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Rent rises are coming for tenants in Auckland as the market catches up with skyrocketing house prices.
The industry says January is the best time for landlords to review their rent and consider increasing it.
And it’s come as a shock to those who are already struggling to find a home.
A place for rent at an affordable price is a sight getting harder to find in Auckland.
And as landlords use the New Year to reassess rent there’s a warning to tenants – the price is rising.
“I believe there is room for movement and I think we’re going to see that in the next few months,” says Auckland Property Investors’ Association (APIA) president Andrew Bruce.
APIA says raising the rent is just good business sense.
“Landlording is a business, it isn’t a set and forget investment,” says Mr Bruce.
Auckland house prices to stagnate in 2016 but rest of NZ will take off, pundits say
2016 may be the year soaring house prices become no longer just an Auckland problem.
New Zealanders who live outside Auckland are being warned: 2016 could be the year your property prices boom.
Rent Day 1856
Auckland’s house prices have been the standout performer over the past few years.
Real Estate Institute figures show Auckland’s median house price was up 19 per cent over the year.
Excluding Auckland, the national median rose just 4 per cent.
But commentators say Auckland house prices will significantly soften over 2016, as the rest of the country ramps up.
Bank of New Zealand chief economist Tony Alexander said outside Auckland, the rest of New Zealand could be in for house price rises of 15 per cent to 20 per cent over 2016 due to low interest rates, population growth and the effect of Aucklanders moving out of the city.
That would probably be enough to worry the Reserve Bank, he said.
Property investor and commentator Olly Newland said Auckland’s prices had already started to level off. But he said in other parts of the country, prices would start to climb steadily over 2016.
“Prices are so much cheaper, there is good buying.”
He said commercial property would also have a strong year.
“Returns are still two or three times that of residential and people are waking up to the fact that a block of shops or a small factory will produce twice or four times as much as a house.”
Pre-registration for Commercial Property Masters Programme 2016
We believe commercial property is in the early stages of a long-term growth cycle. Increased demand from residential investors seeking higher yields, immigrants starting businesses, and local businesses expanding have started to fuel an upward trend in the commercial market.
The commercial property cycle runs at a different speed and frequency to the residential cycle and is now past its recovery phase and into the early stages of a boom.
Now is the time to invest in commercial property before it becomes the next boom market. This process won’t happen overnight, but will play out over the coming years. Those starting now will enjoy the more profitable deals, while those late to the party will find it more difficult to achieve similar results.
The Commercial Property Masters Program is for investors who are new to commercial property investing and want to equip themselves for success in this field.
A comprehensive hands-on program run over a 12-month period, designed to give you an individualised strategy and knowledge to achieve your financial goals.
Stage 1: Setup (Analysis, Plan & Education)
• Obtain relevant information to develop and assess your overall financial position • Assess your risk profile • Explore and confirm your short-term and long-term goals • Obtain relevant information on your current properties • Assess current loan structures • Analyse and critique your existing portfolio and financial position • Prepare and discuss with you an investment strategy and action plan to achieve your goals •
Assist with ownership structures if required • Books, resources and 2-day training seminar to help you understand the nuances of commercial property ownership and leasing strategies.
Stage 2: Implementation
Consulting services to help you implement your investment plan. Includes…
• Property finding advice • Desktop due diligence on potential acquisitions • 7-day access to the Newland Burling team • Quarterly evening functions.
“We would have made terrible mistakes without them, seriously. They do know what they’re talking about.”
- Ivan Morris
“There are property mentorship programmes that you pay a lot more for so we were comfortable with the price. A lot of people would think it was a huge amount of money whereas for us the property we bought for $1.5 million is now worth about $2.1 to $2.2 million in a year. We made a lot of money from it. And we wouldn’t have bought that property had we not done the program. What we paid pales in comparison to what we made.”
- Elizabeth Moore
8 February 2016. We have only 2 places left so it will most likely be your last chance to secure a place for this intake.
REGISTER YOUR INTEREST NOW
To enquire about pre-registration for the 2016 program, or to find out more, go to the “contact us ” page on this site.
WE ARE OPEN RIGHT THROUGH THE HOLIDAYS
The market never sleeps and neither do we at Newland Burling & Co.
If you want advice, have financial or real estate questions or want to move head in the new year, then we are available to assist right through December and January.
To make an appointment call Olly Newland 0274 928 460, or Jack Revill 021 02217333 any time or use the contact page on our website.
Seasons Greetings to all our clients and may the new year be a profitable one.
