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Rent increased over 40% under National (Key years)

Written By: - Date published: 10:24 am, December 10th, 2019 - 137 comments
Categories: national, same old national, tenants' rights - Tags: , ,

Just so we are clear, because there is some odd information coming out of National at the moment (‘shitty and deceptive’ graphs, an ongoing series).

$285 to $400 is an increase of $115, 40% circa 2008 – 2017*.

Source David Hood.

Now Simon Bridges has a bridge to sell you. This appears to be National saying they’ll magically adjust income to rent ratios so that we can all afford housing even as the rents keep increasing. 

 

Meanwhile, the government is reforming the Residential Tenancies Act. From The Spinoff’s cheatsheet on the law changes,

  • Limiting rent increases to once every 12 months instead of once every six months
  • Banning rental bidding (ie: landlords encouraging ‘bidding wars’ among potential tenants for high demand properties) 
  • Ending no cause evictions. Currently, periodic tenancy agreements (ie: a tenancy that doesn’t have a fixed end date) can be terminated without cause as long as the landlord gives 90 days notice. The RTA will now have a list of reasons for termination.

  • Increasing financial penalties. The Tenancy Tribunal will be able to award compensation or order work to be done up to a value of $100,000 (currently the maximum is $50,000)
  • Anonymising complaints to the Tenancy Tribunal by default if the complainant successfully enforces their rights or defending a claim against them.

Much of that is to temper rent increases,

Rental bidding has been another controversial practice that has come up since the demand for houses has increased. In 2018, we reported that in Wellington landlords were explicitly operating tender processes on their rentals in a bid to drive up prices, with one landlord requiring tenants to submit the maximum they’d be willing to pay above and beyond the listed price as the house was in ‘high demand’.

There’s a lot more to be done, and the housing crisis requires multiple, well planned and integrates solutions, but these are initial, concrete actions with the specific intention of preventing rent rises. My money is on Labour and the Greens who have long established policy designed  not social media reckons.

*This interactive graphic suggests the increase is closer to 50%.

137 comments on “Rent increased over 40% under National (Key years)”

  1. Gosman 1

    How will any of the proposed changes temper Rent increases?

    Limiting rent increases to once every 12 months – Instead landlords will increase rents by a larger amount every 12 months.

    Banning rental bidding – Again you will just have a higher rental advertised upfront.

    Ending no cause evictions – This will mean greater scrutiny of prospective tenants will likely occur and Landlords will look to be compensated for the additional cost and inconvenience of tying up their property.   

     

     

    • weka 1.1

      1. next step, limit how much rents can be increased at a time. Also,

      If a landlord is charging a lot more than is being charged for similar properties in the area, the tenant can apply to the Tenancy Tribunal. The Tribunal could make an order for the rent to be reduced. The tenant will need to have evidence that their rent is a lot higher than rent for similar houses in the same area.

      https://www.tenancy.govt.nz/rent-bond-and-bills/rent/increasing-rent/

      2. same. Also, as housing increases it will be harder for landlords to gouge the system in the way you suggest because tenants will have more choice.

      3. again, landlords trying to gouge the system in this way will have problems as housing increases. Ending no cause evictions also stops landlords from dumping tenants and raising rent for the new ones.

      • Rocco Siffredi 1.1.1

        " Also, as housing increases it will be harder for landlords to gouge the system in the way you suggest because tenants will have more choice."

         

        That would be correct, however the fundamental problem remains that housing supply is not increase in relation to demand, it is falling.  Labour is not addressing this any more effectively than the previous government.

      • Sabine 1.1.2

        are rent increases currently not capped at 10%? 

        • David Mac 1.1.2.1

          Rent levels are determined by 'Market Rent' and are legally obliged to fall within that criteria.

          If it gets to the stage that a tenant feels that their rent exceeds market levels they can and should firstly approach their Landlord/Property Manager and if no joy there place a decision in the hands of a tenancy adjudicator.

          An adjudicator's first port of call will be the statistical data.

          This is available to us all. 

          From the bonds paid into Tenancy Services they are able to compile information  re: Lower quartile – Median – Upper quartile rents per week for 2, 3 and 4 bedroom places in all areas in NZ. A Google search for 'Tenancy Services Market Rent Wherever you live' should provide a way to the info.

           

          • Sabine 1.1.2.1.1

            ahh, thanks. This was always one of the points that i found confusing. 

            so if one owns a pig stall one can increase rent cause market…:) Yep, that is as tory as it gets. 

            • Chris 1.1.2.1.1.1

              A tenant renting a shithole can challenge the level of rent the slum landlord charges and the Tenancy Tribunal would adjudicate in terms of what the market determines is fair market rent able to be charged for that shithole.  The tribunal can't provide a rememdy that backdates what fair shithole rent should've been, only what can be charged going into the future.  However, a tenant can at the same time challenge the level of shitholeness they're being forced to endure.  If successful the slum landlord can be required to pay compensation for the level of past shitholeness the tenant has had to put up with, and also reduce the level of future shitholeness.  What then often happens is that the slum landlord purports to reduce the level of shitholeness so puts the rent up.  The next step, if the tenants are still tenants and can be bothered, would be for the whole cycle to repeat, and it often does, except for the slum landlord it's with the next tenants, and for the tenants with their next slum landlord.

