RealEstate WINTER 2020
A REAL ESTATE INSTITUTE OF NEW ZEALAND PUBLICATION
$13.80 excl. GST for members
Helping first home buyers – is it time to think more laterally?
Factors protecting NZ from worst of recession Making virtual tours more effective Marketing listings on social media
2020
REINZ AWARDS FOR
EXCELLENCE
CELEBRATING EXCELLENCE IN REAL ESTATE For the Awards period 1 April 2019 - 31 March 2020
Submit your entries now for the 2019-2020 Awards period at awards.reinz.co.nz The Awards Dinner will be held on Tuesday 1 September at Cordis Auckland - Ticket details available soon* Sponsored by *Subject to change
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RealEstate WINTER 2020
A Real Estate Institute of New Zealand Publication
IN THIS ISSUE OUT & ABOUT 08 FEATURES 14 OBITUARIES 22 SECTOR GROUPS 28 EDUCATION 37 INTEREST STORIES 40 FINANCE 48 INDUSTRY 50 LEGAL 52
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EIGHT FACTORS THAT WILL PROTECT NZ FROM WORST OF RECESSION
16 18 20 28 32
HELPING FIRST TIME BUYERS WHAT EXACTLY IS “HIPSTURBIA”
34 42 44 48
WORKING THROUGH THE PANDEMIC HOW WE DO BUSINESS HAS CHANGED! PLANNING TO SUCCEED ON SOCIAL MEDIA KIWISAVER & FIRST HOME GRANT
HOW TO MAKE YOUR VIRTUAL TOUR MORE EFFECTIVE RESILIENCE TIPPED FOR BAY OF PLENTY RURAL AREAS ARE LOOKING GOOD
ADVERTISE THROUGH REINZ The Real Estate Magazine is a quarterly publication distributed to 14,000 members of REINZ. Ad packages are available. If you are interested in advertising contact Kim Thompson - kthompson@reinz.co.nz
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DISCLOSURE OF DEFECTS
Become a Member Benefit supplier. Contact Dee Crooks dcrooks@reinz.co.nz Wanting to sponsor a REINZ event? Contact Louise Gordon lgordon@reinz.co.nz
KEY CONTACTS Real Estate Institute of New Zealand Inc PO Box 5663, Victoria Street West, Auckland 1142 Phone: 09 356 1755 Free Phone: 0800 473 469 Fax: 09 379 8471 Email: info@reinz.co.nz www.reinz.co.nz
Chief Executive
Bindi Norwell, Please refer all queries in first instance to Kirsty Loader, Ph: 09 356 1752, kloader@reinz.co.nz
Advisory Services
Lisa Gerrard, Chief Legal Officer Ph: 09 356 1760, lgerrard@reinz.co.nz
Membership Team
Mary Rackham, Membership Services Manager Ph: 09 356 1750, mary@reinz.co.nz Karen Chambers, Membership Services Admin Ph: 09 356 1845, kchambers@reinz.co.nz Cindy Stowers, Membership Services & Web Admin Ph: 09 356 1849, cstowers@reinz.co.nz
Events
Louise Gordon, Events Manager Ph: 09 359 5454, lgordon@reinz.co.nz
Communications
Dee Crooks, Head of Communications and Marketing Ph: 09 356 1753, dcrooks@reinz.co.nz
Education
Kirstin Brown, Education Director Ph: 09 359 5455, kbrown@reinz.co.nz
Editors
Dee Crooks, Editor in Chief; Kim Thompson, Editor; Ph: 09 356 1753, dcrooks@reinz.co.nz
Design and Layout
MacWork Design & Print info@macwork.co.nz
ISSN 2324-3791
Technology
Kirti Suman, Chief Digital & Innovation Officer Ph: 09 356 1761, ksuman@reinz.co.nz
Finance
Rowan Dixon, Chief Financial Officer Ph: 09 356 1762, rdixon@reinz.co.nz
PropertySmarts
Deborah Dunning, Product Manager Ph: 0204 185 5026, ddunning@reinz.co.nz
DISCLAIMER: Any views or opinions included in this publication do not necessarily reflect the views of the Real Estate Institute of New Zealand Inc but remain solely those of the author(s). REINZ is grateful to the companies who have advertised in The Real Estate magazine who enable us to bring this publication to our members. However, placement of advertising in this publication does not constitute an endorsement of the products and/or services shown. Neither is REINZ responsible for the accuracy of any advertising material.
Important changes to CPD for new salespersons All new salespersons issued their licence from 1 January 2020 are now required to complete verifiable and non-verifiable continuing professional development (CPD) for the year in which their licence is issued. Salespersons who are issued their licence between 1 September and 31 December will be exempt from the CPD requirements for that year. This year’s verifiable CPD programme consists of 4 hours of mandatory topics and 6 hours of elective topics. You can choose from 22 elective topics offered through our approved training providers. Find the complete list of training providers at rea.govt.nz/approved-providers
Know your CPD numbers
20
hours of CPD training each year: Made up of 10 hours of verifiable training (4 mandatory + 6 elective) + 10 hours of non-verifiable training
22 25 31
elective topics for you to choose from
Make the most of your CPD and sign up today! rea.govt.nz/cpd linkedin.com/company/realestateauthority
providers approved by REA to deliver your verifiable training
DECEMBER – the last day to complete your CPD for the year
CEO UPDATE
What a different year 2020 has turned out to be
Bindi Norwell, CEO, REINZ
When writing this column for the autumn edition of the magazine, it was mid-February (we have long lead times due to print deadlines) and the world was quite a different place. We were gearing up for a busy March, there was a lot of activity and confidence in the housing market, median house prices were strong and sales volumes were in a pretty good place.
Then COVID-19 hit our shores at the end of February, and in just under a month, our entire country changed, as did the way we operated and most of the freedoms we enjoyed on a daily basis. I’m not a huge believer in dwelling on the past, as I think it’s better to keep looking forward, but the real estate profession adapted to the constraints placed on the industry very quickly. Using technology to conduct real estate transactions was no longer a ‘nice to have’ it was an absolute necessity, and I’ve enjoyed hearing some of the creative ways salespeople and property managers have adapted what they do in order to keep moving business forward for their customers and clients, both safely and within the rules. Without denying that there are going to be some tough times ahead, the fact that the housing market went into the pandemic in such a strong position suggests that things may not take as long to recover had the market been in an entirely different position. And the feedback I’m hearing from members across the country is that things are looking relatively positive right now which is good news.
Helping the industry We know how members have been significantly impacted over the last few months, but REINZ has been doing its best to support members in a number of different ways. So far, the ways we’ve sought to support the profession include:
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• Giving members free access to FlexiSign for three months until the end of June • Making RentalSmarts free for three months until the end of June • Giving members a three-month free trial of PropertySmarts • Providing three months to pay their membership renewal fees • Providing regular updates and industry guidelines throughout the Alert levels • Advocating for private viewings during Level 3 when the REA didn’t believe they could be done safely • Calling for the Government to provide an extension to meet Healthy Homes requirements • Significantly discounting online verifiable training • Answering hundreds of queries about how the Alert Levels work, and • Providing a number of free webinars. We will continue to support our members over the coming weeks and months, as we have done for the last 105 years. As an industry we are stronger together and we will continue to advocate on your behalf as the voice of real estate.
Looking forward We’re hopeful that things will return to some sense of normality relatively quickly and we’re doing our best to get the REINZ
calendar of events and education back on track as quickly (and safely!) as we can. In the meantime, we will continue to provide verifiable and non-verifiable training online, we’ll also continue to provide webinars and other training over Zoom until we can safely meet face-to-face. Keep an eye out on In the Know over the coming months for announcements about things such as our Health and Wellbeing programme, the new date for the Awards Gala Dinner, the Residential Property Management conference and of course our annual YPIRE conference in October. We’ll also continue to improve our data offerings to members and bring you new partnerships that add value and save you money. We wish you all the best in the coming months, stay safe, and hopefully in a few months’ time things will be back to normal.
OUT & ABOUT
Starship Foundation Wellbeing Hampers just in time for Mother’s Day Just in time for Mother’s Day, Barfoot & Thompson embraced the opportunity to support the Starship Foundation with a $100,000 donation to create 300 wellbeing packs for new Mums with babies. Staff volunteered to pack the gift bags with each bag having a personalised written or scanned personal note contributed by Barfoot & Thompson staff.
Lockdown community hero Barfoot & Thompson branches took time to celebrate their local community initiatives through the ‘Local Lockdown Hero’ competition. Aligned to one of the company’s values of community, this was a great platform to engage with the local communities and also acknowledge those who carried out essential work in the community.
Ray White and McDonald’s combine to deliver very happy meal Ray White Wellington City and McDonald’s combined to deliver one of the very first post-Alert Level 4 meals, all in the name of charity. The winning bidder of the online auction on TradeMe paid $801 for two Big Macs, two McChickens, two Cheeseburgers, four Medium Fries, four Medium Soft Drinks, 50 McNuggets and four Apple Pies. McDonald’s, in conjunction with the Horton Group as franchisee, donated the food and Ray White Wellington City Salesperson Ben Atwill facilitated the auction process to support Ronald McDonald House Wellington. “I really feel like the COVID-19 lockdown has brought us together as a nation and our office thought this would be a nice way to make restriction-easing that little more special, while raising money for a great cause,” Mr Atwill said.
Online auctions, a click away With restricted face-to-face activities, Barfoot & Thompson adapted to offer a suite of online tools to get business moving in a safe manner. Providing an online auction service is their most recent offering, allowing vendors to buy and sell property from anywhere in the word. They also offer online contract signing, virtual appraisals, virtual viewing using video conferencing tools or 3D virtual tours, virtual renovations, and the virtual furnish product that allows buyers to test their furniture in the new house.
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OUT & ABOUT
NZ Realtors – Red Bull Force Back NZ Realtors Network was an Official Event Partner of Red Bull Force Back held in six prominent rugby regions across the country earlier this year. The aim of Force Back is to kick the ball across the opponent’s goal line to score points. The tournament was open to men and women over the age of 18 playing in teams of three. Each game consisted of two sevenminute halves and over 500 games were played over the course of the event. Winners of the men’s and women’s tournaments won an all-expenses paid trip to Taranaki where they competed to be crowned New Zealand Champions and play Beauden Barrett and his team mates at his old stomping ground - the Coastal Rugby Club in Rahotu. NZ Realtors Network General Manager, Donna Peffers, attended the tournaments and grand final. Members of NZ Realtors Network were onsite to promote their brands and play in some of the tournaments. NZ Realtors Network and McDonalds Real Estate held a High Ball Catch Competition - with a few of the staff from McDonalds Real Estate kicking high balls for players to catch.
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OUT & ABOUT
Christian Cullen joins Property Brokers Kapiti Coast Christian Cullen, affectionately known as the “Paekakariki Express”, is building on an already successful property career by stepping into a new role as a Commercial Sales Consultant with Property Brokers at their new Kapiti branch. Having been an active team member in many top-performing teams including the All Blacks throughout his career, he knows the real value of being in a team united by a strong vision and passion. “I have been involved in the property industry for many years now, and it’s something that excites me,” says Cullen. “Having looked around at various opportunities, I was instantly attracted to Property Brokers’ philosophies, values and their true team approach. They believe that relationships and trust count for everything. Property Brokers is built on hard work, discipline, friendships, and a powerful sense of family. It felt like a natural fit, moving from one great team to another”. Cullen will be based on the Kapiti Coast but will be selling Commercial Real Estate throughout the country.
‘World First’ international online real estate auction In what is believed to be a ‘world first’, the Ray White Group recently completed its first ever international online auction sale with their auctioneer in isolation in Brisbane, some 2,288 kilometres away from the property being sold in Auckland. With the vendors and buyers in lockdown in their own homes in Auckland and across New Zealand, the auctioneer in Brisbane and the tech support guru running the bidding platform in Sydney, this sale highlighted the strength of the group’s technical capabilities despite the time zones and distances. Ray White New Zealand Chief Operating Officer and Auctioneer Gavin Croft says: “All three buyers were very comfortable. In fact, the underbidder texted me moments after it ended and said how great the experience was, and that they like being at home and bidding online. “Six months ago, we probably would not have considered this... It was seamless despite the distance.”
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The property at 52 Sussex St, Grey Lynn, Auckland sold for $1.45 million under the hammer with three registered bidders and 21 bids during the fast-paced online auction.
Property Brokers welcomes Professionals Whakatane into the family
OUT & ABOUT
Property Brokers is pleased to announce the acquisition of Professionals Whakatane Limited and is thrilled to welcome the successful business into its ever-expanding family. Professionals Whakatane Limited is Whakatane’s longest-serving real estate company and has served the local business community for more than 60 years. The announcement of the acquisition further broadens Property Brokers’ footprint and scale, adding more resources, and resulting in improved service for customers. This acquisition gives Property Brokers a great opportunity to be represented in Whakatane and the Eastern Bay of Plenty, leveraging its combined strengths.
