Property Investors eye rent rises
Many of Quinovic’s property investors – especially those with properties in Auckland – are reviewing their rents as they approach the end of another year of increases in property values and council rates rises.
Recent surveys of landlords have shown a majority intend to put up rents. Our Property Managers are keen to assist any clients considering increases by sharing their information and insights about local market conditions and providing advice on acceptable rents for specific properties.
Many property investors already dealing with rising insurance costs have also been hit with significant council rates increases, which were a significant contributor to increased housing costs for the September quarter, according to Statistics NZ figures released in late October. Housing rentals were up 2.2 per cent for the quarter, while the cost of newly built houses jumped by 4.8 per cent.
Meanwhile, low quarterly and annual inflation figures provided some reassurance for property investors as economists agreed the Reserve Bank was likely to hold interest rates steady for some time.
September quarterly inflation of 0.3 per cent was lower than expected, and annual inflation was down to just 1 per cent – the lowest since the lowest the middle of last year.
And a year on from the introduction of the LVR 20 percent deposit rules, Reserve Bank Governor Graeme Wheeler credited the restrictions with dampening house-price inflation and credit, and reducing consumer price inflation pressures. Mr Wheeler did not predict when the LVR rules would be lifted or relaxed.
A useful round up of current and predicted future mortgage interest rates by Bernard Hickey at interest.co.nz, on October 21, noted that banks had been cutting their two and three year rates by more than 50 basis points since the beginning of August. “Two year mortgage rates have fallen clearly below 6% and now around 100 basis points below advertised mortgage rates”.
Bank economists were recommending fixing over floating rates with 2-3 years fixed being the most attractive.
Immigration boom to sustain property market:
Immigration has, in recent years, been a key driver of the rental property market and investors will be welcoming news that demand for accommodation by new arrivals to New Zealand shows no sign of dropping.
Record immigration numbers were released last month and the Government is stepping up its drive to attract skilled workers, including expat Kiwis, from countries such as the UK and Australia.
Figures for the 12 months to September revealed an unexpectedly high inflow, which the Government said was being driven by international students, particularly from India, and more people returning home from Australia.
Immigrants totalled more than 105,500 for the 12 months and the net loss of 6000 people to Australia was the smallest since 1994. The record net gain totalled 45,400 people compared to the previous record, in 2003, at just 42,000.
Meanwhile, Government will hold a series of job expos in the Australian state capitals starting this month in Perth and Sydney. Organised by the Ministry of Business, Innovation and Employment, together with international employment event organiser Working In, the job fairs aim to encourage more Kiwis to return home and Australians to settle here to help fill emerging skills gaps and support thriving New Zealand-based businesses.
Tertiary Education, Skills and Employment Minister Steven Joyce says some New Zealand employers, particularly in the construction, engineering, and ICT sectors, are finding it hard to recruit sufficient numbers of skilled and experienced workers. These targeted job expos build on the success of similar events in the United Kingdom and Ireland and will expand the pool of potential candidates for New Zealand
employers wanting to grow their businesses.
“For many people Australia and New Zealand are becoming one labour market. We’ve donated lots of our people to work over there in the last 20 years. Now with our economy doing better, it’s time to get more people moving back the other way.”
If you are wanting to talk to an experienced property manager, contact Quinovic Parnell