Sharon Cullwick interviewed by Radio NZ – Eva Cortlett. See RadioNZ article on 15 Sept

LANDLORDS HAVE BEEN TREATED AS SCAPEGOATS

A landlord group has claimed property investors have been treated as scapegoats "for years". It comes as tenants brace for higher rents from September 26, which is when the Government-imposed freeze on rent increases comes to an end. But landlords were warned by the Commerce Commission last month they could be at-risk of cartel-like behaviour after they used online forums to discuss raising rents en masse once the freeze ends. Stop the War on Tenancies spokesperson Mike Butler said rental property owners should have their property rights restored, which he said includes rent paid as agreed, respectful behaviour from tenants and the right to end tenancies if landlords choose.

https://www.newshub.co.nz/home/new-zealand/2020/09/landlord-group-claims-property-investors-treated-as-scapegoats-for-years.html - 15 Sept

ACT'S SUPPORT OF LANDLORDS IS WELCOMED

ACT's promise to reverse this year's Residential Tenancies Act changes and temporarily prohibit new regulations is welcome, Tenancies War spokesman Mike Butler said today. ACT leader David Seymour said: "I've seen some stupid policy before but it's hard to exaggerate the stupidity of Labour's law changes. They've directly disadvantaged the very people they were trying to help. We need to stop the stampede of landlords leaving the residential tenancy market." Mr Butler said that rental property owners must have restored to them their property rights which includes the right to expect rent paid as agreed, the right to expect respectful behaviour, and the right to end tenancies if they so wish. Under the current law, if a tenancy goes off the rails the owner and the Tenancy Tribunal are so tied up with red tape that issues will take months to resolve, if at all, Mr Butler said. https://www.scoop.co.nz/stories/PO2009/S00201/acts-stand-against-war-on-landlords-welcomed.htm - 15 Sept

FREEZE ON RENT INCREASES COMES TO AN END NEXT WEEK

Tenants are bracing themselves for a hike in living costs when a freeze on rent increases comes to an end next week. This is after the Commerce Commission had to warn property investors they could be at risk of cartel-like behaviour after discussing raising rents, en masse, the day after the freeze ends. Sharon Cullwick, who is the executive officer of the Property Investors Federation, received one of those letters. Investors were discussing the possibilities on Facebook, she said, and she's urging them to heed the warnings. "I think it was a general discussion that the Commerce Commission picked up on. I don't think it was anything specific. But it really is a warning to us that they are looking at what property investors are doing." She guessed as well that the Commission doesn't want rents going up in the Covid-19 climate. Tenants could expect to see rent notices appearing in the next couple of months, Cullwick said. "What we've heard is there are quite a few landlords giving rent increases but some of these are because when the legislation came in, we couldn't raise the rents at that time, and it put a delay on that."https://www.stuff.co.nz/business/property/300107374/landlords-expected-to-act-quickly-after-rent-freeze-ends - 15 Sept. https://www.rnz.co.nz/news/national/426054/landlords-expected-to-act-quickly-after-rent-freeze-ends - 15 Sept. https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12364975 - 15 Sept

PROPERTY INVESTORS WARNED NOT TO PARTICIPATE IN CARTEL LIKE BEHAVIOUR

Prime Minister Jacinda Ardern has asked landlords who are considering increasing their living costs for tenants after rent freezes end to "have a level of fair mindedness". The Government announced a six-month freeze on rent increases on March 26 to help protect tenants during the COVID-19 pandemic. But the Commerce Commission warned property investors last month they may be at-risk of cartel-like behaviour after they used online forums to discuss raising rents en masse on September 26 - the day after the rent freeze ends. Due to legislation changes that came into effect from August 20, rent increases are limited to once every 12 months. Previously, increases were limited to once every 180 days. Property Investors Federation executive officer Sharon Cullwick received a letter from the Commerce Commission, and said while investors were only discussing their possibilities on Facebook, she wants landlords to pay attention to the letters. "It really is a warning to us that they are looking at what property investors are doing," she told RNZ https://www.newshub.co.nz/home/new-zealand/2020/09/jacinda-ardern-s-message-to-landlords-considering-increasing-rents.html - 15 Sept https://www.newshub.co.nz/home/new-zealand/2020/09/coronavirus-tenants-brace-themselves-for-living-costs-hike-as-rent-increase-freeze-comes-to-an-end-next-week.html - 15 Sept

