Investing Guide

Investing in property can be a lucrative game if you get the details right and the market dynamics at the time suit what you are trying to achieve. Just because you are investing in bricks and mortar doesn't mean there is no risk - do your homework, an uninformed property investor is gambling not investing.


1. What you want to achieve

By deciding what you want to achieve, you will have a better idea of how to tailor your plan going forward.
Things to think about include:

Do you want to buy a rundown place, do it up and flick it on relatively quickly?

Or do you want to invest in properties to then rent out and hold onto waiting for capital growth (a value increase over time)?

Do you want to invest in commercial or residential property.

2. Know the market

Understanding the market will mean you can get an idea of what you should be paying and whether you are likely to get yourself a bargain or if will be paying above market value – each of which can affect your gross yield or end profit. You will need to consider also which suburbs are the best to invest in. You can find a range of stats on different suburbs across the country as well as how the market is trending in Property Trends. Look up individual properties in the area, check out what they are selling for, look at the E-Valuer trends for both individual properties and the suburb, check out the market rents - spend that extra time to understand what is happening in the market.

3. Do the math

Depending on your aim, you will need to do the math to figure out what makes financial sense. If you are renovating to sell for a profit for example, you will need to factor in the purchase price, how much renovations will cost, how much you are likely to sell for, and of course any fees whilst you own the property such as real estate agency fees, mortgage repayments, rates etc.

If you are looking to rent the property, then you will need to consider how much all the bills add to, including mortgage repayments, rates, body corporate fees if applicable, insurance, legal costs for tenancy contracts etc, and then see if you make any profit after receiving a reasonable market rental income. You can get a gauge for rental prices by looking at our Rental Analysis info . You can of course be interested in capital gains from market movement, but you still need to make sure you aren’t making a loss whilst you own the property.

4. Know the risks

As with everything, there are associated risks. You will need to talk to the banks and get advice on things like mortgage options, interest rates, how much you will need as a deposit and how much they are willing to lend. With simple things like increased interest rates, you may see your profit reduced.

If you are renovating you don’t want to get caught short if your costs start racking up, or if they get delayed. You need to be sure you can cover the costs and that you have contingencies. The same with having tenants – you need to be able to cover the costs if it’s untenanted, and you have contingency funds if the property needs repairs and maintenance.

Understand the rules. Whether you decide to do-up a property or rent it out there are rules in place that you will need to know and adhere to. For renovations, you may need council consent for certain projects for example, whilst when tenanting there are different rules around collecting and lodging bonds from your tenants, contract obligations, and rules on being a landlord.

5. Understand the rules

Whether you decide to do-up a property or rent it out there are rules in place that you will need to know and adhere to. For renovations, you may need council consent for certain projects for example, whilst when tenanting there are different rules around collecting and lodging bonds from your tenants, contract obligations, and rules on being a landlord.

Latest News & Articles


First home buyers grew to 24% of all residential property purchases across NZ in Q3 2018, from 18% four years ago. Such growth means that for the first time, they now hold equal market share with mortgaged multiple property owners. Despite high prices, first home buyers are still managing to find a way to buy, with Christchurch and Wellington particularly popular.

CoreLogic research analyst Kelvin Davidson writes:

The full CoreLogic Buyer Classification dataset for the third quarter of 2018 has just been released, with three clear highlights.

