New Government Settles In

For landlords the year has ended with a higher degree of certainty. With the change of Government many of the restrictive and costly measures introduced by their predecessors are going to be relaxed.

This will not be popular with several factions within the community.

Encouraged by a Government that seemed to believe that landlords were a bunch of greedy, money-grabbing, privileged individuals, groups, such as Renters Unite, expressed their indignation and demonstrated a sense of entitlement regardless of the additional cost landlords were being expected to carry. Statistics tell us quite clearly the most landlords have between 1 and 2 rental properties. They are not large conglomerates able to absorb rising costs. Over recent years Government intrusion into the sector has stepped outside the usual norms. No other investment category has been subject to so many hurdles. One has to wonder just how those in power believed that such steps would benefit those dependent on rental property.

The reintroduction – over time – of tax deductibility on mortgage interest payments; the return of the bright-line test from 10 to 2 years; the return of a landlord’s ability to terminate a tenancy with a 90-day notice will in our view help to restore sanity into the sector. Hands up – there are bad landlords out there and they have done things that in most people eyes are both morally and socially wrong. But they are few and far between. To consider all landlords as similar was a poor judgement.

The key problem behind an unstable rental market is the lack of supply. The new Government has indicated a willingness to review the barriers to the building of new homes – the price of materials, the town planning legislation, the shortage of qualified and experienced builders to name just a few. Complicated, ill-conceived, poorly implanted schemes such as KiwiBuild are not the answer. Let’s keep things simple. Looking forward – if they are successful – the extremes of the market (both for ownership and tenancies) may be minimised.