Much like the rest of the country, the property market in Christchurch is really on the move with strong interest in both residential and commercial properties alike. As a commercial property specialist, it’s a pretty exciting time, and I’m excited about what the next 12 months will bring as the market really gets cracking.
We’ve been anticipating it for some time and there’s now strong evidence that the CBD is very much coming back to life. It’s exciting to see some activity in the retail space – long overdue – with a new retail block now underway facing Cashel St and Plymouth Lane, the BNZ and ANZ centres and The Crossing development finishing early next year.
The new $10 million retail block, being built by Dennis Sunderland, is expected to be complete within 12 months and will house retail, office and apartments. It will occupy the space between Ballantynes and the Re:Start Mall.
Mr Sunderland talked about his experiences recently in The Press, stating that he was excited to finally be underway, but admitted to taking a bit of a punt on the project. ‘‘On that side of the street there’s nothing else happening. I’m the first to go.’’
Given that Plymouth Lane is likely to be a very busy thoroughfare, and significant office spaces going up nearby, I’m confident Mr Sunderland’s hedged his bets well.
In addition to the return of retail in the CBD, other interesting design features are starting to take shape as well. The first of many public courtyards has just been completed alongside the Awly Building on Durham and Armagh Streets and it’s going to prove popular with people living and working nearby. These courtyards formed an important part of the 2012 blueprint for the rebuild and it’s great to see the concepts coming to life.
Manchester St is finally getting its long overdue facelift, with work now well underway to develop it into a beautiful tree-lined boulevard that will attract retail and hospitality patrons.
As for the commercial market itself, the investment sector is very strong, with a lot of as-is-where-is and investment transactions keeping our team busy. We have also seen a large increase in demand for quality residential CBD development sites. We’ve been placing a lot of property offmarket, so some excellent commercial real estate is changing hands without even a single online advertisement. This means that if you’re an investor, developer or a business owner looking for property with specific requirements, we’d encourage you to get in touch as soon as possible. We may well have something perfect up our sleeve.
One of the most important things you can do when taking your property to market, is to commission a ‘Home Staging’ company. They are practised in the art of preparing all types of residences for sale, through furniture and accessory placement.
Professional home stagers understand the market and are able to transform your empty property into a warm, exciting and attractive space. This will result in a larger pool of prospective buyers, culminating in a faster and optimal sale.
A positive first impression is critical for reeling in potential purchasers. This usually happens within the first 3 minutes of initial viewing.
Statistics prove that well prepared properties sell faster, whilst maximising greater returns. Your chosen home staging company will take into consideration your property’s era, personality, layout, key features and colour scheme when tailoring and selecting the right furniture and accessories for you. They will ensure that spaces flow seamlessly and effortlessly, taking the property to its fullest potential. They understand that beautiful rooms attract higher buyer interest.
Each home staging company differs in their approach and will offer furniture and furnishings of diverse quality and style. Do your due diligence, review company web sites and look at their current installs. This will indicate if they are the right fit for your expectations. Home stagers will highlight your property’s strengths and downplay its weaknesses and they understand that selling can be a stressful and an overwhelming process for you.
It is apparent that home buyers now spend more time online, looking at photographs and researching properties advertised for sale. Home staging will ensure that your rooms are presented in a professional manner giving your photos competent online presence and resulting in greater numbers for scheduled open home viewings.
Your property is a valuable asset that deserves your best attention to detail. So, remember when planning your marketing campaign that home staging sells properties!
KAREN ARCHIBALD Bramble Green On Sea
027 357 9055
Recently we have had a number of occurrences where EQC has required our vendors to do an Official Information Act request to get any documents other than a basic scope of works and sign-off document.
The basic scope can change dramatically when the contractor scopes the job, meaning the original basic scope can be out of date. Because of this it is currently taking 20 working days to acquire an accurate, up to date scope of works for a property.
In one instance we were only able to get the uncosted scope of works for a job that had been cash settled. This became problematic as only part of the work was completed and apportionment was required, the costed scope of works would have made this process very simple.
It is a good idea when selling to have as much documentation as possible available for potential purchasers to aid in a smooth selling process.
We recommend all our clients have on file a full original scope of works, contractor’s scope, all variations, and sign off. If cash settled, the costed scope of works is needed.
If you are considering selling it is a good idea to start collecting these documents now to remove any unnecessary delays once the property is on the market. If you have any questions around this documentation, don’t hesitate to contact us.
