Landlords threaten rent rise for Labour reforms
Landlords are threatening to push up rents in reaction to Labour’s new rental sector tax policy change.
Andrew King, NZ Property Investors Federation executive officer, said there was no doubt rents would rise nationally if policy announced by Labour leader Andrew Little was introduced.
There is an easy solution to landlord’s threatening rent rises as a response to Labour cracking down on speculator tax loop holes – renter rights.
This is the new story that tells us everything we need to know about the drive to push rents up…
Barfoot and Thompson director Kiri Barfoot said they regularly reviewed rent prices.
They were in the business of pushing up rental prices for the landlords, Ms Barfoot said.
“Maybe we’re more proactive than someone who looks after [properties] themselves and just wants to get tenants in and doesn’t realise they can [increase rents].”
She said the 4.6 per cent increase in rent in the Auckland area was “modest”.
So Barfoot and Thompson are constantly hounding their clients and playing to their greed to artificially ramp up rent prices? The Free Market at it’s most pathologically ruthless.
How Charming.
We seem to have a system that only benefits those renting the property out. The ability to constantly push up rents due to desperation only entrenches the poverty of those locked into renting get caught on.
Our communities need diversity. State Housing and housing affordability for the poor needs to be seen as a civic obligation, not a slum lord pay day.
Families who can put down roots into their communities is essential for those communities to thrive, if the entire structure of the free market rental environment is built for property speculators, is it any wonder inequality is such a wound on our GDP?
A Landlord can just give you 42 days written notice to evict you if a family member wants the rental, a loophole large enough to be able to drive a truck through.
Closing the tax loop holes that Labour are suggesting has been met with hostility by those abusing the current system and promises of higher rents, the response should be renters rights.
We require new law cementing in long term tenancies with rent controls and the promotion of âethical landlordsâ, people who refuse to squeeze every last drop of money out of their tenants for needless greed.
Long term low rent accommodation is the solution, allowing the corporate greed monsters of Barfoot and Thompson to just graze on the fields of inequality while those with little get pushed to the fringes is not a solution.
Yes, just read this in the Herald. More threats to keep the greedy, greedier.
The irony here is Andrew King, NZ Property Investors Federation executive officer, only mandate will be to look after the interests of investors to make more profit.
This is what bothers me about (some) real estate agents, and property managers especially. They will continue to encourage landlords to increase rents, despite the fact the landlord may not need, or want to increase rents. But they’ll do it anyway, then they’ll go home and watch people living in cars and mould-riddled hovels. And then they’ll go to work the very next day and once again encourage landlords to increase rents. Does it occur to them, I wonder, that the landlord is well aware they CAN increase rents, they just choose not to? Because they’re not grasping parasites intent on sucking the life from their fellow New Zealanders until they’re left withered, wretched husks devoid of both hope and happiness.
Modest? That’s all well and good, Ms Barfoot. But when your wages vacillate between paltry and meagre, modest is often a bridge too far.
You will know that real estate agents, and it is them who are mostly also working as ‘property managers’, tend to get COMMISSIONS. So with every new rental signed up, with every rent increase, I suspect that many of them also get a percentage or total sum amount of a commission or bonus paid to them by their employer (B+T, Ray White, or whosoever it is).
Some tenants also get property inspections every three months, I hear, which is ridiculously frequent and borders on harassment or breach of privacy, but the property manager will of course charge the owner for this, and thus earns fees for the employer or him- or herself.
These costs for the owner and landlord can then also be used in their tax declaration, so they will reduce the gain called profit, and that will for some result in lower taxes and even lower tax rates, if they are smart. A win win for owners, landlords, property managers and agents.
B+T and Ray White and others also try to influence landlords to sell their property, at times, so they can earn commission on the sales. It is close to being a racket what goes on in property business in NZ Inc., it is a disgrace and makes tenants live in homes that they are never really able to enjoy, as the frequent inspections sends the message, you only live here on limited time, my friend. At the same time they pay ever higher rents, leaving little to enjoy the rest of life from.
But I see and hear nobody take action to change this total BS.
Yes, a change in the Residential Tenancies Act should have been part of Labour’s announcement, same as an expansion of ‘Kiwi Build’, with added on more state and social housing investment and construction.
Sadly Labour have only been offering to tinker around at the edges again.
In New Zealand a landlord only needs to give a 60 days notice to increase rents, and the landlord can do this twice a year:
”Residential Tenancies Act 1986′ :
http://www.legislation.govt.nz/act/public/1986/0120/latest/DLM94278.html
Section 24 – Rent increases:
http://www.legislation.govt.nz/act/public/1986/0120/latest/DLM95057.html
“(1) The rent payable in respect of any tenancy may be increased by the landlord provided all of the following conditions are complied with:
(a) the landlord shall give the tenant notice in writing of the increase; and
(b) that notice shall specify the amount of the increased rent and the day upon which the increased rent shall become payable; and
(c) the day upon which the increased rent shall become payable shall be not less than 60 days (or, in the case of a boarding house tenancy, not less than 28 days) after the date on which that notice is given; and
(d) the rent shall not be increased within 180 days after the date on which the last increase took effect; and …”
Note: There are NO rent controls in place in New Zealand, while many countries in Europe, even states and cities in the US and other places, have ceilings that limit rent increases per annum.
