Proposed regulations prompt some landlords to sell

A Tauranga property investor is selling his rentals and ditching the industry in anticipation of tougher tenancy regulations.

The government is considering making more than 10 changes to the Residential Tenancies Act - including limiting rent rises to once a year and setting the amount of notice a landlord needs to give to end a tenancy to 90 days.

If any changes are approved, they are likely to come into force in 2020 and would affect almost 600,000 rentals.

The Tauranga property investor, who spoke to RNZ on condition of anonymity, has been in the business for about 20 years.

He says tougher tenancy regulations, increased rates and "landlord bashing" have left him with no choice but to sell his five properties.

"It's hard to see how it can work for anyone, really, unless you're a big commercial landlord and I think that's probably the way things will go, that most mum or dads will get out of the market because it is just too hard."

Some of the proposed changes to the Residential Tenancies Act punish landlords and limit their options, he says.

"The only time I've ever had to use a 90-day notice is they've been disrupting neighbours and you don't want to have to give that as an excuse.

"So not having that 90-day option is actually gonna make it really hard for everyone else.

"If you've got a good tenant, you're not going to want to get rid of them anyway so it's taking away all of the options."

He is not the only property investor in Bay of Plenty selling off houses.

The owner of Rentals Bay of Plenty, Gary Prentice, says about 20 of his landlords have sold their properties because of the proposed new regulations.

Landlords believe the government has gone too far and is bending the rules to suit tenants, says Gary.

"It just appears that there are a lot of new rules and regulations that are coming in that are going to be very costly for the landlord, in a lot of cases, and are they necessary?"

A different story in other parts of the country

In Auckland, Jon Harris from Harper Properties said the business had lost up to 40 properties in the last year.

But that was not because of the proposed changes to the Act.

"We noticed a definite trend going back maybe to 2015 - a pick up of our clients selling.

"I think largely, it was to do with house prices so a lot of our clients have owned their properties for 10+ years and have seen pretty dramatic gains over that period, so decided to cash up and sell - and you can't blame them."

Joseph Lupi runs Full House property management in Wellington.

The number of rental properties increased over the last six months and landlords supported the proposed changes, he said.

"By and large, landlords are good people and want the best for their tenants - good tenants means properties get looked after," says Joseph.

"So, by and large our landlords are supportive of the changes that are proposed and we think that it will be good.

"Happy tenants make for happy properties which make for happy landlords."

In Christchurch, Chris Uren of Priority Property Management says business was quiet.

"The feedback I'm getting from my property owners is the real estate market is quite flat in some pockets of Christchurch.

"I have had some owners try to sell their properties, but then they've reintroduced them back to us just because they can't move them."

He says those property owners tried to sell for personal reasons, and it wasn't a "knee-jerk" response to the proposed changes to the Act.

The public will be able to give feedback on proposed changes to the Residential Tenancies Act later this month.


6 Comments

The Greed Must End!

Posted on 03-10-2018 16:22 | By Bruja

Rental prices in this country need to be halved across the board. To have so very many Kiwis paying 80+% of their income in rent is beyond belief! Kiwis LITERALLY taking the food out of the mouths of fellow Kiwis. It is NOTHING but sheer greed. THINK ABOUT IT PLEASE!!! When you lie in bed at night grinning smugly as you think about your fat bank balance think ALSO about the MANY Kiwis living in absolute misery simply because of YOU. No more pretending! One of the other things that needs to happen is to get rid of property managers altogether. They are 100% LEECHES! If a person cannot manage their own rentals? they shouldn’t have them! Likewise, if they need to charge outrageous rents in order to cover large mortgages they shouldn’t have them in the first place. THINK PLEASE! We MUST end this greed. :(

Avr

Posted on 03-10-2018 13:39 | By Anton

It’s time that rents are coming down, Renting a house in NZ is a rip-off. Those landlords want to have a far better return for their money as at the bank plus a huge price increase from their property. An average family shouldn’t pay more as a quarter of their average income on rent. And this is from one income not two. But what can you expect as you let 20.000 more people in the country as there as houses been build. The poorest have to live in damp garages, which courses a strain on the health system.

Rents/owners

Posted on 03-10-2018 13:19 | By socantor01

Would a mass sell-off of rental homes lower the prices sufficiently to make them affordable and attractive enough to persuade renters to buy them? If so, roll on! If not, market forces don’t work after all.

Truth Please

Posted on 03-10-2018 12:00 | By sangrae

Agree with By Merlin,there is another side to this story and it is not all about tenants and new rules if they come in, what about some of the useless property managers there attitude is sometimes not always good.

Agree

Posted on 03-10-2018 09:18 | By overit

I am thinking of opting out too. Screw this Govt.

With

Posted on 03-10-2018 08:20 | By Merlin

With the large increase in house values some landlords are taking their capital gains and selling up while the prices remain high.To say this is all because of the tenancy act is not entirely true.Hopefully first home buyers are purchasing them.

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