Time for a sea change - Monday 7 January 2019. https://www.landlords.co.nz write up. - 7th Jan 2019

Time for a sea change  -  Monday 7 January 2019. https://www.landlords.co.nz write up. https://www.landlords.co.nz/article/976514124/time-for-a-sea-change

Time for a sea change

Monday 7 January 2019

Regional Review

Time for a sea change

Nelson-Tasman is famed for its lifestyle attractions but its solid price growth and tight rental market make it a good option for investors too, writes Miriam Bell.

Proudly staking its claim to being the sunshine capital of New Zealand, the Nelson-Tasman region has a very particular set of attractions. Sitting at the geographic centre of the country, the region is blessed with significant natural bounty – including stunning beaches and the Abel Tasman and Kahurangi National Parks.

Nelson itself is one of New Zealand’s oldest settlements and is a solid economic performer. It has the largest fishing port in Australasia, a range of industries in established areas like forestry and tourism and new, exciting ones like aquaculture and boutique brewing. Thanks to a thriving arts scene, it has also become known for its lively city centre and an alternative, creative vibe.

That all means the region has become popular with both those seeking a sea change and those looking to retire for a gentler pace of life. As a result, it has one of the fastest growing populations in the country. And that has led to a strong, healthy housing market.

In recent years, the Nelson-Tasman region has seen good price growth and an increasingly tight rental market. Experts say a slow-down of sorts is likely and, further, that there are some unique issues impacting on the market. But they also continue to predict a rosy outlook, with options for investors, going forward.

Price performer

Unlike many other regions, Nelson-Tasman has long seen decent house price growth. It is estimated that over the last 10 years Nelson’s house prices have gone up by an average of 78% while Tasman’s have risen by 66%.

One of the main reasons for this is the strong demand generated by the growing population. But the latest data highlights just how strong the region’s market continues to be.

The latest QV House Price Index shows that Nelson values rose by 7.7% in the year to October and by 1.7% over the past quarter. This leaves the average value in the city at $593,947. Likewise, values in the Tasman District have also continued to rise. They were up 7.2% year-on-year and 1.0% over the past three months, leaving the district’s average value at $586,219.

QV’s Nelson property consultant, Craig Russell, says land values have significantly increased in the city centre, mostly due to its lifestyle appeal and the limited supply of properties. “But investor activity has been quieter than usual. This is a likely result of more modest returns, a limited prospect of strong capital growth in the short to medium term and increased compliance costs on the horizon.”

The October data from REINZ also points to a healthy market. It has Nelson’s median price up by 15.8% year-on-year to $518,000. The wider Nelson/Tasman/Marlborough region saw median prices up by 10.5% and sales volumes up by 16.9%, once seasonally adjusted.

REINZ chief executive Bindi Norwell says the market remains positive across the board and there are still buyers that are relocating from Auckland and other regions. “This suggests that the region continues to be seen as affordable. The Nelson area is seeing the majority of relocated buyers.”

However, the REINZ data suggests the market is slowing down. Norwell says that when looking at September compared to October in the region, the increase in median price was smaller than expected. At the same time, a decrease in the sales count was fractionally greater than expected.

First National Real Estate’s Martin Wilkie agrees that buying demand has gone down a little of late. But not prices, which continue to tick over well, he says. “We don’t tend to see the troughs that you do in other markets. Still, I see prices plateauing a bit and cooling over the short to medium term. They won’t be like they have been over the last 18 months or so.”

He is still seeing a fair amount of out of town investors active in the market. “But Mum and Dad type investors are starting to get out a bit because the market is getting so much tougher for them.”

Supply constraints

There may have been a decrease in investor activity, but prices are staying put. That’s not just because of population growth. The Nelson-Tasman region’s unique supply constraints have contributed too.

Nelson City, which is surrounded by hills and the sea, has run out of flat land to build on, Nelson Property Investors’ Association secretary Glenn Morris explains. While building can be done on the hills, it is more difficult and the land available is constrained.

The surrounding Tasman District which has lots of flat, rural land is the obvious solution. But the Tasman District Council (TDC) has long tried to restrict such growth and it’s only recently that developers have managed to push through, he says.

As a result, there’s a major shortage of housing. Morris says there is intense competition for properties on sale as well as strong demand from people with deep pockets. “But the number of properties available in Nelson is very low and that is keeping the prices up.”