          • Sacha 1.1.2.1.2

            If it gets to the stage that a tenant feels that their rent exceeds market levels they can and should firstly approach their Landlord/Property Manager and if no joy there place a decision in the hands of a tenancy adjudicator.

            Sadly if they do either of those things they will be put on an industry database of 'bad' tenants.

            • Chris 1.1.2.1.2.1

              Anonymising tenants in Tenancy Tribunal proceedings would fix that.  Leaving only landlords' names published would then leave a database of bad landlords.

            • Chris 1.1.2.1.2.2

              While on the face of things the proposed changes are about strengthening tenants' rights at a time of high rents, low security of tenure etc caused largely by all of the things that've contributed to a decrease in home ownership (and for this reason they're difficult to fault), the downside is the thought that we're finally jettisoning any remnants of hope that home ownership can be restored as our primary method for putting a roof over our heads.  

              • Sacha

                Horse long bolted. The only young people who expect to own homes are those with parents who already do, and a mortgage holds way less allure than it used to.

                • Chris

                  Maybe, and so maybe it is a matter of coming to terms with that as with all cultural change, I don't know.  Part of me feels, though, that it's not quite time to give up, that's all, and that these changes, how ever practical and desirable for tenants, say that for most the dream of home ownership will remain just that.  I guess once that's accepted it quite rightly becomes time to put the screws right down on landlords.  But this is why the proposed changes bring so much intrepidation.

          • John Clover 1.1.2.1.3

            A few years back I was in the position that I might have been able to become a Landlord.   But reading this I am very glad that I didn't venture in that direction with these draconian restrictions being put on landlords.

            Even though I get a miserable amount from the banks holding my limited capital at least I do not have to worry about being rooked by a poor tenant who conned their way onto my rental property with my lack of experience in judging character.

    • AB 1.2

      If the economically powerful can get around any attempt to regulate their behaviour in the interests of the powerless – then the problem is not the lack or inadequacy of regulation, but  the inequality of power itself. Thanks for demonstrating this. You would do well to advise someone like Elizabeth Warren of this simple fact that seems to escape her. Downward redistribution of power is more important than downward redistribution of wealth.

    • Sabine 1.3

      Just because you will do all of these things does not mean that all landlords will do so. 

      I know its hard to understand. But if you give it thought even you should be able to understand that a good long term tenant that only gets a rent increase every now and then is more valuable to the owner of the property then say someone who only leases on six month contracts so as to jack up rent every six month for the next sob who moves in for another six month. 

      really, you should give it a thought and maybe look at changing your business model. 

       

       

    • David Mac 1.4

      Any LL looking at rent increases more frequently than once a year is working for Tony Soprano, regardless of any law change.

      Rental bidding – The market has become so competitive bidding against other interested parties is a waste of everybodies time. Property owners, just advertise at your top wildest dreams top number. Many privately funded or government assisted applicants will find a way to pay the galactic sum each week. Religiously, every week, or face the lions once more. 

      'Ending no cause evictions' is a bit of feel good fluff. "Putting the power into the hands of the tenants Man." The minute I decide I want to push a roller over of my tenant's ceiling, they've got legitimate written notice to vacate in their letterbox. 

  2. Gosman 2

    The ONLY ways you can bring down the cost of renting is to increase the supply of rental properties or reduce the demand for them. I see nothing in the government's plan that does much of that.

    • weka 2.1

      that's because you're not looking Gosman.

      • Paddington 2.1.1

        I'm with Gosman.  NZ's home ownership rate is following the rest of the world – down.  That is unlikely to change.  Government can tinker around the edges of the relationship between tenants and landlords, but at the end of the day the best solution is to increase supply.  This government is doing the right thing ramping up state house building, but KiwiBuild was a huge mistake, and the resources invested in that should have gone into building even more state houses. 

        • Incognito 2.1.1.1

          The home ownership rate per se is not the issue, it is a red herring like most economic (aggregate) indicators (e.g. GDP) when discussing social issues. As long as you frame it in economics terms only, the ‘solutions’ will be similarly economic in nature only too. If anything, we need to break the hegemony of economics and neo-liberal thinking on current (political) discourse. Earth will be a shrivelled planetary raisin before that happens …

          • David Mac 2.1.1.1.1

            Yep, housing people in happy homes is the only stat that matters. If we can find a way for people to own them, even better, that's the key to building communities that give a damn, even if it takes 3 generations of drip feed. Probably better if there is a generational stake in 'Our home.'

        • weka 2.1.1.2

          I agree that tenancy reforms alone won't solve the problem, but no-one is claiming they will. It's a given that we need more housing available to low income people. Simply building more houses won't achieve that for the reasons Incognito explains. Gosman isn't arguing for more housing for low income people, he's arguing for less govt intervention and to let the market sort it out. This is what we've done for decades and is exactly why we have a housing crisis.

          Maybe Gosman is about to argue that National were wrong to increase population so fast. That's a supply and demand equation.

        • SPC 2.1.1.3

          Don't agree. 

          Sure ideally build 5000 state houses a year, rather than the 2000 pa, but the government carries the debt cost of that.

