While the number of landlords who have raised or are thinking about lifting rents continues to be high, the number has dropped from the last survey.
While 20 per cent of landlords hiked rent in the previous six months, this was six points lower than the last poll. The number considering a rent increase in the next six months also fell - it was down 7 points.
Infometrics chief executive and economist Brad Olsen urged caution with some of the numbers, noting that landlords looking to increase rents might increase them regardless of the Government’s policies.
In 2021, the Government revoked the ability of landlords to deduct interest costs from their tax bill - effectively a tax hike on landlords.
The tax change rolls out in phases, beginning in 2021 and ending in 2025. With interest rates rising, removing the ability to deduct the cost of those rising interest rates will add hundreds of dollars a week to some landlords’ costs depending on the size of the mortgage.
Some properties like newbuilds and large build-to-rent developments are exempt.
Housing Minister Megan Woods said despite the survey suggesting landlords were putting up rents because of the changes, she had no intention of slowing the speed at which they were phased in.
“We have no plans to change the interest deductibility rule beyond the carve-out for new builds and Build to Rent, as its purpose is to stimulate badly needed new housing - and in the case of existing Build to Rent - ensuring that we grow more long-term secure rentals,” Woods said.
The survey also found only 4 per cent of people surveyed had purchased a rental property in the past six months, down from 7 per cent in May 2022.
The national median rent reached $595 in January 2023, according to Trade Me property data, up significantly on pre-pandemic levels - the median rent was $520 in December 2019.
National’s housing spokesman Chris Bishop said landlords “aren’t the enemy in the property market”. and voiced concern that more landlords were not entering the market.
“They’re a critical part of the property market,” he said.
Bishop said the interest deductibility changes were just “starting to bite”, noting that they had not yet been fully phased in.
“The government is engaged in a war on landlords and tenants are collateral damage,” Bishop said.
Olsen urged caution with parts of the survey, like the changing of the way questions had been asked from survey to survey. For example, the survey changed the prompt around rental costs increasing due to “other” reasons like rates or insurance, which had a 21 point bump in response.
“The prompting of the question I think is, is particularly unhelpful - not only because it’s prompted, but also because the changes means that that the actual figures are certainly not helpful to understanding what’s actually driving rental increases,” Olsen said.
He also drew attention to the falling numbers of landlords hiking rents overall and buying new rental properties.
“I think it’s notable that there’s a, a statistically significant decline in the number of landlords who are expecting to consider increasing rent for the next three months,” Olsen said.
“I think that probably highlights that the rental market is getting a bit tougher to operate in in terms of supply and demand and you know, from the point of view where there’s probably a bit more choice that’s starting to open up now.
“That’s not meaning that rents are cheaper, but you do start to get a feeling that perhaps there is a little bit more competition occurring in the market and that’s limiting just how much landlords might be able to raise rents,” he said.
