New Law Allows Consent-Free Granny Flats and Landlords Speak Out on Occupancy Rule Backlash

Topic #1:  RNZ 21st of October- Landlords respond to research criticism on occupancy limits

Topic #2: 1News 23rd of October - Exemption allowing granny flats to be built consent-free passes into law

Topic #3: Interest.co.nz 22nd of October - Trade Me Property says the balance of power between tenants and landlords is shifting in tenants' favour

Topic #4: NZ Herald 22nd of October- Why you might need $1m to retire in a big city

Topic #5: Stuff 23rd of October - 700 property owners in limbo, millions at stake while council and Government play blame game

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#LandlordsNZ #OccupancyLimits #GrannyFlatsNZ #ConsentFreeGrannyFlats #HousingReformNZ #RentalMarketNZ #PropertyLegislation
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Transcript

 Hi everyone. I'm Debbie Roberts, owner and financial adviser at Property Apprentice. Join us today for the Week in Review where I talk about current events for the everyday investor and home buyer. Our topics for this week, first up from  📍 RNZ on the 21st of October. Landlords respond to research criticism on occupancy limits.

Topic number two from  📍 1News on the 23rd of October exemption, allowing Granny Flats to be built consent-free passes into law. Topic number three, from interest.co.nz on the  📍 22nd of October, TradeMe property says The balance of power between tenants and landlords is shifting in tenants favor.

Topic number four, from  📍 New Zealand Herald on the 22nd of October. Why you might need $1 million to retire in a big city. Topic number five from  📍 Stuff on the 23rd of October, 700 property owners in limbo, millions at stake while council and government play the blame game. 

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So first up for this, week in review from RNZ on the 21st of October.

Landlords respond to research criticism on occupancy limits. Researchers are urging a review of rental occupancy limit rules, arguing that current restrictions are raising housing costs. Forcing families to live separately and making it harder for people to access housing. The study conducted by the University of Otago Housing and Health Research Program analyzed rental listings on TradeMe for one month.

It found that landlords commonly set restrictive limits, typically allowing only one more person than the number of bedrooms e.g. six people in a five bedroom house. This practice is leading to larger homes being underused. The study suggests that occupancy limits should be reviewed to better align with public health guidelines and ultimately make living costs more affordable for tenants.

Under the current Residential Tenancies Act, landlords are legally permitted to determine the occupancy limits for their rental properties. I am not sure what the reason would be for a landlord to restrict the number of tenants in a property other than if they were renting it out by the room, in which case, they would be wanting to avoid, you know, triggering the boarding house scenario by having more than five tenants in a property.

But apart from that, I can't see why they would restrict that there must be something that I'm missing.

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 Topic number two from 1News on the 23rd of October exemption, allowing Granny Flats to be built consent free passes into law.. Legislation has been passed that will allow New Zealand homeowners to build Granny flats up to 70 square meters in size without needing a building consent.

With the new regulations set to take effect in the first quarter of 2026. To qualify for this exemption, the dwellings must be simple in design, meet the building code, and be constructed by professional builders. Homeowners will still be required to notify their local council, both before starting and upon completing the work.

RMA minister, Chris Bishop, stated that the new regulations, which were part of the National New Zealand First Coalition Agreement are expected to ease the cost of living by providing more housing options for various groups, including grandparents, people with disabilities and rural workers. To further support the change, Bishop said that the government will update the national direction under the Resource Management Act to remove the need for resource consents for these flats, which he expects to be in place by the end of the year. Building and construction minister, Chris Penk

 indicated that the changes of forecast.

To deliver around 13,000 new Granny flats nationwide over the next decade, which won't have a significant impact on the housing market in my opinion, but it can certainly help with a number of different scenarios. Penk noted that this will increase work for builders and free up local councils to focus on more complex projects.

Associate Finance Minister Shane Jones added that the changes will benefit extended families, companies providing staff accommodation and small communities. The article notes that any building work already in progress or starting before the exemption takes effect, will still require a building consent.

It is important to understand that with this new regulation passing, you still need to notify council before you start the process and also at the point of completion. And the devil will be in the detail. I think it is going to depend on, on how much input the council has at that point of notification as to whether they will allow it to go ahead or not.

Uh, for example, if there's not enough infrastructure to support an additional dwelling, they might be able to say no. Or if it, is in a red zone, for example, you know, due to flooding risk or whatever, they may potentially be able to turn down that application at that point, but we'll see how it all comes out, once they update the Resource Management Act to align with this. Topic

number three, from interest.co.nz on the 22nd of October, TradeMe Property says the balance of power between tenants and landlords is shifting in tenants favor. The rental housing market is continuing to shift in favor of tenants, marked by an increase in supply and a decline in asking rent. According to TradeMe properties

september data, the number of homes available for rent on the site was up 6.3% compared to September last year. While the median advertised rent saw a decline of 1.6% over the same period. Demand from prospective tenants also fell with property searches down 1%. The spokesperson for TradeMe Property, Casey Wilde, stated that this increased supply is responsible for the downward pressure on rental prices.