          Whereas 5000 KB get sold on and involve no rise in debt apart from the annual cost of the build finance. The problem with KB is they lack buyers – because they conflated a home building programme with affordable first homes (new  builds are not great affordable first home options). That is resolvable by allowing young couples with a starter property (flats and apartments) to buy their first family home via KB. And also allow those boomers who want to downsize to also buy KB – freeing up their homes (for those taking advantage of lower interest rates to move up to premier property. 

          • Paddington 2.1.1.3.1

            Hi SPC.  The market already provides for the those options.  What the market doesn't provide (because it isn't designed to) is sufficient 'social' housing.  I see that ss the role of the state.  KiwiBuild was a huge distraction of resources.  At a time when we needed to be taking care of our most vulnerable, providing houses for young lawyers was not at all clever.

            • SPC 2.1.1.3.1.1

              Sure as many state houses as can be afforded – built or buy up, but there is a place for extra stock at no cost to government by building small homes (starter family homes for those already on the market via flats and apartments for those downsizing). There is a market shortage of low maintenance small homes – so a real demand for KB type  homes by these two groups – who cannot buy them on current policy settings. And each new home built adds supply to the market. 

              • Paddington

                I don't believe it is an appropriate use of government resources to be building houses for 'downsizers', or for people who can afford to buy.  I support all state housing resources going into providing houses for those who cannot afford to own.

                • SPC

                  Not even when

                  1. the market is failing to meet such demand (old people staying longer in large high value property is a waste of scarce resources, including capital). 

                  2. this boost to supply comes with little cost – as there are private owners who can buy.

                  3. the increase in supply reduces private market rents (the government will never supply enough state houses for those on benefits/super let alone the working poor).

                  4. the supply enables more private sector investment in new construction methods – such as factory built. This lowers future construction cost. 

                  5. it is good politics to cater to wider housing sector issues not just the shortage of state housing (of which only some is afforded out of any surplus, the rest by debt financing).

                  • Paddington

                    1. What evidence do you have that the market is failing to meet that demand?

                    2. The cost is a diversion of resources.  There are costs associated with running any building program that are not directly related to each individual property (administration etc).  The failure of Kiwibuild is a potent lesson.

                    3. That supply can and will be met by the market.  The problem in Auckland, for example, is not the lack of private investment in building, it is the lack of land and infrastructure.  That won't magically dissappear simply because it is the government doing the building.

                    4. As per 3.  The private sector is not shy to make that investment, if the conditions are right to build.

                    5. It might be 'good politics' to throw money at all sorts of projects.  That doesn't make it sensible.

                    My overriding point is that governments cannot, and should not do everything.  Their first priority in housing should be to house those in the most need.

                    • Sacha

                      There is no "lack of land" except for building sprawling single-family dwellings – which cost way more to service with infrastructure and prevent our transition to a lower-carbon economy.

                    • SPC

                      The goal of the government and those of the private market are not the same. The latter will only build when they profit.

                      A government building only for those who cannot afford market rents, will always be inadequate. For one, if there is a shortage of supply there both the cost of AS goes up and there is even more need state housing. Thus anything it does to get more supply into the market will reduce its longer term AS cost and the need for state housing (ideally down to those not working).  

                      Getting boomers to downsize from their large homes on the 1/4 acre sections, will assist in freeing up land for more housing (including small homes on the front lawns of those sections).

                    • Paddington

                      Sacha this absolutely a shortage of land in the Auckland market, and that is a result of public policy.  The intensification of Auckland is causing significant social and environmental problems, and these will only get worse.  A far more sensible model is satellite settlements where land is cheaper (eg Pokeno) connected by rail links.  Instead of that, we are losing large expanses of urban ecological spaces to make way for shoe box living.

                    • SPC

                      @1.40pm. I agree about rail links from satellite settlements being one way forward. Centralised (facilities included) apartment buildings will also help – for mine the real problem with intensification is that it escalates land values. Some areas should be excluded from intensification to keep property affordable.

                  • Paddington

                    "1. What evidence do you have that the market is failing to meet that demand? "

                    That isn't evidence the market isn't meeting demand.  It just isn't meeting the demand at a price everyone can afford.  The market cannot serve everyone's needs while there it is limited on where it can build.

                    "A government building only for those who cannot afford market rents, will always be inadequate. "

                    I disagree.  Neither the private sector nor the government can build houses where land and infrastructure are lacking.  The government's first responibility should be to housing low income/low net worth citizens.  Kiwibuild is an excellent example of why the government should keep out of building houses for resale.

                    "Thus anything it does to get more supply into the market will reduce its longer term AS cost and the need for state housing (ideally down to those not working)."

                    You are making a number of incorrect assumptions.  You are assuming the government has unlimited resources; it doesn't.  You are assuming the government is better at building houses for resale than the private sector.  It isn't.

                    • SPC

                      You are making a number of incorrect assumptions. You are assuming the government has unlimited resources; it doesn't.

                      Totally untrue – KB is the home building requiring the least from government, as money put in comes back when the property is sold.

                      You are assuming the government is better at building houses for resale than the private sector. It isn't.

                      It is when developers are reluctant to build because of risk, and yet there is a lack of supply impacting on the housing needs of people. 

                      What has happened with KB is only an excellent example of why one should not build houses and restrict sale to a limited number of people (first home buyers only). 

                  • Paddington

                    "Totally untrue – KB is the home building requiring the least from government, as money put in comes back when the property is sold."

