property quarterly (july 2011)

In this issueCanterbury Earthquake Recovery Act

Bay of Plenty regional feature

Property market member survey

Data capture and iPads

Issue 2 • July 2011

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Vol 1, Issue 2, July 2011 Property Quarterly 1

ContentsExcellent conference David Clark ...................................................................................................................... 2

Legal updatesCanterbury Earthquake Recovery Act 2011 Kitty Lin ............................................................................................................................ 4North Shore City Council v Body Corporate Niven Prasad ................................................................................................................... 9

GeneralMitigate your risk Phillip Curnow ................................................................................................................ 7Property market member survey Ian Campbell and Ian Mitchell ................................................................................. 10Professional Pathways and quality assurance programmes Allan Smee ....................................................................................................................13Learning from the Christchurch earthquakes Rob Hawthorne ............................................................................................................15Chinese delegation visit PINZ Ian Campbell ................................................................................................................. 41Property Institute Conference wrap up and awards Jenny Houdalakis.........................................................................................................46

Regional feature Bay of PlentyIs the country falling apart? Kevin Allan ....................................................................................................................23The residential, lifestyle and commercial markets in the Bay of Plenty Alex Haden, Roger Hills and Len Green .................................................................27

New technologyData capture – iPads and why property valuers use them Glenn Hughes ...............................................................................................................32Business systems and software in valuation Steve Tucker ..................................................................................................................35Tips and tricks for using Excel spreadsheets Steve McNamara .........................................................................................................39

Letters to the Editor ...................................................................................................43

ProfileGary Garner ...................................................................................................................44

Publication Committee

Iain Gribble Donn Armstrong Peter O’Brien Bevan Fleming

Contact details

Jacklyn Hensch

Property Institute of New Zealand PO Box 11 380 Manners Street Central Wellington 6142

Phone: 04 384 7094 DDI: 04 382 7622 Email: [email protected]

Editor

Julian Bateson

Assitant Editor

Helen Greatrex

Bateson Publishing Limited PO Box 2002 Wellington Phone: 04 385 9705 Email: [email protected]

Publisher

Property Institute of New Zealand

Issue 2 • July 2011

Excellent conferenceThe 2011 annual conference of the Property Institute was an excellent event with a great turnout, excellent and varied content, and an entertaining and thought provoking dinner. Most of the survey responses were very complimentary and the suggestions and comments will help us improve in the coming years. Currently we are unsure what the format will be for 2012 because there is a Pan Pacific Conference in Melbourne in October 2012 which we should support. The

2013 conference will be a joint conference with API.

The successful conference was a great reward for Jenny Houdalakis (Events Manager) and the team. I marvel at the organisation and effort that goes into a conference of this size. Most organisations would employ external event management companies to stage such an event. The anxieties and doubts experienced in the weeks leading up to the conference have evaporated and have been replaced by a sense of achievement and pride.

Supportive membersThe Professional Pathways Programme and the Quality Assured Accreditation scheme were widely talked about over the two days. Most members were supportive, even suggesting that such a scheme was well overdue, but I did sense some underlying concerns about its implementation and possible burden on small practices. A comprehensive project plan is being established which will provide for member input and comment, as well as from stakeholders such as banks and insurance companies.

Graeme Henry’s address had little to do with property, although he did comment on our shared objective of ‘turning professionals into leaders’. However the organising committee justified his inclusion on the basis that the Rugby World Cup will have a material impact on all sections of the New Zealand economy. As a result of Graeme’s inclusion in the programme, the Property Institute has been invited to work with the players’ liaison team to provide guidance to the professional players on property and related matters. This association will provide some invaluable profile opportunities for the Property Institute.

AGMThe AGM highlighted that there are still issues that need to be addressed and I am hopeful the Council and the Board will work to resolve them. From a staff and management perspective, these issues

CEO Comment

2 Property Quarterly Vol 1, Issue 2, July 2011

direct resources and energy away from the outcomes we are working on. It is also evident that they have a negative impact on our membership. It is pleasing to see that new Property Institute President Phil Hinton, and Valuers Council President Nicki Bilbrough, have convened a working party to examine some of these issues.

The result of the proposed motions was rather surprising. I was expecting a close vote given the extent of emails circulating beforehand. However, I am pleased with the result and we can now now get on with delivering member benefits as well as addressing these issues in a timely manner.

Property Quarterly This is the second issue of the magazine Property Quarterly. The feedback from members to the first edition was positive so the pressure is on – from members and staff – to build on the good start. I have the advantage of reading many of the articles before publication and I am confident issue number two will be at least as good as the first.

The featured district this month is the Bay of Plenty. The contributors collectively provide a comprehensive coverage of the recent history and current issues facing the region. Kevin Allen’s article, for example, covers natural disasters which have afflicted the region and was written before the tragic and fatal land slip or debris fall in Ohope on 18 June.

Ian Campbell writes about the visit by representatives of the Qualification Registration Centre of the Ministry of Housing and Urban-Rural Development from the People’s Republic of China who visited the Property Institute in Auckland in May for the first time. I was fortunate to be present at this meeting which generated much goodwill between all those present. In some respects it was quite extraordinary. The Chinese were extremely surprised that an organisation with seven staff could provide its members with an exceptional facility such as its e-learning platform. In turn we were amazed at the sheer numbers of people they are charged with licensing.

Jessie Jiang from Sheldon’s, who organised the meeting and provided excellent interpretations, was also amazed at what we have developed. How many other members are out there who are unaware of this fantastic facility? All members now have access to e-learning by logging on to our website to obtain access. Members can access courses as guests via the member web page to view the content. See Allan Smee’s follow-up article for more information on e-learning, the Professional Pathways Programme and the Quality Assured Accreditation in this issue.

Christchurch continues to reel with the continuing aftershocks and earthquakes and we all feel for the

residents. Rob Hawthorne has provided an insightful article from inside the Christchurch City Council’s property asset management team. It expands on his presentation with Paul Mautz at the conference. It is a frank outline of the issues the Council was confronted with and how they are addressing the enormous tasks before them. The level of trust and confidence in the partnership with their facility managers, City Care, has obviously been advantageous even if they are a Council-owned company.

Simpson Grierson have again provided two interesting articles, one on a case involving a leaky building, and the other a commentary on the Canterbury Earthquake Recovery Act 2011.

Steve Tucker’s article looks at technology options for valuation firms using his company as a case study, and Steve McNamara has some tips on using Excel.

Business as usualPost-conference, business at national office returns to normal – usually. This year we turn our attention to a number of projects underway. Allan Smee, Professional Development Manager, is working diligently on more modules for the Professional Pathways Programme. The Quality Assured Accreditation project is underway and we are still hopeful of developing a platform to assist branches in completing pedestrian surveys.

During the year we developed a new website called www.propertyvoice.co.nz which promotes the services of our members to the public. This website attracts the public to our website with the use of Google advertisements as well as direct internet searches. Currently the website receives over 40,000 visits a month and it astounds me that members are not taking advantage of this advertising potential for their businesses. Frankly it is a no-brainer. Members should contact Jacklyn for more information on WebAds.

Retiring PresidentFinally, a few words about departing President, Ian Campbell. He has been a tireless crusader for the Property Institute and its members for the past two years, always full of ideas to promote the interests of the members. He has understood and respected the boundaries between governance and management. Ian willingly stepped in to assist me and national office whenever help was required and his advice has usually been on the money. He remains on the Board as he is the Auckland representative and as such is still available as a sounding board. I wish him well in his ‘retirement’ I also look forward to working with new President, Phil Hinton, over the next couple of years.

David Clark

CEO Comment



Canterbury Earthquake Recovery Act

Kitty Lin

Canterbury Earthquake Recovery Act 2011 Implications for property owners

The Canterbury Earthquake Recovery Act 2011 was passed by Parliament under urgency and came into force on 19 April 2011. The Act will help the recovery of the Canterbury region following the Christchurch earthquake in February. A high level recovery strategy, setting out where and when rebuilding will take place, is to be developed in the next nine months.

During this time, the Canterbury Earthquake Recovery Authority (CERA), a new government department led by a chief executive and given broad powers to implement the recovery strategy, will be operational. It will work alongside the Minister for Canterbury Earthquake Recovery for the next fi ve years. However for property professionals, the main question is how the Act affects people’s property rights. The most controversial powers granted by the Act are, without a doubt, the powers to compulsorily acquire land and to demolish buildings.

Acquisition of land – sections 52-59 Before looking at the chief executive and Minister’s powers to acquire land, there is an unusual provision in the Act worth paying attention to − section 52. This section allows the chief executive to require adjoining or adjacent property owners to work together for each other’s benefi t, which is uncommon in property law. An example of when the section may apply is if one building is severely damaged by the earthquake to the point where it may collapse and cause damage to a neighbouring building. The chief executive can then require the building owners to work together to demolish the building for their mutual benefi t, or instruct them to do other things as the chief executive sees fi t.

Following on from that, the chief executive can, in the name of the Crown,


acquire and deal with land and personal property as they see fit. For non-residential land in the CBD, the chief executive is not bound by the disposal provisions in the Public Works Act 1981 to offer the acquired land back to the person from whom it was acquired if the land is no longer needed.

Compulsory acquisitionAlternatively, the Minister can acquire land compulsorily by publishing a notice of intention to take land in the Gazette and notifying the public twice. The notice must be served on the owner of the land unless it is impracticable to do so. There is no right of objection to a notice of intention to take land. The land will vest in the Crown through a proclamation after the notice is given. The owner must vacate the premises, or the Minister can seek an order from the High Court for vacant possession of the acquired land.

Although the land owners can claim compensation for the acquisition of land under the Act, they must lodge a claim for compensation within two years of their land being taken. The definition of compensation in section 61 is very restricted. Owners can only be compensated for actual loss which is not reasonably expected to be insured and which does not arise from any regulatory change or cancellation of an existing right. In addition, the process for determining compensation is very subjective. The Minister determines whether any compensation will be paid and the extent of that compensation, although he is required to have regard to the current market value of the land.

Demolition of buildings – sections 38-42There are two different schemes under which buildings can be demolished under the Act, depending on whether a building is classified as a dangerous building or not. A dangerous building is defined as one which one or more of the following applies − • Intheordinarycourseofevents,islikelytocause

injury or death to persons or damage to other property• Intheeventoffire,islikelytocauseinjuryordeath

to persons because of fire hazard or occupancy of the building

• Inanearthquakewhichgeneratesshakingthatisless than a moderate earthquake, poses a risk that the building could collapse or otherwise cause injury or death to any person in the building

• Generallyposesariskthatotherpropertycouldcollapse or otherwise cause injury or death to any person in the building

• Aterritorialauthorityhasnotbeenabletoundertakean inspection to determine if the building is dangerous or not and the territorial authority or chief executive is required to exercise powers under sections 124 or 129 of the Building Act 2004.

The definition, and particularly the last element, is extraordinarily wide in addition to the definition of an earthquake-prone building in the Building Act 2004, although the apparent intention is to cover buildings weakened by the earthquake. There is uncertainty about the level of risk which is acceptable before a building is classified as a dangerous building. If it is any consolation to property owners, where a building is labelled a dangerous building without an inspection by the council, the council can only restrict entry, but cannot carry out work on the building.

The classification is particularly significant for property owners because a dangerous building can be demolished without compensation, whereas compensation for loss is available for the demolition of a non-dangerous building. In addition, the Act places an onerous financial burden on the owners of buildings which are classified as being dangerous. When a dangerous building is


is giving extraordinary powers to CERA to enable timely and effective decision-making in the process of rebuilding Christchurch.

Appeal rightsTo top it all off, rights of appeal are extremely limited under the Act. Individuals have the right to appeal against the Minister’s determination of compensation or against decisions under the Resource Management Act if a right of appeal exists there, but that is about as far as it goes.

On the bright side, the Minister and CERA are expected to involve and consult the community in the process of rebuilding Christchurch. Their actions will be closely scrutinised by the public despite the apparent absence of checks and balances on the exercise of their powers.

ConclusionIt is difficult to predict how a radical piece of legislation like the Canterbury Earthquake Recovery Act will operate in practical terms. The Act arms the Minister and CERA with unprecedented powers to rebuild the Canterbury region for the ‘greater good’, although arguably at the expense of individuals and businesses whose property rights may be taken away. It will be the topic of discussion for another day.

Kitty Lin is a commercial property solicitor for Simpson Grierson


demolished, the demolition costs can be recovered from the owners of that building. As with the acquisition of land, the Minister has the final say on any compensation available to affected property owners.

Other rights affectedBesides acquiring land and demolishing buildings, the chief executive can also require building owners to do any necessary work on buildings at their own costs. Where a building is suspected to have experienced structural change from the earthquakes, the chief executive can require the owners to carry out a full structural survey before allowing the building to be re-occupied.

To implement the recovery strategy, the chief executive has been given wide-ranging powers from acquiring land and demolishing buildings to closing roads (section 46) and subdividing land (section 43). Parliament clearly signals that the recovery strategy is to prevail over most property rights, as reflected in the extent of powers granted to CERA and the Minister.

When the Canterbury Earthquake Recovery Bill was first introduced into Parliament, the accompanying explanatory note stressed that the recovery plan under the scheme will prevail over other statutory plans. These include the Resource Management Act, Local Government Act, Land Transport Management Act and the Reserves and Wildlife Act to the extent that the recovery plan is inconsistent with them. The government

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Phillip Curnow

Mitigate your risk

All valuers, irrespective of age, status or experience are at risk of a complaint being laid with the Valuers Registration Board. This article takes a brief look at how a valuer may be subject to a complaint relating to standards and how this risk might be mitigated.

