Are landlords profiting from increased student allowances?

Morning Talk 09/01/2018
Photo: Getty.

The student union in New Zealand is calling out landlords in Wellington for allegedly profiting off increased student living fees.

The Union of Students' Association has received reports of rent hikes in Wellington, after the Government boosted student allowances by $50 a week from January 1.

Jonathan Gee, national president of New Zealand Union of Students' Associations, joins Summer Morning Talk to discuss alleged controversy facing some Wellington students.  

“Obviously it’s not all landlords who are taking advantage of this increase,” says Mr Gee.  

It is quite a stressful time to be a student right now.

The Government also increased the maximum amount students can borrow for living costs by $50 a week – from $178.81 to $228.81 a week.

“It was the first substantial increase we’ve had in over a decade,” he says.

The allowance increases are all part of Labour’s first 100 days initiative, which also includes making the first year of tertiary education fees-free from 1 January 2018.

“We are getting anecdotal statements from students saying that their rent has increased from say $180 to $230 for next year,” he says.

 “A lot of students are working part time on top of their studies in order to pay for their rent…” says Mr Gee.

Are landlords really at fault?

Andrew King, president of the New Zealand Property Investors Federation NZ, joined Summer Morning Talk to give his take on the issue.

“The landlord can’t actually do that,” says Mr King. “I doubt this is happening, actually.”

Mr King explains that landlord legally can’t price their rentals above market levels.

“If they do, that’s an illegal act,” says Mr King.

Mr King says that what’s likely the case is that landlords haven’t maintained their rent at market levels, and have simply increased it all at once – which can come as a shock to tenants.

“Rent in Wellington has been going up quite strongly in the last couple of years,” says Mr King.

New Zealand Property Investors Federation NZ generally advises rental owners to “keep up to date with what market levels are doing and increase it slowly” so it’s easier on the tenant.

Students urge the Government to address the housing crisis.

Mr King says if landlords have to charge students less, then they will just refuse to let students stay in their homes.

Still, Mr Gee proposes that the housing crisis plays a big role in students struggling to pay rent.

“We are pushing for government to address the housing crisis,” says Mr Gee. 

Listen to the full interviews with Jonathan Gee and Andrew King above.

Summer Morning Talk with Stephen McIvor, weekdays from 9am-noon on RadioLIVE and streaming live to the ROVA app on Android and iPhone.