                    Your missing the point.  Money spent is only one aspect.  The biggest failure of Kiwibuild was the decision making around what to build and where.  The private sector does a much better job of that, and carries the risk.

                    "It is when developers are reluctant to build because of risk, and yet there is a lack of supply impacting on the housing needs of people. "

                    If there is a lack of supply, and available land and infrastructure, developers will build.

                    "What has happened with KB is only an excellent example of why one should not build houses and restrict sale to a limited number of people (first home buyers only). "

                    Yet Kiwibuild homes have been offered to other groups and still remained unsold.

                    • SPC

                      The unsold KB homes in Queenstown, do not represent the nationwide situation or policy settings.  

                      When markets peak (Auckland), private investors land bank rather than flood the market with new housing – to hold up the price they can get. KB is not so constrained. It is the government that has to ensure supply in such times – it pays the cost in AS and the homeless in motels otherwise. 

                  • Paddington

                    "The unsold KB homes in Queenstown, do not represent the nationwide situation or policy settings."

                    It's not just Queenstown (https://www.stuff.co.nz/business/better-business/112913336/govt-buys-unsold-kiwibuild-homes-in-auckland-canterbury, https://www.newshub.co.nz/home/politics/2019/11/government-can-t-sell-kiwibuild-homes-to-housing-new-zealand-due-to-design-standards.html). This represents policy failure. It also represents risk and diversion of resources that is precisely the problems I have been highlighting.

                    "When markets peak (Auckland), private investors land bank rather than flood the market with new housing – to hold up the price they can get."

                    1. The government has been 'land banking'.  Drive around Auckland.  There is plenty of vacant land where state houses have been removed and nothing built.  2. Developers would not land bank if land was not going up in value by as much as it has.  That rate of increase could have been avoided by greenfields expansion north, west and south of the city.

                    "KB is not so constrained. It is the government that has to ensure supply in such times – it pays the cost in AS and the homeless in motels otherwise. "

                    Putting homeless into hotels is the result of not having enough social housing.  Kiwibuild was never going to address that.

                    • SPC

                      The link actually said that the unsold houses were only available to eligible buyers … (no extension of whom they could be sold to)

                      Yeah, the inability to use unsold KB homes as state housing is risible – is there no one able to work that out (they can be leased to an external social housing provider in the meantime – maybe the local council).   

                      The empty publicly owned land in Auckland is a result of historic policy (may have begun before National came into office) of demolishing older state housing and using the sale of some of the land to build an equivalent number of new properties. The current government's intent was similar – just add KB property (affordable small family homes) before selling the land onto the private market.  But there was also the goal to increase the overall number of state houses – currently building 2000pa.

                      There is currently no plan to fully state house all those without home ownership who receive less than MW from work (benefits/super/part-time workers). This would require a singular government financial commitment (to build 5000 and buy 5000 pa – at his point they seem to think building 2500pa is ambitious (and they are not buying up stock despite housing people in motels). 

                      Then there are the growing number of the low waged poor who either cannot afford or successfully "win a tenancy" in a private sector providing insufficient supply. Adding stock and on-selling it to those who can buy it is the only way out of this dilemma. Unfortunately KB, did not do that – and should be re-designed to do so.   That would reduce the future cost of AS which is rising as rents do each and every year.

                  • Paddington

                    “The link actually said that the unsold houses were only available to eligible buyers … (no extension of whom they could be sold to)”

                    The point is the program built houses where no-one in the original target cohort wanted to buy them.  That represents policy failure, and across more than one district.

                    “But there was also the goal to increase the overall number of state houses – currently building 2000pa.”

                    Which I support, but that number could have been even more of not for the resources poured into KiwiBuild.

                    “Unfortunately KB, did not do that – and should be re-designed to do so.”

                    That’s where we differ.  The state housing boom of the 40’s and 50’s housed working class/low income families and many/most were long term state house tenants for life. That is a common model overseas, particularly in the UK. I would rather see roof’s over peoples heads than arguments over the merits of home ownership.

    • UncookedSelachimorpha 2.2

      Supply / demand is important and needs addressing – but no, it is not the ONLY way.

      German rent control works for both landlords and tenants

      But much of the opposition to rent control is misplaced. As my UK investment house has discovered, in Germany, a form of it works very well indeed.

      ….German tenants tend to stay in our properties for an average of around eight years, while UK tenancies tend to be around two years.

      …. Precarious tenants tend not to treat properties like homes either, we have found, so UK landlords often sustain higher costs from having to remedy spills and damage than continental peers.

    • Nic the NZer 2.3

      Showing your a novice at economics with that comment Gosman. In practice (and even in theory) supply and demand analysis doesn't tell you which direction prices will go. Its equally possible for rental prices to fall with a fall in supply or to rise with a rise in supply (due to income effects feeding back in). Even assuming that the incredibly simplistic models of human behaviour your analysis relies on are good enough, your analysis doesn't resolve the aggregation problem.

    • David Mac 2.4

      Yeah, I do, pumping up the state house build rate. The right want to choke on their Truffle Burgers…'What! Give those wasters that can't help themselves heavily subsidised houses?"

      It's a plan worth considering for both sides of the political coin. With everyone living on less than 25k a year sorted out for a place to live and their kids laughing and playing…wanna develop a site and sell chrome and glass apartments to rich people?

