PHOTO: Rishabh Kapoor. SUPPLIED
Recent governmental changes, including alterations to interest deductibility and the implementation of a 90-day eviction law, have failed to alleviate the persistent shortage of residential rental properties, as per newly released data.
An expert in the industry emphasizes the need to address systemic issues to combat the sector’s perception as the ‘wild west’, rebuild investor confidence, and augment rental property supply.
Current statistics indicate a continual rise in the number of prospective tenants per rental property, with a doubling observed over the past six months. Concurrently, residential vacancy rates have dwindled from 3.8% to 2.3%, while prices have surged by 6% during the same timeframe.
Rishabh Kapoor, former tax lawyer turned CEO of Impression Real Estate, managing approximately 1,000 rentals in Auckland, asserts that while the government has shelved regulatory plans, self-regulation within the industry is imperative to foster trust restoration.
Kapoor points out that the recent adjustments to interest deductibility and eviction laws have not bolstered property supply sufficiently to alleviate rental costs. While some landlords may welcome the reinstatement of interest deductibility and the ability to evict tenants within 90 days, Kapoor stresses the necessity for further measures to address the burgeoning supply deficit and mitigate rental prices.
He highlights a prolonged market imbalance, particularly in central business districts (CBDs), where landlords perceive a lack of control over tenancies, leading to conservative landlord behaviors and stringent tenancy agreements. Kapoor underscores the disproportionate impact on society’s vulnerable due to a regulatory climate discouraging risk-taking.
While acknowledging the positive step of the 90-day eviction law, Kapoor advocates for additional measures to restore investor confidence. He emphasizes the need for licensed, well-trained property managers subjected to industry standards and proposes the enactment of the Residential Property Managers Bill to ensure adherence to regulations.
To combat the chronic shortage of rental properties, Kapoor’s firm aims to set a new qualification standard for property managers, aspiring to achieve independent certification to the level previously proposed by the abandoned Residential Property Managers Bill.
Furthermore, Kapoor advocates for a review of minimum standards for rental accommodations to safeguard tenant well-being, addressing issues such as cramped living spaces and inadequate ventilation.
In terms of rental property preferences, Kapoor notes a demand for properties within the $450-$750 per week range, emphasizing cleanliness, compliance with healthy home regulations, and amenities conducive to remote work.
With Kapoor’s legal and real estate background, he brings a unique perspective to industry challenges, striving for a balanced environment benefiting both investors and tenants alike.