14 minute read
PROPERTY INVESTING
JOHN ELLIOTT: HOUSING CRISIS STILL UNSOLVED - SHARED EQUITY SOLUTION POSSIBLE
This article is not about apportioning blame, but is an attempt to suggest a solution.
It is a fact, despite National maintaining to the bitter end of their reign that no crisis existed, that a huge housing crisis does exist in New Zealand, with the worst example being Auckland.
Young families who are tied to Auckland by their jobs are between a rock and a hard place. They can neither afford to buy a house, unless the bank of mum and dad can pay for most of it, but worse still they cannot afford to rent either. What are they expected to do - live under the harbour bridge with other homeless souls?
Labour has been totally preoccupied with its response to Covid-19, and in my book has done well, but now they must address some of the inequalities that have become so much worse in the last 35 years since Roger Douglas and his neoliberal mates went mad for a time in New Zealand.
In his latest book just out, ‘Too Much Money, How Wealth Disparities are Unbalancing Aotearoa New Zealand,’ Max Rashbrooke says right at the outset of his introduction: “In the last few decades, an apparently ordinary financial institution has assumed an importance that could hardly have been foreseen. It is the bank of mum and dad.”
Rashbrooke calls this ‘insidious’ because it allows some young people a significant and completely unfair advantage over others. Shamubeel Eaqub calls it, “the return of the landed gentry".
So what can, and will, a Labour Government do about this inequality? So far, not much, although the government has launched a shared home ownership scheme for families who can’t save a deposit. Through the scheme, Kainga Ora would take an equity share in a property to assist first home buyers who could service a mortgage, but need help raising a deposit. Housing Minister Megan Woods said, “A core belief of this government is that everyone deserves a warm, dry and secure home whether they own or rent.”
Under the first home partner scheme, Kainga Ora would take an ownership share of the home it helped families buy. Over time new households would buy those shares back to become homeowners.
The proposal has been welcomed, but it is still unclear who will build these houses, where, and what the shared equity might look like.
Habitat for Humanity has pledged to build 40 homes under the scheme with the 13.8 million dollar zero-interest loan it would get from the government. So there is some action, but it’s slow and spasmodic.
The price of land in Auckland is a huge impediment, but the National and Labour current proposal for three storey in-fill towers throughout central Auckland would be no help to first home buyers. Those new apartments are likely to be priced at nearer $2 million than one, both prices well out of reach of first home buyers.
Labour has two years until the 2023 election to work on wellbeing, poverty, and inequality. It should get a further chance in 2023, but that might be it. Few New Zealand governments get more than three terms in government. National is the only party in 65 years to secure a fourth term, winning in 1960, 63, 66, 69 before losing to Labour in 1972. Just do it Labour - while you still retain power. (JOHN ELLIOTT) PN
PONSONBY NEWS+ December 2021 35
Leasehold Learnings. Move up a level.
Not all leasehold property is created equal. There are many different types and in this article we demystify some common misconceptions.
Leasehold property is largely unknown territory for Kiwis. But as our city continues to extend its outer suburbs, waterfront living is set to become increasingly desirable and a major drawcard to our city of sales. Hear from the team of leasehold specialists at Ray White Wynyard Quarter about waterfront leaseholds.
Who owns the land?
Different properties are owned by different groups but Auckland waterfront apartments are predominantly owned by these four groups: - Nga - ti Wha - tua-o-O ra - kei - Viaduct Harbour Holdings LTD - The Ports of Auckland, which own Princes Wharf and leases it to Dockland Apartment Leases Limited - Panuku Development Auckland Limited (Wynyard Quarter)
How does a lease work?
A lease agreement is generally between two parties the ‘lessor’ (land owner) and the ‘lessee’. This lease agreement normally outlines the terms of the lease, i.e ground rent review dates, the length of the lease and standard memorandum terms.
Is it possible to predict ground rent increases? How is the ground rent calculated?
In some circumstances it is, for instance, the ground rent for Princes Wharf is increased annually by 3% or the CPI (whichever is greater) and this is fixed until at least 2039. However, most increases are calculated from the land value and depending on the length of the lease it is normally worked out every 5-7 years. The ground rental is established either with an agreement between the parties (the body corporate and lessor) or in arbitration between registered valuers acting for each party. Land value is determined by analysing unimproved freehold sales of comparably zoned land.
How long is a lease?
There are two types of lease lengths: in perpetuity and finite. The length of the lease is normally outlined in the agreement. The majority of the Viaduct Harbour Holdings leases are 999 years in perpetuity, renewable every 21 years. On the other side of the scale, a lot of Nga - ti Wha - tua leases are finite with a lease term of 150 years (or Princes Wharf with 97 years) and you will need to return the land and the buildings to the freehold owner in the condition specified in the lease. Some developments, such as 30 Madden in Wynyard Quarter, have pre-paid the ground rent for the next 128 years – which is reflected in the property price.