Supply pressures do look set to alleviate going forward. Some relenting on the part of the TDC means some major developments are set to go ahead. One of these, the Richmond West subdivision, will create 1,500 new dwellings plus two retirement villages.

Additionally, REINZ reports a recent increase in the amount of properties available for sale. The region’s inventory was up by 8.3% in October as compared to October 2017. Morris puts this down to a spring lift. “Only time will tell if these new listings will impact on current record high house sale prices.”

Rental squeeze

It is not just Nelson-Tasman’s sales market that is affected by the shortage of housing. The region’s rental market is extremely tight. Tenant demand is high but there’s limited stock and rental vacancies are very low.

This state of affairs is good for investors as it makes for strong rent growth. Summit Real Estate property management GM Stewart Henry says they have seen rent increases in Nelson of up to 10% and in Tasman of 7% over the last year and of 3% per year over the last 10 years.

It has left rents at record levels. Realestate.co.nz has the region’s average weekly rent at $437 in October, up from $430 in September. And all our interviewees believe they are still rising due to the ongoing rental pressures.

Despite this, returns are not as high as in some other regions, with Realestate.co.nz putting the average rental yield at 3.39%.

Looking at three-bedroom houses, Henry says the average in Nelson is 3.9% and 4% in Tasman. “I’d say the hot spots for investors are Nelson City two-bedroom flats and units which have returns averaging 4.6% and Tahunanui Stoke for two-bedroom flats and units returning 4.8%.”

However, the region’s tenant pool is generally considered to be good quality and it benefits from seasonal workers who come to work in the fishing, forestry and fruit industries. The region’s tenants also have a preference for long term tenancies.

Henry says properties don’t sit around empty for long. “There is always a choice of tenants and if tenants are looked after well they tend to stay in the properties. If you look at websites like Realestate.co.nz you will see that Nelson has far fewer vacant rentals than other cities like Auckland.”

Top spots

Investors looking to buy do need to think about where they are buying, even though the supply shortage means there is demand for property throughout the region.

Morris says it pays for investors to remember that rental demand is actually highest in the Tasman district due to the very low number of vacancies there. “But in a number of urban areas – Richmond, Golden Bay, Wakefield, Motueka – there is also huge demand for rentals and good rates of capital growth.”

Some of the suburbs with older housing stock are more affordable but they don’t offer the same quality, he adds. This is backed up by QV’s Russell who says properties that are mostly in original condition, or have significant deferred maintenance evident, have proven difficult to sell or have sold at more modest levels, particularly in the Port Hills.

“In contrast, the College and Cathedral area, in particular, has proven popular given its proximity to good schooling and central city amenities. Modernised character homes in this area are generally selling in excess of $900,000.”
 
Wilkie also picks Richmond as a suburb with potential as it is popular with families and, therefore, good for long term tenants and solid returns all year round. It’s also set to expand due to the planned developments.

“But Motueka is coming into its own while Moutere is a bit of a jewel in the crown. It’s a lovely village which is great for short-term, holiday type rental properties.”

But investor Harry Pearson, who owns four properties in Nelson, believes properties in areas close to the city centre are winners. He also says that if an investor can make the numbers work, high demand for one or two-bedroom flats makes them an attractive option.

“Most importantly though, buy a place with all day sun. They are warmer and drier so they have less problems with damp. You can get houses that are cheaper because they get less sun but you will struggle to find good tenants for them.”

Words of wisdom

All our interviewees say the fact that being a rental property owner has got a lot harder means investing has become less attractive. But they also all still see opportunities in the Nelson-Tasman market.

The planned developments means new builds are an option for investors, while the region’s ageing population means there are growing numbers of older houses ripe for value-adding renovation coming on to the market.

There’s also plenty of activity in the holiday rental, Airbnb market – although it is competitive. Pearson thinks there is opportunity for investors in short-term accommodation for seasonal workers and students. “For those starting out, maybe younger investors, there is scope in the rent-by-room option, which would also help the rental shortage.”

Overall, the market’s outlook is healthy, Wilkie says. “When it comes to financial returns for investors, I don’t see price growth just finishing. More people are seeing what the region has to offer. It’s a lifestyle destination for people. They are going to keep coming so prices will remain strong and the area will keep going up.”