First, the pace-setters are multiple property owners (MPOs) with a mortgage and first home buyers (FHBs). Mortgaged MPOs have increased their share of the market back to 24% in Q3. Granted, that’s lower than the figures of around 28% prior to LVR III (October 2016), but it’s still a decent increase from about 22% earlier this year. Despite extra regulatory pressure (e.g. Healthy Homes; the looming removal of negative gearing; longer-term threat of a capital gains/income tax), these figures show that new investors are still entering the market and/or existing landlords are expanding their portfolios.
% of NZ property purchases (Source: CoreLogic)
For FHBs, the rise to 24% of the market in Q3 continues the upwards trend that began back in early 2014 (see the first chart). At those levels, FHBs’ share of the market is on a par with the pre-GFC peaks*, while it’s also the first time that they have matched mortgaged MPOs. Around the main centres, key FHB markets are currently Christchurch and Wellington (see the second chart).
% of property purchases by FHBs (Source: CoreLogic)
Christchurch in particular has seen a big shift over the past year, with FHBs’ market share rising from 24% a year ago to 30% now. For NZ as a whole, it’ll be really interesting to see if FHBs can push ahead of mortgaged MPOs next quarter, driven by access to their KiwiSaver funds and also a clear financial incentive (often renting can be more expensive than a mortgage repayment, provided that the deposit hurdle can be cleared).
Annual change ($m) in gross new lending (Source: Reserve Bank of New Zealand)
Second, movers (i.e. existing owner-occupiers who are shifting house) have a relatively low share of the market in an historical context. At 27%, their share is the lowest it’s been since early 2011. The high cost to trade up, both in terms of the higher price for a newer/larger house as well as legal/moving expenses, will be a key factor keeping existing owners where they are. We also know from high levels of building consents for renovation that owners are altering rather than moving.
And third, the share of purchases going to cash MPOs has flattened off a bit in the past few quarters. This is quite a broad group, but will cover some offshore purchasers – so it’s conceivable that the foreign buyer ban has already played a role here.
Two-year fixed mortgage rates (Source:
So where to now? From a macro perspective, banks continue to gradually raise their lending activity, to both investors and owner-occupiers (see third chart). And not only are credit flows rising, but the competitive market is seeing mortgage rates fall too (see fourth chart). All else equal, we may start to see these factors flow through to uplift in the overall level of property sales activity in the coming months – that would be even more likely if the Reserve Bank relaxed the LVR speed limits later in the year. However, overall activity is unlikely to race away, so the story for the next few months at least will continue to be about the different buyer groups (and their lenders) jostling for market share.
* However, it’s also important to note that the number of FHB purchases in late 2006 and early 2007 was 11-12,000 per quarter. In Q3 2018, it was less than 7,000.


This week, CoreLogic hosted 22 of Australia’s leading developers from the Queensland Urban Development Institute of Australia Study Tour in Auckland.  The group received insightful commentary on the NZ market, delivered by keynote speaker: Head of Research, Nick Goodall. This was followed by a Q&A session, which saw robust discussion on varied topics including both the supply and construction pieces of the property development puzzle, and any legislative limitations/opportunities. I’ve summarised the discussion below:  

Investors & NZ’s legislative focus: 
Property speculators have been the target of much legislative change, with a number of measures already introduced by the coalition government to influence property investment behaviour, recognising our reducing home ownership rates and subsequently the increasing numbers of kiwis living in rental properties. 
Currently, a Tax Working Group is looking at whether New Zealand needs a more comprehensive capital gains tax amongst other changes to our tax system. One of the findings from their interim report was that 82% of assets potentially impacted by a capital gains tax are held by the top 20% in terms of wealth measures. These are not NZ’s typical mum and dad investors. 
This is the latest in a line of measures, including the Healthy Home Guarantee Act (ensuring all rental properties have to meet a minimum level of heating/insulation requirements), the Brightline Test (effectively a capital gains measure: requiring investors to pay tax on any gains if a property is purchased and sold within 5 years), and ring-fencing of losses for negative gearing purposes.
But despite all these measures, investors still appear to be acting relatively consistently. 
Auckland’s supply and construction challenges:  
Looking to the supply side of the equation, August 2018 was a particularly strong month for building consents, continuing the recent upwards trend. In terms of actual ‘on the ground’ impact, we measure the net change in stock on the ground due vs. what was actually consented, taking into account those properties which are demolished in order to build new properties 12 months ago, just over 10.5K building consents were issued, but the net increase to stock was only 6,800 properties. Statistics NZ have previously reported that 95-97% of consents go through to completion so the difference mostly accounts for regeneration, as well as a slightly longer time to completion. 
To truly make an impact on Auckland’s housing shortfall, Auckland has a target of 13K new builds per year. We’re currently only at 50% of that, despite what the consents say. 
Challenges to achieving build at pace come in the form of available construction labour, Resource Management Act consent processing and large building companies unfortunately going under. 
On the plus side, we’re also seeing a change in building type in consents: previously, up to 80% of consents were for standalone houses but that’s reduced to 50%, with apartments and townhouses on the increase: a promising trend for Auckland’s intensification. 
KiwiBuild is the government’s initiative to address the affordability challenge, and the first KiwiBuild home-owners will move in over the next few weeks. The shorter term impact of KiwiBuild won’t necessarily see volume uplift, but what it will do is improve affordability, with prices capped and generally a smaller deposit accepted.
Where to from here? 
CoreLogic has a sales prediction model, which takes into account macroeconomic indicators such as GDP, migration, interest rate movements etc. and that model indicates that the sales volumes could drop away a little further. However, modelling will always have limitations and in real life, we’d expect market reaction to counter a further drop, such as LVR limits being loosened.  The more likely scenario is that volumes will remain flat for the short term. 
Currently the model predicts just over 80,000 residential sales each year for 2018 and 2019, which is relatively low - below NZ’s boom in the mid-2000’s, and not far above GFC levels of 65-70k per annum). 
My personal call is that sales appear have hit a bit of a floor, with value growth weakening across most of NZ. A low listings situation exists in many markets, and despite encouraging building consent numbers, it’s still not enough. There are signs of loosening credit, which could impact short term values, but otherwise the market outlook is for a relatively constrained NZ property market. 

