South Taranaki Star
Rents up highest in Taranaki, at 18%
Rents have increased across the country but in Taranaki they have increased by a greater proportion than anywhere else.
Trade Me’s latest Rental Price Index figures show on average the national median weekly rent has jumped 7% in the last year to $575.
However, in Taranaki rent has jumped 18% to $530 – the largest increase of any region in the country.
Nicki Smith, president of the Taranaki Property Investors Association, said the changes to tenancy laws from 2020 brought several new costs for landlords and these had been recouped from tenants through rental hikes for the past two years.
‘‘Landlords are facing tax increases, and they need to cover those costs somehow,’’ Smith said.
There were changes to healthy home rules including to the heating, ventilation, and moisture ingress and drainage standards.
Tax deductibility was another change and landlords could no longer write off their interest costs against the tax on their rental income.
Because rent rises could now only be done every 12 months, landlords were forecasting for a year instead of six months.
‘‘So those jumps are more substantial,’’ Smith said.
The Green Party called for an immediate rent freeze at the beginning of April, followed by limits on rental increases linked to inflation or wage growth to support renters.
But Smith said the threat of capping rent increases was another concern for landlords, as they were having to find the money for tax increases somewhere.
‘‘Tenants need to make themselves aware as to why their rent is being increased because that imposed tax is passed onto the last person, and they are that last person.’’
Pam Hight, rental division manager at Taranaki’s McDonald Real Estate, agreed rental prices were growing due to tax increases but said there were other factors.
‘‘Supply and demand have played a role as many investors have sold, and those houses have not been replaced.
‘‘For those investors still in the market, house prices and mortgage interest rates have increased substantially which means higher rent prices to be able to make even a small return on investment,’’ Hight said.
She said the new tax laws had slowed the investments in rental properties, ultimately impacting supply.
Compliance for the Healthy Homes Act and maintenance costs were also something to be considered.
‘‘While much needed to supply warm homes to tenants, it comes with a cost that has added to the problem,’’ she said.
‘‘Maintenance costs have also risen with the increase in the cost of supplies and time frames to complete work.’’
First National Taranaki property manager David Cruikshank said everything was starting to cost a lot more.
‘‘[Increase in rent prices] is a bit to do with new rules for landlords, higher mortgages and also rates. It’s a combination of everything.’’
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