TENANT RESPONSIBILITY FOR BEHAVIOUR OF OTHER PEOPLE ON THE PROPERTY

Tenant responsibility for the behaviour of other people on the premises can have limits depending on the circumstances, a new Tenancy Tribunal ruling indicates. A South Auckland landlord, represented by their property manager, Sujata Koirala, from Oaks Property Management Limited, wanted to end a tenancy due to anti-social behaviour. Koirala went to the Tribunal back in May on that grounds that anti-social behaviour was causing problems at the property rented by Ena Mokaraka. At the time the Tribunal found Mokaraka's ex-partner, who had been invited on to the property, was responsible for the disturbances but it did not terminate the tenancy. While the circumstances in this case were tied up in family violence, addressing anti-social behaviour on the part of tenants and their guests generally has long been a problem for landlords. This ruling highlights just how difficult it can be to deal with such situations, even when they impact on people in neighbouring properties. https://www.goodreturns.co.nz/article/976517493/ex-partner-s-behaviour-not-a-tenancy-breach.html - 15 Sept

REGULATORY AND RATING FRAMEWORK FOR SHORT TERM RENTALS

No reasonable person would expect a homeowner who lets out a room in their house for short-term accommodation to be required to obtain resource consent and face a torrent of red tape. At last check, of the 4000 Christchurch listings on Airbnb alone, the majority are entire unhosted homes, available for short-term let. In Christchurch, the new charging regime for STRAs will be thrashed out in next year's Long-Term Plan, and once again, QLDC's (Queenstown Lake District Council) methodology provides a sound model to consider. But no matter what regulatory and rating framework Christchurch settles on, it's imperative the Government comes to the party with a mandatory national registration system for all STRAs, with a strict code of compliance, to enable local councils to effectively enforce the ground rules. https://www.stuff.co.nz/the-press/opinion/122762544/fairhanded-accommodation-regulation-a-complex-matter - 15 Sept

LIMIT RENT INCREASES TO NO MORE THAN INFLATION

An advocacy group for tenants is asking "current and future" MPs to limit rent increases to no more than inflation. Renters United is calling for support for its open letter, which, among other things, calls for incentives and sanctions to force the replacement of the worst private rental stock, a requirement for new rents to be set within a reasonable range compared to houses nearby and an inflation link for rent increases, except where significant improvements had been made. At present, inflation is running at an annual rate of 1.5 per cent while rents in many parts of the country have been increasing at twice that pace.https://www.stuff.co.nz/business/300108286/rent-increases-should-be-tied-to-inflation-tenants-rights-group-says - 16 Sept

Sharon Cullwick interviewed by Leah Panapa on Magic Radio about rent increases (See articel below) – 16 Sept

LANDLORDS WILL NEED TO HAND ON COSTS FOR HOME IMPROVEMENTS

Landlords will have no choice but to hand on costs for home improvements, says the chief executive of the Property Investors Federation. Sharon Cullwick says renting is a business, and as such, costs must be passed on. In an interview on Magic Talk, Cullwick said new legislation asking rental properties to be heated and free of draughts will inevitably result in rent hikes. "When you buy a commodity you have to pay for the cost of that commodity and the same goes for rent - it's the cost of business," she said on Wednesday. She also defended predictions landlords will raise rents when the Government's rent freeze comes to an end next week, saying it was only a matter of time. She denies landlords are planning with one another to raise rents in what the Commerce Commission labelled "cartel-like behaviour" but admits that higher rent is on the horizon for many tenants. "We know the price of holding a rental property has increased with The Healthy Homes Standards coming through - so we know there are a lot of costs coming through at the moment. It's the cost of business." https://www.newshub.co.nz/home/new-zealand/2020/09/landlords-will-have-to-hand-on-home-improvement-costs-to-tenants-says-property-investor.html - 16 September

NEVER A RIGHT TIME TO BUY PROPERTY

New Zealanders who are apprehensive about buying property should be spurred on to take the jump as record low mortgage rates and a lesson from the current world backdrop settle in, argues iConsult's Satyan Mehra*. This year the entire world has been shut down, travel has been prohibited, trade has been severely hit and our social-economic wellbeing has taken a monumental blow. How much worse could our situation get? Yet Kiwis looking to buy their first home might as well invest in property now as there's never a right time to invest. https://www.goodreturns.co.nz/article/976517502/comment-never-a-right-time-to-invest-why-buyers-need-to-act-now.html - 16 Sept

TENANTS ARE NOT REQUIRED TO HAVE THE CARPETS PROFESSIONALLY CLEANED

A Twizel real estate agency has failed to get a $1900 carpet cleaning fee through the Tenancy Tribunal, despite being awarded $5210 in other claims. However, the claim that the carpets required a $1900 cleaning fee was not upheld by adjudicator J Talbot on the grounds that "the available evidence does not substantiate this unusually large amount," according to the official judgment. "I am however satisfied that it would be reasonable to have incurred $300.00 cost for carpet cleaning including stain removal, and I award that amount in compensation,'' Talbot said. According to the Residential Tenancies Act, a rented property is required to be left in a reasonably clean and tidy condition at the end of a tenancy. This does not account for normal wear and tear. Last year excessive carpet cleaning claims drew media attention after Kelly Hannifin, a tenant in Christchurch, had her $840 bond withheld while her landlord unsuccessfully took her to the Tenancy Tribunal for a $90 professional carpet cleaning fee. In their ruling on Hannifin's case, the Tenancy Tribunal said that tenants are not required to professionally clean their carpets when they end their tenancies and that Hannifin was not required to leave the carpet in a state where the premises could immediately be rented again. https://www.stuff.co.nz/timaru-herald/news/122755469/twizel-landlord-fails-in-bid-to-get-1900-carpet-cleaning-fee - 17 September