1 January 2019 Newsletter. - 1st Jan 2019

1 January 2019 Newsletter.

 
Occupancy rate 100%
Arrears 1.08% for December 2018
 
Welcome to 2019!! Our staff is back after enjoying a break over the Christmas New Year period ready to continue providing excellent service to our valued clients. I hope Santa has been good to you all and has delivered on many stress-free options for you to spend your leisure time. The end of last year saw us working through to the 24th as we continued to take on new management, complete property inspections and work through maintenance issues prior to the break. Our notified Letting Fee changes came in to force on the 01/01/19. 
 
Chris Varcoe Manager at Haven Property Management.
 
Rental Market
 
Many commentaries over the past 4 weeks have focused on the cost to tenants to cover off the letting fee charged, effectively increasing the rents on properties. We see no difference in Nelson with rents looking to be adjusted to counter the letting fee. The secret being that the longer the tenants remain in place the better off Landlords will be as there will be no letting fee charged and rents will increase. The average length of a tenancy with Haven Property Management is 3.3 years and see this increasing.
There is still a lack of quality rental properties in the Nelson Tasman region.
 
Property rental listings in the Nelson Tasman region have slowly increased prior to Christmas as we traditionally experience, with many properties advertised for short-term tenancies throughout summer. At the end of December, there were 80 rentals available: 22 three bedroom properties, 24 two bedroom properties, 17 one bedroom and only 14 four bedroom properties available.
 
The median rent received in Nelson/Tasman for the month ending November 2018 was $409.58 an increase of $1.92 per week from October. The average rental in Nelson Tasman has increased by 5.45% in the past 12 months. (NZ Property Investor)
Our occupancy levels are 100% for the month of December.
 
The market is finally starting to see the return of the investor. Interest in quality dwellings is on the rise as many banks have relaxed their Loan To Value Ratios (LTV)come down to 20% from 40%. Current gross yields can be as high as 5.5% for the right property purchase with investors looking at the long-term gains in a buoyant economy and rising rents forecasted to continue.
 
Meet the Team

Kendall Robinson - Property Manager

Kendall is about to celebrate her first year’s anniversary with Haven. She brings an infectious, high energy to the office and enjoys building relationships with Owners and Tenants alike. Having owned property Kendall has a feel for prioritizing maintenance and working with Owners for the best outcomes. Kendall has a genuine interest in building and construction and has renovated homes previously. Kendall has experience working on two $5m Shopping Centre redevelopments while living in Australia and excelled in the role of Project Coordinator. Kendall also has experience asPT instructor and can be found at the gym most mornings.
 
Rental Disbursement
 
The next rental disbursement will be on Tuesday 15th of January for mid-month payments and Friday 1st February 2019 for the end of the month payment and statement.
 
From the team at Haven Property Management.
 
"More than just collecting the rent."
 
 

 

RISING RENTS ON THE HORIZON AS GOVERNMENT POLICY KICKS IN - 1st Dec 2018

RISING RENTS ON THE HORIZON AS GOVERNMENT POLICY KICKS IN Link from our December newsletter

PLEASE CLICK THE LINK BELOW.

https://www.realiq.nz/news/2018/11/20/lettingfeeban?ct=t()&mc_cid=fa3e371b1b&mc_eid=2752da220a
 

1 December 2018 Newsletter. - 1st Dec 2018

1 December 2018 Newsletter. Occupancy rate 98.23%   Arrears – 0.26% for November 2018
 
As this is our last Newsletter of 2018, I would like to take the time to acknowledge all our valuable clients whom many we have worked extremely closely with on refurbishment projects, large maintenance projects, insulation projects and those who have had tenants vacate. Your support in making the compliance legislation as smooth as possible means a great deal to our Property Managers. The relationships built over time are testament to the sound work our staff continue to administer to ensure your best interests are being catered too. Without a doubt it has been a testing past 12 months for property owners and Property Managers alike, as an over zealous Government have moved to implement change across a variety of criteria.

Grocery Vouchers
 
Thanks to those of you who have contacted Nicola to request grocery vouchers. It is still not too late  to acknowledge your tenants by way of grocery vouchers, either $50 and $100 New World   gift cards. Please email Nicola directly at nicola@havenpm.co.nz to nominate your preference by Friday 07/12/18. We have great tenants looking after your properties, so we are happy to co-ordinate this good-will gesture.
 
