Wairarapa Property Investors' Association
More than 80% of New Zealanders disagree with ending the no-cause 90-day notice as outlined in the proposed changes to the Residential Tenancies Amendment Bill, according to a recent survey conducted by the Real Estate Institute of New Zealand (REINZ).
REINZ sought the views of more than 2,800 landlords, property managers and tenants around the country on the various proposals and 82.1% of respondents disagreed or strongly disagreed with ending the 90-day notice.
Even tenants disagreed with ending the 90-day notice with 45.4% against a change compared to 40.9% supporting the proposed change. A further 13.7% either didn’t know or neither agreed/disagreed.
Bindi Norwell, Chief Executive at REINZ says: “Overwhelmingly, our survey shows that New Zealanders don’t agree with the proposed change to the no-cause 90-day notice as outlined by the Government in the Residential Tenancies Amendment Bill.
“We weren’t surprised by the fact that landlords/investors and property managers were opposed to the change as we knew this was likely to be the case from the wider discussions we’ve been having with the industry. However, what did surprise us was that tenants don’t want the law changed either with most respondents disagreeing with the proposed change,” she continues.
“Verbatim comments from survey respondents suggest that tenants are concerned around issues caused by problem neighbours and are also worried that the changes could result in their rent rising,” continues Norwell.
The research also sought people’s views around fixed term tenancies automatically converting to periodic tenancies. Again, the overwhelming majority of respondents (63.1%) disagreed with the proposal. Breaking the results down, nearly three quarters (71.4%) of landlords/investors don’t agree with the proposed changes, 21.2% agreed and 7.4% were unsure. From a tenant perspective, more than half (61.5%) agreed with the proposal, yet more than a quarter (27.2%) disagreed with the change; the remaining 11.4% were undecided.
“We weren’t at all surprised with the results around fixed-term tenancies automatically converting to periodic tenancies,” says Norwell. “Landlords want the freedom to choose who lives in their rental property and tenants are after greater security of tenure. But there must be a better way to find the right balance than the current proposals.”
The survey also asked investors and landlords whether they would consider selling their rental property if the end to the 90 day notice went ahead. Nearly half (46.3%) of investors/landlords said it is likely or highly likely they would sell their rental property if the proposals go ahead, 32.6% were unsure and the remaining 21.0% were not likely or definitely would not sell their rental property.
These are similar results to what the New Zealand Property Investors' Federation found. Based on a survey of its members, they estimated 50,000 landlords would leave the industry if the proposed reforms become law.
“Not being able to exit tenants in a timely manner or who are acting in a seriously anti-social manner towards neighbours is a big concern for landlords. The majority of investors only own one or two rental properties and for many it’s part of their retirement savings plan. To not be able to control who lives there is a huge concern to them which is why so many have said they would consider selling if the legislation goes ahead.
One investor surveyed summed the situation up quite succinctly:
‘I’ve built many great relationships with tenants over 25 years and had very few problems. But you need the freedom to act quickly and decisively if a tenancy goes wrong. This for the sake of other tenants and neighbours as well as the financial consideration. The Government is making it too stressful – I’m scared to put a foot wrong. To hell with this, I'm selling up.’
“One of our biggest concerns is that investors find the proposals too cumbersome, they sell up, reducing the pool of rental properties and raising rental prices even more,” says Norwell.
“Even the Ministry of Housing and Urban Development’s own regulatory impact statement has said that the proposed changes ‘may increase landlords’ business risks and impact on their profit margins’,” concludes Norwell.