Property Market Archives

Factors Affecting the Property Market

There is nothing consistent about the property market. But that can be considered as a good and bad thing. The property market under the real estate industry is one of the most common investment options here in New Zealand.

When entering the market, as a buyer or a seller, you need to be aware of the different factors that impact the cycle. Here are the top factors highly affecting the property market.

Laws and Restrictions

Laws and restrictions implemented by the government are mostly done to address particular issues. These laws may benefit buyers or lenders. For example, a government implements stricter lending restrictions. This will benefit lenders or banks but not property buyers who are planning to get a home loan.

The government can then loosen those restrictions to give the ball back to the buyers. One good example of this is Australia’s cash rate. Since October 2019, the Reserve Bank of Australia cut down the cash rate to .75%. This means lower monthly repayments for people.

Infrastructure

Infrastructure projects make an area more desirable because it improves liveability and quality of life. However, that is not all, these projects are meant for different purposes. Some projects are mainly for transportation.

Some projects improve community interactions and congestion. New hotels and resorts are considered to be infrastructure to improve accommodation and tourism in a particular area.

A city with several planned, on-going and completed projects is highly desirable. Properties in a highly urbanised area tend to be more expensive. Why is that? Living in these areas with improving liveability tend to attract more investors.

Auckland is one of the most desirable cities in New Zealand. The city offers several services, business opportunities and at the same time leisure precincts. These projects also attract international investors to do business. That will then result in more jobs being created.

Pandemic

This is a big one and will greatly impact the property market negatively. One of the most recent instances is the COVID-19 outbreak. The pandemic resulted in numerous fatalities all over the world. It also rendered most companies and businesses all over the globe to shut down.

The property market was particularly hit. Agents can’t push through with open houses, construction for residential developments were also stopped. The property market entirely seized from functioning.

That is why real estate companies and researchers are looking for ways to improve continuity in times like this.

The property market is not the only one taking a hit. A pandemic’s economic impacts are not contained in a particular country. All countries are affected and most of them come up with contingency plans on how to stay afloat.

Subscribe to our blog for more information about the property market. Feel free to contact us if you have some questions that need answering.

Long Term vs Short Term Investments

Most people these days are finding value in investment as a way to ensure financial security in the future. There are different kinds of investments you can engage with. Keep in mind that there is no such thing as a guaranteed investment.

There are always risks we have to take. However, there are many ways how we can minimise those risks. So, let’s list down the top choices for both long term and short-term investments you should consider right now.

Rentvesting – Short Term

Rentvesting is done with property. Instead of selling a property, you rent it out. Instead of renting out a unit, you rent out your home. Rentvesting is becoming more and more prevalent here in New Zealand.

You need to consider the area of the property you want to purchase. You need to make sure that the median rent price is high. You can then live on another property which you too will rent out. But you can pick a property that offers an affordable rental fee.

So, the idea is when you buy a property, you then rent that out meaning you’ll get a positive cashflow you can then use for your mortgage. You are also spending less money on your rent. It is also very viable to live in a great property because when the property price is high, the rent price tends to be low.

Online Gambling – Short Term

This is an odd one and there are a lot of risks to consider. However, more and more people are still sold to the idea of making money out of online gambling. What they do is they set apart a sum of money they will then use to gamble.

This is not a regular thing by the way. Most people do it if they have extra money to spend. So, they then play their best casino games. These investors are strategic when it comes to gambling because they pay attention to their bets and they maximise every possible outcome there is.

With the bonus of playing right at home, they are more confident in their environment meaning they make better decisions. If you are highly considering this one, you might need to check out the best online casino nz.

Property Investment – Long Term

Now, this is usual to buy a property and sell a property investment. The idea behind this investment is that the value of a property tends to increase the longer you hold on to it. So, you can buy a property today and 10 years later, you can sell it for a higher price. That way, you’ll make money out of it.

However, in some cases, it is possible wherein the capital gain is not the big given the property market conditions. It is also possible that the longer your property stays in the market, its price will decline.

So, in this investment, you need to play your cards right and learn everything you can about the property cycle. You might even consider a property asset for a family trust. For more content, don’t forget to subscribe. If you have any questions about investments and the laws surrounding them, contact us today.

Dissecting Family Trusts

According to the New Zealand Law Society, the numbers of family trusts are picking up from the last couple of years. According to the law society “Trusts are becoming an increasingly popular way of protecting property and managing assets.”

Now, when we say trusts, that can cover a whole lot of things but basically, a trust is a legal arrangement between the grantor (creator of the trust), a trustee (one legally assigned to manage the trust) and the beneficiary or beneficiaries (the one who will benefit from the trust).

Family Trust Beneficiaries must only include family members, relatives or in some cases, close friends. Everyone can be a beneficiary if he or she is related to the grantor by marriage, blood or law.

Family Trusts

The purpose of a family trust is to provide financial security and transfer assets (mostly investment) to beneficiaries. To be subjective, it is a legal arrangement that assures all assets of the grantor benefits his or her beneficiaries with his or her death.

There are different classifications for a family trust. One is the living trust, wherein the grantor is still alive. This is also referred to as the inter vivo trust. When the trust was created in the grantor’s last will, this is what we refer to as testamentary trust.

A testamentary trust is an irrevocable trust meaning the grantor can’t any longer revoke or cancel it. From that, we go to the revocable trust. It is the opposite of an irrevocable trust, meaning you can cancel or revoke it.

What can be covered?

Family trusts can cover a lot of assets, mostly financial and property. Let’s say, your father wants to leave his small duplex in Auckland to the eldest child, a trust will take care of that. Let’s say he wants to leave his apartment for rent to the youngest child, a trust will take care of that.

A family trust here in New Zealand is also one way to ensure your family members get financial security or even a business asset when you are gone. For more content, subscribe to our blog.