New Zealand parliament has passed a bill that will modernise the 1986 Residential Tenancies Act.
The Government says most of the reforms won’t come into play for another six months, allowing tenants and landlords time to adapt.
Changes include the removal of no-cause termination, limiting rent increases to one a year, and allowing DV victims the ability to end a tenancy with 48 hours’ notice.
The Real Estate Institute of New Zealand (REINZ) has warned of the “unintended consequences” that may arise.
“For example, in a recent survey around half of landlords and investors (46.3 per cent) said it is likely or highly likely they will sell their rental property if removal of the right to issue a 90-day notice went ahead,” REINZ Chief Executive Bindi Norwell said.
“Given we already have a shortage of quality rental stock across the country, this is problematic as it will further reduce the pool of rental properties available and likely push up rents even further.
“With median rents in Auckland having risen 9.8 per cent in the last three years (from $510 to $550) and in Wellington by 20.2 per cent (from $420 to $505), it will be interesting to see how much higher rents go as more landlords withdraw from the market.
“Additionally, tenants without an ‘excellent’ rental history may now find it even harder to successfully secure a rental property than they already do, given how hard it will now be to remove tenants who end up significantly in arrears,” Ms Norwell continued.
“This is especially true, considering landlords will need to apply to the tribunal to terminate the tenancy, therefore extending the average timeframe to resolve claims and extending backlogs further.
“Both the institute and the NZ Property Investors’ Federation, who represent a significant portion of landlords across the country, have warned this would be a likely outcome as landlords and property managers seek to take a more risk-averse approach to selecting tenants.”