Illegally raising rents?

Grant Robertson says he will ‘make an example of any landlords found to be illegally raising their rents to exploit students’.

RNZ:  Robertson asks students to dob in dodgy landlords

From 1 January, the cap on student allowance and living cost loans rose by $50, a Labour election campaign promise.

Since then some students have complained of landlords raising rents to an unreasonable level in response.

Rental prices in Wellington for December were up $30 on October’s figures, according to Trade Me numbers.

Its Property Rental Index showed the median price had risen from $450 to $480 since October, peaking back up to match the record set last January.

If the Wellingtom flat market is anything like Dunedin’s then calendar year leases will be common, and it is common for flats to be cleaned, done up and re let. Annual increases in rental are also likely to be common.

Mr Robertson invited students to get in touch if they believed a landlord was raising rents illegally, and within 10 hours, he said, he had received dozens of reports.

“There are rules in the residential tenancies act about not putting rent up above the market rate, and we are looking very closely at some of the examples that have been put to us today to see if they would breach that act.”

I don’t know what the rules are, but in a normal market prices are set by supply and demand. if prices are too high the market will reject them. I’m not sure how rents can be put above ‘market prices’ if they are being accepted by tenants.

Property prices have been rising, that will put pressure on rental rates.

The government that Robertson is a part of may be deterring people from remaining as landlords or becoming landlords, this will put pressure on rental rates.

Are there rules in the residential tenancies act against government policies pushing up rental prices?

43 Comments

  1. Blazer

     /  January 20, 2018

    ‘be deterring people from remaining as landlords or becoming landlords, this will put pressure on rental rates.’…yes…downward pressure.

    • Kitty Catkin

       /  January 20, 2018

      That’s not how it works. If demand is greater than supply, the price goes up, not down. This applies to any market.

    • Alan Wilkinson

       /  January 20, 2018

      That’s on a par with your banking theories, B.

    • Blazer

       /  January 20, 2018

      landlords sell their properties=more available for people to buy instead of rent.Accomodation supplement is a huge gift to landlords that distorts the much vaunted ‘free market’.Landlords will be deterred when they cannot rely on hydraulicing rents,negative gearing and or cap gain.Building new stock of state houses,apartments and private residential projects will address…supply=rents dropping.

      • chrism56

         /  January 20, 2018

        No Blazer, your maths is as suspect as the rest of your ideas. The census data shows the occupancy rates of owner occupied dwellings is lower than that for rented properties. That means every rental taken off the market increases the accommodation shortage. And landlords can charge more because they will be in short supply. .

        • Blazer

           /  January 21, 2018

          No that means that rents are so high…that to pay it, tenants squeeze numbers into rental accomodation.Take away accomodation supplements and tax breaks,treat rentals as every other asset class is….and its all over for the rapacious rentier class.No one has the guts to do it..of course.

          • Gezza

             /  January 21, 2018

            It would be political suicide to take away accommodation supplements I suspect, Blazer. A huge gamble that could easily backfire if large numbers of poorer people suddenly end up homeless while the rental market adjusts.

            • Blazer

               /  January 21, 2018

              true but the other effect…would be many landlords…out of business…crashing out.It is not a true market of supply and demand.

            • Gezza

               /  January 21, 2018

              Yes that’s part of the huge risk though. Who do you expect would buy the properties & tenant them or purchase them for their own homes? I think it unlikely to benefit those who currently struggle hardest to afford rentals.

            • Blazer

               /  January 21, 2018

              the properties would be alot cheaper…the old Housing Corp with low interest loans for buyers could be set up.Atm the solution of putting people in motels and allowing landlords to charge what they like is not working.The paradox is that the landlord class scream about Govt regulation,yet cannot sustain their business…without..it.

            • Gezza

               /  January 21, 2018

              I can see your argument but it’s based on the prediction that large numbers of current landlords will unload their properties onto the market. They may not. They can just increase rents & rants & blame the government in the expectation the situation will be resolved at the next election.

              Do you know if any governments have tried the approach you’re advocating in recent times?

            • Blazer

               /  January 21, 2018

              No,as I said ,no one has the guts to upset landlords.They lobby hard,and get positive media coverage.Believe me,they would unload…big time.A few would be unaffected but find better use of their capital if investment was a ..level playing..field.

            • Gezza

               /  January 21, 2018

              I think they’d just boot their capital investments overseas. The buggers could already invest in productive enterprises now if they wanted to.

