More rental properties needed

A story which caught my attention today was one about the importance of property investors in the New Zealand economy.

The story here reports on comments from the Department of Building and Housing (DBH) that the number of people in New Zealand renting is increasing and the trend is likely to continue.

There are a bunch of reasons for this, which are explained in the story, many of them being global trends rather than locally-driven ones.

Where I thought this was interesting is that if the government department responsible for the sector is talking about the growing importance of landlords, then surely the government should be listening and making sure the rules around property investment support Kiwis investing in bricks and mortar.

Past Blogs in recent weeks have talked about housing policy and next week’s general election, I just hope whoever wins, takes on board this information from DBH and helps investors.

If not I guess we end up with more state housing and overcrowding in private dwellings – not an attractive idea.

The other story which is related is that a survey out this week shows rental property is not currently seen as the place which will deliver investors the best returns. Rather property has fallen from grace and been replaced by term deposits and bank savings accounts. I can understand this at the moment, but again Kiwis need to see property as a good investment which provides adequate returns for the risk and the amount of capital invested.

If this doesn’t happen then we end with the situation that there won’t be sufficient rental houses in the private sector pool to address this trend DBH have identified.