National’s weird tenancy policy announcement

Written By: - Date published: 10:31 am, April 30th, 2023 - 73 comments
Categories: act, chris bishop, national, same old national, spin, you couldn't make this shit up - Tags:

Back in 2008 when John Key was seeking power National’s policy mix was very middle of the road.  They tried to look like Labour lite but also offering a tax cut.

The policy worked and it took the country a while to realise that they had been sold a pup.

Which is why National’s current approach is such a surprise to me.  Because they are clearly more concerned with appealing to their overly wealthy base.  As their announcement of their tenancy policy this week showed.

But what was surprising was the framing National chose to apply to the policy.

In a speech to the Property Council Residential Development Summit Comrade Chris Bishop came up with some outstandingly strange takes and over the top rhetoric.

He said that the Government was engaged in “a war on landlords by removing interest as a legitimate expense for rental property owners and extending the bright-line test to 10 years”.

He subsequently made these questionable claims:

  • There has been a decrease in the supply of tenantable properties caused by Labour’s policies.
  • Rents are up $175 per week in the past five years.
  • Changing the law so that tenants can be evicted without cause is a “progressive pro tenant move”.

These claims were comprehensively rebuked in this clip:

And if you need proof:

In December 2017 lodged bonds totalled 358,767.  The latest data for February 2023 suggests that lodged bonds are now 398,067 which is an 11% increase.  And in August last year the Government celebrated the construction of over 10,000 new state houses in its term.

As explained by Clint Smith the statistics relating to the level of rent increases is rather dodgy to put it mildly.

And the claim that allowing tenants to be evicted more easily is a pro tenant move is such a ridiculous thing to say that I am astounded that Bishop would say it once, let alone repeat it.  It is the sort of thing that a landlord would think, and maybe this is why he said it.

The bright line test extension is clearly having an effect.  Prices have been dropping for 15 months now.

This particular announcement highlights two matters.

Firstly National will pander to its base this election.  It looks like Act’s strong polling has pulled National to the right in a defensive move.

Secondly National will say any thing no matter how ridiculous in an attempt to dominate the airwaves.

Hopefully the media will note how easily disproven and ridiculous and factually incorrect their utterances are.

73 comments on “National’s weird tenancy policy announcement ”

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  1. tsmithfield 1
    30 April 2023 at 1:54 pm

    If Labour actually were succeeding solving the housing crisis, then there would be a basis for criticising National. But, as I pointed out in GD, the housing problem has become a lot worse under Labour.

    Regardless of the number of houses available, the cost for rentals has become a lot more expensive, and out of the reach of many. I think that can largely be traced back to steps the government has taken to make it more expensive for landlords, who will look to recover those costs from rentals.

    On the converse, if life is made easier for landlords, they will likely rent out available property, and will be more likely to take a chance with tenants if they are able to get rid of them if they don't work out. If more property is available, and costs and risks for landlords are less, then prices should drop, and more property should become available.

    So, prices should drop, and more houses should become available, and people should get more opportunities. Whether it works out will depend largely on how well they respect the properties of landlords, and how reliable they are at paying their rents. Landlords are unlikely to turf out good tenants.

    So, the housing crisis should reduce under National. And those who become homeless are more likely to be those who have demonstrated that they are not good tenants in the first place.

    • Bearded Git 1.1
      30 April 2023 at 2:36 pm

      Tsmith….if during the Key and English 9 years National had built more state houses rather than selling them off (to finance tax cuts) there would've almost no housing crisis now.

      As the post says, Labour has built10.000 in 5 years. Also in the last couple of years there have been record residential construction consents (can't link…right now I'm on a tricky walking track). So to Blame Labour for the housing crisis is laughable.

    • Incognito 1.2
      30 April 2023 at 2:39 pm

      Let me condense and paraphrase your beliefs based on pure dreaming without a shred of supporting evidence:

      If National (together with ACT) gets in charge then the landlords should be happy and they should drop their rental prices, which should make the good tenants happy too, and this should solve the NZ housing crisis, which should make everybody happy.

      Happy, happy, clap, clap. I think you have just landed on National’s election campaign slogan.

      • tsmithfield 1.2.1
        30 April 2023 at 3:21 pm

        Its called the law of supply and demand. The more there is of something, the less expensive it tends to become. This is a universal law that applies to most markets.

        If the government changes to rental requirements for landlords (eg eliminating interest deductability) encourages them to sell, then the most likely buyers will tend to be first home buyers at that price range. And, that is likely to increase homelessness a lot more. Here is why:

        Many first home buyers tend to be single people or young couples who already are often comfortably housed. Either at home with their parents, or flatting with others. Hence, they are causing no stress on the housing supply.

