In a Radio NZ interview today, Labour's housing spokesperson said that the NZ Property Investors' Federation (NZPIF) was scaremongering by releasing findings of a survey that showed that nearly three quarters of rental property owners would increase rents if some of Labour’s housing policies were introduced. He also said that NZPIF did not explain why this would happen.
Labour has all but confirmed they will introduce a capital gains tax on all assets apart from the family home. Although we aren't being told any detail of this tax, in any form it will increase the cost of providing rental property.
This is not just the view of our industry group. In his economic overview last week, Tony Alexander, BNZ Economist, said that a capital gains tax would "tend to place upward pressure on rents".
Another proposed Labour policy, the ring fencing of rental property losses, will add $4,084 per year to the cost of providing the average property as a rental home.
Labour's proposed extension to National’s Minimum Standards law for rental property (which the NZPIF supported) will require many properties to have insulation top ups costing thousands of dollars for a 5% increase in efficacy. The same policy will make heat pumps a requirement for every rental property regardless of whether this is the best source of heating or if it is what tenants want.
Tony Alexander concluded that "Labour's policy mix has capacity to help constrain the pace of house price rises for lower-priced properties by boosting supply. But it will come at the price of higher rents".
When proposing its desire to apply debt to income restrictions, the Reserve Bank stated that this would lead to a reduction of 9,000 rental properties. Given the large and widespread impact of Labour's policies, they must have completed similar modelling to assess the effect on rental property supply and rental price increases.
Families who are renting and the parents of children who are flatting deserve to hear from Labour how they are likely to be impacted by Labour’s policies. Labour has not been able to say how long it will take to implement their proposed solution of a large increase in the number of new houses nor will they guarantee that this and taxing speculators, who are already taxed on their profits, will bring rents down.
Further information from
Executive Officer, NZ Property Investors’ Federation
Mobile: 021 216 1299