Rental Market
 
Despite Labours announcement that they ‘did not expect rents to rise’ with the abolishing of the Letting Fee, it is short sighted to believe that Landlords would ‘absorb’ the costs. There is no doubt about it, the costs associated with new legislation will be passed on to the tenants, directly through the increase in rental prices. We will see over the next 12 months a continuing of rental price increases as demand continues for good quality rental properties. David Faulkner of Real IQ addresses the issue.
 
Property rental listings in the Nelson Tasman region have dropped further approaching the Christmas New Year period, down from 101 to 78 across all dwellings. There are only 25 three bedroom properties, 23 two bedroom properties, 17 one bedroom and only 12 four bedroom properties available. This is resulting in large numbers of groups registering to view properties with many high quality tenants being identified.
 
The median rent received in Nelson/Tasman for the month ending October 2018 was $407.66, an increase of $8.04 per week from September. The average rental in Nelson Tasman has increased by 6.27% in the past 12 months. (NZ Property Investor)
Our occupancy levels are 100% for the month of October.
 
Meet the Team
Paul Meeson - Senior Property Manager

Paul and Haven Property Management are synonymous with experienced property management. Paul has forged a successful relationship management career through his ability to listen too and advise Landlords on all aspects of property investment. Starting his Property Management in England, Paul has an established client base, many who have been with him for many years.
An avid runner and administrator of athletics in Nelson, Paul has
an infinity with Crystal Palace in the EPL, for the meantime!!

New rates valuations
 
The Nelson City Council has released the new valuations for properties.  If you wish to check your current valuation please go to http://www.nelson.govt.nz/rates-search/
 
Rental Disbursement
 
The next rental disbursement will be on Monday 17th of December for mid-month payments and Thursday 3rd January 2019 for the end of the month payment and statement.
 
Emergency contact numbers
 
The offices of Haven Property Management will be closed from 2.00pm on the 24/12/18 and will re-open on Thursday 03/01/19 at 8.30am.
Should you have any emergencies that require urgent attention you can reach me Chris on 0272203326.
 
Like us on Facebook and Instagram
From the team at have Property Management.

1 September 2018 Newsletter. - 1st Sep 2018

1 September 2018 Newsletter. Occupancy rate 99.76% Arrears –0% for August 2018

The longer days are very welcome, the blossoms and daffodils are evident, both positive signs that spring is nearly here. It also signals the increase in demand for property management services with a surge in property appraisals being requested in the last two weeks.
The Government signaled the intended changes to the Residential Tenancy Act recently and these are summarised below:

  • The removal of the 90 day ‘No Cause’ notice to end a tenancy
  • Limiting rent increases to one every 12 months, with a formula to be established around the method of calculating increases
  • The increase in days from 42 to 90 for the notice period for property sales
  • The removal of Dutch auctions preventing Property Managers seeking the highest rent a tenant is prepared to pay.
These changes have been signaled to take effect in 2020 so there is a period of lead time, and we see these as relatively minor changes to our business.
The 2nd and 4th  points will not effect Haven Property Management as we adhere to these already.
 
 
Rental Market
 
Listings in the Nelson Tasman region have fallen dramatically with only 128 properties available at the time of writing. Throughout the month the level has been as low as 110 which is placing pressure on the available properties with good numbers looking to view. For house sales, the days on the market are slowly but surely increasing with many property price expectations also falling. Are we seeing a plateau in the prices achieved?
Our occupancy levels are 99.76% for the month of August.
The median rent for the Nelson region across all rental dwellings in July 2018 was $406.00 per week (New Zealand Property Investor August 2018) an increase of 7.13% increase in the previous 12 months.
 
 
Rental Disbursement
 
The next rental disbursement will be on Monday 17th of September for mid-month payments and Monday 1st October 2018 for the end of the month payment and statement.

From the team at Haven Property Management.

"More than just collecting the rent."
 

1 August 2018 Newsletter. - 1st Aug 2018

1 August 2018 Newsletter.

Occupancy rate 99.48%
Arrears 0.26% for July 2018

 
“What does it take to be a compliant Landlord in 2018 and beyond” – a free Property Investors Seminar.