        However, if a landlord decides to sell a property, this may mean displacing a family in order to sell the property. If one of those first home buyers, who is already comfortably housed buys one of those properties, then someone who didn't really need a house will be potentially displacing a family.

        • arkie 1.2.1.1
          30 April 2023 at 6:45 pm

          I have pointed this out before; housing doesn't operate by the 'law' of supply and demand. At the end of last year:

          The number of rental properties available has increased, with listings nationwide up 6% annually in November. Supply has now increased year-on-year for eight months in a row.

          …

          Stats NZ’s latest rental price index showed rents across the entire market up 4% in the year to November, and by 0.2% on October.

          https://www.stuff.co.nz/business/property/130801129/by-the-numbers-the-rental-market-at-years-end

          And then in February this year:

          Rent prices in New Zealand reached a record national average high of $600 per week in February, according to Trade Me's latest property data.

          https://www.newshub.co.nz/home/money/2023/03/february-sees-record-high-for-rent-prices-across-aotearoa-trade-me.html

          So as you can see, rents keep going up regardless of the lower demand. The 'law' of supply and demand is broken.

          There is an inherent contradiction in the landlord-tenant relationship; the tenant wants the nicest possible home for the lowest possible price, while the landlord wants the cheapest possible house to be rented for the highest price possible. The renter wants somewhere they can set up a stable healthy home, the landlord wants maximum yield on their investment; these goals are opposed. NACT policy would further intensify this profit-seeking to the detriment of those who simply need somewhere to live.

          Housing is a human right; investment returns are not.

        • Incognito 1.2.1.2
          30 April 2023 at 8:19 pm

          I can tell that you believe your own hypotheticals to be accurate and true. However, your supporting evidence is severely lacking and mostly based on your dogmatic faith in the ‘good and generous’ nature of the free market. Which is why you only provide lame generic supporting information to argue your points.

          The NZ housing ‘crisis’ is really an affordability crisis. Giving landlords more power & control in a market that is already heavily tilted in their favour is only going to make matters worse for tenants.

          • Sanctuary 1.2.1.2.1
            1 May 2023 at 10:56 am

            The biggest issue isn't the rights of renters, it is that most NZer's who own rentals do so primarily to farm the untaxed capital gain.

            National's policy was essentially to engineer a housing crisis by unchecked immigration coupled with policies practically designed to guarantee a housing shortage, thus (on paper at least) enriching the property owning class at the expense of everyone else who had to pay inflated rents.

            This current housing "policy" shows that National isn't really interesting in housing per se, but very keen to return to a not so subtle class war of rewarding the rich who own property and want a return to profitable, no risk capital gains farming at the expense of everyone else.

            Land speculation was, is and always will be the primary concern of a globalised capitalist rentier settler elite who wish nothing more than to farm the capital gain and eventually sell up and retire to a villa in the Napa Valley or the South of France or the Home Counties.

            • Incognito 1.2.1.2.1.1
              1 May 2023 at 11:56 am

              I think the balance between the rights of renters and landlords is still not quite right here in NZ. In addition, having rights on paper shouldn’t mean long and tortuous semi-legal dispute processes to claim and protect those rights.

              As to farming untaxed CG, this is generally realised upon a one-off upon sale of the property. You can call it a one-time harvest instead of long-term ‘farming’. Unless you use it to buy another property and repeat the process. For many (?) landlords, a rental is a nest egg and an insurance against future pressures on Super.

              Obviously, there are other financial perks of owning rental property, which adds to one’s total net wealth.

              I don’t have stats for this but a number of landlords are ‘accidental’ landlords in that they ended up owning a second property through a change of personal circumstances. I’d like to think this is fairly common. Our SYSOP is an example. Personally, I don’t think such change suddenly changes a person into a greedy heartless arsehole hell bound on ripping off renters and kicking them out and onto the street. But this seems to be a meme that some like to propagate.

              Some still seem to think National is acting for the good of all Kiwis. Tui ad stuff!

              • Sanctuary …
                1 May 2023 at 12:35 pm

                A lot of people are "accidental" or semi-pro landlords in NZ. The problem with that is a mindset where renters are the unfortunate consequence of having to pay the mortgage on the superannuation asset and the property itself is primarily the main asset of an often cash-strapped owner, rather than someone else's home.

                Any number of renters can attest to amateur landlords who can't get their head around the concept it isn't their house and behave as if they are the victim of some sort of imposition on their property rights when the tennant requests repairs or government regulation forces them to do something.

