Big C.P.I. rise after rent surge: Mr Goff

Press, 2 July 1985, Page 1

Big C.P.I. rise after rent surge: Mr Goff

PA Wellington Soaring rents since the three-year rent freeze ended would boost consumer price index figures for the June quarter, said the Minister of Housing, yesterday. He cast doubt on estimates from tenant groups of rent increases of 50 to 100 per cent, and the 40 per cent estimated by the Real Estate Institute.

But he agreed the rise would be “substantial.” His estimate was 25 to 35 per cent, which he said would ensure that the C.P.I. figure for June was high. Mr Goff said rent increases would in effect be

compressed into one quarter rather than spread throughout the year, because of the way in which the regulations worked. The increase would also reflect anomalies which developed over nearly three years of rent control. Mr Goff said rent control was due to end in April last year but the National Government, fearful of the impact in election year, postponed lifting controls for another year. Part lifting of the rent freeze in April last year allowed a small increase of 3 per cent from that month, he said.

A 12-month rule stopped more increases for most properties until April this year, so most rents which rose under the regulations were due for further increases from April, Mr Goff said.