Landlords retreat
A property manager says Wellington’s rental crisis is being fuelled in part by extra compliance costs.
A property manager says many landlords are selling their rentals as increasing regulation and costs have made keeping their properties an unattractive proposition.
Oxygen Property Management general manager Christian Casbolt said the company, which looks after about 3500 rental properties across the Wellington region and Hawke’s Bay, lost 10 per cent of its rental stock between January and August last year.
Feedback from people exiting the market had indicated to Oxygen that they were selling because of increasingly tight regulation and compliance costs.
Legislation such as the Healthy Homes Guarantee Bill and courts recently ruling in favour of renters in cases of unintentional damage had pushed up costs, making rental businesses untenable or unattractive to many.
High equity threshholds to buy rentals properties made it difficult for some people to enter the rental business and also contributed to the rental crisis, he said.
High property prices in conjunction with conditions perceived to be unfavourable made cashing in on properties ever more attractive. Many former rentals sold were not re-entering the rental market.
Casbolt stressed that the housing shortage was a dynamic environment and regulations were not the only factor.
No-one would argue that healthy-homes regulations were not a positive step as they added value to the properties and made them nicer places to live for tenants, he said.
However, he said he could see why some owners might be tempted to sell their properties rather than take on further costs.
He thought landlords had been unduly maligned in recent times and they were ‘‘by and far good owners who were considerate of tennants’’.
Renters United organiser Robert Whitaker did not believe landlords pulling out of the rental market was a major factor in the rental crisis.
Evidence he had seen suggested high demand rather than dropping supply was the more pressing factor.
Both Whitaker and Casbolt agreed the core reason for the crisis was a lack of new homes being built.
Whitaker could not think of any regulations having recently
"Half the population are now renters and they deserve to have security in their homes." Robert Whitaker Renters United organiser
come into effect that would have urged landlords to get out ouf the business in great numbers.
The Healthy Homes Guarantee Bill had long lead-in times for landlords to get their properties up to code.
Whitaker cited compulsory insulation for rentals as part of the bill that did not come into effect until July 2019, with some standards not having to be reached until 2024. ‘‘Nothing has changed right now.’’
More regulation to safeguard the rights and living conditions of tenants was a good thing.
‘‘Another way of looking at it is [landlords] have had it easy for a long time. Half the population are now renters and they deserve to have security in their homes.’’