                The thing is there is an entire generation of boomers and Gen Xer's who grew up in the multi financial crises post 1973. They observed the financial capriciousness of the Muldoon years followed by the Douglas/Richardson era where crony capitalism asset stripped the country, causing mass unemployment, and outright crooks engaged in insider trading and all sorts of other sharp practice to enrich themselves before the 1987 sharemarket crash. Those boomers/Gen Xer's decided enough was enough and the only way to guarantee their retirement nest egg was to invest in something literally as safe as houses.

                So instead of developing an economy where the Kirk superannuation scheme was main source of retirement funds and New Zealanders invest in all sorts of productive, locally based industries we've got a pay-as-you-go super scheme struggling at the seams and a property owning public deeply mistrustful of investing in anything productive lest they lose it all to some shyster in a nice suit.

                Ultimately, we have to restructure our economy so housing is seen primarily as providing people with somewhere nice to live and we invest in things that add to the sum of our national wealth, rather than having a group of NZers lucky enough to have been born before 1975 getting notionally rich by selling house to each other.

                Funnily enough, although not immediately related making Kiwisaver compulsory would actually be the first step in making a generational shift in attitudes to housing.

                • Incognito …
                  1 May 2023 at 8:52 pm

                  Good comments, thanks.

                  It goes against the DIY attitude of Kiwis, and might save a few $$, but a professional property manager can help to create that necessary distance between owner and occupier/tenant. My own experiences with NZ landlords underlines this, although they were all quite nice and reasonable people, but couldn’t respect the boundaries enough.

                  I would love NZ to grow up and start investing in its future and in an economy that is innovative and proudly produces high-value products. It is about fucking time that this happens!

      • Bearded Git 1.2.2
        1 May 2023 at 10:13 am

        smileyLove it Incog.

    • miravox 1.3
      30 April 2023 at 4:24 pm

      You write as if there is only one option. There are others, and Vienna's social housing system operating since the 1930s, tweaked in the 1980s to include private developers competitions to build masses of mixed housing, is very hard to beat in terms of providing quality housing for its population.

      e.g.

      Built on an old industrial site spanning about 7 hectares, the Kabelwerk social housing project has a total of 1,004 housing units spread across various housing types including subsidized rental housing, subsidized owner-occupied homes, apartments for refugees, and student housing. The development includes amenities such as shops, restaurants, a kindergarten, meeting rooms, and a rooftop pool which enhance the quality of life for the residents.

      … Rents are regulated by the city government so that none of the residents pay any more than 20 to 25 percent of their household income for housing…

      Private rental supply is the most unfair and inefficient system (especially when environmental and social externalities are taken into account) imho.

      • tsmithfield 1.3.1
        30 April 2023 at 4:57 pm

        I think there will always be a need for social housing. And that sort of model has its place. But, if the private rental market is working well, and is providing affordable accomodations, then there will be a lot less pressure on the housing system as a whole, including social housing.

        So, having the private market functioning well is key to the social housing market functioning well. All these things are interlinked.

        • RedLogix 1.3.1.1
          30 April 2023 at 5:25 pm

          But, if the private rental market is working well, and is providing affordable accomodations,

          And it will only work well if not only the supply but the cost of providing that supply is affordable. We could all hypothetically live in 500m2 mansions by the beach if there was an unlimited supply of beach and houses could be built for next to nothing.

          The reality that any property owner in NZ can tell you is that relentlessly rising fixed costs, rates, insurance and R&M, plus variable costs such as interest rates, makes owning any house an expensive proposition.

          Consider that to either buy or build a fairly median 3-bed house in a median suburb is going to leave not a lot of change out of $750k.

          With a standard mortgage at 20% equity and 8% interest – this amounts to $48k per annum of mortgage payment. And if the mortgage is less than 10yrs old the large majority of this is interest and for a landlord this is not tax deductable.

          Now factor in another $10k pa or so of fixed costs – and instantly it is obvious no-one can afford to operate this as a rental. You would have to charge close to $1200pw just to cover these costs – let alone make any kind of sane return on the asset.

          Yet the really stupid thing here – is that neither could the existing tenants who live in the majority of rental units afford to own them either. Even assuming they had the equity and any bank would qualify them for a mortgage.

          Everyone here pays attention to the symptom of the problem, and given so many on the left cannot get past a pathological, resentful hatred of landlords – the root cause of the manifest housing problem in NZ remains untouched. Which suits plenty of people as it gives them something perpetual to moan about.

        • miravox 1.3.1.2
          30 April 2023 at 5:58 pm

          "if the private rental market is working well, and is providing affordable accomodations, then there will be a lot less pressure on the housing system as a whole, including social housing."

          It's the other way aound in Vienna. The social housing market works well, so the private market can't get itself too out of synch with it – and provides good housing.

