Selwyn not suffering from rental shortage
by Mike Isle
Rents in New Zealand hit a record high in August, with the country’s median weekly rent for the month up 6.7 per cent on a year ago. Here in Selwyn, the median rent during the period from March 1 2018 to August 31 2018, was $420.
Thanks to our construction boom of recent years, our region is fortunate in not suffering from a shortage of rental properties. However, this is not the case in other parts of New Zealand including Wellington, Auckland and the Hawkes Bay.
Unfortunately, government policies such as the extension of the bright-line test for residential property, proposed changes to the rules allowing owners of rental properties to offset losses against other income, and the prospect of a capital gains tax on rental properties are all acting to deter Mum and Dad investors from purchasing residential properties as an investment. That is not good news for renters as it means less properties available to rent, and if there are fewer rentals available rents tend to go up.
Some of the government’s proposed rental reforms are swinging the pendulum too far against landlords and will only serve to further reduce the number of people wanting to invest in residential property.
For example, currently, landlords are required to give tenants 42 days’ notice if they decide to sell their rental property.
Most people would consider six weeks ample time to find alternative accommodation — but the government has proposed increasing the required notice period to 90 days.
Given that tenants are able to move on and only need to give their landlord 21 days’ notice, 90 days seems excessive. In many cases landlords will not be selling their rental properties on a whim but due to a change in their financial or other circumstances.