Rent rises rough all round

The region has seen a sharp rise in rents, with both landlords and tenants feeling the pinch.

Landlords say rising costs have forced them to increase rents, while tenants struggle to pay the new, higher amount.

Wairarapa Property Investors Association president Tim Horsbrugh said the average market rent in Masterton is now about $530 per week, up from $400 in 2020. That’s an increase of almost 33 per cent, and the rest of the region has experienced similar spikes.

“Rents have shot up over the past two years. They have almost reached the point where they can’t go up any further,” he said.

Horsbrugh said the costs of owning a property had risen significantly.

“Rates have gone up between eight and 12 per cent annually, and insurance has gone up between 17 and 30 per cent annually. Costs have definitely spiked over the past two or three years,” he said.

Horsbrugh said while interest rates had also risen, the government’s new measures to restrict the deductibility of mortgage interest for much residential property had been a significant new cost.

“It’s totally wrong. Some landlords are quite close to the wire. Some are really struggling at the moment. Rents are no longer covering mortgage interest costs, the new tax payments, and other costs,” Horsbrugh said.

“If landlords can’t keep their heads above water, they will have to sell. That will be good for the first-time buyer, but bad for tenants,” he said.

Wairarapa MP Kieran McAnulty said restricting interest deductibility for investors is just one of a range of measures the government has brought in to help make housing more affordable.

“It wasn’t that long ago that house prices were out of reach of first-home buyers,” he said.

McAnulty said the government remained committed to turning around the housing crisis by urgently increasing the housing supply.

“We didn’t want investors competing for existing stock and driving up prices. Something had to be done. The property tax changes had specific aims; to encourage new builds [which are exempt] and to shift the balance back to first-home buyers.”

McAnulty said the plan was working.

“We are seeing the green shoots of change with a massive upswing in construction of new homes, an increase in the proportion of first home buyers, and government investment in infrastructure like pipes and roads to enable more housing.”

Mike Butterick – National’s Wairarapa candidate in the upcoming election – is opposed to the interest deductibility rules, which he regards as a new tax and said will be repealed if his party wins.

“The inevitable outcome was always going to be rent increases would follow, and this was widely warned of, not only by landlords but also officials,” he said.

“While I’ve been out and about talking to renters and landlords both, I’m continually hearing of the very real impacts of Labour’s tax,” he said.