New Zealand Property Investors' Federation Annual Conference

  • Phil Heatley
Energy and Resources Housing

Good morning and thank you for inviting me to your conference.  It’s a great pleasure to be able to speak to you and to tell you about the Government’s housing policy and legislative programme. 

I like the theme of “Spring into Action” you’ve chosen for this conference.  It’s a theme this Government thoroughly endorses and the busy policy and legislative programme we have shows that we are putting in place lasting reforms that will build a more productive and competitive economy.

The building and housing sector is an important player in New Zealand’s economy.

It’s a complex market, particularly at the moment. 

The earthquakes in Canterbury have seen rent costs and sales prices rise there – especially in Christchurch, Selwyn and Waimakariri.

Auckland and Christchurch continue to see house and rent prices rising more quickly than the national average, while Wellington and Hamilton are more subdued.

In fact, Auckland and Christchurch are driving the rising national trend, as far as house prices go.  Prices in those cities rose 8 per cent and 5 per cent respectively in the year to August 2012.

Wellington and Hamilton have seen lower increases of 2 per cent and 4 per cent respectively.

In terms of sales, days to sell are improving slightly – a median of 35 days as at August 2012.  This is 4 days less than a year ago.

Mortgage interest rates are stable at under 6 per cent – and they have been for some time.  This follows highs in excess of 10 per cent in 2007 and 2008.

The Government is very keen to keep interest rates low, to help improve housing affordability and the cost of servicing a mortgage.

In terms of the rental market, rents have been looking subdued in Hamilton and Wellington.

There have been increases in Christchurch, being driven by demand for rental housing following the earthquakes.

Rents in Auckland remain the highest in the country.

This means rental affordability is the lowest in Auckland, with increasing pressure in the Christchurch market.

This is why managing the economy well is so important – keeping interest rates down is essential for both first home buyers and landlords for lower flow-on rents for tenants.

Waiting times for Tenancy Tribunal hearings

I’d like to start off by addressing what I recognise is one of the key issues facing landlords:  disputes and the way they are managed.

For the year ended August 2012 the Ministry of Business, Innovation and Employment assessed just over 43,000 Tribunal applications, mostly from landlords.

Rent arrears continue to be the largest category of dispute – almost 60 per cent.

I know that there is considerable pressure in Auckland. The statistics show that 41 per cent of applications are from Auckland and Manukau – around half each.

The Auckland region is also under pressure because, nationally, Auckland has a higher number of cases where one party to a dispute does not agree with the issues raised by the applicant. 

These disputes can take considerably longer, creating pressure on the courts.

But here’s some very good news. I’m pleased to say that “springing into action”, your theme, is a fine description for the work the Building and Housing Group has done to reduce waiting time for Tenancy Tribunal hearings.

I know the Federation has been frustrated about delays in resolving tenancy disputes, and the resulting loss of income. 

I believe the process has been improved and I’d like to acknowledge the Federation’s helpful input, particularly from your President, Andrew King.

Your response has spurred on the Building and Housing Group which, 18 months ago, put in place a continuous improvement programme, focusing on improving the way residential tenancy services are delivered.

This has seen a focus on:


  • better advice, information and education, to avoid disputes in the first place


  • better use of Tribunal sitting days and the court system, to reduce waiting times


  • smarter processes, such as streamlined application forms, text or email reminders for hearings and telephone mediation (which also help reduce waiting times)


  • improving adjournment rates – to reduce the need for re-hearings.


There are positive results from this work and I’m going to tell you about some of these now.


  • Waiting times for Tribunal hearings are down – in Christchurch we have seen a 12-day reduction; in Auckland, 5 days.


  • The success rate for resolving disputes at the first attempt rose by 30 per cent in the year to August.


  • The time it took to go from application to Tribunal hearing dropped by almost seven days between June and August this year.


  • There has been a 58 per cent reduction in disputes over rent arrears, through a focus on getting landlords and property managers to require prospective tenants undergo a credit check.


  • Tenancy-related calls managed by Building and Housing’s Service Centre achieved a success rating of almost 90 per cent.


  • Ninety per cent of all mediations are now dealt with by telephone, so clients can resolve a dispute without having to travel to mediation.


I’m pleased to be able to report these improvements to you and I can assure you that, on my watch, the Building and Housing Group will continue to make improvements to the delivery of its service to clients.

Improving legislation

Part of the Government’s role in the housing market is to help the housing market by ensuring legislation is workable and recognises the reality of today’s market. 

Over the past two years we have enacted significant pieces of legislation to enhance the housing market – amendments to the Residential Tenancies Act in 2010 and the new Unit Titles Act.

Further legislative amendments that will impact on the way landlords do business are on the cards.

Landlords’ issues with collecting civil debt should ease in April next year when the Courts and Criminal Matters Act comes into effect.

The practical effect of this Act, from a landlord’s point of view, is that, providing both parties to a dispute agree, an attachment order agreed by the parties can now be recorded at the end of a hearing. 

This will enable a debtor’s employer or the Ministry of Social Development to make regular deductions from the debtor’s salary or benefit until the debt is paid.  And the attachment order can be enforced by the District Court.

Insulating rental properties

Now I’d like to tell you a little bit about my plans in my Energy and Resources portfolio.

I am delighted to see that many residential landlords have taken up the opportunity to insulate their rental properties through Warm Up New Zealand: Heat Smart.

The Warm Up New Zealand: Heat Smart programme is now in its fourth year, and has insulated more than 185,000 New Zealand homes, of which 26,000 are rental properties.  The programme aims to insulate 230,000 New Zealand homes in total.

This programme provides real benefits to New Zealanders.  Reports on the programme have found benefits worth $5 result from every $1 invested, mainly in the health area.

The occupant of the house is clearly better off through improved health, lower power bills, and a house that is generally cosier and more comfortable to live in.

Why landlords should do it

There are many reasons why insulating a property makes sense for landlords too.

We know that potential tenants are now asking the question – is this house warm and dry?  An insulated house is a drawcard for new tenants, and encourages existing tenants to stay longer.

EECA’s research backs this up.  A survey of those who had insulated their homes through Warm Up New Zealand: Heat Smart found that 78 per cent of respondents regarded it as extremely important for them to have insulation in any future home they would live in.

Perhaps even more importantly, it helps to look after your asset. A warm, dry home reduces the likelihood of dampness and mould, and therefore the need for on-going maintenance and repairs to wallpaper, curtains and other fittings.  It should be part of a basic home maintenance plan for every rental property.

While many landlords have used the programme, there is certainly room for more uptake. 

If you have not already taken up the opportunity, please do.

This programme provides one third (up to $1300) off the cost of installing ceiling and underfloor insulation. 

If your primary tenant has a Community Services Card, you may be able to get 60 per cent off.

Any house built before 2000 is eligible, and it doesn’t matter if you own multiple properties or what your income is.

A BRANZ survey on the condition of insulation in homes indicates there is still a significant number of rental properties that are not properly insulated.

As our most vulnerable citizens are often those who are renting, the Government considers that it is a priority to get landlords to insulate their properties. 

Of course the Government is a landlord too, and we are doing the right thing by making sure that where possible all Housing New Zealand houses are being insulated. 

So the next question is, how do we go about getting the remaining landlords to insulate their properties to an effective standard?

I am very interested in your ideas and feedback on ways to encourage landlord uptake.  Meanwhile, subsidies are still available now, so if you have not already taken advantage of this offer, I would urge you to do so soon.


We have achieved a great deal over the past few years, particularly with legislative change and our insulation programmes, but there is more to be done.

Again, I thank you for your participation in and contribution to our housing market, and I wish you well for the reminder of your conference.