NZ - "one of the least tenant-friendly regimes in the developed world"

[artemis]

So says says NZIER chief economist Shamubeel Eaqub in the Herald today, under the headline "Tenants need help: expert".

Could that actually be true? And if so, what does he actually mean - he gives no clue really except to advocate some unspecified "rental market reform". Any ideas?

"He said it was wrong to blame Chinese investors, lack of an effective capital gains tax, planning rules or cheap credit for our housing market problems. The issue could not be fixed by a single silver bullet, he said. " . . . the solutions will be complex and perhaps the most effective measures could come from unexpected corners, like rental market reform."

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11295286

[Wayne]

He said the same thing at the WPIA the other week when he gave a talk.
He used the examples of long term (generational) tenants overseas (Europe).
Also mentioned how in some places tenants bring their own kitchen etc.

I was going to suggest that we would need better training for tenants to make them 'long term suitable'.

[PTILoveYou]

I was going to suggest that we would need better training for tenants to make them 'long term suitable'.

Agree .

[BigDreamer]

I was going to suggest that we would need better training for tenants to make them 'long term suitable'.

Haha - that would be the day.

[artemis]

He said the same thing at the WPIA the other week when he gave a talk. He used the examples of long term (generational) tenants overseas (Europe). Also mentioned how in some places tenants bring their own kitchen etc. I was going to suggest that we would need better training for tenants to make them 'long term suitable'.

OK, but what reforms would be needed here? Is he talking about very long fixed terms? Or rent control? Or allowing / encouraging tenants to bring their own kitchen? Do their own redecorating? What?

There are many, many long term tenants in NZ. Especially outside the main centres. I'm sure there are some tenants whose term is cut short by the LL for one reason or another, but also many where the tenants give notice and leave because it suits them.

Maybe this guy has a point. But what exactly is it?

[Wayne]

In some cases he's talking about a pertual lease with very specific clauses to get out for non-performance.
In parts of Europe you have a house forever so long as you keep your node clean.

Basically he was saying that, as the % rental v's owner occupied increases, tenants being given 90 days to leave for no reason isn't fair.
They needed more surity of tenancy.

[PTILoveYou]

90 day eviction notice being unfair? What about tenant's 21 day notice?

[artemis]

In some cases he's talking about a pertual lease with very specific clauses to get out for non-performance.
In parts of Europe you have a house forever so long as you keep your node clean. Basically he was saying that, as the % rental v's owner occupied increases, tenants being given 90 days to leave for no reason isn't fair. They needed more surity of tenancy.

Actually, 90 days notice is never given for no reason. Unless the LL is mentally challenged, maybe.

[PTILoveYou]

The cheapest property I have is around $360k. This is worth more than a Lamborghini Murcielago.

If tenants were to lease a Lamborghini, there would have been more scrutiny and investigation into their background etc before they can even touch one.

I bet very few of my past and present tenants would be able to lease a Lamborghini, even if they could afford it.

I say landlords are on the short end of the stick at times.

[Wayne]

Actually, 90 days notice is never given for no reason. Unless the LL is mentally challenged, maybe.

I wouldn't give a reason - give a reason and they can challange.
If you want them gone tell them to be gone.

But this misses the point really.
For a start I was only saying what he said.

But, if you have a society (like many European ones apparently) that has a very high % or renters and the population is not mobile then they probably want to make the house their home.
So you need a mentality on all parties that supports that.
Having the possibility that the LL can lick you out at 90 days notice may not be what is required.

Now NZ, I suspect, is more mobile.
I understand the average ownership is still around 7 years (used to be a while back) so even home owners don't expect really long term.
And in Europe there are people whose family has rented a house for generations.
Let's face it, the time NZ has been inhabited is a blip on the European time scale.

I have no idea how it works overseas and it is a bit short sighted for anyone to suggest we adopt their rules.
We are differant!
But it is something to think about - what would it look like to have say 80% renters?
How would thinks have to change then to be 'fair'?

Certainly when Shamubeel said what he did my 1st thought was 'sounds interesting but not so easy'.

[Maccachic]

I'm more than happy for tenants to provide their own kitchens, saw this is practise while overseas and they thought it was odd they come with our rentals -'what happens if you don't like the kitchen" was a common question.

Actually they could provide a house and we provide a section? Same returns....

[Wayne]

I'm more than happy for tenants to provide their own kitchens, saw this is practise while overseas and they thought it was odd they come with our rentals -'what happens if you don't like the kitchen" was a common question.

Actually they could provide a house and we provide a section? Same returns....

Still can't get my head around how it works really.

I like the last suggestion.
Would give more work for the house movers

[flyernzl]

APIA had a discussion with the representitive from Auckland Council about the idea of long-term tenancies last year.

I posed the question to them "How may tenants would be prepared to tie themselves into 25, 50 or 99 year tenancy that they could not terminate?"

The discussion seemed to end there.

What these people seem to envisage is a tenancy agreement where the Tenant can leave whenever they like but the Landlord can never terminate the tenancy.

Looks a bit one-sided to me.

. . . tenants being given 90 days to leave for no reason isn't fair.

There is always a reason, of course.
Just that the reason is not evident to the tenant.

[artemis]

I have found a bit more information about the 'problem' from Mr Eaqub's POV. Not sure it adds much to the discussion though, as he seems to take a position that these things are beneficial only to the landlord. Whereas clearly there can be benefit to the tenant as well of, for example, short(er) notice.

".... Lease terms are short, tenants can be asked to move with short notice, leases can be terminated on almost any condition as long as notice is given, and personal customisation is often difficult. Changes to prevailing lease conditions would make renting less unattractive..."

http://www.nbr.co.nz/article/embrace-falling-home-affordability-says-nzier-bd-159408

[DazRaz]

Having the possibility that the LL can lick you out at 90 days notice may not be what is required.

Not a service most LLs provide...