“It pre-dates Covid-19 and recent policy announcements and we haven’t seen evidence of rent increases or a reduction of stock directly linked to those.
“Nationally, rents increased 4.9 percent in the year to June 2021. While rents are increasing, it isn’t yet clear whether this is a return to the pre-Covid-19 trajectory or a new trend of higher price rises.
“We know that Tairawhiti Gisborne is experiencing growth for the first time in decades, with demand pushing up housing costs across the system, including in the rental market, and that there is a large proportion of the population which is low-income and cannot afford these shifting costs. That is why the Government has identified Tairawhiti as a place where we need to work more closely with the community in partnership to understand and respond to the urgent and longer-term issues they are facing.
“Te Tuapapa Kura Kainga Ministry of Housing and Urban Development has established relationships with local iwi and is working through Manaaki Tairawhiti to bring local government, iwi, and central government together.
“The Government has made multiple legislative changes to improve the security and rights of renters, including ending no-cause terminations, limiting rent increases to once a year and banning rental bidding.
“If a tenant thinks their rent is too expensive and not in line with market rent, they can go to the Tenancy Tribunal to request a rent reduction. Rent should be similar to the rent charged for similar properties in similar areas.
“The Government is monitoring what happens with rent rises and will take action if necessary.”
Ms Williams said the 2021-2022 Public Housing Plan (PHP), released in February, had an increased focus and extension into areas and regions of highest needs.
“Tairawhiti Gisborne is a focus area for the plan, with a target of delivering 240 new public homes, up from 75 in the last plan.
“Among other initiatives to alleviate the housing crisis is the Housing Acceleration Fund, which will increase the pace and scale of housing delivery and support more people into home ownership.
“It includes a $3.8 billion investment to unlock more land for housing development, support the provision of critical infrastructure needed for housing development and support delivery of a wider mix of housing (for ownership and rental) that is affordable for low-to-moderate-income households.”
She refuted investor criticism of recent government announcements on housing.
“There is no evidence at present that rent increases or any reduction in rental stock are linked directly to policy change announcements.
“Proposed changes regarding interest deductibility for residential rental properties phase in at 25 percent per year over four years starting from October 1, 2021. Given the gradual phase-in of the changes, the full impact won’t be felt until the tax year April 1, 2025. Given that interest rates remain low, this moderates overall cost pressures on landlords. The government is continuing to monitor the rental market closely.
“Over a longer period, the new build exemption to the tax changes should incentivise new builds, including those intended as rentals, and therefore contribute to the overall rental stock.”
NZ Property Investors Federation executive officer Sharon Cullwick said the drop in Gisborne rentals was “shocking” but not surprising.
“The Government is not making it easier for landlords.”
Ms Cullwick said a major issue was around changes to tenancy laws, which made it harder to evict bad tenants. That meant when landlords did evict tenants, it took longer to fill vacant rentals.
“Whereas in the past a property might have been left empty for two weeks, it’s now taking four weeks for landlords to come up with the right tenant.”
