This year has been quite a tough one for our industry, at least politically. The Reserve Bank has made financing rentals much harder, the courts have made us pay for our tenants damage and meth has continued to take off and act like a grenade being thrown around threatening to blow up our investments.
Things are looking up though as we wind down for the year. The Government is looking to introduce legislation to address the injustices of tenants not being responsible for damage they cause following the Osaki case. All industry participants seem to agree that it is unjust for rental property owners to be responsible for tenant damage. This includes opposition parties, insurance companies and even tenant groups who see that tenants will also lose out from this. While it will take some time for a solution to be confirmed and introduced, Housing Minister Nick Smith is addressing the matter with speed. The NZPIF hope that with opposition support to a change that this will speed the process up.
The Ministry of Health has reviewed and increased their recommended requirement levels for properties affected by meth. This is great news for the whole housing industry, but particularly the rental housing industry.
In addition to this, Standards NZ should have released their draft Meth Standard by the time you read this article.
The NZPIF has spent a considerable amount of time and resources addressing the Osaki and Meth issues this year, and it is extremely pleasing to see positive movements in both.
While the political issues have been hard work, the market has continued to work well for rental property owners, aside from the difficulty in obtaining finance.
It is ironic that at a time when we need more rental properties in some parts of New Zealand, we are being hampered from actually providing the homes that many tenants need.
However the market has ended the year positively for the majority of areas in New Zealand. As expected, property price rises have slowed in Auckland, however there is still a supply/demand imbalance and prices are still rising. Good news for those already in the market.
Most other regions in New Zealand have had property price increases with a few, such as Waikato, Bay of Plenty and Wellington, increasing faster than Auckland.
Rental prices have also increased in most areas, with national increases considerably higher than the general rate of inflation. This demonstrates that if new regulations are introduced that make it harder for us to provide rental property, then higher rental prices will surely follow.
Tenants also suffer when our job is made more difficult, as overcrowding is increasing in places, particularly Auckland, as tenants struggle to make ends meet. Tenants moving in with each other is likely to be why rental prices in Auckland have been flat this year.
Continuing low interest rates have helped cashflow and go some way to counteract the measures introduced to restrict our finance.
I'm certainly looking forward to the holiday break and I wish all readers a very Merry Christmas on behalf of the NZPIF and Associations around the country.