tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, July 12th, 7:33PM

News

rss
Latest Headlines

Droves of landlords want to raise rents

A record 82.2% of landlords are aiming to raise rents over the coming year.

Friday, April 28th 2023, 9:11AM

by Sally Lindsay

The latest Tony Alexander and Crockers Property Managers  Property Investors Insight survey shows the average rent rise landlords are seeking has risen to a 10-month high of 6% from 5.6% in March and a low of 5.3% in December.

Alexander says it is not just a matter of rising costs for landlords placing upward pressure on rents.

“The Government has actively discouraged growth in the rental stock through tax changes, and a sharp acceleration in the population growth rate courtesy of a new net migration boom is lifting demand. Add in the incentive to switch property use back towards tourism and the supply/demand interaction is increasingly in favour of rents rising at an accelerating pace.”

He says the Reserve Bank will not want to see this sort of thing as rising rents feed directly into inflation rates.

Rising rents also come at a time when house prices have been falling. They are now down 17% from the November 2021 peak, but still 17% above the pre-pandemic levels of March 2020.

Rising rents versus falling prices, says Alexander are rapidly shifting the equation for existing renters in favour of buying and that is going to create an interesting situation – maybe late this year. “Prices may have just about stopped falling, but rents will keep rising while population growth accelerates because of the migration boom and new build growth is set to slow down quite a bit.”

Plenty of tools

He says, however, before people start thinking about rising house prices, they need to remember the Reserve Bank has plenty of tools to dampen the housing market. LVRs have been used effectively and next year the bank will have debt-to-income ratios (DTIs), which many economists believe it will introduce. At what level any DTIs will be introduced has yet to be revealed.

DTIs are likely to hit investors harder than owner-occupiers and will have the effect of bringing down house price inflation to about 3% a year instead of 6-7% seen in recent years, apart from two years of pandemic fuelled madness when the Government unleashed cheap money.

Tax changes bite

Of significance is the increased realisation by investors of the cash flow implications of another financial year ticking over and a further 25% drop for the proportion of interest expenses which can be deducted against rental income.

Alexander says the tight setting for monetary policy magnifies the impact of this tax rule change made just over two years ago.

The survey has revealed a fall in the number of investors planning to hold their property for 10 years or longer from 64% to 59%, despite the Brightline test being at 10 years. 

This is the lowest reading since the survey started almost two years ago and could reflect the turn of the year rise in awareness of tax changes.

Buying intentions edge higher

However, after trending down from mid-2021 to the end of 2022 there are underlying signs that the number of investors thinking about buying a property in the next 12 months may be edging higher.

But if this is the case the movement is modest. Just over 21% of investors thinking about buying is well below the 25% near two-year average so overall interest from investors in expanding the pool of rental accommodation remains low.

The 23.4% looking to sell is, on the other hand, slightly higher than the average of 22.7%. It is the highest since May last year.

Tags: rents

« March better but housing still in the doldrumsWork from home lifts rents in outer suburbs »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.74 7.35 6.99
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.65 7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 8.74 7.74 7.09 6.95
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 7.14 6.49 6.35
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Lender Flt 1yr 2yr 3yr
Westpac 8.64 ▼7.49 7.35 6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - ▼6.89 6.75 6.39
Median 8.64 7.14 6.82 6.65

Last updated: 11 July 2024 1:26pm

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com