Are you buffering or are you bidding? In April, Harcourts introduced its first online auction competition, bringing 28 of its senior and up-and-coming auctioneers together to showcase their auctioneering skills in a virtual forum. Congratulations to Lisa Yardley-Vaiese, the Harcourts Lockdown Auction Competition Open winner, and Owen Griffiths, winner of the Rising Star division. “We created the Harcourts Lockdown Auction Competition to keep our auctioneers sharp during the lockdown and to help them adapt to a live streaming format which presents some unique challenges,” says Harcourts National Auction Manager, Aaron Davis.
Harcourts awarded most trusted real estate brand for the eighth year in a row
Seasoned auctioneers, Mark Sumich, Phil McGoldrick and Andrew North judged the event, scoring the competitors’ performances based on the quality of their opening statement, property description, answers to questions designed to test their knowledge of real estate and contract law, and bidding sequences created to test their numerical and salesmanship skills.
Reader’s Digest announced its Most Trusted brands for 2020, and for the eighth consecutive year New Zealanders have voted Harcourts the Most Trusted real estate brand. Harcourts Managing Director Bryan Thomson says that the Harcourts team right across the country is particularly humbled to receive this honour as the country continues to battle COVID-19. “Harcourts has been committed to helping New Zealanders with their property needs for 132 years”, says Thomson. “We’ve been through good times and we’ve been through some extremely difficult times with our clients. This would be one of the most challenging times they’ve ever faced, and now, more than ever, we need to trust and support one another.” “Being voted the Most Trusted real estate brand for eight years in a row is hugely important to our team and we don’t take that trust for granted.”
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OUT & ABOUT
Two new franchises for Century 21 Century 21 New Zealand continues to expand, with two new franchises opening – one in South Auckland and the other in the South Island. “The opening of a new office in Papatoetoe further strengthens our strong presence in South Auckland. We’re also delighted to announce the arrival of Aurora Real Estate, marking Century 21’s return to the South Island,” says Derryn Mayne, Owner of Century 21 New Zealand.
Taking care of our most vulnerable Harcourts Levin Lifestyle and Rural Specialist, Suzanne Cottle, swung into action as the country battled COVID-19 and went into lockdown in March. After looking after her family, Suzanne’s attention turned to her elderly friends and neighbours. “I have quite a few repeat vendors who are in their 80s and 90s and are living on their own,” says Suzanne, so she did their grocery shopping for them, delivering it to their homes along with homemade meals, baking and fresh produce from her garden. “I’ve been cooking for eight people, but it was no problem. I have a big kitchen and I love to cook!” As lockdown progressed and cabin fever set in, Suzanne opened her rural property to locals and their families. “It gave them plenty of wide-open spaces to explore during lockdown,” says Suzanne, “and they could enjoy a walk through the garden.” Suzanne still managed to sell four properties during lockdown and was Harcourts’ top Lifestyle and Rural Specialist in her region for the 2019 financial year.
RE/MAX NZ announces award-winners RE/MAX New Zealand announced its award-winners for 2019 at a gala event in the evening of the ‘2020 vision: Navigating change’ Rally, where the theme turned to ‘Bollywood’. The network’s ultimate individual honour, Broker Owner of the Year, traditionally the final announcement, went to Garry Malcolm, RE/MAX Team Realty in New Plymouth. The highest business accolade, the ‘Pinnacle Enterprise’ Award, which is based on a franchisee’s total business, including sales and property management divisions, went to RE/MAX Revolution, owned by Don Ha. RE/MAX Revolution won the Top Multi-office Award.
Team Lewis
Team Lewis from RE/MAX Go For Sold in Palmerston North was the New Zealand network’s top sales team. RE/MAX New Zealand also turned its attention across the Tasman to support Beyond the Bricks, an industry-wide response to the devastation caused by Australia’s bushfires. A generous and caring audience raised more than $8000 with Ben Kloppers as auctioneer for a charity auction on the night.
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Jeremy Crossland & MD
Garry Malcolm
Century 21 award winners named Century 21 New Zealand has announced its real estate winners for the first quarter of 2020, which saw one of its newest offices taking a starring role. “Century 21 Local Realty in Papakura had a great start to 2020 after franchise owners Gary Bal and Iresh Tennakoon only opened their doors late last year. Their team exudes incredible energy and professionalism. Despite the lockdown, they’ve remained very active with their buyer and seller relationships and their digital marketing,” says Derryn Mayne, Owner of Century 21 New Zealand. Papakura’s Local Realty won Top Office for the Quarter for both Gross Closed Commission and Units (the number of properties listed and sold). While Local Realty salesperson Kevin Ratnayake won Top Salesperson for the Quarter for both GCC and Units. He was a Platinum sales award recipient, as were Gary Bal and Iresh Tennakoon. Local Realty was also named in the Top 21 offices across Century 21 Australasia for the first quarter of 2020. The new Papakura franchise took out sixth spot, while Darrak Realty in Albany was the 20th best performing Century 21 office across Australia and New Zealand. Also featuring prominently in Century 21’s first quarter awards was The Moshi Group Real Estate Team in Wellington Central. Alen Moshi took out Top Principal for the Quarter for both GCC and Units, and a Platinum sales award.
RE/MAX adds to NZ network Leading West Auckland sales agent, licensed auctioneer and businessperson, Tony Teague, joins the global RE/MAX network with the rebranding of his Professionals New Lynn office. Mr Teague’s real estate experience spans more than 30 years in West Auckland. He has owned businesses for more than 25 of those years and been wellassociated with major brands. “New Lynn is the hub for West Auckland,” he said. “The New Lynn market is changing in positive ways, it has so much to offer, particularly with the injection of infrastructure investment. It is a vibrant and amazing place to live.”
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FEATURE
Eight factors that will protect NZ from worst of recession Just a few months ago it looked like our economy was going to grow by 2% and perhaps a bit more this year. It looked like the upturn in Auckland’s housing market and markets in the regions from July last year would also continue. But everything has changed in a record short period of time to the point where we are probably in recession right now and will continue shrinking through to the September or December quarters.
The ban on foreign visitors is the biggest hit to our economy coming from our part in global efforts to stop the spread of COVID-19. Inward tourism accounts for about 40% of all tourist spending in New Zealand and contributes just over 4% to our GDP whilst providing employment to nearly 165,000 people. Many of these people are going to lose their jobs. Many will also lose employment in the entertainment and hospitality sector as we all engage in various forms of social distancing to limit our chances of both catching and spreading the new virus. Clearly, with these impacts running through our economy, and people concerned about developments offshore, the outlook for our housing market has shifted. Will prices now fall, rather than rise as we were expecting just two months ago? In tourism hotspots the answer is almost certainly yes. These locations like Queenstown and Rotorua have boomed on the back of a rise in visitor numbers from 1.6 million in 1999 to 3.9 million in 2019. In other regions the combined effects of weak tourism, consumer and business pessimism, a sizeable lift in the unemployment rate from the current 4%, and drought, will also probably produce some declines. In the main centres however, things may be less bad. Turnover will slow as always happens during a recession, and there will be downward pressure on prices. After all, during the Asian Financial Crisis of 1997/98 average New Zealand prices fell by 6% as the economy shrank 1% and the unemployment rate rose 1.7% to a 7.9% peak. During the 2008-09 GFC average house prices fell 11% as the economy
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Tony Alexander, Economics commentator
shrank 3% and the unemployment rate rose 3.4% to 6.7%. This time around the economy looks likely to shrink at least 1% and the unemployment rate rise at least 2% from the recent 4%.
But there are a great number of factors which will help insulate our main centres against the worst effects of the recession. 1. Property owners have not been crushed recently and placed in a position of having to sell by high interest rates which in the past have preceded house price declines. Mortgage rates have been at record lows and are now headed even lower courtesy of the Reserve Bank’s aggressive easing of monetary policy 2. Housing debt grew by 90% in the five years leading into the late-2008 GFC. Growth for the past five years has been just 41% 3. B anks are likely to tighten lending criteria. But their capital bases and funding lines are not under threat to the same degree as during the GFC so the drive to curtail lending will be less 4. There is light at the end of the tunnel, though few in the West are seeing it at the moment. China has got its outbreak reasonably under control, emergency hospitals have been closed, and people are emerging from their homes while factories gear production back up – though there is still some way to go 5. The long-term fundamentals for our housing market are unchanged. There are shortages in the major cities, many young
FEATURE
people eager to buy, and many investors increasingly disappointed with term deposit rates (and maybe now more wary of volatile sharemarkets)
the basis of the many positive long-term factors I have striven to highlight since 2008. These include… • Insufficient building of houses
6. The Government’s massive 4% of GDP fiscal support package (with more announced in the May 14 Budget) will help mitigate though not fully offset the weakness in our economy coming from COVID-19 effects
• L ack of construction of enough lowerpriced new dwellings
7. Listings are in short supply and there are reports that in the United States vendors are taking their properties off the market through fear of visiting potential buyers spreading the virus
• Good credit availability
8. During recessions people tend to move from the regions to the cities looking for work.
And perhaps there is now one new factor to put in – at least temporarily. Kiwis were set to make over 3.2 million trips overseas this year. Now they won’t. Where will the saved billions of dollars go? Some will go on domestic holidays, some into savings, some on electronics, and some might go toward financing a new house or a property investment.
These factors do not add up to a positive picture set alongside the extreme short-term shock we are at the start of experiencing. But they do reinforce the need to make one’s property decisions on
• S tructurally lower interest rates boosting affordability and encouraging investors away from bank deposits • High and still rising development costs •A shift up in net migration inflows over the past three decades.
This article first appeared on OneRoof.co.nz and is republished here with permission.
For housing, as for virtually all sectors bar healthcare, a recession means weakness. But the long-term fundamentals remain the same and one way or the other within a few months this recession will end – either with the virus being successfully contained and dying out, or passing through the entire world’s population. We all need to focus on getting through to the other side of this global pandemic, protecting cash flows and our employees where possible, perhaps remembering these final few numbers. In the five years after the Asian Financial Crisis average New Zealand house prices rose by 45% after rising by 24% in the three years preceding the recession. In the five years after the GFC average prices rose by 24% nationwide with Auckland ahead 58%, after prices rose just 14% in the past three years with Auckland ahead only 2%. Hang on in there is ultimately the message. Tony Alexander is an economics commentator and former chief economist for BNZ. WINTER 2020
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FEATURE
Helping first time buyers – IS IT TIME TO THINK MORE LATERALLY?
Up until recently, the possibility of getting a foothold on the housing ladder in the traditional sense – by saving a deposit and securing a loan – was becoming more of a dream than a reality for many hopeful first time buyers in New Zealand – especially in Auckland, Wellington and other main centres.
However, with the Reserve Bank’s recent announcement that it is temporarily removing LVR requirements for the next 12 months, there are certainly opportunities to be had – especially if you are still employed and can show a good savings history. As the saying goes – never waste a good crisis. Since LVRs were introduced in 2013, many first time buyers have found it extremely difficult to save a 20% deposit – especially as house prices have continued to rise significantly over the last 7 years. For example, the national median price as of April 2020 was $680,000 – a 20% deposit for a property of this value would be $136,000. Many first time buyers report having to save for a number of years in order to reach that threshold, and when you’re looking at cities, it could take in excess of 15 years for a couple on an average salary to save a 20% deposit. However, there are also other alternatives to consider that involve more creative means of home ownership than are currently on offer. As in any major financial transaction, it’s crucial to involve a lawyer right from the start and check all aspects of a plan very carefully. Shared equity or fractional ownership is a proposition based on having a thirdparty-private investor, contributing around 10 or 15% towards the price you pay for your home, when you don’t have access to the full range of lending you need for a property.
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Bindi Norwell, Chief Executive, REINZ
In return for their investment, they get DIY limitation clauses – just in case buyers get over-enthusiastic and want to tear down walls or add illegal decking, for example. Under BNZ’s YouOwn offering, which applies only to new-build homes in certain locations, a review after five years sees the purchasers permitted to buy out YouOwn’s stake in the property. Capital gains are shared between the parties relative to ownership. However, it’s important to understand that you are taking a risk, because in a quiet market those gains may be minimal. This is particularly important as we start to move to what our ‘new normal’ might look like in a (hopefully) post-COVID environment. Meanwhile, a build-to-rent environment also offers opportunities outside the traditional norm. This approach sees a more substantial input from local property construction, development and investment sectors to build complexes that are specifically earmarked as long-term rentals, rather than as units to be sold. It’s a model which has worked well overseas, especially in places where home ownership isn’t a major priority. The goal of home ownership has always been part of the Kiwi culture, but it may ultimately become a thing of the past for many people here too – especially given the growth in house prices compared to salary growth.
