The Property Academy Podcast

In this episode, we discuss the concept of overcapitalisation, what it is and how you can avoid it. In simple terms, overcapitalisation is where you spend more money to renovate a property, but you get less out of the property than what you've spent. This applies to any dollar that you've spent on a property and not seen a return on that dollar (that is anywhere, where you have spent a dollar and...

In this episode, we reveal real aggregated data from the retirement plans of Opes Partners clients. This gives you the chance to peer behind the curtain and get a sense of how other Kiwis are planning for retirement.  Key figures include: The median desired retirement income is $100,000 The median age of a retirement planner (in the sample) is 41.5, with a median retirement age of 65 Given a...

In this episode, we discuss the BNZ's recently announced changes to its lending policy. These policies govern how much the retail bank is willing to lend on different property types.  Most interesting for property investors, the bank will only lend a maximum of 70% of a property's value for any investment property. This includes any properties that would have been exempt under the previous LV...

In this episode, we discuss how the property market is operating now that the country has come out of lockdown. This stems from a recent article Andrew provided comment for in The Press and for Stuff.co.nz ( read the article here ). We are seeing pent up demand coming onto the market, which likely stems from: a) the property market not being able to function during lockdown. 8 weeks worth of deman...

In this episode, we discuss how the property market performed during the Coronavirus-induced lockdown. This is based on data recently released by the Real Estate Institute of New Zealand.  As predicted, volumes massively dropped during April 2020, down just under 79% year on year. However that decrease is not spread evenly, Auckland's volumes, decreased just under 69% year on year. That is in...

In this episode, we discuss inequality and the difference between how different suburbs appreciate in value. Even if different suburbs appreciate at the same rate, if there were small differences in their initial starting values, one suburb can become more expensive than others within the same city.  This means that homeowners in one suburb can see their wealth increase at a much faster rate...

In this episode, we discuss how you can create a self-funding property portfolio. Generally, in property investment, there are two types of properties that you want to buy – capital growth properties that tend to grow in value quickly and yield properties that produce more cashflow.  The trouble for most New Zealanders is that to invest in property they need to borrow the entire purchase...

In this episode, we discuss 3 things you can do to prepare in case times get tough financially: Build up a 'mojo' or emergency savings accounts. Initially set this up with $2,000. Then, when you can, build it up to 3 months worth of expenses. This will give you added confidence that you can weather financial storms, and allows you to take more risk Get revolving credit accounts in place. These wil...

In this episode, we discuss what "Good Fundamentals" actually means. It's common to hear that you should buy properties in areas with 'good fundamentals', but often it's not defined what that actually means.  For us it means: high population growth tight supply high demand high average incomes low unemployment and a diversified economy We also walk through the data showing which of New Zealan...

In this episode, we discuss the tradeoff that is typically made between capital growth and cashflow (also known as yield) in property investment.  In particular, we deep dive into the reasons why yield properties tend to get lower capital growth and vice versa. We also mention our upcoming property investment webinar , which is happening on Tuesday at 7pm. If you'd like to attend, you can reg...

In this episode, we are once again joined by Darcy Ungaro from Ungaro and Co. and the NZ Everyday Investor Podcast. Here, we discuss how investor behaviour is changing. Falling interest rates are causing investors to look at higher risk assets in order to get a return on their investment. This decreases yields in general and forces all investors to move towards slightly riskier assets than they we...

In this episode, we are joined by Darcy Ungaro from the NZ Everyday Investor Podcast. Within the show we pick up on the trend where more New Zealanders are using mortgage brokers. ANZ has announced that almost 50% of their new lending is through mortgage brokers.  We discuss why this trend is occurring and how to pick a good mortgage broker.  If you are keen to listen to a recent NZ Ever...

In this episode, we are joined by Darcy Ungaro from Ungaro and Co and the NZ Everyday Investor Podcast to talk about whether it's easy or hard to get money from banks right now.  Darcy reveals that while banks are increasingly pushing mortgage applications through faster, lending institutions are still conservative – especially as incomes are reduced due to the Covid-19 shutdown.  I...

In this episode, we discuss the numbers you really should be looking at when you invest in property ... Return on Equity and Return on Cash.  When you invest in property there are two parts to your investment – the equity you initially put in, and then any cash you invest to top up the mortgage. It makes sense then to base your investments on these two factors, given that we each have a limit...

In this episode, we talk about what to look for when choosing a developer for an investment property. This is something close to our hearts as it is what Opes does day in and day out.  We also dig into some of the claims that particular developers make, particularly around the world population and the correlation with New Zealand house prices.  Finally, we mention our upcoming property i...

In this episode, we discuss the RBNZ's recently announced LVR changes and what they mean for property investors in New Zealand. We also discuss what a high LVR loan means for borrowers in terms of additional costs. For instance, often when a borrower takes on the lending of more than 80% of the value of a property, they will either pay an upfront fee ... or a higher interest rate. We also mention...

In this episode, we discuss how many properties New Zealand investors really own, and the distribution of those investors.  What we found is that in 2015: 104,357 investors owned just 1 property, which is 79.68% of all investors 22,914 investors owned between 2-5 properties, which is 17.5% of the total 2,455 investors owned between 6-20 properties, which is 1.87% of the total 457 investors ow...

In this episode, we discuss 5 reasons why the property market in New Zealand may not drop in value by as much as you would otherwise think. These reasons are: The drop in interest rates make it cheaper for homebuyers and investors to purchase property. Lower interest rates also decrease the return from term deposit, which encourage investors to seek yield in the property market First home buyers a...

In this episode, we discuss split banking and why you can get more money from the bank if you cheat it on it with another.  This is because when you have all your lending with one bank, they cross secure the assets and you can only borrow a maximum of 70% against the value of your investment properties. But, if you move that lending across to another bank, you're able to borrow up to 80% of t...

In this episode, we discuss 5 different strategies that you can use to pass the bank's servicing stress test. Whenever you apply for a mortgage from the bank, the institution will stress-test your application through different criteria.  If you don't have enough income to pass these stress tests, you can improve your position by decreasing your expenses ... not by spending less, but by restru...

In this episode, we discuss a new data source from QV that investors can use when considering investments in different areas.  While the tool can give broad insight into gross yields across multiple suburbs, we do question their usefulness when applied with a broad brush across the whole suburb. Better to use the additional features to dig down into the number of bedrooms and type of property...

In this episode, we discuss recently released data from the Real Estate Institute of New Zealand. This house price and volume data covers properties that settled in the month of March.  March 2020 showed strong house price growth across the country, with particularly promising growth in Auckland and Christchurch.  We also mentioned our property investment webinar, which is coming up this...

In this episode, we discuss a particular proportional property ownership model that is currently being promoted by a property investment company within New Zealand.  The model includes purchasing a residential property outright, without any debt – the investment divided into 12 equal shares and offered to investors. The benefit of this model is that an investor can get exposure to the pr...

In this episode, we discuss the Reserve Bank's recent announcement that it will scrap the Loan to Value Restrictions for a period of 12 months.  This will have a massive stimulatory effect on the property market as: investors will have more ability to borrow against their existing portfolios to buy more property. They'll also be able to purchase more property using that lending. We also discu...

In this episode, Andrew and Ed feature on the NZ Everyday Investor Podcast, which is hosted by Darcy Ungaro. Darcy recently asked us to come on the show to talk about forces for good and bad in the property market. In part 2 of the 2 part series, we talk about the forces for good, the things that could typically push property prices up on average. This includes LVR changes, interest rates, changes...