Colour Crush: Sage

Tuesday, 16 October 2018

Ahh sage, the creamier, serene cousin of mint green. Aside from seriously trending on Pinterest, sage’s other talents include, neutralising contrasting tones in a room, amplifying the level of calm in a space, and really mastering the under the radar approach in interiors. Blending effortlessly with natural wood, metalics and contrasting hues. Sage is a seamless way to integrate a taste of colour without impacting the harmony of your space.
There are of course, some considerations, as always. When choosing your perfect shade of sage, careful not to err into bright territory, keeping in mind this should still fall into the ‘neutrals’ category. Paint colours typically appear brighter on the wall than when you pick them from a swatch on the shelf so consider this in your selection. Opt for a slightly more subdued hue than you want to ensure your expectation, meets the reality. 
Choose your room wisely. The room dictates the hue, and the pairings. Sage will affect the mood and ambience of the space so ensure you keep this front of mind when planning how this will filter through your home. Don’t be so rigid in your creativity, initially you may be thinking to simply paint - and don’t get me wrong this is an expert way to explore the shade - however sage can be integrated into a room in tiles, paneling and even cabinetry. 
It has greater impact in spaces that it can truly be the hero. For you, it may simply be the featured wall in the master bedroom, if you’re feeling wary. If you’re quite smitten with the hue, it can feature en masse or in detailed patterns through bathroom tiles, kitchen splashback or your cabinetry. For the most cautious, it may be worthwhile simply trialling in soft furnishings and decor before you take the plunge. Natural greenery like eucalyptus throws this hue along with a crisp fragrance, sensory explosion in more ways than one!
Then, work to find its dream pairings. Sage has a beautiful friend in brass details. Brass adds an element of warmth, injecting a little personality and met halfway with crisp whites, creamy nudes, or off white to expertly build your colour profile. If you’re looking for something a little more adventurous, don’t be afraid to pair sage with something unexpected. Balance the hue notes to best complement the details, a coffee toned or sand base, charcoal and even pink clay or blush are hues that marry for an outcome that feels carefully considered and restrained.

- Kelvin Davidson

A recent ‘on-the-ground’ tour around Auckland revealed that new housing construction is moving ahead with infill development a rising trend. KiwiBuild will help to drive even more infill housing, making more efficient use of inner city land (not to mention removing some poor quality housing). However, new sections still seem pretty expensive and transport infrastructure is a problem.

CoreLogic research analyst Kelvin Davidson writes:

The shortage of housing in Auckland is clearly one of the biggest issues in NZ’s residential property market at present (and it will probably remain one of the biggest issues for some time to come). This Pulse sets out some observations from an ‘on-the-ground’ look around Auckland’s various sub-markets last week; some positive surprises, but also some reasons for concern.

Firstly, contrary to perception that Auckland has been at a supply standstill for many years now, a huge amount of development has actually already taken place, both for standalone houses (e.g. Pokeno) and townhouses (e.g. Stonefields). The scale is huge compared with any other part of NZ and, without it, the housing affordability problem in Auckland would be even worse. The Stats NZ figures clearly illustrate the relative shift towards smaller dwellings in recent years (see first chart), with apartments/townhouses etc. now outnumbering houses.
Auckland dwelling consents, annual running total
(Source: Stats NZ)


On top of that, it’s easy to see that infill development is on a rising trend. And that’s backed up by our data. As chart no. 2 shows, five years ago, the change in the dwelling stock in Auckland over a 12-month period was similar to how many dwellings were consented. Lately, however, the stock has been growing more slowly than dwelling consents – illustrating that rising shares of consents have been granted to replace older houses that have been demolished. The pattern in Auckland has been much starker than in Wellington, for example, where the stock change has stayed consistent in relation to dwelling consents (see chart three).

