Meth main concern
Damage to property, especially by meth contamination, was the top concern of investors who took part in the 2017 ANZ Property Investment Survey, which was released in mid-October. Forty-eight percent of investors viewed meth contamination as a risk – a 10% increase on last year. Despite their concerns, investors remained confident in the future of the sector, with 74% expecting positive changes in property values over the next five years and almost 70% of respondents indicating they would buy again.
Bank CEO urges Capital gains tax
The head of one of New Zealand’s major banks says the new government should make a capital gains tax one of its policy priorities. Speaking shortly after the election, BNZ CEO Anthony Healy told Newsroom that such a policy would help rebalance the economy. But the government must at the same time reduce other taxes so there’s no overall increase in tax revenue.
Only two takers for Rental warrant of fitness
Wellington City Council says despite good interest from landlords in the first six weeks of its rental warrant of fitness scheme, only two landlords had applied by mid-October. The voluntary scheme was developed by Otago University, Wellington City Council and the NZ Green Building Council. The warrant, which costs $250 and aims to raise the bar for minimum housing standards, contains more than 29 criteria to assess whether a house is warm, dry and safe to live in.
Demand cools as rates rise
KPMG said steadily increasing floating rates on new mortgages might be contributing to a cooling demand from house buyers. Loan-to-value restrictions in New Zealand and rules in China restricting the flow of money overseas had also played a part. “However, fundamental factors bolstering the market are expected to persist over the short to medium term,” KPMG said in the commentary to its latest Financial Institutions Performance survey.
Investor yields looking up
Until recently, yields have been trending lower as property prices rose faster than rents, reducing the rental returns available to investors. But that appears to be changing, according to interest.co.nz’s Residential Investment Property Rental Yield Indicator, which tracks the REINZ’s lower quartile selling prices for 3- bedroom houses in 56 locations around NZ where there are high levels of rental activity and matches them with the median rents on newly rented 3-bedroom houses in the same areas. This allows it to track changes in the income earning potential of rental properties throughout NZ.
