Market Insights Post-General Election
NICK COWDY / Residential Sales Consultant, Principal Agent
Post-general election periods of the past 15 years have demonstrated remarkable growth and resilience, even in the face of political shifts and global events. In this analysis, we’ll delve into the data provided by the Real Estate Institute of New Zealand (REINZ) to uncover insights into the market’s performance in the post-elec.
The 2005 election sparked significant growth, with consistent rises in median sale prices. Year-on-year increases highlighted the market’s stability, setting the stage for a robust trajectory in the years to come. Even with a change in government and the global financial crisis in 2008, the real estate market in Christchurch remained stable. While median sale prices fluctuated, long-term growth remained consistent. This resilience continued after the 2011 election, affirming the market’s strength in the face of challenges.
2014 witnessed robust growth, marked by consistent increases in the median sale price and property values. It exemplified a thriving market that not only withstood changes, but also offered opportunities to both buyers and sellers. The 2017 post-election period brought a mix of price fluctuations and stability. While median sale prices lacked a clear trend, the market’s long-term growth remained stable. This demonstrated the market’s capacity to absorb short-term fluctuations and its overall resilience.
The 2020 election, accompanied by a change in government and the onset of Covid-19, brought remarkable strength and growth to the Christchurch market. An upward trend in median sale prices underlined the market’s significance, even amid political transition and a global pandemic.
Considering the last 15 years’ worth of data, it’s evident that the Christchurch real estate market maintains its dynamic nature and resilience, regardless of political shifts or global events. This consistency offers stability for buyers and sellers, providing a reliable landscape for real estate in the foreseeable future.
The data used for these insights is sourced from REINZ’s Market Insights Reports, which has been recording real estate data since 1992.
The Residential Property Managers Bill
In August 2023, New Zealand took a significant step toward ensuring the professionalism and accountability of residential property managers with the introduction of the Residential Property Managers Bill (The Bill) in Parliament. This landmark legislation marks a long awaited milestone that Cowdy have campaigned for alongside the Real Estate Institute of New Zealand (REINZ) for many years. The Bill aims to create a comprehensive regulatory framework for residential property managers and management organisations, addressing the concerns of both property owners and tenants.
New Zealand’s rental market is substantial, with nearly a third of households living in rental properties, and approximately half of these properties are managed by property managers. While many property managers uphold high professional standards, the lack of legal requirements for minimum conduct, competency, and industry practice standards has led to inconsistencies in service quality. The Bill seeks to bridge this gap, instilling confidence in both tenants and property owners regarding the quality of property management services they receive.
Key Features of the Residential Property Managers Bill:
- Compulsory Registration and Licensing: Under the new system, individual property managers and property management organisations will be required to register and obtain licenses, ensuring that only qualified and accountable professionals operate in the field.
- Training and Entry Requirements: The Bill outlines minimum qualification and training requirements for each license class, including a three-tiered licensing structure: provisional, standard, and supervisory, each with its own prerequisites.
- Professional and Industry Practice Standards: Property managers will be obligated to engage in continuing professional development (CPD) and adhere to a code of professional conduct and client care. Property management organisations must operate trust accounts subject to annual audits and meet prescribed insurance requirements.
- Regulatory Authority: The Real Estate Authority (REA) will oversee the regulatory framework, ensuring compliance and accountability within the industry.
- Complaints and Disciplinary Process: An independent complaints and disciplinary framework will be established to address issues related to the professional conduct of property managers or management organisations. This includes Complaints Assessment Committees and an Independent Disciplinary Tribunal.
- Offences and Penalties: The Bill introduces penalties for various offences, such as providing false information, practising without proper registration or licensing, and failing to comply with financial record-keeping requirements.
- Regulatory Stewardship and Monitoring: Te Tūāpapa Kura Kāinga (HUD) will serve as the regulatory steward for the property managers’ regime, ensuring its effectiveness and relevance.
