June 2022 Market Update

by Hamish Wilson on Wed Jun 2022
June 2022 Market Update

Renters enthusiasm wanes, we start thinking insulation again and check out our winter maintenance deals for you!

Welcome to Winter

The frosts have arrived signaling the traditional winter slow down. With this cooler, more unsettled weather and less daylight hours, we are seeing renters enthusiasm wane.

Compliance & Auditing Never Fades…
We’ve had a lot going on this month, including a compliance sample from MBIE Tenancy Investigation and Compliance Team. These happen from time to time based on bond lodgment data. It is always interesting to see what results from their audit, even though we have confidence in our processes, our Healthy Homes surveys are only a snap shot in time. Just because a property is compliant today, doesn’t necessarily mean they will be tomorrow.

What is often sought, is the evidence to support the information that is recorded on the Healthy Homes Statement. We call this information “the backstopping” and it can include invoices, specifications, photos and in some cases, reports from expert trades. There are significant fines for landlords that put false information on their Healthy Homes statements. So if you are completing them, ensure that the supporting information is available and not a “best guess”.

We are constantly auditing our properties for compliance, checking on actual physical compliance and backstopping material. Don’t be alarmed if one of the team contact you about this, we like to be as robust as possible with the information we hold. As mentioned above, things change, window spacers fall off, draft stopping wears or there is need for more. At the end of the day, we all want to provide a warm, dry and secure home for our tenants.

What Is the Current Required Ceiling Insulation Level?
Ceiling insulation is an area of confusion, as during the period of 2016-2019, the standards differed from what is required now. If the insulation was in place prior to 2016 and was at least 120mm thick, then that is fine. However, if it was “topped up” after 2016, it is required to be R3.3 and not just bought up to 120mm.

MBIE have made some changes to the Healthy Homes Standards, with some concessions for properties built after October 2007. These changes get complicated very quickly, so I will leave that one there. The concessions are only really going to apply to properties new to the rental pool going forward, as most have already passed their compliance dates now.

Winter Deals - Spouting Clean & Heatpump Service
With autumn behind us, now is the ideal time to have your spouting and downpipes cleared. We have a contractor that uses a telescopic vacuum to clear leaves, dirt and sludge from your spouting. Each property is unique with it’s size - an average single storey property is $180 and $240 for a two storey. We have also secured an excellent heat pump service technician and for $108 they conduct a 26 point service including cleaning and disinfecting the fins and coils. You’d be surprised as to what comes out of there. 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 two months, we have seen an increase in supply again by 79 properties. Trade Me has 822 properties listed for rent in Christchurch this week. As borders are open again and the sales market is facing a head wind, we will continue to see those stock levels rise.

We are also experiencing the rise of the “reluctant landlord” once again, with the family home not selling as quickly as it was. The vendor being unable to achieve the price they require decide to withdraw the property from the market and to reluctantly become a landlord.

By renting out the home, vendors feel that they have weathered the market. And for some of these by-default landlords, this will be the beginning of a long future as property investors. The original home becomes the rental and off they go on the property ladder.

As usual, enquiry rates have dropped in line with the reduced number of people looking to move at this time of the year. We anticipate rents to hold and slowly increase as per what would be a normal market. Supply is far off the level required to see rents come back at this point.

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.