Auckland CBD retail rents have jumped 12.4 per cent in the third quarter of 2015.
Auckland houses are not the only property prices rising, with retail rents in the city’s CBD reaching unprecedented heights.
A new wave of luxury brands including Top Shop are being blamed for a rise of 12.4 per cent in the third quarter of this year.
The research, released by commercial real estate company CBRE, revealed the jump to $3400 per square metre a year for Queen St was the highest rise since 2008.
Auckland’s CBD will be inundated with building projects in the next few years, with motorists warned to avoid driving in the central city.
Work on the City Rail Link, a new convention centre and numerous apartment towers and offices are already underway or scheduled to begin next year.
The CBRE report follows the release of Colliers’ 2015 New Zealand Retail Report, which highlighted massive demand for retail in Auckland.
9 November 2015
A large apartment in the old Devonport power station was sold at auction last week, and Bayleys agents concluded 2 commercial sales in Takapuna and one in Waiuku, plus leases in Rosedale & Takapuna.
Features: 330m², one of 3 apartments in the Devonport power station, 5 bedrooms over 3 levels, private terrace garden, separate self-contained accommodation
Outcome: sold at auction for $1.59 million
Agents: Prue de Bie & Diana Poor
8 Eldon St Takapuna
Features: 883m² site, 150m² commercial building, 5 parking spaces
Rent: $51,354/year + gst
Outcome: sold pre-auction for $2.2 million at 2.33% yield 132 Hurstmere Rd:
Features: 1503m² site, 1483.63m² building – retail 170.5m², office 1313.13m², deck 112m², 28 parking spaces
Rent: $459,771.85/year net
Outcome: sold in October for $7.5 million at a 6.13% yield, $4990/m²
6 Court St: Waiuku
Features: 1243m² site, 559m² floor area, 2 buildings on a single title, roadfront exposure
Rent: $48,000/year gross + gst, fully tenanted with 4 tenants
Outcome: sold at auction for $815,000
38 Constellation Drive: Rosedale
Features: 1155m² of retail space
Rent: $235,000/year net + gst
239N Rosedale Rd:
Features: 67m² retail, 2 parking spaces
Rent: $17,000/year net + gst, premises rental $254/m²
13 Barrys Point Rd, unit 1: Takapuna
Features: 136m² floor area, 3 parking spaces,
Rent: $38,000/year net + gst
Attribution: Company release.
Auckland house price should rise for another six months
Auckland house prices are expected to keep rising as demand continues to outstrip supply, according to a panel of property experts.
The panel of property managers, valuers, agents and brokers was assembled by the Property Institute, which represents valuers, to give a feel for how the market is heading every quarter.
Institute chief executive, Ashley Church said that despite speculation to the contrary, the valuers unanimously predicted further price rises in Auckland over the next six months, across all price categories.
Fewer than half expected an increase in the number of Auckland house sales.
However, while the panel was only looking to the next six months, veteran property investor Olly Newland is less confident about the long-term position of Auckland’s housing market.
Newland says there may be some small price adjustments in the near term, but predicts the Auckland market will then be stagnant for a long period, possibly a decade.
Emily, 22 Emily Place, unit 4A:
Features: 112m², 2 bedrooms, high stud
Outgoings: rates $2010/year including gst; body corp levy $8401/year
Income assessment: $700-750/week
Outcome: passed in after one bid at $400,000 vendor bid at $700,000
Hudson Brown, 57 Mahuhu Crescent, unit 119:
Features: leasehold, 105m² on 2 levels, 2 bedrooms, 2 bathrooms, basement parking space
Outgoings: rates $1817/year including gst; body corp levy $11,166/year
Income assessment: vacant
Outcome: passed in at $250,000
City Zone, 11 Liverpool St, unit 2006:
Features: 44m², fully furnished 2 bedrooms, spaces available to rent onsite
Outgoings: rates $1212/year including gst; body corp levy $3091/year
Income assessment: $475-500/week
Outcome: no bid
132 Vincent, 132 Vincent St, unit 104:
Features: 73m², fully furnished 2 bedrooms, high stud, secure basement parking space
Outgoings: rates $2554/year including gst; body corp levy $4690/year
Income assessment: $600/week
Outcome: sold for $641,000
Marina Park, 146 Fanshawe St, unit 50:
Features: 77m², 2 bedrooms, covered parking space
Outgoings: rates $1455/year including gst; body corp levy $3575/year
Income assessment: $500-$600 pw
No end in sight for city’s growing rental shortage
Tauranga is in the grip of an escalating rental shortage – and real estate experts do not expect it will end any time soon.
