New Zealand Property Investors' Federation

The NZPIF is the umbrella body for 20 local Property Investors' Associations throughout New Zealand.

(027) 357 9243

www@nzpif.org.nz

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10-12-2007

Landlords react to compulsory insulation

Responding to the Government's energy efficient plans announced yesterday, the NZ Property Investors' Federation (NZPIF) President Martin Evans said the Federation was opposed to any measures to make its members compulsorily insulate their homes.

“A better approach would be to let the market decide as an appropriately insulated rental property will attract a better standard of tenant and encourage them to stay longer.

“Earlier this year the NZPIF negotiated a 55% discount with ECCA on insulation for its members to encourage them to insulate their rental properties. This led to 1,300 applications to take advantage of the scheme being received over a short period of time.

“The discount has now been extended to all landlords. However the information about this second stage was only given to NZPIF at the beginning of last month and, as far as we know, has not been widely publicised to landlords in general.  For the Government to say that compulsion will be considered if the scheme is not taken up in higher numbers is premature.

“Any regulation will be fraught with practical difficulties such as policing for compliance. At the recent series of HERS stakeholder meetings, it was indicated that the cost per inspection might be $350, with no details of how many inspections would be required.

“Additionally, the cost of insulation and ongoing inspection costs will add to the cost of providing rental property and lead to further rental price rises.

“Tenants will drive the demand for insulated properties, so regulation is not required.

“If the Government wants to improve the uptake rate for insulating rental properties they should consider offering an alternative discount for just the materials and allow landlords to install it themselves. Currently the discount only applies if the insulation is installed professionally, which adds to the cost even if it is subsidised.

“The present discount scheme is only available for rental properties with low income tenants limiting the scope of the scheme. “If it is good enough for low income tenants, it should be good enough for all tenants” said Mr Evans.

“Given that around 70% of all homes are owner occupied, the environmental savings would be greater if applied to all homes, not just single out rental properties”, concluded Mr Evans.

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