In the ongoing conversation surrounding New Zealand’s rental market, it’s easy for emotions to run high. There are always stories of bad landlords, frustrating tenants, and misunderstandings that cloud the larger discussion. Recently, a comment on one of our articles sparked a conversation about several common rental market misconceptions that deserve a closer look. Let’s break them down for the benefit of both landlords and tenants.
1. Are Landlords Driving Up Market Rent?
A common complaint is that landlords “go over market rent,” pushing rent prices higher across the board. However, the notion that individual landlords can unilaterally increase market rent doesn’t align with how the rental market actually functions. Rent is fundamentally a product of supply and demand—what a landlord is willing to let a property for and what a tenant is willing to pay.
Market rent isn’t arbitrarily set by landlords; it’s a reflection of what the market can bear. If there’s more demand than supply, prices rise. The real issue is the lack of housing supply. The best way to empower tenants and prevent inflated prices for substandard properties is to increase housing availability, giving tenants the choice to say no to properties that aren’t up to par. Over time, this would naturally push down the price of lower-quality homes.
Assuming all properties meet accepted standards, the answer lies in creating a market where renters have more choices. The power that comes with exercising that choice will incentivise landlords to lower the rent and or offer better quality properties. Only then will substandard properties lose their leverage. Of course, there are always the non-compliant properties and bad acting landlords. Those are separate issues that are more appropriately dealt with by sanctions under the law.
2. Compliance: Is More Legislation the Answer?
Another point raised is the call for a rental warrant of fitness (WOF) to ensure landlords meet standards across various legislative acts, from the Health Act to the Building Act. It’s worth noting that the Residential Tenancies Act (RTA) already mandates landlords to comply with these laws and regulations. Specifically, section 45(1)(c) of the RTA requires landlords to maintain their properties in a way that “comply with all requirements in respect of buildings, health, and safety under any enactment so far as they apply to the premises.”
No one disputes that landlords should be held accountable. However, the issue lies in excessive legislation that adds compliance costs without necessarily improving outcomes. If the current laws are adequately enforced, adding more legislation doesn’t necessarily solve the problem—it just creates more paperwork and higher costs for everyone, which could trickle down to tenants in the form of higher rents.
3. Landlord and Tenant Registers: What’s the Real Issue?
A common misunderstanding is the role of tenant registers, like those maintained by credit agencies such as Illion. These are not open databases where any landlord can freely access tenant histories; rather, they are credit reports that can only be accessed with permission from tenant applicants.
Calls for a landlord register often come across as well-intentioned but lacking in clarity. What data would such a register hold? How would it be used? More importantly, what problem would it solve? While tenant registers (through credit checks) have a clear function—protecting landlords from high-risk tenants—proponents of a landlord register have yet to provide a compelling case for how it would improve the rental market for tenants or landlords.
4. The 90-Day No-Fault Termination: Why It Matters
One of the most contentious issues is the return of the 90-day no-fault termination provision. Critics argue that this tool allows landlords to evict tenants without reason, leading to insecurity. However, the purpose of this provision isn’t to be wielded at will. Think of it as a form of insurance. Just as no one buys car insurance with the intention of getting into a crash, landlords don’t rent properties hoping to evict tenants. The 90-day no-fault termination gives landlords the peace of mind they need to rent to tenants they don’t know.
Without this provision, landlords may be less willing to rent to tenants who don’t have a perfect rental or credit history, ironically reducing rental options for those who need it most. It’s about creating a balance where landlords feel secure enough to rent to strangers, knowing they have a fallback option if things go wrong.
5. Tenant Rights and Education: The Path to Balance
Where we absolutely agree with the comment is on the importance of tenant education. Tenants should be aware of their rights, especially when it comes to holding landlords accountable for providing safe, healthy living environments. The inherent imbalance of power isn’t just between those who own properties and those who rent; it is also between those who are well versed with the law and those who are not.
For instance, Section 54 of the RTA protects tenants from retaliatory actions if they make a legitimate complaint against their landlord. More awareness and education around this clause would empower tenants to speak up without fear of eviction, improving the overall quality of the rental market.
At the Auckland Property Investors Association (APIA), we’ve long advocated for better awareness of these protections, not just among tenants but landlords as well. A well-informed rental market is a healthy rental market. We are always open to collaborating with tenant groups to further education and ensure that both parties are operating in good faith.
The Answer? Less Argy-Bargy. More Practical Solutions.
There will always be bad actors on both sides of the rental market—landlords who cut corners and tenants who don’t respect property. But painting all landlords or tenants with the same brush is counterproductive. Instead, the focus should be on fostering an environment where landlords and tenants operate within clear, fair guidelines that protect both parties’ interests.
The way forward is through a balanced approach: increasing housing supply, enforcing existing legislation without creating unnecessary compliance burdens, and improving education for tenants to ensure they know their rights and can assert them confidently.
As always, we welcome feedback and productive discussions that drive positive change for New Zealand’s rental market. Let’s keep the conversation going.
Sarina Gibbon
Sarina Gibbon is the general manager of the APIA.
How would a rental WOF be excessive in legislation? And add to compliance costs? If the landlords are already following the RTA S45 then they have nothing to worry about do they? The WOF is just basically a tick system that independently focuses on compliance of s45 of the RTA and the laws and bylaws that pertain to that section. The only compliance costs would be towards the landlords that have not complied, therefore weeding out the landlords that give the good landlords a bad name.
