Affordable Housing for Our Community. Annual Report

Transcription

1 Affordable Housing for Our Community Annual Report 9

2 Chairman s Report This was our second year and it has been pleasing to achieve significant housing outcomes for home buyers in a challenging and uncertain economic climate. A total of 24 households were assisted into home ownership during the year. These are can work-can t buy households that could not otherwise afford to purchase in the district. Contents The Purpose of the Trust The Trust is a beyond profit organisation with a simple purpose to ensure that residents committed to the district and in regular employment have access to housing at no greater cost than elsewhere in the country. Our success in achieving this goal contributes to a more inclusive and balanced community, assists employers to attract and retain staff and supports the local economy by ensuring households are not spending excess disposable income on their housing obligation. p3 Chairman s Report p4 Statement of Financial Performance p5 Statement of Financial Position p6 Movements in Equity When measured against international benchmarks the cost of housing in New Zealand is high. It reflects a disparity between house prices, borrowing costs and household incomes. Research shows it is not uncommon for households to commit more than 45% of their gross income to meet housing costs against an international target of 30%. In the Queenstown Lakes district where prices remain well above the national median, the cost of housing absorbs even higher levels of household income. We can t solve the national problem, but we can strive to remove housing cost as an impediment for residents making a long term commitment to the district. p6 Notes to the Financial Statements The Changing Environment p9 Audit Report p10 Shared Ownership facts and figures p12 Lake Hayes Estate project p14 Trustees p15 Directory Housing Affordability While interest rates have fallen, improving one aspect of affordability, banks have raised deposit rates to 20% making it more difficult for buyers to take advantage of otherwise more favourable buying conditions. It reminds us that the Trust doesn t set the environment and nor does it have a forecasting role but must remain nimble prepared to navigate and adapt to the fluid conditions set by the market. The Success and Popularity of Shared Ownership The design and implementation of the Shared Ownership programme has proved a winner for first time buyers and among the most successful of its kind in New Zealand where home owners enjoy all the privileges of ownership without having to fund % of the purchase price. Testimonials confirm this is a product that is correctly targeting real housing needs in our district. Lake Hayes Estate Development During the year the Trust traded some of the Jacks Point obligations under a stakeholder deed with Council, for an approved 42 lot mixed use development at Nerin Square, Lake Hayes Estate. Building consent for the first stage comprising 5 two storey dwellings has been approved and construction is expected to start in June 9. This development is a new supply initiative for the Trust as it seeks to break the perception of affordable being synonymous with cheap. The quality of the housing will be excellent it s the tenure options that make them affordable. Recent Events To ensure the Trust remains aligned with market needs, it completed an independent market research survey across more than 400 renters in March 9 to gain a better understanding of their needs and aspirations. The results of this survey are being compiled and will become a cornerstone piece of work for refining the needs in the market place and the types of products that the Trust might develop in the future. Acknowledgements The Trust relies on the contribution and assistance of many organisations for which we are appreciative. They include Housing New Zealand Corporation, co-funder of our shared ownership programme and Queenstown Lakes District Council who has provided unfettered support for the Trust s activities, enshrined during the year in a Memorandum of Understanding. There are many other individuals and organisations who have provided their skill and expertise to assist the Trust during the year and to them we convey our thanks. It is a privilege to lead a team of talented and committed trustees where headspace is regularly stretched from wide lateral thinking to quite challenging levels of detail. Innovation provides few blueprints to follow. It was disappointing to lose Brett Gould from the district whose contribution was invaluable and we wish he and his family success in their relocation. The Trust enters the new financial year with a strong balance sheet, plenty of challenges and a bevy of achievements to build on. But in this environment we remain vigilant and take nothing for granted. The Trust has borne no costs in the production of this Report David Cole

