Kainga Ora Complaints, West Coast Joins Property Price Declines & Predictions by Tony Alexander

Kāinga Ora must pay woman after failing to act on complaints about unruly North Shore neighbour

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“The Week in Review”  is where we talk about current events for the everyday investor and homebuyer.

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THIS WEEK IN REVIEW TOPICS:
Topic #1: Good Returns 19th of June - Tony Alexander predicts

Topic #2: Interest.co.nz 21st of June- Average rent on newly tenanted homes increased by $25 a week in the year to April

Topic #3: NZ Herald 20th of June-Trade Me data shows more than 340,000 searches for heaters over past two weeks

Topic #4: Landlords.co.nz 20th June- West Coast joins the property price decline for the first time

Topic #5 NZ Herald 20th of June -The Front Page podcast: Why aren’t more Kāinga Ora tenants evicted over complaints?

Chapters

• 1:00 Topic #1: Good Returns 19th of June - Tony Alexander predicts
• 2:48 Topic #2: Interest.co.nz 21st of June- Average rent on newly tenanted homes increased by $25 a week in the year to April
• 5:31 Topic #3: NZ Herald 20th of June-Trade Me data shows more than 340,000 searches for heaters over past two weeks
• 7:48 Topic #4: Landlords.co.nz 20th June- West Coast joins the property price decline for the first time
• 10:39 Topic #5 NZ Herald 20th of June -The Front Page podcast: Why aren’t more Kāinga Ora tenants evicted over complaints?

Transcript

 Hi everyone. I'm Debbie Roberts, owner and financial advisor at Property Apprentice. Join us today for the week in review where I talk about current events for the everyday investor and home buyer. Our topics for this week,  📍 first up from good returns on the 19th of June, Tony Alexander Predicts.

 📍 Second topic from interest.co.Nz on the 21st of June average rent on newly tenanted homes increased by $25 a week in the year to April.  📍 Third topic from the New Zealand Herald on the 20th of June tradeMe data shows more than 340,000 searches for heaters over the past two weeks.  📍 Fourth topic from landlord.co.nz on the 20th of June West Coast joins the property price decline for the first time.

And fifth  📍 topic for this week in review from the New Zealand Herald, 20th of June, the front page podcast: why aren't more Kainga Ora tenants evicted over complaints?  

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So first up for this week, in review from good returns on the 19th of June, Tony Alexander Predicts. Economist Tony Alexander, speaking at L F G Group's Conference in Christchurch, expressed confidence in the upcoming activation of a large queue of potential home buyers who've been holding off on their purchases.

While he believes this may not happen in the current year, he expects a surge of activity in the near future. Alexander also highlighted that interest rates appear to have reached their peak with no immediate possibility of rate cuts. Additionally, the unexpected surge in net migration reaching 72,300 people by April will add pressure to the rental housing market.

However, Alexander's caution that accurate short-term forecasts are challenging as economists misjudge the impact of the COVID 19 pandemic on house prices. With New Zealand officially entering a recession, Alexander noted that the unique nature of this recession, as jobs continue to grow and job security remains high. Businesses, after laying off staff during the initial lockdown, now struggle to rehire due to labor shortages leading to a hoarding of labor.

Furthermore, the construction sector is facing challenges as inexperienced individuals who entered the industry during the house construction surge are now at risk of going outta business. This trend is expected to continue for around two years. Putting further strain on existing housing stock.

Alexander predicts a shift in emphasis from renting to buying houses. As prices begin to move. He anticipates that the housing market activity will be concentrated in major cities while some regions may have experienced over building. Second topic from this week in review from interest.co.Nz on the 21st of June.

Average rent on newly tenanted homes increased by $25 a week in the year to April. The residential rental market remains steady as the number of rented properties in April aligns with the typical seasonal pattern while rents maintain their gains achieved earlier this year. According to the latest data from Tenancy Services 11,157, tenancy bonds were received in April, slightly lower than the 11,802 received in the same month last year.

Typically, bond numbers peaked during summer and declined throughout the winter months. This year's figures indicate that the rental market's following this trend since January 2021. After a period of growth, rents are stabilizing with the national average rent reaching a records $575 per week in April.

This represents a $25 a week increase compared to April last year. Although the average rent dropped to $560 in February and March after reaching $575 in January, it bounced back to $575 in April. The rent figures derived from recently lodged bonds set a benchmark for landlords when reviewing rents for existing tenants.