  3. Sacha 3

    There have been no tax changes to rents.

    • weka 3.1

      it was a nonsensical tweet, but maybe he was referring to landlords?

      • Sacha 3.1.1

        Conflating 'taxes and costs' is what I'd expect from these dangerous clowns. They have repeated the lie about this govt imposing heaps of new taxes so frequently that many people believe it now.

        • David Mac 3.1.1.1

          Mum and Dads viewing a rental property as a viable superannuation plan option have over the last few years had their faith in that particular option dismantled. Most weeks there is a press release that confirms that they made the right decision. A no cause eviction change has my old Dad declaring 'We can't kick them out anymore, doesn't matter what they do."

          That's all well and good, they'll sink their mattress money into Ryman and Sealegs shares instead. But that is helping those sleeping under bridges less than we were before. The best way to help the guy sleeping under the bridge is to find a home for the guy living in a half-way house. We all roll over.

           

  4. Rocco Siffredi 4

    All the policies being introduced by Labour are designed to increase rents.

    • weka 4.1

      you’re new here. Please have a read of the Policy and About. We expect people to explain what they mean, not just drop opposition talking points into a comment.

      Obviously Labour don’t want rents to go up, so it doesn’t make sense to suggest their policies are designed to increase rents. Care to have another go?

      • Rocco Siffredi 4.1.1

        "Obviously Labour don’t want rents to go up, so it doesn’t make sense to suggest their policies are designed to increase rents. Care to have another go?"

        The effect of these changes will be to reduce supply of rental houses.  That is an elementary economic fact that no one would dispute.  The government knows this, and knows that reducing supply will have an inflationary effect on rents.  It is not at all obvious that Labour does not want rents to increase, because the policy they have enacted will have exactly that impact.

        If they wanted lower rents they would be doing everything they could to increase the supply of property for rent.

        • weka 4.1.1.1

          like building more state houses?

          One of our first actions in Government was to stop the sell-off of state houses. We're proud to have done that, and to have boosted the public housing stock to support thousands of New Zealanders. On average, Housing New Zealand is building four new houses a day, and we've delivered more than 2,100 public houses this year – the biggest increase in the number of public houses in about 20 years!

          https://www.labour.org.nz/week_that_was_010819

          But I agree. Time to also regulate around retaining fulltime rental accommodation, empty housing stock and so on.

          • Rocco Siffredi 4.1.1.1.1

            If this was having an impact, rents would be falling.  None of this additional regulation would be required.

            • weka 4.1.1.1.1.1

              the regulation is needed because some landlords are greedy and will take advantage of the situation. It's also about making it fairer for tenants, and promoting housing as a right not a side effect of someone's investment choices.

              Are you now arguing that increasing social housing won't stop rents rising?

              • Rocco Siffredi

                "Are you now arguing that increasing social housing won't stop rents rising?"

                No, I am not.

                 

                • weka

                  what's your point then? You argued that Labour want to increase rents. I pointed out that (a) that would be daft and (b) they're also building housing (which is what you say needs to be done. The only thing I am left with is partisan objection to Labour on principle, or ideological commitment to protecting the investor class via neoliberalism.

                  • Gosman

                    The argument that was being made was that Labour must want to increase rents because that is the natural outcome of the policies they are proposing and they are clever enough to know this. I disagree with that.

                    • weka

                      of course. Your anti-Labour troll line would be that they're stupid. But you're the one in premod now Gosman, so maybe best not to start throwing those stones.

                  • Rocco Siffredi

                    "You argued that Labour want to increase rents. I pointed out that (a) that would be daft and (b) they're also building housing (which is what you say needs to be done."

                    They are not building anywhere enough to impact the demand and reduce prices.  The effect of the regulations they are introducing far outweigh a few extra state houses.  The required scale is tens of thousands more in the areas of demand given the current population growth.

                     

              • Gosman

                What does taking advantage of a situation where the supply of houses is not keeping up with demand look like exactly? I suspect it looks very similar to any situation where supply is a long way from satisfying demand (i.e. prices increase by a significant amount). You are essentially bemoaning the fact that if you jump up in the air you are brought down to Earth by gravity instead of flying off.

                • weka

                  "What does taking advantage of a situation where the supply of houses is not keeping up with demand look like exactly?"

                  Greedy landlords increasing rent as much as possible, or running bidding wars to up the rent in line with what the market will tolerate. Nothing to do with people needing homes or housing being a human right.

                  An excess of housing relative to demand might limit the ability of landlords to do that, but it doesn't stop them from doing other shit. Hence tenancy laws.

                  It will take time to redress the housing shortage that was created over decades, because the drivers of the crisis are complex. We actually have lots of houses in NZ, so simply freeing up the market to build more won't solve tenancy issues. Regulation and some level of government control is needed. Labour's biggest problem is that the middle classes are resistant to effective reform because they've been told for twenty years to use property as a retirement investment and they don't want to give that advantage up.

                   

                  • Sacha

                    The 'demand' that the NZ economy's settings encourage is for housing as an investment asset class, not as homes for people to live in.

                    Building more houses does nothing about that and there is more money in the world flowing this way than we can ever stay ahead of without regulating it.

