Rent levels in New Zealand have risen substantially according to recent Trade Me Property data. The national median weekly rent rose to $595 in January, up by $25 a week or 4% from last year. This follows the national median having stagnated at $580 in the previous three months.
According to Housing Minister, Megan Woods, the rent increases being recorded may be attributed to regulatory changes. However, National’s housing spokesman, Chris Bishop, is pointing to law changes made by Labour that have resulted in rents going up by $150 per week under their leadership. He said this was a big contributor to the cost-of-living crisis and a consequence of the government’s alleged war on landlords.
A survey commissioned by the Ministry of Housing and Urban Development found that 26% of landlords had increased rents in the six months before May 2022. This was up from 19% of landlords that had raised rents in the six months before an earlier survey in October 2021.
Respondents were allowed to cite their reasons for raising the rent. 57% of those that increased rents said they did so as they had not raised the rent for more than a year. 51% also said they wanted to increase their rents closer to market value. The next most common responses related to changes in government policy, including 32% linking their decision to the added cost of the Government’s healthy homes regulations and 26% citing tenancy law changes made in 2020.
Woods defended the government’s property tax changes, noting that they were not among the main reasons for landlords raising rents. She also said that the tax changes were implemented to help reduce the problem of property speculation, shifting the balance back to first-time home buyers, and boosting new builds.
National is however proposing to better resolve the housing crisis through fast-tracking a build-to-rent policy that will be opened up to institutional investors if the party is voted into power later this election year. These developments are to be established near transport links and key amenities while offering tenants long-term tenures. They are also intended to be professionally managed and owned by the investors through shareholding.
Bishop stated that though this policy would not cure the housing crisis, it would ease pressures, allowing both domestic and international capital to help in providing more Kiwis with housing. He also said that this would be accompanied by changes to the Income Tax Act that would allow the developments to qualify for depreciation deductions, as with commercial buildings.
The Property Council is supporting this proposed initiative, noting that by making changes to the Overseas Investment Act and permitting depreciation benefits, it would constitute a housing solution enabled at scale. Property Council NZ CEO, Leonie Freeman added that their membership was ready to deliver over 25,000 Build to Rent homes in the next 10 years once the right policy settings were put in place and depreciation allowed.
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