And there is plenty of housing availability in Auckland. There are new builds that have been sitting there empty for a year or over, and there are still plenty of them being built as we speak. Again, it is the landlords that are expecting their rental property to receive the top amount of market rent when the standard of the rental is nowhere near top quality, and unfortunately a lot of tenants find themselves in a position of being unable to pick and choose for lots of reasons. And when a landlord has made the mistake of purchasing a rental in the past few years with the expectation of it to pay for itself and them each week, only to find out they have made a massive mistake in doing so, instead of taking responsibility for this mistake, they pass the buck by making tenants pay for it instead.
Non-compliant landlords and properties should not be a separate issue if you are wanting to find balance in the rental sector, that is basically paying Peter to pay off Paul.
You mention that illion is not an open data base where any landlord can freely access a tenant history and are only credit reports that the tenant has given permission to check? Have you looked into the web site and seen the copy they provide you as to what you would be getting when you pay for a credit check? Have you seen the questions that they provide the landlord to be asked when speaking to an employer, a personal friend, and how long they keep the information for?
A landlord register should expect tenants to be able to find out information that the landlords expect from a tenant.
1, How long were the previous tenants at the property for?
2, Why did the tenants leave?
3, Was the landlord communicative about issues of repairs raised by the tenants?
4, How long has the landlord been renting out properties for?
5, Has the landlord been given any 14 day notices by tenants? What were the 14 notices for?
Of course no landlord wants to evict tenants. But with the amount of checks that can be done on tenants, there are seasoned landlords that are still willing to evict a tenant if they do not ‘perform’. What does ‘perform’ actually mean? This is what your vice president Peter Lewis has said it means………
“My view is that a decent tenant is a life-competent person. They have gained knowledge and skills to get a good paying job, and kept that job by turning up on time on Monday morning, clean, sober, dressed appropriately and ready to work. As such they can afford to pay a reasonable market price for their housing.
Conversely my experience in housing mainly working-class tenants, is that those that seek cheap rent are generally the life-incompetents. They struggle to find employment, then spend what incomes they do get in a wasteful and destructive manner, and turn up to work late on a Monday with a black eye and a hangover. They are not the tenants I seek”. WOW!
I also find it ironic that NZPIF state that they charge below market rent compared to others in the industry and yet Peter Lewis likes to remark to other investors who are new in the game and are having to top up each week as rent does not cover all their costs, by saying, and I quote, “Why subsidise a tenants lifestyle by having to top up $250 each week?”.
If you wish to focus on fostering an environment where landlords and tenants operate within clear, fair guidelines that protect both parties interests, then I suggest you look more closely at where exactly the imbalance firstly lies.
Hi Katpea
Thank you for your comment and for taking the time to engage with this topic.
To address your first point, when I say we are against a rental warrant of fitness (WOF) because it’s excessive legislation, I’m talking about the need for better enforcement of existing laws, not adding unnecessary layers. The WOF criteria you mention largely mirrors what is already in section 45 of the Residential Tenancies Act (RTA). Adding more legislation to reassert what’s already there simply increases costs, and those costs will be passed down, whether through landlords or public funding. Ultimately, tenants end up shouldering the burden. I believe that rather than a rental WOF, we should focus on strengthening the powers of the Tenancy Compliance and Investigations Team and improving tenant education. That way, tenants are better equipped to hold non-compliant landlords accountable, and we can empower the Tribunal to impose meaningful penalties that deter future breaches. Heck, we are even open to discussing whether the current maximum penalties under the RTA appropriately commensurate the harm to the other party and reflect current economics. If they need to be bumped up to deter the wrongdoer and future wrongdoings then they should.
We can quibble about the where the draw the line when it comes to tenancy law, and that’s healthy. It helps us move forward. But at the end of the day, tenants need more choice. We need more rental housing in the market, not less. When tenants have choice, they have the economic power to say no to subpar properties and subpar landlords, and that is exactly the kind of outcome we should be striving for in the rental sector. A balanced market will naturally weed out bad actors.
As for housing availability, yes, some new builds may remain vacant, but that doesn’t necessarily correlate to rental prices. Rent is a function of supply and demand and New Zealand being a low-wage economy certainly doesn’t help things along. I’m not suggesting that landlords should get away with charging excessive rent for subpar properties. Where that happens, tenants should be able to take action using the existing channels. However, it’s important not to conflate the issue of non-compliance with market rent drivers. They’re related but distinct issues.
On credit reports, I am familiar with the process, and I don’t see a problem with the information provided in credit reports. These reports are used across various industries, from finance to employment, and serve a legitimate business purpose. While Illion might suggest certain questions for landlords to ask employers, those would only be recommendations, not directives.
You suggested a landlord register with details like how long tenants stayed, why they left, and whether repairs were made promptly. While I see your point, these are only relevant when there have been issues, which is already covered by the Tenancy Tribunal’s publicly accessible database. Again, the focus should be on supporting tenants to use existing tools to address serious landlord misbehaviour.
Regarding the comments attributed to Peter Lewis, I completely agree that his words are problematic in the context of 2024. That said, I don’t know when, where, or under what circumstances those comments were made, and Peter hasn’t been our vice president for many years. So, I can’t comment further on the specifics. The quote you alleged does not reflect the sentiment and attitude of the landlords we represent. Furthermore, I don’t think anyone should be defined by their worst moments and we are certainly not in the habit of naming and shaming people just to make a point.
Constructive solutions are way more productive than perpetuating blame. Conversations like these are crucial to improving the rental market, but they need to focus on collaboration, not division.
Thank you again for sharing your thoughts. I hope we go beyond communicating by blog comments and connect offline. We need more productive conversations and collegiality in this sector and less grandstanding.
Cheers
Sarina Gibbon, APIA GM