Landlords advised against increases

LIZ MCDONALD
Last updated 05:00 14/03/2014

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Christchurch landlords are being advised not to use rising council rates and mortgage payments as an excuse to hike rents.

New rating valuations released for the city on Wednesday, and the Reserve Bank's boost to interest rates yesterday, mean most property owners will be facing larger bills.

But Canterbury Property Investors Association president Lewis Donaldson said landlords should be able to absorb both increases.

"It shouldn't have a big effect. Let's face it, investors have probably had it better over the last couple of years.

"We're doing better than previously, so it doesn't make things so tight for us."

However, Donaldson believed the increases would make some would-be landlords consider whether or not it was a good time to invest.

The rating revaluations will redistribute how this year's 6.5 per cent rise in rate take will be shared among residential property owners. The Reserve Bank's increase of base lending rates by quarter of a percentage point, with more signalled to come, saw banks begin raising mortgage rates.

Christchurch rents have been rising at the rate of about 12 per cent a year due to post-quake demand.

Property manager Diane Horner, of First Avenue, was also not expecting much in the way of rent rises.

"I don't think it will affect things hugely, because we've already had these big rent rises," she said.

"Rents might go up $10 a week at rent review time as usual, and we're hoping owners won't take this as a licence to increase rents further. We'd certainly counsel them not to."

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- The Press

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