Wednesday, January 12 2022

Mega Landlords is a Thing series on the nation’s largest real estate owners, how successive governments have allowed investors to acquire astonishing wealth while leaving the everyday Kiwis behind and how little is known about who actually owns the News -Zeeland. Ged Cann reports.

Samuel Eva and his wife Kristy had their first daughter in February and sold their home in Ranui in West Auckland in October in hopes of finding a bigger place for their growing family.

But within weeks, they found themselves overpriced to move up the ranks, and they’re now considering homes smaller than the one they just sold.

The couple Kristy and Samuel Eva with their eight month old daughter Sophia Eva at their home in Ranui, Auckland.

Abigail Dougherty / Stuff

The couple Kristy and Samuel Eva with their eight month old daughter Sophia Eva at their home in Ranui, Auckland.

The family competes in one of the most investor-dominated parts of the country, with nearly two-fifths of all Auckland homes owned by investors.

Eva is a mortgage advisor and has a good sense of the market, which is why the family avoids advertisements that might attract investors or developers, including areas marked for urban intensification or plots large enough to be subdivided. .

But they still can’t find a new home, and Eva says the family is repeatedly overpriced by first-time homebuyers so desperate to climb the ladder that they will offer up to $ 120,000. above the asking price.

The family thought they would have enough to upgrade to a bigger three bedroom after their home set what they believed to be a new record for the street.

They average one bid per week, and Eva says it has been stressful to outbid multiple times.

“You start measuring your furniture and making sure everything fits, then someone is going to put an extra $ 100,000 on it, and we’re back to square one. “

“I guess it’s a bit like a grieving process,” says Eva.

Eight-month-old Kristy Eva and Sophia Eva in the courtyard of their home in West Auckland.

Abigail Dougherty / Stuff

Eight-month-old Kristy Eva and Sophia Eva in the courtyard of their home in West Auckland.

“We’re stuck with what we sold our house for, and then over the last couple of weeks we’ve seen house prices go up another $ 100,000. “

In October, the government announced new rules that will allow buildings up to three stories high at most sites in the city without the need for resource consent, starting in August 2022. Eva says this is likely to create more investor demand in single family home areas.

The planned extension of mortgage deductibility on new construction will also likely spark interest in anything that can be subdivided, converted or newly built.

The markets most dominated by investors

Analysis conducted by the real estate data company Valocity for Things The Mega Landlords series reveals that 38% of Auckland’s homes are owned by investors, with similar proportions in Waikato, Bay of Plenty and Gisborne.

However, all of them are overtaken by Queenstown, where 48% is now held by investors.

There is also a trend for more urban areas having a higher proportion of investors owning more than six properties, which suggests a greater concentration of real estate wealth in the country’s major cities.

In Auckland, just over 22% of investors own six or more properties. In Wellington, it is 19%, in Christchurch, 21%.

In comparison, in the Tasman area only 11% of investors have six or more properties, in Marlborough it is 13% and in Northland it is 14%.

Rod Schubert, managing director of Rod Schubert Financial Advice, explains that this is because investors view urban areas as generating higher rents and the biggest selling profits.

Rod Schuber Says Many Government Actions To Help First-Time Home Buyers Have Been Reduced By Soaring Prices

RSFA / Tips

Rod Schuber Says Many Government Actions To Help First-Time Home Buyers Have Been Reduced By Soaring Prices

Lucy Telfar-Barnard, a senior researcher at the University of Otago, says having larger landlords could mean more professional services and landlords are less likely to sell a property to lower tenants.

“On the other hand, the pyramid approach to real estate investing, where you buy something, improve it a bit, increase the value, borrow against the increased value to buy the next one, and so on, can leave highly indebted and under-capitalized investors, which can make them less responsive to maintenance and upgrade needs, ”she said.

Dr Lucy Telfar-Barnard says having larger investors in a housing market can have advantages and disadvantages.

Ross Giblin / Stuff

Dr Lucy Telfar-Barnard says having larger investors in a housing market can have pros and cons.

The main drawback is the concentration of wealth, especially after the recent increases in house prices.

“This means that the benefit of this net gain in wealth is focused on fewer people and the people in those places who don’t own property are further excluded from the benefits of ownership. “

Rental housing uncertainty can have negative impacts

Telfar-Barnard argues that the impact of high levels of rental properties should not automatically be unfavorable. In Europe, where tenants have stronger rights, tenants can still feel secure and take root.

“In Aotearoa, New Zealand, it’s not that benign,” she says.

Although the Labor government recently beefed up tenants’ rights and safety with the biggest overhaul in 35 years, they can still be given notice if a landlord decides to sell – and in such a buoyant market, that’s a real possibility. .

“When the rental market is tight, that little knowledge that will be hard to find elsewhere if you have to move only adds to the general stress of everyday life. “

The Eva family sold their home on October 21 and find that they already have no more prices to move up the ownership ladder.

Abigail Dougherty / Stuff

The Eva family sold their home on October 21 and discover that they already have no more prices to move up the ownership ladder.

Telfar-Barnard says strong investor ownership in Queenstown and Waikato is likely skewed by vacation homes, which were an underutilized resource, but did not necessarily have a negative impact on the local community – unless housing pressures are increasing.

“Empty houses mean locals are struggling to find places to live. “

Telfar-Barnard says there is anecdotal evidence that a brain drain is already happening, with many stories of Aucklanders and Wellingtonians considering moving to Christchurch, and she is not surprised.

“If you have a particularly useful profession – like teaching, trades, or one of the medical professions, then you can easily find work anywhere in the country,” she says.

“So why would you stay in a place where housing costs mean you have little hope of owning your own home, and your rent also makes it difficult to build a solid financial foundation, including saving for retirement? “

Most of Samuel Eva’s family have already left for Christchurch, and he says he would consider doing the same, but Kristy is determined to stay, with her family still in Auckland.

Uncertain future

Eva has a good relationship with the developer who bought her house and says she has been told he can stay until November of next year.

“That’s good, but we also don’t want the market to slip away from us,” he says.

“To stay in Auckland, you really have to be in the game, with outrageous rental prices and so on. From that aspect, it’s very stressful.

Samuel Eva is a mortgage consultant and says he feels the same kind of disappointment when his clients are shut out of the market.

Abigail Dougherty / Stuff

Samuel Eva is a mortgage consultant and says he feels the same kind of disappointment when his clients are shut out of the market.

First-time homebuyers overbid

When the Eva family made offers, it was actually the first buyers who outbid them.

Eva says investors are calculating the numbers and if they don’t add up they won’t bid higher, but first-time buyers get emotional and fall in love with the properties.

“A house in Massey got 16 offers, it wasn’t convertible, so I knew instantly investors wouldn’t take it.”

Auckland is now 38% owned by investors, which is among the highest investor shares in the country.

123RF

Auckland is now 38% owned by investors, which is among the highest investor shares in the country.

“Each (offer) was about the same as us, but one person gave up an extra $ 120,000 – a first-time home buyer because they fell in love with the house.”

Eva says he experiences the same disgust when he can’t find his clients’ homes.

“I had a potential client call me last week and say, ‘hey, we want to buy our first house, we’re both school teachers, 60,000 a year, but we have four kids, we need a four bedroom, we want a half site. “

Eva couldn’t get them more than a $ 600,000 mortgage, which he said wouldn’t allow them to buy in Auckland.


Source link

Previous

6 Sonoma County Condos Perfect to Start Up or Downsize

Next

Denver apartment complex in Ballpark neighborhood sells for $ 84 million - The Denver Post

Check Also