While monthly rent data can fluctuate, the figures suggest a return to normalcy in the rental market following pandemic-related disruptions, although with slightly higher rents. If the market continues to follow seasonal trends, it's likely that the average rent will soften a bit in the middle of this year and potentially increase again during spring

aligning with rental activity and the  underlying supply and demand dynamics. A more comprehensive quarterly analysis of rental activities available through interest.co.nz residential rent report,   📍 which we'll link in the show notes and the video description for you.  If you'd like   📍 to learn more about investing in property, join me at one of our free events called How to Succeed With Property Investing in 2023, I'll discuss strategies for successful investing from my perspective as a financial advisor

available live-online, or in person. Check out www.propertyapprentice.co.Nz for upcoming dates and register today.  We don't sell property, so it's all about increasing your knowledge to reduce your risk. If you'd like to find out   📍 more about how we can help you to reach your financial goals, you can either attend one of our free events because I talk about this towards the end of the session, or you can also book a no-obligation phone call or meeting with my husband Paul Roberts via the website also.

 Third topic for this week in review from New Zealand Herald on the 20th of June TradeMe data shows more than 340,000 searches for heaters over the past two weeks. As the cost of living takes its toll this winter, New Zealanders is a turning to secondhand options to stay warm. TradeMe data reveals that over the past two weeks, there've been more than 340,000 searches for heating-related items ranging from firewood to heaters.

Among the top 20 trending searches up to 15, were focused on staying warm, including Merino clothing, wool products, puffer jackets, and thermals. Icebreaker in particular, garnered nearly 6,000 searches since the beginning of June outnumbering the current listings of icebreaker items on trademe, which stand at 1,536.

Millie Sylvester, a spokeswoman for TradeMe  noted that such items experience a surge in demand during winter, and the recent cold snap has further amplified the increase in searches. 

Sylvester encouraged people to sell their unused warm items stating if you have old woolen socks or unwanted thermals lying around, there are thousands of Kiwis currently searching for them. The rising costs of home heating have also prompted a fire safety message. Fire and emergency are urging individuals to clean and inspect their chimneys to prevent unwanted fires.

Also, if you haven't cleaned your chimney, then that could also void your insurance on the house, so make sure you do sweep those chimneys annually. Annually fire crews respond to approximately 600 chimney fires throughout the country.  

 Adrian Nacey the Acting National Manager for Community Readiness and Recovery at Fire and Emergency, shared three key tips to ensure safety, have the chimney professionally checked and cleaned, burn clean and dry wood, and cool ashes in a metal container before disposal. Nacey also emphasized the need for caution when using electrical heaters, including electric blankets.

He advised maintaining a one meter distance between heaters and objects at all times and checking electric blankets for hotspots before getting into bed. Fourth topic  from landlords.co.nz on the 20th of June: West Coast joins the property price decline for the first time. Average asking prices for houses in the West Coast region have experienced a dip for the first time in the post covid property market

according to TradeMe's May property price index. Despite drops in asking prices across most regions, the West Coast saw continued increases until May. 

The affordability of the region with an average asking price of $409,700 in may contributed to its resilience against market drops. However, this slight decrease of 0.1% compared to the previous year indicates the impact of increased interest rates and living costs on house sales. TradeMe's property sales director Gavin Lloyd noted signs of the market stabilizing with May's National average asking price falling by 10.5% compared to March and April's 10.9% declines. The average asking price decreased by $99,500 from 2022 to $850,150 after two consecutive months of substantial year on year drops.

The rate of property price falls in Wellington in the Bay of Plenty, two buoyant markets, has slowed suggesting a potential flattening market. In Auckland prices are yet to ease with the average asking price dropping $161,500 to slightly above $1 million. Supply and demand in Gisborne and Hawkes Bay were significantly affected by Cyclone Gabrielle resulting in substantial drops in both aspects.

Taranaki and Southland experienced increased supply while Wellington supply decreased Christchurch apartments and larger houses saw year on year increases in average asking prices. According to CoreLogic's Chief Property economist Kelvin Davidson, the property market is transitioning into two halves with the first half being weak and the second half expected to be more stable or even showing gentle rises.