          In a capitalist market system, the private market will also build whatever makes the most profit. In the last few decades that has led to mansions for some and edge of town builds for others and a rise in slumlords.

          Vienna's system is fully integrated planning that instructs developers where to build and what to build and then they tell landlords how much they can charge. If you think NZ landlords have it tough, you should see what landlords in Vienna have to do – and yet, they still make a living.

          If the aim of housing is to house the population in safe, affordable housing that allows people good access to ammenities, jobs and transport then the interlinked state housing system Vienna is the way to go. If the aim of housing is profit for landlords, then yeah – vote national.

          • tsmithfield 1.3.1.2.1
            30 April 2023 at 6:20 pm

            In the end, it comes down to supply. If there is enough housing, then the type of model you refer to will work well. If there is not, there will be shortages.

            For instance, according to someone I know from Holland, they have to wait for up to seven years for a rental over there.

            • miravox 1.3.1.2.1.1
              30 April 2023 at 6:32 pm

              Because the planning is done by the local govt (and they're very good at it) the state has planned and built well ahead of need, despite rapid population growth.

              • tsmithfield …
                30 April 2023 at 7:23 pm

                the state has planned and built well ahead of need

                And there you have hit the nail on the head. In your example supply is not a problem, which confirms what I have said as well.

                Unfortunately, we aren't good at planning ahead here. Look at our roads for example.

                • miravox …
                  30 April 2023 at 7:34 pm

                  we aren't good at planning ahead here

                  Exactly – a capitalist economic model, based on private enterprise providing for a diverse population, only when it can make $$ doesn't work as well as a social democratic model that plans for its people's needs. Some things, like housing, shouldn't be left to "the market" (imho)

        • Incognito 1.3.1.3
          30 April 2023 at 8:04 pm

          The private market is synonymous with the free market. You are suggesting that unfettered capitalism will find a social conscience and a moral compass to fill social housing (and presumably other) needs. This hands-off approach sounds like one of these self-driving cars from Elon going into carpooling mode because AI told it so. Mate! You are dreaming!

        • Thinker 1.3.1.4
          30 April 2023 at 9:16 pm

          The government supplying state houses isn't really enough. The government used to have a role in some industries as a regulator and the supposed-market forces ideology has done a lot of damage.

          Governments are in a more difficult position to step in and regulate markets these days, for many reasons.

          I don't think neoliberalism actually prevents governments from regulating. I believe that, for anyone born in New Zealand who is under 40, their only experience is governments that are market-driven. Sadly political parties of all colours bought into neoliberalism in the mid-eighties and there was no-one to be the poster-children for regulation.

          MMP protects us from the wealthy becoming kingmakers, regardless of which party wins an election, but it hasn't stopped the myths and legends creeping in, most prominently the association of Socialism being linked to Communism, Red-menace, etc, which makes it difficult for governments to introduce a regulated economy, even in part.

          Which leaves landlords able to base their rents on the market. As others have said, when you have a supply of 100 houses and a pool of 200 potential tenants, rent becomes a bidding war to be won by the 100 tenants who can most afford to outbid the other 100. The only regulation is the affordability of the 100th bidder, however much profit that might represent.

          Unfortunately, the 100 who miss out are probably the ones who have the fewest other choices.

          Without the ability or preparedness to regulate, all the government can do is try to build enough social houses to fill the gap, limited as it is by the other political pressure of how much taxation are people prepared to pay.

          I think the damage was done 40 years ago, when a myth was created that our small economy could work using the same levers as much larger ones and where anyone with an alternative view found themselves shut down.

          I'm not an economist, but I've worked in roles where I had to try to make sense of what they said. From that perspective, I think the only answer will come when a political party can persuade New Zealanders who were born being brainwashed by monetarist thinking that our small economy must be regulated (or quasi-regulated) in key areas, where the so-called "level playing field" between supplier and consumer is simply a myth.

          • Belladonna 1.3.1.4.1
            1 May 2023 at 8:42 am

            Government (both central and local) does indeed have a role. At the moment, that role is resulting in housing being more expensive.
            The RMA process, and the subsequent resource consent requirements add tens of thousands to the build price.
            The local council unwillingness to consider alternative building materials (exposed when there was a shortage of gib – meaning that building consents using an alterative product were no longer valid) means that building materials suppliers have a stranglehold on NZ (they cost a lot more here than in Oz)
            Costs and delays in the building consent process. I'll leave that one here. Anyone who's been through it knows.
            Restriction on land supply. There is a very strong argument that the price of land (the greatest cost, by far, for any new building project in a city), is being driven up by council green belt restrictions. There may, indeed be arguments for this – but the result is a much higher land price.