A complaint, once lodged, triggers an investigation, and this is often carried out by the Valuer General. A complaint can arise from any number of a valuer’s actions or inactions. A typical complaint will be in regard to a valuation or rental that an interested party, not necessarily the client, thinks is either too high or too low.

A common element in complaints is that the reader is presented with a report that may or may not have adequate information and a conclusion or valuation which has no linkage with this information. In short, the reader has no idea how the valuation or rental has been arrived at.

General

StandardsThe NZIV has made mandatory practice, for registered valuers from 1 October 2009, the following Australia and New Zealand valuation and property standards.• IVS1–Marketvaluebasisofvaluation• IVS2–Basesotherthanmarketvalue• IVS3–Valuationreporting• IVA1–Valuationforfinancialreporting• IVA2–Valuationforsecuredlendingpurposes• IVA3–Valuationofpublicsectorassetsforfinancialreporting• ANZPS1–Valuationsforcompensationacquisitions.

It is important for valuers to accept and realise that inadequate implementation of these standards may have implications. If standards are not adhered to within a valuation report a valuer can put themselves at risk of a complaint being laid.

What is the risk?This risk is linked to the code of ethics and more specifically to the section Professional Responsibility. Within this section two clauses are of particular note

Often valuers will comment −• IamtheexpertsowhyshouldIexplain?• ThemoredetailIprovidethemorethatcanbe

criticised by the client.• Weneverhadtodothisyearsago.

The answer to these comments is simple.Your professional body has agreed to these standards being either mandatory or best practice and that is the measurement the public will judge your reports and actions on. The standards are not to be feared or ignored. They can help provide a practice and reporting procedure which will minimise a valuer’s risk of being the subject of a complaint. In turn, if a complaint is lodged, it will help in a valuer’s defence.

Reasonable answerMany complaints, when investigated, are dismissed if a valuer has adopted accepted methods and has demonstrated that they have arrived at a reasonable valuation or rental conclusion. Your client and others who may rely on the report may not agree with your answer. However, if they can see that it has been reasonably arrived at, you are meeting your professional obligations to communicate.

At a board of inquiry hearing I recall a valuer’s response to cross examination by the defence lawyer. This was that the subject property was difficult to value, that none of the sales evidence was directly applicable, and a number of judgements had to be made. At the end of the valuer’s explanation the defence lawyer put to the valuer, ‘Then would it not have been useful to have spelled this outinthereport?’ This clearly demonstrates the value of a report which is as full as possible of relevant information.

Where to now?Understanding and applying standards is a growing obligation on valuers. The likelihood of further change to the standards in the next year or so is real. Understanding your obligations now will help in any future standards which the Property Institute adopts.

At the recent PINZ conference in Wellington, Iain Gillies, Strategic Property Manager for the NZTA, gave his view on the type of valuation report he would like to see. This was a report which told the story about the property, its environment and market influences in a logical fashion and led the reader through the valuation process to the conclusion.

This is not earth-shattering feedback, but more a wake-up call to valuers as a group. If your report is to be useful and effective to a client, together with minimising the risk of a complaint being laid, compliance with the standards makes both good business and professional sense.

Phillip Curnow, Valuers Registration Board

General

and they are often used if a disciplinary charge is laid against a valuer.

Clause 1.2 A member’s conduct shall at all times uphold the reputation of the Institute and the dignity of the profession and abide by all laws, statutes, regulations and rules relevant to their professional practice.

Clause 1.5A member shall exercise the utmost care and good faith to ensure the maintenance of the highest standards in the preparation of statements, reports and certificates, as these constitute one of the most valuable assets of the profession, being relied upon by clients, employers, shareholders, investors, creditors and the public.

Communicate to mitigate To mitigate risk, a valuer complying with the standards in a demonstrative manner and not just putting in a compliance statement, may have some defence to a charge that the code of ethics have not been complied with. To what extent is it prudent to comply with the standards to mitigate the risk of a complaint to the Valuers Registration Board?Theshortansweristofullycomply.

There will be few valuers who are fully conversant with the standards and able to apply them. What a valuer needs to do is demonstrate that they are complying with best possible practice, adhering to applicable standards and if they are not providing an explanation, why there is a departure from the standards. A departure from the standards can arise for various reasons. One of the most common will be an agreed reporting format for a particular client which may not contain some elements normally found in a report.

Useful leafletThe standards manual does not have an easy layout for reading. To help in using the standards, the Property Institute has produced a colour leaflet which is very helpful and shows all the standards and guidance notes. This can be found on the PINZ website, following the online learning section. The introduction to the International Valuation Standards states −

‘Of equal importance to the work of valuers is clear communication of the results of the valuation and an understanding of how those results have been obtained.’

ThisiselaboratedoninIVS3–ValuationReporting5.1.8 which states

‘Include a description of the information and data examined, the market analysis performed, the valuation approaches and procedures followed, and the reasoning that supports the analyses, opinions, and conclusions in the report.’


Niven Prasad

Council’s liability for negligence in a mixed commercial/residential use building North Shore City Council v Body Corporate 207624

A local authority owes a duty to residential property owners to exercise reasonable care and skill when carrying out inspection and approval functions during construction. The local authority is liable for loss or damage caused by a breach of that duty. For mixed commercial-residential buildings, the Court of Appeal has recently ruled in North Shore City Council v Body Corporate 207624 [2011] NZCA 164 that where the essential character of a building as a whole is commercial, there is no such duty of care owed by a local authority to owners of any incidental residential components in that building.

Appeal and cross-appealThe case concerned an appeal and a cross-appeal from a High Court decision relating to the Spencer on Byron Hotel building on Auckland’s North Shore. Significantly, the hotel, found to be a leaky building, comprised 249 units used commercially by a hotel company holding a 10-year lease, and six units used as residential apartments. Hotel unit owners made up one group of plaintiffs and the apartment owners another.

In relation to the body corporate and the hotel unit owners, the High Court struck out their claims for negligence and negligent mis-statement. Those parties appealed that finding.

Cross-appeal allowedIn relation to the apartment owners, the High Court refused to strike out their claim in negligence, stating that there may be an arguable case. The council cross-appealed against that finding. The Court of Appeal was unanimous in dismissing the appeals by the hotel unit owners but disagreed on the council’s cross-appeal. By a two-to-one majority the council’s cross-appeal was allowed.

The majority of the Court held that, given the integrated nature of the building and the indivisibility of the watertightness issues affecting the entire building, it would not be fair, just and reasonable to impose a duty of care on the council solely in respect of the residential component. Harrison J in the minority thought the focus on the intended use of a building should be on the component properties themselves when a mixed-use structure is involved.

Legal update

The Hamlin line of authority formed the basis of the reasoning in the case. That line of authority began with the case of Invercargill City Council v Hamlin [1996] 1 NZLR 513. Recently, the Supreme Court reaffirmed the principles from Hamlin in North Shore City Council v Body Corporate 188529 (Sunset Terraces) [2010] NZSC 158.

The Supreme Court decision in Sunset Terraces has put it beyond doubt that the Hamlin duty of care is −1) Owed to owners of premises intended for use as a

home2) That intended use is established on basis of plans

lodged with the council3) The duty is not owed to owners of commercial

premises.For mixed-use developments, the North Shore City

Council v Body Corporate 207624 case is important in showing that the courts have taken an all or nothing approach when it comes to finding a duty of care owed by a local authority to owners of units. The presence of the six apartments did not convert the essential character of a hotel, built for commercial purposes, into a residential complex. In the words of counsel for the council, ‘the apartment tail should not wag the hotel dog’.

It is worth noting that the majority of the Court left it open to say that if the residential component is a substantial component in its own right and more than incidental to the commercial component, it is still possible that the Hamlin duty may be imposed.

Niven Prasad is a commercial property solicitor for Simpson Grierson



Ian Campbell and Ian Mitchell

Property market member survey

A recent survey of Property Institute members working within the rural sector has revealed that they may be seeing the beginning of a rural recovery. Indicators show that, compared with other sectors over the last six months, positive sentiment towards rural property is being experienced.

During May 2011 the Property Institute six-monthly survey was conducted across 200 members working within the commercial, industrial, residential and rural sectors. Professionals were asked to express their views on the economy and to provide a snapshot of the property sector they work within, answering set questions which covered demand and supply, rentals and values. Once received, the results of the survey were then compared against the previous results collated in November 2010.

Positive trendThe results show that around 64 per cent of members operating in the rural sector expected to see an improvement over the next six months, a positive trend seen against the last survey. If this trend were to continue, any positive signal in the rural sector would obviously be an important indicator for the economy. The increase seen in rural property demand may also tend to indicate that a correction in rural property values is currently underway.

The results have been presented in table and summary form. A further survey will be completed later this year in November. This will be to again check and determine if the current trends seen here are continuing and to detect other major movements across each sector.

Member survey

Member survey

HighlightsResidential sector

59 per cent say that •the market conditions would remain unchanged over the next six months 53 per cent expect that •residential demand will remain unchanged at current levels, with 38 per cent indicating purchaser demand to increase 68 per cent expect that leasing demand will remain •unchanged, with 26 per cent expecting lease demand to increase 66 per cent expect owner-occupier demand to remain •at current levels 53 per cent expect property investor demand to •remain unchanged 51 per cent expect current residential supply to •remain unchanged 60 per cent expect rent for residential property to •remain unchanged70 per cent expect the value of residential properties •within the sector to remain unchanged.

Commercial property sector

55 per cent advised •that the market conditions within the sector would remain unchanged 70 per cent expect that •interest rates will remain unchanged over the next six months63 per cent expect purchase demand will remain •unchanged at current levels 54 per cent expect that commercial leasing demand •will remain unchanged 59 per cent expect owner-occupier demand to remain •at current levels48 per cent expect commercial property investor •demand to remain unchanged 43 per cent believe that the supply of commercial •property for sale or lease will increase, with 47 per cent expecting to see current supply remain unchanged

Residential sector Commercial sector Industrial sector Rural sector

Survey question Nov 2010 May 2011 Nov 2010 May 2011 Nov 2010 May 2011 Nov 2010 May 2011Overall market conditions over the next 6 month period?

Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged Improve

National economy over the next 6 month period?

Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged or improve

Unchanged Unchanged or improve

Interest rates for the next 6 month period?

Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged

Demand for purchasing property over the next 6 month period?

Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged Increase

Demand for leasing property over the next 6 month period?


Demand for owner occupiers over the next 6 month period?


Demand for investment property over the next 6 month period?


Supply for property for sale or lease over the next 6 month period?

Increase Unchanged Unchanged or increase

Unchanged Unchanged Unchanged Increase Increase

Rental rates over the next 6 month period?


Value of property over the next 6 month period?

Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged or increase


52 per cent expect commercial property rentals within •their area to remain unchanged 57 per cent expect the value of properties within the •commercial sector to remain unchanged, with 23 per cent expecting a decrease in property value.

Industrial property sector 53 per cent advised •that the market conditions within the industry sector would remain unchanged 65 per cent expect •interest rates will remain unchanged 53 per cent expect that demand will remain •unchanged at current levels, with 35 per cent indicating purchase demand to increase47 per cent expect that industrial leasing demand will •remain unchanged over the next six months, with 30 per cent expecting demand to increase 65 per cent expect owner-occupier demand to remain •at current levels, with 53 per cent expecting industrial property investor demand to remain unchanged 63 per cent believe that the supply of industrial •property for sale or lease will remain unchanged, with 31 per cent expecting to see supply increase70 per cent expect industrial rentals within their area •to remain unchanged, with 18 per cent expecting an increase in rents41 per cent expect the value of industrial properties •to remain unchanged, with 29 per cent expecting a decrease in property value with the same number expecting values to improve.

Rural property sector 28 per cent advised •that the market conditions within the rural property sector would remain unchanged over the next six months, with 64 per cent expecting the sector to improve 48 per cent believe that the national economy will •remain unchanged, with 44 per cent predicting the economy to improve72 per cent expect that interest rates will remain •unchanged over the next six months 46 per cent expect rural purchase demand will remain •unchanged at current levels, with around 54 per cent indicating rural purchaser demand to increase over the next six months54 per cent expect that leasing demand will increase •over the next six months, with 42 per cent expecting demand to remain unchanged 59 per cent expect owner-occupier demand to remain •at current levels, with 54 per cent expecting rural property investor demand to increase 54 per cent believe that the supply of rural property •for sale or lease will increase, with 29 per cent expecting to that current supply remain unchanged58 per cent expect rural property rentals within their •area to remain unchanged, with 42 per cent expecting an increase in rent41 per cent expect the value of properties within the •rural sector to remain unchanged, with 50 per cent expecting property values to improve.

Member survey



Allan Smee

Professional Pathways and Quality Assurance programmes

General

Professional Pathways programmeIn the first issue of Property Quarterly we introduced the Professional Pathways education programme. Professional Pathways is the means by which graduate and provisional members achieve full membership of the Property Institute of New Zealand, and the process by which all members become a registered professional in different professional communities.

The programme consists of three levels of modules. The first level comprises the compulsory core modules which will be mandatory for someone to become a member of the Property Institute. Level 2 and Level 3 modules will be determined by each professional community and will be based around a series of relevant competencies. You can read the full information about this on the web site.