In recent months, we have seen some significant changes that will increase the cost of being a landlord. We are likely to see rents increase maybe as much as 10% before the end of the year as landlords try to recover the increase in costs.
The reality is that if you are a landlord you are in business and any business needs to make money to survive. The following are four reasons why rent is set to increase:
The new Health and Safety at Work Act
The new law identifies that a Person Conducting a Business or Undertaking (PCBU) has a duty of care to its workers and to other people, and must provide a safe workplace. A PCBU is a business or a sole trader.
Is a private landlord a PCBU? Yes, they are. This means that they will be affected by this new legislation and must take steps to ensure that they comply. Section 45 of the Residential Tenancies Act (RTA) states that landlords must comply with all requirements of building, health and safety and any enactment.
The RTA and the HSWA talk to each other. If a house is noncompliant then a landlord may also be in breach of the HSWA as well as the RTA.
Fines for failing to comply with the HSWA are enormous and will frighten many landlords. We will see an increase in landlords getting their properties professionally managed. Here in New Zealand about 40% are managed compared to nearer 90% in Australia. The risk of a landlord facing litigation in Australia is far greater so most get their properties managed. The same will eventually happen in New Zealand.
However, the cost of running a business will increase and so Property Management companies will be far less willing to negotiate on fees as their profit margins will be slashed. You will also see Tradies increase their fees to cover the costs of compliance.
Because of this, landlords will want more rent to cover the increased costs they face with regards to compliance around the HSWA.
Changes to the Residential Tenancies Act around insulation and smoke alarms
As of July 2016, it is likely that a new bill will be passed meaning that landlords will have to state the level of insulation in the property on Tenancy Agreements. Then, by July 2019, it will be likely that all rental properties will have to have underfloor and ceilings insulated. The cost of doing this will be around $4000 per property.
The proposed changes to the RTA will also make it clearer who is responsible for smoke alarms and where they have to be located. Under the proposed changes, landlords will be responsible at the commencement of the tenancy and tenants will be responsible during the tenancy. Expect to see the tenant wear the cost of this, though power bills will be reduced as the quality of our rental stock gradually improves.
Tenants no longer liable for accidental damages
A landmark case recently ruled in favour of tenants who accidentally caused damage to their rental property through a fire that caused over $200,000 in damages. This means that tenants will no longer be responsible for damages that they have caused through negligence. Again, the consequences of this landmark ruling are huge. Tenants can cause damage to properties and all they have to say is that ‘it was an accident’ and they are in the clear.
Insurance companies will no doubt increase premiums to cover the increased risk that they are exposed to. Again, landlords are likely to offset these costs to the tenant.
Fear of Methamphetamine Contamination
We constantly hear in the news of properties being gutted due to being contaminated with Methamphetamine. There has also been debate as to whether houses will need to be tested for ‘Meth’ in between tenancies so the house will comply with the RTA and the HSWA. Whether this is true or not is debatable but one thing is certain, more and more houses are being tested positive for ‘Meth’.
More landlords may well take this stance of getting their properties tested between tenancies to prevent and deter prospective ‘Meth’ producers from renting. The average cost of a swab test is around $200 so again do not be surprised to see this passed on to tenants. We will also see more landlords take out Landlord Insurance which is additional to their rental property insurance. This protects them from loss of rent and wilful damage caused by the tenant.
These increases will put a huge burden on the landlord. We cannot expect landlords to simply accept the increase of these costs and wear it without any impact on the tenant. Tenants will find themselves paying more to help cover the increased costs around
being a landlord.
DAVID FAULKNER Real-IQ
Building a house or doing renovations is hardly ever a smooth process. When problems arise, the building contract takes centre stage and unfortunately it usually protects the builder more so than the owner.
Here are six things to consider when a contract is put in front of you to sign:
1. Fixed Price Contracts: A fixed price contract should in theory mean that the builder takes the risk for and pays for any increase in the price stated in the contract. In practice though, there is no such thing as a fixed price contract. The builder will always include rights to adjust the price in certain situations. Some are reasonable but the key point is they should all be considered carefully, particularly where you will be stretched financially if further costs are charged.
2.Cost Fluctuations: This is the most important price adjustment clause to consider. It will appear in most contracts and will allow the builder to increase the price if there is an increase in the cost of materials or subcontractors. The builder would add their margin to those extra costs, typically around 10% (plus GST, and you may not be able to recover the GST). Most builders should be able to secure fixed prices on materials or subcontractors so consider deleting the clause. If the builder resists, have them list the specific items that cannot be on a fixed-price basis and check whether you can accept possible increases within your budget.