FEATURE Rent-to-own schemes are currently being promoted by the Government as another alternative option for struggling home buyers, often under the auspices of charitable trusts. These schemes work in various ways – often by having some of the rent that’s being paid, put towards building equity. There will generally be a fixed timeframe, at the end of which the tenant is able to buy their home outright or move to a shared ownership approach. However, rent-to-own arrangements are based on the assumption that house prices will rise, so it’s important to consider potential outcomes if they don’t. A significant number of buyers continue to tap into their KiwiSaver fund to withdraw funds to put towards the deposit on a first home. Even though many are finding their KiwiSaver fund is at a lower level as a result of COVID market volatility, this is still an avenue to be explored. As part of the deal to utilise your KiwiSaver funds, you must live in the property yourself for a certain time, you must be over 18 years old and have been contributing the required minimum amount to KiwiSaver for at least three years. Additional KiwiSaver grants may be available to those with income (before tax) of less $85,000 for an individual and $130,000 per annum for two people or more, as long as you have a 10% deposit.
The Government is looking into updating the scheme to allow people to use their KiwiSaver for proportional share with others or for investment purposes which may see more people purchasing properties in affordable areas in order to get onto the property ladder. As with any investment decision, when considering any of these more innovative approaches to home ownership, our advice is that people undertake appropriate due diligence - which at a minimum should include legal and financial advice. It is important that potential investors understand all of the current and future costs involved. Additionally, they should also seek to understand the level of risk they are taking on and ensure they are comfortable with that risk. Anyone considering some of these more lateral property moves should at a bare minimum ensure they take legal advice and talk to their bank about what sort of finance would be available. We would also recommend talking to a financial adviser for additional financial planning support. Lastly, if you’re thinking about going down the investment option, make sure you are aware of what your future obligations will be as a landlord – especially in relation to upcoming legislative changes such as the Healthy Homes Standards, as this may change your view substantially on the type of property you want to buy.
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FEATURE
What exactly is “hipsturbia” AND WILL THE TREND REACH NEW ZEALAND? IT MAY ALREADY HAVE!
Kiri Barfoot, Director Barfoot & Thompson
“Hipsturbia’’ is a term that may earn a good eye roll if it is the first time you are hearing it. Lingo like this, referring to Millennial and Generation Z behaviour, seems to be popping up every day and fading away just as fast. This concept however, in the realm of real estate, is worth paying attention to for those considering where to buy or sell a property.
So, what exactly is hipsturbia? In countries like the United States, 20-somethings and those in their early thirties were typically attracted to urban areas in major cities to jump start careers and to take advantage of the nightlife. The reality of city living though means high rents or mortgages, limited parking, expensive restaurants, $20 cocktails and cramped small apartments that may require flatmates to meet monthly obligations. A quantifiable trend is starting with Millennials demonstrating that all that glitters is not gold with regard to what major urban centres have on offer. For this reason, they are literally headed in another direction - to the suburbs! When people consider life in the “burbs” it is likely for the green spaces, larger homes at lower costs, walkable town centres, good public transport, easy mobility and access to cafes and shopping centres. These are the same reasons that Millennials are looking to both buy and rent. A report by real estate group CBRE, in the United States, released in November 2019 says that, “Millennials are thought to be those born between 1980 and 1995. For midrange Millennials, ages 25 to 29-year olds, about 426,000 moved to cities in 2014 while 529,000 moved away. For the younger ones, 20 to 24-year olds, the flow’s direction was
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more pronounced.” Overall, in 2014, CBRE found that, “30% of Millennials lived in urban areas, while the other 70% don’t seem to be in a rush to move downtown.”1 So, what can New Zealanders glean from these statistics in the US? First, it makes it clear that the assumption that youth automatically means a desire to live in the centre of the action may be overestimated. Granted some of the upticks in Millennials moving to the suburbs may be due to the boomerang child phenomenon but it cannot account for hundreds of thousands of people making this property decision against urban centres. Given that the average house price in Auckland has settled around the million dollar mark this trend may be even more amplified here. Millennials on starting salaries are simply unable to buy in central areas making the suburbs very appealing especially as public transport improves. They’re looking for affordability as well as urban staples like dining, shopping, entertainment all within a walkable distance. Hopefully jobs will also be easily accessible as well, as more companies consider moving away from Auckland to provide/create a more affordable lifestyle for employees. Developers in the region seem to be responding to these demands with some
FEATURE
planning communities that have workfrom-home shared hubs, daycares, parks, trails, cafes and small groceries as part of their planning and design. Those buying off the plans in these suburban developments are not just considering commute times but also what their community can offer them especially if they have young children.
found in the city, excellent leisure facilities, and a super speedy train to whisk residents across town.”2
Has the trend already started here in New Zealand?
She continued, “I am from the non-existent generation that never gets any mention between Millennials and Boomers - Gen X. Most of us brought our first home in the ‘burbs’. Mine was in Northcote which, at the time, had no cafes, bars or restaurants in sight, but it was close to transport links and the city. You definitely get better value for money with this mindset and potentially a better return on investment. There really is something about owning a home and land that is pretty special. Buying in central areas is likely unaffordable for Millennials, but still doable in the west and south.”
As an American publication noted in November 2019, “Recently, the Real Estate Institute of New Zealand (REINZ) assessed Auckland suburbs on a variety of factors, including walking distance to amenities, average rental and house prices and public transport, to determine the best areas for Millennials – Papakura came out on top. This hipsturbia, which is located 22 miles south of Auckland, offers residents great space, value for money, the same retailers
Kiri Barfoot, Director of Barfoot & Thompson says, “With an average sale price of $592,0003 Papakura certainly makes sense for this demographic. It is a great suburb to start in - or never leave for that matter.
Want to know more?
Talk to one of Barfoot & Thompson’s knowledgeable salespeople to get their take and advice.
1. The “New Cool Urban Suburb” Attracting Millennials and Babyboomers Alike, realworthnetwork.com, written by Kathy Fettke, November 25, 2019 2. Is it time you moved to “hipsturbia”?, propertyguides.com/news/lifestyle/hipsturbia/, written by Amy Baker, 7 November 2019 3. Barfoot & Thompson’s internal sale price statistical data as of December 2019.
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FEATURE
How to make your virtual tour more effective
Karen Jackson Managing Director, Lifestyle Finance
With “physical distancing” becoming a buzzword of these strange times, you may have been considering using digital solutions to showcase your vendors’ properties. If done properly, virtual tours can be a valid alternative to in-person viewings – and a good complement to your marketing efforts, even when COVID-19 restrictions are lifted once and for all. Here are some tips to make your virtual tours more effective and engaging.
Why digital real estate marketing is on the rise We’ve been living in a digital age for several years now, and more and more people search properties online. But while online marketing has always been important for real estate agents, the sudden need for ‘physical distancing’ has made them even more valuable. Sure, nothing can replace the in-person experience in its entirety, but digital tools are becoming increasingly sophisticated and immersive. From interactive floorplans through to 360-degree photo tours and virtual renovation simulations – now can be a great time to expand your toolbox. In this article, we’ll look at how you can best present your vendors’ properties online, using virtual tours to build your digital presence.
What type of virtual tours are there? Depending on the companies and software you’ll be using, here are some tools you can use to create a virtual viewing experience. • Still photo tours (photo-gallery) As we said in a recent blog post on our website (“15+ compelling facts about real estate marketing” – lifestylefinance.co.nz), professional photos are the number-one attention grabber.
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While you may not consider still photos as part of your virtual tour, they are usually the first things buyers will see when browsing listings. So first and foremost, make sure the photo-gallery puts your vendor’s property under the best light • 3D floorplans 3D floorplans enhance traditional floorplans by offering a more accurate illustration of the property’s layout and dimensions. However, they are still quite static and provide no interactions • Interactive floorplans Interactive floorplans allow buyers to click on each room and see related still photographs, getting a high-level view of the property. This option is usually quite mobile-friendly, but the key disadvantage is that it doesn’t provide a 360° view of the room • 3D virtual walkthroughs Combining 3D floorplans and 360° highresolution photos, 3D walkthroughs offer a more immersive experience, allowing buyers to explore the property from the comfort of their own couch. The level of detail and interactivity may vary depending on the tools you’re using, and panorama photos may be slow to load – but when working properly, they can offer a great alternative to in-person viewings
FEATURE • Don’t forget about the outdoor areas In a virtual tour, the outdoor areas are as important as what’s inside. By using a drone, for example, you can provide still photos and/or video footage that showcase the property’s curb appeal. Plus, consider taking 360° high-resolution photos in the backyard garden or on the deck • Aim for perfection Some things can be fixed in the postproduction stage, but it’s always best to start off with good material. Whether you’re using still photos or video footage, be aware of mirrors and reflections (including windows). And don’t hesitate to reshoot any areas where your videocamera wasn’t steady or transitions weren’t smooth • Use more than one tool at a time Depending on the property you’re marketing, you may want to use different listing assets at the same time. 3D floorplans and videos, interactive walkthroughs and still photos – how you mix and match these tools is up to you and your vendor’s budget
• Video tours It’s no secret that videos tell a story. By using drones and professional video footage, you can create a full-motion video of your property and even add music, narration and text overlay. Some buyers may favour this type of virtual tour because of its immediacy, but load time and lack of viewing control may also be a disadvantage.
Top tips to make your virtual tour more effective As we’ve seen, different virtual options have different degrees of interactivity and engagement power. And of course, if you’re hiring a professional, costs will change significantly depending on the solution. At Lifestyle, we can help your vendor secure a premium marketing campaign – please visit www.lifestylefinance.co.nz/vendor-info to learn more about our “Advertise Now, Pay Later” finance tool. In the meantime, here are some tips to make the most of your marketing efforts (sourced from Zillow.com and Medium.com). • Prepare the property Doing prep work is key, so before starting,
make sure cleaning, decluttering, homestaging and landscaping tasks are complete – just like you would do before a real-life property viewing • Focus on quality and compatibility The higher the quality of your virtual tour, the more engaging the results will be, but don’t overlook the compatibility on all device types. Make sure that the tools you (or the professional you hire) are using are easily accessible, intuitive to control, and duplicate the experience of visiting a property in person as much as possible • Finishing touches before shooting Clutter and poor lighting may get in the way of the perfect shot, so hide unnecessary items and turn on all the lights to create a nice setting • Choose the right viewpoint Ensure the images (either videos or still photos) are taken from viewpoints that reflect a natural, human perspective. Also, depending on the room you’re capturing, positioning in the exact centre of the room may not be the best option. If this were an in-person inspection, would most of your buyers stop in the corridor instead, or choose a different corner?
• Time to promote your listings A comprehensive digital marketing campaign through listing sites, social media and search engines can allow your listing (and virtual tour) to reach a wider buyer audience. Lastly, track results: it’s a good idea to ask buyers – especially those that have purchased the home – whether they have watched the virtual tour, what type of device they were using, and what they thought about it. While it may take a while before the property market finds its ‘new normal’, it’s safe to expect that ‘physical distancing’ will be a buzzword for quite some time. Plus, with buyers likely being more cautious in the months to come, you may need to find new creative ways to entice them. Remember: by adding new tools to your toolbox, you’ll perfect your online presence for the future and beyond.
Get in contact with the Lifestyle team: we can help you and your vendors maximise your sales opportunities. Please check out our “Advertise Now, Pay Later’ finance tool to learn how we can help your vendor fund a top-notch real estate marketing campaign. Visit www.lifestylefinance.co.nz.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.
