We contributed recently to a Stuff article that highlighted the very real issue of current Landlords looking to sell up over the proposed changes to rental rules. The issue is real, it’s prevalent and it’s happening.
A lot of commentators and other people are right though: a lot of those going up for sale are being picked up by other investors. The problem is, a lot of them are also being picked up by First-home buyers.
Contrary to popular belief. First-home buyers who are purchasing these properties can afford to do so because they have a deposit. Your average tenant does not have that deposit nor can they afford to save for one. Now think of this: if our rental stock is decreasing, what is the inevitable after effect? what has commonly happened in human history where a commodity has become scarce and prized by numerous others? the price of that commodity increases!
That is the reality of the proposed law changes, that is the reality of what is happening irrespective of the “other investors will buy” fact. Because they will, but the supply is still ridiculously short and people are still without homes and people still cannot afford to rent at current prices, imagine prices increasing even more.
The changes are influenced by the following reasons according to the Associate Housing Minister:
“The changes are ‘aimed at achieving an effective balance of the rights and responsibilities of landlords and tenants’, he says. ‘They are designed to stop exploitative behaviour by a minority of landlords.’
Because of the behaviour by a minority of landlords, the majority are struggling to keep up with the ever-changing rental industry. This isn’t just opinion either, it’s fact and it’s being experienced across the board. (See “An industry under pressure” by Property Brokers 18/12/2019)
The question from us is: would it not be more beneficial to 1. regulate the property management industry, 2. educate landlords and tenants and 3. require an education course or even licensing for private landlords?
Now again, do not get me wrong, there are some good proposals in the reform such as banning rental bidding – my primary concern is the 90-day notice reform and the knock-on effect this will have in the Tenancy Tribunal.
At present it takes 4 – 6 weeks to get a Tenancy Tribunal hearing. You aren’t able to apply to the Tenancy Tribunal for a termination and possession order until after the 90-day notice expires, because most times, you just won’t know if the tenant is going to carry on and ignore it.
In these circumstances you end up with 4 – 6 weeks rent arrears and a high likelihood of property damage. There goes your bond and now the landlord is left with another cost that, in most circumstances, is recovered at $30 per week until the debt is repaid.
The logic behind the reform and the requirement of “3 instances in 3 months” to prove your case – it’s absurd and it won’t work.
Bring on a reform of the Tenancy Tribunal’s processes – allow 90-day notices to be dealt with in a similar manner to abandonment applications whereby it can be decided without attendance, or hire more Adjudicators to ease the pressure.
Either way, betters options available to the Government aren’t very limited at the moment when you look at the current proposal. I live in hope that along the way and throughout consultation some good suggestions will come forward that are thoughtfully considered and adopted. Perhaps one of them will be our suggestions? you never know…