2 Oct 2018

Proposed regulations prompt some landlords to sell

5:34 pm on 2 October 2018

A Tauranga property investor is selling his rentals and ditching the industry in anticipation of tougher tenancy regulations.

Houses at Mount Maunganui, Bay of Plenty.

Photo: 123rf

The government is considering making more than 10 changes to the Residential Tenancies Act - including limiting rent rises to once a year and setting the amount of notice a landlord needs to give to end a tenancy to 90 days.

If any changes are approved, they are likely to come into force in 2020 and would affect almost 600,000 rentals.

The Tauranga property investor, who spoke to RNZ on condition of anonymity, has been in the business for about 20 years.

He said tougher tenancy regulations, increased rates and "landlord bashing" have left him with no choice but to sell his five properties.

"It's hard to see how it can work for anyone, really, unless you're a big commercial landlord and I think that's probably the way things will go, that most mum or dads will get out of the market because it is just too hard," he said.

Some of the proposed changes to the Residential Tenancies Act punish landlords and limit their options, he said.

"The only time I've ever had to use a 90-day notice is they've been disrupting neighbours and you don't want to have to give that as an excuse.

"So not having that 90-day option is actually gonna make it really hard for everyone else.

"If you've got a good tenant, you're not going to want to get rid of them anyway so it's taking away all of the options," he said.

He is not the only property investor in Bay of Plenty selling off houses.

The owner of Rentals Bay of Plenty, Gary Prentice, said about 20 of his landlords have sold their properties because of the proposed new regulations.

Landlords believe the government has gone too far and is bending the rules to suit tenants, Mr Prentice said.

"It just appears that there are a lot of new rules and regulations that are coming in that are going to be very costly for the landlord, in a lot of cases, and are they necessary?" Mr Prentice said.

A different story in other parts of the country

In Auckland, Jon Harris from Harper Properties said the business had lost up to 40 properties in the last year.

But that was not because of the proposed changes to the Act.

"We noticed a definite trend going back maybe to 2015 - a pick up of our clients selling," Mr Harris said.

"I think largely, it was to do with house prices so a lot of our clients have owned their properties for 10+ years and have seen pretty dramatic gains over that period, so decided to cash up and sell - and you can't blame them."

Joseph Lupi runs Full House property management in Wellington.

The number of rental properties increased over the last six months and landlords supported the proposed changes, he said.

"By and large, landlords are good people and want the best for their tenants - good tenants means properties get looked after," Mr Lupi said.

"So, by and large our landlords are supportive of the changes that are proposed and we think that it will be good.

"Happy tenants make for happy properties which make for happy landlords."

In Christchurch, Chris Uren of Priority Property Management said business was quiet.

"The feedback I'm getting from my property owners is the real estate market is quite flat in some pockets of Christchurch," Mr Uren said.

"I have had some owners try to sell their properties, but then they've reintroduced them back to us just because they can't move them."

He said those property owners tried to sell for personal reasons, and it wasn't a "knee-jerk" response to the proposed changes to the Act.

The public will be able to give feedback on proposed changes to the Residential Tenancies Act later this month.

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