Jacinda Ardern - our new PM

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Forums › Politics › Jacinda Ardern - our new PM

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#1938709 14-Jan-2018 18:21

SJB:
Twyfords $5000 is probably about right. Insulation for floor and ceiling around $2500 and the rest for a heat pump.

Insulating floor and ceiling is a no brainer but doing the walls in most properties isn't practical. It would effectively mean re-lining every room and no landlord would do that unless it was part of a complete renovation.

Double glazing is a good idea as well but whether most landlords would think it financially viable is another matter. You might be talking $15k-$20k for an average size house and your retired couple with a single rental to top up the pension won't have money like that available.

IMHO an end to Mom and Pop retirement rentals will only be a good thing for the property market in general. They’ve only done it as that’s the best way to invest once your own house is paid up, but I sincerely think it’s propped up the bottom end of the market and strongly influenced the current ‘unaffordable’ 1st home situation.

BUT... has anyone here considered the impact this would have on the low west end renters though... perhaps we’ll end up subsidising this in our taxes when they end up in Housing NZ because the lowest rental prices get out of reach instead...

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blakamin

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#1938727 14-Jan-2018 19:48

Geektastic:

I suspect we will end up with more corporate owned rentals, where companies own tens or even hundreds of properties .

This is it... SOMEONE has to own rentals, and most middle-lower income people cant afford it, so this will happen... and rents will go up every year and being a good tenant will make no difference because at the end of the day, all companies care about is the bottom line.

House prices aren't going to drop unless there's a huge global financial crisis.

And NZ bank regulations about having 20% deposit effed up a hell of a lot of peoples chances of home ownership. Why wasn't 10% enough?

Yaaay housing!. /s

Geektastic

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#1938828 14-Jan-2018 23:45

PhantomNVD:
SJB:

Twyfords $5000 is probably about right. Insulation for floor and ceiling around $2500 and the rest for a heat pump.

Insulating floor and ceiling is a no brainer but doing the walls in most properties isn't practical. It would effectively mean re-lining every room and no landlord would do that unless it was part of a complete renovation.

Double glazing is a good idea as well but whether most landlords would think it financially viable is another matter. You might be talking $15k-$20k for an average size house and your retired couple with a single rental to top up the pension won't have money like that available.

IMHO an end to Mom and Pop retirement rentals will only be a good thing for the property market in general. They’ve only done it as that’s the best way to invest once your own house is paid up, but I sincerely think it’s propped up the bottom end of the market and strongly influenced the current ‘unaffordable’ 1st home situation.

BUT... has anyone here considered the impact this would have on the low west end renters though... perhaps we’ll end up subsidising this in our taxes when they end up in Housing NZ because the lowest rental prices get out of reach instead...

I agree; I think one of the main drivers is the lack of a tax free retirement savings option in New Zealand. Almost every country with which we might compare ourselves offers at least one (and usually more than one) tax free option. In NZ, the only tax free option really is property capital gain.

tdgeek

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#1938832 15-Jan-2018 07:16

rjt123:
Geektastic: When it comes to funding, I’m not sure that the government lives in the real world anyway. I saw this today

“Speaking before the third reading, Twyford said new standards would see extra costs for landlords of between $3000 and $5000, if they had to insulate from scratch and put in a heat pump.”

I was left wondering if Mr Twyford had ever got quotes for that work, as I would be surprised if it wasn’t twice as much as that unless you used a no brand heat pump, cowboy installers and the house was only the size of a shed.

Theoretically if a rental wasn't up to your desired standard you would pass it by and find a better house. I view renting as a choice not an obligation...

Obviously the better quality homes command better rents. Making all the homes better quality will therefore increase the rents across the board. I don't know if that's the government's intention or if they even thought about that... I'm not averse to improving the "health" of rentals but imposing regulations will have a flow on effect that won't necessarily benefit the consumer in the long term. There is a risk that renting becomes the realm of the wealthy the same as home ownership... And then we're back to square one.

Its a bit unrealistic to expect any business to absorb a cost and just leave it at that. So you feel its ok to increase the health of a home but not pay more rent?