3 Statement of Financial Performance For The Year Ended 31st March 9 Statement of Financial Position As at 31st March 9 Group Group Parent Parent $ $ $ $ INCOME Grants Received 50,000 50,000 50,000 50,000 HNZC Reimbursement Grants Received 31,533 31,533 Developer Contributions Received 3,555,000 2,208,544 3,555,000 2,208,544 Interest Received 152,780 49, ,780 49,318 3,789,313 2,307,862 3,789,313 2,307,862 LESS EXPENSES Accountancy Fees 15,623 3,590 15,203 3,590 Accountancy Fees - Taxation Advisory 1,400 6,150 6,150 Administration Services 12,480 26,775 12,480 26,775 Audit Fees 7,000 4,000 7,000 4,000 Advertising 2, Bank Charges Commission Computer Expenses Consultants Fees Consultants Fees (reimbursed) 31,533 31,533 General Expenses Insurance , ,638 Interest 6 6 Legal Expenses 5,869 16,637 5,010 16,637 Meeting Expenses 3,254 1,068 3,254 1,068 Mileage 1,899 1,038 1,899 1,038 Office Expenses 2,033 6,639 2,033 6,639 Rates 4,310 Repairs and Maintenance 136 Staff Training Subscriptions 1, , Telecommunications Travelling Expenses 6,353 3,3 6,353 3,3 Valuation Fees 1,913 1,675 1,913 1,675 Trustee Fees 81,750 97,500 81,750 97,500 Wages 41,081 41,081 TOTAL CASH EXPENSES 225, , , 171,741 TOTAL EXPENSES 225, , , 171,741 Group Group Parent Parent $ $ $ $ EQUITY Trustees Accumulated Income Account 5,700,226 2,136,121 5,709,634 2,136,121 TOTAL EQUITY 5,700,226 2,136,121 5,709,634 2,136,121 REPRESENTED BY NON CURRENT ASSETS Fixed Assets As Per Schedule Land and Buildings 2,789, ,300 2,789, ,300 Investments ASB Term Deposit 900, ,290 SBS Term Deposit 522,1 1,909, ,1 1,909,855 CURRENT ASSETS Development Property 3,028,267 ASB Bank Accounts 227,567 60, ,330 60,430 Deposit on Property Amber Close, Arthurs Pt 105, ,000 Accrued Interest 865 3, ,801 Anderson Lloyd Trust Account 283, ,308 Tax Paid 543 4, ,711 Advance QLCHT Developments Ltd 3,043,138 GST 6,517 8,860 2,818 8,860 3,547, ,802 3,556, ,802 TOTAL ASSETS 6,859,763 2,256,957 6,868,698 2,256,957 LESS LIABILITIES NON CURRENT LIABILITIES Housing Corp NZ Ltd (note 4) 1,136,710 79,500 1,136,710 79,500 CURRENT LIABILITIES Accounts Payable 22,569 41,336 22,096 41,336 PAYE Deductions Payable ,827 41,336 22,354 41,336 TOTAL LIABILITIES 1,159, ,836 1,159, ,836 BALANCE ADDED TO TRUSTEES ACCUMULATED INCOME ACCOUNT 3,564,105 2,136,121 3,573,513 2,136,121 NET ASSETS AS PER TOTAL EQUITY 5,700,226 2,136,121 5,709,634 2,136,121 4 QLCHT Annual Report 9 5

4 Movements in Equity For The Year Ended 31st March 9 Group Group Parent Parent $ $ $ $ TRUSTEES ACCUMULATED INCOME ACCOUNT Opening Balance 2,136,121 2,136,121 PLUS Income Allocated 3,564,105 2,136,121 3,573,513 2,136,121 Balance at Year End 5,700,226 2,136,121 5,709,634 2,136,121 The accompanying notes form part of and are to be read in conjunction with these financial statements. Notes to Accounts For The Year Ended 31st March 9 STATEMENT OF ACCOUNTING POLICIES Reporting Entity Queenstown Lakes Community Housing Trust is a Qualifying Trust operating in accordance with its Trust Deed and governed by the requirements of the Trustee Act The Financial Statements of the entity have been prepared in accordance with generally accepted accounting practice as required by the New Zealand Institute of Chartered Accountants for general purpose financial reports. The entity qualifies for differential reporting as it is not publicly accountable and the entity does not exceed the size criteria. All differential reporting exemptions have been taken advantage of. Measurement Base The accounting principles recognised as appropriate for the measurement and reporting of earnings and financial position on an historical cost basis are followed in the preparation of these accounts. Specific Accounting Policies The following specific accounting policies have a material effect on the measurement of