For further details email events@reinz.co.nz
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OBITUARY
Clyth Iain MacLeod 27 October 1933 – 20 March 2020 “Give me the child until seven and I will show you the man.” Aristotle Clyth would say, so true and so fortunate in his case. Born during the depression and to immigrant parents, he suffered major illness at age 5. This had a major influence on him. He spent six months in hospital and endured three major surgeries. His parents provided many comics and books to read and he developed reading skills well beyond his years. Those who are fortunate to have had Clyth in their lives will know of his love of books and of his intense thirst to continue to learn right throughout his life. At a young age he gained the realisation that life can be short so “seize the day”. It also gave him his first lesson in resilience and that ‘anything was possible attitude’. His father Iain was from Wick in the North of Scotland and his mother Marjorie from Coventry, England. Iain and Marjorie married in 1932 and moved to Palmerston North where Iain was a manager of Co-op stores. As a consequence of his father’s work the family moved frequently throughout Clyth’s childhood. The depression left its mark on everyone who lived through it. While the family were not poor, he was brought up to believe in “save a match and buy a farm”, and his dad’s later bankruptcy reinforced to him that “cash is king”. By the time Clyth was of secondary school age he had attended seventeen schools, some in very remote areas of New Zealand. It was at this point that Clyth’s parents decided to end their peripatetic lifestyle and they purchased a home in Pt Chevalier, along with a Four Square grocery store in Mt Albert. Clyth attended Mt Albert Grammar Boys School where he excelled both academically and in sport, being involved in athletics, swimming, tennis, softball and rugby. Clyth then attended Auckland University where he graduated with a Bachelor of Arts degree, having majored in History and English. Following university Clyth joined his father in the family business retailing home appliances. Later when needing to extend his horizons, Clyth left to take up an executive position with Foodstuffs in 1962 where he remained until moving into real estate. After some years of rubbing shoulders with RE business sales reps, who all drove flash Jaguars and the like, Clyth decided in 1970 to make the move into full commission selling, signing up with Brown and Taunt, where he stayed for 3 years. In 1973, Clyth started his own business working from home. He was then elected to office in the Real Estate Institute in 1984, serving on the District Committee and going through the different subcommittee roles. In 1985 he moved to his commercial premises at 460 Manukau Road, Epsom. Between 1990-1992 he became the REINZ Auckland District President and in 1991 succeeded in starting the first Special Interest Group within the Institute for Business Brokers. In 1992, Clyth became a Fellow of the Institute. Between 1992-1994 he became a National Councillor and in 1998 his REINZ membership was elevated to a Life Membership. Clyth joined the International Business Brokers Association in the USA (IBBA) in 1985 - was an elected Board member for 3
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years and served as Vice President and International delegate. Made a Fellow of the IBBA in 1994, and in 2013 became a Life Member of this organisation which is a rare and highly esteemed honour. He was a: thorough gentleman, a man of great taste, was always the picture of sartorial elegance, the most gracious host, a loyal friend, a dedicated husband, father, grandfather and now great grandfather, a man of total integrity, a voracious reader of the printed word, he held an acute and astute business brain, a sharer, a carer, polite to a fault, a man of strong personal faith, a man who made time for you, and a man of quiet and considered demeanour – never a raised voice. Now, before we all rush to anoint him with a sainthood as our new Mother Theresa – can we remember why we actually liked him? He had a penchant for expensive European cars, he was not averse to the odd well-made ale, he had a love of very fine wines, but only after the cleansing ales, a fine bush lawyer/ litigator and advocate, and a desperate seeker of publicity in the business world, always penning articles of unmitigated self-promotion! Well-known and respected for his inventive business appraisals! You only have to read his valuations to know why he obtained so many listings! Silk purse and sows ear springs to mind. He had a wicked, wicked sense of humour. Oh! and he was also a Warriors Rugby League tragic! The COVID pandemic has taken away the chance to come together to farewell Clyth. However, an overwhelming number of tributes have been sent for Clyth and this has softened the blow somewhat for fellow colleagues, family and friends. The legacy Clyth has left is truly wonderful.
OBITUARY
Douglas Maxwell Brown 1927 – 14 April 2020
A local legend in real estate, talented golfer and keen skier. Doug was raised in Christchurch but relocated to Invercargill with his parents in the early to mid 1950s. Originally a surveyor, Doug moved into real estate to work for an established real estate company. Doug eventually set up his own company, D M Brown Limited trading as a real estate company. Doug was a hard worker, working alone most of the time with occasional help from a receptionist, often arriving home after 10pm each day. In addition to running a real estate company, he developed two suburban blocks of shops in Invercargill. Doug would spend a few hours onsite with the nail bag before heading into the office for the day. Doug used to pride himself on putting together chains of sales of three to ten properties, all conditional on the last of them going unconditional. A special opportunity evolved when the Aluminium Smelter decided to set up at Tiwai Point. They appointed Doug to purchase 50 plus properties for their workforce, sight unseen. He successfully sourced the 50 plus houses in just over a year, a huge success in his career. In 1970, Doug took his family to Sydney, Australia and as he left Invercargill, he boasted he had sold a property in every street in the area. By this stage he had also spent time on the REINZ Board and was made a Fellow of the Real Estate Institute of New Zealand. Once settled into Sydney, Doug went to night school to gain his Australian qualification and worked in commercial real estate in the centre of Sydney for Jones Lang and Wooton (now, JLL). Doug moved back into residential sales based in Manly in late 1973 before deciding to move back to Queenstown, mostly for the skiing and the cooler climate. Queenstown in those days had a population of 1,500 so it wasn’t a big market. It was at this time that Doug decided to set up Queenstown Real Estate. The only subdivisions in the area at the time were Sunshine Bay and Arthurs Point above the Arthurs Point Pub. Throughout this period the Kelvin Heights suburb, Fernhill and The Commonage above Queenstown also came on-stream. Doug auctioned one of the first sections in The Commonage for the council and set a record with the first $100,000 sale. The market was booming for Doug in the mid 80’s. He built up a successful real estate business selling in all parts of the district from residential, commercial and even 10-acre lifestyle blocks. The 90’s continued with more development and the town really started to morph into a tourist mecca and commercial areas expanded. In 1998, Queenstown Real Estate merged with Kelvin Collins from Harcourts and they rebranded as Harcourts. Doug was always a keen skier and golfer, and harboured ambitions of becoming a pro golfer. Before the kids arrived, he was a 2 or 3 handicap player and even had discussions with his wife to try out the professional circuit. Doug was a perfectionist when it came to anything he did, whether selling property, building a new house or sport. He loved his Mercedes Benz and had several when he came
back to Queenstown, even winning the Mercedes Owners Golf Tournament and going to Germany to play in their international event. Doug was a very supportive family man, encouraged his four boys with ski racing, yachting and some rugby amongst other things. His two sons are now part of the NZ Sothebys International Realty Group with Julian being one of the two New Zealand founders and Nigel holding the licence for the non-franchised offices. Doug retired in 2002 and sold out to the Highland Group which has several Harcourts offices in the region. Given the timing of his passing we wonder what Doug’s predictions will be for a post COVID-19 world? He always encouraged his family to buy and invest in property and he was always right.
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OBITUARY
Neil Christie
December 16 1943 – March 25 2020 Neil Christie hugely contributed to the Real Estate industry throughout his successful career. Neil David Christie was born on December 16, 1943 and passed away peacefully at home, on March 25, 2020. Neil started his real estate career in Pauanui in 1996 after a previous life as fabric retailer in Thames. After 35 years of owning a fabric store, Neil was given the opportunity to join Richardsons Real Estate in their Pauanui office as a salesperson in May of 1996. Right from day one Neil knew the industry was for him. He loved selling but more than that Neil loved working with people, and over the years formed many strong friendships that began through a real estate introduction. Neil wanted to be involved and contribute to the real estate industry from early on in his career. He was a long-standing Associate member of The Real Estate Institute. Neil was also the Coromandel Delegate and member of the REINZ Auckland District Committee from 2001 and up until 2019 he was the REINZ Ambassador for the Thames-Coromandel Region. Neil was also part of the NZ Realtors Group which was an association he very much valued. He not only valued the business association, but also the friendships that came from being involved with the group. Neil often said he felt privileged to work alongside so many friendly and caring people. He also viewed life as a constant learning opportunity. Neil loved working in the Richardsons Pauanui office with his team who always had good fun and held mutual respect. It was a sad day for Neil when he realised his illness meant that he had to step away from his love of real estate. Neil was thankful for the opportunities that had been given to him and the lifelong friendships that he formed. Neil was described as a generous, kind, loyal, loving human being and was adored by his family. He touched so many lives and cared about so many people. His family are so grateful for all the love and support shown to Neil and his family at this time. Neil is survived by his wife, children and five grandchildren.
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FEATURE
3 Steps to marketing listings more effectively on social media
Howard John, Regional Sales Manager, DIAKRIT
Many agents these days are marketing their listings across various online platforms in order to raise awareness and generate more interest in the property. The rise of social media marketing has therefore earned its place in any modern agents marketing strategy today, understanding the huge audience of buyers available online.
With over 71.6% of the entire New Zealand population owning a Facebook account as of April 2020, there is no denying the need for agents to be marketing their listings on social media. But how do you market real estate on social media to cut through all the cat videos and TikTok compilations and really get in front of potential buyers? Follow these 3 simple steps to help your listings stand out.
1. Introduce lifestyle photos into your marketing Lifestyle photos allow buyers to imagine themselves being in the home - evoking feelings, emotions and telling a story. When buyers are searching for their next home, yes, they are interested in the fundamentals of how many bedrooms, bathrooms and car space. But they also want to be able to see themselves cooking breakfast for their kids in that kitchen or having a BBQ with friends in the backyard. Being able to paint that picture of everyday life to buyers early on helps them get a better understanding of how the home fits in with their lifestyle. Think of the types of photos used in interior design magazines, where examples can include: - Styling the home to look more lived-in - Placing a chopping board and cookbook on the kitchen bench, books and flowers
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on a bedside table, soap and nicely placed towels in the bathroom etc. - Unique angles used to offer a different perspective of the room - Instead of straight-on angles or photos taken whilst standing in the corner of the room, lifestyle photos bring certain elements in focus to add a sense of welcoming warmth.
2. Understand when to use lifestyle photos and real estate photos Now we know what a lifestyle photo is, lets recap what a real estate photo is. Real estate photos are ones used most commonly to market property, showing a straight-on angle of the room or an overview shot to get everything in frame. When attracting buyers’ attention on social media it’s important to recognise they aren’t actively thinking about property at that current point in time. If they were, they wouldn’t be on social media but rather realestate.co.nz or another property website. But that’s not to say we can’t market to the passive buyers on social media and grab their attention. With that in mind, that also means if you show them a typical real estate photo when they are scrolling through their newsfeed, they will most likely dismiss it. Again, they aren’t on social media to look for their next home right now. But if you use a lifestyle
FEATURE photo, this adds an element of emotion that will capture their attention and stop them from scrolling through. For example, if you post a lifestyle photo of a home office set up near a window during peak hour on a Monday morning and caption it “Over the Auckland traffic? Imagine relaxing with your favourite cup of coffee in your own home office?”, that is sure to get buyers’ attention and let their mind wander to the possibility of it.
3. Give buyers more to interact with when you’ve captured their attention Now you’ve got a buyer to stop scrolling and actually engage with your post, where should you lead them? Obviously to find out more about the listing. But that doesn’t necessarily mean to a page to show them only more static photos and a floor plan.
Photo by DIAKRIT – Real estate photo
In today’s digital age there are various interactive property marketing tools designed to help keep buyers on your listing for longer and move them through the homebuying journey more effectively. Adding digital renovating, furnishing and decorating tools to your listings help buyers personalise the home to their own taste and give them a better buying experience. Virtual tours are also a great tool to engage buyers with, giving them the ability to tour your listing online and from the comfort and privacy of their own home.
Practice makes perfect! Like any skill, the key is actually starting and testing the waters. Put yourself in the buyer’s shoes. What would they want to see? What information would they want to know? Can you make the homebuying process easier and more engaging?
Photo by DIAKRIT – Lifestyle photo
For more information on real estate photography that is proven to generate buyer clicks or to understand how better to market your listings on social media, speak to Diakrit. With over 18 years experience globally, Diakrit produces digital property marketing content for 2,000+ real estate brands. From magazinequality photography, 2D and 3D Floor plans to interactive and engaging tools, the whole suite of property marketing content was designed to make buyers fall in love with your listing before stepping through the door. Contact Howard John on 022 530 2007 or howard.john@diakrit.com Photo by DIAKRIT – Real estate photo
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SECTOR COMMERCIAL
Resilience tipped for Bay of Plenty commercial property sector
Mark Walton Commercial Sales Manager, Bayleys Tauranga
As COVID-19 floods the economic outlook with uncertainty, research from a leading real estate organisation suggests Tauranga’s commercial property sector is entering the ‘new normal’ from a position of strength and the region’s economic makeup promises future resilience.
