4. Question No. 4—Housing and Urban DevelopmentHon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban DevelopmentQuestion No. 4—Housing and Urban Development4. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: What advice if any has he received from MBIE on reforming the Residential Tenancies Act 1986?Hon PHIL TWYFORD (Minister of Housing and Urban Development): Thank you Mr Speaker. Fakalofa lahi atu. I have received advice from both the Ministry of Business Innovation and Employment (MBIE) and the new Ministry of Housing and Urban Development. The advice was primarily about how we strike a balance between providing tenants with security of tenure and allowing them to make their house a home while protecting the rights and interests of landlords. This advice was the basis of the consultation document that we released in August this year. Our tenancy laws are antiquated and this Government is committed to modernising these laws so that every New Zealander has a warm dry and secure home.Hon Judith Collins: Has he seen advice from MBIE that cumulative changes may lead landlords to sell their rental properties and leave the housing market?Hon PHIL TWYFORD: The advice from MBIE makes it clear that the policy changes that the member is asking about should have minor effects on the housing market. Landlords of course will make their own commercial decisions. However if a landlord does sell that property will either be bought by a first-home buyer or another landlord.Hon Judith Collins: When he announced his changes to the Residential Tenancies Act was he aware that his officials had advised him that supply in rental accommodation would decrease and lead to increased costs for tenants?Hon PHIL TWYFORD: I want to acknowledge that this is a time of uncertainty for landlords. We have a big reform agenda in place to make life better for renters and landlords and we are committed to striking the right balance between a tenant's right to make a house a home while ensuring that landlords can still get rid of rogue tenants and protect their asset. The Reserve Bank research shows that rents are driven primarily by supply and demand not landlord costs and that's why we are firmly focused on building our way out of the national housing crisis and increasing the supply of housing both for rentals and owner-occupiers.SPEAKER: Before I go to Paul Eagle I am going to ask the Minister to answer the question. Hon PHIL TWYFORD: Mr Speaker would you mind having the question repeated?Hon Judith Collins: Thank you. When he announced his changes to the Residential Tenancies Act was he aware that officials had advised him that supply in rental accommodation would decrease and lead to increased costs for tenants?Hon PHIL TWYFORD: I was aware of advice that said that the effects of our reforms were likely to be minor and that houses that were sold by landlords for example who are over-leveraged or who owned rental properties that were in such poor condition that it would be too expensive to bring them up to the Healthy Homes guarantee standards—those homes would be sold on either to renters or to other owner-occupiers and that any effect on rents would be likely to be minor. Hon Judith Collins: If as reported by the department of building and housing rents have increased by $25 per week since he has been the Minister does he expect them to go up even more next year?Hon PHIL TWYFORD: Well MBIE data shows that average rents for new tenancies in Auckland sat at $543 a week in August only $7 up from the same period last year and down from $550 in June. In Wellington they were at $442 a week in August $19 up from the same month last year but down from a peak of $516 in February. Paul Eagle: Fakalofa lahi atu. What response has there been to the proposed changes to the Residential Tenancies Act 1986?Hon PHIL TWYFORD: There have been over 2000 completed submissions and a further 1800 submissions are under way. I want to encourage every landlord and tenant to tell us their views on how we can strike the right balance between a tenant's right to make a house a home while ensuring that landlords can still get rid of rogue tenants and look after their asset.Hon Judith Collins: Does he expect rentals to go up again next year?Hon PHIL TWYFORD: Our goal—our policy goal—and my expectation is that the housing market under our policies will stabilise both for house prices and rents. And as I said before Reserve Bank research shows that rents are set by supply and demand which is why we're focused on increasing the supply of housing. KiwiBuild is ramping up and we are increasing the number of public houses through Budget 2018. In Auckland there were 12959 new building consents in the year to August 2018 a record for Auckland that eclipsed the last record set in 2004 under the Clark-Labour Government. Hon Judith Collins: Does he still say that if property investors don't like the proposed changes they should put their money elsewhere" as reported by media last month?Hon PHIL TWYFORD: A country needs good landlords and it's lucky for us that most landlords are good people trying to do the right thing and provide a service. Our policy in contrast to the party sitting opposite is to set decent minimum standards for the 21st century that will professionalise the rental market and clean out the rogue operators at the bottom of the market who are undercutting good landlords and giving the whole industry a bad name."