Factors such as decreasing listings, peaking mortgage rates, strong employment, soaring migration, and eased credit conditions contribute to the end of the housing downturn. Yay. However, a sharp upturn is unlikely as mortgage rates are expected to remain higher, putting pressure on housing affordability. Debt to income ratios, or DTIs on mortgage lending which have been indicated by the Reserve Bank of New Zealand that, uh, banks need to be ready for the first half of 2024

although they have no plans of implementing those D T I rules at this stage, they could potentially further impact house prices and property portfolios in the long run. Fifth topic for this week in review from the New Zealand Herald on the 20th of June, the front page podcast: why aren't more Kainga Ora

tenants evicted over complaints? Kainga Ora is facing renewed criticism after the distressing account of the Hamilton woman enduring disruptive and disrespectful neighbors for years. This incident adds to a series of similar stories spanning years highlighting the plight of neighbors subjected to abuse, aggression, and antisocial behaviour.

Despite receiving over 10,000 complaints in a recent 14-month period, Kainga Ora has only terminated two tenancies during that time. This has triggered the ACT party to hit out at the government claiming it's only interested in protecting those causing the chaos. Nick Maling the General Manager of National Services at Kainga Ora acknowledges that not all complaints are serious with approximately 85% related to minor issues like car noise, visitor frequency, or lawn maintenance.

Maling emphasizes that there are established complaint processes and eviction is pursued in only severe cases. Moreover, about 90% of tenants had no complaints at all, and only 3% of tenancies received multiple complaints. Interestingly, that 3% is about the same percentage of tenants who were given 90- day notice without needing to state the reason prior to the removal of this with the reforms to the Tenancy Act, which resulted in that removal of what became known as the 90-day no-cause terminations.

Lane Nichols, the Deputy Chief of News at New Zealand Herald reminds us that the observed antisocial behavior often stems from underlying problems such as mental health issues, addiction, intergenerational poverty, and domestic violence. Simply evicting tenants won't solve these complex issues. It can lead to homelessness or just relocating the problems elsewhere.

Addressing the root causes requires a comprehensive approach. However, in my opinion, it is also unfair to expect innocent neighbors of antisocial Kainga Ora tenants to continue to suffer the effects of no consequences for inappropriate and sometimes dangerous or threatening behavior. Can you just imagine the fallout if a private landlord told a neighbor that if they didn't like it, they could move?

In a separate article from the New Zealand Herald, released on the 13th of June, opposition mps are fuming after revelations that just three people had been evicted from state housing for bad behavior despite a promised government crackdown. National's housing spokesman, Chris Bishop said that with more than 25,000 people on the waitlist those who abuse the system should face consequences.

My opinion is that with the government stating that they're a landlord of last resort, I'd love to know who they think should be the first resort as a landlord for tenants. Bearing in mind that a third of our population lives in rental accommodation and private landlords or trusts house about 80% of all of the tenants in this country, yet the government appears to see private landlords as a problem that needs to be fixed.

We are in fact the solution not the problem. Not to mention that private landlords don't cost New Zealand taxpayers a cent which is something that can't be said about Kainga Ora, emergency housing or community housing providers. Did you hear about the Tenancy Tribunal ruling, which resulted in Kainga Ora paying $3,000 of our tax paid money to another Kainga Ora tenant, who's the neighbor of a problematic Kainga Ora tenant?

And to add insult to injury, it's the second time they had to make payment to the same tenant  within just over 12 months. So $3,000 was the latest one. The first payment was for $5,000 because the tenancy tribunal ruled that the agent agency had failed to take all reasonable steps to stop the neighbor's disruptive behavior.

We'll put a link to that article in the show notes for you too. Thankfully, by far the majority of landlords and tenants in New Zealand are actually great. Discover how to thrive with property investing by   📍 joining me in a free training session. As a licensed financial adviser I'll share invaluable tips and insights during these live sessions available both online and in our Auckland office.

Whether you're an experienced investor or a first home buyer, this session aims to equip you with knowledge and minimize investment risks. Our free How to Succeed With Property Investing in 2023 Events are interactive training sessions that encourage questions and provide expert guidance completely free from any sales pressure. We prioritize delivering accurate information and the most effective strategies tailored to your success since we don't sell properties ourselves.

To secure your spot, visit our website at www.propertyapprentice.co.Nz.   📍 Alternatively, you can schedule a no obligation phone call or meeting with my husband Paul Roberts through our website as well. That's www.propertyapprentice.co.Nz. Grab hold of this opportunity to gain valuable insights into successful property investing.

 Thanks for listening, and we look forward to seeing you in our next episode.