Market analysis conducted by Bayleys Real Estate suggests that long-term economic and demographic factors will help to buffer the Bay of Plenty’s commercial and industrial property market against major impacts from the coronavirus. Bayleys Tauranga commercial sales manager Mark Walton said the full market implications from the coronavirus would take time to emerge. Bayleys’ research was carried out before the business impacts of the virus and lockdown, but the findings offered cause for optimism for the Bay of Plenty. “Tauranga and the Bay of Plenty will not be immune to the global economic impacts of coronavirus. But our analysis points to longstanding demographic and economic drivers which see our fast-growing region approaching these challenges from a strong position, and these will help to underpin long-term commercial property fundamentals,” Mr Walton said. He said the research pointed to a stretched supply-and-demand legacy after years of population growth, and an ongoing economic stimulus from large-scale projects – both of which would help to cushion the region’s commercial property scene from the impacts of an economic downturn. “Added to this, the Bay’s reliance on core horticultural and agricultural industries – ‘essential services’ in the language
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of lockdown – are helping to keep the economic wheels turning. The world still needs to eat, and that won’t change,” said Mr Walton. “The Bay will continue to benefit from supplying that demand for primary products – and that will be an ongoing source of resilience for the region.” Key infrastructure would lend further support, with a third of New Zealand’s exports passing through the Port of Tauranga, underpinning demand for industrial property, Mr Walton said. The local economy and property market would also derive ongoing benefits from major investments in road improvements, such as the $455 million Tauranga Eastern Link (TEL) motorway from Te Maunga junction to Paengaroa; the $45 million Maungatapu underpass between Welcome Bay and Turret Road; and the $102 million Baypark to Bayfair link upgrade adding two flyovers on State Highway 2, improving the link to the Port of Tauranga and connecting to the TEL. “In addition to these investments, a number of ‘shovel-ready’ projects have been identified that could form part of the post-COVID-19 stimulus package to boost economic recovery,” said Mr Walton. “These include roading projects such as the State Highway 2 Northern Link; land
COMMERCIAL SECTOR
infrastructure development in the Eastern Corridor and at Tauriko West; city and port rail link alignments; urban intensification and public transport improvements at Te Papa Peninsula; and commercial ferry links for Tauranga-Mount Maunganui.” Mr Walton said Bayleys’ analysis provided a detailed picture of the strength the region’s commercial property sector was carrying into the new, challenging environment. The research revealed that demand for commercial and industrial space had been growing strongly in Tauranga as the local economy boomed off the back of a fast-growing population, thriving agricultural industries and record trade volumes. A flourishing construction sector had delivered a raft of new property as development ramped up to meet demand. “Conditions have been particularly tight in the industrial sector, where vacancies have hit historical lows, intensifying upward pressure on rents. Tauranga has also seen considerable investment demand for commercial and industrial property, with increasing interest from out-of-towners,” said Mr Walton. Between 2012 and 2019, annual investment sales averaged around $210 million, with a spike between 2015 and 2017 driven by a combination of more transactions and
the sale of high-value institutional grade properties – including the new Trust Power building (108-125 Durham St) in 2015 for $41.2 million and 306 Cameron Road in 2016 for $41.5 million. Yields for quality space remained tight across all major sectors. Industrial property, in particular, had seen yields tighten for both prime and secondary assets. Prime industrial yields now ranged between 4.5% and 5.5% – tighter than office or retail yields. “In short, the demand for commercial and industrial property from tenants and investors has been far outstripping supply, which will help to underpin values and returns for landlords,” said Mr Walton. Growing demand for industrial space had led to tight conditions in all of Tauranga’s major industrial areas. The overall vacancy rate was 2.4% in the third quarter of 2018, down from 4.4% a year earlier. The southern suburb of Greerton recorded the lowest vacancy at 1%. Vacancies had risen marginally in nearby Tauriko, due to the completion of speculative developments at survey time – including multiple, smaller strata units, most of which had since been sold or leased. The Mount Maunganui industrial precinct, linked to the Port of Tauranga, had performed exceptionally well. To the east, tight vacancies in Papamoa
reflected growth constraints due to encroaching residential development. Rapidly falling vacancy in Judea near the CBD – home to largely older, secondarygrade real estate – reflected just how tight conditions had become across the city. Mr Walton said these conditions had driven across-the-board rises in industrial rents and further yield compression. Land values had grown significantly, particularly in Mount Maunganui where prime industrial land sells for up to $1,100 per square metre. Industrial land values in the Tauriko business Park were now reaching around $500 per square metre and there remained a substantial shortage of vacant industrial land across Tauranga and the Western Bay of Plenty. Mr Walton said supply of future industrial land was likely to come from greenfield areas such as the 250-hectare Rangiuru Business Park, near Te Puke – though supporting infrastructure would be required. Meanwhile, Bayleys’ research pointed to multiple developments which were delivering a more vibrant Tauranga city centre – lending support to long-term commercial property fundamentals across the CBD. These projects were led by the $130 million redevelopment of the Farmers building on the corner of Devonport Road and Elizabeth WINTER 2020
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SECTOR COMMERCIAL Street, to house 8,000 square metres of retail, 23 townhouses, 96 apartments and 322 parking spaces. Other office, co-working and mixed-use developments, along with apartments, were on the way amid major civic and amenity improvements – including a new central library, civic administration building, open spaces and a hotel and conference centre. The new $39 million-plus University of Waikato campus was set to bring 1,800 students into the CBD once fully operational, creating new demand for accommodation. Further student accommodation worth $54 million is in the pipeline. A residential consent to build a $14 million four-storey student living facility and separate manager’s accommodation on Selwyn Street, was approved in February. Resource consent for a $40 million tertiary student accommodation complex with 392 rooms on Durham Street, near the city’s Waikato University campus, had also been granted. The CBD was also poised to gain a lift from the project to turn Wharf Street into a pedestrian-friendly ‘eat street’.
“Together, these major projects amount to a major rejuvenation of the CBD, which will support demand for commercial space to serve a growing concentration of apartment dwellers, students and workers,” said Mr Walton. “While retail and hospitality are currently bearing the full brunt of COVID-19 restrictions, and it’s unclear when the sectors will emerge into a ‘new normal’, this once-in-a-generation renaissance of the central city will support recovery and add to the CBD’s long-term attractiveness as a location for commercial property.” Bayleys’ research noted that many larger office occupiers were well-housed in modern space along Cameron Road, and the city centre improvements had already lifted interest among smaller occupiers to venture back into the CBD. New office builds in recent years had added to the stock of prime space, seeing rents generally tracking sideways while space was absorbed. Though there was solid investment demand, opportunities to buy well-let, modern office premises had remained limited.
Mr Walton said Bayleys’ analysis had shown that rising consumer spending, driven higher by sustained population and business growth, had provided a catalyst for new retail development. Beyond the projects in the CBD, this had given rise to retail centre developments including the 70,000-square metre Tauranga Crossing, housing brands including PAK’nSAVE, Noel Leeming, The Warehouse, H&M and Event Cinemas. A $155 million staged expansion of Bayfair Shopping Centre was increasing its footprint by 9,000 square metres, to 42,000 square metres – with 150 stores, a new Countdown supermarket, an allweather dining precinct and, due to open in the final stage, a new seven-screen cinema complex. Mr Walton said suburban shopping centre rents had been rising as new developments had set new benchmark levels, especially with the arrival of global brands such as H&M.
...THE BAY’S RELIANCE ON CORE HORTICULTURAL AND AGRICULTURAL INDUSTRIES – ‘ESSENTIAL SERVICES’ IN THE LANGUAGE OF LOCKDOWN – ARE HELPING TO KEEP THE ECONOMIC WHEELS TURNING.
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*Reader’s Digest Most Trusted Brand Real Estate Agencies 2013-2020.
20 3-20 201 Re al E ies state A g e n c
SECTOR RURAL
Rural areas are looking good It looks like rural and agricultural areas are an upcoming bright spot on the real estate horizon in New Zealand. We are experts in lifestyle blocks, horticulture and dairy and beef farms. We’ve asked two of our most qualified rural salespeople Claude Shepherd and Stephen Hiscock to talk through their thoughts and forecasts for the future.
Stephen Hiscock Barfoot & Thompson, Waiuku Lifestyle/Rural salesperson
In the months prior to COVID-19, rural sales were robust and we were heading towards a record year. Now that the market has slowed dramatically, there are a couple of things that we can glean from recent activity, that gives us a lot of confidence for our rural regions.
Life after lockdown could include a lifestyle block Stephen Hiscock, Barfoot & Thompson, Waiuku Lifestyle/Rural salesperson explains, “With regard to lifestyle properties, there has been a boost in enquiries from people wanting to depart urban areas. Their sentiments reflect a shift in priorities with regard to a desire for a better quality of life, room to roam and the ability to be more self-sufficient. For some, living in the city has lost its appeal. They are exploring the fact that they can get more for their money if they venture further out. We are also hearing from potential buyers that the idea of being able to supply your own food sources via small gardens, chickens and a small number of livestock, creates some certainty and independence that they find exciting. Further, the concept of being a part of an intimate community with a small town vibe is intriguing. These are all factors they are mulling over as they consider what they want their futures to look like and how they can leverage new ways to work from home. Those of us who sell in these regions need to make it absolutely clear to our clients that there are no silly questions. We need to position ourselves as a resource and educator for people considering a move out of Auckland. This will not only make buyers more confident and comfortable; it might help to get a sale over the finish line.” The other interesting development we are noticing is that we are receiving calls from expats living overseas who are thinking about possibly returning to New Zealand. Our economy is looking to recover sooner
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Claude Shepherd Barfoot & Thompson, Kerikeri Rural salesperson
than other parts of the world, given that we have a stable government and that we successfully flattened the curve. These are all factors that may make a move back home an attractive and wise decision. One thing that has always been a bit of an uphill battle for rural salespeople is the perception that rural areas are a bit backward, e.g. lacking in technical savvy. Nothing could be further from the truth. Internet service is improved and elegant farm-to-table restaurants, vineyards and sophisticated boutique retailers have opened their doors in small towns. There is no lack of access to luxury goods or specialty foods with efficient and fast delivery and courier systems in place. There are no party lines anymore, and life is ‘just as modern’ as it is in the city. There may need to be some polite subtle communication to this effect with customers. Even if a potential buyer is not alluding to these stereotypes, experience has taught us, they may still be thinking about them. This is especially true for millennials who may be contemplating a rural way of life for the first time. Stephen Hiscock, says, “All six of my children are in their 20’s and 30’s and are either living on rural properties or aspiring to do so in the near future.”
Agriculture and forestry are a bright spot for the economy Claude Shepherd, Barfoot & Thompson, Kerikeri Rural salesperson says, “If you look at the current situation, people are not lining up for commercial goods like plasma TV’s but they are willing to stand in line for food. We are a food producing export country and people need to eat. Food security all over the world is being looked at more closely. For instance, if we look at the US beef processing plants, many are currently shut down as a number of their staff have been in contact with the virus creating short term shortages which is obviously a major concern.
RURAL SECTOR
I feel this may lead to countries seeking to have multiple supply sources so as not to be reliant on one food source to protect food security. With New Zealand’s beef processing plants operating successfully without interruption during the lockdown this will only strengthen our position. Agribusiness will be a primary means of recovery for the New Zealand economy. Beef and horticulture farms are experiencing strong returns and to a lesser degree dairy. The beef schedule has been strong for at least the past five years. Kiwifruit returns are showing 8-14% returns on their capital investment. For our trading partners we are a supply line for food which makes us critically important. Prior to the pandemic, beef farms sales were strong with many beef to beef transactions occurring, exemplifying the strength in the sector. Also worth noting is that there has been growing competition for steeper more marginal farms for forestry and carbon. This has been spurred on by the government taking off the price cap of carbon. This in turn has brought many forestry buyers to Northland looking for steep land to plant. This has caused an increase in values on steeper land allowing many retiring vendors to sell at good prices in remote locations
that in the past have been difficult to sell. Another trend is senior owners providing finance directly to buyers and leaving financial institutions out of the mix.
greenfield land in the Bay of Plenty and we are and would catch up to this area and become the fruit bowl for the country allowing for significant exports.
Most farmers I have spoken with have taken the lockdown seriously and put precautions in place. Like the “city folk” they are looking to get out of their homes and our dropping to Level 2 is very liberating. We expect Gypsy Day to proceed as usual this year.
If successful, this venture will have massive benefits to the local area. This is the best land use as the soils here are regarded by many as being in the top 5% in the country for not only kiwifruit but also avocados and market gardening.”
Two particular areas of growth which are exciting are avocados in the far north at Houhora and kiwifruit and avocados in the Bay of Islands area. Last year there were around 330 canopy hectare acres of kiwifruit in production and this area is projected to almost double to around 600-hectare acres within the next two years. The Regional Council, in conjunction (and partly funded through) the Provincial Growth Fund are looking to find and build a new water storage dam that will secure town water for Kaikohe. This would also release water for horticulture for Ohaeawai and surrounding areas which could open up close to 1,500-hectare acres or more. This is in addition to new greenfield land for horticulture. To put this in perspective, there is around 4,000 hectare acres of
A community coming together One thing that has truly been heartwarming is seeing the community come together to support one another through this difficult time. Agricultural salespeople, tradespeople, neighbours and friends are making sure that people are staying connected and mentally fit. Because farms are largely isolated, it has pretty much been business as usual for farmers, except when they go into town for groceries. They are taking social distancing very seriously and have demonstrated a can-do, positive, optimistic attitude as we slowly return to normal. Now may be the time to consider life in the country. Talk to one of our rural/lifestyle salespeople for information on current opportunities. WINTER 2020
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SECTOR RESIDENTIAL PROPERTY MANAGEMENT
Working through the pandemic Jo Rae, Head of Property Management, REINZ
The focus for the property management industry rapidly shifted a few days prior to 26 March 2020.