Most of the core modules are now available on the e-learning website www.propertyelearning.co.nz for review of the material, and the full assessment can be completed for the professional ethics, professional risk management and property law modules. You can familiarise yourself with the content of the module by logging in as a guest using the default password available on the website. To complete the assessment and receive your CPD points you will need to pay the enrolment fee online.

Encouraging responseWe have had on overwhelmingly positive reception to Professional Pathways from main stakeholders in the industry. Many members have now completed one or more of the core modules, and the feedback has been encouraging and constructive.

The implementation programme for Professional Pathways will be

General

staggered. Current indications are that new members applying for registration in a professional community excluding property valuation after the following dates will needtomeetthespecifiedcriteria–

After 1 December 2011 − Core modules will need to •be completedAfter June 2012 − Level 2 modules will need to be •completedAfter December 2012 − Level 3 modules will need to •be completed.Registration for property valuation will continue

with the current registration process through the Valuers Registration Board (VRB). The modules have been designed to help graduates achieve their registration in this community and have been fully endorsed by the VRB.

Quality assurance programmeFollowing registration, members will be able to become accredited as Quality Assured. This recognition will be possible through the launch of the Quality Assured Accreditation Programme recently announced by the Property Institute. The purpose of the programme is to ensure consistently high standards for all registered property professionals by appropriate education, operational efficiency and a quality review process.

While registration confirms the required standards at the point when a member joins the Property Institute, the quality assurance programme will ensure that those standards are consistently available throughout the career of a member, from registration to retirement. Clients can therefore be assured of professionalism and consistently high standards when they use a quality assured property professional.

Voluntary schemeThe quality assurance programme will be a voluntary scheme available to members who are registered in a professional community and are committed to high standards in the industry. It will build on the already existing internationally recognised standards and ethics of the Property Institute.

The programme will be available to both firms and individual registered members, implemented under existing valuation rules and comply with the Valuers Act 1948. The programme will be fully transparent with a directory of quality assured property professionals and firms published on the internet.

The focus of the programme will be on business improvement. By applying best practice to individual circumstances and providing mentoring support, we will enable the operational efficiency of accredited firms and individuals. We want to work with members to ensure consistently high standards.

An independent quality assurance panel will be

established to set and monitor levels of compliance and to address any issues raised by stakeholders or others. Quality assurance reviews of reports and business practices will be conducted. If any issues or gaps are identified by the panel, then they will advise members of the issues and agree measures to lift the member to the required standard.

Annual accreditationAccreditation will be granted annually, and may be removed if an individual or firm repeatedly fails to address the issues that have been raised in order to meet the required standards. The quality assurance panel will document and track any issues received from stakeholders and the results will be made available to appropriate parties.

The quality assurance programme is entirely independent of the VRB, and therefore any complaints received against a Registered Valuer will be referred to the VRB via the Professional Practices Committee in accordance with the provisions of the Act. In recognition of feedback from our key clients, the quality assured panel will manage this complaints process on behalf of them.

Best practice proceduresTo achieve quality assurance accreditation, a firm will need to demonstrate they have best practice procedures in place relating to their business administration and conduct of business. To achieve compliance in business administration, quality assured firms will have to demonstrate that they undertake only appropriate advertising and financial administration. They must also have suitable arrangements in place to cover the incapacity or death of a sole practitioner.

In their conduct of business, a quality assured firm will at all times act with integrity and avoid conflicts of interest. They will be able to demonstrate their competence, standards of service and the security of clients’ files. Quality assured firms will have appropriate complaints handling procedures in place, adequate insurance cover and a commitment to the continuing professional development of their people. By contrast, the types of compliance required for an individual to become accredited as quality assured will include elements such as ethical behaviour, competence, service standards and a commitment to continuing professional development.

The detailed components of the quality assurance programme are currently being defined and a steering committee has been established to manage the process. Feedback from our members will be taken into account, and we encourage you to become involved and have your say about the programme. Regular updates will be provided in the weekly newsletter.



Rob Hawthorne

Learning from the Christchurch earthquakes

The dust has literally not yet settled on the face of Christchurch following the devastation wrought by the earthquakes in September 2010 and February this year, together with the myriad of aftershocks. The implications of these earthquakes are only now beginning to be fully appreciated. Much has already been written. The learning that will come for those involved is likely to fuel many articles and research projects over the coming years.

Learning from earthquakes

This article expresses the observations and views of one property professional working in the very challenging and often chaotic arena of post-earthquake Christchurch. It is fair to say that the contribution and significance of property within our social and cultural worlds and in our economy has never been so starkly brought into focus.

Property professionals have been at the forefront of both the immediate recovery and, more importantly, in the looming challenge of re-investment in the fabric of our society. As tragic and painful as the earthquakes have been, it also presents unique opportunities for the city to celebrate its heritage and identity, build on its strengths, and resolve some of the issues that have plagued the city for decades.

Life – but not as we know itThe initial phase of the emergency response in both significant quakes was under the guidance and direction of Civil Defence. This involved some of the council’s property team being seconded to Civil Defence, and to that extent the Christchurch City Council (CCC) as a property owner had some modest advantage over others in knowing what was happening. As for other property owners and managers, a large frustration in the early phases of the earthquakes was the lack of information or guidance on what could or could not be done. This was in particular for the central business district (CBD), with difficulty

obtaining access to many properties to clarify and resolve issues.

The world as we had all known it was tipped on its head and few of the processes we were accustomed to worked. In particular the role of Civil Defence, and now the Canterbury Earthquake Recovery Authority (CERA), has superseded normal decision-making processes. This has required high levels of adaptability by landlords, tenants and organisations to cope and respond.

For most businesses and property owners, the lack of existence or adequacy of business continuance planning showed they were hugely unprepared for a large-scale disaster. In the future, risk assessment practices for all businesses are likely to give much more attention to the high impact low probability end of the risk scale. In fairness, the ferocity and level of damage in the CBD zone for this particular event would have stretched even the best of business continuance plans.

Ingredients for success in a crisisLife rarely crystallises moral decisions as pointedly as in a disaster. For property people, doing the right thing is not about what happens on the day. Landlords, governance and management have legal and moral duties of care for the safety and wellbeing of tenants, staff and customers. We must put people first, and this means being diligent in meeting and exceeding obligations in relation to the array of legislation such as Health & Safety and the Building Act.

None of us should ever be in the position of having knowingly contributed to someone losing their life or being maimed forever. However it is far too common for people to view such legislation as an annoying obstacle to business objectives or a challenge to get away with doing as little as possible. We all need to re-think our attitudes and behaviours when it comes to meeting these obligations, and understand that we may hold someone’s life in our hands as we weigh the costs and the benefits.

PreparationSo what are some of the other ingredients for success inacrisis?Preparationandmorepreparation.Giventhearray of potential major disasters and the huge number of unique situational factors that come into play, how can we effectivelyplanourresponse?

Detailed risk mitigation and business recovery plans have great merit, and in this regard others will learn from the earthquakes which will help us all. However, natural disasters are mostly a test of how well your business has invested in human capital and good business practices. Ask yourself some questions −• Do you have leaders able to hold people together and

inspirethecollectivestrengthoftheteam?• Isthecultureofyourorganisationcando?• Doyouknowyourbusinessinsideout?• What are your strengths and weaknesses and what

opportunities and threats exist as a result of the natural disaster?

• Are you alone as a business or have you developed partneringrelationships?

• Do you know enough about who your customers are andhowthedisasterwillhaveaffectedthem?

• Doyouhaveadequateinsurancecover?We all know the saying that a problem is just

an opportunity in disguise, but how many of us are adequatelypreparedandreadytoseizetheopportunity?Without question, time and effort spent developing a clear set of business tactics and strategies enables investors, financiers, staff, managers and governance to respond more cohesively and rationally in the event of a disaster and make faster and better decisions.

These are all facets that should be fundamental to your business practices, but they may prove critical when it comes to responding to and surviving a disaster.



The importance of informed proactive leadershipEarthquakes are quite simply damned scary. Fear is a great motivator, generating remarkable fight or flight responses. While it can save your life, fear can also generate irrational behaviour and panic. The earthquake has seen many examples of tenants and staff running a mile, or financiers tightening their doors. Tenants, staff, financiers and customers are all looking at landlords, managers and governance for leadership. Failing to take ownership of the situation allows fear to grow and contributes to the equally damaging malaise of frustration. Time is of the essence.

As property people we know business is all about profit and risk. If fear and frustration depletes profit and value, then knowledge and confidence builds value. Knowledge and confidence comes from having done the hard work in your business. The best antidote for irrational fear is well-informed, clear, confident communication, strong relationships and proactive leadership.

In my view, landlords and large businesses have distinct corporate responsibility to show leadership, providing confidence across a community over the short, medium and long term. To be effective, leaders need to know what is happening, have a plan developed with clear, well thought through priorities, and show good communication skills. Demonstrations of such informed effective decision making can prove powerful in galvanising a recovery.

The Council’s experience The Christchurch City Council, like most other businesses and organisations, was simply not prepared for the scale of the February earthquake. We did, however, have something of a trial run with the September earthquake and as result had some initiatives and thinking underway that proved useful.

The Council has a large property portfolio worth in excess of $750 million before the earthquakes. It includes a significant social housing portfolio, along with hundreds of operational buildings such as the art gallery, libraries, community centres, aquatic and sports facilities and parking buildings. It also has a network of service centres and civic spaces, along with corporate office accommodation, including the recently completed $115 million civic headquarters. It also has a large number of commercial tenancies, including many in heritage buildings that were badly affected by the earthquake.

OwnershipWhile the primary reason for ownership is invariably tied to the well-being of Christchurch’s citizens, the specifics of each individual property are associated with the relevant activity or service. These span over 20 business streams,

each having a mix of business objectives. Most of these are not targeted on profit as such, but should ultimately bring value for money.

The titular ownership of these properties sits with each of these activity groups. However, the asset management functions are carried out by several corporate or shared service property teams. The property consultancy team are responsible for acquisition and disposal, leasing and non-housing tenant management. I am in the property asset management team with a staff of five and we have two main functions

First function• Develop and manage the asset management system for

all CCC properties • Assess and evaluate the condition and suitability

of CCC properties to support the various business activities

• Develop and maintain asset management plans for each activity

• Develop a tactical works programme spanning the life of the asset.

Second function• Responsible for overseeing the deployment and

management of the annual works programme and budget

• Manage day-to-day reactive works and an outsourced maintenance and renewal contract.

High level objectives Following the September earthquake the property asset management team (PAMT) were required to coordinate the Council’s immediate response in relation to its own properties, managing the insurance claim and the associated remediation strategy. It established a high level objective for the portfolio, summarised as ‘return all Council-owned buildings to full operation’ where possible. This was underpinned by five supporting objectives −• Support the corporate response to the emergency• Assess all Council owned buildings and return all

buildings with modest damage to full operation as soon as possible

• Ensure all insurance accountabilities are met to promote and protect the financial and service position

• Establish a revised repair and renewal programme for facilities and buildings incorporating the insurance work

• Identify and evaluate opportunities for the business.

InformationWithout question, after the earthquakes information was paramount. The Council’s first step was to identify the situation and immediate options. Critical to this was the partnering relationship with City Care who teamed up



arose getting up-to-date information on the status of Council properties inspected by Civil Defence’s rapid inspection process. The social housing portfolio caters to a tenant mix of some of the most vulnerable citizens in the city.

An approach to Civil Defence was made to accredit our own contracted engineers for the rapid assessment process. This meant we could combine the rapid inspection with a more detailed structural assessment. Social housing was identified as a priority, and we coordinated teams comprising an engineer, a City Care representative and tenant officer to assess each of the 2,649 housing units.

Where only parts of a building were damaged, or only modest works were required to move a building from red to yellow or yellow to green, City Care carried


with engineers to inspect properties and supply quality information.

This allowed PAMT and the various business units involved to consider options and how they affected stakeholders in the short, medium and long term. Where possible, effort was made to consult with stakeholders. They can at times surprise you with alternative solutions.

Finally, it is important to make decisions and make it happen. Act firmly but with compassion and consideration. Critical to this is a clear understanding of the delegated authority. This may be as an internal decision making protocol or externally with insurance companies and financiers.

A corporate response to the emergencyThe Council’s headquarters accommodated approximately 1,200 staff over six storeys and 23,000 square metres. All staff were successfully evacuated from the building during the February earthquake. Although the buildings suffered relatively moderate damage in both quakes, a significant proportion of this related to the plasterboard stairwell linings which compromised the fire cells for evacuation purposes. Repairing this was time-consuming.

Following the February earthquake it was clear we had to ensure that staff had a safe work place and attract them back to the building. We needed to undertake very extensive structural and geotechnical assessments and to address all the areas that did not perform well in the earthquake. The assessments are complex and intrusive, requiring significant make good work as part of the insurance process, and it was clear we would be out of the building for a long period of time.

Accommodating the needs of over 1,500 staff displaced by the earthquake has proved to be a big challenge. It has required solutions which include lots of staff sharing desks, phones and computers, as well as many staff operating from home on alternate days. Large areas of work activity were suspended and many staff were seconded to quite different tasks. This in itself has kept the corporate accommodation challenge changing on a weekly basis as needs alter.

Assessing the damageOne of the first tasks was to identify and have assessed properties which could be used for Civil Defence purposes and other staff carrying out the recovery effort. This involved engineers, contractors and technicians assessing the suitability of various properties, mostly in the less affected north west part of the city. Over 500 staff were relocated to temporary premises by the end of March 2011.

Following the September earthquake difficulties

Red placard/status meansIt is unsafe to be near or in the building:

• RiskofinjuryorpartialcollapsewhenthebuildingoradjacentbuildingissubjecttoNZS1170constructiontypeloadsorfromaftershocks

• NobodymayenterthebuildingwithoutauthorisationfromtheCouncil.

Yellow placard/status means• Thereisriskassociatedwithentryintothebuilding

• ThereisriskofinjuryorpartialcollapsewhenthebuildingoradjacentbuildingissubjecttoNZS1170“serviceability”typeloadingorfroma“moderate”earthquake(one-thirdofnew-builddesigngroundshaking)

• Accesstothebuildingisrestrictedasdescribedontheplacard.

• Businessesmaynottrade.

Green placard/status meansItissafetooccupyallpartsofthebuilding:

• ThereisnoriskofinjuryorpartialcollapsewhenthebuildingoradjacentbuildingissubjecttoNZS1170designtypeloadingorfromamoderateearthquake(one-thirdofnew-builddesigngroundshaking)

• Greenstatusdoes not exempt the owner / landlord from any requirements of the 2004 Building Act(i.e.dangerous,insanitaryorearthquake-pronebuildings).

Changing the status of a building from red to yellowSubmitareporttotheCouncilwhichexplainsthatthebuildingfallsintotheyellowcategoryasdescribedabove:

• Thereporttoincludephotographsandaproducerstatementforanydesignedaspectsoftemporaryworks(PS1)

• Thereport(andPS1ifapplicable)mustbeendorsedbyanengineerwiththeCPEngqualification

• TheCouncilreservestherighttorequestapeerreview.


out work or installed barriers. This avoided a significant number of tenants being displaced. City Care also conducted other non-structural checks on behalf of the owner to ensure that the tenancy or property was safe to occupy. With complex buildings, this involved sub-contractors to assess systems such as lifts and liaison with inspectors to sign off the building before handing it over for occupation.

PrioritisationThe worst hit properties were prioritised and inspected in the first few weeks following the earthquake. Where tenants needed to be vacated, tenancy officers supported them in finding alternate or temporary accommodation. By mid to late March, virtually all the housing stock had been assessed and a relatively clear picture emerged of the scale and extent of damage.

Non-housing properties were also being assessed in parallel with the housing inspections, using the same process but without the support of a tenancy officer. A significant constraint on progress in handing over green stickered buildings to tenants or activity groups was the availability of specialist trades such as fire and suspended ceiling contractors. Other services at times could not be fully checked because power or water supply was compromised.

Owners’ responsibilitiesA common problem was with tenants or user groups entering buildings where they had been given green placards, but were still awaiting the full owner checks. An earthquake does not suspend the owner’s responsibilities under the Building Act or other legislation. However, few tenants or user groups appreciate these accountabilities.

Worse still were well-meaning community groups keen to help, entering buildings with yellow and even red placards. These were the same groups of lobby councillors and community board members who had experienced frustration at not having access, or who had offers turned down while we worked through a prioritised insurance and remediation process.

One of the lessons learned from the September earthquake was that with such as large group the potential downtime for our team in answering queries was very significant. Apart from large numbers of one-off inquiries we were also asked to provide four separate reports at different times of the month and to different people. The information was very similar, but all had different formats and criteria. Naturally people became frustrated as the reports said different things, either due to human error or the changes that often occurred on a daily basis.

Following the February earthquake we developed and strongly promoted the advantage of a weekly update. The summary table below incorporated a site-by-site update for the classification status, comments summarising

damage, what has been done to date and what is currently under action. A red marker denotes that the status or comment box has been updated from the previous week.

Scope for recoveryWhile many insurance companies and loss adjusters have been accused of delaying tactics to defer the payout dates for claims, our experience has been very positive. With contract rates and information management processes in place, the insurers and loss adjusters have worked collaboratively to support us in getting as many buildings back into service as soon as possible.

This shows both good intent as well as the benefit of an open and transparent approach, generating significant levels of trust and good faith. On significant sites a natural caution on the part of insurers has been exhibited that work was not being done which would effectively have to be repeated due to underlying problems with the ground or structure.

During the first inspection process our engineers completed Level 2 inspections which provided us with an indication of what damage had occurred, where in the building or on-site it was, and the severity of the damage. It also provided an indication of where more intrusive and comprehensive engineering assessments were likely to be required. On this basis, a rough order of costs was assessed and a classification applied based on the level of complexity of the building and damage. This formed prioritisation for both detailed engineering assessments and pricing of the remediation works.

Safe environmentWhere engineers were required, City Care provided on-site support for any work required to provide a safe environment for the engineers to complete their inspections. The focus of assessments moved relatively quickly from mapping the extent of the damage to better understanding the structural integrity of the building and site. Increasingly questions relating to ground conditions and the appropriateness of repairs came to the fore with both insurers and our own thinking about the longer-term implications for the various portfolios. This was in contrast to the increasing pressure from the public and business units in relation to getting the city back to some semblance of normality and preserving jobs associated with badly damaged buildings.

Where limited structural damage had occurred, or where engineers had detailed the remedial work for structures, the full scope of work and cost estimates were required by insurers for each building or site. To accelerate the approval process five teams were formed comprising a loss adjuster and a City Care project manager, with relevant specialist contractors pulled in where required.

With such a large number of sites, this approach was critical to progress the work in a timely way. A scoping



document and plan of each building, with damage marked up, was presented back for approval and formal sign-off by insurers. For most projects, the insurance sign-off has been speedy and pragmatic, resulting in a significant number of sites being remediated and back to full service. Larger jobs, or where options exist for remediation, have required more concerted effort to resolve the best path forward.

As time moved on, the focus moved away from just the status of the buildings on to how we were progressing the remediation work. To help business managers and others, a graphic representation was also developed to show at a glance progress in the remediation process mapped against the broad classifications status.

When is the budget not the budget? Following the first earthquake, it became apparent that the scale of damage across Council infrastructure was significant. Much of this was not covered by insurance, and a potential budget blow-out was therefore probable along with significant rates increases. With residents already stressed in their personal lives, the executive team and politicians agreed to minimise the effect by significantly cutting half the $100 million annual capital budget. This involved a prioritisation exercise with each of the business units and a recalibration of the 10-year works programme.

The situation following the February earthquake was far worse, although it became evident that some facilities were beyond repair and as such released operational and capital funds for a number of years. It was also evident that significant funds would be available from central government, although the extent of this was and is still difficult to quantify. Existing budgets and works programmes over the next few years were cut dramatically.

It was clear that a second recalibration of the 10-year works programme was required and a close look at prioritising the spend was needed. In normal circumstances, spend that protects the physical asset is preferable as this generally reduces future spend remediating damage from the elements or prolonged wear and tear. Spend motivated by aesthetics considerations can add value to the business operation, but is subject to a

less certain payback. Most of the cut-backs have therefore been around aesthetic treatments.

However, where insurance work resulted in a substantial but not complete renewal of an area, it became apparent that for example the requirement for scaffolding or other situations where economies of scale occurred could generate potential savings. This tended to focus on works that were already planned to occur within the next few years.

Seize the dayThe scale of the damage and disruption caused by the earthquakes can easily invoke a ‘possum in the headlights’ response. This is particularly so in relation to decisions about remediation plans. By far the easiest course of action is to just accept the insurance approved repair, especially where significant pressure exists to get services up and running.

In some circumstances significant opportunities exist to address long-seated problems, either with the activity or the asset. Opportunities to enhance existing Council business objectives were identified. With this in mind, some sites were identified with existing performance issues. This may have been due to poor design, location, demand or capacity issues. Equally, opportunistic circumstances were identified that presented potential to improve the CCC business objectives by acquisition, disposal or redevelopment options or some type of partnership arrangement.

Current issues The CBDThe elephant in the room is the complex central city challenge. With few exceptions, the relative scale of destruction can probably best be compared with the World War II bombing of a European city. The red zone conundrum epitomises the wider challenges and frustrations experienced by the city.

Does CERA rush the demolition to expedite recover?Ifso,whatoftherightsofindividualbuildingowners and tenants and what errors are made on the way?If,however,theyareslowerbutmorecarefulandmethodical is the delay a further death knell to the viabilityofanyrecovery?

The delays getting access to significant areas may play out in quite diverse ways for different owners. Those that have badly damaged buildings likely to be demolished will ultimately benefit from either new buildings built to high engineering standards or payouts of some description.

In some respects those with less damage may face more challenges as most insurance companies did not contemplate a red zone with the associated departure or business failure of tenants. Legal battles are likely, and as we know the only certainty with these are the bank balances



of the legal fraternity. Once the cordon is removed and the buildings are repaired, the owners face the challenge of finding a tenant happy to go into an old building which may be well below the revised code.

Owners eligible for replacement or indemnity insurance payouts will have to decide whether to re-invest large sums of capital back into the central city or take these funds and invest elsewhere. With rental returns in the central city modest, and in places poor before the earthquakes, the likelihood is not good that future tenants will be confident enough to pay rentals commensurate with the capital being invested.

Regardless of this, the practical reality is that demolition and redevelopment will probably be piecemeal, leaving a patchwork of buildings and businesses. The list of questions and implications seems to grow longer each day.

Earthquake legislation and regulationThe playing field keeps tipping. Over the last 40 years awareness of geotechnical risk has progressively advanced and so have the demands of the building code. New technological knowledge has enabled smarter and safer building design which was responsible for saving lives during the earthquakes. It also presents a challenge for regulatory authorities about how to put into effect the retrospective upgrade of buildings in a timely way while maintaining a viable proposition for property owners. The February earthquake has brought into focus the importance of the Earthquake Prone Building (EPB) legislation, and the required policy development by New Zealand local authorities to implement it.

With numerous unknown faults under Canterbury recently discovered, the risk rating for Canterbury has been raised from Z22 to Z30 but still short of Wellington’s Z40 ranking. The effect of this is a substantial increase in seismic design loading of new buildings in the order of 30 per cent additional strength. This also applies to existing structures as the EPB policies generally relate to a relative standing against the current code.

In the case of Christchurch, any building under one-third of the code strength requires a definitive commitment to strengthen it over a period of time to at least two-thirds of the code. With the recent risk loading change, the relative code strength is closer to 50 per cent of the old code strength. Normally an assessment is triggered by certain building or resource consents or a change of use, or where the Council as a regulatory body suspects the building strength is low.

It is now evident that CERA is developing a detailed engineering evaluation procedure which will probably be applied to many buildings in the region. Information about what criteria will be used is still unclear. However, it is clearly going to be more rigorous than the Level 1 and Level 2 assessments that have been applied to date. While the proposed assessment is not the same as the EPB

assessment, it may in turn prompt the Council to require one, which as we have seen may now apply to a larger pool of properties.

The changes may slow up and alter the insurance, remediation planning and consenting sign-off for properties. If the claim is signed off early the owner may be caught with additional unbudgeted costs for the new standards. If these are included, alternate insurance based decisions may have pointed to a demolition and replacement as opposed to a repair.

These changes are clearly targeted on Christchurch. However, it is reasonable to assume they will trigger a review of how such policies may apply across the country. Some engineers have promoted a system similar to the building Warrant of Fitness focused on structures, advising the public of the status of the building in a bold coloured symbol. The intent being that tenants and the public vote withtheirfeet–rewardingthosethatupgradebuildingsand punishing those that do not.

Insurance Many insurance arguments are in progress which will only be resolved once major players complete legal challenges around the interpretation of insurance policy wording. The length of time required for this may be too late for the majority, but will be significant for the rest of the property sector for decades to come.

Regardless of the outcome of specific historic claims it is almost certain that the property sector is in for very challenging times as we come to terms with the insurance sector addressing the balance of risk within their policies. What is almost certain to happen is the advent of higher premiums and excesses. There are likely to be many other policy variations and considerations, however. As representatives of owners and tenants we will need to grapple with the risk equation these present for our clients.

Insurance is mainly about the transfer of risk from an individual or entity to another organisation − one who is better positioned to accommodate, balance or mitigate that risk. In fairness to the New Zealand insurance sector a key part of this issue is their ability to acquire re-insurance overseas which is necessary to spread their risk.

For corporate property owners there has been a trend by some brokerages to go for a blanket cover across a large portfolio. This puts weight on the inherent spread of risk that often exists when a mix of properties are insured under one cover. The dramatic disparity in the way individual buildings performed in the earthquake will probably see the focus of insurance cover being more squarely on individual buildings and their risk ranking. This is also likely to be a spotlight on the insurance valuations for all buildings, especially in regard to the allowances for demolition and the time provision for repair or rebuilding.



For large property owners with many buildings the historic approach has generally been to insure all buildings regardless of their criticality. Insurance companies may in the future exclude certain properties or modify the nature of cover available. Corporate property owners will need to understand and consider alternate options to manage the varying levels or types of insurance cover on offer. These may involve only insuring critical assets from an investment or service perspective. Other approaches may be to insure only assets the insurer defi nes as low risk for earthquakes or providing narrowed insurance cover excluding earthquake cover. For many corporate property owners there is a reasonable likelihood of being called on to self-insure in some respect.

Where to from here?This article has touched on only some of the experiences and challenges faced by property people working in Canterbury at the moment. Many groups have been formed to advocate and promote particular perspectives, often with vested interests. As expressed by Chris Stanley and Bevan Fleming, spokespersons for the Canterbury/Westland Branch PINZ, what we need in Christchurch are decisions based on carefully considered economic

principles rather than unfounded speculation. The Property Institute as an independent professional

body and its members can provide reliable and responsible commentary on the challenges facing Christchurch. While we are doing this for individual clients there is an opportunity to respond to the community as a whole. To do this we need to use the strength of our collective knowledgefromallourcommunities–valuation,property advice, property and facility management and infrastructure, plant and machinery.

