‘Tenants will have a lot of power, more than what investors are used to’

More investment properties are expected to hit the market in Auckland as new rental laws take effect.

From February 11, changes to the Residential Tenancies Amendment Act will bolster the rights of the country‘s 1.5 million renters and make evictions harder.

Agents told OneRoof that have had conversations with landlords who plan to exit the market before the reforms became law.

Harcourts agent David Ding said buyer demand was “pretty crazy” for January. He had brought nine new listings to market this year, nearly half of which were ex-rental properties.

“People who had rental are looking at selling this year as new rental regulations come into play,” Ding said.

“I’ve had investors tell me, ‘I don’t want the tenant to paint the walls yellow or green and I enjoy being in power of my property.’”

First home buyers were the main pool of buyers for ex-rentals and anything under $1 million mark in Auckland would attract a lot interest, Ding said.

However, with the number of properties for sale down on last year – Ding said overall the Shore had 975 live listings compared to 1500 last January – competition among buyers has been intense and has put upward pressure on prices.

Ray White Manukau director Tom Rawson agreed that the new tenancy rules would lead to changes in the market.

“Tenants will have a lot of power, more than what investors are used to,” he said.

Ray White Manukau agent Pat Lapalapa said he had noticed an uptick in investors looking to sell, but other factors were influencing the market.

“Those [investors] who were already on the fence about selling were triggered earlier than expected but those who are looking to hold on to a property long-term just stay put,” Lapalapa said.

The fear of missing out and uncertainty around proposed changes to the loan to value ratio rules were also having an effect on first home buyers.

"Buyers are hearing rumours, they feel like something else will be thrown in the spanner of things and feel scared of the LVRs going up, but the majority of these people buy with 20 percent deposit.”

The Reserve Bank has said it is looking at increasing the deposit requirements for investors in a bid to cool the market; there are no planned changes to the deposit rules for owner-occupiers, though.