Category: Radio New Zealand

Source: Radio New Zealand

The Warehouse Group’s shareholders have peppered the board and executives with pointed questions and criticism about several years of under-performance at this morning’s annual meeting.

Outgoing chair Dame Joan Withers said the past few years had been difficult for shareholders, but a refreshed executive team had hit the ground running with a sharpened focus on controlling costs and driving growth.

The first quarter of the current year ending in July saw a near 1 percent gain in sales, though group profit margins remained under pressure, dragged down by Red Sheds, while Noel Leeming and Stationery saw some improvement.

Chief executive Mark Stirton said trading conditions were still challenging, though customers were responding to new product ranges, with an increase in foot traffic.

“It is clear to me that our competitive advantage lies in our stores, footprint and in our footfall,” he said.

“We have the highest number of stores of any New Zealand general retailer, with 1.7 million customers walking through our doors every week.

“It is within our gift to show up for these communities and customers better than we have to date.”

The company previously announced it would cut an undisclosed number of jobs in its head office, but not at the front line, where hundreds of jobs were shed in recent years.

Still, the value of its shares had dropped more than 25 percent over the past 52 weeks, with another 1 percent drop as the meeting dragged on.

Dame Joan spent a good part of the meeting acknowledging the failure of the business to deliver profit growth and shareholder value over her tenure.

“We’ve been through the history of what’s happened over the last few years a lot, and analysed what we did,” she said.

“We focused on an ecosystem strategy. We believed that with Amazon going into Australia, there was a massive threat, and we had to have a platform.

“We were told it was existentially important to us. If we’re honest, we took our eye off the ball a little bit in terms of the store environment.”

She said both incoming chair John Journee, who had acted as interim chief executive until Stirton was appointed in May, were focused on getting the fundamentals right.

“As Mark has said, it’s the gross profit margin that remains under pressure, and that we’re addressing, and that we obviously know that we need to improve our bottom line profitability, and we’re totally focused on doing that.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Westpac New Zealand has been penalised $3.64 million by the High Court for breaching lender responsibility rules.

It comes after Commerce Commission action for multiple failures leading to customers not receiving legally required information about their loans, and in some cases, agreed interest rate discounts.

The Commission’s director of credit Sarah Bartlett said it was due to a failure to invest in adequate systems and processes.

The breach was self-reported by Westpac, which agreed to admit the breaches prior to the Commission filing proceedings.

The Commission said it was the biggest pecuniary penalty imposed under the Credit Contracts and Consumer Finance Act (CCCFA) to date.

“The pecuniary penalty sends a strong message not only to Westpac but to the consumer credit industry that continued failings to adequately invest in robust systems and compliance practices will not be tolerated and there are serious consequences for not complying with the Act,” Bartlett said.

In a statement, Westpac said it worked “promptly to close the identified compliance gaps” and it was in final stages of completing remediation for affected customers.

“Westpac co-operated fully with the Commerce Commission’s investigation and we are pleased to have resolved the matter,” a spokesperson said.

Under the CCCFA, lenders must disclose specific key information to borrowers and in some cases, guarantors.

In the judgement, Justice Anderson found Westpac’s failures related to systems that were “set up in a way that was foreseeably deficient”.

“Multiple steps could have been taken to prevent the harm, including changes to the systems, adequate staff training, and mechanisms to identify and respond where disclosure was not provided, and discounts were not applied,” the judgement said.

It said the penalty reflected Westpac remediating up to 11,398 affected borrowers a total of $2.67m.

The conduct also affected more than 3000 guarantors.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Tenants are in the driving seat in the rental market at the moment – but there are still rules about what they can and cannot do when they rent a property.

RNZ reported earlier on the things that still catch landlords out.

Now, here are six things that tenants can’t avoid.

Pay the rent on time

Problems with rent payments are still the bulk of the Tenancy Tribunal’s work. Two-thirds of claims before the tribunal last year related, at least partly, to rent arrears.

Tenants have to continue to pay rent even if they are involved with a dispute with their landlord. You cannot withhold rent because you think the landlord has not kept up their side of the bargain.

In one case the tribunal dealt with in June, a tenant reduced her rent payment and then withheld it completely because she was not able to use her en suite bathroom.

The tribunal said that was not an appropriate response. “The tenant suffered a loss of enjoyment of the tenancy. But along with that loss there was a loss suffered by the landlord, which needs to be acknowledge.

“The tenant reduced her weekly rent payments by $80 for a period, and then simply stopped paying rent while still remaining in possession. Although the landlord did not give evidence of the tenant’s actions regarding rent payments resulting in financial hardship, the tenant was not entitled to unilaterally reduce how much rent she paid, nor to stop paying her rent entirely.”

The tribunal said a reduction in rent would have been an appropriate response for the parties to agree on.

In another case, a tenant racked up $6335 in rent arrears because he withheld rent in lieu of money he claimed the landlords owed him for work done on the property. The tribunal said he was unable to prove he was owed this.

Keep the property reasonably clean and tidy, and leave it that way

The tribunal regularly deals with claims from landlords seeking compensation for clean-up costs incurred after a tenancy is finished.

In one case, an adjudicator said a tenant left a “huge” amount of rubbish – “including household refuse, dog toys and faeces, broken furniture, mattresses, wood, rocks, bedding, and old bath, two large drums, a number of broken plastic and containers and much other rubbish”.

That landlord was awarded $1572 for rubbish removal.