A series of think tank groups calling on local and national members could be coordinated through the Canterbury Branch with the results of these considerations vetted by head offi ce before being made public. This would not only contribute to healthy debate but also promotetheexistenceandrelevanceofourprofession–ata time where our knowledge and skills are sorely needed.

This article expresses the observations and views of the write and do not necessarily represent the view of the Christchurch City Council or its staff.

Rob Hawthorne has over 25 years’ property experience in New Zealand and the UK.



Kevin Allan

Is the country falling apart?

It seems that every time we pick up the daily press or tune into the television news we are confronted with stories and pictures of some natural disaster. The disasters can be local, national or elsewhere on the globe – fl oods, earthquakes, landslips, big freezes, erosion, tsunami, tornadoes, volcanic clouds, debris fl ow or drought.

Regional feature Bay of Plenty

Nowhere appears to be immune, with New Zealand sustaining its share of nature unleashed. Without making light of the devastation wreaked by Canterbury earthquakeswecouldvalidlyask−Isthecountryfallingapart?Itistheincreasing frequency of natural events that seems to be the talking point, or perhaps it is just a fact that we are better informed and familiar with such things as liquefaction, ash clouds and rain bombs.

Flooding and landslidesThe eastern Bay of Plenty has been the focus of some of the action within the last generation, having sustained fl ooding from time-to-time, the Matata landslides in 2005 and the Edgecumbe earthquake of 1987. This piece of paradise is home to less than 50,000 people comprising three territorial local authorities and covering an expansive geographic area of the Bay of Plenty Regional Council.

Whakatane District has 50 per cent of its 34,000 population in urban Whakatane and Ohope. Opotiki District Council with a population of 9,000 is a sparsely populated coastal county. Kawerau District Council with 6,500 owes its post-war existence to the mills established by Tasman Pulp and Paper from the mid-1950s, and operated as the town’s council until transition to an independent borough around 1986.

Mainly ruralThe eastern Bay of Plenty has an underlying rural base mainly of dairying but with signifi cant horticulture, and is fringed with vast pine plantations feeding Kawerau, the Whakatane Board Mills and the log export trade via Tauranga.


These events are not always attributable to human intervention and may or may not have been exacerbated had controlled removal of mature trees, particularly pohutukawa and blue gum, been undertaken.

In some instances, the top of the landslip has started on public land and caused damage to neighbouring private land and buildings. Such an event is sufficient for a council to impose section 72 Building Act notifications on the certificate of title at the time when a building consent is sought for remedial repairs, additions or some later new dwelling.

Knowing the riskRegistration on a title acts as a general public alert to the community that there is a perceived risk threatening the property and will pop up on a LIM report if requisitioned. However, a neighbouring property which has not sustained any landslip damage, but which might be viewed as having a similar risk exposure, would not suffer a section 72 imposition. That risk may or may not be evident from a simple LIM scrutiny. In the case of Whakatane District Council, a section 72 notation is only registered on title following consultation with the property owner.

In addition to the risk of landslip, colloquially referred to as ‘debris fall’ in the legislation, the West End area and other sectors of suburban Ohope are designated as ‘hazard zones’. These are areas deemed liable to potential inundation, erosion and eventual sea rise. Following external engineering reports, public consultation and debate, hearings and appeals to Environment Court level, the Whakatane District Council adopted Variation 6 as part of its district plan.

This result followed the general directive under


Tourism is an untapped resource, with the White Island volcanic experience the best known and organised operation. Many North Islanders will have holidayed at safe coastal beaches and successfully fished its waters.

A marine farm joint venture between iwi and Asian interests has secured resource consent for a major off-shore proposal, and its development means it will become the largest employer and a major economic benefit for the Opotiki-based business. The population is growing at less than the national average in sharp contrast to the Tauranga sector of the Bay of Plenty. It has one of the highest Maori populations at 36 per cent and a relatively higher proportion of land under some form of Maori ownership.

Floods and sunshineThe Matata devastation was triggered by a freak rain bomb, but such events are now uncannily or uncomfortably frequent. In the course of the past 12 months the Whakatane area has experienced one ‘once in one 100 year flood’, two ‘once in 40 year floods’ and a couple of so-called ‘once in 10 year’ occurrences. All this is from a town which recorded the highest New Zealand sunshine hours in 2010. Such events test the capacity of the land to cope, but more so the community to meet the repair costs of damaged infrastructure with consequent deferral of otherwise planned capital works.

The Rangitaiki Plains is an area of sedimentary river plains requiring stop-banks, engineered canals and drainage systems protecting productive cropping and dairy country. It is surrounded by a sometimes fragile hill escarpment with elements of doubtful seismic capability. Prolonged rainfall saturation, along with uncontrolled vegetative cover on steeper faces, has been a recipe for hill instability and resulted in recent instances of landslip.

Pohutukawa trees failed to hold precipitous hillside behind this Ohope home


the government’s coastal protection policy to manage the country’s sensitive coast more aggressively, but is not confined just to urban residential precincts. All local authorities now have measures in place to control the location and type of development within perceived hazard zones, either for existing housing but particularly for new subdivisions.

Again, section 72 notifications are recorded on title at the time of building consent. However where the design of a new home will already have been subjected to specific locational constraints, minimum floor levels and in some cases homes are required to be of a relocatable form.

The district plan provides for potential sea rise effect lines in 50 and 100 years’ time as well as current erosion zones from normal sea action. Some appellants to the court claimed the Ohope area had been expanding for 5,000 years and had actually accreted within the past 60 years. Such arguments inevitably descended into the climatechangedebate–predictablywonbytheplannersand council for whom the section 72 Building Act offers a measure of protection.

Value changes Given the retreat of coastal land values over the past three years along with the public’s general indifference to sea rise which may or may not happen in 50 years’ time, it is not possible to measure the effect of these planning changes. Indeed, any damage to coastal property may be impossible to trace over the next decade or two as residential values inevitably return to some upward trend. Other factors, such as the protection afforded by the height and width of seaward sand dunes, already provide different reasons for value changes on residential sites on Ohope’s eight kilometres of beach.

In a built-up area where hazard zones are becoming commonplace, the existing use rights attaching to dwellings lying within risk areas may prove interesting in terms of

value as opposed to the occasional vacant site subject to ‘no-build’ restrictions. In the case of West End at Ohope, a number of deep sites between the surf and the almost vertical escarpment actually have a very small permissible building plate. Thirty years ago such a site might have been approved for two or possibly three houses.

Premium problemsValuers will be aware that section 72 notifications are of vital interest to insurers and may lead to higher premiums, higher excess sums, specific exclusions or an outright decline by insurers to take on new customers in areas of perceived risk. We are aware of one major insurer who will not write any insurance for homes in the Matata township, irrespective of whether the property sustained damage in the 2005 flash flood and debris flows.

Some instances of local flooding in the past year can be attributed to extraordinary rainfall −130 mm in two hours resulting in steel stormwater lids being bounced off drains. However some downstream property damage in Whakatane was clearly the result of inadequate or poorly maintained stormwater systems. The debate now is whether those previously non-flood-prone areas might be subject to rebuild restrictions. All these natural events simply compound to make the valuer’s task more problematic. You almost needs to be a geotechnical engineer, climatologist and hydrologist and forget having a view on global warming.

WhakataneWhakatane town itself is located on the east bank of the Whakatane River which was stop banked 50 years ago. It is situated on a wedge of land at the foot of a steep escarpment affording a bush covered and west-facing natural backdrop to the town, or until recently. An engineering explanation is still awaited as to why this previously stable hillside failed, opening a deep scar bringing down thousands of cubic metres of trees and mostly rotten rock but nicely arrested by a four level apartment complex. At the present time, the Earthquake Commission is funding the almost continuous removal of debris falling within the eight metre building perimeter, although the top of the slip lies within public reserve land. It looks like a case of ‘watch this space’.

Although the NZ Transport Agency takes responsibility for the maintenance of state highways tracking east-west through the eastern Bay of Plenty, considerable damage has occurred on district roads in successive floods over 2010-2011. As a result, Whakatane District Council in particular has had to revise its annual plan to finance works and loans needed for essential repairs. This has resulted in deferral of normal capital works and services programmes by a territorial local authority not very flush with funds and with a relatively

Slippage on public land at Ohope’s West End has destroyed a coastal walkway



over recent years of more intense rainfalls had much of the moredifficultlandnotbeencommittedtoforestry?

Road failureOne of the worst road failures occurred on State Highway 35, some 30 kilometres east of Opotiki. This is where the elevated coastal highway around the seaward side of Maraenui Hill continued to slip into the Pacific Ocean despite years of stabilisation, road widening, the creation of batters and drainage improvements.

Six months ago the coast road section of around two kilometres was abandoned in favour of a three kilometre forestry road deviation around the landward side of the hill. This winding and unsealed section is now under urgent upgrade and will duly be designated as a state highway and keep open the only physical link to the coastal townships reaching up to East Cape.

Different problemsAs observed earlier, the earthquake devastation in Christchurch is clearly in a different league from the rest of the nation’s wrestle with nature. However, who would have predicted seismic activity of that magnitude in a previously inert Canterbury, or tornadoes on the North Shore,orrecentflooddestructionincentralHawke’sBay?Maybe the country is not so much falling apart, but just stretched at the seams.

Kevin Allan is a practising valuer for Bay Valuation Services Limited, Whakatane


small ratepayer base. Like much of the country in the past year or so, the roads seem to be in a constant state of works dotted with hazard cones and barriers.

Almost continuous work over the past two years on the Ohope Hill Road has resulted in thousands of cubic metres of unstable material excavated from moderately steep slopes to create stepped embankments designed to arrest further landslip and closure of traffic lanes. This work evidences the unstable nature of much of the district. How much hill country damage would have occurred

Engineered terracing to prevent continuous landslip on the main Ohope access road

Nearly new apartments vacated after escarpment failure flanking Whakatane River



Articles by staff of Hills Haden Limited (Registered Valuers), Tauranga

The residential, lifestyle and commerical markets in the Bay of Plenty

The western Bay of Plenty residential property market started 2011 on a relatively quiet note. However participants have noticed an upturn in activity in March, and to a slightly lesser extent April and early May. There has been no real explanation for this increase in activity other than perhaps the further slight easing in interest rates.


Residential and lifestyle marketAlex Haden

There appears to be a perception among some buyers that we have reached the bottom of the property cycle and they have suffi cient faith in their job security to commit to house purchases. Job security is still a very important factor in the timing of a recovery in the market and we are now hearing of employers looking for more staff. However, job opportunities are attracting large numbers of applicants.

We are yet to see signifi cant numbers of investors returning to the residential market with returns remaining poor and in our opinion little prospect of worthwhile capital gain. Values will either have to decline further or rental returns increase in order to entice investors back, especially with the changes in depreciation and LAQC rules. Interestingly, we are starting to see some upwards pressure on rents with some suburbs having a shortage of rental accommodation.

Historical perspective The western Bay of Plenty residential and lifestyle property market went through a period of significant growth in terms of sales volumes and values through the period from 2004 to 2006. Over this time there was a ready availability of credit, strong migration to the area and a vibrant economy. It was met with a relative under-supply of suitably zoned and developed residential vacant land to fuel strong value increases in sections and house prices.

At the beginning of this boom period the average greenfield section prices were in the vicinity of $70,000 to $80,000 each. As migration began to improve we found ourselves in a situation where there was no adequate residential land available and developers rushed as quickly as possible to meet this new demand. This led to unprecedented scenes such as police supervision at auctions and people camping overnight to await the following day’s release of sections to the market.

Sold out in hoursWhole stages of subdivisions sold out in a matter of hours in some cases. Incredibly, strong value gains were experienced in section prices over the ensuing years to the point where these green field sections reached average prices in excess of $180,000. The boom period saw very large residential subdivisions being created to meet this new demand.

Unfortunately, with the lag time between purchase of a block of land through to the development of new sections, the end result of many of these subdivisions did not reach the market until the economy had turned, migration had slowed and the official cash rate had risen sharply. The result of this was that many indebted speculative property owners had to place not only sections, but also completed houses, on the market. This over-supply of property to the market led to downward pressure on value. Punters

had gained the wrong impression that capital gains would follow as long as they bought sections as had happened in previous years.

Over supplyOver the years since 2008 we have had a situation in Tauranga where there has been a very large over-supply of residential sections on the market, combined with building activity slowing down in response to the slow local economy and reduced migration. There has been significant downward pressure on section prices as vendors, under pressure, have sold at whatever prices are able to be offered so as to correct their balance sheets and their exposure to debt.

It has been estimated that in the vicinity of 5,000 vacant sections are available in the western Bay of Plenty area. This represents roughly five years’ worth of demand at peak migration levels of around 50 people a week to the western Bay of Plenty.

Housing affordabilityOne of the main challenges we see in the Tauranga residential property market is that of affordability. Incomes in Tauranga are poor in comparison to house properties. The index of household incomes and their relationship with median house prices shows that Tauranga has an index of around seven years of gross household income to match the median sale price. This number is among the worst in the developed world, worse even than Auckland.