The rise of infill townhouse/apartment construction is of course very welcome in terms of making better use of big sections that currently only have one, small (often poor quality) standalone house on them. However, more needs to be done. The inefficient use of state housing land is clear around Mt Albert and Mt Roskill, for example, so KiwiBuild is well-targeted in those areas. It gets harder when the properties are privately owned, and the current owners cannot (e.g. for financial reasons) or will not move elsewhere and free up that land for more efficient use.
Wellington housing stock change and dwelling consents
 (Sources: Stats NZ, CoreLogic)

But even though there are some positive factors on the supply-side in Auckland, housing affordability is still poor. And that’s despite no obvious physical shortage of land (e.g. look at Pukekohe with its large numbers of new, empty sections). Thus the question naturally arises – why isn’t supply moving even faster? Three obvious hurdles exist here. Firstly, although the land physically exists, it doesn’t seem to be available at the ‘right price’. Sections priced in excess of a hefty $500,000-600,000 were easy to find. Secondly, part of the reason why land is still expensive will be the need to develop the infrastructure to support new housing, especially transport. Finally, it’s the well-known builder shortages and capacity constraints in the construction industry.


Wellington housing stock change and dwelling consents 
(Sources: Stats NZ, CoreLogic)
On the whole, the worst critics of Auckland’s supply shortfall are probably overstating the problem. The land exists, infill housing is underway and KiwiBuild will help to speed this up. However, there is still a long way to go in terms of boosting the raw numbers of homes in Auckland, not to mention fixing a quality issue (e.g. poor general state of repair, lack of insulation) that clearly exists in many parts of the city.

The Allure of Pre-loved Pieces

Tuesday, 9 October 2018


There is a certain charm to sourcing a pre-loved piece. Not only does it feel like you’ve hustled a little harder to find it, but you can more often than not, pick up quality pieces at a fraction of the price. There is a real sense of achievement to a quick fixer-upper that ticks all the boxes for your home. Whether it’s restoring a timber sideboard, reupholstering some cushions or relacquering an outdoor setting, with the right approach, you can source all manner of household pieces – sometimes you just need to know where to start.
As with any purchase, begin with a checklist of questions you’ll need to know before you could confidently purchase a pre-loved item. This checklist will help guide your purchase decisions. Make a mental list on non-negotiables that you want in your piece and exercise patience. Trawl the usual suspects, Gumtree, Ebay and even Facebook Marketplace are great places to start. Tip! Save your search terms so that you’re automatically notified any time an item is listed that matches your criteria.
Once you find a piece that catches your eye, you’ll need to know a little about the owners lifestyle. Are they a smoker? Do they have any pets? This will help you understand wear and tear, and any associated odours before you invest more time into this listing. If you’re hunting for a designer piece, or a piece reminiscent of a particular design period – i.e mid-century modern – then there is an entirely new set of questions to consider. Ensure you ask whether the piece is an original, and if so, if it has been authenticated. Whether or not you mind if it is a replica is irrelevant, requesting this information will amplify your negotiating power later on should you decide to pursue the purchase.
When shopping second hand it is easy to become caught up in the adrenalin of finding a bargain, so exercise caution. Triple check all your measurements, including your doorway if you’re purchasing a big-ticket item like a lounge or fridge. Don’t cross your fingers and hope for the best!
Don’t underestimate the value that you can find in a second hand piece if you look hard enough, many people are willing to part with items for free for the simple convenience of having it removed for them. Otherwise have confidence in the value you assign to the piece and the price you are prepared to pay and negotiate until you are satisfied with the outcome. 
Don’t forget if you prefer to treasure hunt in person, vintage stores and local op-shops are a wonderful place to begin your search. Op-shops are typically better suited for small wares, think vases, ceramics, table settings and all manner of crystal. Seek out your closest vintage stores for other homewares and furniture. They have done the hard trawling for you!