            All of those result in increased cost of housing – driven entirely by central and local government policies.

    • Adam Smith 1.4
      1 May 2023 at 2:23 pm

      The reason it is worse under Labour (and this is debatable) is that they have been too chickenshit to implement a Capital Gains Tax (CGT) in a close to unregulated market.

      The problem started with National and has worsened under Labour. This is due to the austerity driven Labour policies which followed 9 years of National austerity (which followed … etc).

      This issue is complicated by our inflation rate currently. Not the worst in the OECD – but still problematic aye!

  2. Chess Player 2
    30 April 2023 at 3:44 pm

    This looked interesting right up until when you started quoting Clint Smith

    • Incognito 2.1
      30 April 2023 at 7:10 pm

      You cannot handle the truth, we get it.

      Stick to reading the headlines only and you’ll be ok.

  3. Ad 3
    30 April 2023 at 4:27 pm

    National is framing landlords as latent assholes.

    Not helpful.

  4. pat 4
    30 April 2023 at 5:38 pm

    The state of the rental/property market will depend significantly upon the result of the election if the BBQ discussions are to be believed….Ive lost count of the number of rental owners who have stated they are defering the decision to sell until after as National will restore interest deductability removing the necessity to sell….

    …it may all be moot however if credit continues to tighten.

  5. tsmithfield 5
    30 April 2023 at 6:31 pm

    Labour's very own policies will likely make the problem worse. From the Labour document under home ownership:

    We’re making changes to help more first home buyers into their own place. We’ve lifted the income and house price caps on First Home Loans and Grants, meaning more people can access this support. We banned offshore speculators from buying Kiwi homes, and we’re also removing interest deductibility that benefits local property speculators. These measures, along with the extension of the bright-line test to 10 years, will ease pressure on the market and help more first home buyers get into a property.

    So, by implication, it appears that Labour removed interest deductibility to make it less attractive for Landlords to rent homes so they would sell them to first home buyers, as the interest deductibility changes affected landlords as well as “speculators”.

    As I pointed out above, first home buyers are often already comfortably housed either with their parents, or out flatting with friends. Hence, they are not part of the housing problem.

    But, if landlords sell their properties, as appears to be part of the government plan, then this could result in the displacing of families in those rentals to be replaced by first home buyers purchasing those homes who don't actually need the accomodation.

    I suspect this is part of why the homeless problem is increasing. As an unintended consequence of Labour's goal to make it easier for first home buyers.

    • pat 5.1
      30 April 2023 at 7:31 pm

      As your synopsis suggests, it will depend on what happens to those previously rented properties….there is nothing to stop them from remaining in the rental market, indeed Housing NZ have been buying existing properties over the past few years…and the gov is far less constrained by credit risk.

      Come November we may see a substantial increase in HNZ stock levels (and a consequent reduction in the waiting list)….and maybe even at fire sale prices.

    • Incognito 5.2
      30 April 2023 at 8:08 pm

      So, by implication, it appears that Labour removed interest deductibility to make it less attractive for Landlords to rent homes so they would sell them to first home buyers …

      Except the big sell-off has not materialised.

      https://www.stuff.co.nz/business/131801260/number-of-investment-properties-selling-plummets-up-to-83

      It seems that you apparently like to speculate about possibilities. It is obvious that you have no evidence to support your figments of imagination.

      • pat 5.2.1
        30 April 2023 at 8:23 pm

        Meh…the evidence will appear when it does.

        • Incognito 5.2.1.1
          30 April 2023 at 8:44 pm

          Of course, I can predict the Lotto numbers from last week too.

          Faith-based speculation is no foundation for debate, unless you vote National or ACT.

          • pat 5.2.1.1.1
            30 April 2023 at 8:55 pm

            One mans faith based speculation is anothers random sample of stakeholders.

            • Incognito 5.2.1.1.1.1
              30 April 2023 at 9:07 pm

              I prefer a random sample to a cherry-picked one and definitely more than faith-based reckons from true believers any day. If people want to believe Luxon & Bishop’s bizarre and absurd promises that’s on them.

      • tsmithfield 5.2.2
        30 April 2023 at 8:31 pm

        That is a fair point, at the moment. Mainly, it appears, because those owners would likely lose a bundle if they were to quit their properties at the moment. Not because of a lack of desire to try. From the article you cite:

        John Bolton, founder of mortgage brokerage Squirrel, said there was definitely softness in the market, and investors wanting to quit properties, but no buyers.

        Given that there will be buyers at a low enough price point, that is a fair implication of the statement.

        But, if interest rates keep increasing, and landlords remain unable to deduct those interest costs, then many may not have much option but to sell at whatever they can get for those properties. At previous low interest rates, non-deductibility wasn't the problem it is at current interest rates. So, the effect may yet be to come.