Over the past four years, we’ve witnessed a wave of legislative changes, including amendments to the Residential Tenancies Act, the implementation of Healthy Homes regulations, updates to the Privacy Act, and changes to the Health and Safety at Work Act, among others. Coupled with environmental and social challenges like Cyclone Gabrielle, property management is a profession that New Zealanders have come to rely on.
The property management industry was deregulated in 2008 following the formation of the Real Estate Agents Authority (REAA). Cowdy chose not to make any changes to our Property Management division following the deregulation, retaining our trust account which continues to be audited, and having almost all our property managers qualified or working towards being qualified.
Cowdy strongly support the Residential Property Managers Bill, recognising the importance of this legislation in enhancing the professionalism and accountability of property managers.
If The Bill is enacted, it will undergo an 18-month establishment period for the Regulatory Authority to set up systems, regulations, and operational standards. Subsequently, there will be an additional 6 month window for property managers and management organisations to obtain licences before the regulatory regime takes full effect, which would be 24 months after enactment.
By establishing clear standards, qualifications, and a robust regulatory framework, The Bill aims to enhance the professionalism and accountability of property managers. This move would not only benefit property owners but also provide tenants with greater confidence in the services they receive.
Changes to the First Home Partner Scheme
On 14 August 2023, changes were made to the First Home Partner Scheme administered by Kāinga Ora – Homes and Communities. The shared ownership initiative has been enhanced to make it even more accessible and flexible for aspiring first home buyers to get on the property ladder.
One of the most significant updates to the First Home Partner scheme is the expansion of eligible properties. Previously participants were limited to purchasing new builds, but now, all eligible applicants can buy both existing homes and new constructions through the program.
Financial eligibility has also been redefined to accommodate a broader spectrum of applicants. The household income cap has been raised from $130,000 to $150,000, meaning more individuals and families can qualify for assistance under the scheme.
Another progressive adjustment to the First Home Partner scheme is the expansion of the income cap criteria for intergenerational whānau. Previously only smaller whānau units were eligible, but with these changes any eligible whānau of at least six people who typically reside together can participate in the program.
The changes to the First Home Partner scheme take a significant step towards making home ownership a reality for more New Zealanders. The ability to choose between existing and new homes, the higher income cap, and the inclusion of larger intergenerational whānau support those who may have previously been on the edge of eligibility.
Further information can be found here on the First Home Partner scheme.
Commercial Leasing – Tips for Tenants
SAM COWDY / Commercial Sales/Leasing Consultant
Entering a new commercial lease can be a significant step for any business. In New Zealand, most leases use the standard ‘ADLS deed of lease’ form, designed to balance the interests of both landlords and tenants. However, in reality, priorities and bargaining power often differ between the two parties. To ensure a successful lease agreement that aligns with the needs of your business, it’s crucial to focus on the important aspects from the beginning.
If you plan to customise the premises, obtaining the landlord’s approval for fitout and signage plans is essential. Additionally, ensure you understand the condition you’ll need to leave the premises in at the end of your lease. To prevent disputes, collaborate with your landlord to create a premises condition report, complete with photos, documenting the premises’ initial state when your lease commenced.
Leases often specify the permitted business activities within the premises. Consider negotiating for a broader description, such as “retail” or “any use permitted under the relevant district plan” to allow flexibility as your business evolves. Additionally, evaluate neighbouring businesses and, if needed, negotiate exclusivity of trade clauses to secure your market position.
Choosing the right lease term is crucial. Short leases provide flexibility for changing needs, while longer leases offer security. Negotiate options for assigning or subletting space if necessary. You can also explore the possibility of a right of first refusal or an early lease termination clause for added flexibility.
Many landlords will request a personal guarantee, however there are ways to limit your guarantee such as exploring alternatives like a bank guarantee, or a refundable security deposit upon lease termination.
Consider not only the initial rent but also how future rent reviews will impact your budget. Landlords may offer lower initial rent with substantial increases during reviews. Understanding different rent review options is essential to make informed decisions. Most leases in New Zealand are ‘net leases,’ meaning tenants pay a share of the building’s expenses (outgoings) on top of rent. Before signing a lease, obtain an estimate of expected outgoings to understand your total financial commitment.