3.Variations: Clauses that would allow the builder to adjust the price where there are variations must be carefully considered. Some contracts allow the builder to claim a variation where extra works are necessary that are not covered in the plans and specifications. Usually the builder prepares the plans and specifications so you should consider only agreeing to pay for variations where the variation is requested by you. Builders should also be able to claim variations where there are problems with the land, such as subsidence, or where extra works are required as a condition of the building consent. It is important to acknowledge that there will almost definitely be a variation of some sort on a project. So always have extra funding to turn to if the unexpected happens.
4.Mortgage: Clauses that allow the builder to register a mortgage or caveat against your property should be deleted. A mortgage or caveat will prevent you from refinancing or selling the property. It could be months before you can force the builder to release their mortgage, even where you have a genuine dispute.
5.Bank: If you intend taking a loan to pay for the cost of the works, make sure the bank tells you what conditions will need to be satisfied before they release funds at each stage. Some banks will want a certificate from a quantity surveyor confirming the works referred to in the invoice have been done properly. The building contract will need to be changed to allow for this.
6.Monitoring: Have an independent builder monitor the quality of the works at key stages. This is very important to identify problems before they are built over. Of course there will be a cost but it is certainly worth it.
SAUNDERS ROBINSON BROWN LAWYERS
While the faces of the company are always the sales agents and property managers, it also takes a number of support staff to keep a business such as ours going. Here we introduce you to the admin staff that make our services possible. If you have had the need to ring our office it’s likely that you have spoken to one or more of these ladies, so here we put a face to the name.
Colleen has been with the company since its inception and knows our business inside and out, she takes care of administration and accounts, among many other things.
Harriet is the support person for much of the sales team, covering both Commercial & Residential sales, she takes care of the property advertising, database management and is editor of the quarterly newsletter.
PA to Nick & Sam Cowdy
Danni is personal assistant to both Nick & Sam Cowdy, working within Residential sales for Nick and Commercial sales for Sam, she does property advertising as well as general administration support.
PA to Andrew Cowdy
Traci is personal assistant to our director Andrew Cowdy, she manages Andrew’s property advertising and assists him with general administration support.
Brenna is the member of our team that you will most likely come across, she mans the front desk and takes your calls, she also supports the property management team, taking care of their property listings and booking people in to view properties.
Not content to be lumped in with the rest of the CBD, and resistant to the idea of creating a new “precinct”, property owners of the area surrounded by the Avon River, spanning eight city blocks between the river, Hagley Park and Gloucester St have worked together to create a new name for their area: West End.
Except that it’s not actually a new name at all – in fact, a bit of digging around in the archives revealed that the area between Cambridge Terrace and Hagley Park was known as the West End for nearly a century from 1850. It was collected into the more generically named CBD some time in the middle of last century.
The owners of a number of important new buildings in the area (including Ngai Tahu Property, Canterbury Property Investments and Armitage Williams) decided they needed to create a unique identity for the area and agreed that the forgotten name of West End was a great fit for the area.
It didn’t take much to convince the Mayor and others in the area, and the group have developed a brand for West End, and will use it on street signs and buildings to give the area added vibrancy and cohesiveness.
Ngai Tahu Property’s Gordon Craig was recently quoted in The Press saying, “We have created something new, but with an eye to our heritage. The name West End has some real prominence historically and it’s great to have a hand in its return”.
There is a lot of jargon in the real estate world, below are a few helpful definitions
The property is offered for sale with no price, with a deadline upon which offers need to be submitted (e.g. 3 to 4 weeks). The Vendor has the right to negotiate with any offer and can sell their property prior to the nominated date if they wish.
The greatest possible interest a person can have in a property.
This type of ownership is common where there is more than one home on a block of land. You are all owners of the land (usually fee simple/freehold) and you each lease your home. The lease will usually provide for an exclusive use area for each cross-lessee. It’s like owning a freehold property but there are some restrictions. Another form of ownership for more than one home on a block of land is a unit title.
When more than one buyer wants to put an offer on a property at the same time. If this occurs you will be alerted and asked to submit your best offer in writing. You will be asked to sign a form acknowledging that this is your best offer and you understand you may not get another chance to negotiate. All offers are submitted to the vendor who then chooses which offer to accept or further negotiate with.