Students misguided over cost of housing improvements

National student president Rory McCourt has called for more regulations on rental properties saying " We just want affordable housing that doesn’t make us sick.”

The NZ Property Investors' Federation is not against improvements to rental properties, however people need to realise that improvements come at a cost that not all tenants are willing to pay.

Unfortunately many students are under the impression that regulations forcing rental property owners to maintain minimum standards will not result in them paying higher rents. This is not the case.

February rental statistics, a peak time for renting in NZ, showed that 25% of 3 bedroom rental properties in the Dunedin's University area were under $285pw. Another 25% were over $378pw. This means that 50% of rentals were between $95pw and $125pw per room.

The properties that were under $95pw were likely to be older, with less insulation and no heat pump. However a quick look at Trade Me shows that properties with heat pumps and insulation are available from $100pw.

If students want better accommodation standards then these properties are already readily available, but it is unlikely they will cost less than $100pw.

Blanket minimum standards will simply remove some properties from the rental pool, as they will be uneconomical to meet the standards, while others will increase in price. This is a simple reality.

The unintended or unexpected consequences of minimum standards are fewer accommodation choices for students and low income families, plus higher rental prices. This needs to be part of the decision making process.

ENDS

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