Values are significantly lower in Tauranga than in Auckland, but the major issue is that wage levels are significantly lower. With land prices still very high this represents a discouragement for businesses attempting to set up here. As a result it reduces the desirability of this area for people who may be considering migrating here if jobs are hard to come by and houses difficult to afford.

Some statisticsI have seen interesting statistics showing that, in regions where incomes are at comparable levels to Tauranga, namely, median industrial land values lie at around the $120 a square metre. These contrast with levels of well over $200 a square metre in Tauranga. Comparable section values in Hawke’s Bay and Taranaki are around $120,000 a section where a median section in Tauranga is still at around the $170,000 to $180,000. These increased value levels strongly contribute to the affordability issue that currently exists in Tauranga.

There has been very little uptake in the residential or industrial redevelopment market over the last two-year period. The obvious reasons are the availability of credit and the over-supply of sections meaning that creation of further sections is not advisable. Residential redevelopment blocks that sell are likely to do so at levels significantly discounted from the highs of the market in



2005 to 2006. The Tauranga City Council is contributing to the

current depressed building market with the level of development impact fees that are being levied against both developers and builders. This is highlighted by the fact that a combination of subdivision and building fees for a home in Bethlehem currently exceeds $40,000 excluding GST.

Apartment marketThe apartment market in Mount Maunganui, and to a lesser extent Tauranga, continues to be over-supplied and sales levels remain patchy. The last substantial complexes to be completed at Mount Maunganui were the Pacific and Eleven which were finished in 2009. We note media reports suggesting that approximately half of the apartments in the Eleven complex have sold although our data indicates far less have settled. Our records also indicate under half have settled in the Pacific apartment complex.

Sales values were established at very high levels as a result of the very high prices paid for land and the significant development fees charged by the local authority. In addition high debt levels on behalf of developers have meant they have retained stock at high asking prices, despite very low demand and low sales volumes, due to an inability to reduce prices to any notable degree. We are aware of instances where smaller complexes have gone into receivership and some apartments are being drip fed into the market place, with values achieved being significantly less than their initial quoted prices.

The outlook There are arguments that the reduced level of building over the last three or four years will mean that a catch –upisrequired.Whatwearefindinghoweveristhatthe number of residents per property is increasing as the recession is leading to people renting out granny flats and spare rooms to help with weekly budgets.

A point to note for the Tauranga vacant section market is the recent failure of The Lakes subdivision in Tauriko. This subdivision has recently gone into receivership. This will have a negative effect on confidence in our market place and further highlights the oversupply of sections in the western Bay of Plenty market. We believe that sections prices need to show a further softening so that house prices can be affordable.

We are seeing an increasing number of tenancies for lease with perhaps the greatest weakness for small industrial tenancies. Many tenants initially held on during the current economic conditions in the hope of better times, but these have failed. With three years of low activity, the number of tenancies for lease has increased.

We are aware that inducements are being paid to obtain tenants. This has resulted in considerably reduced rentals over the first two years, rising to existing levels. In addition, there have been extended rent holidays and it is not unusual to see one month’s rent holiday for each year of lease. This has effectively resulted in an overall reduction in the rentals being paid. Given the current market

In looking at the rental situation, Tauranga experienced very high growth rates from 2003 to 2007. They flattened in 2008 and since then rents have tended to fall, although some areas have managed to maintain their rental levels better than others.

Commercial marketRoger Hills




a band between three and four per cent. Where the price bracket rises we are also seeing an increase in the capitalisation rate.

In summary, the tenant and length of lease are of prime concern. Purchasers are reflecting the fact that it is more difficult to obtain a tenant at existing rent in what is a poor market. Where rents are slightly above market and if there is a strong long-term lease, there is still demand. It is quite easy to buy an industrial property in Tauranga for under $1 million and get a return of seven to eight per cent.

Development blocksPerhaps the biggest downturn in property values has been for development blocks. Before late 2007 it was not unusual to see prices for industrial land in the range of $250 to $300 a square metre. From a redevelopment perspective this made building and getting an adequate return on funds very difficult.

As a result of the downturn, we have seen a correction with the price band now at $200 to $250 a square metre. There still remains to be a great deal of demand at this level with the difficulty of obtained development funds.

Commercial and residential redevelopment blocks have tended to follow the same trend. In Cameron Road in Tauranga, prices were reaching $1,700 to $1,800 a square metre but now such blocks can be purchased at around $1,200.

conditions, we would expect to see little growth in rents over the next couple of years.

Growth centreHistorically, Tauranga has tended to sell at slightly lower capitalisation rates than the rest of New Zealand. Investors have tended to see Tauranga as a growth centre and are prepared to buy at lower returns in the hope of higher growth of rentals and this has not necessarily happened.

Good, well tenanted properties have tended to sell well and we have recently seen a property leased for 10 years to a national tenant sell at a 5.9 per cent return. Properties with leases to fast food outlets on long-term leases have sold at 6.0 per cent to 6.5 per cent returns. One of the realities of the current downturn is that the market is now more correctly assessing risk. With higher risk comes a higher capitalisation rate and this now covers


Port of Tauranga Ltd has 184 hectares of land. There are 72 hectares at Sulphur Point on the Tauranga side of the harbour with1.8 kilometres of frontage to the harbour, and 112 hectares at Mount Maunganui where there are three kilometres at the waters edge.

In addition, the port company leases 4.9 hectares of land adjoining the Mt Maunganui wharf complex and has a similar interest in a 10 hectare block at Southdown in Auckland. The latter operates as an inland port with a direct rail link to Tauranga. Most of the land is fully used but there are areas on both sides of the harbour affording potential for future expansion.

Over the last four years the port company has acquired the freehold or leasehold interest in 13 hectares of adjoining land at Mount Maunganui. Currently in mid-2010, Port of Tauranga Ltd land holdings are worth $442,000,000. However this does not include the substantial investment by port users in buildings erected on land leased from the port company.

Trade through the Port of Tauranga continues strongly with a recently announced overall 17 per cent increase, resulting from 13 per cent increase in exports and a 29 per cent increase in imports. Container volumes increased dramatically during 2010 as Tauranga’s role as a national hub port continues to grow. Demand for on-wharf storage accommodation, both land and buildings, remains high.

Port of TaurangaLen Green




New technology

Glenn Hughes

Data capture –iPads and why property valuers are using them

I am not really a gadget man. I have found it hard to beat a pen and bit of paper when it comes to capturing the general tumbleweeds of potentially useful information I feel the need to record. I have also made no secret of the fact that for a long time I have used a child’s school workbook to act as the receptacle for all my important doodles, scribbles and general day-to-day mental ramblings. In a failed attempt at humour I have even altered the 1B5 on the front of said book to read iB5, so I can say that it is my new iPad version B5.

NiftySowhyhaveIgotbothaniPhoneandaniPadsittingnexttomenow?Itallstarted with the iPhone. Until recently my mobile phone, which still felt new to me, generated chortles from helpful shop assistants when I placed it on top of their shop counters. I clearly needed a new one and decided to see what all the fuss was about with these new iPhones. I quickly got used to the iPhone’s nifty zoom and navigation around the screen features. You know something is nifty if you carry on performing the operation for a long time after it serves any practical use. That is how zooming in and moving about a screen is with an iPhone.

Gliding your fi nger over the screen moves you around the application you are in, and the fl ick of your thumb and forefi nger zooms you in making it easier to see what is going on, or to enter data if your fi ngers have cousins who are sausages. That is just the start of the niftiness with these iPhones. Before you know it you will be checking which way is north all the time with the built-in compass, and asking it to pinpoint your position on the map using its GPS features, even though you already knew where you were.

Capture data onceI took my crew out for lunch a few months ago. Our young IT guru was with us, and when an incoming call suggested we had to make a change to one of our hosted databases he said to hang on. With tongue positioned for maximum concentration he tapped away on his own iPhone for a few minutes. Then he announced he had logged into ValBiz and made the change. We were somewhat taken aback, but he confirmed that with the correct passwords and computer addresses this could be done on an iPhone. On his screen was the ValBiz application in question, exactly as we would see it on a desktop, only obviously much smaller.

So if we could access our databases from an iPhone, then we should be able to access it on the iPad. As they use the same operating platforms, that turned out to be correct. Now this was starting to get exciting. I am a big fan of capturing information once and once only, and then using it many times. This is a business process fundamental which has been driven into me from my earliest involvement with IT. In the earlier days it was more of an aspiration than a reality, as integrations between different software packages used to manage different bits of a business were expensive projects in themselves. Now that requirement is the cornerstone of any business enterprise software package worth its salt.

Price and ergonomics All this makes me a big fan of in-the-field data capture for my valuer customers. The hardware to do this has been around for some time. We have all seen them in action, be it signing for a delivered parcel or having your electricity meter read. So why are most New Zealand property valuersnotusingthem?

First, not all valuers have a robust database application where they can save the data captured . Second, hardware for capturing data in the field has traditionally not been cheap. Finally, someone has to spend time, effort and money on developing the software that will enable your in the field data capture kit to talk to your database.

Another barrier was the ergonomics of the devices. You need to be able to hold it with one hand and easily perform all the data capturing functions with the other. I am reminded of the story about how NASA spent millions of dollars on developing an ink pen that would work in zero gravity conditions, whereas the Russians pragmatically decided to use a pencil. Give most technical types a problem to solve and they will come up with a solution for you. However, there is no guarantee it will be one that makes any commercial sense to roll out.

Still using pencilsA project was undertaken by our company several years ago that allowed valuers to capture data on the then state-

of-the-art PDAs. These were the cheapest in-the-field data capture options available at the time and were retailing for about $3,000 each, twice the price of the average personal computer back then. Our company spent quite a bit of cash building the software that integrated them with our database products. As it turned out no-one seemed to be preparedtopay$3,000foraPDA–itseemstheyallhadpencils.

You can imagine that this influenced our path forward. Other firms have since arrived on the scene touting state-of-the-art software and data capture applications, but none really seem to have got over the perceived cost to benefit hurdle or have ever got any traction in New Zealand.

So where did that leave us for in-the-field data capturedevices?Shouldourcompanyhaveanotherexpensive crack at supplying the hardware and software when there is no guarantee that the same thing will not happenagain?

The Apple solutionIf nothing had changed I would have been pretty sceptical about repeating our historic approach. Technology and Apple, however, have produced the solution for us in the shape of the iPad. We now have access to an ergonomic device that can sensibly be used in the field to capture data into an existing hosted database with which you are probably already familiar, without the need to build expensive integration software. So for about $1,200 you can get yourself a tool that not only allows you to get a head start by capturing some of your inspection data on-site, it also allows you to do all those other things we have

New technology


now almost all become dependent on such as using email and accessing the internet.

When we first tested this approach with the iPad1 we thought that this was is fantastic. You can show a lot of information and the input controls are tailored for fingers so it all felt really good to use. All went well until we had to take a photograph of the property. Enter the iPad2, now with built-in camera.

Another revelation is that there are speech recognition applications available to download on to the iPad. The hiccup is that they are still only available to download in the US, but it will not be very long until they are made available here as well. We have built into our software the capability such that when it is available here, you will be able to dictate straight into the correct position on your report template in ValBiz while you are inspecting.

Development spendNow that someone else had sorted out the in-the-field data capture hardware and integration software for us, we were able to focus our own development spend. This was on making sure that the software the iPad will be remotely accessing was easy to use, flexible, and as useful and complete as possible. For the record this included −

The introduction of a type of wizard which allows •you to step yourself through or jump to different sections of your report to fill inAccess to a personalised library of commonly used •commentsThe ability to then pass the report into a Word •document format for final tidying up and editing. When we first considered data capture in the field

and its bedfellow for valuers, the automatic generation of a formatted report, we aimed high. We started with the objective of getting all the data required captured on-site and taken to a single pre-defined industry standard report template which was signed off by the professional body. This could then be emailed directly to the customer along

with their invoice. All this could be undertaken while still at the inspection site.

Overnight considerationIt is uncanny that the film A Bridge Too Far was on television the night before I wrote this article. The approach mentioned above was, I think, a bridge too far for most valuers to contemplate. ‘I like to sleep on my reports,’ was the default answer when presented with the all in one approach.

It is hard for me not to consider the fairy tale about the princess and the pea. If the report is figuratively tucked under the mattress of the sleeping valuer and is a bad one, the valuer tosses and turns and cannot get a good night’s sleep. I can understand the principle, but you do not have to send out your reports from the site. You can still consider them overnight and send them off in the morning if that is how you like to operate. No, I do not think valuers are a bunch of princesses.

I have heard it said that the most revolutionary new inventions or ideas do not come from eureka moments, but are instead the modification of early ideas or concepts whose make-up or timing were not quite right. So given that no exorbitant hardware or software costs are now needed to capture your data in the field when using an iPad, it is not a step too far for valuers to consider capturing at least some of their on-site inspection information while in the field. Would having even 80 per cent of your report already filled in by the time you get backtotheofficemakeadifferencetoyourpractice?

RisksSowhataretherisksandarethereanydownsides?Security of data has been brought up as a possible risk. This is only a risk if you make it one. If your database is password protected your data is as safe as it always was, as long as you choose to use a suitable password.

HowrobustaretheseiPads?Onlytimewillreallytell, but I did perform my own iPhone robustness test when I clumsily and accidentally drop-kicked it across a concrete floor last week. To my relief it bounced around a bit and then acted as though nothing had happen.

iPhones and iPads can use any of the three mobile carriers Telecom, Vodafone and 2, and according to their marketing they all provide cover for 97 per cent of where all New Zealanders live, work or play.