Concern around pending Healthy Home Standards and the Residential Tenancies Amendment Bill were quickly overshadowed. Businesses became focused on continuing to work effectively, albeit remotely during the lockdown. Alert Level 4 brought with it some challenges, a new raft of urgent temporary legislation was released to restrict terminations on tenancies and lessen the economic impact for tenants from COVID-19. Schedule 5 was added to the Residential Tenancies Act for an initial period of 3 months (26 March to 26 June), however, the right to extend this time frame if required for a further 3 months is ever present. Many property managers found themselves trying to explain to landlords who were wanting to return to their properties, that under the new legislation this was no longer possible. Tenants who had been given notice or had fixed terms ending and had agreed to vacate prior to 26 March were no longer required to move or simply could not move. Rent increases were frozen for 6 months, so notices of rent increases due to take effect post 26 March were no longer valid. Terminations for non-payment of rent, required a tenant to be at least 60 days in arrears instead of 21 days. While initially these measures were considered extreme, there have been some very positive outcomes and learnings. Most businesses transitioned easily to a remote working environment with Zoom meetings for staff, tenants and landlords becoming the new norm. Looking forward, more work flexibility and remote working options could be an attractive proposal for employees. Those businesses with technology that allowed electronic signing of documents were well placed. There was a push to video
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vacant properties before the lockdown. Virtual tours and floor plans may now become standard practise, in addition to the more traditional photos for advertising. Initially there was talk in the industry of the potential for rents to drop by up to 30%. Feedback from members is that currently this figure has been negligible with the only major variation being tourist areas that have been hit hard by unemployment. As Government wage subsidies end, we may still see another surge in tenants struggling with rental payments. REINZ has spoken with two business owners who have had vastly different experiences during this time. They have shared some insight into how they have managed through the last 6 weeks. Hayley Stevenson is the Managing Director of Housesmart a medium sized business located in Queenstown. “The effect of COVID-19 and the lockdown has had an immediate effect on our business. We had reduced 84% of our portfolios’ rent by between 15-20% within the first 10 days of lockdown. We currently have 9,000 people registered with the Queenstown Lakes District Council requiring assistance. These are not only migrants but also Queenstown locals. Currently we have 5,600 registered as being unemployed and this number is expected to increase. “The challenges on our clients that are renting is huge. Thousands of jobs lost, businesses struggling or gone, opportunities dried up, tenants stuck here and families separated. The Housemart team are working twice as hard for half the money. What we have learnt is that people fear what they don’t know. Good clear communication has been vital. We developed a plan very quickly and made
RESIDENTIAL PROPERTY MANAGEMENT SECTOR sure our team knew how to execute it. Be quick, think on your feet and act now. Making the wrong decision is worse than making no decision. “My role as the Business Owner changed, I became a mother figure, a support person, motivator, financial adviser and guidance counsellor while still being the Leader. The team’s role then became all of the above to our tenants. We had a great culture going into this, I think this is one of the reasons were have survived so far. We currently have a 4.3% vacancy rate which is very good compared with others and 13 properties available for let now. Our rental average has dropped over $120 in the space of 4 weeks. Two months ago, we had a housing crisis with no rentals available, now there are currently 170 rentals available for rent on TradeMe. Queenstowners are by nature positive and innovative people who are always up for a challenge. Yes, we have been hit hard, but we are back up on our feet, moving forward and ready for business.” Jason Waugh is the General Manager of Lodge Rentals in Hamilton and is heading into his 17th year in Property Management, this year Lodge is celebrating 50 years in business.
“The lockdown has presented us with many challenges which I was excited and apprehensive about, we started to prepare and plan for the lockdown 5-7 days prior to the Government’s announcement. As with most property management companies, the lockdown forced all our staff to operate remotely. I was interested to see how all the planning and implementation of our cloudbased systems would operate. The transition was seamless, and staff adapted quickly. “Our focus in the first few days of lockdown was communication, we made it a priority to personally call all our landlords and tenants. We identified that payment of rent would be our biggest challenge in the first 3 weeks. We had created a very good working relationship with MSD and WINZ in Hamilton which we used to streamline our process to help support tenants that were financially affected. We also communicated any issues with rent arrears to our landlords, this resulted in minimal impact on our arrears across the portfolio. “We created a new platform to undertake virtual inspections with our tenants during this time, our landlords really appreciated that we had the ability and technology to complete them. I have been advocating
for a long time the importance of communication and especially personally calling clients rather than emailing or texting. The lockdown has given us a great opportunity to re-connect with our clients on a personal level, we will be implementing this as our standard form of communication post lockdown. Our current vacancy rate sits at 1.8%, this is up from our normal percentage due to being unable to lease properties for the last 6 weeks. We haven’t seen a drop in rents to date and we have rented 54 properties since level 3 started. We are seeing a steady flow of enquiries for our available properties “The key to all of this is having a great team within your business who are prepared for change and able to communicate effectively.” Overall, REINZ is seeing a clear feeling of optimism from within the sector. We are more fortunate than many to be in an industry where having a home to live in sits at the top of the list of priorities for most. Experienced investors have indicated they are in for the long haul and attention will soon return once again to concerns over the proposed Residential Tenancies Amendment Bill.
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CHAMPIONING EXCE LLE N CE IN PROPERTY MANAGEMENT THURS 22 OCTOBER 9:30am - 5:00pm Pullman Auckland
RPM
Proudly sponsored by
20 20
Thanks to our supporters:
For more information about our speakers and the agenda visit reinzconference.com Join keynote Liam Malone and MC Laura McGoldrick at the 2020 REINZ RPM Conference.
EDUCATION
Property Management Fundamentals programme launching June REINZ has recently developed a 20-hour online programme designed for those new to property management or with fewer than 12 months experience. If you’ve just started in the industry or you’re a manager who has employed staff new to property management then this induction programme is ideal. REINZ Property Management Fundamentals Programme
NZ Certificate in Residential Property Management (Level 4)
• 20 hours of practical online content and downloadable booklets
A formal NZQA-recognised qualification that will help increase your professionalism and complement your industry experience:
• Approximately 45mins per day of training across 1 month
• 7 – 12 month programme across four modules
• 5 key modules with 5 mini-topics inside each module
• Online learning and 4 practical workshops
• Practical tasks, interactive activities, clips, quizzes and much more!
• A great range of industry speakers and presenters
• Includes a REINZ certificate of attendance
• Monthly intakes
• A great pathway into the NZ Certificate in Residential Property Management (Level 4). Only $199+gst for members $299+gst for non-members Enrolments via the education website: reinzeducation.co.nz
Usually $1,599+GST. Now only $1,499+GST (members)/ $1,899+GST (non-members) Group discounts available. Contact Kirstin Brown at kbrown@reinz.co.nz or go to reinzeducation.co.nz for more information.
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EDUCATION
2020 Online Verifiable Training Take some time now to get your training in for the year! REINZ has a good online variety of verifiable training packages available now. • Seven packages to choose from (10 hours total)
Trainers include:
• Knowledgeable, experienced, engaging industry speakers • Interactive online tasks, videos, case studies, scenarios and more • New auto-save function - stop and start whenever you want! • Group discounts available - contact Kirstin Brown Book via the REINZ Education Portal
Yvonne Box
Kirstin Brown
David Palfreyman
Graham Crews
2020 Online Non-Verifiable Training Need to clock up your non-verifiable hours? REINZ has some great options for you! • Key compliance packages 1, 2 & 3 - Two new packages! • Commercial and industrial • Sales and marketing success • Property management essentials. Individual modules are also available! Book via the REINZ Education Portal Contact Lisa Stern at lstern@reinz.co.nz if you have any questions
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YPIRE Conference 2020
INSPIRE MOTIVATE CONNECT Wednesday 15 October | LIFE Central, Mt Eden, Auckland Visit www.ypireconference.com for earlybird tickets! Save $40 on all ticket types
Fresh new content for the real estate profession, to inspire, motivate and connect like-minded individuals with ideas, tools, and the expertise to enhance careers.
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Guest Speakers
Key Sponsors Thanks to our supporters: Barfoot & Thompson, Harcourts, James Group and Woork
INTEREST
What will the post-COVID real estate environment look like?
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INTEREST
It has been proposed that our industry is ripe for disruption and the notion of “Proptech” is forever trending. The enforced slowdown brought on by COVID has challenged our adaptiveness and provided us with a taster for new and alternative forms of communication and technology. In this age of instant responses, Uber Eats and swipe rights, do these developments actually provide the industry with improved and more efficient connectivity?
Our office has tended to be ahead of the curve when it comes to implementing the available technology. We have been using the Cloud, chatgroups, Artificial Intelligence tools and virtual assistants for many years. The lockdown was a stress-test to see how we could effectively operate without a physical office to host in-office sales meetings and negotiations in. Off the bat we launched into virtual meetings and it immediately brought to light how much more time effective they were. From an operational point of view, it was incredibly easy to dial in guest speakers, trainers and senior management. Participation from all team members increased and the early consensus was that this could really be the way of the future. I feel there are instances where important information can be disseminated more efficiently via these communication forms rather than the traditional meeting format. Our Auctioneer had great success in Facetiming vendors a few days before their auctions to start the rapport building process early – a time effective and invaluable step which wasn’t always possible previously. As we dropped through different levels and guidance and regulations changed quickly, we found a simple update in our office chatgroup was far more efficient than hosting a full-blown meeting. However, as the weeks dragged on it became evident that physical and social interaction plays a major part in creating an office culture. The lockdown highlighted that the social aspect of sales is a reason why we are attracted to being salespeople in the first place. I for one missed my office family after a while. Whilst at home, I found it refreshing to have more relaxed chats with clients who weren’t in such a rush to get off the phone.
Jared Cooksley, Salesperson & Business Owner, Ray White Mt Eden
Having more time led to better depth of conversation and more effective discussion around how we can help, which is beneficial to both parties. I would like to think that this will continue but suspect that may be wishful thinking, as the pace of life picks up again. Although our office will be going back to ‘normal’ soon enough, I will definitely be making sure we keep focused on the value of a relaxed environment and our virtual efficiency during lockdown. Another benefit of the physical office is its ability to harness mental focus, creativity, and provide delineation between work and home lives. I have heard it many times before that “the hardest part of being selfemployed is managing your free time” and the lockdown really put that to the test. The 1pm update with Dr Ashley Bloomfield became a somewhat unconventional benchmark for achievement for the day. How many virtual meetings had I had? How many clients had I spoken with? Was I still in my PJs? Had I even showered? A shout out to the “touch up my appearance” feature on Zoom must be made here! The last few weeks should give us confidence that we as are an integral part of the transaction and the best salespeople are the ones who use technology to help streamline their businesses. Furthermore, the physical offices that support a culture that is conducive to success will continue to attract the best people. This experience will be a defining period in all of our careers - but what lessons and learning will we carry forward from it? Will a momentum shift happen in how we operate, as we learn from the efficiency that technology can provide, and the value in using that extra time for increased quality client interaction? Or will it be business as usual? The choice is up to us. WINTER 2020
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How we do business has changed!
Karine de Carteret, ArtSpec
For how long we don’t know. What we do know is that businesses are looking to be more efficient in how they go about their marketing. Working from home is nothing new, we’ve all done it and some will continue to do so.
What has changed? Businesses are looking at how they can improve their software solutions with remote access. SaaS as we know has become a buzz word, and one that’s becoming harder to ignore, when we know and can see a number of benefits in its use. The most commonly known to businesses, and the wider marketplace, are Dropbox, XERO, and MailChimp. Marketing as such is often seen as an unknown, yet its importance is often overlooked. Why is it important? It allows businesses to maintain long-lasting relationships with their customers and those that will become their customer. It’s not about a fix it one-time but rather an ongoing strategy that helps businesses grow. Marketing engages customers and is at the heart of success; this is especially true in the real estate market.
But how do you engage? What benefits are there to consistent brand messages? • Firstly, it has a HUGE impact on what people think of you, and it matters what people think of you and the agency that represents the sale of your property • Consistent messaging with consistent branding validates the brand promise benefiting those looking for a specific property • Brand value is a quality that embodies your values, decision-making and in everything you do. We’re not telling you anything you don’t already know, having been a real estate
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marketing manager, I too understand the real value in building a personal brand and a company brand - you can build both simultaneously.
THE FUTURE WILL BE DRIVEN BY LESS FACE-TO-FACE SO WE HAVE TO BE AT OUR BEST. As it’s been said: With so much content and so many people being online, a brand that connects to a person’s face is a much easier and faster to trust. It takes less time to build a relationship with a personal brand than it does with a business brand, that often has multi-brands within it. We live in a more transparent world, if you don’t take ownership of your brand and marketing, others are likely to do it for you. Your brand is crucial in establishing trust, how you’re perceived, what you are known for and how you communicate that to your market across the various mediums: video, flyers, email, newsletters, in-person etc. Here are few key areas in building your brand and keeping your marketing relevant and on point: 1. Content: You’re the expert. The goal is to have people instantly know you. Sharing of consistent messages, you know your area, you’re the leader, focus on creating great customer experiences. Define what and how you want to communicate and be consistent!
INTEREST
2. Visibility: You have to be visible. Do you have a strong social media presence? Are you speaking, writing and contributing to local on and offline publications; doing video; starting a podcast? Getting your message out there in the most visible places as you can. What are you doing to raise your visibility in the organisation? Are you contributing to newsletters, magazines, volunteering and sharing your ideas with internal collaboration platforms? Being visible with your own brand is key to creating you, and your teams’ own ladder. 3. Frequency: Sharing often without it becoming spam. Are you sharing relevant content several times a day via social media, what’s happening with that weekly newsletter, are you featured in a podcast or media at least once a week? Constantly being out there building your brand and making sure messages are being heard. The more you share your message, the stronger your brand and marketing become. Being confident in your messaging, and willing to put yourself out there that has real value to your audience, and works towards creating a recognisable brand that can boost your value.
