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Six Years of Change - Reflecting on the Rental Market

As we head towards the end of the year, it is a good chance to reflect on what has been a turbulent time over the past six years.

The changes have been constant and almost impossible to keep up with. In 2017, the Government promised to make life better for renters, but is life really better now for tenants than it was six years ago? Now is a good time to take stock and review the changes that were made.

It is important to remember that we do live in a property-owning democracy, although not everyone has an equal opportunity to participate in the market. Although many, welcome a change in Government, not everything the previous executive did was bad. Some of the changes that were supposed to assist tenants, however, may have had unintended consequences.

In this article, I have decided to take stock of and review some of the big decisions we have seen over the Labour Party's time in power. Some of the decisions have been necessary. Others have been ill thought through, and have led to dire consequences.

From October 2017, when the Ardern came to power, the changes came thick and fast, and not all have been because of the Government. Here is just a snapshot of the changes we have seen.

  1. Banning charging tenants a letting fee.
  2. Passing the Healthy Homes Bill.
  3. Commissioned the Chief Science Officer to review Methamphetamine standards.
  4. Implementing a bill to set minimum standards for Methamphetamine contamination but then failing to set the standards within the timeframe given.
  5. Implementation of Healthy Homes standards followed by changes on calculations and dates when they realised mistakes had been made, as well as changing the date of implementation when it became apparent that their own stock would not make compliance within the timeframe.
  6. Implementing a rent freeze and increasing termination for arrears to 60 days during the lockdown period.
  7. Implementing mass reforms to the Residential Tenancies Act by introducing the amendments Bill in 2020. This led to the removal of no cause terminations and gave tenants name suppression in the Tribunal.
  8. Introduction of punitive steps that landlords could take to remove a tenant for anti-social behaviour.
  9. Advancing the powers of the Tenancy Tribunal by increasing their jurisdiction to $100,000 as well as introducing more unlawful acts with higher exemplary damages.
  10. Giving tenants the right to make minor changes to rental properties, and the landlord cannot decline requests without a valid reason.
  11. Introducing legislation to protect tenants who were victims of family violence.
  12. Increasing the Bright-Line Test period from two to five and then to ten years.
  13. Phasing out the ability of landlords to deduct interest from income.
  14. Implementation of the Credit Contracts and Consumer Finance Act (CCCFA) in an attempt to provide protection to consumers when taking out mortgages. This had dire consequences on many borrowers who complained that banks would not give them a mortgage based on their spending habits.
  15. Drafting a bill to regulate the Residential Property Management industry.
  16. The Office of the Privacy Commissioner set new rental sector guidance for the Property Management industry following a property manager admitting in a select committee meeting that she went through tenants' bank account details, looking at the spending habits of tenants.

Some of these changes have been necessary, such as reforms around the Residential Tenancies Act, introducing minimum standards for rental properties through Healthy Homes and giving greater protection to tenants. However, attacks on landlords have led to unintended consequences, particularly around taxation.

No doubt, a new Government will have their own views as to what is required between getting the balance right to protect both parties and ensuring that the system is fair. Hopefully, they catch their breath and listen to the relevant interest groups before they make changes. They need to take their time and make sure that the decisions they make benefit the well-being of the country.

David Faulkner
Property Brokers