What are the benefits of leasehold?
There are a number of benefits to buying leasehold property, however the biggest benefit would have to be lifestyle. As most of the Auckland waterfront is surrounded by leasehold apartments the only opportunity to live there is to purchase or rent. Leasehold property is generally cheaper to buy than if it was on freehold land because you are not purchasing the land component. This allows you to live in a prime location without having to pay what would otherwise be a prohibitively high price. A number of savvy investors turn to leasehold for the high yields this can create. Short stay accommodation such as Airbnb means waterfront properties can earn a healthy nightly rate from people choosing to rent out an apartment rather than a hotel room. Waterfront property generally rents very well, or makes an impressive Auckland city pad to live in yourself.
What is the current rental demand like?
With a number of major corporations now basing their operations in Wynyard Quarter, there is a shortage of good quality, long term rental properties.
Opportunities:
8/143 Pakenham Street West, Wynyard Quarter
2 Bed, 2 Bath, 1 Car
Auction: 6pm, 14th Dec 2021 [ RV: $1,550,000 ]
Body Corporate: $8115.54 per annum Ground Rent: Prepaid for 128 years Rental Appraisal: $1,350 per week Chris Lewis - 027 405 0287
45/143 Quay Street, Princes Wharf
4 Bed, 3 Bath, 5 Cars
Set Date of Sale: 2nd Dec 2021 [ RV $3,500,000 ]
205/121 Customs Street, Viaduct
1 Bed, 2 Baths, 1 Car
Auction: 12.30pm, 9th Dec 2021 [ RV: $940,000 ]
Body Corporate: $9744.46 per annum Ground Rent: $16,140.51 Rental Appraisal: $750 per week Gabriela Galateanu - 020 414 13853
2C/87 Halsey Street, Wynyard Quarter
1 Bed, 1 Bath
Asking price: $369,000
Body Corporate + Ground Lease: $19,753.20 per annum Rental Appraisal: $600 per week Mitch Agnew - 021 445 962 / Chris Lewis - 027 405 0287
Ask our friendly local team about the exciting opportunities - we’re anchored, calm and onboard!
Ray White Wynyard Quarter | 132 Halsey Street | (09) 308 5511
THE 2021 HADDOWS WINNERS FOR PONSONBY RESIDENTIAL REAL ESTATE ARE…
With the 2021 calendar year nearly at an end, it’s time to announce the winners of the prestigious Haddows real estate awards – a review of some of Bayleys Ponsonby salesperson Blair Haddow’s most memorable sales and property-related events over 2021.
So without any further ado, the winners of this year’s Haddows are…..
Highest $-value sale of the year: 25 Hackett Street – a stunning and majestic totally modernised four-bedroom/three-living room area residence which public property records show sold for $6.358million. Exquisitely designed and finished throughout with state-ofthe-art fittings and fixtures, the home’s master bedroom spans the entire width of the upper floor, and has its own private deck overlooking the heated swimming pool and rear yard.
The most people through an open home in one day: 42.
Most bids on a property (also the winner of the longest auction of the year award): 99 Franklin Road – a mixed-use property which was originally a four-bedroom/one-bathroom residence with double off-street car parking, but more recently has been used as commercial premises by its current owner and their professional services business.
The auction for the property was held online through zoom during Auckland’s recent lockdown. The auction lasted for 56 minutes and drew a total of 58 bids – many of those in increments of just $800 through a commercial salesperson within Bayleys. The property eventually sold for $2.43million to Blair’s buyer.
The longest distance property inspection of the year: New York – some 14,220 kilometres away. An ex-pat’ Kiwi and his New Zealand wife asked Blair for a 30-minute Facetime viewing of a Grey Lynn villa Blair was selling. After setting up a suitable trans-global time, Blair held up his mobile phone and wandered around the dwelling – from the front garden, through the front doors, around the living spaces and bedrooms, before giving a tempting glimpse of the backyard and swimming pool. The New York-based Kiwi duly made a pre-auction off on the villa, but was subsequently out-bid by another buyer at auction.
The most unusual listing pitch of the year: 18 Sentinel Road in Herne Bay (being auctioned by Bayleys Ponsonby as this edition of Ponsonby News was going to press).
Following stringent Covid-19 protocols and strictest contactless meeting guidelines, the property owners/vendors sat in their car outside the home while Blair extensively examined the property to formulate the necessary marketing and sale process recommendations.
