The property market is rapidly changing in every which way. It's more important now than ever to stay ahead of the game as much as possible and we are here to ensure you do. Our Managing Director, Hamish Wilson, gives you his 2 cents worth...
All of a sudden, it’s 2020 and keeping the momentum from last year there has been a lot happening in the investor and landlord space in the first quarter of this year. We hope to bring you as much information as possible via our newsletters and blogs.
The market in Christchurch seems to have come to life from what has been a long hiatus. Looking at the current properties for rent on Trademe, we see a little pressure coming into the local market. At the time of writing there are 1132 properties available which is the lowest I’ve seen it for quite some time. Local rents have not moved North as much as other centres but the latest data set shows a 5% increase from January 2019 to January 2020. On the rent for an average three to four bedroom property in Christchurch at $450 per week that’s a $22.50 per week uplift.
Added to the now present rental uplift is the capital price growth, the first we’ve seen here since around mid-2016. January saw values lift 2.1% across the greater region. Investment worthy properties are fielding enquiry from non-local buyers for the first time in a while and appear to be readily snapped up.
All these factors are indicators of our market showing signs of life. Who knows where this run will take us, other area’s have seen some significant growth whilst we have just held our own. We are not “land poor” like other centres, which helps ease demand, but the draw to the suburbs still remains strong.
Also making news this month are the Residential Tenancies Act (RTA) Reforms and later in the year a General Election! The RTA Reforms Bill has been referred to the Social Services and Community Select Committee. The Committee has called for public submissions and they close on Wednesday 25 March 2020. The bill proposes to;
- Remove a landlord’s ability to use no cause terminations to end a periodic tenancy agreement and require landlords to use a justified reason to end a periodic tenancy, including new provisions to respond to anti-social behaviour
- Mandate that fixed-term tenancy agreements must become periodic tenancy agreements upon expiry unless both parties agree otherwise, or certain conditions apply
- Increase financial penalties and give the Regulator new tools to take direct action against parties who are not meeting their obligations
- Allow for identifying details to be anonymised in situations where a party has been wholly or substantially successful in taking a case to the Tenancy Tribunal
- Ensure that tenants can add minor changes such as brackets to secure furniture and appliances against earthquake risk, baby proof the property, install visual fire alarms and doorbells, and hang pictures
- Prohibit the solicitation of rental bids by landlords and limit rent increases to once every twelve months
The current Government and their partners have sided completely with the tenants and have done nothing to address any concerns of landlords. With the submission process they may provide the politically acceptable ‘community consultancy process’ but I feel their minds were made up a long time ago. The last select committee ignored 90% of the submitted consultation and forged ahead with their own agenda anyway.
Since the current Government has been in power, landlords have been constantly hit with change after change and with increased costs. Some were necessary, particularly around having to provide warm, dry and secure rental properties. However, the amount of change has simply been noticeably one eyed.
New Zealand needs a strong private rental sector to provide stable accommodation to those that choose to rent or that are unable to secure their own housing. As we know, this well-intentioned “reform” Government policy has so far succeeded in driving up rents to never seen before levels.
So far, since this Government has been in power, landlords have had to;
- Pay the cost of the letting fee that was originally paid by the tenant
- Lose the ability to offset losses from rental properties against their own personal income when the rental property runs at a loss
- Pay added costs with compliance due to insulation and healthy homes
- Be encumbered with increased reporting as evidence of compliance with legislation
And with the new Bill, landlords are starting to lose control of their own properties, in fact it impinges upon property owners’ rights to an extent that I’d thought I’d never see in the modern democratic society of New Zealand.
The submission process is pretty straight forward and I would urge you to let them know your thoughts on it all, remember it is a short call public submission process that closes on Wednesday 25 March 2020.
Here is a description of the Bill. The Committee has called for public submissions on the Bill. We need as many submissions as possible to go through to the Select Committee before the closing date.
Here is a link to the Parliament website where you can make a submission. Here also is a submission template which will assist you to complete the content of the online submission form.
That’s probably enough information to digest for now. As always, we love to help with any queries, please feel to contact myself or one of our friendly team.