Hawke's Bay Property Investors' Association

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Research into landlord motivations

There has been vigorous discussion in the media and other forums over several months about the detrimental effects, particularly for children, of living in cold, damp, uninsulated accommodation.  There have been calls from many quarters for a blanket warrant of fitness for rental properties. The NZ Property Investors’ Federation has consistently pointed out that a blanket WOF is not the answer for the particular health problems that these tenants are experiencing.  The Federation instead believes that Government incentives to encourage installing insulation and heating along with targeted help with the cost of electricity for certain tenants would be much more effective.

More recently there has been specific concern about the high rate of rheumatic fever in some areas of New Zealand, believed to be caused by living in overcrowded houses which are also cold and damp.  This concern has led the Ministry of Business, Innovation and Employment to this week ask for proposals to conduct research on the drivers of landlord motivation to upgrade and maintain their rental properties, where children in those properties may be at risk of rheumatic fever.

The Request for Proposal (RFP) also points out that researchers will need to be able to target a specific segment of landlords – those with rental properties in geographic areas where the rate of rheumatic fever is high relative to the rest of New Zealand and where overcrowding may be present in the households.  

Recently published statistics show that rents have been rising. This could be further exacerbated by the recent moves of the Reserve Bank to bring in new rules requiring banks to hold larger capital reserves against the loans to property investors, pushing up the cost of these loans.  In addition, some tenant groups are concerned that the accommodation supplement is not keeping up with rental price increases, putting pressure on low income tenants.  These factors can lead to overcrowding in rental accommodation as people attempt to cover the cost of the rent.  This has little to do with landlord motivation to upgrade and maintain their rental properties.  In order to increase the supply of warm and dry homes, which are not overcrowded, and therefore to improve the health outcomes for children, it would be beneficial to look at the bigger picture and  find funding for research into additional barriers affecting this supply.

Proposals should reach MBIE by Monday 6th of April. The RFP can be found here.  



Tags: property investment