It has been way too long since the last NZPIF conference, but it was well worth the wait. Despite problematic new tax rules and a falling market, there was an upbeat mood among delegates that was infectious. Even the AGM was fun!

We were first reminded that although the market had peaked and was now in a decline phase, this had happened many times before. Property prices move in cycles, affected by many factors. Two lead indicators for property price are sales volumes and the number of days to sell. These are stats that are worth watching to gain an idea of where general market prices may go.

This period of the property cycle also presents good buying opportunities. As Warren Buffet says: “Be fearful when others are greedy and greedy when others are fearful”; essentially a counter cyclical mindset to take potential opportunities while competition from other buyers is low.

Tony Alexander provided excellent insights, as usual, saying his interpretation of macroeconomic factors indicates the market will start to turn some time towards the end of next year. This gives an indication of how long good buying opportunities will remain and also gave confidence that the property cycle will turn positive again at some point in the future.

The Tax Debate

The removal of interest deductions was a big talking point. Delegates were taken through the NZPIF interest deduction calculator, available on the NZPIF website, to identify how properties will be affected and what steps can be taken to counter this unnecessary tax increase.

Accountant Mark Withers explained details of interest deductibility changes and opportunities the rules presented to maintain deductibility.

In addition, chasing tax deductibility through buying new rental property may not be the best strategy. One reason was that it will not be around forever. National spokesperson Chris Bishop told the conference the war on landlords had to stop and confirmed that if returned to government National would repeal what he called the tenant tax of interest deductibility as well as returning the bright-line test to two years. ACT also agree with this.

Another reason was that buying existing properties and adding value to them may still be a good strategy, even if mortgage interest isn’t tax deductible.

Heather Black followed this up by detailing the key concepts of a profitable property do-up and talked about examples of her renovations.

With these practical presentations to encourage us, we were then inspired by Mike Pero and what he has done to achieve his success.

Michael Boulgaris also shared his journey after injuring his neck at a horse event last year. It is incredible what he has endured and overcome, made all the more inspirational through the humorous way he told his story.

Expert Tips

Olly Newland gave his expert tips on commercial property, then gave a great answer to the question, “why do you keep investing given your age and success?” Olly shot back, “because it’s fun”.

Finally, I would like to thank all attendees for their positive attitude. I’d also like to thank sponsors, especially Opes Partners. The success of the conference was made possible by the incredible vision and organisational skills of Manawatu PIA president, Pauline Beissel, and her great team. Thank you all.