Maybe the landlords should be allowed to offer squalor housing so rents will drop??

Having the cake and eating it too doesnt work

tdgeek

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#1938833 15-Jan-2018 07:23

If rentals became less desirable, that will reduce the house price boom. Excess supply. Generally, rentals are just average properties, and units. Lower priced. Being rentals they will be in sound condition. Ideal for the lower end of the market to pick them up. Incentivise by way of a means test, offer a Govt underwritten mortgage topup for the SOLE use of necessary renovation. (Maintenance, heat pump, not decks)

Fred99

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#1938860 15-Jan-2018 08:46

Removing negative gearing for purchase of existing homes, but retaining negative gearing for investment in new homes for rental might incentivise home building and take some of the heat out of the first home buyer market.

It seems unfair for first home buyers to be competing in a market where property investors can get a tax rebate on loan interest. Especially when justification for this is that they're running a business - but few ever pay capital gains tax as businesses must, and as geektastic points out, ordinary folk can't even get a tax break on any form of retirement saving.

Pumpedd

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#1938887 15-Jan-2018 09:41

Fred99:

Removing negative gearing for purchase of existing homes, but retaining negative gearing for investment in new homes for rental might incentivise home building and take some of the heat out of the first home buyer market.

It seems unfair for first home buyers to be competing in a market where property investors can get a tax rebate on loan interest. Especially when justification for this is that they're running a business - but few ever pay capital gains tax as businesses must, and as geektastic points out, ordinary folk can't even get a tax break on any form of retirement saving.

I do agree. But saddling Rental property owners (especially mum and dad investors) with massive upgrade costs and expect them not to put rents up accordingly is just dumb. Govt needs to tread with more care here and perhaps only force ceiling and floor insulation for example. Make it too difficult and the number of rental properties will decrease drastically within 6 months. What level of return would YOU expect for a $600k investment property?

tdgeek

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#1938905 15-Jan-2018 09:52

Pumpedd:

Fred99:

Removing negative gearing for purchase of existing homes, but retaining negative gearing for investment in new homes for rental might incentivise home building and take some of the heat out of the first home buyer market.

It seems unfair for first home buyers to be competing in a market where property investors can get a tax rebate on loan interest. Especially when justification for this is that they're running a business - but few ever pay capital gains tax as businesses must, and as geektastic points out, ordinary folk can't even get a tax break on any form of retirement saving.

I do agree. But saddling Rental property owners (especially mum and dad investors) with massive upgrade costs and expect them not to put rents up accordingly is just dumb. Govt needs to tread with more care here and perhaps only force ceiling and floor insulation for example. Make it too difficult and the number of rental properties will decrease drastically within 6 months. What level of return would YOU expect for a $600k investment property?

Cant blame the Govt, unless we also blame them for allowing uninsulated and unhealthy homes. Its 2018 now. Heatpump is a good move as they are efficient. If i was again a landlord Id put rents up, but enough to cover the costs, but I am sure many are abusing that, thats up for the market to sort out. As to reducing rentals, thats a good thing. For every landlord that gives it away, it either goes to another landlord or it goes to a new home owner

SJB

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#1938961 15-Jan-2018 11:09

I don't put the rent up unless there is a change of tenant and then I base the new rent on advice from the property manager who knows the market value. I've put in floor and ceiling insulation and heat pumps and anything that breaks gets fixed. That all makes sense for when you come to sell anyway.

In Timaru the rental market is healthy enough but you can't milk it.

No matter what other investment opportunities there are a lot of people like property. As long as you invest for the long term and can hold on to it even in the slumps you will make money. And unlike shares, bonds etc you can feel it and touch it. That's a big psychological plus for a lot of people.

I've had all sorts of investments over the years, both good and bad, but property has never disappointed.

tdgeek

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#1938965 15-Jan-2018 11:16

SJB:

I don't put the rent up unless there is a change of tenant and then I base the new rent on advice from the property manager who knows the market value. I've put in floor and ceiling insulation and heat pumps and anything that breaks gets fixed. That all makes sense for when you come to sell anyway.

In Timaru the rental market is healthy enough but you can't milk it.

