City of slums: Inside the rental market

By Joanna Mathers

As our property markets rise to dizzying new heights, online descriptions of houses to rent are reaching even more remarkable heights — prompting questions about truth in advertising, and whether the law is being broken. Joanna Mathers discovers all is not as it seems in the world of online listings.
About 910,000 Aucklanders live in rental accommodation. It's a significant number in a city of around 1.6 million. Photo / Doug Sherring
About 910,000 Aucklanders live in rental accommodation. It's a significant number in a city of around 1.6 million. Photo / Doug Sherring

The black mould didn't appear in the photos. Nor did the scarred and pit-holed lawn, the filthy carpet, the encroaching weeds.

If an accurate photo of the "charming character home with three bedrooms in one of Auckland's most desirable suburbs" was presented online you wonder whether 40 people (including me) would have shown up to the viewing.

"What a waste of everyone's time," a youngish man muttered behind me. I couldn't have agreed more.

My arduous search for a rental in Auckland soon after the birth of my child was one of the darkest moments of my life. Stuck in a dank two-bedroom flat with a screaming infant, it seemed as though finding a decent three-bedroom home for around $600 a week was akin to locating the Holy Grail.

Be they filthy, ancient, or just plain weird (one place had apricot vanities in two of the bedrooms) Auckland's rental market is a pretty scary place to visit.

Ten years ago when I was last looking for a rental, $600 would get you flash house in the centre of Auckland. Now it seemed it could only get you what could realistically describe as a slum.

According to Crockers statistics, in 2006 the average rental for a three-bedroom home in Mt Eden (one of the most expensive Auckland suburbs) was just $450 a week. The latest stats are for 2015 - an average three-bedroom in Mt Eden is now $656 (and you'd be hard-pressed to find anything at that price point if recent experience is anything to go by). For $450 you'd be looking at a one-bedroom in Ponsonby.

In further-flung suburbs such as Glen Innes, you used to be able to rent a three-bedroom for around $330 in 2006, in 2015 you would expect to pay in excess of $500 week.

The regularity with which rental properties are misrepresented online is worrying. Many of the houses look light, bright and large - in reality they are small and grim. Taking time off family or work commitments to fit into the 10-minute viewing times can be difficult, but when you are routinely met with homes that look nothing like the online listing, it is soul destroying.

It could also be against the law. According to the Fair Trading Act, online representations of goods or services must be accurate and not mislead customers.

Hayley Miller, technology, IP and commercial lawyer.
Hayley Miller, technology, IP and commercial lawyer.

Hayley Miller, a partner at law firm Kensington Swan, says images that have been altered or that don't represent the current state of a rental property could be seen as a breach of this act.

"It hasn't been tested yet, but if the representations were very inaccurate this could constitute a breach of the law," she says.

People would be well within their rights to report such imagery to the Commerce Commission.

Claire Turner is another new mum looking for a three-bedroom home in the $600 mark. She is also shocked at how far removed representations of homes on sites like Trade Me are from reality.

"Almost every property we have gone to looks nothing like the picture online," she says.

The photos are either very old, taken when the house was new, or Photoshopped.

"There have been cracks in the walls, mould on ceilings, old and dirty carpet, ovens with bits missing, gardens growing wild or the property differs significantly from the description online."

Tanya Gerrard, a corporate trainer, has also been scarred by her experience of rental hunting. She says the quality is appalling, even in the higher price range (around $750 a week) and properties were routinely misrepresented online.

"Photos were lightened to make houses look brighter and stretched to make them look bigger. In reality the properties would smell damp, were not maintained, and in bad need of paint."

Labour Party housing spokesman Phil Twyford. Photo / George Novak
Labour Party housing spokesman Phil Twyford. Photo / George Novak

The Herald on Sunday contacted a wide range of leading real estate agencies about standards for marketing properties, but none were prepared to comment. Real Estate Industry of New Zealand says some general advertising standards are being developed but would not comment further.

Only 43 per cent of Aucklanders (around 680,000) owned their homes at the 2013 census and competition for rentals is hotter than ever. Nationwide, the figures are dropping, too, Figures released by Statistics New Zealand showed home ownership in 2015 was the lowest in 60 years (at 64 per cent).

About 910,000 Aucklanders live in rental accommodation. It's a significant number in a city of around 1.6 million.

In October it was announced a new Ministry of Business, Innovation and Employment tenancy services scheme has been set up to enforce the new Residential Tenancy Act.