New Zealand is very “liberal” in allowing landlords to increase up to the existing MARKET RENT. And that is determined by the rents charged in recent tenancy agreements entered into. It is similar to the house price escalation we have, as valuation is based on recent sales prices, not on sales over a longer historic period. If the landlord may have a good enough reason, they may even get away with higher increases going above market rent.
So an increase can easily be ten, twenty or more percent, should the ‘market rent’ increase significantly, as it has for many in places in Auckland, and some other cities and regions. It is time we follow other developed countries and put in place maximum increases based on say nothing more than five percent per annum, or based on a ceiling that is not simply looking at the present market rent! Labour have so far not shown the courage to do this, nor are they hinting to expand on Kiwi Build or on state housing supply plans.
This is how bold property investors and their agents and trainers can behave themselves in NZ Inc. these days:
‘Auckland property investors urged to target deceased estates, ‘dummies’ and ‘divorcees’
NZ Herald, 06 May 17:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11850187
“Property investors are being encouraged in a tutorial video to exploit the “seven Ds” – which include targeting “deceased estates”, “divorcees” and “dummies” who don’t know the real value of their home.
The advice has “appalled” the country’s largest bank which is now reviewing its sponsorship of the organisation that distributed the video, Auckland Property Investors Association (APIA), and its national body.
The video by Auckland property tycoon Ron Hoy Fong titled How to make massive profit in today’s property market says “desperate” homeowners forced to sell cheaply before banks step in are also prime targets.”
‘Investors boss says buyer tactics commonplace among property investors’
NZ Herald, 11 May 2017:
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11853251
“A property investors boss and magazine publisher says controversial buyer tactics like targeting deceased estates or homeowners with money troubles who need urgent sales are not new and have been used by investors “forever”.
“Often the best deals are around mortgagee sales, deceased estates, people who got into financial difficulty and have to sell, and that’s standard,” said NZ Property Magazine publisher Philip Macalister.”
Other ‘stuff’ on this:
‘Who’s getting rich from the property market?’
http://www.stuff.co.nz/business/84021489/Whos-getting-rich-from-the-property-market
“The winners include investors, real estate agents, property coaches, specialist lawyers and software developers, all of whom usually make good money when the market swings up.”
These are the kind of guys laughing at all us renters and sellers of homes:
Mr Ron Hoy Fong, controversial property investor trainer:
http://ronovationz.com/about_us.html
http://ronovationz.com/coaching.html
If we allow the market to operate for those that are still able to “participate” in it, which is a twisted logic kind of market with high immigration continuing, more and more owners and renters will be shut out of the market.
The extortionist type rent increases many now face in Auckland will result in more homeless, overcrowding, in cramped, unhealthy and stressed living conditions for the poorest, and in less remaining money of all to be spent on consumption of goods and so forth.
That will seriously affect the rest of the economy.
Labour needs to do much, much more than tinker around the edges to raise a hypothetical additional 120 to 150 million in tax revenue through closing so-called “loopholes”, that will not solve much, especially if that will lead to rent increases for tenants.
Rents can not rise as a result of tax changes or rental WOFs. This is just alarmist threats by Bill English and the Investors.
Landlords can and do only charge the highest rent that the market willl allow.
If they could raise rents at will they would have done it already.
However, raising the accommodation supplement will result in almost instant rent rises because more money is available to pay rents.
To stimulate the economy and to stop inflation the reserve Bank reduces interest rates.Those with savings in fixed deposits are robbed.The banks lower mortgage interest rates so allowing more people to buy homes,and those with existing homes to upgrade. Immigration is increased for “growth’ and the housing market gains momentum..House prices start rising with the new demand,and so do rents.New home buyers miss out,and speculators thrive.Banks get cheap money from Western countries quantitative easing.They dont need NZ fixed depositors any more.Tenants can not pay the new rents,or can with great difficulty.More tenants get the housing supplement which is a boondoggle for landlords as they get more rent and so can afford to further leverage their properties to buy more.The housing supplement is paid for by general taxpayers,so it is a subsidy[socialism ] for the landlords and capitalism for everyone else.
And so the rentier class become more and more wealthy.Long term we are heading for medieval inequality.If you live in a carpark or are homeless you are there already!
“The housing supplement is paid for by general taxpayers,so it is a subsidy[socialism ] for the landlords and capitalism for everyone else.”
The bottomless pit of tax-payers’ money – and we’re ALL tax payers, including beneficiaries. (GST, fuel excise, and who knows whatall else.)
