by The Landlord
By Andrea Milner
“The addresses are identified, instead of a general location, which has never been the case before – that’s the difference,” says property manager Richard Evans of Rotorua Rentals who chairs the REINZ property management special interest group.
The statistics were launched at the recent REINZ property managers’ conference, attended by about 300 industry members from around the country. Attendees heard that the upsurge in residential property investment and the parallel surge in house prices has seen many investors and their advisors struggling to determine fair market value for rental homes, because areas are too vaguely defined in currently available statistics derived from bond lodgements.
The current system, says Evans, has limited value, as the areas are too vague and general in nature to be accurate enough for informed decisions to be made or opinions offered.
“We have all spoken with investors who have researched the market extensively and taken absolutely the wrong messages from that.
“For example: an area of Rotorua called Ford Block, a dangerous and infamous part of town brought to fame by Once were Warriors, is bundled in the stats with a very classy neighbourhood called Pukehangi, so buyers see that typical three-bedroom homes rent on average for $240 a week in that area.
“The truth is that they fetch $170 in Ford Block and $270 in Pukehangi, so they are mortified when they learn the truth and are facing heavy cash flow losses from day one.”
The new data will reflect seasonal and geographical trends as well as providing a “moving median statistics system” based on bonds lodged to track the market. Evans says this will take into account the time lags with some bond lodgements and the fact that not all bonds are collected and lodged, but probably 90% of tenancies will be lodged at some time.
The information, accessed via the REINZ website, will not be made available to unlicensed property managers.
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