Stricter laws for rental properties could be the silver lining first-home buyers have been looking for. It’s widely predicted that amateur property investors will choose to sell up instead of paying out thousands to upgrade their homes, bringing new houses to the market.
The new Government has announced a review of the Residential Tenancies Act in 2018 and want to have ‘new modern tenancy laws’ in place by the end of the year, likely including what they promised during the election campaign—a mandatory WOF, a set formula for rate rises and minimum tenancy periods.
How will these changes affect the market?
Houses in Wellington are amongst some of the oldest in New Zealand, and some will need substantial work to bring them up to the new proposed standards—this presents an excellent opportunity for first-home buyers who are willing to buy a house that needs some work to get on the property ladder.
Here in Kapiti, our housing market is still robust, and it’s quite likely more people will choose to sell now and take advantage of higher house prices, and bypass the cost that will come with things like the Warrant of Fitness.
It’s a good idea to have any work that needs to be done assessed by a professional before buying so you don’t get any nasty surprises. Most people expect to do cosmetic work and look at improvements like new curtains, carpet, heating and insulation, but we always recommend getting an expert’s opinion on anything more.
If you are an investor wanting to buy a property, it’s a different story. More stringent laws coupled with difficult lending conditions and bigger deposit requirements will push some aspiring buyers out of the market altogether, especially when there are other easier investment options to consider. Some investors may look at commercial property as a new way to invest.
If you already own a rental property and are willing to do any work needed it could pay off in the long term, building on your home’s value and rental return. You may also be able to attract a higher level of tenants to the property. Rental properties are in high demand, and it looks like it will stay that way for a while yet.
Our advice? If you’re considering buying a rental property, or securing your first home then talk to a trusted mortgage broker. There’s a lot of change happening in housing, and we’ll be able to help you make sense of it all and most importantly make the right financial decision for you. If you are a first-home buyer, do you know any landlords potentially looking to sell up? A private sale could be your chance to avoid the competition.
Get in touch to discuss how we can help you.