To sum it up - Simultaneously build a personal brand and a company brand - Social platforms connect you with your target demographics - Collaborate and build relationships. Be the thought leader, record, write and post through shared social mediums - Build trust and authority - Build your network - Attract more clients. “Having a personal brand is important . . . it’s important for . . . . brands to come out to the forefront and connect with their audiences. People connect with people”. – Kevin Stimpson.
For more information about ArtSpec and how they can help you, contact Karine de Carteret at karine@artspec.design or on 021 524 346; or Bill McSherry at bill@designprintltd.co.nz or on 021 624 100
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Planning to succeed on social media Odette Coates, Halo Digital
The saying goes, ‘you can’t run before you can walk’. This has never been more true than when considering the many social media platforms currently available to market you and your business effectively. From Facebook, to Instagram, Twitter and LinkedIn to TikTok, Pinterest and Snapchat. Where to begin?
Having worked with a number of agents and business owners, I’ve seen firsthand how overwhelming it can be trying to juggle your daily calls and meetings, while still trying to source, write and post content. All the while feeling guilty that you aren’t managing to engage with and grow your online community (and watching as some of your competitors are smashing it and wondering how). Detailed planning upfront for both your social media strategy and associate content plan will reap these significant rewards: - Allow you to kiss your social content dilemma goodbye, ensuring everything you share has a purpose, aligned with a business goal. Whether it’s a post, a share, a comment or reply, there should be a reason for it - Provide you with the ability to start meaningful conversations online, building and encouraging a channel of communication between you and your audience - allowing for immediacy and authenticity - Allow you to be clear about the direction you’re heading in and not having to worry about what your competitors are doing.
Social Media Strategy - Defining your Pathway Before you start creating and posting any content, invest the time to develop your strategy. This is your blueprint, a well-
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considered and thought out plan that will provide a pathway to achieving your goals. If you’re working as a team, it’s also your collective ‘go to’ document to ensure you’re aligned with what and how you are posting. Your social media strategy should answer the fundamental questions of - Why, Who, What, How and Where. - WHY am I doing this? Before considering anything else, take a step back to understand why social media is part of your overall marketing plan. What are your marketing goals and how will social media help you connect with your audience to achieve them? It may seem obvious, especially after COVID-19 pushed everyone onto online engagement in some form or another, but defining the why helps with detailing the rest of your strategy. At a high level this could translate to ‘build your personal brand’, ‘increase community engagement’ and ‘generate seller leads’. - WHO am I talking to? Knowing who you are talking to will help you decide which social media platforms you should be using along with the type of content you should be creating. Aim to go beyond the obvious of age and male/female demographic. Consider lifestyle, stage of life, motivations, challenges and interests. You may identify a couple of audiences, and that’s ok. If necessary, identify a primary audience, and a secondary audience. Or a ‘buyer’ and
INTEREST Using the Content Pillars outlined earlier: - S tart with deciding how many times a week you will post. Be realistic about what you can achieve versus listening to the many voices of the number of times you should be posting. Set yourself up to succeed! - S econdly, allocate your content (based on your Content Pillars) into the Plan. Start with the ‘obvious’. For instance, schedule a ‘Thought Leadership’ piece to share the REINZ monthly property statistics and your opinion on what this means to your market. Include seasonal content e.g. An Advice piece on Gardening in Winter (which ties back to adding value to your property). Include a monthly Community feature profiling a local small business or charity. And then include your Success pieces e.g. a weekly testimonial, new listings or sold properties
‘seller’ audience. Detailing your audience profile helps to identify what type of content would interest them, and what social media sites they will probably be active on. - WHAT do I want to say? Once you know why you are on social media, and who you are talking to, you can start planning what you want to say. Your content. To help you organise all your content ideas, create Content Pillars. A content pillar is a grouping of types of content, or topics, that will form the foundation of your Content Plan. For instance, as an agent you may have the following pillars: - Advice: e.g. Real Estate selling tips, first homeowner advice - Business Activity and Success: e.g. Testimonials, sales, listings. - Thought Leadership: e.g. Property sales stats, real estate market review. - Brand: e.g. What your business and personal brand offers in the market - Community/Family: e.g. Local community information (people/places), more about yourself (your family, life outside of real estate) By organising your ideas into pillars makes planning your social media posts easier and more effective. - HOW am I going to say it? Social media provides the perfect
opportunity for you to build your personal brand online - to have immediate, transparent and authentic conversations with your ‘virtual’ community. Whether you’re creating video, graphics or written content, it is essential that you’re consistent and keep it real. Be your authentic professional self. Funny is fine. Flippant, arrogant and insincere? Probably not. Remember, people deal with people and you are aiming to connect on a personal level and share your true self. This is not the time to look over your shoulder to see what your competitor is doing and how they’re doing it - this is your conversation to own. - The ‘Where’ This is where you need to be realistic about what you can achieve in terms of available time, resource and ability. If you are managing your social media yourself, your ‘where’ may simply be determined by the social media channels you are familiar and confident with, for example Facebook and Instagram. Rather do less, properly and consistently - than trying to do too much poorly.
From Strategy to Action Your Content Plan Time to put your Social Media Content Strategy into action and reap the rewards of your planning! Your Content Plan is your detailed view of what you are going to post to support your strategy. Ideally, plan a ‘month to view’.
-A t the same time, identify whether each content piece is written by you, a video, or contributed by a third party e.g. the garden post could be a shared local garden centre article. Also plan what images are going to be used, what artwork is needed, and who is going to do this. You can see how quickly a Content Plan is populated with relevant content once you know what you are posting and why. Finally - be cognisant of the need to review what is working and what isn’t and refine as you go. This could be changing the time of day you post, or using video instead of written content for some posts. As you become more confident, start exploring additional social media channels that you feel will reach your target audience more effectively. Remember, walk before you run. And before you know it you have completed your first marathon! Looking for a great example of a Content Plan to work off? Connect with me on odette@halodigital.co.nz and I will forward one on to you.
Odette Coates is a digital marketing & communications professional with over 12 years’ real estate marketing experience. She works with business owners and agents to create results driven online strategies to grow their business and brand. To get in touch call on 027 4637977 or email odette@halodigital.co.nz
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Mental and emotional wellbeing in uncertain times
Jasmine Platt Founder, Real Estate Leaders
When I was asked about writing an article about wellbeing, I had to think about what I’d want to share – especially at this time of uncertainty for many. For context, I train real estate salespeople and agencies in producing results. But I also used to teach wellbeing. I like to think, as a result, that I have a fairly well-considered perspective when it comes to the interrelationship between financial success and wellbeing.
While – out the back of the COVID-19 lockdown, I could write an article about the importance of certain wellbeing practices – exercise, water consumption, meditation, etc. – I was loathed to do that for this article. Why? Because as human beings, our lives are multi-dimensional. Giving you tips on wellbeing without speaking to the very real financial and human challenges that occur during uncertain times, would be like suggesting a meditation class to soothe your stress levels while ignoring the fact that there’s a tsunami on its way to the door. I want you to be well and happy, but I also want this article to be practical, and based on the commercial realities you might be facing. To assist with this, I’ve compiled a list of 6 practical tips for creating a solid business and wellbeing in challenging financial times:
1. Make sure your profile building plan is solid and implementable Have you been investing in your profile and marketing, or sitting back hoping your office or agency does the work and invest for you? If your profile building plan is non-existent, inadequate – or you can’t easily implement
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it, you’ll struggle to create your own opportunities. So be sure to get onto this. Several questions to reflect on: Does your marketing collateral convey professionalism, build trust and stand out from your competitors? Is it personable and authentic? If you don’t have money right now to invest in your profile, find a way. As they say: “Marketing is an investment in the future. It’s only a cost if it’s not working”. Take time to reflect on what has been working or not working. And if it’s not working, work out why! For further advice on this profile building, read the article on marketing on page 44.
2. Make sure you have a solid prospecting plan that you’re working Are you doing enough? I once heard a sales coach say that no matter how good you are at sales, you only sell x% of the opportunities you get, so the only way to control your income is to focus on (a) creating more opportunities and (b) improving your conversion rate.
INTEREST
The latter point I’ll cover in the next tip but be sure to focus on prospecting as a way to generate business. It’s critical to knowing where the current and future opportunities are. Learn to do it well, because if you don’t make it your priority, your competition sure will be!
3. Create a learning and development plan and get on with upskilling Write a list of the skills and knowledge you don’t have (yet) that will make you better at what you do – from marketing and prospecting, listing/closing listing opportunities, to negotiation, closing sales and creating raving fans. Be honest with yourself about what skills you need. Ask your manager to help you identify where you can improve. Then find people to teach you. Do the work. Lazy salespeople struggle and blame. (Don’t do that.)
4. Focus on high-value activity – and be sure to take breaks Real estate salespeople are notorious for putting off the hard stuff – marketing planning, prospecting, and skill development all tend to fit into this category. If you are putting off the hard stuff, you’re putting off income. And if we’re talking about wellbeing, putting off the big stuff naturally creates stress! Rather than using your week up by doing the distracting, low value “busy work” first, leaving yourself little time for creating actual results, focus on high value work first, then give yourself decent, well-earned breaks.
5. Be sure to create work/life balance No matter how difficult things are financially, be sure to take breaks from work - and from thinking about work. Exercising, eating well, and taking time to create space will help you to restore yourself – and keep yourself energised. Take time to think back on about what you learned from working from home during the COVID-19 restrictions. Did life or your perspective change at all during that time? Is there anything you now consider important that you didn’t before? Has your attitude changed towards what you once considered to be important? Has anything changed that you want to integrate more fully into your life? Success is a long-term game. You need to have the space and energy if you’re going to make it financially, mentally and emotionally.
Let’s face it, while savings is nowhere near as sexy as a new Audi in the driveway, if nothing else, COVID-19 has been a wake-up call for a lot of now-very-stressed people, who didn’t have money put aside! We all want to feel good– and it’s hard to feel good when we’re struggling and stressed. But if we’re financially stressed while also not engaging in the right work (and trying to hide from ourselves the fact that we are not doing the right work), unconsciously we know that we’re a bit stuffed, even if we try - consciously or otherwise - to blame someone or something else (COVID, anyone?) It’s a well-known fact in our industry that some salespeople do well in uncertain times, while others struggle. Focus on the above six things – and give yourself the best chance of coming out the other side of uncertain times in good shape - financially, mentally and emotionally!
6. Build a “Battle Chest” Having money in the bank to get you through challenging financial times is as important practically, as it is emotionally and mentally. A financial planner friend of mine talks how people – especially those of us in business - should put aside several months of living and operating expenses (2-6 or whatever we’re comfortable with) in an account in case we ever go through challenging financial times. Having that breathing space helps us feel safer and more steady - and ensures we have the capacity to make good commercial decisions moving forward.
Jasmine Platt is the Founder of Real Estate Leaders. As a high-performance specialist, she works with head agencies, branch leaders, franchise owners and salespeople to help them lift their results, make more money and win more of their time (and sanity) back in the process. To speak with her about how she can help you, email her directly at jasmine@realestateleaders.co.nz
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FINANCE
KiwiSaver & First Home Grant
Stephen Tsang, Partner, Withers Tsang
Food and shelter are our basic physiological needs as proposed by Maslow’s famous Hierarchy of Needs theory. Yet the notion of owning our first home, be it the good old “quarter acre” Kiwi dream home or a more realistic 50 square metre apartment in today’s terms, seems getting harder to attain. Or is it?
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FINANCE The biggest challenge is getting the deposit.
eligible-for-first-home-grant/ for full details.
A silver lining in this COVID-19 pandemic is that it prompted RBNZ to consider relaxing the stringent 80/20 Loan Value Ratio for first home buyers. Compounding with the extraordinarily low interest rate environment, now is the perfect time for first home buyers to canvass all avenues to chase that illusive deposit.
You can use this grant as additional deposit when applying for a loan from lender of your choice.
KiwiSaver First Home Withdrawal Granted KiwiSaver is intended to be a longterm investment – saving for your retirement. Thanks to the KiwiSaver rule change though, you can make a KiwiSaver First Home Withdrawal as your house deposit since 1 June 2015. Provided your KiwiSaver provider offers this option, you can withdraw the entire KiwiSaver fund (except you must leave a minimum $1,000 balance) including the employer contributions to use as your first home deposit. In general, you need to be contributing into the KiwiSaver fund for more than 3 years to qualify. Please check as not all providers offer this withdrawal option. Incidentally, if you have never consulted an investment advisor before, now is the time to do so. You may be missing out on potential windfalls or exposing your funds to unnecessary pitfalls in this turbulent time. And if you have not signed up for KiwiSaver, you may wish to reconsider. I remember a renowned financial advisor once said – what other investment would give you a 100% return. You put in 3% and your boss (in most cases) matches the same 3% into the KiwiSaver fund of your choice. If nothing else, this is like a guaranteed pay rise. Please get some investment advice beforehand.
