July 2022 Market Update

by Hamish Wilson on Tue Jul 2022
July 2022 Market Update

Local Council are introducing water rates - who will pay? Plus find out how we rank on Trademe with marketing rentals...

Welcome to Mid-Year! Being 1 July, we are day 178 of 352, so well and truly into the year now and come tomorrow the second half of the year. We’ve experienced a typical “pre COVID’’ June with more unsettled weather, less daylight hours and renter’s enthusiasm to be moving has definitely tapered off.

Christchurch City Council implementing excess water supply rate
Did you know?...Our Local Body Authority aka the Christchurch City Council (CCC) has introduced what they call a “Excess Water Supply Targeted Rate”. The targeted rate will apply to any single household with a water meter that uses, on average, more than 700 litres a day – roughly equivalent to 100 toilet flushes. Property owners in Christchurch will pay a fixed rate of $1.35 for every 1000 litres they use over the average limit. Most households are average water users and won’t use enough to receive an invoice. The CCC will read your water meter and invoice you for any excess water use on a quarterly basis (roughly every 90 days). Meter reads cannot be requested.

The first bills for excess water use will be sent between January and March 2023. These will cover excess water use in the period between your first and second quarterly water meter readings after 1 October, which is when excess charges come into effect.

Bills for excess water use will be sent out quarterly, and unlike rates they won’t come at the same time each quarter. The CCC will send you a bill after we’ve carried out your quarterly meter reading.

Who pays for metered water charges?
A metered water supply allows a water supplier to charge for the amount of water used. The tenant pays for any water charges if

• the property has a separate water meter
• the water supplier calculates water charges based on metered use
• the charges can be exclusively attributed to the tenant's use of the property

Otherwise the landlord pays for the water charges.

The landlord must pay the whole water account and then ask the tenant to reimburse them. Landlords should send the tenant a copy of the bill on a regular basis to prepare the tenant for paying (landlords can remove personal details before sending). The water account can’t be in the tenant’s name.

So with the retrospective billing (90 days) and no ability to request a meter reading how is this going to apply to tenanted properties? If the billing period sits within the current tenancy, then it is straight forward to apportion that water use to the current tenants. If the tenancy has changed within the billing period there is currently no way of attributing each person’s exact water usage.

Winter Deals - spouting clean & heatpump service specials
The team tell me there has been a strong uptake of the spouting and heatpump specials. The spouting cleaning ranges for an average single storey property being $180 and $240 for a two storey. The heat pump service is $108.

Our contractor came in with a video of what they manage to clean out of the indoor units and I was quite honestly astounded and a bit disgusted that all that filth can hide in those units. Again please let your property manager know if you’d like to take advantage of these great winter service options.

What’s happening in the local market?
Following on from the last three months, we have seen an increase in supply again but only by five properties. Trade Me has 827 properties listed for rent in Christchurch this week.

Our Trademe Account Manager shared some stats with us on her recent visit. Sorry but I am going to share some because I love stats and I’m also proud of these results for the team. On average A1’s listings have 1984 views per property where the nation average is 1297. The average number of people who add our listings to their watchlist is 160, compared to the national average of 104.

So, our marketing on trademe is well above the average, we take pride in our ability to be able to best represent your property. Our marketing stats show the results of that diligent work by the team.

Back to the local market…
Interestingly, it has been a month of strong enquiry from landlords. Many are first-time landlords looking to retain their property interest as they head oversea’s for work or have moved into a new property and managed to retain their current one. We’ve always recommended retaining your own home as a great way to get on the investment ladder. You know it well, it’s generally well maintained and in good condition therefore attracts great tenants.

Both these scenarios add to what was a very shallow rental pool and contribute to the added supply we are seeing here in Christchurch. Back at the end of last year we would have seen those owners cashing out of the market with sale prices being rather buoyant at that point.

As usual, tenant enquiry numbers have tapered off in line with the reduced number of people looking to move at this time of the year. We haven’t seen demand and supply equalise to a point that rents are dropping but note in some areas, where rents have been rampant, there has been a correction in some of the asking prices. I anticipate rents to hold and slowly increase as per what would be a normal market.

As always, we do truly appreciate your business and the team and I are always just a phone call away. We are always available for a free chat and are happy to share our experience and knowledge wherever we can be helpful.

Hamish Wilson

Hamish Wilson

An active investor for over 25 years & qualified builder, property has always been a part of life. Hamish has sat on the committee of the Canterbury Property Investors Association including two years as President.