Steve Hart's Property Report podcast

Property Report 6 for week ending 20 October 2019

Auckland landlord Lachlan Chung has been fined more than $5000 after renting out a damp and mouldy flat to a mother and 16-month old baby.

When the mum moved in she became unwell and had an air test carried out at the Mt Eden property. Biodet Services found the property had dangerous levels of penicillium and aspergillus mould according to a Tenancy Tribunal hearing.

The mother and child moved out of the property for the sake of their health; breaking a lease agreement. A tenant can terminate a fixed term tenancy if the home is uninhabitable according to the Residential Tenancies Act.

Andrew McIntyre of Forensic Building Services told the tenancy Tribunal bedrooms at the property should not be used until the damp subfloor under the house was fixed and said the flat is not suitable for human habitation.

Chung told the Tribunal underfloor insulation couldn’t be installed due to there being a concrete floor; but the Tribunal later heard there is no concrete floor under the property.
Chung was ordered to pay the woman $2858 in compensation for the false insulation statement and refund her $2200 bond.

Median values up

Median house values across New Zealand rose 6.6% in the year to September to $597,000 according to industry lobby group the Real Estate Institute. Take Auckland out of the equation and values were up 6.8% to a record high of $500,000.

Median house values in Auckland increased 0.2% during the past 12 months to $848,000.

According to figures supplied by the institute record median prices were seen in Manawatu, Southland, and Taranaki. Hawke’s Bay saw its median value up by more than 13% to $500,000.

There were some value drops though; namely the West Coast: -7.5% to $185,000; Northland: -5.5% to $477,000 and Nelson: -5.4% to $560,000.

Fletcher Building

Fletcher Building has opened a home building factory in Auckland and plans to build 500 homes a year. The factory cost $15 million and will employ 35 people.

Fletcher Building says using the Clever Core facility means it can build the main elements of a new home in 6 weeks. The sections – such as walls, floors, roof and partitions – can then be delivered to a building site and be bolted together. Things such as bad weather won’t affect construction times.

The company will use the facility for its own Fletcher Living housing developments, but may decide to take orders from other firms down the track. Fletcher is working with Auckland Council to streamline the consenting process.

Red tape to be cut

The construction sector is being freed up to allow more homes to be built more quickly as the Government plans to cut through some of the red tape of the Building Act next year.

It wants to make the building of prefab homes easier with a streamlined consenting process and reduce the number of building inspections needed.

Prefabrication and off-site manufacturing are the future of construction says the government.
Among those welcoming the change is Tranzasia Corporation.

The company says it has orders for modular homes but the problems of gaining consent have held up sales and marketing for months.

Kiwisaver

First-time buyers are often advised to buy a property somewhere other than where they want to live and rent it out as a way of getting on the property ladder.

But Kiwisaver can only currently be used toward buying a home to live in. However, this may be about to change.

Interim Retirement Commissioner Peter Cordtz says the rules should be relaxed.

If you have a view on this then you can let the Commission for Financial Capability know by 31 October. See SteveHart.co.nz for a link. Government Minister Kris Faafoi will have the final say.

Landlord fined for videoing tenants
A property manager in Dunedin has been fined $3,500 after carrying out a home inspection with a camera crew in tow.

The Otago Daily Times reports that tenants took Click Property Management – an agency for Lucky Dragon Investments – to the tenancy tribunal over claims the landlord breached their privacy in January.

The person shooting the video was asked by tenants to stop, but refused.

The tribunal found the landlord interfered with the “reasonable peace, comfort and privacy” of the tenants by allowing filming without notice, and continuing the filming when asked to stop.

The tribunal awarded the tenants $1500 in compensation and $2000 in exemplary damages.

More homes for Queenstown

Queenstown Lakes District Council has finalised an agreement with the preferred bidder for the development of the Lakeview Precinct in Queenstown.

A partnership between Melbourne-based developer Ninety Four Feet and Auckland-based investment company Augusta Capital signed a development agreement with QLDC last week.

The partnership proposes to develop a range of residential buildings, hotels, hospitality and retail options with construction estimated to take more than ten years.

Auckland dwelling connects

Annual dwelling consents in Auckland hit an all-time record of 14,345 in the year to August 2019 – with about half of those consents being for apartment units.

Auckland Mayor Phil Goff says the figures show the progress that’s being made in housing in the Super City. Seven years ago in 2012 the council was issuing about 3600 consents a year. But that was post GFC when the banks were playing hard ball with developers.

Construction fo apartment blocks in Auckland is currently going great guns; but with no new ones in the pipeline this area of home-building in Auckland will drop like a stone come 2021.

Interest Rates

I mentioned a few weeks back to keep an eye on fixed rates deals as they would be coming down. And down they have come.

ANZ, BNZ and Westpac have all reduced their 1 and 2-year fixed mortgage rates this week. One year is down to 3.55% and 2-year is 3.45%. Bank of China is offering one and two-years for 3.15%.

Still, Kiwis are getting a raw deal. For example Westpac in Australia is offering a 2-year rate of 2.98%. Why we don’t have the same rate in New Zealand is a mystery.

If you are in the market for a mortgage or refinancing then do compare rates, shop around, and haggle to get the best deal you can. I predict even more cuts are coming.

Auckland’s ugliest house
A home that looks like it was built by Barney Rubble from the Flinstones TV show failed to sell at a Barfoot & Thompson auction this week.

The cross-lease home at 62b Stranolar Drive in Mt Roskill attracted one $500,000 bid at auction. Sales agent Alex Yang told the NZ Herald banks were reluctant to loan against the property. He says negotiations are ongoing to get the property sold.

Auckland’s ugliest home at 62b Stranolar Drive in Mt Roskill. Agent photo.