Haven Property Management in conjunction with Real IQ hosted a well-attended seminar last night at Trailways Hotel in Nelson. Our keynote speaker David Faulkner spoke on the Healthy Homes Guarantee Bill and trends relating to Property Management around the country. Alex Davidson (Tax Specialist) addressed the issues of property ring-fencing, the Brightline Test and depreciation aspects of rental property chattels. Tom Pyatt (Mortgage and Insurance Specialist), Neil Allen (Legal Specialist), David Faulkner and Alex Davidson fronted a Question and Answer section providing insight into the burning questions faced by Landlords.
A link to the recording of the evening will be forwarded to all our Owners within the next few days.

Insulation: Have you got yours sorted?
Here at Haven Property Management, we are requesting free assessments for properties that have not had the insulation information provided to us by Owners. You will be aware through the media that the number of properties to be insulated throughout New Zealand is in the hundreds of thousands and the industry has the potential to insulate 40 – 50 thousand per year. Information is now in the media citing things like ‘dobbing in your Landlord’ whereby tenants are being encouraged to complain if their tenanted property is not up to the minimum standards required by 1 July 2019. There is a potential $4,000 fine that will be paid to the tenant!!
We encourage you to act on the quotes you may have received to date from us. If you have knowledge of the insulation in your properties, let us know so we can send out an Owners Declaration for your signature.
 
Industry Qualifications
The Property Managers at Haven Property Management are embarking on an industry training program in preparation for the regulation of the property management industry. Through Skills NZ and NZQA our staff are working toward a Level 4 Property Management qualification that when accompanied with the current Real Estate industry licences held will give Landlords peace of mind that their properties are in good hands.

Rental Market
There continues to be a shortage of quality rentals in Nelson Tasman. Media reports indicate that the region is the third least affordable for 1st home buyers placing additional pressure on the rental market.  Our occupancy levels are 99.48% for the month of July.
The median rent for the Nelson region across all rental dwellings in June 2018 was $397.66 (New Zealand Property Investor July 2018) an increase of 5.39% increase in the previous 12 months.

We would love to hear from you!

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Rental Disbursement
 
The next rental disbursement will be on Wednesday 15th of August for mid-month and Monday 3rd September 2018 for the end of the month.
 
From the team at Haven Property Management.
 
"More than just collecting the rent."
 
 
 

1 July 2018 Newsletter. - 1st Jul 2018

1 July 2018 Newsletter.


Occupancy rate 97.94%
Arrears 0.52% for June 2018

 
In this issue we will highlight the proactive stance our Property Managers take in ensuring your asset is kept to the high standards we expect. Once a great tenant has been identified and signed up, we embark on a process to document and photograph the condition of the property which forms the basis of a trust and understanding relationship with the tenant and depicts the starting standard. Classified as a Commencement Inspection Report your property manager goes through the property, identifying each room, the features in each room, the condition of each feature backed up with photographs.
 
This process ensures that the tenant has an understanding of the requirement to keep the property maintained as it forms the backbone of the Exit Inspection. The report generally takes 2 – 3 hours to complete. We see this as a valuable investment of time as it ensures the tenant can be held accountable for issues outside of regular wear and tear when vacating. Properties are then inspected every 13 weeks to ensure the levels of cleanliness are maintained, any maintenance issues identified and mid to long-term maintenance identified. The proof is that when our tenants do depart 98% of the bonds lodged are refunded without issues and properties can be re-let quickly and the process starts again.
 
“What does it take to be a compliant Landlord in 2018” – a free Property Investors Seminar

Haven Property Management in conjunction with Real IQ is hosting a free seminar on the 31st July 2018 at Trailways Hotel in Nelson. Our panel of experts includes Alex Davidson (Tax Specialist) Tom Pyatt (Mortgage and Insurance Specialist), Neil Allen (Legal Specialist), Ross Alvey (Accountant Specialist) and guest speaker David Faulkner of Real IQ. Find out what is new and relevant in the industry and what it means for you. To RSVP by email click the above image.
 
