Kevin Smith: Fixed price contracts
Auckland Property Investors Association (APIA)
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2y ago
A lot has been said of late about construction companies and questioning their ability to produce a Fixed Price Contract. In order to understand whether there is any truth in the matter, we need to first understand what a what a Fixed Price Contract is and how it is compiled. The fact of the matter is that Fixed Price Contracts are becoming a rarity among building companies. When lending money from a financial institute to build a new home, one of the main requirements is to provide a Fixed Price Contract from a reputable building company. The lender needs to know that should a default occur ..read more
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Stefan Nikolic: Why Auckland investors should not write off short-term rentals just yet (despite the lockdown)
Auckland Property Investors Association (APIA)
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2y ago
It comes as no surprise that the short-term rental market is heavily affected during lockdowns, and some investors will be put off by the idea of staying in the market, but that doesn’t mean you should give up on the idea altogether. In fact, lockdowns present a massive opportunity for those investors that are looking to adopt a counter-cyclical investment strategy and take a more long-term approach. During a lockdown, occupancy rates plummet due to travel restriction, and a lot of investors in the short-term rental market give up hope and either lock in a tenancy agreement, or they start thi ..read more
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Moving between different Alert Levels
Auckland Property Investors Association (APIA)
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2y ago
In anticipation of the rest of the country moving to Alert Level 3 this Wednesday while Auckland and Northland remain under Alert Level 4, we've produced this easy referencing guide to help tenants and landlords work out the rules of moving across regions that are at different Alert Levels:     To region at Alert Level 1  To region at Alert Level 2  To region at Alert Level 3  To region at Alert Level 4  From region at Alert Level 1   ? ? ? ? ?  ? ⚠️  From region at Alert Level 2 ? ? ? ? ? ? ? ⚠️   From r ..read more
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Ryan Smuts: Bank funding for new-builds
Auckland Property Investors Association (APIA)
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2y ago
In many cases, bank lending has changed considerably when it comes to new-builds, and most of these changes have happened only within the last few months. An original advantage of funding new-builds with banks was that they are exempt from LVR rules, so banks could lend what they wanted on them. In most cases, banks would lend up to 80% for investment new-builds properties. This meant investors needed half the deposit for a new-build (20%) than they did for an existing property (40%) at the time of writing. In some special cases, banks would lend even higher than this on investment new-builds ..read more
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Landlord FAQs for Level 4
Auckland Property Investors Association (APIA)
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2y ago
Level 4 has caught many of us by surprise. Here are answers to some common day-to-day questions arising out of the latest snap lockdown.   Q. My tenant has asked for a rent reduction for the duration of Level 4. Can I do that? A. For sure. You are not obligated to reduce rent during COVID lockdowns but should you consider it appropriate to do so (e.g. whether your tenant is, in fact, experiencing a reduction in income, the relationship as a whole, your risk appetite, your personal financial situation etc) then you simply formalise your temporary rent reduction arrangement by executing a ..read more
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Kelvin Davidson: Time to focus on income
Auckland Property Investors Association (APIA)
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2y ago
  There’s no doubt that the economics of property investment in NZ have changed dramatically in a short space of time since the market unexpectedly surged in the wake of COVID originally hitting our shores. True, mortgage rates fell sharply, and that triggered a wave of renewed property demand – alongside the temporary removal of the loan to value ratio speed limits and a continued lack of available listings on the market – which have all combined to deliver large capital gains pretty much everywhere. Apart from MacKenzie District (5.5%), every area of the country has seen at least a dou ..read more
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Ryan Smuts: Interest rates are on the up
Auckland Property Investors Association (APIA)
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2y ago
Interest rates are starting to track up leading to significant cost implications for property investors. Some specific issues to be mindful of:    1. Why are interest rates going up? Interest rate markets are already pricing in a 90% chance of a rise to the OCR in August! The recent RBNZ comments around the Large Scale Asset Purchase (effectively money printing) are also influencing mortgage interest rates as they are now moving away from this which played its part in the reduction of rates over the last 12 months There are also other factors that you need to be aware of which may ..read more
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Kelvin Davidson: Inflation and interest rates take centre stage
Auckland Property Investors Association (APIA)
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2y ago
What a change a few weeks can make. It was only a short time ago that some commentators were predicting that the official cash rate (OCR) wouldn’t start to rise until 2023 or even 2024, and the ‘consensus’ was for a rise in the second half of 2022. But that has all changed very rapidly, and now an OCR increase looks relatively likely for August 18th – i.e. only a few weeks from now. So what is going on and what does it mean for investors? The key shift has been on the inflation front. With COVID driving supply chain problems and also increased spending/demand locally by NZ residents, stronger ..read more
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Kelvin Davidson: There’s never a dull moment in the property market
Auckland Property Investors Association (APIA)
by
3y ago
Over the past month the property market has remained at the forefront of news headlines, so here’s an important reminder of recent key points: Property values are still rising rapidly – in May they were more than 20% higher than a year ago (on the CoreLogic House Price Index) However, there are hints that sales volumes are starting to cool, due to previous measures such as 40% deposits for investors, but also due to the simple lack of listings/choice The Reserve Bank ‘surprised’ economists by publishing a clearer forecast that (in response to inflation pressures) the official cash rate will ..read more
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Stefan Nikolic: The Auckland short term rental market - Post-COVID recovery so far
Auckland Property Investors Association (APIA)
by
3y ago
As you can imagine, the short term rental market was hit hard by COVID last year when the first lockdown was announced. Zodiak was no exception . Losing half of our clients in a single month was not a pretty sight, and the short-term rental industry was in free-fall for the next few months. Luckily though, we survived! Now the Airbnb market is improving month on month, and this looks to continue moving forward.   Statistics In May, we achieved an average occupancy rate of 83% for our managed Airbnbs in Auckland, and this was up from 77% in April. This too was an increase over March where ..read more
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