Freeze on rent rises introduced - temporarily
Monday 23 March 2020
The Government has introduced a freeze on rent increases on residential rental properties as part of the economic measures announced in the fight against Covid-19 and its impacts.
By Miriam Bell
New Zealand today moved to Level 3 of the Covid-19 Alert system and over the next 48 hours the country will move to Level 4 – which means a national lockdown will be in place.
This is expected to lead to widespread job loss and so, in a bid to provide further support for the economy, workers and businesses the Government has also announced further economic measures.
As part of this, Finance Minister Grant Robertson says there will be a temporary freeze on all rent increases and they will be looking to extend no-cause terminations to protect people during this difficult time.
As yet no further details on this announcement are available, but Robertson says they will be releasing more details over the coming days.
Investor Andrew King, who was until recently the NZ Property Investors Federation executive officer, says he can’t see the rent increase freeze being a problem for landlords.
“As a landlord, I increased my rents in January but I’ve already informed my tenants that we won’t be enforcing that. I imagine lots of other landlords will be doing something similar.”
He says that, given the amount of potential job losses, it will be important for landlords to try and help tenants so that they can keep living in their rental properties.
“It would be good if Government can provide some support to rental property owners by ensuring that the existing mechanisms around WINZ payments can be processed quickly. Speed will be crucial.
“We’ll also be putting a message out to our members that they need to prepare and they should make sure that they can cover the rent, if need be, for a couple of weeks while tenants who need to work out their situation with WINZ can do so.".”
But King was disappointed with the Government’s move to extend no-cause terminations for people.
He says it looks as though the Government is trying to push through its controversial tenancy law reforms without going through the Select Committee process.
“Given the level of opposition to the removing the ability for landlords to issue 90-day notices, it doesn’t seem fair to do that.”
REINZ chief executive Bindi Norwell agrees with King on both fronts. She says that in the current environment, implementing a freeze on rental increases is a sensible and moral step to take.
“The strict Alert Level 4 measure means that in the coming months a number of people are likely to lose their jobs. To have to deal with a potential rent increase at this time could be incredibly stressful for a tenant to have to deal with, so we welcome the Government’s announcement around this particular measure.”
For landlords who have already spoken to tenants around a rental increase in the previous few weeks, we believe this will be unable to go ahead, she says.
“But we will work through what this means for these situations as the finer details of the announcement become available.
“In the interim, we would encourage landlords, tenants and property managers to keep the lines of communication open – as some rent may be better than no rent in the current environment.”
However, they are disappointed with the announcement on the removal of the 90-day notice, given the property industry has made its views on it very clear over the past few months, Norwell says.
“We do understand they are trying to do their best by tenants in these trying circumstances and we will be looking for further clarification in the coming days from the Government as to what this means for landlords and tenants who have already issued/been issued with a 90-day notice.”
Comments from our readers
Sign In / Register to add your comment
Global ratings agency Standards & Poors is the latest to join the chorus of predictions around potential house price falls in New Zealand – and they’re picking a 10% drop.
ASX-listed Centuria Capital has declared that its takeover of New Zealand property funds manager Augusta Capital is now unconditional, as it has secured nearly 66% of Augusta’s shares.
The New Zealand property market has emerged strongly out of lockdown, according to mortgage advisers, who say they are busy as ever this winter.