        • Incognito 5.2.2.1
          30 April 2023 at 8:50 pm

          It is hard and almost impossible to have a serious and constructive convo with a true believer.

          Why don’t you go and find out how many Mom & Dad investors own more than one rental and get back to us with some hard numbers & facts that we could use to build a debate on?

          You may also want to do some research on how many of those investors will have their mortgages come off their fixed rates this year.

          Then you can put this into the context of a high-interest and high CoL environment with dropping house prices.

          Then we can start talking business instead of faith & beliefs.

          Have a good night.

          • tsmithfield 5.2.2.1.1
            1 May 2023 at 7:00 am

            Well, it certainly seems to be true in Christchurch. According to the article, rentals in Christchurch have dropped from 2105 in 2021 to 690 now. According to the article, people are finding it incredibly difficult to find houses to rent.

            According to Bayleys investment sales specialist Angela Webb:

            stock levels were at an all-time low due to investors selling their rental properties because of all the red tape and extra costs.

            And so far as the rental situation generally is concerned, it is also about investors purchasing properties for rental. Not just the sales. According to the article below, part of the reason for the shortage of rental houses is:

            “Less rental stock available – restrictions on investor buyers means there are fewer properties being purchased for the intention of renting”

            https://ironbridge.co.nz/2017/04/whats-happening-with-the-rental-market?gad=1&gclid=CjwKCAjwo7iiBhAEEiwAsIxQEXZRaGwrIQ8mdfK-zWuVagwPrPn-NtiG6sMBZ1tZzssKBWT8agQFDxoCKwkQAvD_BwE

            • tsmithfield 5.2.2.1.1.1
              1 May 2023 at 7:23 am

              And something you didn't mention in your comment about the article you linked to was the massive sell-off of rental property between Q2 of 2020 and Q2 of 2021. The sell off there peaked at over 17000 compared to an average of around 10000 prior to that.

              So, I guess those who could sell did, likely to take the capital gains available at that time due to low interest rates. And, it seems likely that the reason for a drop off in sales now is the large drop in house prices.

              So, the effect I originally described seems likely to have occurred already in the 2020-2021 quarter.

              And, according to the Ironbridge article:

              • Prospective buyers having to continue renting – the growth in property prices has made it unaffordable for many would-be-buyers to purchase a home

              But, if the rental stock that was sold off in 2020-2021 isn't being replaced as the article I linked to suggests, and people are staying in rentals longer, then that could well explain the rental shortage now.

              • Incognito …
                1 May 2023 at 8:28 pm

                Oh boy, the big ‘sell-off’ has already happened and you missed it!

                What you failed to mention in your comment is the (modest) dip in sales in Q2 2020.

                Many things were happening, due to Covid-19, but this was all before the introduction of the interest deductibility change. Weren’t you arguing that it was and is all the Government’s fault??

                Out of interest, who bought those properties sold during the big ‘sell-off’? Usually, properties change hands, unless it is under National and they are bulldozed to the ground.

                Maybe you want to re-read the OP, especially the part where it mentions that the number of lodged bonds has increased by 11%. Doesn’t quite fit into your narrative, does it?

                • tsmithfield …
                  1 May 2023 at 9:38 pm

                  Maybe you want to re-read the OP, especially the part where it mentions that the number of lodged bonds has increased by 11%. Doesn’t quite fit into your narrative, does it?

                  That seems like the old correlation isn't causation thing to me. If there is a shortage in housing available for rent, then of course lodged bonds will drop off. Not because less people want to rent. But because there just aren't the houses available to rent.

                  Look at the figures for Christchurch I referred to earlier. Down to 690 available compared to over 2000 several years earlier.

                  So, if there are less houses available, then of course, there will be less bonds lodged.

                  And, the chart you linked to doesn't really prove your point as much as you would like it to. That is because it is referring to sales not listings.

                  On the TV1 news tonight they were saying that average sales times have ballooned out to 84 days. My wife, an ex real-estate sales person, was quite shocked at that.

                  So, it might well be that landlords are trying to sell their properties, but they just can't find buyers in this market.

                  And, if they are trying to sell them, well that is pretty much the same thing so far as tenants go. That is, because landlords often terminate tenancies when they intend to list their properties for sale. That is so they don't have the hassle of having to try and organise viewings with tenants, and so they can present their properties to their best advantage.

                  • Incognito …
                    1 May 2023 at 9:48 pm

                    If there is a shortage in housing available for rent, then of course lodged bonds will drop off.

                    […]

                    So, if there are less houses available, then of course, there will be less bonds lodged.

