Oh look, some students have discovered real life market forces

Finally, some students have discovered a real life example of market forces and economics…before they’ve even set foot in a university:

Renters are blaming a new $50 boost for students for a spike in Wellington rents, but landlords say the market is simply tight.

The price hike is particularly acute in the capital, where 30,000 thousands of students compete with highly-paid young professionals and families increasingly priced out of the property ladder.

Simple economics. High demand, short supply…price increases. Happens the world over. The only surprise is the fools in government didn’t see this coming.

The average rent for new leases of an entire property in Wellington increased $42 between November and December 2017 to $482.

The Ministry of Business Innovation and Employment (MBIE) stressed that rents in Wellington traditionally rise over the summer months when many tenancies change hands. Between November and December in 2016 mean rents increased by $32. Averaged out over the past three months of each year rents rose a more modest $26 between 2016 and 2017.

Look at that lovely sharp increase at the end of the chart. The students can thank Labour for that.

The new Labour government increased all student allowances and the living costs portion of loans by $50 a week from January 1, 2018.

Several students say that in anticipation of the boost, their rent has been hiked by landlords specifically citing the extra cash.

Wellington student Teri O’Niell, 19, lives in a four bedroom flat near the central city and was paying a combined $185 for her room and expenses.

“Two weeks after Winston [Peters] decided the Government, the landlord said from the first of January, because some of you are on living costs and allowances, we are looking to increase the rent to $230.”

This per-room figure includes roughly $15 for expenses. The rent rise applied to all rooms despite the fact that O’Niell lives with two young professionals.

O’Niell said she was supportive of the boost to student allowances however, saying the previous figure of about $175 was not enough for people to live on, but she was shocked by her landlord’s behaviour.

“Especially because I don’t take a benefit myself. It felt a bit like we were all being punished.”

“The policy that was put in place was for students who can’t afford rent as it is. I work 25 hours a week but that barely coves the cost of rent and food.”

Box of tissues, anyone? Cry me a river of tears…you voted for them, suck it up snowflake.

New Zealand Union of Students’ Association president Jonathan Gee said he had heard several stories similar to O’Niell’s.

“We support that $50 increase to meet basic needs. But there is that fear that because there is a housing crisis we know rents will increase,” Gee said.

“At the moment students are competing with potential first home buyers who can’t afford their first home, families who can’t afford homes, and young professionals.

 

And what does Chris Hipkins and Phil Twyford have to say on the matter? Not much, if anything, they are still sunning themselves on holiday.

 

-Fairfax

 


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