I read in the Sunday Herald last weekend that the Queen was so impressed with the iPads which the Prince and the Duke now own, that she ordered her staff to get her one immediately. If our very conservative 81-year-old Head of State thinks they are worthwhile, and she does not need it for capturing data in the field, then it must be worth the effort of our country’s valuers to have a look into them as well.

Glenn Hughes is the General Manager for Headway Systems Ltd

New technology



Steve Tucker

Business systems and software in valuation

As most of us know as time passes the requirements to operate a business change, and generally this means your investment in technology increases. For any valuation business computers are now a must, as is email, word processing and spreadsheet software. Within the next few years the valuation sector in New Zealand will see mobile data collection devices and industry-specific software becoming mainstream. My prediction is that those that do not make the transition to this technology will be left behind.

New technology

Previous business experience highlighted that, although I knew what I needed to do to grow and expand my business, the problem was finding the time to implement those ideas or strategies. Using technology is the answer. Our businesses continue to grow and we continue to develop systems to manage the work. Many businesses will get to the point of having to take the next step with technology and software to grow and move with the times, or simply remain a small business using mainly manual systems and processes. With imminent change within the valuation profession, every valuer will need to reassess their business systems and look to technology and software to give them any chance of survival within the residential mortgage sector.

Australian proofThe Australian market is proof of this.I was recently in Australia on business and spent some time exploring the technology and software which the valuation profession in Australia is using. This has developed over the last 10 years as a result of three factors − the introduction of a standardised report, the establishment of clearing houses and pressure on fees.

Companies needed to find a quicker way to produce reports and we are currently seeing the average valuer complete five to six reports a day for mortgage lending. Compare this with the average of 0.8 reports being completed per day by valuers in New Zealand in 2005-2006. I am not

New technology

convinced this increased workload is the correct solution as valuers are now under enormous time pressure and there is currently a large increase in professional indemnity claims within the residential mortgage sector. Hopefully in New Zealand we can look to the Australian model and find middle ground that enables the long-term success of the industry.

In this article, rather than looking at the software in the market which will allow you to create a valuation report, I am going to look at software from a business model perspective. I see this as the key to the continuing success of our industry in New Zealand. It is not just about producing a report, but making sure you are building your business with technology and software which can withstand the changing times.

Software options in valuationWithin Property InDepth we identified the need for change when we started to develop the business in 2004. First was to forget about the valuation industry and to look at the entire business model. We wanted any solution that involved software and technology to be an entire business model.

There are four main parts to any business and a successful business will have systems in place for three or four of these. These systems would have been developed as the business grew. These will most often be paper-based templates or spreadsheets and standard documents. The four main parts are −

Administration and accounting •Completing valuations•Marketing and maintaining relationships•Management, growth and development.•The following diagrams show the three valuation

business models we considered within when looking at software and technology. Each model covers each of the four main parts of the business. The first and third options are at opposite ends of the scale and the second option represents middle ground. It is important to note that these are only examples and in reality, there are numerous possibilities and combinations which as a valuer you could integrate into your business.

Business model oneThe first model uses off-the-shelf products such as Outlook, Word and Excel as well as a customer relationship products and perhaps a workflow management system. This is the traditional valuation firm with some added functionality. Generally the products are operated locally within the office using your own hardware, possibly with a local network to store data.

AdvantagesThe only real advantage in this technology is the cost of entry. It would offer some increased functionality

for the business owner in the four parts of the business. This is specifically in relation to the performance and operation of the business by the integration of a customer relationship management tool and workflow management, but very little overall.

DisadvantagesTo successfully integrate this technology and to achieve the full benefit would require someone within the business who has a knowledge of the products. It provides no real functionality in relation to the completion of reports or the valuer’s job and offers no added benefit in data collection. Our research with valuers concluded that the two major issues they have are trying to deal with administration staff and the time it takes them to complete reports. This model does not offer a solution to either of these problems so we discarded it as an option.

Business model twoThe second model uses a combination of industry based software and off-the-shelf products. There are a number of valuation industry software programmes being used in Australia. Some have been developed within the individual valuation firms and others are available to any valuer. These industry products will support a level of on-site data collection and a level of report creation. Some products offer limited functionality around administration and accounting as well as customer relationship management.

Although this business model goes most of the way to providing a solution to the two major areas of frustrationforvaluers–administrationstaffandtimetocompleteareport–wefeltitwaslackinginotherareas.No industry software covered all four parts of the business.

AdvantagesThis model is affordable for most and is generally subscriptionbased–youpayamonthlyorannualfee.

Business model one – Basic software integration

Valuation business

Marketing

CRM to track contacts

Accounting and Debtors

Accounting

Growth

Business planning &

development

Excel Word Paper templates Outlook Sales Data

Doing valuation and admin


New technology

It should be able to be customised to allow you to differentiate your company from your competitor, not only in branding but also report content.

This model operates in a cloud environment, which means your data is stored off-site in a secure location. The collection and storage of data also means you are building a business which will have something tangible to sell when you look to exit. Turn round times for valuers should be reduced and productivity increased as duplication between site data collection and report writing is avoided. Administration costs should be reduced because the report writer will mean fewer typists will be needed.

DisadvantagesThe end result means there will still be some business data in the industry software and other data in different programmes. For example, referrals and marketing relationships in a customer relationship system or debtor management data being held in accounting software.

Most valuers in New Zealand are commission-based and are responsible for their own debtor management. Ideally this means they should have continuous access to the accounting software. The ability to customise the product may be an issue for many valuers who are not computer literate. Although you are using an industry product it can be restrictive if you want to develop new products or are continually changing existing products.

Access and speedDepending on how these products collect data on-site there are a couple of issues to watch out for. If they require internet access to enter data straight into the software be aware that mobile internet reception in New Zealand is not great. Even in Auckland we found this to be a major issue. Also the speed of the software is a problem. We had to overcome both of these issues and our

answer was to build a piece of software which sits on the mobile device and then synchronises back to the main system when we knew we had great internet coverage.

Although the industry software is cloud based and stored off site, all of your other data will probably be stored in a different location. You now have different business data in separate locations and it does not communicate. You will probably still need a level of paper based files to store information against a client or property file.

Business model threeThe third model is a custom built business management software that operates every aspect of the business. This model provides one software solution which operates all four main parts of the business.

Business model two – Industry software integration

Valuation business

Marketing

CRM to track contacts

Accounting and Debtors

Accounting

Growth

Business planning &

development

Industry software for data collection and report creation

Admin

Outlook Sales Data

Doing valuations

Business model three – Custom built business management

Valuation businessADMIN/ACCCustomersEmailsTasksCalendarCallsInvoicingDebtors

VALUATIONSData collectionReport creationSales accessWorkflowTXT messageAuto populate

MARKETINGMarketing contactsReferralsNext actionReminders

GROWTH/DEVDashboardPlanningManagementPerformance

It is this model that we selected for Property InDepth. We identified an opportunity and decided to develop a comprehensive software system to give us a competitive advantage in every aspect of the residential valuation profession. Our custom built solution automates all the various systems which, as valuers and for the business in general, we have developed such as Excel, Word or even on paper.

AdvantagesBy having customised software built, I knew the business would be operated as I wanted rather than looking to use a multitude of products which would mean a change the way we operated to match the software. This customisation allows us to focus on the other areas such as business growth, marketing and product development while the valuers produce a unique report.

Above all they are able to be more productive that most other valuers. The upside of customised software can be fantastic. For us this includes −

Fast turnround•A comprehensive report with more information•Increased productivity for valuers•Mobile data collection and synchronisation•A system for recording referrals sources and automated •tracking of referralsAutomated performance reports•Cloud-based system for data security•


System-generated communication through text •messaging and emailA unique report presented online like a website•Huge staff reductions with one administration staff •member for 16 valuers No requirement for accommodation•A paperless business•A saleable business with everything recorded and •stored for an incoming operator.All of these benefi ts, which provide increased

productivity and market share and cost reductions , mean the cost to develop the system is recovered.

DisadvantagesIt required a large, initial capital outlay and time commitment. For many valuers the capital to build and integrate a custom built business managemen t system could be a barrier.

SummaryMany look to technology and software and think it is all about reducing the time a valuer spends on-site, but they are wrong. This is our point of difference. It is what the valuer identifi es on site that cannot be obtained using Google Earth or any data or statistical products. We are

capturing a greater level of data as well as ensuring it is quality data.

The real advantage in software and technology is what it does to the data collected on-site and is where the major gains are achieved. On site we want our valuers tothinkaboutallfactors–contaminatedsoil,subsidence,boundary encroachments, ways to increase saleability and more. On site is not the place to take shortcuts. Otherwise we risk a model similar to Australia that is seeing increased professional indemnity claims due to time pressures on valuers and lack of quality control in data collection.

As valuers, we need to stop focusing on the valuation alone and start paying attention to every aspect of the business. Using software and technology across the entire business will see business grow in the context of change.

Although business model three carries a high initial capital outlay which will prevent many valuers adopting it, business models one and two or a combination of them are achievable and must be achievable for every valuer. Remember that you are not a successful valuation business just because you can produce a report. There are three other vital parts to your business which must be operating effectively to achieve success.

Steve Tucker, Property InDepth

New technology



Steve McNamara

Tips and tricks for using Excel spreadsheets

Most of us use Excel on a frequent basis but few of use more than 10 per cent of the extensive numbers of features it offers. In this article I will touch on a few of the basic, more commonly used, features which should help build your confidence in discovering what Excel has to offer.

New technology

The basicsCalculation resultsThis simple feature allows you to highlight a series of numbers and then choose to sum, average and find maximum and minimum numbers. You can also count the number of numbers in the series. Simply highlight the series and then right click on the sum at the bottom right of the sheet for other options.

Applying formula across several cellsYou may want to run a formula using data from one cell across a number of variables. For example you can make the cell reference of the fixed cell, such as the house price as shown in the example, and then copy formula across several cells which in the example have the interest rates.

The formula for cell B4 in this is example is =$A$2*B2. This formula can then be copied and pasted across cells C2 to F2 and will use the information from cell A2 in each formula.

General

Using multiples tabsIn speaking with prospective franchisees and valuers we have often been presented with several spreadsheets on the same topic. This would have been carried out much better had the valuer used several tabs within the one Excel fi le

The sheets are labelled along the bottom of the Excel page labelled sheet 1, sheet 2 and sheet 3. You can also add additional sheets as well as graph pages. By using several sheets within one fi le you can easily link cells between pages, so you can have several in-depth calculation tabs with a summary on the front tab.

Hide a single sheetIf you want to email a spreadsheet, but hide the workings, then simply hide a single worksheet. Go to the worksheet you wish to hide and select Format, Sheet and then Hide. To reverse the process select Format, Sheet and then Unhide.

Create a fi le password For those wanting to keep information private on shared servers use a simple password lock for each fi le. Simply Save as, then on the side of the pop-up box select Tools, then General options and enter the password.

Inserting a chartThis can be included to great effect, and very simply. First highlight the information you want to appear in the graph, then click on Insert and on the graph wizard as shown and then work through the wizard.

Wrapping textSometimes labels are too long for one line, but you can wrap text so it follows on the following line. If Wrap text is not visible on the tool bar simply click on Cell, select Format, then select Alignment, and fi nally tick Wrap as illustrated. While here, if you were to tick Merge then you can have a heading across a number of columns.



General

Ian Campbell

Chinese delegation visit PINZ in Auckland

A delegation from the Practice Qualification Registration Centre of the Ministry of Housing and Urban-Rural Development from the Peoples Republic of China visited the Property Institute in Auckland for the first time on 18 May 2011. The visit was hosted at the offices at Simpson Grierson.

Following a day of comprehensive presentations provided by the Property Institute, the delegation was reported to have been very impressed, particularly with the online learning presentations. They showed significant interest in the future cooperation and development of relevant areas between both organisations. The meeting was very successful in advancing the relationship between the Practice Qualification Registration Centre and the Property Institute, and also New Zealand and China’s joint relationship in the professional property sector.

The Practice Qualification Registration Centre is responsible for the organisation and management of individuals working within China’s construction industry. This includes examination, the licensing and registration of architects, surveyors, project managers, and is soon to include property managers. The extent of future licensing of property managers is expected to be into the many thousands of individuals across China. The Property Institute’s current registration of property managers is seen in the same way.

The Ministry’s purpose for visiting New Zealand and meeting with the Property Institute was to review how the Property Institute manages the learning, examination and registration for its own property professionals, but particularly property managers. The Practice Qualification Registration Centre was aware that amongst other countries, the Property Institute in New Zealand is seen to stand out internationally, having over the last decade developed standards and online capabilities for best practice learning for its members, particularly registration of members. It was also generally aware of the Property Institute’s

Following last year’s visit to the then under construction Claudelands Events Centre, 34 members of the Waikato Branch were again shown through the centre which is now nearly complete and is already partially operational. The $68.4 million project includes a 5,000 seat arena, a 1,500 person conference centre and substantially upgraded exhibition facilities. The centre is located within 10 minutes walk of Hamilton’s CBD and already has numerous exhibition and concert events booked for later in the year.

Claudelands

comprehensive advancements in the areas of property education, professional standards, ethics and registration, with strong linkages with university learning centres and property course accreditation.

