Auckland

Will tenancy law changes mean increased rents?

Henry Cooke from stuff recently put out this report which is worth a read.

My two cents on the topic: The article talks about whether recent tenancy law changes will result in increased rents. Landlords are generally arguing that they will.

Rents have been going up for some time and there are a number of factors. But inevitably, it comes down to supply and demand more than rule changes.

The number one cost landlords face is mortgage interest and you don’t see the reverse rhetoric of “this will cause rents to go down” every time interest rates drop further.

Personally, I’m a fan of the recent law changes as everyone deserves to live in a healthy home and one rent increase a year is plenty (although this will likely cause a temporary sudden increase in rents this year). Removing no-cause evictions is a little more debatable but I see the reasoning behind it. Stability is so important for family well-being.

If, as a result of these rule changes, landlords choose to exit the best investment around, which has likely made most of them massive amounts of money through this last property cycle, then that’s up to them. But I would argue that complaining about rule changes is a very glass-half-empty approach.

If you are an investor, why not focus on the incredible wealth your family has likely built up if you’ve been fortunate enough to have owned rental property in NZ over the past 5, 10, 20 or 30 years.

This doesn’t happen by accident, a functioning property market requires a stable society with reliable contracts and rule of law in place.

Investment property owners have everyone to thank for such privileges.

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