Welcome to Autumn and where did the summer go. Down here in Southland we have managed to escape any major weather events. I think all the visitors we had to Invercargill for Burt Munro were even treated to a couple of stunning Southland days.
The Southland Rental Market
The number of houses available in Invercargill has dropped significantly with only 77 current rental houses listed on Trademe. Compare this with Nov – Dec 22 and the number was closer to 110 available. While nearly every region in NZ saw an increase in supply, Southland had a -21% drop, Auckland -11% and Otago -4% drop in rental listings. We are seeing a lot more enquiry for our available properties and higher numbers of applicants for each property.
The average 3-bedroom home in Invercargill median rental price is $440 per week compared with $428 for the same time the previous year. The NZ median is $610 per week for a 3-bedroom home. Whilst sale prices are trending down rental prices are holding firm with a slight increase over the last month. Rental yields are still strong in the south with many houses returning over 5% rental yield.
https://www.bayleyssre.co.nz/property/4851253/unit-d-56-mackenzie-street-winton/ This 3-bed unit in Winton with its current list price and expected rent of $400 pw will return a 6.3% rental yield.
https://www.bayleyssre.co.nz/property/4851236/unit-4-145-esk-street-invercargill/ Inner city flat returning 6.7% yield.
Is now a good time to buy another investment property?
What happens with your rental in a natural disaster?
With the recent weather events in the North Island, I thought it prudent to give an overview of what would happen if a similar event were to occur to your rental property.
If a property is deemed uninhabitable by a qualified professional, for example an insurance assessor, a termination notice will be issued to the tenant to end the tenancy within 7 days. The owner of the property is not responsible for providing emergency accommodation in the instance of a natural disaster. The property owner is also not responsible for the tenants’ contents, this should be covered by the tenants own insurance policy. Tenants are also not required to pay rent for the 7-day period.
If the property is damaged, but still liveable, then the rent should be reduced until the damage is repaired. There is no formula for the reduction in rent and will be by mutual agreement. If the tenant can stay in the property during the repair process 24hrs notice is required before any inspections or repairs are carried out. The insurance council of NZ has provided the following general advice: Property managers should be looking to minimise further damage to the property where they can. However, you should not be making any emergency repairs unless it is safe to do, such as having an electrician check the electricity at the property before turning it on. Specifically, do not start non-essential repairs without having your insurance company approve the repairs. Should essential services require repair, such as water, electricity, gas and sewerage, keep copies of all invoices, take photos of any damage, and contact your insurer as soon as possible. Photograph and put aside any water or mud-damaged goods that pose a health risk, such as saturated carpets, soft furnishings, or food.
Our team update
At Southland Real Estate Property Management continuing our professional development is high on the priority list. Annelise, Sammie and I headed up to Queenstown for the morning at the end of February to attend an industry discussion with eknows, looking at how we can do things better in 2023, what works well and what we need to improve, both personally and professionally.
Jude has also completed the NZQA Level 4 certificate in Property Management, with 3 of our 4 Property managers now gaining this qualification.
Our vacancy rate has dropped from 0.94% to just 0.46%, proving the demand for properties is there. We have added 9 new managements in the month of February with a few of our owners adding to their rental portfolios. Rent arrears are at 2.13% which is higher than our usual, but still below the NZ average.