Corporate welfare: Working for Families who are employed at below their worth; and accommodation allowance to allow smart and frugal people of ALL ages to buy a rental and ‘get a foot on the property ladder’.
Do you suppose Labour has turned the corner far enough to bring these rorts to an end?
Will they also be acting to ensure that the great Kiwisaver, prop for the Clever People who gamble with others’ futures and pensions, actually delivers excellent returns to the investors? (After the hefty management fees are deducted, of course.)
(So that the Evil Entitled etc Baby Boomers and other trusting mugs can make enough to bulk out the miserable pittance that is a ‘pension’.)
Or build the economy and the regulations strongly enough so people don’t lose all their hard-earned savings because of the speculations of those Clever Hardworking little Millenials and other fables.)
And the pigs are fed and ready to fly…
100% Pete.
How about a rent rise tax. Charged at 200% of any rise payment for 2 years, it will take 4 years for any increase to break even. #RentIsTooDamnHigh
Actually, further to my previous, bets on that the battleground from what is referred to as the ‘Centre Right’ is going to be fought by CT and others’ spin lines referring to their opposition being ideologically driven.
I’ve heard/seen it twice already in the past half hour.
Andrew, and Hoskins.
Grubby little Pot accusing struggling Kettle looking for a bit of warmth much? Yea Nah – pull your gold plated cuff links and look/feign authority sitting next to a Fox News bimbo trying her best to be Miss Personality, whilst an entire crew think JESUS CHRIST behind your back, and you probably have 5 hours to midnight.
Christ they’re gorgeous
Loosen up the squatter laws, that would discourage speculators from owning empty houses.
Auckland and it’s obsession with property speculation is so f””””ing boring !.
People sitting around the bbq talking about increases in the value of their spec houses get a bloody life!!.
many countries ie Canada have “rent control”
canada has rent control
We need to take a close look at the way rental housing is operated in European countries, such as Germany, where property and rental speculation are carefully controlled and have not been allowed to become a part of the whole neoliberal economy. Tenants have rights around the standard of the accommodation and security of tenure.
Here in Ĺtepoti, a huge amount of the rental housing is taken up by students. Landlords have been putting up the rent every year for decades, despite the fact that the student allowance (and student loan living costs) have stayed pretty much static. Students get $177 in the hand every week they are in study:
https://www.studylink.govt.nz/products/rates/student-allowance-rates.html#null
Rents for rooms in the streets around the university, many of them damp, drafty hovels, are getting up towards $200 per room. In other words, the current rate of student allowance isn’t nearly enough to live on, as acknowledged by Steven Joyce:
http://teu.ac.nz/2016/05/living-increase-loans/
This means that instead of being able to focus on their studies, fulltime students are forced to take on part-time work to survive. This helps employers break up what could be secure, fulltime jobs into fragmented part-time jobs, in a city desperately needing more paid work for its permanent population, especially with the recent decision to sack hundreds of workers from the Cadbury factory.
Who wins here? Not the students, whose ability to get good marks and maintain a healthy work/life balance is heavily eroded. Not the unemployed and underemployed of the city, who could potentially have fulltime jobs if the students could afford to live without part-time jobs during term time. The landlords do pretty well out of it though, as do the rich who get tax cuts with the money saved by not paying student allowances and benefits at livable rates.
Either the rate paid to people on the student allowance (and other benefits) needs to go up, or rents need to be controlled to keep them under 50% of people’s income. Which is it going to be?
Mum and dad investors, of which I am one, assembling a few rental properties so we can pay our own rest home fees rather that rely on the government to pay, would be advantageous I would have thought. raising costs for landlords will simply increase rents, there will be less rental accommodation as the more savvy investor knows that commercial property is the way to go.I imagine an increase in rents and less supply is not really what Labour wants. What Labour could do is have a look at overseas investors who by 30 or 50 properties , not the 2 or 3 that most land lords have, These overseas investors can detrimentally affect supply and demand and dont pay much tax here.
And if you look at Labours policy on this, this is exactly what they are saying, mum and dad investors won’t be targeted but what is regarded as an acceptable number of investment properties 1,2, 3, 12?
2 houses at 1 million each should support you in a rest home?
I’m so fed up with that photo and cliched message. Bullshit. So many of us boomers do NOT have million dollar homes and how many would have half a million dollars? Am I missing something here? Was it meant to be ironic? As a boomer I have never had stable fulltime employment despite being well educated (at my own expense). I do not have kiwisaver despite paying taxes for more than 40 years. I rent out my delapidated house because I can’t afford to live in it. I became an economic refugee after the Natz killed my career so I’m living onless than the minimum wage on the other side of the planet. For goodness sake stop this. Yeah, technically I’m a landlord but I have no car, no furniture and no smartphone. I haven’t bumped up the rent beause I think my tenants are paying enough for an aging house. Just put me in a room with anyone who subscribes to that nonsense message about entitlement.
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