Blair then sat alone in his car, while the vendors sat in their vehicle parked behind him, and the two parties continued discussions over their mobile phones.
Biggest life-changing moment of the year (both professional and personal): Blair buying his new St Marys Bay ‘dream home’ at the beginning of the year. For Blair, the process was a timely reminder of how emotional and nerve-wracking the auction procedure can be. Nervous Blair hardly ate or slept at all in the three days leading up to the auction.
However, knowing how auctions work, Blair went in with a set strategy on opening the bidding and what increments to raise the bidding by – exactly the type of advice Blair gives potential buyers coming to his auctions.
Blair said the auction wholeheartedly reinforced how transparent the real estate sales process can be, and how auctions really do achieve the best market price for a vendor on the day.
www.facebook.com/BlairHaddowRealEstate
SUMMER IS HEATING UP, AND SO ARE BOOKINGS FOR KIWI BACHES
The mercury is rising, spring showers subsiding, and Aucklanders finally have freedom in their sights.
The announcement of the border opening on 15 December came with a sigh of relief for many; we will get to spend Christmas with loved ones and travel outside of Auckland for the first time in over three months. While we’re certainly not out of the woods just yet, the huge effort by healthcare workers and the public means we can enjoy a sense of normality this summer. For many Kiwis, that will include booking a bach.
The latest data from Bachcare, New Zealand’s largest serviced holiday home management company, shows just how eager Aucklanders are to travel. On the day of the border announcement, Bachcare had their busiest day of bookings since June 2020 when Aotearoa moved to Alert Level 1 out of the very first Covid-19 lockdown. Compared to the previous day, this was a 58% surge in bookings. As expected, an even greater increase was seen with Auckland guests where bookings were up 159% compared to the previous day.
The data also revealed that guests are going against normal travel trends in that they aren’t waiting until Christmas to travel. The most popular departure date for Auckland guests on the day of the announcement was 17 December, the first Friday of freedom, for an average length of stay for 2.23 nights. Aucklanders can’t wait to get out.
The Bay of Plenty, Coromandel, Northland, and other drive-to destinations are among the most popular regions given there is still some hesitation to lock in flights. Waihi bach owners like Karen and Corey are prepared for a busy summer of bookings. They are especially looking forward to not having to lift a finger, knowing their guests and holiday home are being well-cared for by Bachcare.
The owners of the Modern Kiwi Bach [Bachcare property ID 1049701] had previously listed the home on Airbnb and received a few bookings, but Karen quickly realised she didn’t have the time to manage the logistics of a holiday rental. When looking for a full-service property manager, Bachcare appealed to Karen because of the 100% management approach. Given how much is involved, she finds the Bachcare service offers great value for money. Having the local manager was particularly appealing to the family given they live in Auckland.
“To have a service that manages the marketing, bookings, customer communication, property management, cleaning, guests while they are in-house, and a customer service centre for the level of commission is spot on.”
For Karen and Corey, offering their second home up for rent has never been about the money beyond covering expenses. In saying that, they’ve been impressed with the number of bookings they’ve received in just 18 months. In fact, The Modern Kiwi Bach has received 40% more bookings than the average number for Bachcare properties in the Waihi Beach area.
If you’re looking to cover the expenses of your holiday home, now’s the perfect time to get everything in order and make the most of what is set to be a record-breaking summer for bach bookings.
www.newowners.bachcare.co.nz
Make their Make their summer stay your payday summer stay your payday Cover the expenses of your holiday home by listing with Bachcare, the hands-free way to rent your happy place.
Summer is just around the corner and listing your bach is a great way to help cover the overheads and upkeep. If your bach sits empty most of the time, we could be putting your property to good use and earning you some extra money. Bachcare is New Zealand’s leading specialist when it comes to short-term property management. With 17 years’ experience in the holiday rentals game, we make the process of renting your holiday home smooth and simple. If you’re looking for a hands-off way to rent your happy place and start earning a passive income, Bachcare is your one stop solution.
Summer is just around the corner and listing your bach is a great way to help cover the overheads and upkeep. If your bach sits empty most of the time, we could be putting your property to good use and earning you some extra money. Bachcare is New Zealand’s leading specialist when it comes to short-term property management. With 17 years’ experience in the holiday rentals game, we make the process of renting your holiday home smooth and simple. If you’re looking for a hands-off way to rent your happy place and start earning a passive income, Bachcare is your one stop solution.
Get in touch to list your bach today.
Maximum rental returns through data-driven pricing
Post-stay cleaning by locally-based managers
Guest enquiry and bookings management Portal for tracking bookings and calendar blocking
Professional set of photographs and online listing
Property listing on our site plus partners such as Airbnb and Bookabach
@ TONIC TILE LOUNGE
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