The largest annual decline in median advertised rents was recorded in the Wellington region, down 7% followed by Northland down five oh down 6.5%. Marlborough down 3.4% and Hawke's Bay, down 3.1%. Canterbury was the only region to see a year on year increase in advertised rents rising by 1.8%. The report concluded that the increased supply combined with a marginal drop in national searches suggests that the balance of power across the country now favors tenants at the moment.

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Topic number four from the New Zealand Herald on the 22nd of October. Why you might need $1 million to retire in a big city. New retirement expenditure guidelines from Massey University for 2025 show that retirees are increasingly struggling with costs, with many needing to significantly top up their New Zealand super payments.

The research details that all types of retired households are spending more each week than they receive from the pension. The report calculates significant weekly shortfalls for various retirement lifestyles. Single person with no frills lifestyle needs to top up by about $166. 92 cents a week in metro centers, and $42 and 33 cents in provincial areas.

Single persons with choices in retirement would need to top up by about $252 and 20 cents a week in Metro centers. Two people households requiring a top up ranging from $109 and 4 cents a week for no Frills Metro to a substantial $951 and 95 cents a week for a choices lifestyle in a big city. Report lead associate Professor Claire Matthews highlighted that council rates and food expenses are major issues driving these shortfalls.

She noted that rising rates are a key, unavoidable cost for homeowners and a source of anxiety with cumulative increases over the last three years, ranging from 20. To 47% in major centers like Auckland and Wellington. The report calculated the lump sums needed to fund these lifestyles, showing that single people in metro areas require savings between 181,000 for no frills and 273,000 in choices.

Two person households pursuing a choices life in a metropolitan area would need over $1 million. Matthew stated that KiwiSaver, if started early enough, would be sufficient to help most people reach the required savings. I would put a sideline to that saying, as long as they're in a decent KiwiSaver fund, 'cause there's some really rubbish ones out there, so make sure you get some help with your KiwiSaver.

Modeling showed that someone who begins contributing in their early twenties can still reach the lump sum needed for a modest retirement, even after withdrawing around $75,000 for their first home However, she warned that those who delay joining until their forties or fifties will find the gap much harder to close.

Matthews also suggested that the high number of people making hardship withdrawals from KiwiSaver might indicate that the process is a bit too easy, causing people to rob their future selves. She concluded that while life is getting harder for retirees, some are still managing on just the pension, though it may not be the retirement lifestyle that they desire.

If you know someone who's struggling in retirement, get them to talk to a financial adviser to help them through that process, they might qualify for something like a reverse mortgage or something similar that could help them through the next few years. 

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Topic number five from Stuff on the 23rd of of October, 700 property owners in limbo, millions at stake while council and government play the blame game.

The withdrawal of Auckland Council's Plan Change 78. PC 78, and its medium density residential standards or MDRS has left approximately 700 property owners and developers in limbo with millions of dollars in projects now in disarray. The council voted to withdraw PC 78 after the government amended the Resource Management Act, the RMA, to allow councils to change residential development rules.

However, the resulting uncertainty is due to a lack of transitional arrangements for projects already underway that relied on the MDRS component. The issuer sparked a dispute between Auckland Council and the central government. Auckland Council's Director of Policy Planning and Governance. Megan Tyler stated that the government's RMA amendment did not include transitional arrangements making the legal basis for the 700 existing projects unclear.

She said the council was urging the government to prioritize a legislative fix to provide certainty. However, housing minister Chris Bishop disagreed stating that Auckland Council already possesses the ability to solve the problem under the RMA and encourages him to act quickly. Bishop also noted that the council had not raised any issues regarding impacts on existing consent holders when advocating for the ability to withdraw PC 78.

In response, Auckland Council's General Manager of Planning John Duguid maintain that legal advice suggests the council does not have the means to resolve the issue in all cases, and it's working with the Ministry for the environment for a resolution. The situation's having a severe financial impact on homeowners and developers.

The Gray family, for example, spend about a hundred thousand dollars and two years developing plans for their new house only to have their construction start unexpectedly halted. Another affected couple estimated that the 700 consents represent up to $70 million in costs already spent on applications and planning, and potentially $700 million in construction projects now in disarray.

They emphasized that many people undertaking this activity, irregular people working hard to build a good life. Whether you're a first time buyer or an experienced investor, you need more than just hope you need a roadmap.

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