Owner of Tauranga Rentals Dan Lusby said rental properties listed online had almost halved, from 300 to 150, in just two months.
(photo: Dan Lusby)
In a snapshot of rental properties available on TradeMe yesterday, 136 properties were listed, 31 in Mount Maunganui and 18 in Papamoa.
Mr Lusby said he had not seen a shortage of rental properties “to this extent”.
Tauranga Rentals received about 80 application in one week for a home in 15th Ave.
“We’ve got desperate people coming in, ringing in, emailing in saying they can’t find anywhere to live and they’ve got to get out of the house they’re in because it’s been sold, or for whatever reason, and we just can’t house them.”
Mr Lusby believed the shortage was due to “growing pains” associated with the city’s rapid growth. “Employment is high in Tauranga, with a lot of new industries which is creating new opportunities for people out of town to come here and want houses as well.”
151 Beach Rd City
Features: 1032m² site zoned strategic management area 2, 50m height limit under proposed unitary plan, 1829m² floor area on 2 levels
Rent: holding income of $278,212/year + gst
Outcome: sold to a developer for $6.8 million at $6589/m
X Gallery, 18-26 Wellesley St East:Features:
1032m2 site on Lorne St corner through to Khartoum Place, the 2712m2
X Gallery heritage building, refurbished into character retail & office space and fully leased to 12 tenants
Rent: $1.718 million + gst
Outcome: sold for confidential sums
Epsom 107 Great South Rd, unit C:
Features: 253m2 top floor of 3-level office building, leased for 4 years from February 2015 to tax advisors
Rent: $71,073/year net + gst
Outcome: sold for $1,040,013 at a 6.8% yield
Penrose 24 Greenpark Drive:
Features: 2704m² bare industrial site
Outcome: sold with vacant possession for $1.5 million at $623/m²
(Photo 9-13 Exmouth St)
9-13 Exmouth St:
Features: 1322m² site zoned mixed use, 2125m² warehouse leased back to the vendor for one year with 2 6-month rights of renewal
Rent: $285,000/year net + gst
Outcome: sold for $4.3 million at a 6.6% yield
75 France St South:
Features: refurbished 571m² 2-level office building with final 5-year right of renewal to German multinational Brentagg until May 2020
Rent: $130,000/year net + gst
Outcome: sold for $1.848 million at a 7% yield
Grey Lynn 252-258 Great North Rd:
Features: 1002m² development site zoned mixed use, 15m height limit increased to 16.5m under proposed Auckland unitary plan
Rent: holding income of $74,160/year expiring September 2016
Outcome: sold for a confidential sum
6 Tweed St:
Features: 2 dwellings on a 2905m² site, one 1360m² containing Mollies boutique hotel & function centre, the other a 239m² villa, joined by a connecting hallway
Rent: lease over the larger building to operator of the Mollies business at $283,000/year net + gst
Outcome: sold for $9.5 million
Mt Eden 25, 27, 29 Altham Avenue:
Features: 1518m² development site in 3 equal titles, mixed use zoning under proposed unitary plan
Rent: holding income of $60,000/year net + gst from vehicle storage lease
Outcome: sold for $3 million
South of the Bombays
The Pukaki Centre, Rotorua.
1144 Pukaki St:
Features: 5-storey 3653m² Pukaki Centre office building on 1711m² cbd site, fully leased to 7 predominantly government tenants
Outcome: sold site unseen for $5 million at an 8.7% yield to an American who has bought a number of high yielding regional properties through Bayleys
Waihi Beach 127 Emerton Rd:
Features: 7693m² site that was a former motel property converted to a permanent residential & holiday home & caravan complex, with licence-to-occupy income streams
Outcome: sold for $1.2 million
Wellington CBD, 76 Willis St:
Features: 655m² mixed use building on 275m² site, ground-floor retail, first-level café, third-level apartment
Rent: $248,824/year net + gst
Outcome: sold for $3.3 million at a 7.5% yield
Hataitai, 298-300 Evans Bay Parade:
Features: 2918m² site zoned business 1, 479m² building comprising 2 former dwellings with monthly lease to childcare centre licensed for 65 children
Hornby, 17 Halwyn Drive:
Features: 3404m² site, 1696m² modern industrial building, new 9-year lease to The Moving Co
Rent: $210,600/year net + gst
Outcome: sold for $3.009 million at a 7% yield
Attribution: Agency release (Bob Dey)