Insulation costs see selling spike
Some rental property owners are opting to sell instead of paying to comply with new insulation standards.
In 2016, the former Government announced landlords would have to bring their rental properties up to standard by July 1, 2019, or risk being fined $4000.
Property managers working alongside landlords have recently noticed a rise in properties going on the market.
Professionals Real Estate Rentals and Property manager Tom Dymond said about 20 per cent of the more than 400 properties the company manages still needed to comply.
However, some were choosing to sell their investments instead.
‘‘There’s still houses that need [insulation], some of the owners have chosen to opt out of the rental business.’’
Pride Property general manager Jackie Alexander said she has seen 80-100 former rental properties sold in the last 18 months.
The new standards were good for tenants and good for the rental industry, Alexander said. ‘‘At the end of the day, it’s going to make the houses warmer, dryer and healthier.’’
But the reason for selling is not just because of compliance.
‘‘It’s down to a whole host of things, from new insurance prices to the insulation standards.’’
Ray White Invercargill business manager John Murphy said they were most of the way through upgrading their properties and he too had seen a rise in rental properties being sold.
‘‘There has been a steady amount [of sales] because some landlords can’t afford it.’’
However, Southland Real Estate general manager Gus Johnston said while he had not noticed an increase in rental properties being sold, the process to reach the standard took a lot of time. ‘‘It’s consuming on labour but it has to be done.’’
The company’s property sales were ‘‘as normal’’ at this stage, Johnston said.
In 2016, the Ministry of Business Innovation and Employment estimated there was 180,000 rental properties in New Zealand.
In a statement, Insulation Association of New Zealand president Stu Henwood said the insulation must meet a certain standard. ‘‘It’s not enough to stick your head in the roof space of a property and say the ceiling and underfloor are insulated.
‘‘Our members are experiencing a significant number of queries from landlords, however, we are concerned that all properties won’t be able to be completed in time,’’ Henwood said.
On Thursday, IAONZ executive officer Richard Arkinstall said while there were properties being upgraded throughout the country, there was an estimated 80,000-100,000 properties across the country still to be assessed.
‘‘The biggest issue was property owners trying to assess their properties themselves and thinking it’s compliant when it’s not.’’
Arkinstall said the exact breakdown of Southland rental properties was unclear.