meet the above conditions could invalidate any claim on insurance. For landlords having their properties managed by professional property managers I would strongly suggest emailing them a copy of the insurance conditions and getting a written reply that they will manage your property in such a way that all of these conditions are met. 

For landlords managing their own rentals ensure you follow the conditions of the insurance or do not be surprised if you find your claim rejected. 

Until next time,

Best wishes,

John Goodrum

Licensee Agent REAA 2008
021945140

thelegendofthewest@gmail.com
09 838 8895

The number of sales in June on the Peninsula was 23 and the median selling price was $953,000. The average days to sell was 30. There were 8 sales over $1,000,000. The highest value sale was 57 Kervil Ave at $2,560,000.

6 Street Spotlight

Average Rent for Te Atatu Peninsula: 1st January – 30th June 2017

Did You Know?
The highest value of sales on the Peninsula in the past 10 years was $37,085,500 (29 sales) which was in June 2016 – last year.

Quote of the month:
Top 10 things to do when selling your home, 1# call John Goodrum, I will handle the other 9.

Until next time,

Best wishes,

John Goodrum
021945140
thelegendofthewest@gmail.com

The number of sales of dwellings including apartments in Waitakere City for June was 256. There were 94 sections sold. The median selling price was $776,000 and the average days to sell was 33.

Capital Gains June 2012 – 2017 Median Prices 

Ranui                 121.1%

Sunnyvale          90.6%

Massey               99.9%

The number of property sales in Waitakere City has fallen to 256. There has only been 2 June months with lower sales numbers in the last 20 years, which where June 2008 and 2010.

It is now 10 months since the 40% LVR was introduced and there are no signs of the market speeding up again at the moment. The uncertainty caused by the coming general election in September will certainly be a contributing factor.

 With net migration still running at record levels (close to 73,000) and a big shortage of homes in Auckland plus builders and related trades shortage it seems that prices will begin to rise again but probably not until after the
general election.

Do you want to know the value of your property? Its probably worth more than you think. Contact me for a free no obligation value update.

Best wishes,

John Goodrum

Licensee Agent REAA 2008

021945140

thelegendofthewest@gmail.com

Welcome to the thirtieth edition of the West Auckland monthly Residential Landlords Newsletter.

I am a landlord myself and have been for over 30 years. I currently own rental properties in South Auckland, the North Shore and of course West Auckland. Being a high preforming Real Estate Agent (top 1% in New Zealand) for over 26 years and always working in West Auckland I know the real estate market and the rental market very well. 

In this and future newsletters I hope to provide ongoing up to date information relevant to landlords who own rental properties in West Auckland.  

Regular features will include: 

• Current sale prices
• Current mortgage rates
• Current rents
• A monthly suburb spotlight review
• A relevant feature article each month       

Source REINZ

Source – J Goodrum – Internet search

Source NZ Government building & housing 

Source NZ department of statistics 

So what is the future for the rental market in New Zealand? 

I believe it is very bright for landlords. It is expected to continue to grow. Even if the percentage of people renting (33% in 2016) stayed the same, the growth in the number of houses would mean that the number of rental properties will grow. 

It is likely however, that the percentage of people renting will also continue to increase as it has for the past 25 years. The reasons are the shortage of houses in Auckland, which will for some years yet not be eliminated and mean prices will continue to rise, meaning less people will be able to afford to buy.

Rents are likely to increase as house prices increase but rent rises usually lag behind house price rises. Remember also that as house prices rise it is not certain that rents will rise. 

In the UK for example, in London there is a shortage of houses and prices are rising, yet rents are falling slightly. Brexit perhaps? The political scene can have a significant effect. The general election this year could change things dramatically. 

The New Zealand House Rental Market – Past, Present and Future

The peak of home ownership in New Zealand was in 1986, when 76% of New Zealander’s owned their own home. That meant that 24% were renting. The ownership rate declined in the 1990’s and has continued to fall ever since. 

The main reasons for the growing numbers of rentals is the rising prices of houses. In West Auckland, the median house price in 1992 was $112,000. Today it is $760,000. That is a 578.6% increase in 25 years or 23% straight line increase each year. For many over the years, as today, house purchase is not affordable. 

Today in New Zealand, 33% or 1 in every 3 houses in rented. Is that a bad thing? Well, it is not a sign of a poor economy. After all, the New Zealand economy is one of the best performing in the OECD (Organisation for Economic Co-Operation and Development countries) which include much of the European Union, USA, Japan, Korea, Australia and Canada.  

Also, it is interesting to note that one of the poorest performing economies in Europe – Spain, has the highest owner occupancy rates at 83.2% (16.8% rentals) and the best performing European economy is Germany, which has the lowest owner occupancy at 43% meaning 57% of Germans rent their house. 

If you would like to discuss your rental property situation please call me for a confidential discussion. 

Until next time, 

Best wishes, 

John Goodrum

Licensee Agent REAA 2008
021945140
09 838 8895

Welcome to the twenty-ninth edition of the West Auckland monthly Residential Landlords Newsletter.

