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Bad Rap For Student Landlords

The bad press landlords have been receiving for an accusation of bumping up student rents is unjustified, writes Andrew King.

By: Andrew King

18 April 2018

Last December Trade Me reported that rents were going up around the country. Hardly surprising to rental property providers. In response to this, Victoria University’s Student Association reported that they had heard of students having their rent increased by $50 per week and claimed that this was due to the student allowance being increased by $50pw.

President of the Student Association, Rory Lenihan-Ikin, said “It’s that $50 that’s been given to students with the intention of trying to alleviate student poverty, and unfortunately it looks like lots of it has been gobbled up by landlords.”This was seized upon by many media outlets who slammed landlords, calling us unscrupulous and greedy.

We pointed out that the Student Association’s view was purely anecdotal and that it was highly unlikely that students would be targeted like this. It appeared to be one of those stories that flashes up but would settle down quickly.

However, in January it was raised again, even though there was still no evidence it was actually occurring. Despite no evidence, the Student Association’s view was taken as fact and landlords were again attacked as being greedy and unscrupulous.

The good news is that the story has finally been confirmed as untrue, however this has been done in a much quieter fashion.

‘Surely people will wise up soon and realise that rental property providers are an essential part of our society and the economy’

Dan Rowe, a writer for The Spinoff website, recently interviewed Minister of Housing, Phil Twyford. He asked the minister: “The increase in student allowance being immediately swallowed by at least some landlords – what is your response to that? It seems like a cynical move”.

Thankfully the minister had researched the situation and replied, “We looked at that and the data does not support the idea that the increase in student allowance stimulated an increase in rent. Many tenancy agreements are on a 12-month term, which terminates at the end of the year, and so you get this annual cycle of increases. This year I think the increase in rent was 9.4%, and it was 9.1% at the same time the previous summer, when there was no increase in student allowance. There’s anecdotal indications around landlords bumping up rent, but actually I don’t think the facts support that, to be honest”.

This was an excellent reply, which unfortunately doesn’t appear to have been reported anywhere else, which is hugely frustrating.

It is completely reasonable that the general public has formed a view that landlords have taken advantage of students and taken their allowance increase. Once again the bad, yet false, news has been widely publicised while the true situation is ignored.

The NZPIF will try to get the minister’s response to be more widely known, but unfortunately it is likely that the media have moved on.

We have a situation where tenants are concerned about a lack of rental property availability and price rises, yet we have regulations and negative public opinion reducing supply. Surely people will wise up soon and realise that rental property providers are an essential part of our society and the economy, needing support not impediments to providing people with homes to live in.

Andrew King, Executive Director NZ Property Investors’ Federation

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