Renting in New Zealand is Changing

Renting in New Zealand is Changing

“By 2024, New Zealand’s rental stock will be of the best quality, and tenants will be living in warm, dry and healthy homes, based on the Government’s healthy homes initiative.”

“On paper, it seemed doable – insulation needed to be brought up to code, a heater should be fixed in all living rooms, and holes and gaps should be filled to stop draughts. But in reality, it’s proving a slow and expensive process.”

Renting in New Zealand is changing. Presently, there appears to be a shortage of rental accommodation, particularly in the major cities. Landlords are saying they are selling up their rental properties as it is getting too tough with the over-regulation including the Healthy Homes Standards. But are these factors alone contributing towards the rental market being driven into the supposed ‘crisis’? Or are there other factors that are at play?

Regulations, regulations and more regulations, it’s getting too tough for landlords!

That has been the calling card from many landlords over the past few years since the labour led coalition government took office.

We have seen the introduction of the Healthy Homes Regulations, Residential Tenancies Amendment Act 2019 and further legislation which is currently being proposed. These laws and regulations have been introduced to dissolve the supposed power in-balance that sits between landlords and tenants, effectively giving tenants more rights and better living conditions. As stated in the lead article, “reducing health issues resulting from cold, damp, mouldy homes was the main point of concern for the Ministry of Housing and Urban Development”

However, what is happening is that some landlords are getting fed up as they are ‘losing control’ over their investment properties and it will be harder to manage tenants when things go wrong. Not to mention the extra costs involved in bringing their properties in-line with the Healthy Homes Regulations. The overwhelming feeling from landlords is that tenants are being given too much power over tenancies.

The rental market is facing huge demand and is under supplied!

Interest rates are at record lows and there is no recession or economic downturn, therefore why is there a housing shortage?

One reason is increasing over-population. People need money to live and a higher proportion of jobs across a wide-range of industry sectors are in higher density urban zones. 

More investors are turning to short-term accommodation. Thus, decreasing the amount of long-term rental properties available in the market. AirBnB in particular is flourishing across New Zealand and property owners are able to make a higher return renting week-on week than renting to tenants for over a year or longer at a time.

If all of those properties available on AirBnB were introduced into the rental market, then it would go some way to ease pressure on renters in the major cities where there is huge demand presently.

Kainga Ora is growing exponentially.

From January 1st Kainga Ora received a significant boost in funding from the government (over $4billion!!) to increase the amount of state homes being built by 2022.

This allowed them to increase the supply of new state homes from the proposed 6,400 to approximately 11,200.

In theory this will help to ease the backlog of families on the waitlist for state housing, but as we are still seeing in the overall market, thousands of people are unable to secure homes and rentals. Many emergency housing tenants are being housed in motels at a great cost to the tax payer.

Are we heading down a dangerous path by being so dependent on the state for housing? Or, in the long-run, could this be beneficial for our country?

What Kainga Ora should offer moving forward is a rent-to-buy scheme. This in-turn will enable people to get a head start into the housing market and life-long renters who in the past have been unable to pull together a house deposit to purchase their own home.

The future is moving towards multi-unit style dwellings.

The 1/4 acre section, New Zealand home-ownership dream is becoming a thing of the past. 

Land is becoming highly unaffordable and scarce in major urban areas, while sections that are now being sold would be lucky to be over 400-500m2.

What we are now seeing is multi-level apartment style blocks being developed (particularly in major cities) across New Zealand. 

This style of living is the norm overseas, particularly in Asian and European countries. There you will find streets with condensed multi-level apartment blocks that occupy the same amount of land as a single dwelling would in New Zealand. Instead of one house homing 2-4 people, there could be anywhere from 10-20 people or more living in the multi-unit apartment block. 

Is it time for New Zealanders to embrace this style of living? and could it go some way to easing the housing shortage we are being faced with presently?


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