New Zealand Landlords respond to Labour’s new rental policies

Labour leader Jacinda Ardern talks Labour housing policy regarding tenancy laws at the home of the Lipsham family

Labour’s new rental policies include:

  • Abolishing no-cause terminations of tenancies.
  • Increasing the 42-day notice period that a landlord has to give a tenant to 90 days
  • Limiting rent increases to once a year, with a formula for increases included in the tenancy agreement.
  • A ban on letting fees.
  • An offer of a $2000 grant to landlords for insulation and heating.

Labour’s new rental policies look set to make things worse not better for the tenants they claim to be trying to help. The NZ Property Investors Federation have completed a survey and 73.6% of the 800+ landlords surveyed said that they will increase rental prices if Labour’s new rental policies became law. But that is not all that they will do.

[…] Only 6.5% said that they wouldn’t increase rents, while 19.9% were unsure whether they would or not.

When asked by how much they would increase rents, more than half of the respondents (54.8%) said they would increase them by between $20 and $40 a week, with 25.1% opting for a $20 per week rise.

According to the NZPIF, this gives an indication of the rental price increases tenants are likely to see if Labour’s rental property policies are introduced.

The survey also showed that for 36.4% of respondents it was very or extremely likely that they would sell their rental property if Labour introduced its rental policies.

So not only will tenants under Labour be paying higher rent they will have less rental properties to choose from. Less rental properties force tenants to compete for the limited rental stock. This will ensure that rents go up even further. The landlords most likely to sell up will be in expensive markets like Auckland where they have negatively geared because the returns are so low.

A further 22.1% said that it was likely they would sell their rental property.

When asked about specific Labour rental property policies, survey respondents expressed significant concern about the prospect of a capital gains tax, as well as an end to negative gearing and the removal of the 90 day notice without cause option.

However, most respondents did not expect that the introduction of minimum standards for rental properties would have much impact on them.

That is because most Landlords are good landlords who take care of their assets. It is bad business to not provide the best possible living standards that you can. Better standards mean better tenants and a higher rent. No landlord wants bad tenants.

[…] Labour Party housing spokesperson Phil Twyford said that the NZPIF was scaremongering by releasing the survey findings.

But NZPIF executive officer Andrew King said that tenants deserve to hear from Labour how they are likely to be impacted by Labour’s policies in terms of rental prices and the supply of rental properties.

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