No matter what other investment opportunities there are a lot of people like property. As long as you invest for the long term and can hold on to it even in the slumps you will make money. And unlike shares, bonds etc you can feel it and touch it. That's a big psychological plus for a lot of people.

I've had all sorts of investments over the years, both good and bad, but property has never disappointed.

So you increase the rent, just because you can?

Geektastic

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#1938968 15-Jan-2018 11:20

tdgeek:
SJB:

I don't put the rent up unless there is a change of tenant and then I base the new rent on advice from the property manager who knows the market value. I've put in floor and ceiling insulation and heat pumps and anything that breaks gets fixed. That all makes sense for when you come to sell anyway.

In Timaru the rental market is healthy enough but you can't milk it.

No matter what other investment opportunities there are a lot of people like property. As long as you invest for the long term and can hold on to it even in the slumps you will make money. And unlike shares, bonds etc you can feel it and touch it. That's a big psychological plus for a lot of people.

I've had all sorts of investments over the years, both good and bad, but property has never disappointed.

So you increase the rent, just because you can?

The next step will be rent controls....

tdgeek

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#1938975 15-Jan-2018 11:30

Geektastic:
tdgeek:

SJB:

I don't put the rent up unless there is a change of tenant and then I base the new rent on advice from the property manager who knows the market value. I've put in floor and ceiling insulation and heat pumps and anything that breaks gets fixed. That all makes sense for when you come to sell anyway.

In Timaru the rental market is healthy enough but you can't milk it.

No matter what other investment opportunities there are a lot of people like property. As long as you invest for the long term and can hold on to it even in the slumps you will make money. And unlike shares, bonds etc you can feel it and touch it. That's a big psychological plus for a lot of people.

I've had all sorts of investments over the years, both good and bad, but property has never disappointed.

So you increase the rent, just because you can?

The next step will be rent controls....

I doubt that very much. This post shows that its market driven, and fair enough, what the market will bear.

There isnt really any reason to manage rents, they serve a purpose. If you really wanted to increase the homeowner ratio, you need to make it easier for first home buyers. A side effect is lower rents due to less demand, which then helps the renters, which adds more funds to the economy, assuming renters put cash into the economy and not into interest on investment property mortgages

SJB

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#1938997 15-Jan-2018 12:13

tdgeek:

SJB:

I don't put the rent up unless there is a change of tenant and then I base the new rent on advice from the property manager who knows the market value. I've put in floor and ceiling insulation and heat pumps and anything that breaks gets fixed. That all makes sense for when you come to sell anyway.

In Timaru the rental market is healthy enough but you can't milk it.

No matter what other investment opportunities there are a lot of people like property. As long as you invest for the long term and can hold on to it even in the slumps you will make money. And unlike shares, bonds etc you can feel it and touch it. That's a big psychological plus for a lot of people.

I've had all sorts of investments over the years, both good and bad, but property has never disappointed.

So you increase the rent, just because you can?

Here in Timaru they have increased by less than 10% in 5 years. Why would I not increase the rent if I can?

rjt123

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#1939005 15-Jan-2018 12:32

tdgeek:
So you increase the rent, just because you can?

Exactly. Investors aren't in the business of social welfare, they have invested with the sole intention of a financial return. They aren't obliged to care for their tenants, that's the government's job.

rjt123

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#1939008 15-Jan-2018 12:40

tdgeek:
Its a bit unrealistic to expect any business to absorb a cost and just leave it at that. So you feel its ok to increase the health of a home but not pay more rent?

Maybe the landlords should be allowed to offer squalor housing so rents will drop??

Having the cake and eating it too doesnt work

Sorry you misunderstood (or I probably didn't get my point across very clearly...)

No, it would be normal, and I would expect that rents will go up as a result, my point was the government probably hasn't even thought about the impact it will have.

If there is a market for sqaulid rental properties what's wrong with that. If there was no demand they would disappear. The only reason they exist is because people are desperate for a rental, so they settle for lower quality than they would prefer. The government needs to help improve low-cost housing supply to reduce the demand on rentals. There is no such thing as low cost housing in Auckland so they will need to think outside Auckland, in the regions

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