- Auckland landlords are selling rental homes as the Healthy Homes compliance deadline approaches.

- The number of units for sale has doubled, with many landlords avoiding costly upgrades.

- Properties are often bought by investors willing to spend money to meet compliance standards.

Auckland landlords are ditching their rental homes as the final deadline on Healthy Homes compliance fast approaches.

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One real estate boss estimates that the number of units for sale has doubled in the last six months.

Landlords have until July 1 to bring their rental properties up to scratch and comply with the Healthy Homes legislation, which sets minimum heating, insulation, and ventilation standards.

A block of 10 units on Browns Road, in Manurewa, which were only partially Healthy Homes compliant, sold for $3m earlier this month. Photo / Supplied

Ray White Manukau co-owner Tom Rawson says some older, longer-term investors have decided to sell up rather than spend more money on their properties. Photo / Supplied

Ray White Manukau co-owner Tom Rawson told OneRoof that he kept a close watch on unit listings and had noticed a spike in the number of unit blocks for sale. He said the blocks were usually owned by a single investor, who would be selling to avoid costly upgrades.

He pointed to the recent sale by auction of 10 flats on Browns Road, in Manurewa, for $3 million. The owner had started making them compliant, but only finished two before listing the entire block for sale.

Rawson estimated that about a quarter of his agency’s listings were rental properties that were not Healthy Homes compliant.

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He said most of the landlords selling up had owned the properties for 15 years or more and viewed making the property Healthy Homes compliant as the “final straw”.

“Things have changed a lot for the investor who bought 20 years ago. The balance of power has been tipped well towards the tenant and it’s less favourable from an economic perspective too,” he said.

“They know it’s a bit of a cost and will make the property a better home to reside in. They have just lost the energy to do it and are collecting their funds to enjoy life.”

Barfoot & Thompson agent Donald Gupta had also seen an increase in the number of blocks of units for sale and expected more in the coming weeks.

A block of 10 units on Browns Road, in Manurewa, which were only partially Healthy Homes compliant, sold for $3m earlier this month. Photo / Supplied

A long-term landlord decided to sell his block of four two-bedroom brick and tile units for $1.6m ahead of the Healthy Homes deadline. Photo / Supplied

A block of 10 units on Browns Road, in Manurewa, which were only partially Healthy Homes compliant, sold for $3m earlier this month. Photo / Supplied

A Hamilton landlord is selling this do-up property on Avalon Drive, in Nawton. Photo / Supplied

Gupta has just sold a block of four two-bedroom brick and tile units on Atkinson Avenue, in Otahuhu, for $1.6m.

An investor had owned the block for some time, and while some work had been carried out, more was needed to bring it up to standard.

Gupta said these properties were usually picked up by other investors who were prepared to spend money and add value.

He said he was selling a block of six one-bedroom units at 18 Atkinson Avenue, which a long-term landlord sold for $1.5m last year. The new owner had renovated three units but decided to resell the entire block rather than finish upgrading.

Harcourts agent Alex Dunn, who also sells in South Auckland, said some investors had kept putting off upgrading their properties and were now surprised by how much it cost to comply.

“I think people underestimated the [requirements]. They thought, ‘I will just get a heat pump and a rangehood, and I will be sweet as’, but it’s all the insulation, an extractor in the bathroom, and all those things.”

Dunn has been involved with selling individual two and three-bedroom units rather than blocks, but said the reasons for selling were the same. “They are typically a little bit older, and people just kind of set and forget them.”

Harcourts Hamilton manager Campbell Scott said some of the landlords selling up weren’t necessarily getting out of property investment, but had decided to divest themselves of costly rentals.

Lodge agent Blair Pointon had also noticed a slight increase in rental stock hitting the market in Hamilton. He’s selling a rental property at 91 Avalon Drive, in Nawton, which the landlord has decided to sell before the July 1 deadline. The do-up property is marketed as one of the cheaper stand-alone homes in the city and has an asking price of $399,000.

“There are lots of people who have had them for a while and can’t be bothered with them anymore.”

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