results and financial position: Revenue Recognition Grant and Developer Contribution revenue is recognized upon entitlement that is in accordance with the terms of the underlying agreements, interest revenue is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable. Fixed Assets All fixed assets are stated at cost. No depreciation is charged on land and the Trustees determined no depreciation is to be charged on buildings. Investments All investments are recorded at the lower of cost or net realisable value. Accounts Receivable Accounts receivable are stated at expected realisable value. Goods and Services Tax The accounts have been prepared on a GST exclusive basis with the exception of Accounts Payable and Accounts Receivable which are stated GST inclusive. Development Properties Development properties are stated at the lower of cost or net realisable value. Cost includes planning expenditure and any other expenditure to bring the Development property to its present condition. Basis of Consolidation The Group financial statements are prepared by combining the financial statements of all the entities that comprise the Group, being Queenstown Lakes Community Housing Trust (the parent entity) and its subsidiary QLCHT Developments Limited. Subsidiaries are entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies so as to obtain benefits from their activities. Consistent accounting policies are employed in the preparation and presentation of the Group financial statements. The Group financial statements include the information and results of each subsidiary from the date on which the Trust obtains control and until such time as the Trust ceases to control such entity. In preparing the Groups financial statements, all intragroup balance and transactions, and unrealised profits arising within the Group are eliminated in full. Investment in subsidiaries are measured at cost in the parent company s financial statements. Impairment of Assets At each reporting date, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value less cost to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase. An impairment of goodwill is not subsequently reversed. Taxation Taxation has not been provided for as the Queenstown Lakes Community Housing Trust is a registered charity and meets the criteria for exemption from income tax in terms of the Income Tax Act 7. Changes in Accounting Policies There have been no changes in Accounting Policies. All policies have been applied on a basis consistent with those used in the last year. 6 QLCHT Annual Report 9 7

5 Notes to Financial Statements Audit Report For The Year Ended 31st March 9 NOTES 1. Capital Expenditure As at 31 March 9 the Trust is committed to property purchases under the Shared Ownership Scheme totaling $588, (excluding amounts to be funded by HNZC). (8 $251,). AUDIT REPORT TO THE TRUSTEES OF QUEENSTOWN LAKES COMMUNITY HOUSING TRUST 2. Contingent Liabilities There were no known contingent liabilities at balance date this year, or last year. We have audited the financial statements on pages 4 to 8. The financial statements provide information about the past financial performance and financial position of the Queenstown Lakes Community Housing Trust and Group and its financial position as at 31 March, 9. This information is stated in accordance with the accounting policies set out on pages 6 to Related Parties Brett Gould (retired Trustee) was a partner in the firm Anderson Lloyd who provide legal services to the Trust. The aggregate of these payments totalled $25,861. Of this amount, $5,869 was on revenue account being 2.61% of the total expenses incurred by the Trust (8 $6,637 and 4.0%). The remaining $19,992 related to property acquisitions, being 0.35% of current year acquisitions. Trustees Responsibilities The Trustees are responsible for the preparation, in accordance with New Zealand law and generally accepted accounting practice, of financial statements which fairly reflect the financial position of Queenstown Lakes Community Housing Trust and Group as at 31 March, 9 and the results of their operations for the year ended on that date. The Trust has advanced $3,043,138 to its subsidiary QLCHT Developments Limited. The advance is interest free and repayable upon demand. There were no other related party transactions. Auditors Responsibilities 4. Borrowings Basis of Opinion On the 27th February 8, the Trust entered into a suspensory loan agreement with Housing New Zealand Corporation. This loan has a facility limit of $2,000,000. The Trust is able to draw ( drawings ) against this facility up to 15% of the valuation of the relevant residential dwelling being purchased through a shared ownership agreement. The loan is secured over land owned by Queenstown Lakes District Council. The loan is interest free and will be forgiven after 10 years provided that the terms of the agreement are observed by the Trust. 