Following the recommendation from the Social Services and Community Select Committee that the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill be passed the Real Estate Institute of New Zealand (REINZ) is calling for a balanced approach to the rental market to avoid harming the rental market in the long term.
In its submission to the Select Committee REINZ, alongside other similar industry bodies, outlined that while banning letting fees will reduce fees upfront, that long term those fees may simply be recuperated by landlords through increased rent which contradicts the purpose of the ban, which is to reduce costs and improve fairness for tenants.
Bindi Norwell, Chief Executive at REINZ says: “Whilst banning landlords from charging tenants letting fees might help them in the short term, in the long run it’s likely that these costs may be passed on to tenants via an increase in weekly rent.
“Additionally, it may make tenants with shorter term tenancy requirements, such as students or seasonal workers, less attractive to landlords making it harder for them to obtain rental accommodation.
“Given the current raft of legislation being directed at landlords, this may contribute to landlords’ decision making to exit the rental market further reducing the available pool of rental properties and driving up prices. This was highlighted by one property manager earlier this week who said he’d lost 20 properties due to investors looking to exit the current market conditions,” continues Norwell.
“The opportunity to make a significant difference to the lives of renters doesn’t come along every day. We’re calling on Labour to seriously help renters who include some of our most vulnerable members of society, by taking a balanced approach to the up and coming reviews of legislation that impact the industry. Additionally, we call on Labour to regulate the property management industry.
“We don’t want New Zealand to continue to be an outlier – instead we need to follow the good example set up countries including Australia, the UK, Republic of Ireland, the USA and Canada and ensure that our property market is regulated. This is one of the key ways we can ensure that we’re improving the lives of renters,” concludes Norwell.