The Green Party is yet again calling for ‘rent capping’ to be introduced. ACT in return have called them ‘financially naïve’. (ED: not often I would agree with ACT).
This call comes on the back of newly released statistics from the Bonds Office which show that average rents have increased by $30 year-on-year as at end of May. The average nationwide rent is now $600. In January 21 the average rent was $500 so over a 40-month period rents have increased by 20%. (ED: can I compare this to my latest car insurance which has increased by 19.4% and that’s after they reduced the sum insured by 21%. So, in reality an increase closer to 50%).
What the simple statistic of the 20% increase doesn’t show you is that nearly all of that increase happened during the last 6 months of 2023. The actual rate of increase since January 24 until May has been quite small. This may reflect on the current high listing of rental properties, the drop in net migration, greater competition amongst landlords.
No landlord puts rents up just to increase to the bottom line. The vast majority resort to increasing rents simply to offset increases in holding costs. Rapidly increasing costs such as insurance, rates and maintenance make it illogical to expect landlords to hold rental increases to a level of (say) the level of inflation.
Finally, it may seem that Kainga Ora are acting like any other landlord and evicting troublesome tenants.
Over the past three months there has been a noticeable increase in formal notice warnings being issued for disruptive behaviour – 80 notices compared to just 13 in the same period in 2023. Housing Minister Chris Bishop says “There need to be consequences for poor behaviour. For too long there hasn’t been. Kainga Ora has not used the tools available to it through the Residential Tenancies Act and within its own policies”. Bishop points out the growing waiting list for social housing units. “The message is now clear. If your actions are causing your neighbours to live in fear and misery then your time is up. Those on the waiting list deserve the chance to have a home and those perpetual abusers of social housing must forfeit their privilege to make room for others”.
(ED: This situation brings with it the requirement for landlords elsewhere to be more vigilant with their tenant selection. You do not want people being evicted from Kainga Ora ending up in your property and creating the same problems).