5. Land and Buildings Group 9 $ Group 8 $ Company 9 $ Company 8 $ Buildings at Cost 1,545,235 1,244,520 86, 77,500 1,545,235 1,244,520 86, 77,500 Net Book Value of Land and Buildings 2,789, ,300 2,789, ,300 Freehold Land at Cost It is our responsibility to express to you an independent opinion on the financial statements presented by the Trustees. An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. It also includes assessing: the significant estimates and judgements made by Trustees in the preparation of the financial statements, and whether the accounting policies are appropriate to the Trust and Group s circumstances, consistently applied and adequately disclosed. We conducted our audit in accordance with New Zealand Auditing Standards. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to obtain reasonable assurance that the financial statements are free from material misstatements, whether caused by fraud or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Other than in our capacity as auditor, we have no relationship with or interests in Queenstown Lakes Community Housing Trust or any of its subsidiaries. Unqualified Opinion We have obtained all the information and explanations that we have required. In our opinion the financial statements on pages 4 to 8, fairly reflect the financial position of Queenstown Lakes Community Housing Trust and Group as at 31 March, 9 and the results of their operations for the year ended on that date. Our audit was completed on 26 May, 9 and our unqualified opinion is expressed as at that date. Estimated depreciation not charged in 9 is $18, Subsidiaries NAME OF ENTITY SUBSIDIARY QLCHT Developments Limited QLCHT Annual Report 9 Balance Date Country of Incorporation 31 March New Zealand Ownership Interest 9 8 % % Chartered Accountants DUNEDIN, NEW ZEALAND

6 Homeowners Comments Shared Ownership Shared Ownership Helping First Home Buyers All the Privileges of Ownership without Funding % of the Purchase Price While incomes in the District closely follow national averages, house prices remain consistently higher than the national median, making it challenging for first home buyers to purchase a home within reasonable debt servicing levels. While interest rates have declined, banks have raised the threshold deposit to 20%, making it difficult for aspiring homeowners to take advantage of the otherwise favourable buying conditions. Shared ownership is a means for solving these problems. Julie Scott Programme Co-Ordinator The Trust purchases up to 40% equity interest in the property The owner invests in the balance by way of deposit and mortgage An owner s repayment obligations are targeted at 30% of gross household income The owner may staircase to full ownership, at market, over time as their incomes allow The owner enjoys capital appreciation based on their level of ownership Comparison of Queenstown and National Median House Prices Period June 5-November 8 (in months) Data set provided by QV for Queenstown Lakes Community Housing Trust Initial Fund $4m Protecting the Trust s Investment An initial sum of $4m was created for the pilot programme with funding provided by: The Trust s interest in each property is recorded on the individual title The Trust receives its % share from any sale proceeds All outgoings are paid by the household Each investment is supported by independent valuation prior to any commitment An annual report on each property is provided to the Trust by a qualified building inspector $2m $2m HNZC funds have been provided as a suspensory loan to be written off by the Corporation after 10 years provided the moneys are invested in affordable housing through this period. The Trust contribution was provided by Jacks Point Ltd as part of its obligation to Council under a Stakeholder Deed. Average Investment per Property $133,000 The