Politics, policy and a win on missing bonds

Hon Tama Potaka – Yes, Minister! 

Another week, another good, constructive meeting with a key politician. We met in person with the Associate Housing Minister Tama Potaka, and discussed a range of issues including: 

• Property Manager Regulation (still happening, but not this parliament) 

• Boarding House Regulation (in committee stage, no government position yet, won’t happen this parliament) 

• Tenancy Tribunal wait times (the pilot which prioritises health & safety and arrears cases is showing early signs of success, too soon to say for certain. NZPIF asked Minister to consider additional funding to help reduce delays.) 

• We also asked the Minister to consider increasing funding for Tenancy Compliance & Investigations Team. In our view better enforcement would produce more tangible benefits than some of the alternatives, like Boarding House Regulation. 

However, the big win was on lost bonds. We have had reports of delays and tenants’ bonds being lost in the system, with no bond number, leaving tenants out of pocket and landlords looking like the bad guys. 

The Minister was appalled to hear that was happening, and asked his officials to sort it out, pronto. We sent him one case, and it was resolved in two hours. It shouldn’t take us having to go the Minister to sort it out, but it is great that he acted immediately to demand a solution, and great that officials delivered. 

VP Kathryn Seque-Roche has several other similar cases to take to officials already, but is happy to take more. If you’ve been having trouble with a lost bond and aren’t getting any joy through regular channels, drop her a line at [email protected]. 

Nelson Property Investors Association visit 

I had a great visit to Nelson last week, to talk to local NPIA members about – you guessed it – the upcoming election. It was good to see so many members out on a Tuesday night and such interest in the coming poll. 

While there, I visited two properties owned by local investor Harry Pearson, 2024 Landlord of the Year Runner Up. Harry has put solar panels on these properties, with a scheme in place to share the savings between him and the tenants. I have to say I was impressed. Both tenants seemed very happy with their lower power bills, and Harry gets enough back to pay for the system. Win-win. 

I’ve talked over the years about how this government has a goal of changing our economic model from one driven by selling houses to each other, to one driven by making things and selling them. As Housing Minister Chris Bishop put it last year, the government wants NZ “decouple its economic growth from house price increases.” 

It’s a policy that seems to be working. As economist Cameron Bagrie put it on ZB last week, “what we’re going through at the moment, the economy is literally being rewired, replumbed, electrified. We’ve had this old model of selling more expensive houses to each other, relying on migration etc” which isn’t sustainable. 

He went on to say we’re getting back to the basics, productivity growth, business investment, better economic policy, which is starting to produce growth in many areas, despite the housing market overall being flat (on average, nationally). 

He’s not the only economist to notice this, so I think this means we can start to accept that this is the new economic order for New Zealand. The problem is that politics is stuck in the past. In a world where property prices aren’t going through the roof, there’s no need for some of the old tax policies – like ring fencing – that were implemented to try to slow runaway house prices. Or new old ones, like interest denial. 

That is one of our key focuses for this election. Get rid of the old, punitive policies. Treat rental investment like a business. The flat rental market and political uncertainty are having a big impact on how rental property as an investment is viewed. ASB’s latest investor confidence survey shows a record 40% of people are “very concerned” about how local political uncertainty will affect their investments. 

The sooner we can get some common sense – and fairness – back into the policy debate on all sides of the house, the better. 

I mentioned last week that I was joining David Faulkner on his Property Brokers Podcast to discuss all things politics and property related. If you didn’t catch it live, you can view the recording here. 

Another interest rate decision this week, with the consensus being that the Reserve Bank will lift the OCR by 0.25 percentage points.  

Kiwi Bank is the lone voice saying they should hold. Chief Economist Jarrod Kerr told Mike Hosking last week that we need the economy to recover and rising rates don’t help that. I tend to agree with him, but I don’t think the RB will listen to him. 

A few people have asked me recently if National really would rule out Opportunity after the election. Especially now that it looks likely they’ll hold the balance of power.  

My answer is of course National will work with Opportunity after the election if it’s the difference between forming a government or being a one-term loser. Will they make concessions to do so? Yep. Will that include Land Tax? Nope. 

In the words of Neale Jones, former Labour Chief of Staff, about the negotiations with Winston Peters in 2017: “I said, ‘If you wake up tomorrow and he’s gone with National and they get a full term and you’re in Opposition and Labour’s in crisis, will you say I’m really glad I didn’t make [him] Deputy Prime Minister? … No, you won’t’.” 

According to the latest Herald Poll of Polls, a National, NZ First, ACT, OPP coalition has a 97.5% chance of getting enough seats to govern, vs only 48.3% for the current three-party coalition. On the other side of the house, a Labour, Greens, Te Pāti Māori, OPP coalition only has a 40.8% chance of making it to 61 seats. Although that doesn’t account for TPM’s strategy to force an overhang (more MPs) by winning the Māori seats. 

While some lobby groups are raising concerns that too many rentals are not Healthy Homes compliant, it seems like there is still plenty of work being done to bring homes up to standard and keep them there. Far from dropping away entirely after last year’s deadline, Christchurch company ‘Ecohome Programme’ has experienced only a slight drop in business. 

Owner Blair Ashcroft said “We probably do an assessment every day. There’s been an increase in tenants booking assessments, and about 10% of our clients are homeowners who want their home to meet the standards.” 

Property managers are also implementing regular compliance checks on their rentals. I think it’s interesting that more tenants are getting assessments done. It shows greater awareness of the issue and that tenants aren’t afraid to stand up for their rights.