We pulled 6 gems from the torrent of property news this week to keep you abreast of the most important insights affecting investors. 16-22 November 2019
The big news this week was the government’s plans to hit property investors even harder, part of its ongoing “war on landlords”. Read all about it here…
No-Cause Eviction Ban – The Unintended Consequences
Associate housing minister Kris Faafoi has turned a blind eye to the harm that the ‘no-cause eviction’ ban will have on tenants, neighbours and landlords.
The Government has agreed to changes to the Residential Tenancies Act. These changes will be set out in legislation, due to be introduced to Parliament in early 2020.
Expect to see more investors exit the market, more renters driven into state housing as the supply of rental properties dries up, rents increasing in line with the decreased supply, tenants fighting increased competition to get a rental property, neighbours of bad tenants being unable to do anything about the antisocial behaviour.
At the same time, expect politicians of the red and green persuasion to be patting themselves on the back for all the chaos they’ve created.
The key proposed changes, implications, and investor feedback are listed in the article…
Green Party says Govt plans shift power imbalance from landlords to tenants
Landlords have hit back at new tenancy law reforms, saying the latest rules will make it harder to evict anti-social tenants.
Landlords will no longer be able to get rid of tenants without reason, under law changes announced today by Associate Housing Minister Kris Faafoi.
They say the law change will make it much harder for landlords to get rid of unsavoury renters, which will also affect neighbours of bad tenants who will have to put up with them for longer.
But the Green Party says it shifts a power imbalance from the landlord to tenants.
Two new studies show moving Ports of Auckland out of Auckland not cost effective
At last some sanity prevails in the long-running, highly politicised proposal to move Ports of Auckland’s freight business to Marsden Point, on the southern head of Whangarei Harbour.
Earlier, EY (Ernst & Young) prepared an economic evaluation for the Upper North Island Supply Chain Strategy working group. EY calculated a benefit:cost ratio of 2:1. It put the total net cost of moving Ports of Auckland’s freight task to Northport at $1.8 billion in present value terms. Chalk one up for the ‘move’ lobby.
Ports of Auckland got a review from the NZ Institute of Economic Research and a second assessment from Castalia Ltd. Castalia pointed to major flaws in EY’s analysis and estimated the cost of moving at $6.7 billion in present value terms, nearly 4 times more than EY’s estimate, brining the cost:benefit well below 1. Chalk one up for the ‘stay’ lobby.
The Institute of Economic Research report summed up by saying EY’s analysis and the study group’s recommendations should be treated with a high degree of caution. Chalk two up for the ‘stay’ lobby.
New home completions in Auckland up 25% on year ago
Auckland Council issued 3,534 Code Compliance Certificates for new dwellings in the third quarter of this year, up 25% compared to the third quarter of last year and up a whopping 82% compared to the third quarter of 2017.
Although the residential construction industry faces headwinds, including capacity constraints, funding challenges, cost pressures and ongoing problems with buyer affordability, it’s not showing any sign of slowing down yet.
According to Statistics NZ, the total value of new dwelling consents (excluding land) issued in Auckland in the 12 months to September was $5.63 billion, up 17% on the previous 12 months and up 37.3% on the same period two years ago.
ANZ cuts home loan rate to match KiwiBank
New Zealand’s largest home loan bank has chosen to match the hot 1-year rate from the smallest of their major home loan rivals as wholesale rates stay low.
ANZ has set an effective new lower one year fixed mortgage rate, matching Kiwibank.
It’s not quite a formal rate change, but ANZ says its staff can match Kiwibank’s one year home lending rate of 3.39% “for ANZ customers, subject to their terms and conditions”.
Term deposit rates up and down
A big surprise this week was minnow KiwiBank increasing its 1-year term deposit rate to 2.75% (from 2.7%). Before you get too excited though, term deposit rates continue their overall trend down. ASB just dropped its 1-year rate to 2.55%. The major banks are now clustered between 2.55% and 2.65%.