He’s no Nostradamus, but after his early predictions of 2018 he may well be Hamilton’s equivalent. Lodge City Rentals General Manager, David Kneebone, looks at what the new year will bring.
Did you ever hear the one about the music recording company that rejected the Beatles?
‘Decca Recording Co’ made one of the worst predictions the world has known with this incredible 1962 analysis of the soon-to-be biggest band in the world: “We don’t like their sound and guitar music is on the way out.”
Well, with the bar for predictions now set nice and low, allow me to entertain you with my special lens into the future.
Now, you’re going to have to trust me on this one, but I promise I made this list at the start of January, and these two were on it:
Now for some predictions that I have genuine knowledge and authority on:
I believe that Lodge City Rentals, and rental management companies in general, will see an increase in better rental stock as a result of the Healthy Homes Bill.
The Bill requires landlords to meet new heating and insulation standards and I think some property owners will struggle with that. That’s where our help, and expertise in property management, comes in. Click here for all you need to know about the Bill.
Not much change here. Hamilton’s population growth will remain consistent, with a continual demand for good quality rentals needed.
This one will have an effect on the building market, and in turn the rental property market. The cost of building materials has risen 25% in the past 10 years and there is a shortage of skilled tradespeople, which means those costs have increased too. More expensive to build means more expensive to buy.
If 2018 had a theme for property investors, it might be “uncertainty”. This year landlords are likely to be in for more regulatory change and increased costs. But, the softening of the market means savvy investors are already looking for potential opportunities, maximising their current portfolio and expecting rents to rise.
Property Investors magazine say 2018 is going to be the Year of the Yield – and I tend to agree, but this comes with a caveat.
It’s important to note that it’s different for every individual. Yield shows how much income has been returned from an investment based on initial cost, but it does not include capital gains in its calculation. For some, it’s a good idea to go for a higher yield but on a property that may require maintenance; others pay more for a lower yield which will pay dividends in the long run. It’s just what you can afford at the time.
Immigration has such a large impact on economic activity but the 2018 outlook is harder to predict than a Pakistani batting performance in New Zealand.
Immigration curbs will dramatically reduce the net inflow of people coming into New Zealand each year from its recent high of 74,000. This may lead to labour shortages in, for instance, the hospitality industry. Its effect on the housing market is still to be determined.
Immigration New Zealand believes more jobs will be created in New Zealand as a result of a decision to bring home much of the high-risk, high-value processing of visas currently done overseas. I’m going to withhold my prediction on this one. Much like I did throughout the cricket.
Whatever 2018 throws at us, we’re excited to step up to the challenge. And with 16 property managers, six support staff, a team of trusted contractors and a continued focus on protecting our landlords’ investments, Hamilton's largest property management company is ready to help you too.