We have a new Government and Maurice Williamson is our new Minister of Building and Construction. We welcome Maurice to the role and know that his experience as a Parliamentarian will be an asset. Over the last year, we have had a number of meetings with all the Members of Parliament who were at the time their party’s spokesperson for housing. Thomas Chin is now approaching Maurice Williamson’s office as we are keen to meet with the new Minister and learn about the plan for working through the many building and housing issues identified by National prior to the election. We also anticipate progress on the Residential Tenancies Act Amendments (2), which was tabled in Parliament in May last year. As the national organisation representing all members, we will be forwarding your views at every opportunity. We also encourage each Association to keep in touch with the new, or re-elected, Members of Parliament in their area. Our objective is to have as many as possible in the House who are well informed about housing and property investment issues.
The world economic crisis is expected to affect everyone and New Zealand hasn’t really experienced the brunt of the world problems yet, only of our own recession. Property investors may consider themselves safe. You will not be concerned about the falling values of your long term hold properties if you are not planning to sell. However the main impact may come from the situations in which your tenants may increasingly find themselves. These could include
job losses for household members;
insufficient income to meet rising costs;
inability to repay debt;
hire purchase repayment starting for items purchased 1-2 years ago with a payment holiday;
overcrowding of rental properties or family homes to reduce costs;
fewer employment opportunities for people leaving schools or university, for those made redundant or for students looking for holiday employment.
All of these factors could add up to extreme stress and despair. The Department of Building and Housing is already reporting that applications are up 25% in October compared with October 2007. Bailiffs are reporting that high numbers of evictions are being requested.
If you are a landlord, you will find you need to spend more time managing your
properties to minimize losses. Tighten up your selection process of new tenants to reduce future risk. Act quickly when rents are in arrears. Apply early to the Tenancy Tribunal even when tenants make promises of repayment. The Tenancy Tribunal waiting times are likely to get longer. We all like National’s stance to stop employing more public servants, but that also includes Tenancy Mediators and support staff.
Communicate regularly with tenants, especially vulnerable ones. At the same time show compassion to a tenant when he or she is experiencing a problem as these are likely to be more genuine than in the past. Be prepared to listen. Point them in the direction of agencies that may be able to assist them. If you are prepared to show a little leniency, do it carefully. However, it could be a time when helping a tenant to stay in their home and sort themselves out is more prudent than insisting on an eviction and then trying to relet. I think problems will be more widespread then usual, especially those which are the result of redundancies or having succumbed to the temptation to take on too much credit over the last few years. All types of tenants and properties will be affected, not just those in the lower socio-economic groups, so I urge you to be prepared.
Andrew King, myself and Usha Ganda-Wilson (representing the Independent Property Managers’ Association) attended a Department of Building and Housing National Customer Service Council meeting on 23 October. Attended by representatives of industry groups such as the Real Estate Institute and ourselves, Tenants’ Protection Association, and Housing New Zealand as well as the Department, this meeting had a national focus. Several speakers outlined trends of vital importance to us as property investors and landlords. Of immediate concern is the trend already mentioned above, that of the increase over the last year in the number of tribunal applications from both landlords and tenants.
Another trend, identified as the result of a research project, related to older renters. Between 1996 and 2006, there has been an increase of 10,000 of those over the age of 65 renting, the total now being 54,220 households. It is projected that this trend will continue and the number will increase to 169,000 households in 2051. We had an interesting discussion about the issues and challenges surrounding the availability of rental accommodation for the elderly in the future. You can obtain more information about this research by emailing Judith Burney at Judith.email@example.com
Recently, we were pleased to be able forward the views of members to the Review Team at the Ministry of Justice. They are conducting a review of property managers to consider if their services to property investors should be regulated in any way. Andrew King and Allan Storey met with the Team on a Wednesday and were asked to have the views of the members of affiliated Associations to them by the Wednesday of the following week so that these could be included in a discussion document to be presented to the new Minister a few days later. A total of 588 responses were received over the five days of the survey, and about half of the respondents were using property managers full time. These responses have now been forwarded to the Review Team, who, up to that point, had only heard from property managers. Thanks to Andrew and Allan for initiating this survey, and to all of you who contributed to the communication process at such short notice. We very appreciated the fact that members were notified and that many took the time and trouble to respond.
If you would like a copy of the Ministry’s Review Team discussion document when it is available, email Managment@NZPIF.org.nz and we will send it to you.
I am pleased to be able to welcome back all the members of the previous NZPIF Executive who were re-elected at the AGM on 24 October. Helen Gelletly from Hawke’s Bay PIA is Secretary, Alan Sharr from Christchurch PIA is Treasurer. The other members of the Executive, whose roles were allocated at the first Executive meeting at the end of November, are
Terry le Grove – Waikato PIA – Northern Region Representative.
Andrew King – Auckland PIA – Vice President.
Allan Storey – Manawatu PIA – Central Region Representative
Janelle Morgan – Marlborough PIA – Central Region Representative.
Owen Smith – South Canterbury PIA – Representative for IT projects.
Cliff Seque.- Otago PIA – Southern Region Representative.
There is more information about all the members of the NZPIF Executive at https://www.nzpif.org.nz/about-us. Please feel free to contact myself or any other member if you would like to know more about your representatives and/or Federation activities.