From late spring, they sprout on many windows and doors in North Dunedin.
Some are colourful and beautifully finished but most are plain and hastily made. But no matter their form, they serve the same function: they tell flat hunters to keep on hunting.
‘‘Rented for 2020’’ signs are ubiquitous in the student quarter at this time of year and while they are bad news for the temporarily homeless, they are great news for city landlords.
The market is buoyed by students seeking certainty months in advance of the new academic year. Months away from next year, demand in popular areas outstrips supply. It is a seasonal rush that starts as the city emerges from winter, but there are ominous signs a season that provides certainty for renters and landlords alike is about to change.
Plans to retool the Residential Tenancies Act are considered a looming threat to many city investors who have rental properties in suburbs where fixed-term, annual contracts are the norm. The changes would allow fixed-term tenancies to automatically become periodic tenancies at the end of a fixed-term agreement. This will happen unless both parties agree otherwise, the tenant is not meeting their obligations, or specified grounds for the tenancy to end apply.
Currently, agreements without a fixed end date can be terminated without cause as long as the landlord gives 90 days’ notice. These ‘‘no cause evictions’’ will end, with the Act providing for a range of justified reasons to end a periodic tenancy.
The Government has been clear as to why the law must change. Runaway house prices have outpaced wages to such an extent there has been a steady shift from home ownership, meaning a significant proportion of a new generation will rent rather than own.
Such renters are exposed to risk. They risk losing their home when rents increase or when they are rented to someone else. They risk an unsettled future, itinerant when they should be forging community bonds and securing consistent schooling for their children.
This is part of the pro-change narrative and there is little doubt it rings true for people exposed to the whims of the demand-led rental market. Queenstown, Central Otago, South Canterbury or Dunedin — no matter where in the South one is, equitable and affordable access is not available to everyone.
Landlords will — and should — say this is how markets work. They take the financial risk to provide a service whose value is set by what the market is prepared to pay. At the same time, they want the certainty of well-planned tenancies and control over how their investment is used by others.
To some, the counterpoint is equally valid. For some landlords, risks are offset by untaxed capital gains while the market is skewed by a national housing shortage worsened by government mismanagement.
Many people have no choice but to accept high rent and shifting tenancies because of economic circumstances. It means some life-long renters will always be strongly disadvantaged.
The proposals would tackle this by limiting rent increases to once every 12 months and would ban rental bidding, in which renters make best-price offers for high-demand properties.
But tenancy rollover remains most problematic where circumstances dictate annual tenancies are the norm. The Dunedin market mirrors the academic year: vast numbers of rental arrangements risk uncomfortable periods of limbo as the rental year rolls into the next.
Renters will be in a much stronger position to say when they expect their occupancy of someone else’s property to end. Landlords will not want to lose good tenants, but they will also want the certainty of knowing their property will pay its way.
The Otago Property Investors Association warns many will sell rather than lose their ability to manage their risk. Others will step in, but they may be challenged by a new batch of signs declaring ‘‘Rented for 2021, until whenever’’.