“It is encouraging to see that the new Coalition Government is acting quickly to ease the current situation evident in the rental market of decreasing supply and increasing rents,” says Sue Harrison, President of the NZ Property Investors Federation (NZPIF).
The best way to make rentals affordable is to ensure there is a plentiful supply, not a shortage. The best way to ensure a plentiful supply is to encourage people to invest in rental housing and treating them fairly, not penalising them.
Both National and ACT campaigned on getting the balance right for rental property owners, claiming Labour had gone too far to support tenants. The Coalition Government’s promises of policy changes will do much to readdress the balance to treat rental property owners fairly like any business, rather than penalising them.
These promises are to restore mortgage interest deductibility for rental properties with a 60% deduction this financial year, 80% the following year, and 100% by 2025/26, to allow 90-day eviction notices for tenants on periodic agreements – without having to state the reason, and to return tenants’ notice period to 21 days and landlords’ to 42 if the tenant wishes to move and the landlord wishes to sell their rental property. The promise to introduce pet bonds will make it easier for tenants to have pets. Finally, the Brightline test period will be reduced from the current 10 years, back to two years.
This good news for rental property owners is also good news for tenants. These proposed changes will discourage existing rental property owners from selling up and exiting the market and will encourage new property investors to enter the rental market. Consequently, the supply of rental properties will increase and, in time depending on the level of this supply the rents will stabilise and even decrease. Good tenants will not be affected by the 90 day eviction notices being reintroduced, and if people find they have tenants from hell living next door the rental property owner can do something about it.
It is in the interests of tenants that tenancy advocates support policy that increases the supply in rental property to make the provision of rental housing a profitable and rewarding business.