In the latest Eagle Eye Property Insights, Graeme Eagle explores SBS’s bold move to lure first-home buyers, the true value of property managers, and what longer property cycles could mean for the market.
SBS Bank have targeted first-home buyers in a bid to compete with the top four Aussie banks. SBS are offering a mouth-watering 3.99% fixed for one year. But it wasn’t just the interest rate that caught my attention. Along with a $2,000 cashback (which does have a three-year clawback), SBS will contribute $1,000 towards a home insurance policy and $1,000 towards a KiwiSaver plan. The big question is, will we see any of the NZ banks try to match this?
In my experience, the real value of using property managers is only seen when something goes wrong, such as having to evict a tenant or fill a vacancy. I hear a lot of people say they don’t want to pay the extra costs for a property manager. However, property investors working full-time can leverage a property manager’s time and expertise. More complex tenancy laws mean it’s becoming harder and harder to keep up to date. These days, tenants are a lot more informed, and one mistake could lead to a fine.
Using a property manager also puts a protective layer between you and the tenant for communications, so you are not taking those late-night phone calls to fix the leak in the toilet. Some other often-overlooked advantages of using a property manager include planning scheduled maintenance (such as winter chimney cleaning) and making constructive suggestions for property improvements.The length of the current and future property cycles may be longer than in previous cycles. Traditionally, property cycles in NZ have lasted 7–10 years depending on the state of the economy at the time and regional or capital city variations. We saw the last property cycle end in 2021 following an annual 15.8% increase in real house prices (adjusted for inflation). Based on previous timeframes, we are almost halfway through the current cycle, but the NZ median property price is still declining.
Note: The content provided above is for general information only and does not constitute personalised financial advice. Please consult a licensed financial adviser before making investment or lending decisions.