News

Political Updates

Green Party Pledges Landlord Register and Rent Control Measures 

The Green Party has announced a "pledge to renters" with a set of policies aimed at improving the rental market. The party plans to introduce a Renters' Rights Bill within the first 100 days of a new government, focusing on ensuring safe, healthy, and affordable homes for all renters. They propose implementing rent controls to limit annual rent increases, establishing a Rental Warrant of Fitness to guarantee the quality of rental homes, and accelerating the construction of affordable and environmentally-friendly housing in desired locations. Additionally, the Green Party aims to create a national register of landlords and property managers, providing transparency on rental properties, ownership, rental history, and compliance with safety standards. Co-leaders Marama Davidson and James Shaw emphasise the need for bold action to address the current housing crisis and improve the living conditions of renters. The party's goal is to lift people out of poverty and prioritise the well-being of renters across New Zealand. 

ACT Party Criticises Green Party's Renters' Policy, Calls It an Attack on Landlords 

The ACT Party has voiced its opposition to the Green Party's recently announced "renters rights" policy, claiming that it unfairly targets landlords and portrays them in a negative light. ACT Party housing spokesperson Brooke Van Velden argued that landlords play a crucial role in providing housing for New Zealanders and should not be demonised. She expressed concerns that the Green Party's policy, which includes rent control measures and stricter regulations for landlords and property managers, would discourage investment in housing and hinder the construction of new homes. Van Velden emphasised the need for increased housing supply and simplified consent processes to address the housing shortage. National Party housing spokesman Chris Bishop echoed these sentiments, criticising the Green Party's proposals as economically illiterate and counterproductive. However, renters' advocate Geordie Rogers supported the policy, stating that it would improve conditions for both renters and landlords by ensuring healthier homes and consistent rental income. 

Landlords Express Concerns Over Green Party's Proposed 3% Rent Increase Cap 

The Green Party's proposal to limit annual rent increases to a maximum of 3% has drawn criticism from the Property Investors Federation. Vice President Peter Lewis argues that such a policy would exacerbate the shortage of rental properties as landlords may choose to sell their properties instead. Lewis also raises concerns about more rental agreements being conducted in the black market, where tenants have fewer protections. He questions the logic of targeting rent for price controls, noting that rents have been rising at a lower rate than inflation. Lewis suggests that restoring landlords' ability to offset mortgage interest costs against taxable income would be a more effective way to assist renters. 

Exploring the Nuances of Rent Control: A Closer Look at the Green Party's Proposal 

Tom Baker from Interest.co.nz highlights the debate over the Green Party's rent control proposal. He urges considering different types of controls and their potential benefits, noting that existing research focuses on outdated controls. The Green Party's proposal aligns with second-generation controls, allowing limited rent increases. Rent control policies vary globally and should be tailored to specific contexts. Baker emphasises the need for a nuanced discussion on rent control approaches to address New Zealand's rental affordability problem. He argues that the Green Party's proposal deserves consideration as a legitimate option to improve renters' lives.

National's Housing Policy: Past Measures, Risks, and Contrasting Approaches 

Journalist Vernon Small dissects National's housing policy ahead of New Zealand's October election. Small highlights the previous housing crisis, including a shortage of houses and challenges for first-time buyers. The Ardern-led Government implemented measures targeting foreign buyers, capital gains taxation, and interest cost offsets for property investors to support owner-occupiers and first-home buyers. While there isn't a direct connection between these reforms and the current property market, notable changes have occurred, such as reduced foreign buyer activity and increased building consents and construction. National's housing policy takes a different path by proposing a reduction in the Brightline Test, reintroduction of interest cost offsets, and a return to the former Resource Management Act (RMA). The article raises concerns about the potential risks of undoing progress for renters, first home buyers, and the state housing waiting list. National's approach appears to appeal to small-scale property investors seeking pre-2017 settings. In contrast, the Greens advocate for renters' rights and rent caps. 

National Party Unveils Housing Strategy for Greater Christchurch 

National Party's housing spokesperson, Chris Bishop, visited Rangiora to present the party's plan to address the housing crisis in the Greater Christchurch area. With a population growth projection of 173,000 people over the next 30 years, the region requires an additional 77,000 houses. Bishop outlined a three-point plan, which includes incentivising housing targets, providing more funding for infrastructure, and protecting productive land. National aims to set targets for councils, rezone areas for higher-density housing, and offer financial incentives to councils for opening up more land. They also plan to amend legislation and the Infrastructure Funding and Financing Act to provide more flexibility and funding to councils.

Property Investment Updates

Increasing Number of Investment Properties Making Losses, Valocity Reports 

Valocity research has revealed a significant rise in the proportion of newly-purchased investment properties that are operating at a loss. The data shows that the percentage of cashflow-negative properties has surged from 10% in 2021 to over 90% at present. Investors now have to top up their properties by an average of $30,000 per year, a stark increase from $5,000 in 2021, due to higher interest rates. To make holding these properties financially viable, owners are relying on annual house price growth of 2.7% to 3%. However, with the market remaining uncertain, many are questioning how long they can sustain these losses. The study also found that some smaller investors with one or two properties are exiting the market. Valocity suggests that the situation may not improve immediately, even if investor-friendly policies are reintroduced after the upcoming election. 

ANZ Bank Predicts Rising House Prices and Rents in New Zealand 

ANZ Bank predicts a 3% or more increase in house prices in New Zealand, indicating a tightening housing market. Despite challenges, ANZ expects stronger tailwinds in the second half of the year. Rising mortgage rates are offset by resilient household incomes and significant net migration. Real Estate Institute of New Zealand data confirms market strengthening, with increased sales and reduced inventory. In May, Auckland saw a monthly price rise of 0.2%. ANZ's chief economist, Sharon Zollner, suggests rents may also increase due to migration. Investor activity may be subdued pending clarity on tax policies. ANZ foresees rising rents next year alongside migration and income growth. They predict a brief housing market surge, with a 3% price lift in the second half of the year followed by moderation.

That concludes our Fortnightly Rental Market and Investment News Roundup for July 12th, 2023. Stay informed and ahead of the game by subscribing to our mailing list today to receive these updates and other valuable content directly to your inbox. Subscribe now