[ad_1]
It’s not just house prices that are rising. Rents are also rising, and experts say that creates confusion about what is fair and what is not.
According to the latest rental price data from Stats NZ, in October, the stock measure, which measures changes in rental price across the entire rental population, including tenants in lease, increased 0.2 percent in September and 3.2 percent in October 2019.
Similarly, the Stats NZ flow measure, which covers changes in the rental price of homes that have a new bond deposited during the month, also reveals an increase in October. It has raised rents by 0.7% in September and by 2.3% in October 2019.
The most recent rental data from Trade Me Property tells a similar story. It has rents nationwide increasing 3 percent year-on-year in September, which is the biggest increase since April. That increase left the national median weekly rent at $ 510.
READ MORE:
* Rent increases should be linked to inflation, says renters rights group
* Investors blame rules for rent increases, but not everyone is convinced
* Rent Reforms: Landlords Slam 90-Day ‘No Cause’ Eviction Notices
For months there has been talk from representatives of the real estate industry about the likelihood of rents increasing due to changes in the leasing law, along with the impending need to meet Healthy Homes standards.
Covid-19 took a toll on those expectations because when New Zealand entered alert level 4 lockdown in March, the government introduced a temporary freeze on rent increases to help people overcome uncertainty.
The freeze on rent increases came to an end in September and data suggests that rents in many parts of New Zealand are now increasing, with Queenstown and Auckland CBD apartments being notable exceptions.
ROSA WOODS / Things
Renters United held a farewell party for the rent freeze, which meant that landlords were unable to raise a tenant’s rent for most of the Covid shutdown.
But landlords have the legal right to increase the rent they charge once a year, so what constitutes justice when it comes to a rent increase?
Hamilton tenant Mereana Marsters was shocked to recently receive a notice of a $ 50 per week rent increase from the property manager.
The increase means the rent for Marsters’ two-bedroom unit will go from $ 250 a week to $ 300 a week.
But, based on current market rental data from Tenancy Services, the median rent for properties in Frankton, which is the suburb where Marsters lives, is $ 360, though the bottom quartile price is $ 270. .
For two-bedroom apartments (a category that includes units), Frankton’s median rent is $ 420, with the lowest quartile price being $ 380.
The notification Marsters received said that a review found that the property was below current market rent and that the rent was increasing in response to that.
Marsters, who said her rent is warm, dry and safe and her landlord is good, understood that, but said the size of the increase still surprised her.
Adding to his confusion is the fact that before Covid he received a notification of a $ 10 rent increase. That was frozen and now after Covid you have been notified of the $ 50 raise.
Real-iQ director David Faulkner, who trains property managers, said that this type of situation was far from uncommon and that confusion surrounding rent increases was a trend that would only grow.
One reason was that a growing number of homeowners who had managed their properties themselves were turning them over to property managers due to demands for greater compliance.
Faulkner said many of those landlords had not kept up with the growth in market rents, especially when landlords knew and had developed a bond with their tenants.
“So when a property manager takes over and conducts a rent appraisal, it often turns out that the property rents below market price, which will lead to advice to raise the rent. In turn, this can come as a surprise to tenants.
“But landlords have the right to increase their rents as long as they follow the correct procedures and do not increase them substantially more than the market rent for that type of property.”
In Marsters’ case, it appeared that the property had not been previously rented, he said. “It is still below market price, which means that similar rental properties in the area are likely to be more expensive.”
Not everyone agrees that market considerations should determine rents.
Renters United spokesman Robert Whitaker said the rental market was being driven by a shortage of rental properties rather than rising costs for owners.
“Owners can’t just shrug their shoulders and blame the market. They must take responsibility for continuing to increase rents at a time when many tenants are under financial pressure. “
David White / stuff
Andrew King of the New Zealand Property Investors Federation says that it is already illegal for a landlord to raise the rent well above the market value of other comparable rentals in the area.
While Whitaker said a major government action on the supply side was the way to solve the problem in the long run, Renters United is also calling on the government to take urgent and immediate action to control rents.
“We want to see the introduction of rent caps that ensure that landlords cannot increase rents more than inflation. It won’t fix the problem, but it will slow the rate of increase. “
During the election campaign, both the Green Party and the Opportunities Party committed to introducing rent limits.
But NZ Property Investors Federation President Andrew King said it was already illegal for a landlord to raise the rent well above the market value of other comparable rentals in the area.
“If a tenant is notified of a rent increase that is significantly above market levels, they can petition the Leasing Court to overturn the increase.”
In such cases, the court could order the rent to be lowered, but the tenant would need to have evidence that their rent was much higher than the rent for similar homes in the same area.
King said that the new changes to the leasing law meant that landlords could now only increase the rent once a year (instead of every six months), so some rent increases would be higher than they would have been if they were divided into two increases.
But the current shortage of rental stocks was contributing to rising rents and it was widely accepted that boosting supply was the best means of stabilizing the market.
Faulkner pointed to the Christchurch rental market as a prime example of that.
“Also, look at the Auckland CBD market: Covid-19 and a shortage of international students has resulted in many one- or two-bedroom apartments coming onto the market and rents are down.