                    Read the OP and my comment again; the number of lodged bonds has increased by 11%.

                    The rest of your comment is mostly reckons and speculation again and your ‘conclusions’ are without foundation.

                    • tsmithfield …
                      1 May 2023 at 9:54 pm

                      Sorry. Dyslexia kicking in.

                    • tsmithfield …
                      1 May 2023 at 10:26 pm

                      To answer your point, the increase in bonds is similar to the increase in population over that time. So, it doesn't necessarily mean things have got better for tenants.

                      And, the bond figures are meaningless unless we also know how often tenants are changing houses. Because, if landlords are terminating rentals to sell or attempt to sell their houses, then those tenants that have been displaced would need to find somewhere else to live.

                      Hence, there would be more bonds simply due to tenants having shorter tenure in rental properties.

                    • Incognito []
                      3 May 2023 at 3:40 pm

                      Look, at the end of the day, you are Right and you want to be right, that much is clear.

                      Your calculator is kaput if you think population has increased by 11% over that period.

                      Of course, the bond figures are ‘meaningless’ to you because you are interpreting the data wrongly.

                      You have no interest in debate but only in point scoring and this is reflected in your comments that are all over the place irrespective of whether the data are up or down.

            • SPC 5.2.2.1.1.2
              1 May 2023 at 3:50 pm

              The elephant in the room – if investors sell and other investors are not the buyers – who are?

              People who are now owner-occupiers, people formerly renting.

              • tsmithfield …
                1 May 2023 at 6:30 pm

                Maybe. But, as I pointed out above, the government has been aiming to make it easier for first home buyers to access the housing market, by their own policy, as I linked to.

                As I have already pointed out, first home buyers tend to be already comfortably housed. But if they buy a home off a landlord, the tenants in that house will be displaced. Hence, the housing crisis gets worse.

                • SPC …
                  1 May 2023 at 7:01 pm

                  And which is why an important component part of housing policy is to help those who will never own.

                  That means more housing owned by Kainga Ora and at subsidised rents. This does not just mean building, but also buying homes sold by investors.

                  And it should involve direction to better use of land and property – via a tax on vacant land and unoccupied property.

                  And encouragement of people to share – continuing individual rate payments to sole parents and those on super when they do this.

                  • tsmithfield …
                    1 May 2023 at 8:14 pm

                    I think social housing will always have a part to play. But, the more the private sector can pick up the slack, the less the government has to do, and that means more money to spend in other areas of need.

                    I think one of the big problems in NZ is that the number of people occupying houses has decreased over the years while the population has increased. I heard some commentator making that point on the radio awhile ago. So, what it means is that there is a lot more pressure on housing, even if population numbers remain constant.

                    A bit like the example I gave of first home buyers who are currently comfortably housed, but take the opportunity to buy a house of a landlord who is renting a house to a family.

                    We end up with an imbalance in the way people are housed.

                    • Belladonna …
                      1 May 2023 at 9:33 pm

                      You might also look at separated households. Where Mum and Dad divorce, but both need to have full-size houses since they share care of the kids (for economic reasons).

                      This is a big trend in middle and upper-middle classes. Where one family used to occupy one family-size dwelling, they now occupy two.

                      Yes, it's technically possible to have a single house, occupied by the kids, with a flat for the 'off-duty' parent to share. But, in real life? Not going to happen.

                    • tsmithfield …
                      1 May 2023 at 9:43 pm

                      You might also look at separated households. Where Mum and Dad divorce, but both need to have full-size houses since they share care of the kids (for economic reasons).

                      Good point. There are likely a lot of reasons for this effect.

                    • SPC …
                      1 May 2023 at 10:07 pm

                      You might also look at separated households. Where Mum and Dad divorce, but both need to have full-size houses since they share care of the kids (for economic reasons).

                      The lower income families will be renting and looking to double up – two solo mothers (if not penalised by W and I for this as some are – and it's really dumb as it reduces AS costs). If the bedrooms are large enough – two boys and two girls per room.

                      Yes, it's technically possible to have a single house, occupied by the kids, with a flat for the 'off-duty' parent to share. But, in real life? Not going to happen.

                      The government could force people into doing the smart thing by requiring the two parents to continue to secure (make mortgage payments on) a family home for the children until the youngest is 21 (university from home option). They can then sell to supply equity for their own property.

            • Incognito 5.2.2.1.1.3
              1 May 2023 at 8:15 pm

              When you cherry-pick long enough through mountains of data with a fine-tooth toothpick you will find that magical four-leaf clover that confirms your belief. Pick it and treasure it.