VIEWS OF THE PARTIES ON INTRODUCING RENT CAPS

The Green Party and The Opportunities Party have announced they will both support the introduction of rent caps which would limit the amount a landlord could increase rent. Ricardo Menéndez-March from the Green Party said it supported "to legislate to ensure secure and affordable long-term rental accommodation". "I do think we need to we need to make sure landlords are not ripping us off in the middle of a housing crisis." It was "absolutely unfair" for people to be spending most of their income on rent and "people here are going without because of high rents". National Party's Nicola Willis acknowledged that there was a massive housing challenge in Wellington but the party would not support the introduction of rent caps. "We have to increase the supply of housing that's why we're committing to replacing and appealing the Resource Management Act ... we believe that kind of systemic reform gets to the nub of our housing issue which comes down to not enough houses to keep up with demand. When we solve that, then rents and house ownership become more affordable." Taylor Arneil from New Zealand First said it advocated for the building of more homes instead of introducing rent caps. Labour Party's Andrew Little said it did not support introducing rent caps. https://www.stuff.co.nz/national/politics/122808007/election-2020-green-party-and-the-opportunities-party-support-introduction-of-rent-caps - 17 Sept

SHARED DRIVEWAY A PROBLEM FOR SOCIAL HOUSING AGENCY

A Dunedin couple offered to lease a new rental to New Zealand's social housing agency – below market value – to help a family in need, but were rejected because it has a shared driveway. The woman, who studies at the University of Otago, said she approached Kāinga Ora about leasing the property. ''I just wanted to cover my costs; I didn't want to make more money.'' She said she was more than happy to keep the rent at same price over the proposed five-year lease, and would supply appliances, curtains and two heat pumps, have the driveway sealed, and landscape the section. She was also relaxed about prospective tenants having pets, which she was aware was a major hurdle for some families. Eight days later, she received an email saying Kāinga Ora would not lease the property because the shared accessway was "not suitable". No-one from the agency viewed the property in person. https://www.stuff.co.nz/national/122787062/new-home-rejected-by-social-housing-agency-because-of-shared-driveway - 17 Sept

HIGH DEMAND KEEPS PUSHING HOUSE PRICES UP

The latest Trade Me Property Price Index is out today and it shows the national average asking price increased by 9% year-on-year to hit $701,750 in August. Trade Me Property spokesperson Aaron Clancy says this marks the second consecutive month where the national average asking price has shown such massive growth. "July also saw a 9% year-on-year increase but, prior to this, the last time we saw such a large increase was in 2017."Further, every region in the country saw strong annual price growth in August – including the country's two biggest urban centres, Auckland (up 8.6% to $948,800) and Wellington (up 9.0% to $689,500).Demand appears to be behind the growth, with demand nationwide up by 19% in August when compared with last year and all regions seeing year-on-year increases. https://www.goodreturns.co.nz/article/976517517/high-demand-keeps-pushing-prices-up.html - 18 Sept

LISTING SHORTAGE FEEDING ON ITSELF

Economic commentator Tony Alexander says New Zealand entered Covid-19 with property listings down 27 percent from March 2019 and they were still 13 percent down in August, compared to last year. "There is now so much awareness of a shortage of stock that agents are reporting vendors as being unwilling to sell because they do not want to run the risk of bit being unable to quickly purchase a new suitable property. "The listings shortage has started to feed on itself in a self-perpetuating manner," Alexander says. Bindi Norwell, Chief Executive at REINZ says that eight regions and 17 districts or cities had record median prices in August, including both Lower Hutt ($670,000) and Upper Hutt ($663,200). https://www.oneroof.co.nz/news/38446 - 18 Sept

LANDLORD AWARDED $20,438

A group of tenants who had to be forcibly evicted from a Porirua house have been ordered to pay their former property managers $20,438 after leaving the property badly damaged. The Tenancy Tribunal determined that Aroha Nepia, Nathanael Ngaata, Temare Nepia and Stevie Nepia should pay $5100 for repairs to door jambs, $3710 for plastering of walls and ceilings, $3221 for painting, $1000 for the insurance excess on a garage wall repair and $840 for rubbish removal, among other work on the property. They were also told to pay $2000 to cover loss of rent and $2492 in rent arrears. https://www.stuff.co.nz/life-style/homed/real-estate/300110822/tenants-told-to-pay-20k-after-being-evicted-from-damaged-house - 18 Sept