I am a landlord myself and have been for over 30 years. I currently own rental properties in South Auckland, the North Shore and of course West Auckland. Being a high preforming Real Estate Agent (top 1% in New Zealand) for over 26 years and always working in West Auckland I know the real estate market and the rental market very well.  

In this and future newsletters I hope to provide ongoing up to date information relevant to landlords who own rental properties in West Auckland.  

Regular features will include: 

• Current sale prices
• Current mortgage rates
• Current rents
• A monthly suburb spotlight review
• A relevant feature article each month       

                                                                  Source REINZ

Source – J Goodrum – Internet search

Source NZ Government building & housing

Source NZ department of statistics

2017 – What will happen to rents and property prices this year?

In issue number 17 of the Landlord’s Newsletter (12 months ago), I predicted that rents and house prices would increase in 2016. My forecast for property values were for an increase of between 12 – 16%. 

Here’s what happened: For Waitakere City the median selling price increased by 13.9% – see table on the front page.  

So what about 2017? There is a lot more uncertainty this year so predictions are harder but here goes:

Factors to consider: 

If the market were left alone by the reserve bank (not imposing borrowing restrictions) prices would certainly rise and so would rents. More houses would be built more quickly to meet the demand and prices would stabilise. Supply (short) V Demand (high) = Increases (prices and rents). 

The reserve bank is attempting (and succeeding) in reducing demand which is why price rises are slowing. If they overdo it demand could fall away badly and prices would fall. It is highly probable that interest rates for mortgages will rise in 2017 as the cost of overseas borrowing is increasing. This in itself will reduce the demand.

We could end up with a situation where there is a “true” demand for houses (ie people who would like to buy and under free market conditions could buy) but demand has been squashed artificially at the same time we have a shortage of house. The result will be less houses being built as the demand (from people who can buy) is not there. 

What could that mean?

1. Developers / builders not willing to build more
2. The shortage of houses gets larger

Now add in a change of government, a Labour / Green government propose increasing tax, introducing a capital gains (property) tax and more spending on welfare. 

The result will be a poorer preforming economy and a drop in house prices certainly and with that falling rent prices. If a Labour / Green coalition becomes the government landlords may be hit with a 5 x whammy:

• Falling house prices
• Falling rents
• Increased income tax
• Capital gains
• Increased mortgage rates 

I believe voters will say no to a coalition that would increase income tax and seriously risk the growth in our economy and say yes to a proven government that will cut tax AND grow the economy! House prices are likely to increase 5-7% in 2017 and rents by perhaps 2-3%. With a change of government I would not like to predict by how much house prices could fall. 

If you would like to discuss your rental property situation please call me for a confidential discussion. 

Until next time, 

Best wishes, 

John Goodrum

Licensee Agent REAA 2008
021945140
09 838 8895

Welcome to the twenty-seventh edition of the West Auckland monthly Residential Landlords Newsletter.

I am a landlord myself and have been for over 30 years. I currently own rental properties in South Auckland, the North Shore and of course West Auckland. Being a high preforming Real Estate Agent (top 1% in New Zealand) for over 26 years and always working in West Auckland I know the real estate market and the rental market very well.  

In this and future newsletters I hope to provide ongoing up to date information relevant to landlords who own rental properties in West Auckland.  

Regular features will include: 

• Current sale prices
• Current mortgage rates
• Current rents
• A monthly suburb spotlight review
• A relevant feature article each month       

                                                                     Source REINZ

Source – J Goodrum – Internet search

 Source NZ Government building & housing

Source NZ department of statistics

Housing Shortage and Earthquakes

We already have a housing shortage in Auckland estimated to be around 40,000 houses. The problem is getting worse, not better. Auckland needs 13,000 new houses each year just to take care of the growth in the city’s population but last year there were only 9,700 building consents and not all of them will get built. New Zealand net migration is now sitting at a high of 70,000 for the year to September 2016 and a large portion of these settle in Auckland. 

The problem of building more houses even if more land is made available and Auckland Council is made by the government to speed up the process, is that there simply isn’t enough builders and tradespeople available. This was the case at the beginning of this month. Now, following the 7.8 magnitude earthquake and the many aftershocks around Kaikoura, there is a lot more homes to build, repair and strengthen in many places in New Zealand, including Wellington.  

This is going to worsen the availability of builders, tradespeople and contractors to develop bare land into residential subdivisions in Auckland as people and machinery are needed for infrastructure and building work elsewhere. 

What is the implications for house prices in Auckland? They will increase in price due to the increased cost to build as tradespeople will be able to charge more for their services, putting up the price of new builds and this will relate to increased prices for exiting houses. 

You can “tinker” all you like with LVR and so on but it basically gets down to economics 101. 

1. SUPPLY = DEMAND……..steady prices
2. SUPPLY greater than demand…..falling prices
3. SUPPLY less than demand……increasing prices. 

We are likely to have condition 3 for even longer now, perhaps 3 or more years. 

Until next time, 

Best wishes,

John Goodrum

Licensee Agent REAA 2008
021945140