By taking these points into consideration, you can navigate the complexities of commercial leasing in New Zealand and ensure that your lease agreement aligns with your business goals and needs.
If you need to lease out your commercial property or are on the hunt for the right space to lease, our team is here to help. With in-depth knowledge of the commercial real estate market, our agents are well-equipped to meet your leasing requirements. Get in touch with one of our agents here.
Welcome to the Team
We are delighted to introduce our newest team members, Haydn Scott and Nadine Thomas. Haydn joined us in April this year as a Commercial Sales/Leasing Consultant, and our new Business Development Manager Nadine joined the Property Management team in July.
Here is a little more about our newest team members:
Haydn Scott
Name: Haydn Scott
Position at Cowdy: Commercial Sales/Leasing Consultant
How long have I lived in Christchurch: Most of my life
Family: My wife Claire, our three kids, and our dog
Personal statement: If you’re going to do it, do it once and do it properly
Previous jobs: There’s been a few! Company Manager, Corporate Services Manager, Property Manager, and a Ski Guide
In my spare time: I like to keep active, but the older I get the less active I become. I really need to work on that!
The Charity I support the most: Surf Life Saving NZ
Favourite home cooked meal: My Grandmother’s homemade rhubarb pie
Favourite restaurant: 5th Street, closely followed by The Fairlie Bake House!
Favourite holiday destination: Maui, Hawaii
Favourite thing to do in Christchurch: I love an early morning walk in the winter on the Port Hills
Favourite book: Dan Brown’s The Da Vinci Code
Favourite TV show: It’s between Californication, Boston Legal, and Black Adder!
Nadine Thomas
Name: Nadine Thomas
Position at Cowdy: Business Development Manager – Property Management
How long have I lived in Christchurch: 9 months, after having spent the last 8.5 years in Marlborough
Education: Yes, I had some! Apart from the usual, mainly Tertiary qualifications including being a Certified Associate in Project Management PMI and obtaining my Branch Managers License Level 4 REINZ
Family: My partner Stu and daughter Holly (who has just moved to Perth)
Personal statement: As I was brought up, I treat people as I would like and expect to be treated – politely and nicely. It goes a long way if/when they find out about my warped sense of humour!
Previous jobs: Police officer, Real Estate Salesperson, and Sales Manager
In my spare time: What spare time? I’m an active relaxer so always doing something – housework, projects, cooking, cleaning, or walking and talking
The Charity I support the most: The Cancer Society and Heart Foundation
Favourite home cooked meal: Roast dinner!
Favourite holiday destination: I haven’t gone anywhere recently. I’m thinking France and Italy, and it’s not just the wine! I lived in Marlborough for 8.5 years before moving to Christchurch!
Favourite thing to do in Christchurch: Walk around the ‘new’ city and botanic gardens (shops, shops, shops)
Favourite book: Too many to list, but I mainly enjoy autobiographies/biographies. I love the rags to riches stories; I’m still working on mine!
Favourite TV show: Grand Designs and Heritage Rescue (I was too sheepish to say Coronation Street)
New Brighton Centre
Imagine a New Brighton that stands as Christchurch’s eastern playground, a place where the community thrives, and visitors are drawn to its vibrant atmosphere. This vision is at the heart of the New Brighton Centre Master Plan. In 2012 a process was initiated to identify key stakeholders, address community aspirations and develop a comprehensive plan for the future of New Brighton.
The Master Plan, endorsed by the Community Board and adopted by the Council in March 2015, sets out a strategic vision. It envisions New Brighton as a lively, compact, and viable centre, catering to the needs of its residents while attracting visitors from across the city. It’s a place known for its fun, creative, and relaxed atmosphere, making it an ideal destination for leisure and recreation.
