A big weekend for property investors in Tauranga

The conference debate included a political panel to which all the main political parties were invited, and which National, ACT and New Zealand First came. Labour’s Deborah Russell was intending to come but got stuck in Wellington and could not get flights in and out of Tauranga on the day. I’ve got all the background from Deborah and can attest to the fact that the flights were full, so it’s not some lame excuse. Pity though. 

However, the discussion between the remaining panellists was excellent and a policy announcement from ACT’s Cameron Luxton really made up for missing one panellist: 

ACT has promised to remove rental loss ring-fencing for new builds 

This is the policy we’ve put forward to ACT, National, Labour and New Zealand First, so it is a huge win for our advocacy to have a party pick this up as a policy for the election. I must admit I’m surprised, as well as delighted, to have such early success, but I’ll take the win and I am very pleased that our advocacy continues to bring results. 

National’s Chris Bishop & NZ First’s Andy Foster didn’t rule out the idea and said they’d consider it – that’s fair, I’d hardly expect them to both say ‘us too’ at a debate. I genuinely think that the policy will get a reasonable consideration from both parties. 

I also think this is a policy that Labour can support. It’s logical, evidence based and targeted at new builds which supports their desire for more and better housing. It’s not an expensive policy either – ACT has costed it at $70 million. 

Some of you might be wondering why we didn’t push for full removal of ring fencing. The answer is that it’s a step too far at the moment and would be unlikely to get broad political support.  

So, what happens next? Well, we continue advocating for the policy with Labour, National and NZ First. ACT’s support is great, but they have to win power, and the policy has to survive coalition negotiations. I’d like to see it survive into the next Labour-led government as well, which is why it’s important to try to get Labour over the line. 

However, getting this far shows the value of our advocacy, of sound research, solid data and the development of practical, pragmatic policy which recognises political reality. 

Our engagement with key officials across government continues to grow at conference, and this year, as well as Kat Watson from Tenancy Services and Claire Leadbetter from MCERT (the new mega-ministry which advises the housing and infrastructure ministers) Brett Carter, Principal Adjudicator at the Tenancy Tribunal came and gave a presentation to delegates. 

Kat has now attended three conferences and gave an excellent update on the work that is being done to speed up the Tribunal as well as a progress update on the transition to the digital bond system. Fair to say that it has been a bit “bumpy” (in Kat’s words) but we are only two months into the full switch over and plenty of people are also saying the new system is great. Kat talked about what is being done to address the issues that are cropping up and there is progress being made. 

Brett ran us through what’s happening at the Tribunal, particularly the pilot scheme to fast-track health & safety related cases (there’s only been one, which was resolved well) and rent arrears related cases. The short version is that, while the pilot hasn’t finished yet, initial signs are promising. 

There was a lot in their presentations – the people who attended this at conference got a lot out of it – so I can’t summarise it all in this edition. I’ll follow up with a more detailed look at what they said in a future edition and on the website. 

Final note: Attendees at this session praised the work that is being done behind the scenes and the efforts of these officials to attend our conference and have such open and honest dialogue. This is how we make things better and I too would like to thank them all for their efforts. 

In Media Links this week I’m just going to mention the two category winners – to do justice to the excellence shown by all the finalists and merit winners in our awards needs a special edition, which I’ll work on this week. 

For now, huge congratulations to our former president and CPIA member Sue Harrison (below left), who took out Landlord of the Year, and to Tania and Logan MacDonnell from Taranaki (below right), who won Renovation of the Year for an awesome sounding – and financially rewarding – rental reno. 

Brilliant work you guys, congratulations. More to come on this subject. 

We’d also like to thank our Landlord of the Year sponsors, MyRent for main award, and MBIE for the Merit Awards. Without our sponsors’ generous support, none of this would be possible. 

We’ve had a week of fairly positive economic news, which is well summarised by BNZ Economist Mike Jones in his Eco-Pulse update. On the plus side, there are good numbers in the manufacturing and services indicators, tourism numbers are up, migration continues to lift, albeit slowly and we continue to see economic growth, perhaps even accelerating. 

On the downside, inflation risks are higher thanks to events overseas, leading the BNZ (and other banks) to revert to expecting another OCR hike in October. Today the ANZ revised their forecast to add hikes in February and March as well as October, taking the OCR to a peak of 3.50%. The track then flatlines. 

This change is driven by higher oil prices and crack spreads, a lower exchange rate, and a better starting point for the economy than the RBNZ assumed. 

For the average voter, this is a mixed signal. Those who are already feeling a bit better off will be happier with what this government has been doing than those who are struggling to make ends meet, can’t find work or just can’t see light at the end of a very long tunnel. The balance of those two groups, particularly among swing voters, will determine this election. 

You can see this situation reflected in the recent Freshwater Poll for The Post. Like other polls it shows a tight race, but it has two other aspects which shed light on how we’re feeling collectively as a country. Both major parties polled under 30% in this poll, which has never happened before, and most voters (56%) feel things in New Zealand are headed in the wrong direction. We are not happy campers. 

For those who enjoy detailed poll analysis, this article by Luke Malpass looks at the results of the economic wellbeing questions in the same Freshwater poll. It’s a pretty confusing picture to be honest. More people trust Chlöe Swarbrick to manage the economy than Nicola Willis, yet a majority think National’s economic plan is better and a stunning 60% would prefer lower taxes even if it meant fewer Government services. 

Make of that what you will, but it’s an interesting read. 

Latest figures out from Tenancy Services show that the New Zealand median rent was down to $590 a week in July. That’s a staggering number, as median rent has now been flat for 32 months since December 2023, when the current government took charge. 

It’s even more staggering when you consider that under the previous Labour-led government median rent went from $400 a week to $600. A 50% increase in six years. 

So, who gets the blame and who gets the credit? Were rent increases under Labour all down to low interest rates (driving house prices up) and high immigration? Has the National-led coalition got lucky? While immigration does have an impact (demand), I don’t think any government can get away with blaming external factors. They set housing related policy, and they deal with the external factors in the best way they can. 

(Just to dispel one myth, interest rates and rent increases are unrelated, according to a 2024 study by the Reserve Bank of Australia. Housing demand relative to housing supply is the primary driver of rents.) 

I think the results speak for themselves. Labour spent too much time making life harder and more expensive for landlords and tenants suffered as a result. The current government reversed the worst of those policies (esp interest deductibility) and focussed on housing supply – median rent has flatlined. It cannot be a coincidence. 

That’s roughly how much tax landlords across New Zealand pay each year. About the same as NZ’s biggest bank, the ANZ. Some people think landlords don’t pay tax – we do. That’s the number to wheel out next time you hear someone say we don’t.