Rental Market
 
Winter is upon us and we have been fortunate as a region to have experienced low rainfall thus far. Again June has been a very active month for letting properties and quality properties are in short supply. The number of prospective tenants has dropped off, however our high standards and quality vetting are still identifying great tenants.  Our occupancy levels are 97.94%. With the new subdivisions in Nelson Tasman being built on we are seeing a lot of new properties becoming available for rent. One building company spoken to stated that 5 out of 6 properties built are for investors so the market supply is increasing significantly.
The median rent for the Nelson region across all rental dwellings in May 2018 was $398.16 (New Zealand Property Investor June 2018) an increase of $5.49 per week on April 2018 and a 5.60% increase in the previous 12 months.

Rental Disbursement
 
The next rental disbursement will be on Friday 16th of July for mid-month and Wednesday 1st August 2018 for the end of the month.
 
From the team at Haven Property Management.
 
"More than just collecting the rent."
 
Copyright © 2018 Haven Property Management, All rights reserved. 
You are receiving this email because you opted in via our website. 

Rental prices soar in Nelson region as available rentals fall. - 2nd May 2018

Rental prices soar in Nelson region as available rentals fall. https://www.stuff.co.nz/business/103154086/rental-prices-soar-in-nelson-region-as-available-rentals-fall

KATY JONES - Stuff.co.nz

Last updated 17:02, April 17 2018

The percentage change in Trade Me's rental index from March 2017 - March 2018. The median rental price in Nelson has risen to $420 per week, the data shows.

Rental prices in the Nelson region have hit new highs, two reports show, on the back of a big fall in the number of rental properties available.

The median rent in Nelson/Tasman rose 10.5 per cent in the year to March to $420 a week, according to the latest Trade Me Property Rental Index.

The increase was second only to Hawke's Bay, where the median rent grew 14.3 per cent to $400 per week.

The Nelson region's rental market is tough with one renter saying 30-40 people were turning up for a viewing.

Competition for rental properties in Nelson, resulting from the shortage, was described by one house-hunter as "utter hell". 

"I went to one [viewing] in Oxford Street in Richmond, and about 30, 40 people must have turned up, if not more," said the man from Christchurch, who doesn't want to be named for fear of jeopardising the rental house in Stoke that has taken him and his family three months to find.

MARION VAN DIJK

Landlords say loan to value ratio, as well as increases in rates, insurance and maintenance costs is deterring people from investing in rentals.

The construction worker in his 40s was living in a tent in a campground in Richmond, before ex Cyclone Gita "blew it to pieces" in February, and he moved in with his partner's family.

"We were going to viewings and my partner was breaking down in tears, trying to tell them how badly we needed a place to live. And the thing I found frustrating was that we haven't got quite enough to buy a house, but we have money put aside to rent a house, and we couldn't do either."

Despite having $4000 - $5000 of savings set aside for a rental, they kept on getting turned down, he said.

Statistics released by the NZ Property Investors' Federation on Monday, showed Nelson had the third highest rental price rise of 17 cities and main areas over the past year.

The average cost of a rental in Nelson rose 9.2 per cent to $382 per week, the figures for the year to March revealed.

Rental prices in Nelson/Tasman remained static the year before, the Federation's executive officer Andrew King said.

He said a shortage of rental properties was likely to be behind the hike in rental prices.

Rental listings in Nelson fell 15 per cent in the year to March, although there had been an increase in rental listings of 11 per cent over the past month, figures provided by Trade Me revealed.

Cost increases and rule changes were potentially forcing rental investors to pull out of Nelson, King said.

"The people who are established rental property providers won't be as affected by some of these regulations as new people coming in. What we are finding is that the new people coming in just aren't there."

Changes in the loan to value ratio, as well as increases in rates, insurance and repairs and maintenance costs in recent years were some of the factors that had put investors off, he said.

"It's getting harder and harder to provide rental property."

People were also choosing not to become landlords because of unwarranted negative perceptions.

"They're seen as evil people who stop first home buyers from being able to get into the market, they're seen as charging too much in rent, and yet ironically by the finance industry they're seen as not charging enough and not paying enough tax."

Nelson Property Investors Association spokesperson Glenn Morris, who owns 20 rental homes in the region, said his rents tended to be 80 per cent or less than the market rate.

He was not considering selling up, despite past and present governments "doing things to make life harder for" property investors. 

"The people that rent the place, I've got a responsibility to them as well. Because if somebody else then bought it at today's rate, they're going to have to charge more rent to cover their mortgage."

 - Stuff

 

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