This act says all rental properties must have working smoke alarms and some insulation. There is no obligation for the home to be mould-free or ventilated.,

According to Labour housing spokesperson Phil Twyford, the Residential Tenancy Act doesn't go far enough. "There are big loopholes in law that say if a home is insulated to 1970s standards then it doesn't have to be reinsulated," he says. "It really lets landlords off the hook.

A bill that aims to ensure all rental properties have basic standards of heating and insulation in all rental properties is being redrafted.

Called the Healthy Homes Guarantee Bill (No 2), it is a reworking of a bill voted down by National last year. National considered the first draft put financial pressure on landlords that they would pass on to tenants.

Housing Minister Nick Smith, centre, visiting the Special Housing Area at Omokoroa. Photo / John Borren
Housing Minister Nick Smith, centre, visiting the Special Housing Area at Omokoroa. Photo / John Borren

Housing minister Nick Smith says the Government still considers home ownership the priority and doesn't feel tighter rental laws are necessary. "The Government's focus is on improving the prospects for home ownership," he says.

He didn't respond to questions about any proposed law changes to protect renters, and says New Zealand doesn't have a culture of renting, unlike countries such as the UK and the US. He feels home ownership will continue to be the norm.

"The proportion of New Zealanders living in rental homes is not changing dramatically and owner-occupiers will remain the dominant living arrangement for most Kiwi families into the future."

IT specialist John Duphie disagrees. The 42-year-old father has given up on owning a home as prices are far beyond his reach. He rents a "soulless concrete block unit in a block of 38 down a long drive in Ellerslie" and says that for just under $400 this is the best he's likely to find.

Duphie feels New Zealand's rental laws were set up when rentals were just a stop-off on the way to home ownership.

"People used to rent while they were saving for a home," he says. "Now the houses are so expensive and the rents so high it's almost impossible to do."

Even though he earns good money, he feels its impossible to get ahead.

"I'm a university graduate and I have a good job. I should be part of the middle class with a house of my own, but instead I'm a white collar professional living in a concrete box."

He says that as so many New Zealanders are now renting it would make more sense if our laws were closer to those in places like the United States and Europe.

"In places with histories of long-term rental there is much more protection. People think of rentals as their homes and can do a lot more with them. In New Zealand renters have very few rights and the owners can do what they want."

People ­often complain about how much ­money their landlords are ­making, but it's not as simple as that.
Andrew Bruce, Auckland Property Investors

Tanya Gerrard says sin addition to finding pictures posted online misleading, she found the attitude of letting agents troubling.

"When I moved out of a rental property the inspection process was unreasonable and insulting," she says.

"The agent had taken photos prior to me moving in and then took photos after I left of everything including the inside of drawers.

"I pride myself on looking after rental properties as my own home and was insulted that photos were taken of the inside of drawers which were left spotless. It seems the landlords are taking no responsibility for wear and tear."

During her tenancy the property agent would take video recordings of the home as part of their inspection process.

"Is this not over the top? I can understand if anything is damaged but this was normal living," she says.

Andrew Bruce, president of the Auckland Property Investors' Association.
Andrew Bruce, president of the Auckland Property Investors' Association.

Andrew Bruce, president of the Auckland Property Investors' Association, says renters need to be more aware of the difficulties many property investors face and to not blame them for the high rents and the poor condition of properties.

"I do have empathy for tenants, but people should be aware that investors aren't making as much money as some would think."

He says many investors struggle to pay their own mortgages, and have little real wealth.

"In a lot of cases it is just paper money. Property prices are very high and it can take a long time to pay off mortgages and make money from property."

If a tenant asks to have a heat pump or a similar appliance installed, they should be happy to pay more rent and not expect the landlord to foot the bill.

"It's a complex situation. People often complain about how much money their landlords are making, but it's not as simple as that."

Putting in place legislation for rentals can result in landlords having more costs, and passing them on to tenants.

But this doesn't please the people who are hunting for rentals in one of the world's tightest markets. Gerrard would love to find a decent property that isn't misrepresented or overpriced and that she could be happy to go home to.

"I was very surprised at the standard of properties available for rent. Landlords don't seem to care and don't present a quality product to the market. With less people being able to afford to buy homes it is sad that it is so expensive and so hard to find a home you are proud of and happy to live in."

- Herald on Sunday

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter

SIGN UP NOW

© Copyright 2017, NZME. Publishing Limited

Assembled by: (static) on production apcf03 at 28 Mar 2017 20:05:34 Processing Time: 68ms