Transforming a vision into reality is no small feat, but the community of New Brighton, along with various organisations, has been tirelessly working towards this goal. After technical expert workshops and extensive community consultation, the Master Plan became a roadmap for revitalisation. Since then, there have been continuous efforts to implement its goals and themes.
One of the significant milestones in this journey is the demolition work that began on 25 September 2023 at New Brighton’s mall. This marks the start of a project aimed at creating a new pedestrian walkway at the site. The former Westpac building at 56 Brighton Mall was acquired by the Council as part of the Oram Avenue extension project, which will develop a new movement corridor from Oram Avenue towards Keppel Street. Demolition work is expected to take approximately three months.
Jacob Bradbury, Manager Planning and Delivery Transport, expressed the Council’s satisfaction with this development, saying, “We know that New Brighton locals are supportive of the project and keen to see work begin in this area. This project is the start of the upgrade and revitalisation work planned for the mall.”
Central to New Brighton’s revitalisation is the strength of its community spirit. The vision isn’t just about physical changes but also about creating an environment where people want to live, work and play. Events and festivals play a crucial role in adding excitement to community life, fostering a sense of togetherness and vibrancy.
Rachael Shiels, ChristchurchNZ Placemaking and Engagement Advisor, shared insights into the progress being made: “Momentum is really growing now in New Brighton, with the fantastic public attractions on the foreshore spurring more commercial and community activity. As part of the New Brighton Regeneration Project, ChristchurchNZ has been working alongside locals to support business activity and community activations. We’re looking forward to planning some fun activations in the vacant site left following the demolition of the Westpac building. We plan to start relatively small with some nice lighting and a mural, then work alongside the community to determine what else could be added.”
It’s this collaborative spirit and willingness to adapt and innovate that will continue to drive New Brighton’s transformation.
The future of New Brighton is bright, but the pace of implementation depends on various factors, many of which are yet to be fully determined. Quick wins are essential to boost community confidence and create momentum for the centre’s recovery. The Master Plan’s actions are divided into four streams, each with its own timeline. These actions encourage public and private sector collaboration and alignment to ensure that New Brighton thrives in the coming years.
While some aspects, particularly those involving public space, can provide clearer timelines, private space development and larger projects will require ongoing collaboration and regulatory processes. Funding also remains a significant consideration. Despite the uncertainties, the commitment to revitalising New Brighton remains unwavering.
New Brighton is on a journey of transformation, with a bold vision and a vibrant community leading the way. The New Brighton Centre Master Plan sets out a roadmap for reinventing this iconic part of Christchurch, making it a hub for recreation, creativity, and community spirit. The recent demolition work at the mall signifies progress in New Brighton’s journey to becoming the city’s go-to destination.
What a National-Led Government Means for Renters and Landlords
JANICE COWDY / Director
New Zealand’s political landscape is poised for a shift with the National Party pledging to apply “downward pressure on rents” by reversing several legislative changes introduced by the Labour Government. After six years of Labour’s rule, which brought in a host of reforms impacting tenants and property owners alike, the potential National-led government, in concert with its ally ACT, is branding these reforms as a “war on landlords”.
National Party leader Christopher Luxon has been vocal about his plans to amend the bright-line test, recalibrate interest deductibility, and modify tenancy laws. So, what does this mean for renters and landlords?
Restoring ‘No-Cause’ Evictions
Under Labour, tenants gained increased security with the requirement for landlords to provide a reason for eviction. National plans to revert to ‘no-cause’ evictions, arguing that the current regulations disincentivise landlords from offering rental properties, especially to tenants with a shaky rental history.
KiwiSaver Utilisation for Rent Bonds
A significant policy directed at aiding renters, particularly those under 30, is the proposed access to KiwiSaver funds for rental bonds. This move would alleviate the initial financial burden of securing a rental property, with the bond being returned to the KiwiSaver account upon the tenancy’s conclusion.
Fixed-Term Tenancy Changes
National is also looking to abolish the automatic conversion of fixed-term tenancies to periodic ones. The intention is to encourage landlords to offer short-term tenancies again, which they’ve been reluctant to do under Labour’s changes.
