Warning: Rents will rise
Landlords are asking: How much longer will officials penalise investors before realizing the tactic isn’t working?
Thursday, July 21st 2016, 10:04AM
by Susan Edmunds
Andrew King
The latest move to restrict investment purchasing is a requirement that banks severely limit lending to investors with a deposit of less than 40%, throughout the country.
Andrew King, executive officer of the New Zealand Property Investors Federation, said it was the latest move in three years of actions against landlords – none of which had worked.
“It has to get to the point where they think maybe this is not the problem,” he said. “Where does the point come when they think maybe [investors] are not the entire cause of house prices being where they are?”
King warned that anything that made life tougher for landlords would eventually push up rents, which have started to increase around the country after years of stagnating.
He said it was significantly cheaper to rent than to own homes, so there was room for rents to increase.
“No one minds if you sting investors but they don’t realise that it’s the tenant at the end of the day who will pay. What people don’t understand is everyone needs a home. We buy homes on behalf of tenants.”
King said the move was simply to allow the Reserve Bank to cut interest rates again, and relying on short-term data showing investor activity increasing in the market was an excused.
“They don’t care about people saving for their retirements or providing rental properties. If they really wanted to have an effect they would apply it against everyone.”
David Whitburn, of Fuzo Property, said landlords were a politically safe option for the Government and Reserve Bank to target. “Investors don’t win you elections, homeowners are the ones who get out and vote.”
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