                    • weka

                      Yep. A quick look at the stats on empty houses tells us that the problem isn't just about the gross figures of houses vs occupants stock units.

        • Incognito 4.1.1.2

          I find it amusing when people talk about economics and “elementary economic fact[s]” they seem to believe they are talking about fixed natural laws instead of human constructs and human conditioning. Economics trumps everything, the environment and even CC, does it?

          • weka 4.1.1.2.1

            Amusing would be nice. I'm bored of the thinly disguised investor class talking points.

          • Gosman 4.1.1.2.2

            Can you point me somewhere on the planet where someone has successfully avoided the problems that have been identified in relation to more regulations and the cost of housing?

            [Putting you back in premod to dampen the trolling. If you had said what you perceive the problems to be, someone might legitimately be able to answer. But your backwards way of trying to run investor class ideology lines is getting tedious. Try being more honest in your approach Gosman – weka]

          • Rocco Siffredi 4.1.1.2.3

            If you wish to make policy based on your ability to change human behavour, I suspect you will be both very disappointed and frustrated.  Good luck.

            • Incognito 4.1.1.2.3.1

              Putting the finger on the pain-point is not taking the pain away but it is a step forward from the futile hand waving and finger pointing. I believe in human evolution and development and luck has nothing to do with this, absolutely nothing. Where I need luck is when I play Lotto. I am neither disappointed nor frustrated but I’ll take your well-wishes anyway, thank you.

            • McFlock 4.1.1.2.3.2

              That is literally the conceptual basis behind our legal, education, and public health systems. And generally they work better than if we didn't have them.

        • David Mac 4.1.1.3

          I liked the Latin flavour of your name Rocco. I Googled it and watched clips of a man sodomising and throwing shrieking females half his age around his bedroom. Are you the real Rocco? If not, why on earth would you want to attach yourself to a persona of that calibre? Winston, Lennon, Socrates and you chose a porn star. You're knotting up a noose for own credibilty at a left leaning blog site sport.

      • Incognito 4.1.2

        Nope. He has been commenting here for at least five years.

  5. pat 5

    Want to decrease rents….build (lots) more  state houses/ apartments and gradually unwind accommodation supplement….will decrease property values as well.

    I do wonder why this gov continued the absurd practice of paying moteliers extortionate rents on behalf when they could have purchased said motels (under public works act if necessary)

  6. Jimmy 6

    I have a small property I rent out to a lady that has been there over ten years. She is the perfect tenant ….does small maintenance herself etc. I have to insist she gives me receipts for things so I can reimburse her. She sometimes reluctantly does. Next door to her is same size unit which is rented out for $110 more per week, so she knows she is getting a really good deal. I will probably increase rent in 2020 by say $20, last increase was around two years ago.

    I am more than happy to accept a lower than market rent for the 'perfect' tenant. Unfortunately, too many landlords are not, and I believe due to the supply being so scarce and demand so high the prices unfortunately keep rising. Only more supply will fix this.

    • weka 6.1

      what sort of tenancy agreement does she have?

      My landlords are pretty good. I suspect that there are quite a few and we just don't hear about them.

      • David Mac 6.1.1

        Somebody that has the where-with-all to have a house that they don't live in is generally open to a conversation and reason.

        Exploitive landlords are quick to make the front page, as they should. The tribunal is for everyone. I understand tenant reluctance , but still,  95% of cases heard by tribunal adjudicators relate to rent arrears and property damage/rubbish removal.

        My job bumps me into many property owners. Without exception, they all want the people paying the rent at the places they let to love living in their homes.

        I think this Nazi landlord thing is largely a fabricated thing.

        I rent the place I'm in just now, the couple that own this joint are Saints. I do the right thing by them, do a bit of maint, flick a few pics…some would say 'suck up'. I'm Bono and they're The Stylistics, rock stars together.

  7. Jimmy 7

    It's a very old tenancy agreement….I honestly do not know! I would have to dig it out and have a look it was done so long ago. It has obviously just rolled over several times by now. Good to hear your landlord is good….there are some out there that are. But too many just wanting to screw as much money as they can and are taking advantage of the 'current' market where their properties are so in demand. I hate seeing these articles where an open home for rent in Wellington get 50+ people through as you know it will end up becoming a dutch auction.

    • weka 7.1

      It's so horrible.

      National are just straight out arseholes on this now. I haven't looked at their policy but on the face of it they just want to lie their way back to fucking with the economy.

  8. SHG 8

    Why does the graph start at 2010?

    • Jimmy 8.1

      The line of the graph starts before 2010. The scale is not very good but approximately 2008 I would say.

  9. Climaction 9

    Yet housing prices grew by close to 100% in major urban areas in the same period. I wonder if there is a correlation?

    • Incognito 9.1

      I’m quite certain that there will be a correlation with the number of blue-eyed men with brown shoelaces.

      • Climaction 9.1.1

        and just as certain for there to be a correlation between a hot day and blue skies

        but for the relevance of the efficacy of Weka's headline, if house prices go up 100% and rents only go up 40%, then renters were financially better off for renting by the end of the key government than if they purchased at the end of the key government

        one could even argue from a microeconomic point of view that perhaps rents were too low, and that the key government did not do enough to secure appropriate financial outcomes for owners of rental properties vis a vis their capital outlay. 

        or from a macro economic view, the benefits accruing to the purchasers of capital were not paying enough and there was dead weight loss in the price of housing that falsely supported a section of the economy akin to rentiers

        • pat 9.1.1.1

          the correlation is in the amount the banks determine they can milk from the punters.

