The idea of rent caps has been commented on across the media, but now landlords can sigh with relief with the latest government update on Thursday 29th April showing the government has already considered and appears rejected the possibility of rent caps.
Rents across Wellington are at an all-time high. Over the past 5 years across the Wellington region average weekly rents have increased by 53%, from $411 to over $600. With the supply of rental properties remaining too low to satisfy tenant demand, it's unlikely rents will stabilise or lower anytime soon.
This is even less likely when landlord costs increase, as landlords are more inclined to increase rent to help ends meet. A concern that the government considered before releasing their recent housing policy removing interest deductions for residential rental properties acquired on or after 27 March 2021, and a phase out of interest deductions over four years for already acquired properties.
On Thursday, official government documents released showed the government considered temporarily capping rents to try reduce any potential negative consequences of the policy, but international data showed landlords would simply increase rents as soon as the period of rent control ends. Though it should be noted that the market rate will always be a regulator on rents.
What's interesting, is that many investors looking at the numbers are finding their investment properties are still more profitable now than they were in 2019, thanks to low interest rates and significantly higher rents, plus of course capital growth is strong, showing that despite the recent government changes property is still a reliable and profitable investment for most.
Find out how our Wellington Property managers can help you. Managing property can be stressful at the best of times. When additional costs and evolving regulations are added to the mix, it can be tempting to question whether the investment is worth the hassle.
A Property Manager is an easy way to cut the stress out of the equation. We take on all aspects of the landlord’s role, and ensure the property is compliant with Healthy Homes and other legislation.
Find out how our Care & Return System will benefit you, receive a no-obligation, free rental appraisal for your Wellington investment property today!
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