King of property hangs up his hat
Sunday, 20 November 2022
Andrew King has been advocating on behalf of property investors for a quarter of a century, but the long-standing president of the New Zealand Property Investors Federation (NZPIF) has finally hung up his hat.
In a letter to members at the start of the month, he recounted some achievements: “We stopped capital gains taxes being introduced not once, not twice, but three times,” he wrote.
“We have continued to halt a rental property WOF and draconian rental freezes.”
Other highlights included supporting compulsory smoke alarms and insulation, and most of the Healthy Homes requirements, “while preventing ridiculously expensive suggestions”.
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Regarded to be amongst the best lobbyists in the country, King was personable, reasonable in his advocacy, and always had a factoid up his sleeve to throw against unfriendly policies (even if these factoids were often created by the NZPIF itself).
King is quite literally riding off into the sunset, spending the better part of the next three years on a motorcycle trip with his wife around North, Central and South America.
He said his decision to retire was not taken easily, and the timing made it more difficult, because he regarded the next election as the greatest reckoning for investors since capital gains taxes were proposed.
That was because of the Government’s policy to strip investors of their ability to deduct mortgage interest from rental incomes for tax purposes.
National have promised to reverse the change, but if Labour remained in power, King said a federation survey showed the policy could result in a fifth of investors being forced to sell-up.
King said his failure to convince the Government not to implement the policy was his greatest regret.
“It does feel a bit like unfulfilled business, but also, I think maybe we need someone new. I think I’ve done my time.”
That same survey found eight out of 10 members intended to increase rents to make up for the added tax.
“That’s good, if they can do that that’s fantastic because it means that one, they can keep their rental property, they don't sell at a loss, it means when they retire they aren’t going to be as big a burden on the state, and it means there’s more rental property for tenants to choose from,” he said.
“Unfortunately it does mean higher rental prices for the tenants, but at least they’ve got supply there, and it’s better than homelessness.”
He said the biggest changes he had seen in his career was a shift in sentiment to landlords regarding their tenants as customers, whom they provided a professional service for.
As homeownership shrunk to its lowest level since the 1950s, research shows the number of properties in the hands of investors grew 191% between 1986 and 2018, which was achieved by investors buying existing housing stock rather than through new builds.
But King said, in order to increase the supply of houses, “you don’t actually have to build a house'.
From his perspective, investors buying cheaper existing homes, of the type often bought by first-home buyers, allowed cashed-up baby boomers to build their own larger homes.
King said his proudest moment was helping encourage the Winter Energy Payment scheme.
”There were about 43,000 kids who ended up in hospital because they were living in cold, damp houses, and we were blamed basically,” he said.
“We did a survey, and we found even when our members were installing heat pumps the tenants weren’t turning them on. We raised that with the Otago medical school.”
That supported findings that energy poverty was occurring – in essence tenants without much money preferred not to spend what they had on heating.
“I came up with the idea, and I’m really proud of it actually, that the money wouldn’t go directly to the tenant because they’ve got a lot of pressure to spend it somewhere else.
“The idea was the money would go directly to the energy provider.”
“Phil Twyford was their spokesman on housing at the time and I mentioned it to him that I thought it was a good idea, so he expanded it.”
King believed house price falls would continue for at least another year.
He said buyers and sellers would know things were turning around when sales volumes went up and days to sell reduced.
When that happened, prices would likely start to rise again six months later.