        • Sabine 9.1.1.2

          renters are never 'better off' insofar as they pay to have a roof over their heads and that cost is what pays someone elses mortgage. 

          that is what imo should be changed. The rent should not be there to cover the mortgage someone pays on a property for reasons of speculation, or free of cost retirement home, but rent should be calculated on the size of propery, age of property, amenities, as simply the tenants does not get an asset at the end but only the use of it. The landlord keeps the asset.  

          • Climaction 9.1.1.2.1

            When rents rise 40% and the price of capital rises 100%,  renters are better off. 

            • Incognito 9.1.1.2.1.1

              Stupidity and petulance. I wonder if there is a correlation?

            • Sabine 9.1.1.2.1.2

              nope.

              first you don't have to buy a house you can't afford one, even if the bank were to lend you money. 

              you will however still want to rent a place to live as living in a house beats living under a bridge (mind you don't want to live under any of Soimons bridges, he is not known to build real ones, his are all ghost bridges)

              second, not all house went up by a 100%, not even in AKL. 

              third, if you buy a house because the bank gave you money and you then rent the house, chances are you will want the tenant to pay the full amount of mortgage and then some………at the end of the tenancy all the tenant got was to live in your 'rental property' without ever making it a home or have a secure long term tenancy and you got to raise rent every 6 month just for giggles and because the law allowed it, while you end up with a fully paid for asset. 

              fourth, when the tenant moves out or you kick the tenant out cause the prices have risen even further and you can sell your house for a tidy profit no matter if you paid the mortgage of or not) , you win, again, as there is no Capital Gains Tax to pay. 

              Last, If the landlords of this country were not able to make a tidy profit we would not have a housing crisis as everyone who owns more then the one house they actually live in would simply sell of as fast as they can so as to prevent any losses ( and again, you can write of losses on rental properties against income, and if you are in that position and you don't do that i suggest you get a better accountant). 

              Renters are never better off, especially not in NZ with – and even with the current changes – low tenancy protection, rent caps etc etc etc. 

              Now if the tenant were to only pay for the use of the space, have proper long term tenancy agreements (open ended for all ), rent increases only if the property actually gets better (i.e. improvements to the proeprty not just every 12 month cause the law says i can), have  the right to make these rentals their homes etc you might have  a point, but until then, the tenants of NZ pay the mortgages of people who could get a loan from the bank. And that is something that you might want to keep in mind. 

              • Climaction

                Not all rents went up by 40% either. So all your points are invalid when using pricing and lending models.

                If rents went up on average 40% and house prices went up on average 100% then renting became a valid choice and an individual was financially better off renting than purchasing and paying a mortgage. 
                 

                so renters, renting homes purchased any time within the key governance weren’t necessarily paying the owners mortgage. Or even close to it

                fixating on ownership is a bourgeois concept anyway

            • weka 9.1.1.2.1.3

              "When rents rise 40% and the price of capital rises 100%,  renters are better off."

              Better off compared to if rents were so much higher than their income that they had to live in tents or a car, or they could afford their rent but not food? I hate to break it to you…

              (you appear to be comparing house price increases in major urban areas with rent increases nationally, so not sure what your point is).

              • Climaction

                Do you remember the headline of your post? 
                 

                rents rise 40% under national (key years)

                Rents rose in relation to income rises, 

                https://www.stats.govt.nz/news/household-incomes-up-over-40-percent-from-2008

                under Prime Minister Key

                • Climaction

                  The same amount of children living in poverty two years into aderns governance as at the end of keys 

                  what’s changed for the better?

                  • weka

                    we now have a government that is trying to right that. As far as I can see there are two problems there. One is the inordinate amount of time and resource needed just to remedy the parts of the system that National fucked up. Two is the difficulty of doing that in a country that refuses thus far to support the changes actually needed. It's always going to be a compromise.

                    • Climaction

                      This government hasn't done anything. 

                      40% increase over 10 years is an annual increase of 3.4% 

                      <i>"Annual change

                      In September 2019 compared with September 2018:

                      • The index for the stock measure of rental property prices increased 3.4 percent.
                      • The index for the flow measure of rental property prices increased 4.1 percent."</i>

                      https://www.stats.govt.nz/information-releases/rental-price-indexes-september-2019

                      So again, what's changed for the better? 

                    • weka []

                      I already answered that. The change for the better is we have a govt now intent on solving the housing crisis, instead of one intent of making money from it.

                    • Climaction []

                      Answering facts with intentions, which are almost entirely unrealised despite two years of opportunity and promises, is hopeless. It’s a weak argument that only serves to make excuses for poor governance

                • weka

                  Benefits haven't risen by 41%, more like 9% in that time. See if you can figure out what the difference might be with a 40% rent rise for someone currently on $12,500/yr compared to $100,000/yr. For comparison the rents annual went from $14,800 to $20,800.

                  Meanwhile, your theory aside, we now have a permanent population of people who can't afford any kind of home.