The Ministry noted that the Property Institute provided an equivalent function without government funding, and was seen as a very successfully run, self-funded industry body comprising registered valuers through the NZIV and its regulatory function, property advisors, property managers, in which it expressed interest, facilities managers and plant and machinery valuers. By contrast, the Ministry manages all of these functions internally itself across China. The share scale in the sizeable number of people involved has led the Ministry to look at the successfully run Property Institute of New Zealand model.

The delegation included the Practice Qualification Registration Centre, President Zhao Chunsham, from Bejing and provincial representatives, Liang Zeqing for the Shandong Province and Ma Minghui for the Jiangsu Province. Also visiting was Shan Haining, Chief Division Director, and Cao Yi and Xiao Junjie who are divisional heads within the department.

Providing presentations and answers during the day were Property Institute President, Ian Campbell, Tyrell Snelling the Chair of the Property and Facilities Managers Council, Phillip Merfield, Independent Board Member and Partner at Simpson Grierson, David Clark, Chief Executive, Alan Smee, Professional Development Manager and John Darroch, Chair of the Education Committee. Presentations included an extensive and interesting overview by Allan Smee which covered the latest online advancements, the Professional Pathway Programme, and online learning and testing examples.

The Property Institute was very fortunate to have Jessie Jiang, a Director from Sheldons Valuers and Property Consultants and a member of the Property Institute, to manage interpreting between those present during the day. As the meeting concluded, President Zhao Chunsham invited the Property Institute representatives to review progress in Bejing and agreed with Ian Campbell to continue a dialogue and relationship between both organisations.

Ian Campbell is the retiring President of PINZ

General


Letters

Letters to the EditorDear Editor

Unit Titles Act 2010 and body corporatesAlan Henwood is correct in that it is not mandatory for a body corporate under the Unit Titles Act 2010 at its first annual general meeting to undertake some of the matters Phillip Lockyer and I recommended in our article in the first issue of Property Quarterly. However, we did so for the following reasons.

Every existing body corporate is required to have an annual general meeting under the provisions of the Unit Titles Act 2010 (the new Act) within six months of its commencement because of the requirements of sections 219 and 89.

Because the Unit Titles Act 1972 (the old Act) will be repealed, all the existing administrative processes in a body corporate become obsolete unless they are expressly carried over to the new Act or are in the Unit Titles Regulations 2011. A body corporate will not be able to use the provisions of section 15(2) of the old Act and levy proprietors for operating expenses on the basis of unit entitlement because this term will be replaced by the twin concepts of ‘ownership interest’ and ‘utility interest’. Under section 121 of the new Act, a body corporate can only levy owners for normal operating funds on the basis of a utility interest. Although there is a default provision in section 39(2) whereby the utility interest is the same as the ownership interest, we believe that each body corporate should review the position and formally resolve how it wishes to assess a utility interest. Also such a resolution will make it easier for a body corporate to comply with the new disclosure regime and to collect overdue levies.

Although section 116 of the the new Act makes it mandatory for a body corporate to have a long-term maintenance plan, the transitional provisions in section 221 enable the avoidance of this for up to 15 months. Currently, because of the Sunset and Byron Avenue decisions, a body corporate cannot maintain anything other than common property. This has led to the difficult situation in leaky buildings with a rotting timber frame that the proprietors of individual units are required to fund − at their expense and outside the body corporate’s finances− repairs to the inside half of the rotting timber frame. The body corporate is responsible for replacing the exterior half of the rotting timber frame.

The adoption by a body corporate of a long-term maintenance plan enables a body corporate and its constituent owners to remediate both private and common property in the name of the body corporate, which is then empowered to obtain from the respective owners their share of the upgrading costs to their private

property. Thus we suggest that it is preferable for a body corporate not to delay matters, but to resolve to set up a long-term maintenance plan at its first annual general meeting under the new Act.

Section 132 of the new Act introduces some untried alternatives to the financial reporting regime. We believe that until there is consensus as to the interpretation by accountants of their duties to ‘review’ or to ‘undertake specific verification procedures’, the agenda for the first annual general meeting under the new Act should include a special resolution using the provisions of section 132(8) to maintain the equivalent of the financial audit provisions in Second Schedule rule 12(d) of the old Act.

We thank Alan for his contribution to what, we believe, will be an interesting debate on the usefulness and consequences of the new Act.

Michael Chapman-Smith

Dear Editor

Heritage buildingsThe events that occurred and continue to occur in Christchurch have brought to the fore a number of issues around the country. One of the biggest issues to affect our fair city of Dunedin is the plight of heritage buildings.

During the gold rush in the late 1800s Dunedin grew dramatically with grand structures erected throughout the city. A large number of these structures still stand today and form an integral part of Dunedin’s feel and atmosphere. The two Christchurch earthquakes brought to light how vulnerable these buildings are, with only a small number of heritage buildings earthquake strengthened while a large number remain in their original state.

With many heritage buildings left vacant in the city, due to the harsh reality that it is not economically viable to renovate or refurbish them, will increasing requirements simply create more barriers to the refurbishment of older buildings?Orworse,willbuildingownerswaitfortheirheritage buildings to disintegrate leaving the site available forredevelopment?Andfromavaluationstandpoint,willaheritagelistinghaveanegativeeffectonvalue?

It is my belief that heritage buildings can be saved. With clever renovations and the incorporation of heritage features, these once dilapidated buildings can be transformed into modern, funky urban spaces that people can enjoy working in.

Anthony Taylor



Profile of Gary GarnerSenior Lecturer in Property Studies Lincoln University

Lincoln University has recently appointed a staff member specialising in rural property. Gary Garner has a wealth of experience in both the practical and technical sides of property economics, agribusiness and valuation, as well as corporate financial engineering and restructuring. He was involved professionally as an adviser in many capacities for individuals and corporates in Australia for over 20 years. He also successfully concluded many business improvement programmes across a wide range of industries mainly in the agribusiness sector, including involvement in venture capital raising, helping the growth of business network groups, and corporate re-structuring for the establishment of new businesses.

Profile

Earlier professional lifeBefore taking up the Lincoln University position, Gary was a lecturer in property and urban development at the Queensland University of Technology in Brisbane. His tertiary qualifications are in business economics and finance, agriculture, valuation and theology. He is also a Registered (Certified Practising) Valuer in Queensland and has recently been registered as a valuer in New Zealand.

The subjects he teaches − property economics specialising in rural valuation − relate strongly to his non-academic working life which includes many years as a farm adviser and management consultant. In this period he was employed by the Westpac Banking Corporation (Sydney) as their national manager of agribusiness, and later as their senior corporate lending executive managing a portfolio some of the bank’s largest multi-national accounts.

After leaving Westpac in late 1991, he established the Brisbane-based consulting firm Global Solutions 4 Pty Ltd. He was involved in specialised

Profile

rural based valuations, feasibility studies and a range of business improvement programmes, as well as producing innovative business products for Australian and overseas markets. This includes the Business Diagnostic Pak which was accepted into the Australian Technology Showcase in 2001.

During the 1980s and early 1990s he occupied a regular slot on the ABC radio’s Country Hour as Westpac’s rural media spokesperson and was a contributor to both city and regional magazines and newspapers. He is emerging as an economic commentator, particularly throughout the property and agribusiness industries in Australia.

University lecturingGary’s current work at Lincoln University involves lecturing in the area of property valuation with a rural specialisation. He has involvement in other property studies, including commercial valuation and property portfolio analysis. Within the broad field of property economics, along with his Lincoln University research team his main areas of research are − • Housing affordability particularly in relation to the

effect of holding costs• Population demographic analysis• Large-scale state significant projects• Housing and relationships with health outcomes• Displacement of industries and industry change in

rural areas• Business valuation practice and methodologies.

Gary has recently completed a doctorate, with formal conferral still pending, on mixed methods explanatory sequential designed research. His PhD research has provided input into the Australian Productivity Commission’s inquiry into performance benchmarking of Australian business regulation planning, zoning and development assessments, with the economic methodology adopted by the Australian Housing Affordability Fund.

The transition to working in property and the rural sector came about after he had a 90 degree turn in career aspirations. After the completion of his theological studies in 2004, he made a decision to return to the secular workforce. He had already been teaching part time at Queensland University of Technology about 10 years before, so the transition to full time academic life was not too much of a leap. Gary’s attraction to teaching rural property valution is strong. He has lived most of his life in country areas throughout Australia and elsewhere, and perhaps not unsurprisingly cherishes his rural heritage. The opportunity to teach, drawing from his own professional and personal experiences, is something that provides him with a great sense of personal satisfaction.

Publish or perishGary’s current position at Lincoln University involves not only teaching and course development, but a range of research-related activities. The adage publish or perish is alive and well in academia. As a result there is a good deal of pressure to publish in quality peer reviewed international journals. Part of this process can involve presentations at conferences where peers can scrutinise and provide feedback on research and he is quite enthusiastic about such activities. However, he says that this keeps people like him very busy especially during non-teaching periods. He is also involved in supervising doctoral candidates in their research, and involvement in research collaborations with other academics, including those from other institutions and industry more generally.

The position includes academic and research activity within the Faculty of Commerce in the Department of Agricultural Management and Property Studies. As a rural specialist, this provides a linkage which is uncommon within most university structures in New Zealand and Australia. As a land based university, it is also much easier to work within an environment that encourages linkages between these professions. This also helps to establish good working relationships with both the property industry and professions, as well as the rural industry and their professions. Overall he feels it is a good combination and from a personal point of view it provides an immense level of satisfaction.

OpportunitiesGary believes that although jobs are somewhat limited there are opportunities out there as the number of rural valuers declines. Valuers can only carry out activities for which they are qualified or experienced. Because of this, urban valuers are generally unable to carry out rural valuations, although it is quite common the other way around with rural valuers undertaking urban valuations of various descriptions. If you are interested in job enrichment rural valuation as a profession offers a significant advantage.

On a more general note he has been travelling back and forth to New Zealand for some years partly because of his profession, but also because he reckons that New Zealand has to be the bush-walking capital of the world. He has tramped a number of the Great Walks, and despite falling off a cliff about 18 months ago at Mount Holdsworth on the North Island, continues on. What better place to pursue his other two passions in life − music and riding a Harley Davidson motorcycle.

Gary Garner is Senior Lecturer in Property Studies at Lincoln University



Conference 2011

Jenny Houdalakis

Property Institute conference wrap up and awards

The Property Institute Looking Forward 2011 conference attracted over 330 delegates who met in Wellington for a learning and networking fi lled two days. The conference also included the annual Davis Salver golf trophy, with a handful of golfers braving the bitterly cold Wellington weather. Congratulations to Martin Veale on winning the trophy.

The two-day conference programme was packed full of content to appeal toallthedifferentstreamswithinthePropertyInstitutemembership–therewasa smorgasboard of workshops for members to choose from. All the workshops on offer were relevant to the industry.

Thank you to all the speakers below who provided insightful views into their respective topics.

Conference speakersKeynote speakers• WhyNewZealandisgoingtowintheWorldCup–Graham Henry • Economicupdate–Dr Ganesh Nana • Landlordversustenant–Greg Towers and Ish Fraser

Main speakers• Fibre rollout and how this is going to affect the country Rohan McMahon• Energy valuation methodology Ian Bates• Sustainability without the stars Norman Smith• Learning from the Christchurch earthquake Paul Mautz and Rob Hawthorne• PWA valuations − NZTA’s views Iain Gillies• The valuer’s role in EQC’s response to the Canterbury quakes David Townsend • Commercial property forecasting Ian Mitchell• Dairy farm land prices and returns Iona McCarthy • Insurance valuations Chris Stanley • Crisismanagementplan−Howwillyourbusinessstandup?Murray Dobson

• Bridging the generation gap Natalie Jackson• The infl uence of aesthetics on rural values

Blue Hancock • The banking system and risk management

Jason Humphrey • The issues faced in the valuation of Maori land

Grant Utteridge • Emissions Trading Scheme carbon farming

Blue Hancock • Real value valuation for real estate investment and

analysis Rod Jefferies• How the fi nancing and developing landscape has

changed since the GFC Peter Thomas• The performance of residential dwellings in the

Canterbury earthquakes Greg Baker • New Zealander of the year Ray Avery.

This year’s master of ceremonies was John McBeth who did a brilliant job of introducing speakers as well as keeping the delegates entertained throughout the conference. The Property Institute also took the opportunity to launch its Quality Assurance programme to its members during the conference. A signifi cant number of delegates were interested in learning more about this as it is a vital step forward for the industry. The Property Institute encourages members to participate and support

Callum Taylor won the Industry Award

Matt Straka won the Young Property Professional Award

Song Shi won the Academic Award

the initiatives.A site visit to the new Telecom building in Willis

Street, Wellington was popular. Delegates enjoyed the walk through the building and were even given hard hats and bright orange vests to take away with them.

Entertainment was provided by Tom Berger, a Melbourne-based human behavioural expert. Audience participation was to the fore as a large number of delegates were asked to participate on stage in order to showcase Tom’s skills. His act was the talk of many speculations over dessert later in the evening. The conference was wrapped up with a closing session from New Zealand of the Year, Ray Avery, who gave an outstanding presentation.

The Property Institute could not hold an annual event without the support of its sponsors. This year no fewer than 12 sponsors manned trade stands to showcase their products and services to members who were impressed with the innovation and expertise of each of the sponsors.

Property Institute awardsCongratulations to all the Property Institute’s award winners for 2011. The awards signify an outstanding contribution to the property industry and were well deserved by all of the recipients.

David Bower won the NZIV and PINZ Fellowship Award

Terralink International won the Innovation Award

Award winners

Conference 2011


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