What lockdown meant for landlords’ finances
Many landlords were financially affected by the Covid-19 lockdown with nearly 50% seeing a reduced income, according to a new NZ Property Investors Federation (NZPIF) survey.
Monday, June 8th 2020, 9:58AM
by The Landlord
NZPIF executive officer Sharon Cullwick
The NZPIF ran the survey from May 20-29, following an earlier survey, and then collated information from the start of lockdown on March 25 until May 21.
It generated 639 responses from NZPIF members nationwide. Collectively, the respondents manage 6,658 tenancies.
NZPIF executive officer Sharon Cullwick says they were keen to find out the specific financial effects on their members and the tenants in their properties during Covid-19 lockdown levels four and three.
“Landlords provide a service by making homes available for other people to live in. This service costs money and landlords are everyday people who like many others are facing financial difficulties because of Covid-19.”
The survey results show that of the 6,658 tenancies surveyed, 80% of tenants remained in place during lockdown and continued to pay their rent as normal but 5% of houses were left empty.
Eight percent of tenants were given a reduced rent or a deferred rent with a small proportion of these deciding to move out, while 7% of tenants stopped paying rent altogether.
Cullwick says that during the eight weeks covered in the survey, unpaid rent came to a total of $633,528.
“This excludes the many tenancies where notice of a rent increase was given but due to urgent Covid-19 legislation these increases were unable to be implemented.”
Since the beginning of lockdown just one percent (88) of tenants, in the tenancies surveyed, gave a 21-day notice to end their tenancy.
Meanwhile, 53% of landlords who responded to the survey saw no change to their income during the lockdown.
But approximately 47% did experience a reduced income from wages, contracts or a business closedown.
Of this group approximately 18% had a reduced income and another 18% had loss of income but received some Government assistance.
Eight percent had a loss of income with no Government assistance, while another 2% recorded that their loss of income was from either shares or commercial rental income which was their sole source of income.
Cullwick says they have just received information that rent increase notices can be given now provided the increase takes effect after the six-month freeze period.
That means the increase can only take effect after 25 September 2020 - unless the emergency Covid-19 legislation is extended.
“This may not be enough to assist either the landlords or tenants who have lost their main source of income through Covid-19.”
Read more:
How the lockdown is affecting landlords
| « Compliance statement deadline extended | Wind up emergency tenancy provisions now - REINZ » |
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