Trust expects to assist approximately 30 households with this initial pool of funds and anticipates meeting this target in the second half of the 9 calendar year. Property investments are spread across the district from Queenstown to Hawea. Average Investment 30.4% The interest held in any single property ranges from 19%-40%. Note: The initial two year pilot programme has delivered on all its objectives and the Trust is pursuing funding opportunities for continuing the programme. Eligibility Criteria To be eligible for the Shared Ownership programme a household must meet the following minimum criteria: They must have lived in the district for at least six months At least one member of the household must be in full time employment Household income cannot be greater than 150% of the median for the district They must not own other property They must have mortgage approval for the portion they borrow from the bank They must have a minimum of 5% deposit for their interest in the property T hey must show an ability to service the bank mortgage within a target range of 30%-35% gross household income. 10 QLCHT Annual Report 9 We think the programme is great as there is no way we could afford a nice family home like this by ourselves. Now that we are in our home, most of the time we feel like we re % owners even though we re not. S & H Lake Hayes Estate We are delighted with our new home and our experience with the Trust to date has been very positive. We both found you extremely personable and easy to deal with and I think having someone like you as our point of contact is an extremely important part of buying in to the programme. C & H Arthurs Pt We are very appreciative of not having a huge mortgage which we would struggle to repay. So the lack of financial pressure is a real bonus and means we can enjoy great quality of life, rather than working every hour possible. S & J Luggate The affordable gap in our district Housing New Zealand Corporation [HNZC] The Trust This is to say Thank you for enabling me to take this first step. Something I thought I d never be able to afford to do in Queenstown. I am so very grateful. With warmest regards DB Frankton After 10 years of disappointments in trying to get onto a property ladder that always seemed just beyond our grasp, we are still coming to terms with the fantastic reality of our own home. And then to top it all the house is more than we could possibly have hoped for. We wake up each day and think it is even better than the previous day - it is a huge thing for us and cannot really be put into words. S & M Arrowtown We both think that the programme is marvellous and very much needed for the region. I still wake up every morning and think wow. Our wonderful wee home would not have been achievable without the hard work of Julie and this programme. S & J Hawea The Shared Ownership Programme is a godsend without it I wouldn t have been able to afford the unit I m in now. The support and advice from the Trust during the home buying process was invaluable. Thank you. MG Fernhill

7 656 1, 1,550 1,012 1,350 2, BEDROOM 2 2,212 W/C 12,000 12, 906 dwn BATHROOM BEDROOM 3 2/ 2,906 5,206 EN SUITE 10,750 2,206 2/ BEDROOM 3 10,750 2, BATHROOM W/C 3, BEDROOM 2 KITCHEN DINING AREA dwn 1 3, EN SUITE 2,906 3 hwc 12, 4 12, ,812 9, F These homes qualify for the Trust s DINING shared ownership programmearea providing access to first home buyers that meet the eligibility criteria. KITCHEN F 1,512 5,812 1,512 Completion late 9 8 GARAGE 1 BEDROOM ,206 2 up 3 hwc 12, 4 12, $450,000 freehold. 9, , 7 8 GARAGE 11,812 2 car garaging 5,812 12, up 706 1,406 BEDROOM 1 2,906 LIVING AREA bathrooms ,206 Stage 2 GROUND A comprehensive design FLOOR GROUND 1: FLOOR A common architectural character This drawing is protected by copyright Strong landscape attributes Nerin Square is an approved development in the hub of Lake Hayes Estate. The land was purchased by the Trust in 8 with consent to build 42 units. The Trust is undertaking the development in two stages the first stage will comprise 5 homes due for completion towards the end of 9. The second stage will be a more integrated development and include some retail for the local community and potentially facilities like child care. ALL DIMENSIONS TO BE VERIFIED ON SITE Different configurations To add new supply of homes that meet the aspirations of first home