        • Belladonna 5.2.2.2
          1 May 2023 at 9:32 am

          Also the bright line test encourages landlords to retain properties for the mandated 10 years. It's a lot easier to hang on for another couple of years (even with marginal profits, and excess annoyance factor), if you have the prospect of a capital-gains-free profit on the horizon.

          I'd say that interest cost increases will drive up rents further (I know that's anathema to those on TS who believe that interest and rents should be decoupled – but we live in the real world).

          Certainly in Auckland, we had an increase in the number of rental properties available, and a consequent slight drop in the rents – at the end of last year. Driven, largely, by young Kiwis off overseas on their Covid-delayed OE.
          However, that has now been more than soaked up by red and yellow sticker housing (anecdotes from 2 work colleagues looking for houses to rent for that reason, found little on the market); by overseas students starting to return (inner city apartments); and by increasing immigration.

          We do, indeed, still have a significant shortage of rental housing, at least in this city. [Please spare the bleating from the TS commentator about the 'ghost houses' – people are not going to rent out their bach or holiday home for anything other than Air B&B]

  6. Stuart Munro 6
    30 April 2023 at 7:06 pm

    Though Labour have supposedly been busy, the effect on the rental market has not been so much as a saving of $50 a week. That would have been a healthy indicator that their policies were working, if indeed housing had been a genuine priority for Labour.

    Bishop is making the Trumpian transition – it is more effective from a PR perspective, to lie, and then move on to other lies, than to attempt to defend untenable truths.

    Soft soap for speculators is designed to obscure their role in impoverishing society:

    landlords in the capitalist mode of production, due to their extraction of part of surplus-value in the form of rent, constitute an obstacle to the penetration of capital in agriculture and to the accumulation of capital.

    I'd like to say I expected better of Labour, but long experience of that party has reduced my expectations of them below the level of polite conversation. Being merely the better of a lousy choice between themselves and National ought to fill them with shame.

  7. Mike the Lefty 7
    30 April 2023 at 8:46 pm

    How many wars have we got going now?

    A war on farmers.

    A war on landlords.

    Any more I have forgotten?

    National is certainly one to dream up imaginary wars. Perhaps they shouldn’t be discussing policies on guns, they might get overexcited and start letting the ACT gun nuts dictate policy.

  8. Graeme 8
    30 April 2023 at 9:52 pm

    This all got launched in Queenstown and it's got a few local nuances, and seemed very directed at the local market.

    We've got an awful lot of holiday houses here. Often these are 'suburban' type dwellings that might be occupied 10 weeks of the year by the owners and family / friends. All good when interest rates are 4% but now the owners are squirming a tad. The Air B&B thing used to work for these people but it's a lot of work and the property managers took a good cut out of the income. Post covid it's gone off the boil a bit too.

    The real demand is for worker accomodation, employers are fighting over residential leases to get somewhere to house their staff so they don't turn up to work looking like they slept in their car. Unfortunately a 12 – 24 month lease buggers up the holiday house idea, so the cribbies aren't keen on that.

    So the cats roll into town and this appear in the local paper

    Ms Munn blamed absentee house owners for the crisis.

    "It’s getting colder," she said through tears.

    "What if someone freezes in their car?"
    She said absentee property owners who only used their properties four weeks of a year needed "to feel the shame".

    "They just don’t care, because they’re rich enough to own a house.

    Cue an evict at will policy announcement, "this will provide roofs over the homeless…"

    Well back in the 70's and early 80's we had a very similar rental market in Queenstown, maybe even tighter. Some employers, government, banks, hotels and some of the larger employers had staff housing or hostels. Otherwise all that was available were holiday houses, and of course the owners wanted to have lots of holidays, so the tenant got the boot at Easter, Christmas, and most other long weekends or if there was something on in town. Flats, and often families, some in respectable employment, would be franticly running around trying to find somewhere to live for the weekend, or week. People became highly motivated to secure permanent accomodation, or leave, which most did. It was probably a factor in the town taking so long to recover from the 1987 crash.

    The staff housing all went in the neo-lib revolution and now the town has returned to the frenetic levels of the 70's and early 80's somewhere to live has become an issue again, just the problem is 10 x the size.

    Can't see anything different happening with looser rules, we'll still have a housing crisis, just it'll have different sorts of crises, and probably more urgent and tragic ones.

  9. SPC 9
    1 May 2023 at 3:43 pm

    If the government wants to hold inflation down, after the return of the petrol tax, it has to rent freeze.

    Budgeting 101.

      • SPC 9.1.1
        1 May 2023 at 9:55 pm

        It's about the cost of living now.

        An increase in rent forces people out of housing. A landlord can use inability to pay as reason to remove a tenant.

        It would have little impact on short term supply, as landlords will be waiting for the election result.