Tenants also have to leave all the items that were supplied with a tenancy.

Let a landlord know about damage or repairs straight away

In a case currently being dealt wiht by the tribunal, landlords are seeking exemplary damage from a tenant who failed to advise them of damage.

There was damage to the bedroom door, holes in walls and French doors – but the tribunal said in that case it was not satisfied there was a breach to justify exemplary damages.

Use the property mainly for residential purposes, not business activities

If tenants are running businesses from their homes, things can get tricky.

In another case, there was a dispute about tenants operating a plant business from a spare bedroom.

The tenants said their property manager had no problem with it as long as the premises were clean and tidy.

The property owner argued he had no knowledge of that agreement and wanted compensation for professional carpet cleaning in the rooms used for cultivating plants.

The tribunal said the landlord’s claim for compensation was withdrawn by the landlord during the hearing when the tenant confirmed that they had professionally cleaned the carpets when they vacated the tenancy.

Not have more than the agreed maximum number of occupants

Tenancy agreements usually specify a maximum number of occupants. The tribunal said going above that could be a problem because it could put a landlord’s insurance in jeopardy.

There could also be health and safety or security concerns.

In one case, a tenant’s partner urinated in a communal pathway in view of a neighbour, approached another elderly neighbour to ask her for cigarettes and meth, and asked another woman whether she wanted company and whether she smoked cannabis.

The tenant had her tenancy terminated on the basis of the anti-social behaviour and because she had breached a term of her tenancy agreement by having him live with her when she was allowed only one occupant.

Make alterations without consent

In a case heard in 2023 for a Halcombe property, tenants who were described as “in many ways excellent” were in dispute with their landlords after they “exceeded their rights and obligations as tenants”, the tribunal said.

It noted that they seemed to have treated the property as their own. They painted the kitchen green, maroon and gold, the master bedroom a couple of shades of blue, removed carpet in the hallway and second bedroom, put beading along the lower part of a bedroom wall and painted it maroon, put a dog door in French doors and painted another room blue, put beading on the lounge walls, painted the laundry multiple colours, installed ponds and erected a carport.

The landlords wanted compensation including $8500 to repaint the property.

The tribunal adjudicator said the tenants needed to pay $2550 for painting, $2754 to replace the carpet and other smaller amounts for carpet cleaning and glass replacement.

In addition, tenants have to leave all the keys with their landlord when they move out, and pay their own bills for things such as power and water.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

New Zealanders generally like to lock in for the cheapest home loan rates on offer.

But some commentators say it could pay off to try something different now.

When the Reserve Bank cut the official cash rate this week, to 2.25 percent, it made it clear that it thinks it is likely that may be as low as the OCR goes this cycle.

Wholesale interest rates lifted a little in response, and some market commentators have already turned their attention to when rates might start to rise again.

Economists at the country’s biggest bank, ANZ, said it was worth borrowers considering whether a longer-term fix might be sensible at present.

Six-month fixes are priced from 4.75 percent, one and two-year at about 4.49 percent, three years from 4.75 percent, and four and five-year terms from 4.99 percent.

ANZ’s economists said it was too soon to say with confidence when rates might start increasing.

“The key point for now is that wholesale rates have stopped falling. Competition is clearly hotting up, with banks offering cash incentives to switch and that will be welcome news to borrowers.

“But when it comes to which term to select, our broad thinking remains as it was a month ago: we believe mortgage rates are likely at or near their lows, and that it is thus worth considering longer terms. With very little separating rates spanning from one to five years, borrowers with differing levels of risk appetite should be able to find a term that satisfies their own cost/certainty trade-off sensitivities.

“Fixing for five years may suit some borrowers, but it may be too long for others, for whom two to three years might be the happy middle ground.”

They said wholesale rates had put a floor under fixed terms. The two-year swap rate was 2.65 percent before the October OCR cut, and then fell to 2.44 percent. It was 2.59 percent before the November decision, and is now back at more than 2.8 percent.

ANZ expected home loan rates to rise gradually through next year.

They calculated that the six-month rate would only work out to be the cheapest option if the one-year rate fell to 4.19 percent over the next six months. “That seems unlikely if the Reserve Bank doesn’t cut the OCR again.

” If we are at the bottom of the cycle, 18-month and two-year look good compared to one-year, and three years isn’t much higher, and rates in that vicinity likely offer a happy middle ground.”

Based on a market average rate of 4.79 percent for three years, they said fixing for a year for 4.49 percent would only be cheaper if it was still possible to fix for two years at 4.94 percent next year, or 18 months at 4.45 percent and then another 18 months at 5.13 percent.

Over two years, fixing for a year now would only be cheaper if the one-year rate remained at 4.49 percent in a year’s time.

David Cunningham, chief executive at Squirrel, said borrowers were not moving to longer fixes yet.

He said the propensity to fix a the cheapest rate possible was strong. When five-year rates were 2.99 percent, more people fixed for that price, “But still the bulk went to 2.25 percent for a year”.

He said interest rates could stay on hold for a year or a year-and-a-half. “It could be a year of nothing happening while wholesale rates bubble up and down.”

Cotality chief property economist Kelvin Davidson said he was starting to think about a longer-term fix. “That experience in 2021 is still sort of fresh in mind…people who fixed for five years in the middle of 2021, they’re still on those rates.

“It’s not necessarily something I will do but it’s definitely worth giving a thought to.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand