2020 What A Year
Legislative changes, Covid-19 and increased pressure on housing supply have meant 2020 was a rollercoaster ride for property investors, writes Sharon Cullwick.
30 November 2020
As we approach the end of 2020 and gladly cross it off our calendar, we should reflect on everything that has happened in our industry over the last 12 months.
We started the year with the knowledge that as owners of rental properties, we had to bring our properties up to the Healthy Homes standards. These became law on July 1, 2019, and although the final deadline for installation has not yet approached, we need to ensure we have paperwork completed and plans underway to achieve these compliance levels by July 1, 2021 on any new, varied or renewed tenancy agreement. These changes will mean that a rental property will be of a higher standard than a new built house, with minimum requirements for heating, insulation, draught stopping, moisture ingress and drainage, and ventilation.
Amending The Residential Tenancies Act (RTA)
The next main piece of legislation was the Residential Tenancies Amendment Bill 2020. The first reading was held in February and written submissions closed the night the country went into Covid-19 lockdown. On March 23, in response to Covid-19, urgent legislation was introduced. This included a rent freeze and greater protection for tenants – preventing the termination of their tenancies. Under the Covid-19 Response (Urgent Management Measures) Legislation Act 2020, which came into effect on March 26, 2020, we were also advised via a letter to property stakeholders from Hon Dr Megan Woods that a motion to suspend all non-essential parliamentary business would be passed, including suspending all the business currently before the Select Committee, with no fixed date to sit again. However, this was not to be the case and the Select Committee continued to hear oral submissions on the RTA Amendment Bill. On August 11, 2020 the RTA 2020 was passed in Parliament.
Although the NZ Property Investors’ Federation (NZPIF) agrees with many things in the RTA 2020, we do not believe it will help those great tenants who are unfortunate enough to live next door to anti-social tenants. Instead of giving these good tenants security of tenure, which was the desired effect, they will indeed be the ones who do not have this. Anti-social tenants will benefit from these changes knowing it will be almost impossible for a landlord to remove them from a property.
2020 has seen the emergency housing waiting list rise from 5,000 just three years ago, to 15,000 in March this year and now we are at a whopping 20,000 in November 2020. This list will only increase exponentially as we move closer to the implementation of the RTA. Placing a marginal tenant in a property will become much more of a risk for the private landlord.
New Landlord Education Programme
On a positive note, the NZPIF launched its education program specifically for the self-managing landlord. Those who undertake it learn vital basics, confirm their competency, and become recognised as better landlords. Although, it is explicitly designed for the newer investor, it contains information that even the most experienced property investor will benefit from learning. The purpose of the programme is to help you run your property investment portfolio like a professional. In addition, by joining a local Property Investors’ Association, we aim to help you navigate your way through the many changes in our industry and to equip you to be a successful property investor.
With that, we wave goodbye to 2020.
All the very best for 2021.