    • Alan Wilkinson

       /  January 20, 2018

      Splendid logic, B. Except for the minor oversight that there won’t be any landlords building new stock.

      • Blazer

         /  January 20, 2018

        landlords don’t build..anyway.

      • Alan Wilkinson

         /  January 20, 2018

        Who do you think rents out new apartments then?

        • Blazer

           /  January 20, 2018

          the people who buy them…funnily enough.

          • Alan Wilkinson

             /  January 21, 2018

            I.e. landlords.

            • Blazer

               /  January 21, 2018

              Even a scientist should understand the difference between building apartments a la developers and buying. ..one.

            • Alan Wilkinson

               /  January 21, 2018

              Truly fatuous, B. Developers won’t build rental apartments without landlords to sell them to. Honestly, where were you when common sense got dished out?

            • Blazer

               /  January 21, 2018

              Well Al,they must’ve given me your share too.Developers sell apartments off the plan to a mix of speculators,private buyers who will occupy them,and landlords who aim to…rent them.

            • Alan Wilkinson

               /  January 21, 2018

              So there won’t be any new apartments to rent.

            • Blazer

               /  January 21, 2018

              read this s l o w l y……….’ the minor oversight that there won’t be any landlords building new stock.’….I TOLD YOU..landlords don’t…build.

            • Alan Wilkinson

               /  January 21, 2018

              Just one of the many stupid things you said, B. Developers and builders don’t build until they have got purchase agreements off the plans for what they are building.

    • NOEL

       /  January 21, 2018

      Price will not be the only problem for renters in Wellington in 2018.
      Some are claiming delayed earthquake updating, possible increase in renter numbers and removal of some properties which aren’t up to the new standards will create a rental perfect storm in Wellington this year..

  2. Kitty Catkin

     /  January 20, 2018

    $30 won’t break anyone when it’s divided between several tenants. The impression we were given was that landlords were raising rents by $50 for each tenant-enter rumour, painted full of tongues.

    • phantom snowflake

       /  January 20, 2018

      You seem to have got the wrong end of the stick. There have been many claims that landlords were raising rents by $50 per room for some Student rentals (one part of the Wellington rental market) whereas the $30 rise apples to the entire Wellington rental market. That being said, $30 per week translates to a roughly 7% rise in just 2 months for all of Wellington, which is quite worrying.

  3. George

     /  January 20, 2018

    So landlords refuse to rent to students.
    If they have a problem with that refer them to Robertson.
    He’ll put them up at his place

  4. Alan Wilkinson

     /  January 20, 2018

    Robertson is obviously an idiot. If it is above the market rate it won’t be rented. If it is rented it is the market rate. If a politician thinks he is going to punish someone for political purposes he is likely to meet his comeuppance in court.

  5. chrism56

     /  January 20, 2018

    Here is the Act
    http://www.legislation.govt.nz/act/public/1986/0120/latest/whole.html#DLM94278
    Section 24 deals with rent increases and 25 with market rent.
    It doesn’t say what Mr Robertson says it does – It has to exceed the market rent by a substantial amount.
    Why am I not surprised he got it wrong?

    • Gezza

       /  January 20, 2018

      Grant Robertson says he will ‘make an example of any landlords found to be illegally raising their rents to exploit students’.

      I’m not a landlord & have no desire to be one, so I’m unfamiliar with the government mechanisms for making examples of landlords. Maybe they’d have to get MBIE’s lawyers (or consultant lawyers?) to get consent from renters to act as their agents & lodge complaints with the Tenancy Tribunal?

      Unless he’s planning some sort of name & shame game.

      • Alan Wilkinson

         /  January 20, 2018

        The last option is a sure way to wear a defamation suit.

        • Blazer

           /  January 20, 2018

          not if you’re Paula fatty Bennett.

        • Gezza

           /  January 20, 2018

          Unless he comes up with some details of exactly how he’d make an example of them I suspect he’s just blowing it his arse, tbh.

          • Gezza

             /  January 20, 2018

            Whoops. Here’s the missing ‘out’, without which the above comment may seem a bit strange.

  6. David

     /  January 20, 2018

    Robertson needs to get his head around being the finance minister, albeit a shit one, and no longer the president of some student union. Robertson needs to reduce barriers to encourage more landlords which will increase supply…you know the same bloody thinking that he advocates with Twyford for the Auckland markets.
    Seriously things would be better if Blazer was running the place.