However, not all of Labour’s changes are on the chopping block. Rental bidding remains banned, rent increases are still capped at once per annum, and Labour’s Healthy Home Standards are set to stay, despite previous opposition from National.
The potential policy reversals are already causing ripples in the property market, with real estate agents observing a surge in buyer interest post-election. Cowdy has observed this interest, noting it varies across different market segments. The lower end of the market is currently attracting the most attention, a trend Nick Cowdy believes will soon extend to the higher ends of the market as well. Amidst these shifts, the bright-line test might be reduced to two years, and foreign buyers could face new taxes. Yet, these changes hinge on the outcomes of coalition negotiations, particularly given New Zealand First’s differing stance on such issues.
As coalition negotiations continue, both renters and landlords are waiting to see how these promises will play out in reality. The National Party’s strategy is clear: to ease the legislative burden on landlords in hopes of cooling rental prices and revitalising the housing supply. Whether this approach will benefit the wider market remains a point of contention as New Zealand stands on the cusp of change.
Christchurch Red Zone Handover Complete
Another significant chapter in the Christchurch earthquake recovery story has drawn to a close as the final portion of residential red zone land has officially transitioned from government ownership to local control.
Commemorating this momentous occasion, which also marks the conclusion of the Crown’s post-earthquake responsibilities in Christchurch, a modest event was held at Dallington Landing. The event was jointly hosted by Christchurch Mayor Phil Mauger and Minister for Land Information Damien O’Connor.
O’Connor paid tribute to the resilience and determination of all those associated with the red-zoned land following the Canterbury earthquakes. He acknowledged that reaching this point had been a prolonged journey, signifying a substantial stride towards fulfilling the government’s commitment to reinstating local leadership in Christchurch. He also praised the successful collaboration between the Crown and the Council, with Toitū Te Whenua / LINZ overseeing over 2,800 temporary land uses and numerous short-term projects and events on the red-zoned land during its stewardship.
Over the past two seasons, a series of planting initiatives has seen Council rangers, community groups, and volunteers planting tens of thousands of native species throughout the Ōtākaro Avon River Corridor (OARC). Notably, support from the Christchurch Earthquake Appeals Trust has enabled the completion of projects such as Dallington Landing and three pedestrian bridges.
Mauger highlighted the positive impact of these bridges at Medway Street, Snell Place, and Avondale, enhancing community connections across the river and establishing infrastructure for the City to Sea Pathway. He revealed that the construction of the 11-kilometer City to Sea Pathway, spanning from Barbadoes Street to New Brighton, will begin this summer.
Further developments are also on the horizon, with the upper and lower terraces of Avon Park poised for a significant transformation in the coming months. Additionally, plans for a new flatwater sports hub and riverside landing at Kerrs Reach are in progress.
Large-Format Retail Optimism
In a time marked by economic challenges and uncertainties, the New Zealand large-format retail sector is experiencing a surge of optimism thanks to a slew of major development projects across the country. These projects signify a period of growth and expansion, demonstrating that demand for large-format retail space remains robust.
Nelson Junction, an 11,000m² centre, is on track for completion early next year while in Blenheim, Westwood is entering its final stage of development, offering approximately 5,000m² of retail space by early 2025. Canterbury is also witnessing remarkable growth in this sector. Earlier this year, consent was granted for a 24,000m² extension to the Homebase shopping centre in Shirley which will include a new supermarket and department store, solidifying its position as the largest large-format retail site in Christchurch.
While these projects instil confidence in the sector, the retail environment has faced its challenges, including inflation and rising mortgage rates, which have impacted disposable incomes. Despite these challenges, however, retail spending in New Zealand increased by 0.7% in August compared to July, according to Stats NZ’s electronic spending data.
In the face of economic headwinds, major projects in the North Island and significant expansions in the South Island and Canterbury are providing a beacon of optimism. These projects, coupled with resilient consumer spending and a strong demand for large-format retail space, signal a promising future for the sector.
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