Manawatu Property Investors' Association

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Rent increases bad news for all

“The impact of rent increases low income groups in Auckland is not good for anyone”, said Andrew King, Executive Officer of the NZ Property Investors’ Federation, in response to a Salvation Army’ report by social policy analyst Alan Johnson.

Mr King said it is little wonder that rental prices have increased at a faster rate than general inflation since 2008. Rental prices have been affected by large increases in rates, repairs and insurance as well as the loss of depreciation as a tax deduction. 

Mr King points out that costs have been increasing in all sectors of the economy since 2005.  No landlord wants their tenant to be worse off after paying the rent, but on the other hand no landlord will stay in the business of providing rental accommodation if they are making a loss.

It is likely that rent increases would have been higher if low mortgage interest rates were not helping to offset the other cost increases.

“It is important that the report states that the maximum rates of accommodation supplement have not changed since 2005.  This is definitely contributing to the fact that five of the six low-income groups examined in the report are worse off in real terms.” 

 “Auckland has experienced a higher percentage of population growth than other areas in New Zealand, said Mr King. “This fact will create pressure on available accommodation and cause higher rent increases in this city than in other parts of the country.”

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