CPII Survey August 2019
Most investors compliant with the Healthy Homes Act when law came into effect
- 95% of landlords surveyed via Crockers believe their rental home was compliant with the Healthy Homes Act as of 1st July 2019. Only a small proportion of investors’ properties were not complaint as the new law came into effect.
- Most (84%) of investors are aware of the Healthy Homes standards that will come into effect on 1st July, 2021, two years out from the changes being made. Which means 16% of Landlords were unaware of the standards which have new obligations from 1st July 2019.
- It was concerning that a quarter of respondents 26% were unaware of the changes made to the Residential Tenancy Act. These changes include limiting tenants’ liability for careless damage in rental properties and giving Tenancy Services the ability to take enforcement action against landlords who rent properties that don’t meet minimum standards and start to come into effect on 27th August 2019.
- We also asked respondents how they believed the market will react to the increasing compliance costs. An overwhelming 81% of investors believe that rents will increase directly as a result of the changes or indirectly through an increase in demand.
Healthy Homes Compliance, Residential Tenancy Act & Compliance Costs
Healthy Homes Act Compliance
Recent projected migration data from Statistics New Zealand indicates that there has been a slight drop in estimated migration to New Zealand following a peak in migration at the start of the year. This reflects changes in the economy and also government changes in migration policy. Using net migration figures from Statistics New Zealand and sales data from REINZ, we can compare long-term median sales prices with net migration figures to see if net migration has any influence on sales prices. Overall there are clear spikes in migration figures in January-February and July of each year.
Healthy Homes Standards
Following on from this, we asked landlords whether they were aware of the new healthy homes standards that will come into effect on 1st July, 2021. Encouragingly, 84% of respondents were aware of the new standards two years out from their introduction, whilst 66% understood their obligations under the new standards. As most of these landlords use Crockers they are likely to be better informed than those not working with professional property services companies.
Residential Tenancy Act Changes
We also asked investors about the changes to the Residential Tenancy Act, such as limiting tenants’ liability for careless damage in rental properties. Once again, there was an encouraging number of respondents aware of the changes being implemented (74%). In comparison with the healthy homes.
Professional Dealt With
A real estate agent was the most common professional used when buying/selling a property (77%). A private sale (15%) and a developer (6%) were less common. No respondents used investment company guidelines, there may be more education required to get investors up to speed on the Residential Tenancy Act changes.
Finally, this month we asked investors how they believe the rental market will react due to increasing compliance costs within the market. An overwhelming 81% of investors believe rents will increase either as a result of the increase in compliance costs or overall increase in demand.
Crockers Property Investment Index
Auckland Rental Property Performance Index
Both the Auckland Rental Property Investment Index and the Auckland Rental Property Performance Index have remained stable this month, due to investors’ confidence in the market remaining fairly stable.