The recent coalition deal between National, NZ First, and ACT has ushered in a range of changes, aimed at addressing concerns in the rental market. The focus revolves around four key areas for tenants, including no-cause evictions, reduced notice periods, the introduction of a pet bond and an allowance for under-30s to use their KiwiSaver savings to pay rental bonds.

Generally speaking, the moves appear to be largely in favour of landlords. However commentators are saying that improved investor conditions, as a result of changes such as restoring mortgage interest deductibility, could help ease current supply issues, stem the flow of properties leaving the rental marketplace, and encourage more landlords in. Which in turn will generate competition, and potentially help stabilise the rate of rent increases.

“If there is plenty to rent,” says Sue Harrison from the New Zealand Property Investors Federation, “that is great for renters and competition in the marketplace will keep investors on their toes.”

Among the policy changes that the new government is proposing, is the removal of the amendment that requires landlords to give a reason when they issue a tenant with a 90-day eviction notice.

This has drawn attention for potentially creating an imbalance of power, where tenants might be reluctant to voice concerns, make requests, or negotiate rental terms. However National MP Chris Bishop has maintained that reintroducing no-cause evictions is "pro-tenant", arguing it would make landlords more likely to take a risk on renting to people if they knew they could easily be removed if they felt it wasn’t working out.

Another change involves reducing the notice periods for both tenants and landlords.

Under the former Labour government, tenants needed to give four weeks' notice, while landlords required three months for eviction. The new coalition deal reduces these periods to 21 days for tenants, and 42 days for landlords if they intend to move into the property or sell it - allowing a little more flexibility for both parties.

In terms of new legislation, the coalition government is set to introduce a “pet bond” that will allow tenants and landlords to agree on a larger bond sum (over and above the usual four weeks’ worth), to accommodate pets in rental properties and insure against related damages. This policy, originally proposed by ACT, aims to expand the availability of pet-friendly rental options, fostering a more negotiable approach towards having pets, as opposed to a typical “no go”.

The government is also looking at new legislation to allow people under 30 to use their KiwiSaver savings in order to pay for rental bonds. National MP Chris Bishop highlights the difficulty many face in getting together up to four weeks' rent in advance for a tenancy agreement, especially among students and young graduates with limited cash.

“Our policy will mean that people who have some money saved in KiwiSaver accounts will be able to use that money to pay the bond for a rental agreement,” he says.

If you have any queries or concerns about the new legislation, please feel free to contact our professional property management team. We make it our business to and stay in the know.