Richard joined Goodwins in 2020 – peak COVID – after a successful stint in London as a residential sales and letting agent. He loves the idiosyncrasies of the New Zealand market – our fascination with property and the quirks of buying and renting in Auckland that so often bamboozle out-of-towners and new arrivals.
What were you doing in the UK, Richard?
RL: “I was working as a residential sales and leasing agent. Funnily enough, it was with a family business – much like Goodwins – called Gibson Lane, which was similar in many ways. Even in the personality of the owners and the people who worked there. I think family businesses attract a certain type of person – people who enjoy working beyond the structure of a corporate environment.”
What is one of the underappreciated aspects of business development?
RL: “Anyone can rent a house. But if you want a long-term tenant who is going to look after a property, you’ve got to match them with the right environment. What connections do they have in the area? Why do they want to move here? Do they want to be closer to their job? Or do they have another child on the way and need an extra bedroom? You’ve got to have a good sense of these dynamics.
The media leads the narrative on property, but people ‘on the street’ often have a more realistic perspective on the market. What’s going on?
RL: “Never trust a news headline, because media is driven by the need for attention. Times are tough, for sure. But the market is far more nuanced. Rents for what are regarded as affordable homes have remained high – a three-bedroom house for $700-$800 p/w is still in high demand.
Around 35 people will turn up for a Saturday viewing. But once you’re north of $900 p/w and particularly in the $1,500-$2,000 p/w bracket, demand has cooled. So I think you’ll see rent prices ease at this end of town.
There’s a tendency to think: ‘Well, I rented my house for $2,000 p/w during the 2021 America’s cup, so I should be getting more now.’ But a lot was going on in Auckland in 2021 and rental property was in high demand. A market appraisal will be a bit of an eye opener – much has changed since the America’s Cup was last in Auckland.”
A big chunk of demand for housing is driven by immigration. Which aspects of the local housing market surprise new arrivals?
RL: “Those new to the city sometimes struggle to get their heads around the market in Auckland. It seems chaotic to them. There’s very little that is like-for-like in our market, so it’s hard to get a handle on price. That’s the big difference, especially compared to the UK.
For example, a mortgage broker will ring the sales agent to ensure that they can legally justify the price for which the house is being sold. So, there’s less variability and as an agent must justify a price there is more transparency during the initial part of the process. Rents, too, are confusing, because prices vary widely between suburbs.
And then there’s zoning, and proximity to transport and the beach and so forth. There are a lot of Auckland idiosyncrasies. Generally, Kiwis are obsessed with property prices and interest rates – far more so than some other countries. I think it’s because property has been the primary vehicle for wealth creation for so many kiwi families. Property has always been a sure bet – unlike the country’s comparatively poor performing share market.”
What advice do you have for renters who are struggling to get a house?
RL: “Line up your referees and make sure they respond when we call. If we don’t get an answer, we’ll leave a voicemail, text and e-mail. We will try everything we can. It’s the most time-consuming part of this job – and why people often miss out. You can be great prospective tenants, but if we can’t get hold of your referees then we can’t offer you the house. We must do our due diligence.”
What sort of property would be high on your list if you were looking to buy an investment property in Auckland?
RL: “A three-bedroom ‘healthy homes compliant’ house is always going to be a good fit – you’ll always find tenants. Plus, land appreciates whereas buildings not as much – so something with a bit of land. Which is why apartments need extra scrutiny. The body corp fees in New Zealand are steep compared to some countries.
And then we’re still feeling the effects of the leaky homes debacle and lurking costs of deferred maintenance. Owners simply can’t pass on those costs to tenants. I’d also look for a home close to a train station. People are starting to feel quite positive about trains. They also realise that the future is public transport – its going to get progressively harder to travel by car into the city.”
Don’t always believe what you read in the news. The reality is often more nuanced. Contact Richard on 021 278 0375 for a street-level view of the market.
