It doesn’t matter how much the government tries to beat up landlords, the landlords will always win. It is always the tenant that pays the price, no matter what. Sure, many landlords are affected by scumbag tenants who leave their property in a bad way, or damage it extensively, but contrary to what the government seems to think, landlords will not take this lying down. This is why tenants in private rentals are becoming a rare breed, dying out faster than the Hector’s dolphin.
Landlords say they plan to sell their properties – or focus solely on the high end of the market – if their ability to end their tenancies with 90 days’ notice is removed.
At the moment, tenants can be evicted without the landlord having to offer a reason, if they are given 90 days’ notice.
But the Government wants to change that as part of its proposed rental law reforms, designed to give tenants more security of tenure.
So, they will just sell, and take their capital gains with them. Sure it means a first time buyer will have a house, but it means there are less and less properties available for people who need to rent… and there are lots of them.
Owners are not just saying they will raise rents to reflect various cost rises, but will actively weed out any existing bad quality tenants they might currently have before the legislation becomes effective and it becomes near impossible to remove them.
Well, why wouldn’t you do this? Having a bad tenant is hard enough, but the prospect of not being able to get rid of them, no matter how bad they are, is unpalatable. The government seems to forget, or completely ignore the owner of the property. But ultimately, the owner will win the battle, and the tenant will lose out. They always do.
Once in place many owners plan on only selecting proven good tenants. Tenants not in work, tenants with bad credit histories, tenants with young children and, solo mothers, amongst others, will now not be considered.”
He said it would mean there was some pricing power for “good” tenants.
“But in an environment of worsening rental property availability this will throw even more people at the mercy of state housing services – if they can get them. By lifting the average quality of New Zealand rental stock, government policy will price it out of reach of many is a key underlying theme.”
This is the law of unintended consequences at work. It also shows that, try as they might, the government cannot force the hands of those who actually own the rental properties. Landlords have plenty of options, but tenants do not, and the government doesn’t have many options either.
One respondent to the survey said it was very off-putting for landlords of lower-end properties.
“If tools are taken away from us landlords, I’ll be selling a few properties and the Government can deal with these problem tenants and I’ll just focus at the top end rental market.”
That will mean that there will be more people sleeping under a bridge. Nice one, Jacinda.
Another said it would mean they were shifting from providing “tidy, average rental properties at median rents to top-grade rentals at upper-quartile rents”.
“This means I am minimising the risk of anti-social tenants that I can’t get rid of, and only taking top tenants with great references and no credit problems. In order to do this I have sold two properties as too difficult to upgrade for my desired market, upgraded two properties at $50,000 each, and am demolishing one property and rebuilding new. The advantage to tenants is that they will be getting lovely as-new properties. The disadvantage to tenants is that they will face a much higher bar to get in and be facing higher rents.”
This is obvious, and as fewer and fewer rental properties are available, only the really good tenants will get a look in.
The institute polled 2800 landlords, property managers and tenants.
It found 82.1 per cent strongly disagreed or disagreed with the removal of the 90-day notice option. Only 40.9 per cent of tenants supported the move.
Tenants don’t want the law change either? Not the good ones, anyway. They can see where this is heading, and it will probably mean higher rents for them in the long run.
“One of our biggest concerns is that investors find the proposals too cumbersome, they sell up, reducing the pool of rental properties and raising rental prices even more,” Norwell said.
“Even the Ministry of Housing and Urban Development’s own regulatory impact statement has said that the proposed changes ‘may increase landlords’ business risks and impact on their profit margins’.”
Stuff.
When the government’s own housing ministry acknowledges that the latest moves will result in fewer rentals and higher rents, you know you are in trouble. This doesn’t stop Jacinda, though, or her little Green friends. Landlord bashing is mandatory for a communist government. It doesn’t matter that they are providing an essential social service that the government cannot meet. Those ‘rich pricks’ deserve everything they get.
In the meantime, these policies will see only good quality tenants getting rental accommodation. The government can regulate as much as they like, but what they really need to be doing is building a lot more state houses. Currently, there are over 15,000 families on the waiting list. By the time the effects of the latest proposals are being felt, there will be more homeless, more and more people on the waiting list and more and more desperation.
There really is nothing like a socialist government to fix all the societal ills, is there? And even if they dropped all their ridiculous demands tomorrow, the private rental market in this country is doomed forever. They happily make comparisons with countries like Germany, conveniently forgetting that Germany has mainly corporate property owners, not mum and dad investors. The two property markets are as alike as chalk and cheese.
The social problems created by this government will take decades to fix. Tell me about all that kindness again, Jacinda?
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