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HNZ guaranteed rent not enough

Guaranteed rent is not enough to tempt landlords to lease their properties to Housing New Zealand, an investors' association says.

Monday, July 15th 2013, 12:00AM 1 Comment

by Susan Edmunds

Housing NZ has been campaigning to turn around perceptions of its leases as it tries to persuade private landlords to offer their properties to make up a shortfall of houses, particularly in Auckland. It has developed a new lease agreement that includes the option of a shorter fixed term, starting at five years, rather than the 10 to 15 that was previously standard.
It also commits HNZ to meet all repairs up to $5000. Rent is guaranteed whether the property is tenanted or not.

HNZ has 69,000 properties. But the number leased to it in Auckland has fallen over recent years. In May 2009, private landlords leased 2229 properties to the Government. By May last year, that had fallen to 2097.

Marcus Bosch, HNZ's general manager property services, says it looks for privately owned homes in areas of strong demand. "We are continually building, redeveloping and acquiring properties to meet demand," he says.

"Home leasing is one example of how we use a mix of methods to acquire and provide homes to people and families most in need. Leasing properties offers Housing NZ the opportunity to rapidly provide a new mix of dwellings as demand changes."

He says the most recent home-lease campaign has been designed to attract two and four-bedroom homes in Auckland, Wellington, Christchurch, Bay of Plenty and Palmerston North. Nationwide, 3313 private homes are leased to HNZ, up from 3278 in May 2009.

Bosch says leasing to HNZ takes pressure off landlords. "Home lease allows landlords to be hands-off, with no need to deal with finding or managing tenants, chasing rent, general maintenance or even arranging inspections."

But Auckland Property Investors Association president David Whitburn says HNZ leases have fallen from favour with investors because there is a perception it haggles over repairs and maintenance. "Their tenants do provide a lot more wear and tear than run-of-the-mill tenants."

He says he has been told to tell his membership HNZ has a waiting list of 10,000 and private landlords will need to help with that.

Whitburn says HNZ typically pays about 10 per cent less than market rent. When the market is buoyant and supply strong, as in Auckland now, the rental guarantee is not a big drawcard.

Bosch says rents are reviewed annually and adjusted in line with the Consumer Price Index, capped at a maximum of 3 per cent.

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Comments from our readers

On 17 July 2013 at 3:35 pm Lewis said:
$5,000 isn't enough to cover damages caused by a p-lab

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 5.44 - - -
AIA - Go Home Loans 7.99 5.99 5.69 5.69
ANZ 7.89 6.59 6.29 6.29
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.99 5.69 5.69
ASB Bank 7.89 5.99 5.69 5.69
ASB Better Homes Top Up - - - 1.00
Avanti Finance 8.40 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.94 - - -
BNZ - Rapid Repay 7.94 - - -
BNZ - Std 7.94 5.99 5.69 5.69
BNZ - TotalMoney 7.94 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.79 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 7.65 5.99 5.75 5.69
Co-operative Bank - Standard 7.65 6.49 6.25 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 6.40 6.10 -
First Credit Union Standard 8.50 7.00 6.70 -
Heartland Bank - Online 7.49 ▼5.65 ▼5.55 ▼5.55
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.00 6.50 -
ICBC 7.49 5.99 5.65 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.75 6.89 6.59 6.49
Kiwibank - Offset 8.25 - - -
Kiwibank Special 7.75 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 8.44 ▼6.39 ▼6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.99 6.95 6.29 6.29
SBS Bank Special - ▼6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 5.44 ▼5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.69 6.79 6.49 6.49
TSB Special 7.89 5.99 5.69 5.69
Unity ▼7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.50 ▼6.19 ▼5.79 -
Westpac 8.39 6.89 6.39 6.39
Westpac Choices Everyday 8.49 - - -
Westpac Offset 8.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 6.29 5.79 5.79
Median 7.99 6.17 5.79 5.69

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