                  • Climaction

                    focussing on the poorest part of society is great if you want achieve a positive outcome for that small section of society.

                    ignoring all the evidence that labour are just as poor as national at managing national rent increase averages, or perhaps national just weren't the boogie man you think they are in this area

                    • weka

                      Well duh, of course we're focused on that not small section of society. Because we have ethics.

                      Clark's Labour contributed to the housing crisis, over a decade ago. Ardern's Labour is trying to right that. In the middle was a National Party that basically doesn't give a shit and that used policies that we know created problems. At this stage there is no way to use those policies and not be aware of the consequences.

                      The graph in the posts shows a change at the end. Click through on the tweet to see what the graph creator thinks of that.

  10. Cinny 10

    national posts a seriously ill-timed tweet about the cost of rent, with a dodgy graph, that's heinously misrepresented.  This brilliant reply querying the graph has 274 likes.  The original post received a mere 99 likes

    One of his supporters posts a nasty tweet assuming our PM won't be at Q time

    simon tweets that he is off to Whakatane to offer his support.

    simon ends up being a no show at Q-time, but Jacinda managed to do both.

    Our PM offers condolences towards those suffering from the volcano.  She is genuine with her words and emotions.

    paula acknowledges the tragedy, in a somewhat strange manner, found her delivery weird.  paula ends by thanking the government for the working they are doing.

    paula asks the first question, on behalf of simon (no show) regarding the cost of rent and other supplementary Q's about fuel, cost of living etc.  Then JLR asked a sup about the excessive use of force by the government towards protesters in Iraq….good on you JLR

    Strange chain of events.  Anyways, I hope national get's called out by the advertising standards for posting such a misleading dodgy graph regarding the cost of rent.  It looks like some people have fallen for this fake news and are skulling back the koolaid, no matter how much actual factual evidence to the contrary is presented to them.

  11. Herodotus 11

    So we argue over which govt is " less bad "🤢

    Much of the social and poverty issues that we currently face are due to housing. Our Children's Commissioner is onto it.

    With the Accomodation allowance we just perpetuate the problem. rents go up – then after some lag, allowances increase. BUT families are having to navigate their finances in real time. Something has to give, pay rents then survive on what is left. All the time landlords are 🤑. IMO as long as Accomodation Allowances and govts paying private landlords to solve what was a problem that state housing use to solve, we will always be playing catch up

    https://www.rnz.co.nz/news/national/405107/child-poverty-commissioner-says-need-for-housing-income-levels-to-improve

  12. James II 12

    This is just equally lazy reporting from you WEKA,

    From https://www.interest.co.nz/charts/real-estate/median-rents-nz

    Feb 02 – Nov 08 Rents increased 48%

    Nov 08 – Sep 17 Rents increased 36%

    Sep 17 – Nov 19 Rents increased 14%

    Simple conclusion, increases are huge under both Labour and National.

    Time to focus on a proper mixed public/market based approach to housing and the Greens/TOP are the ones to deliver this.

    [This user name is already in use here. Please choose another one, thanks]

    • Incognito 12.1

      See my Moderation note @ 10:25 PM.

    • weka 12.2

      the point of the post was to juxtapose National's lie about rents in the past 2 years under Labour with what happened under National. Also to point out that Labour and the Greens have actual policies to address the problem (compared to National's protection of the investor classes).

      Neoliberal governments have been creating the housing crisis for decades. This is not news. I vote Green for a reason.

      Labour/Greens can probably do it, if there are enough Green MPs in govt (and not NZF). TOP are a problem because they may just choose to kingmake National.

  13. David Mac 13

    Many renters have the thought 'We're paying so much a week if we could rustle together a deposit we could be servicing a mortgage and own the place.'

    As rents rise as they are that sentiment gets more buy-in.

    A feeling a government can't ignore. They too must ask themselves, 'Why are we giving this family $395 a week in rent assistance when we could be putting that money towards NZ owning it?'

  14. michelle 14

    Rent might have increased under labour but under national the homelessness increased, poverty rates increased, inequalities always increase, immigration increased, Maori incarceration rates increased, begging increased. All of  these increases are a direct result of nationals policies and they should be bloody ashamed instead they are running around like political messiahs acting like they are the chosen ones with all the answers to fix the problems they in fact created and exacerbated after 9 years of being in power.     

    • weka 14.1

      This.

    • Gosman 14.2

      Where is your evidence that all of those measures increased during the last National led government?

      • mac1 14.2.1

        Gosman, have you asked that question before and been shown the evidence, about increased homelessness, poverty rates, inequality, immigration, Maori incarceration, begging?

        Because, if it's the first time, then that's a fair question. If it's the second time, that's excusable amnesia. If it's the third time, then that's something else……….

        Have you ever wondered whether these things are on the increase and looked into it. Pretty important questions for someone interested in politics and social questions. Especially for someone who asks as many questions as you.

        A mate of mine, when we were neighbours close to the main trunk line, commented on the railway workers working on a Sunday on repairs to the line, that they were there for the overtime.

        I suggested that it actually may have been that Sunday was a low usage time for the line, and that it was a management decision that the work should be a Sunday affair, and not driven by union muscle.

        Six months later, the same conversation occurred.

        That day I discovered that facts, evidence, argument in the face of pre-determined opinion was a fucking waste of time. I don't accept the amnesia argument. I still remember after thirty years. 

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