The following are excerpts from Kristin Sutherland’s report to the Auckland Property Investors’ Association 2022 Annual General Meeting.
What a tough year 2022 had been for everyone with COVID, and added on top of that, the challenges of being a property investor, with numerous legislative changes and now macro-economic pressures that impact property investment.
It feels to me that we are very much under siege from the current government but be assured that APIA and NZPIF are doing the best we can to get the government to hear our voice on all the proposed changes, but, to be honest, even when we do get them to hear us, they are not very good at listening to our point of view. Unfortunately, we are not making much headway with this government, but we will continue to make noise and advocate, and then educate you as soon as we can about changes as they happen.
In terms of the market itself, I think we can all agree that we are in changing times. I am very active in the market at the moment, and there has been a dramatic shift in the market from very much a sellers’ market, to a buyers’ market. If you are an investor that likes to buy counter-cyclically, maybe your time is coming. Get out there and have a look and see what is happening. … That is a lot of properties not selling at auction, to negotiate on later. I am sure that you are aware that the CCCFA changes implemented in Dec 2021, have had a massive impact on the ability of many buyers, both homeowners and investors to get finance, and this looks set to continue until sometime in July, when the legislation is changed to ease this a little, but not solve the problem. I encourage you to watch our APIA TV presentations on these issues if you are not up to date with the changes, or what you can do to minimize the impact on you and your investments. We work hard to make the right information available to you, at a time that is convenient to view it, and APIA TV plays a large role in this.
We also have the headwinds of inflation and rising interest rates. With respect to interest rates, I urge you to revisit your loans and ensure that you have the right spread of interest rates and terms to ensure that you are in a position to survive, cash-flow-wise, over the next few years. The NZPIF interest deducibility calculator may help you to work out your numbers on the removal of interest deductibility impact on your tax bill.
I attended a talk recently and it was about Gratitude and Breathing, now those of you that I have lost already to the little thought in your head saying ‘I don’t believe in that stuff ‘please bear with me. What I was reminded of during this session was that no matter how hard things are we can always find things to be grateful for, in fact, it is in times that things are hardest that we SHOULD find things that we are grateful for. I know that this current government likes to paint property investors as greedy people always looking for the loophole to make more money, but I am sure that for most of you here tonight that is not what your main focus is, or the reason you got into, or stay in property investment. So I would like to share with you 3 reasons why I am grateful to be a property investor –
I am grateful for the opportunity to provide a future for my children through property investment.
I am grateful that I have the opportunity to provide nice homes for my tenants.
I am grateful for the networks of investors, like yourselves, that support me in my investing journey, even when others don’t.
I am going to try and remember these points each time Labour implements a policy that negatively impacts property investors, or each time interest rates rise in the coming year. That is not to say that I won’t fight it in the first instance, as hard as I can to stop or restrict the negativity, but once it becomes law and I need to play by that rule, I will go back to the core reasons why I invest, and they still make sense and matter to me. I encourage you to do the same. It might make the current political and economic environment a little easier to swallow.
Finally, I thank our sponsors for supporting us this year, I am sure at times that was very hard to do, with your own challenges due to COVID to deal with and ours, we would not be here without you, so a sincere thanks from myself and APIA.
And you the members, thank you for your continued support of APIA and I hope that you continue to stick with us as we ride out the economic storm of the coming years together, because “alone we are strong, but together we are stronger.”
Kristin is the President of the Auckland Property Investors’ Association and has been in her role since 2020.