Rents up $20 in two months - who's to blame?

Labour and National are blaming each other for a sharp uptick in rent prices.

The median nationwide rent has gone up $20 a week over the last two months according to new data from the Ministry of Business, Innovation and Employment. It brings the total rise since the Labour-NZ First coalition took power a year ago to $30.

"Rents have gone up 2.5 times faster under the Labour-led Government than under National, adding to the strain on households forced to stretch each dollar further as the cost of living rises," said National leader Simon Bridges.

The mean rent when National won the election in 2008 was $314. By September last year, it was $428 - an average rise of $12.67 a year. It's now about $448. The median - which is the middle figure - is $430, and that's the one that has gone up $30.

National blames the Government's changes to tenancy law and property investment rules.

"A raft of poorly thought-through policies are behind the recent spike in rents, including extending the bright-line test, ring-fencing of losses, more burdensome regulations, the ban on foreign investment and the threat of a capital gains tax," said Mr Bridges.

"All of these policies discourage private rentals and inevitably drive up rents."

Housing Minister Phil Twyford says rents are driven by supply and demand pressures, not landlord costs. This means landlords will charge as much as they can without scaring off potential tenants, regardless of what their costs are.

A recent Salvation Army report found there was huge demand for rentals, and it was growing three times faster than demand for home ownership.

Immigration is still high too, at about 55,000 net a year.

Mr Twyford also rejected National's claim landlords were quitting the market, drying up supply.

"National saying that landlords are selling up is simply scaremongering," he told NZME. "Corelogic data shows that landlords purchased 38 percent of properties in October, which is consistent with the last two years - there has been no change in landlord activity."

He says the rent rises are the result of the previous Government's inaction on the housing supply crisis, which the present Government is trying to fix through its KiwiBuild policy. So far, 18 houses have been built and 447 are under construction, according to Stuff's KiwiBuild tracker. The Government's goal is 1000 in the first year, and 100,000 in a decade.

"As the KiwiBuild mess shows, Phil Twyford has lost credibility to manage change in his portfolio, having inflated expectations and under-delivered," said Mr Bridges.