HOW THE HOUSING MARKET HAS CHANGED

Sociologist Kay Saville-Smith, the director of Centre for Research, Evaluation and Social Assessment (CRESA), said things changed during the housing reforms of the 1990s when Government investment in new builds largely ceased and there was no longer support for people to get into their own homes, or capital support for the community housing sector. Saville-Smith said house prices were highly-fuelled so that even when interest rates were low, house prices were still so high that the people who several decades ago would have found themselves in owner-occupation with some subsidised housing support could not easily get into home ownership anymore. "In fact most of them won't be able to, which is why we have ended up with young people and young families in the rental market, with over 50 per cent of our kids being raised in rentals."Saville-Smith said there were a lot of undesirables in the housing system; homelessness, insecurity, problems with house prices and an unfriendly rental market. "What confronts us all, is how do you get a housing system that deals with the diversity of need and is adaptable over time?" https://www.stuff.co.nz/life-style/homed/122293626/close-to-home-why-we-need-social-housing-more-than-ever - 19 Sept

SECOND DWELLING ON AN EXISTING PROPERTY AN AFFORDABLE SOLUTION

In October the Nelson City Council will be releasing its draft Whakamahere Whakatū Nelson Plan, which will include provisions to make it easier for people to partition or build a second dwelling on an existing property. In the 2017 CRESA report, while it was identified there was a lot of potential for second dwellings/partitioning, there was not a clear position on the matter across councils throughout New Zealand. Earlier this year, Nelson architects Pete Olorenshaw and Lindsay Wood costed a working example of a house partition, of a two-bedroom villa in The Brook in Nelson. "When Lindsay priced it out, it was less than $120,000 all up, including GST, consent fees, consultant fees, even down to toothbrush holders. Olorenshaw said as well as not having to deal with land costs, there was no additional pressure due to more roading or water supply loading. "$120,000 for a new dwelling is an affordable house for me, and it didn't downgrade the original dwelling that much." https://www.stuff.co.nz/life-style/homed/122768084/close-to-home-could-second-dwellings-be-a-solution-to-the-housing-supply-crisis - 19 Sept

MASTER PLANNED COMMUNITIES WITH AMENITIES BECOMING INCREASINGLY ATTRACTIVE

Well-designed homes in master-planned communities are proving an attractive proposition not only in terms of resale values but also as a way to prevent social isolation among those who live there. Part of the attraction is the design of these new communities which incorporate schools, parks, cafes and other amenities right on people's doorsteps. Master-planned suburbs in large urban cities are becoming more prevalent, Wilson says, with the traditional aspiration for a quarter acre section giving way to aspiration a smaller back yard and pleasant, shared space. https://www.oneroof.co.nz/news/38391 - 19 Sept

PROPERTY INVESTMENT A RETIREMENT PLAN

Riding the share market was Harry Pearson's investment scheme the moment he began working in his teens, but continuous recessions motivated him to diversify his investments, adding property to his repertoire. The self-employed Nelson man has built up a portfolio of five properties in the Nelson region over the last 12 years, which include his own home. But property investment is "not a free-ride" short-term money-maker, he said. His cashflow "flat lines or negatives", he said, having to top up the mortgages. Pearson, in his late 50s, fits the bill when it comes to the demograph of property investors. The properties are his retirement plan, a "back up option" if he needed to support himself, he said. Bayleys Nelson Tasman managing director Graeme Vining said primarily, retirees or later-in-life investors wanting a superannuation plan were "coming out of super funds and directly investing". Meanwhile Pearson is happy to sit on his rentals which he did up to make them comfortable for tenants. "It's a lot easier to buy a new house; less maintenance, but your upfront costs are so high ... you'll never get enough rent to cover cost of a brand new home." His advice to potential property investors was to join a property investors association, do your research and "create a home" for tenants to make them more likely to stay. https://www.stuff.co.nz/life-style/homed/real-estate/122149433/close-to-home-property-investment-no-free-ride - 21 September

OCR EXPECTED TO BE KEPT ON HOLD THIS WEEK

The Reserve Bank is expected to keep the OCR on hold this week, but could highlight the growing chance of a negative central bank rate. TMM Online's latest Monetary Policy Review preview survey finds economists unanimously predict interest rates will stay on hold. Yet with the global fallout from Covid-19 predicted to take its toll on the economy, and NZ reeling from its worst ever fall in GDP, the Reserve Bank is expected to talk up the odds of a negative official cash rate. All of the economists surveyed by TMM Online predicted rates would stay on hold, with an 80%-100% probability. https://www.landlords.co.nz/article/976517520/rbnz-to-talk-up-negative-ocr-preview-survey - 21 Sept

Jan Hains

NZPIF Communication Officer

04 972 5178

0274 526 964