Measuring our progress
With $427 billion net equity invested in housing assets,19 we know New Zealanders have high confidence levels in property rights and that property rights are important to their wellbeing and security. Ninety-nine percent of New Zealand businesses are SME-sized, so housing is often a significant source of collateral for expanding their activities.20
Many factors will influence whether New Zealanders continue to invest in housing at the same rate or whether businesses will use property as collateral. We assess our long-term contribution to encouraging trade, commerce, and wellbeing by monitoring indicators on the impacts we aim to deliver.
Impact measures for Maintaining ease of transacting property rights
A key indicator we use is the World Bank Doing Business Survey, which has ranked New Zealand third in the OECD for ‘ease of registering property’ in the past three years.21
The survey measures the cost, time taken, and number of procedures needed for an SME to register property. As table 2 shows, New Zealand performs equally to top-ranked Saudi Arabia in terms of requiring the least number of procedures and least amount of time. This finding is supported by our most recent research, which found 75% agreement that our electronic system helps survey and titles customers to provide a high level of service to their clients.
The survey also provides a good international benchmark of the cost-effectiveness of registering property. The two countries ranked above us charge no fees for property registration, while the 0.1% New Zealanders pay to register property relates to the cost of our service and the land information memoranda issued by councils.22
The performance of the property rights system through the Canterbury earthquakes also provided an important indicator of its integrity under stress:
- No property rights records were destroyed and customers continued to transact as usual.
- LINZ maintained reasonable business continuity, despite the two-month closure of our Christchurch office.
We will continue to monitor the effectiveness of our regulators’ interventions, particularly the activities to mitigate the effects of earth movements on property rights.
Table 2: Doing Business rankings
|Ease of registering property
by an SME
|Cost of registering
|New Zealand 2005||2||2||0.2%||Not ranked|
|New Zealand 2010||2||2||0.1%||3|
|New Zealand 2011||2||2||0.1%||3|
|Saudi Arabia 2011||2||2||0.0%||1|
|United Kingdom 2011||2||8||4.1%||22|
|United States 2011||4||12||0.5%||12|
Impact measures for Maintaining New Zealanders’ confidence in property rights
The following indicators demonstrate whether we are continuing to provide New Zealanders with high levels of confidence in property rights and minimising regulatory red tape.
Low levels of legal challenge
A key indicator for the integrity (accuracy and security) of our system is the number of legal disputes resulting from our administration of property rights. No High Court challenges were upheld under section 216 of the Land Transfer Act in 2010/11 or 2009/10.
Another indicator is the number of compensation claims paid out for errors made by our staff for lost documents.24 Table 3 illustrates the low number of claims lodged and payments made, compared with the overall number of transactions we processed and the $427 billion invested by New Zealanders in property rights.25
Low levels of objections to rating valuations
We continued to see low levels of objections to territorial local authority (TLA) rating valuations from ratepayers, indicating high confidence in the way properties have been valued for rating purposes. Approximately 2% of the 370,000 rating revaluations in 2010 were objected to, a similar level to previous years. Of these objections, 94% were settled within 30% of the original TLA revaluation, compared to 87% in 2009 and 86.5% in 2008.
Minimising red tape
Reducing regulatory red tape was a key policy driver under the Government’s 2010/11 economic objectives. Indicators on our performance include:
- A Treasury review of government agency regulation regimes against best practice principles assessed our property rights regulation highly in all areas.26
- An independent review in September 2010 found strong support from TLAs for the role of the Valuer-General and a belief that our approach of regulating ‘as little as possible, as much as necessary’ is right.
- We maintained a stock of 76 regulatory documents in 2010/11, below our target number of 90.27
Table 3: Land titles compensation claims
|New Zealanders’ net equity in housing assets||$427b|
|The approximate costs of administering and regulating the land titles register||$28m||$31m|
|Number of transactions processed||496,455||584,159|
|The number of current compensation claims administered||10||12|
|The compensation paid out for current claims||$12k||$24k|
|The legal fees paid out to the Crown Law Office for current claims||$12k||$116k|
19 Figure as at December 2010. Reserve Bank of New Zealand Financial Stability Report, May 2011.
20 New Zealand Centre for SME Research, Massey University.
21 Doing Business 2011: Making a Difference for Entrepreneurs is current as of 1 June 2010. The survey compares how OECD countries perform in terms of delivering regulations that enhance business activity or constrain it. The measure for ease of registering property assumes a standardised case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute.
22 Fee increases from July 2011 should not raise this cost indicator over 0.1%. As an indicator of the costs for our services alone, the fee for a title transfer and mortgage memorandum for a standard house purchase represents 0.04% of a medium-priced house ($350,000) as of July 2011.
23 The World Bank records cost as “a percentage of the property value, assumed to be equivalent to 50 times income per capita.”
24 We also include compensation and legal fees paid out if registration of post-settlement documents is prevented by the intervention of an instrument missing from our electronic system at the pre-settlement stage.
25 A number of claims arise annually due to historical errors or documents lost in the period when the titles system was made up of paper records. This measure monitors performance in our electronic system, so table 3 includes only current claims arising since the electronic system became mandatory. In addition, one-off claims or compensation payments can significantly decrease or increase results in any one year, so we concentrate on five to ten year trends to determine our cost-effectiveness.
26 Areas included whether our regulation allows for growth, is proportionate, flexible, predictable, and transparent.
27 In comparison, we had 291 regulatory documents at the start of a five-year review of our regulatory regime (completed in August 2010). Regulatory documents are the tools we use to help mitigate risks in the areas for which we are responsible. These include standards, guidelines, and education material.