What happens when you have a chronic housing shortage, too few state houses and a government that continually comes out with landlord unfriendly policies? I have watched landlord after landlord sell their rental properties over the last few years, citing various reasons, but just about all of them are to do with government policies favouring tenants over landlords.

As a result, we have a chronic rental housing crisis.

There is no doubt that, in spite of the biggest building boom in at least a generation, the demand for housing outstrips supply by a country mile. This applies both to owner-occupied housing and rental housing. And although we all see home ownership as a positive thing for the country, the simple fact is that there will always be people who need to rent. It makes no sense to me that the government is hell-bent on beating up landlords to such a point that they exit the market in droves. That does make housing available for a few first-time buyers, but it makes life harder and harder for renters. They must know this, and yet they just keep doing it.

Tenants can expect another year of rent rises.

The latest Statistics NZ data shows that rental prices were up 3.4 per cent year-on-year in December.

Mark Smith, an economist at ASB, said there was still “reasonable” population growth and a lack of housing supply, which was pushing rents up.

Prices of houses for sale were also increasing steadily, and picking up again in Auckland.

3.4% doesn’t sound like much, until you consider that some people are paying out half their incomes, or more, on rent. When you look at it that way, any increase will be hard for tenants.

Regional markets had been strong for some time but now the bigger centres were showing more strength again too, he said.

“It’s tough for renters at the moment.”

Brad Olsen, an economist at Infometrics, said the Stats NZ data was in line with expectations.

But there were some indications that things could be getting a bit easier for renters, he said.

The price of rent for new tenancies was up 3.5 per cent, compared to 4.5 per cent in November and nearly 5 per cent at the start of last year.

“This pattern looks set to continue in 2020, with slower rents rises than previous years as increased investor activity drives down yields on rentals,” Olsen said.

“Changes to rental market legislation will also keep rents rising, with landlords passing on costs as demand for rentals outstrips supply across the country.”

Stuff.

The next raft of changes set to come in later this year includes rent rises being permitted only once a year and tenants being allowed to make ‘minor alterations’ to their rented properties. This means that every landlord in the country will increase their rents just before the new rules come in, making life even harder for tenants. The law of unintended consequences is strong here, but the government just looks the other way.

There is no short term solution to this. At the last election, both Labour and NZ First promised to reduce immigration, but so far, the doors are still well and truly open. Over-the-top regulations mean building houses is a much slower process than it needs to be (in 2010 we had a house built in 3 months. In 2019 it was 10 months), builders are in short supply and even though some state houses are being built, the waiting list now exceeds 14,000. This problem is not going to go away.

If there is one good reason to vote out this government, it is because of its complete ineptitude when it comes to the housing crisis. There has never been such a spectacular failure as that of its flagship programme, Kiwibuild. In the meantime, more and more people find they cannot afford housing. This is a tinder box waiting to explode, and the government is doing nothing about it.