The government may have dropped the ball on regulating property managers but a Kiwi-Indian top executive has decided to take matters in his hands.
Rishabh Kapoor, CEO of property management firm Impressions Real Estate, says it’s time those driving the fortunes of renters and landlords firm up their game.
“We have already reached 80% on our target to independently certify all our property managers to the level 4 standard by end of 2024, a requirement that would have become law had the proposed bill seen the light of day,” says Rishabh, whose company manages at least 1,000 rental properties in Auckland. Renters and realtors are upset with the government’s decision last week to scrap the bill meant to regulate property managers over concerns about unethical and unlawful behaviours.
They say the current state of the property management sector lacks any minimum standards or basic checks and balances to protect tenants and landlords.
But Housing Minister Chris Bishop told Parliament's Social Services and Regulations Committee to stop considering the bill last week, indicating the cost-benefit analysis was marginal and uncertain.
“While the government has abandoned plans for regulation, it is critical the industry adopts a level of self-regulation to help restore investor confidence,” Rishabh says.
He points to industry data that shows the recent tax benefits offered on residential rental properties and the 90-day eviction law have not impacted a chronic shortage of residential rental stock as the government had hoped.”
“The figures show the number of prospective tenants viewing each rental property has continued to grow, doubling over the last six months.
“Residential vacancy rates have dropped from 3.8 per cent to 2.3 per cent, and prices have increased by six per cent over the same period.” This is based on internal data measured from Nov - April 2024 across over 1,000 properties in the Greater Auckland region.
Rishabh says while the return of interest deductibility and the ability to evict tenants with 90-day notices will be welcomed by some landlords, more is needed to address the growing supply deficit and reduce rental prices.
“There are a number of property managers out there working out of the back of their car who simply don't understand the industry's requirements and legalities.
“The downstream impact of this is that it can result in thousands of dollars worth of damage for owners and as a result, they often want to exit the rental industry.”
Rishabh says the Residential Property Managers Bill would have changed that by ensuring property
managers were licensed, well trained, and subject to a complaints and disciplinary process if they don't adhere to industry standards.
“Other investment sectors already have similar protections around advisors and we need a
way of signalling to the market that residential property management is no longer operating
like the Wild West and their multi-million dollar investment has appropriate safeguards.”
He adds introducing a minimum training standard will provide the same reassurance for investors as envisioned under the now junked bill.
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