First Home Grant First Home Grant is essentially a name change replacing all its predecessors – KiwiSaver Home Start Grant or KiwiSaver Deposit Subsidy scheme. It is administered by Kāinga Ora which was formed in October 2019 combining resources in KiwiBuild and replacing Housing New Zealand. These grants are usually paid directly to the lawyer’s trust account on settlement day. Unlike conventional lenders who usually stipulate the minimum lending criteria (e.g. minimum deposit, LVR%, loan servicing income), Kāinga Ora’s assistance criteria is the exact opposite. Except for the minimum deposit requirement (5%), all other eligibility criteria have maximum cap (e.g. maximum income threshold, property value needs to be capped depends on the region) Please visit https://kaingaora.govt.nz/homeownership/first-home-grant/check-you-are-
First Home Loan Kāinga Ora also has a list of participating lenders who will offer First Home Loan that allows you to borrow up to 95% of the property value cap. As well as meeting the First Home Grant eligibility criteria, there are few additional stringent requirements you need to meet: • The property needs to be the family home and can not be rented • Cannot own any other property • Need to pay a 1% Lender Mortgage Insurance premium on the amount borrowed. Please visit https://kaingaora.govt.nz/homeownership/first-home-loan/check-you-areeligible-for-first-home-loan/ for full details. Not all lenders participate in this First Home Loan scheme. In fact, only one of the four main trading banks participate in this scheme. https://kaingaora.govt.nz/homeownership/first-home-loan/lenders/ To finish, sharing one of my team’s first home buying journey in her own account will best illustrate the interplay between KiwiSaver and the First Home Grant. My parents signed me up for KiwiSaver when it was first introduced. I cannot remember who the provider was, but I have since changed to one of the main trading banks. My KiwiSaver had been put into a conservative fund by default. I cannot recall ever meeting an investment advisor. I started reading up more and decided to put 70% into a Growth Fund. I was young and do not intend to use the funds for at least 5 years. The risk was higher, but the figure never went down.
pre-approval. The pre-approval process was easy. It was all done online. Now that I have a ballpark figure, I have been looking at other options. In the meantime, I have also been saving the approximate level of a mortgage to ensure I am being realistic and will not be left living payday to payday after purchasing the apartment. As luck would have it, the world pandemic struck. With 70% of my KiwiSaver in a Growth Fund I saw my Kiwisaver account plummet for the first time. I contacted the banker asking what I should do. He usually does not recommend moving funds as they usually will recover eventually. But in my case, as I am likely to purchase a home in less than two years, my funds would be better placed in a Cash fund regardless of the pandemic. I changed my KiwiSaver to a Cash Fund (which has little to no losses, however, the gain is not much either). It is not a big deal if I buy soon. The bank took 5 working days to process my request and unfortunately in these 5 days I lost approx. $5,000. I am guttered my account went down as $5,000 is a lot of money to me. But at the end of the day I have still gained in KiwiSaver more than what I ever would from having that money in a savings account. KiwiSaver has forced me to save. There is absolutely no way I would have been able to save enough for a house deposit without KiwiSaver. The moral of the story is, there is no magic wand. If you want it, start saving - now. It may not happen overnight, but it will happen. The longer you lament how impossible the further away it will be to achieve your dream.
Recently I stumbled across an apartment that I really like. I consulted the bank thinking I would get laughed at but they said yes. I was pleasantly surprised as I kept hearing stories of how hard the Auckland property market is to get into. I am also told I will be eligible for the $10,000 First Home Grant (because I have been contributing to KiwiSaver for at least 3 years, earned less than $85k in the past 12 months, and have at least 5% deposit). First Home Grant can give me $1,000 for every year I have been in KiwiSaver up to $5,000. As the apartment I was looking at is off the plans (new build) I am entitled to an additional $5,000, hence the $10,000 WINTER 2020
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INDUSTRY
Nadine Thomas REA Industry Insights and Engagement Manager
CPD for beginners
The Real Estate Authority (REA) recently changed the requirements for new salespersons and continuing professional development (CPD). Now all new salespersons must complete CPD in the year they gain their licence (unless they are licenced between 1 September and 31 December, in which case they are exempt for the year).
sector and real estate consumers. Regular CPD is important for maintaining and enhancing the knowledge and skills you need to deliver a professional service to your clients. It’s an essential way to keep up to date with changes to regulation and law changes that affect your work.
This article from REA is for new salespersons and their supervisors. It explains what CPD is, why it’s essential and what you need to do each year. It includes information about our video resources too.
What is CPD? Many professions have a continuing professional development or CPD programme and CPD requirements. CPD helps reinforce knowledge about topical issues, trends and changes to legislation and regulations, and contributes directly to increasing industry standards.
How many hours of CPD do I need to do each year? You need to complete 20 hours of CPD each year. The 20 hours is made up of 10 hours of verifiable training and 10 hours of nonverifiable training.
Why is it important to do CPD every year?
This year, there are 4 hours of mandatory topics and 6 hours of elective topics.
Annual CPD benefits you, the real estate
Continuing professional development 2020 Verifiable training:
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6 hours of elective topics
Non-verifiable training:
10 hours
Refresher training:
10 hours
(When required) 50
4 hours of mandatory topics
Total CPD = 20 hours
INDUSTRY
What’s verified CPD? Verifiable CPD is a learning activity that can be verified objectively by one of REA’s approved training providers. Your training provider reports to REA when you have completed your 10 hours of verifiable training each year. REA provides topics and training material for the verifiable training, and the training is delivered online, or face-to-face by 25 approved training providers, including REINZ. Each year you must complete a number of mandatory topics. For the remaining hours, you and your agency and training provider can select topics from REA’s library of elective topics.
What’s non-verified CPD? Non-verifiable CPD is less structured and covers a number of activities such as sales training, seminars, and some in-house training sessions. Viewing training videos can also count towards non-verifiable training, including REA’s training videos and facilitated meeting material – see the information on this page about these. Familiarising yourself with the settled.govt.nz website can also count towards nonverifiable training hours because this is considered to be a key tool for you to tell your clients and buyers about. Some of REA’s verifiable training material is available free for non-verifiable training. If you study this material, it can count towards non-verifiable CPD hours. The topics you include for non-verifiable training can’t count towards your verifiable training in the same or previous two years. You can find the free training material at rea.govt.nz. You can find more about what does and doesn’t count towards non-verifiable CPD at rea.govt.nz/cpd.
How does REA know I’ve completed non-verified training? You must record your non-verifiable CPD in a log. Your supervisor or manager must sign the log to confirm that you have completed the learning. REA audits 3% of licensees each year to check they have completed and logged their non-verifiable training.
What happens if I don’t complete my CPD? REA takes CPD very seriously. If you don’t complete your annual 20 hours CPD requirement, you may lose your real estate licence, which means you won’t be able to work in real estate. If you have not completed your CPD by 31 December and don’t have a good reason for this, one option is to suspend your licence until you have completed the 20 hours of training. You cannot work in real estate while your licence is suspended. If you’re thinking about suspending your licence, it’s a good idea to understand your CPD requirements first. You will still need to complete CPD if you suspend your licence for less than 12 months. If you suspend it for longer, you will need to complete verifiable refresher training. There is more information about suspending your licence on rea.govt.nz.
Where can I find more about CPD? Visit REA’s website at rea.govt.nz/cpd for more information about CPD. If you have a specific question not covered here or on the website, your supervisor will be able to help you, or you could contact your agency’s training provider. You can also call the REA licensing team on 0800 367 732 or email licensing@rea.govt.nz
Video resources REA has produced training videos to help licensees understand various aspects of working in real estate. Studying these videos can count towards your non-verifiable CPD hours if your supervisor or manager signs your log confirming you have viewed them. The videos are a helpful resource for new and experienced licensees to refer to when they have questions about the topics covered. There are five educational videos so far, available at rea.govt.nz. They cover these topics: • Marketing and advertising • Supervision
Can I be exempted from CPD? You can apply for an exemption from all or part of your annual CPD requirements under certain circumstances, for example, if you have recently completed a prescribed qualification for a higher licence. You can also apply for an exemption if you are a member of an approved professional body such as the Property Institute of New Zealand (PINZ) or the Royal Institution of Chartered Surveyors (RICS). You can read more about exemption criteria at rea.govt.nz/cpd.
• Getting ahead with settled.govt.nz • Principles of disclosure • Conflict of interest. The videos about disclosure and conflict of interest can be viewed alone or with the meeting notes available on the rea.govt.nz resources page – these have been designed for managers to use in agency training sessions.
SPRING 2019
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LEGAL
Disclosure of Defects Amesha Rama, In-house lawyer, REINZ
There really is no “one size fits all” answer to disclosure requirements, as each situation and property is different. The general principles to keep in mind when assessing disclosure requirements are Rules 6.4, 10.7 and 10.8 of the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 (“the Rules”).
Before a vendor signs an Agency Agreement, you should explain the importance of disclosing all relevant information to potential purchasers/ purchasers and the repercussions if they do not. It would be prudent for you to go over the property thoroughly with the vendor, including asking specific questions about whether the vendor is aware of or has experienced any issues with the property (e.g. weathertightness issues), and whether they have had any specialist reports that indicated an issue with the property. Best practice is to record in writing any discussions had with the vendor, potential purchaser/purchaser about disclosure or matters that require disclosure, as a way of having written evidence in case a problem arises later. Vendor’s consent should always be obtained prior to disclosing any relevant matters. It is also a good idea to get purchasers to sign an acknowledgement form that demonstrates that they have been made aware of known defects. Rule 10.7 requires licensees to inform potential purchasers about known defects/ issues with the property or business that they are selling. A wide range of matters could be classed as a defect, including moisture ingress, subsidence, unpermitted works, or other damage to the property. Licensees are required to be able to
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identify potential issues with a property, for example, properties that fit the ‘leaky building’ stereotype or properties with suspected asbestos ceilings. Whether there is a likelihood of a hidden or underlying defect with a property, will not be determined based on the views of the individual licensee concerned (subjective basis) but rather based on the views of a reasonably competent licensee (objective basis). If a reasonably competent licensee would consider it more likely than not that a property may be subject to hidden or underlying defects then, in order to satisfy Rule 10.7, the licensee must obtain confirmation that the land is not subject to defect or must ensure that the potential purchaser/purchaser is informed of the potential risk. Under Rule 10.8, where the vendor does not agree with the problem being disclosed, the licensee will need to discontinue acting for them. Rule 6.4 concerns other information licensees may need to share about a property that is broader than physical defects, for example, a development in the area, or whether there has been a violent crime in the property. In early 2019, the Complaints Assessment Committee (CAC) released a decision demonstrating the application and breach of Rule 6.4 and 10.7. In that case, the property
LEGAL was advertised as having five bedrooms, two living rooms, two bathrooms, one kitchen and one kitchenette when some of the rooms did not actually have consent. The purchaser claimed that the licensee failed to disclose that the two bedrooms and kitchenette had not been consented. The licensee responded by stating that the vendor had not disclosed that the area was not consented and that there was no way in knowing that the property had unconsented works. The CAC noted that there were red flags that should have prompted the licensee to ask questions about the renovations. The CAC reviewed photos of the property and could see that the property was older and that it was obvious that renovations had been made and extra amenities were added as evidenced by the downstairs kitchenette and new pipes outside the property. The CAC stated that in those circumstances, a prudent licensee would have confirmed with the vendor on whether the works had complied with any council requirements under the Building Act at the time. The CAC stated that the onus was on a licensee to identify any potential risks especially, when
there were red flags to alert licensees to a risk of hidden or underlying defects. An August 2019 case demonstrated the dangers of not qualifying statements. The licensee in that case gave an opinion to the purchasers, as to the presence of asbestos, in that he did not think that the property contained it when the purchasers had viewed the property. There was no evidence that the licensee qualified his statements to the purchasers, by saying he had made enquiries to the vendor, or would make further enquiries. Nor did he make it clear to the purchasers that whilst he thought the property did not contain asbestos, they should be making their own investigations in that respect. The CAC stated that once the purchasers had flagged asbestos as a matter of importance to them, the licensee had an obligation to either ensure that there was no asbestos present at the property or to recommend that the purchasers sought independent expert advice. The licensee took neither of these actions and the CAC found that the licensee had misled the purchasers by not qualifying his opinion
to the effect that the property had no asbestos. The CAC found that the licensee had breached Rule 6.4.
Given the above, what should a licensee do if they find a potential problem with the property they are listing? The licensee should talk to the vendor about any information they receive and explain that they may be obliged to disclose the issue as per their disclosure obligations under the Rules. The licensee should talk to the vendor about their options including: • The vendor providing information to address or clarify why there is no issue, or that the issue has been resolved • Investigating the nature of the problem so the vendor can make an informed decision about what to do next • Agreeing there is a problem and consenting to disclosure. Remember to keep in mind Rules 6.4, 10.7 and 10.8 when it comes to disclosure obligations.
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