buyers The Trust expects to build approximately 25 dwellings commencing early Prices are yet to be determined but will offer tenure options that make them accessible for first home buyers. To deliver a good quality specification To contribute to local community needs The quality of the homes will match the same high standard in the area. It s the different forms of tenure that will make them affordable to first home buyers. Barry Robertson Deputy Chair QLCHT Annual Report 9 ALL DIMENSIONS TO BE VERIFIED ON SITE Adjoining parkland and recreation reserve To offer purchasing tenures, such as shared ownership, that make them accessible for first home buyers AREA 6 LAKES HAYES ESTATE VILLAGE Key Goals for Nerin Square To provide a comprehensive new neighbourhood that offers individual privacy yet access to good public amenity 12 This drawing is protected by copyright Stage 2 will also include some limited retail outlets designed to service the needs of the local Lake Hayes Estate community. UNITS B ,406 3, LIVING AREA 2,750 3, ,000 3,000 Two storey town homes 3 bedrooms 2,300 3,506 Stage , ,300 2, ,580 2,656 1, 1,550 1,012 1,350 2,750 1, 1,550 1,012 1,350 2,656 2,750 3,506 1, 1,550 1,012 1, , Nerin Square Development Lake Hayes Estate The Development FIRST 1: FLOOR AREA 6 Drawn By: Date: LAKES HAYES ESTATE VILLAGE 1: FIRST FLOOR Hannah Hopcroft 1st December 8 UNITS B2 Expressions of Interest If you live and work in the district, don t own any other property and are keen to take advantage of the Trust s assistance in buying your own home, begin by logging your details at our website Drawn By: Date:

8 Trustees Directory Chairman Settlor Graeme Morris Todd Management Programme. Date Settled 15 January 7 A wide commercial background in leadership roles overseas in both private and public companies across finance, IT and marketing/communication sectors. Would love to find more time to play the piano time and spend less time mowing lawns on his lifestyle block. Date of Incorporation 12 July 7 David Cole BCom and Graduate Australia Institute of Management Advanced Accountants McCulloch & Partners P O Box 64 Queenstown Solicitors Anderson Lloyd Lawyers Queenstown Bankers ASB Bank Queenstown Auditors Deloitte, Dunedin IRD Number Registered Address for Notices PO Box 1748, Queenstown 9348 Deputy Chair Barry Robertson A Fellow of the Institute of Valuers, Associate of the Real Estate Institute of New Zealand and member of the Property Management Institute of New Zealand. Barry is highly respected for his commercial real estate skills. An avid reader and fitness fanatic, he is also completing an unfolding challenge to swim across all the lakes in the District. Dennis Pezaro MDS Former chair of the New Zealand Medical Association, Dennis has lived in the district for 40 years and been a well respected GP for much of that time. He was recognised in the 7 New Year s Honours List with the Order of New Zealand for services to community health and has always been in touch with the pulse of the district in more ways than one. Today he is never far from his new protégé young pup Pie. Stephen Brent LLB and BCom A great combination of commercial and legal qualifications, Stephen has honed his skills both in New Zealand and overseas. He is now building his own legal practise in Queenstown, renovating a relocated house in the District while dismantling an already very competitive golf handicap. Brian Donnelly Brian Donnelly is the Executive Director of New Zealand Housing Foundation based in Auckland, renowned for pioneering innovations in the housing industry. He has been recognised with a social entrepreneur fellowship and is also a talent scout for the NZ Rugby Union Under 20 s national squad selecting and mentoring a number of young elite players. 14 QLCHT Annual Report 9 SBS Bank Queenstown

9 Home is where the heart is. And if there s one thing Housing New Zealand has, it s heart. We ve helped hundreds of New Zealanders into their first homes and into the next stages of their lives. We re especially proud of our partnership with Queenstown Lakes Community Housing Trust supporting their Shared Ownership Programme, which has given people in Queenstown a head start towards home ownership. And we have many more initiatives nationwide. It s all part of our mission to give all New Zealanders access to quality, affordable housing. hnzc.co.nz