New Zealand’s political landscape is poised for a shift with the National Party pledging to apply “downward pressure on rents” by reversing several legislative changes introduced by the Labour Government. After six years of Labour’s rule, which brought in a host of reforms impacting tenants and property owners alike, the potential National-led government, in concert with its ally ACT, is branding these reforms as a “war on landlords”.
National Party leader Christopher Luxon has been vocal about his plans to amend the bright-line test, recalibrate interest deductibility, and modify tenancy laws. So, what does this mean for renters and landlords?
Restoring ‘No-Cause’ Evictions
Under Labour, tenants gained increased security with the requirement for landlords to provide a reason for eviction. National plans to revert to ‘no-cause’ evictions, arguing that the current regulations disincentivise landlords from offering rental properties, especially to tenants with a shaky rental history.
KiwiSaver Utilisation for Rent Bonds
A significant policy directed at aiding renters, particularly those under 30, is the proposed access to KiwiSaver funds for rental bonds. This move would alleviate the initial financial burden of securing a rental property, with the bond being returned to the KiwiSaver account upon the tenancy’s conclusion.
Fixed-Term Tenancy Changes
National is also looking to abolish the automatic conversion of fixed-term tenancies to periodic ones. The intention is to encourage landlords to offer short-term tenancies again, which they’ve been reluctant to do under Labour’s changes.
However, not all of Labour’s changes are on the chopping block. Rental bidding remains banned, rent increases are still capped at once per annum, and Labour’s Healthy Home Standards are set to stay, despite previous opposition from National.
The potential policy reversals are already causing ripples in the property market, with real estate agents observing a surge in buyer interest post-election. Cowdy has observed this interest, noting it varies across different market segments. The lower end of the market is currently attracting the most attention, a trend Nick Cowdy believes will soon extend to the higher ends of the market as well. Amidst these shifts, the bright-line test might be reduced to two years, and foreign buyers could face new taxes. Yet, these changes hinge on the outcomes of coalition negotiations, particularly given New Zealand First’s differing stance on such issues.
As coalition negotiations continue, both renters and landlords are waiting to see how these promises will play out in reality. The National Party’s strategy is clear: to ease the legislative burden on landlords in hopes of cooling rental prices and revitalising the housing supply. Whether this approach will benefit the wider market remains a point of contention as New Zealand stands on the cusp of change.