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Positives for housing in 2016 Budget do not go far enough

Positives for housing in 2016 Budget do not go far enough

“It's great that the 2016 Budget has extended the Healthy Homes Initiative with an extra $18m,” says Andrew King, Executive Officer of the NZ Property Investors’ Federation (NZPIF). “The initiative has performed well in Auckland with a focus on low income people with existing health problems.”

King also thinks it is positive that the Warm Up NZ program has been extended for another two years. However he points out that it should cover the entire cost for vulnerable tenants, not just 50%. The programme makes the insulation cost so high that even a 50% subsidy makes it an expensive exercise which will see rents increase for families living in these houses. This means that there is less money available in the tenant’s budget to actually turn their heating on.

NZPIF feels it is a shame that more tenants are not helped out. If insulation and energy efficient heaters had been made tax deductible expenses, this would have improved rental properties and minimised the required rental increases for all tenants.

It is the increasing cost of providing rentals, not the desire to make large profits, which is driving up rents. There is also a large shortfall of rental properties, mostly in Auckland. Tenants in some areas of Auckland are having to move in with each other to order to achieve affordable accommodation. While the budget for Income Related Rents has increased because of increased social housing costs, the accommodation supplement for tenants in the private sector hasn't been increased. This is surely an area which needs attention and it is unfortunate it was not addressed in this Budget.


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