Landlords cautious about some proposed tenancy law changes

The survey polled more than 500 active Auckland landlords. Picture / NZME

Landlords welcome longer-term tenancies but are cautious about other proposed changes to tenancy law, according to the latest survey by the Auckland Property Investors' Association.

The survey polled more than 500 active Auckland landlords about the extent to which they expected to be affected by various proposals related to the residential tenancy market.

Landlords across the board responded favourably towards the relaxation of loan-to-value restrictions, better security of tenure through longer-term tenancies and the Healthy Homes Guarantee Act, the association said.

The survey found that landlords were most concerned about the prospects of a capital gains tax, debt-to-income restriction, and the removal of the 42-day notice to terminate.

"While the results are hardly surprising at first glance," said association president Andrew Bruce, "what is interesting, and in fact, encouraging to note is that on a 1-10 favourability scale, none of the issues polled is so abhorrent to landlords as to cause them to dump their portfolios."

Long-term investors were cautiously optimistic and steadfast in their approach to investing in the changing market.

"These results strengthen our belief that property is not an overnight rags-to-riches story," Bruce said.

"Most of our members have taken a long-term approach to their investments which includes built-in contingencies and mechanisms to absorb additional costs brought on by adverse policies. It is the price of doing business."

The association said it was encouraged by its members' response to the Healthy Homes Guarantee Act (HHGA) which is set to raise minimum standards for rental properties.

The act was ranked the third most favourable out of the 10 issues polled.

"Our members are acutely aware that the HHGA goes hand in hand with the security of tenure. As landlords, we understand that it is in everyone's interest to provide a healthy and safe home for our tenants," Bruce said.

"What we want to be careful of, at this stage, is to ensure that the HHGA strikes the right balance between maximising tenants' health without placing landlords under an undue burden that could ultimately distort the rental market with lesser rental stocks and increased rents."

Details of the new standards were yet to be decided.

Issues polled in the survey ranked in order of favourability:
• Relaxation of current LVR restriction
• Longer fixed-term tenancies
• Healthy Homes Guarantee Act
• Extension of Bright Line Test
• Limiting rent increases to once a year
• Removal of negative gearing
• Ring-fencing tax losses
• Removal of 42-day notice to terminate
• Debt-to-income restriction
• Capital gains tax