The heat is on for landlords as the election looms.
The election result is in no way a foregone conclusion. There is still a long time to go before our delayed general election next month and as yet, there is very little noise from the major parties as to their policy towards housing and in particular, renting. One party that did come out swinging recently was National as leader, Judith Collins made it clear that she would remove Healthy Homes standards as well as repeal the recently passed Residential Tenancies Amendment Bill if they form the next Government. These comments prompted Andrew King of the New Zealand Property Investors
Association to state that landlords may want to consider delaying the installation of heatpumps to wait and see what the result of the election would be. Mr King has claimed that his comments have been taken out of context as what he was referring to was the fact that some tenants do not want heatpumps installed so those landlords should wait until the
election to see what happens next.
No matter who wins, what we are starting to see evolve is a classic left v right battle over property ownership rights versus the rights of the people who rent the property, On the Right, National which firmly believes that this Government is very much anti-landlord and that too much regulation increases the costs that landlords face which in turn leads to rents going up.
On the other side, we have Labour who have lived up to their 2017 election campaign promises. We have seen just about all of their 2017 election policy around renting legislation implemented. This includes implementing Healthy Homes Standards, removing the letting fee and improving the security of tenure for tenants.
One party which has come out with housing policy for this year’s election is the Green Party. The party has found themselves being heavily criticized recently following the ‘error of judgement’ regarding the funding of a green school in Taranaki and they may struggle to make the necessary 5% threshold.
However, let’s presume that they make the 5% and form a coalition government with Labour.
If this does eventuate, part of the coalition deal will be that the Greens get to enforce their housing policy. This will include the regulation of the property management industry along with the introduction of a landlord register as well as the introduction of the Rental Warrant of Fitness.
Co-Leader, Marama Davidson, announced the Green’s Housing Policy in August and at the time of writing, only the Greens have come out with a policy around housing. A tenant herself, Davidson is extremely passionate about providing warm and affordable housing for all. Although the Greens wrongly believe that speculators drive up prices, there are some valid points about what they are proposing. Davidson said at the launch at their Homes for All Plan, that the property management industry would be regulated, and property managers will be held to the same accountability as real estate agents. This is something we fully support at Tommy’s as do many others who work in the industry. Along with this, a move to develop a landlord’s register will likely see more landlords move towards professional property management. This will be a model similar to that which has been successfully implemented in Wales through the ‘Rent Smart Wales’ programme.
Looking at their housing strategy, it makes sense to give social housing providers the ability to extend their borrowing limit. Although I agree it is important to provide homes for all, social housing cannot become a lifestyle choice. People need to be motivated to better themselves and living off the state on minimum rent in a social house is not a long-term strategy for
economic growth.
All of this means that there could be a significant growth within the property management industry as landlords switch from self-management to professional management. It is estimated that just over 40% of the private rental sector is managed by a property manager. I would not be surprised to see this increase significantly over the next five years. Some
investors will sell as becoming a landlord becomes more complex. However, we are seeing strong enquiry from people looking to put their money into property and there will always be plenty of people prepared to invest in residential properties.
One thing we are extremely careful about at Tommy’s is to not overload our property managers with too many properties. The time it takes to manage a property has increased significantly in recent times and as such we cap what a property manager can look after. This means we are able to service both landlord and tenant promptly, and customer feedback is constantly monitored.
You will probably find that our fee structure is slightly higher than many other operators, however, we do this with good reason. If a property manager is managing too many properties, then service suffers, and your investment is placed at risk. Tenants become frustrated which in turn can lead to vacancies and even worse, litigation through the Tenancy Tribunal. It is wiser to invest a little bit more for the reassurance that your
property manager will be able to provide you attentive and professional service.
As ever, we will keep you posted and up to date with the increasingly complex world of renting in New Zealand, and we will continually be here to support both tenant and landlord.
Regards
David Faulkner
General Manager
Tommy’s Property Management