A Case for Retrofitting

Why Upgrading Older Homes Benefits Landlords and Tenants

At Property Brokers, we manage over 8,000 rental properties across New Zealand, and one striking statistic stands out - the average age of the year when these properties was built is 1946.

That is old! But it is also reflective of the provinces where we operate. In cities such as Auckland and Christchurch, there is a lot of development, particularly with apartments and terraced housing. These properties are obviously built to a far more regulatory standard than properties built in the last century.

This means that a large portion of the homes we manage were built before modern building codes, insulation standards, and energy-efficient technologies were introduced.

While older homes often have character and charm, they also come with challenges, higher maintenance costs, less energy efficiency, and potential health risks for tenants. Retrofitting these properties is no longer just a nice-to-have; it’s a necessity. Investing in upgrades can increase rental yields, boost property values, and create healthier, more sustainable homes.

The Challenges of Older Housing Stock

New Zealand’s homeownership rate has fallen with one third of New Zealanders currently renting. More than one-third of New Zealanders are now renters, with many facing entrenched rental stress. This stress limits their ability to save for a home deposit and perpetuates economic disadvantage cycles. 

Many properties built in the mid-20th century were not designed with today’s energy efficiency or comfort standards in mind. Issues such as poor or no insulation, single-glazed windows, outdated heating systems, and inefficient appliances contribute to:

· Higher Energy Costs: Tenants in older homes often face high power bills due to heat loss in winter and inefficient heating options.

· Increased Maintenance: Aging electrical wiring, plumbing, and roofing systems often require costly repairs.

· Health Risks: Dampness, mold, and poor ventilation can contribute to respiratory issues and other health problems.

· Lower Tenant Demand: In a competitive rental market, tenants are increasingly looking for warm, dry, and energy-efficient homes.

Why Retrofitting is a Smart Investment

Retrofitting is a long-term investment that benefits both landlords and tenants. Here’s why:

1. Higher Rental Income

Tenants are willing to pay more for homes that offer better comfort and lower utility costs. A well-insulated, energy-efficient home with a heat pump, double glazing, and proper ventilation can justify higher rent. In some cases, properties that undergo significant upgrades can move into a higher rental bracket, increasing returns for landlords.

2. Increased Property Value

Homes that meet modern efficiency and comfort standards are more attractive to buyers and investors. Retrofitting boosts the market value of an asset, making it easier to sell when the time comes. Energy-efficient homes are becoming a key selling point, with buyers looking for properties that won’t require costly upgrades in the future.

3. Improved Tenant Retention

Happy tenants stay longer. When a property is warm, dry, and cost-effective to run, tenants are more likely to renew their leases. This reduces vacancy periods and turnover costs for landlords.

4. Compliance with Future Regulations

New Zealand’s Healthy Homes Standards have already set minimum requirements for heating, insulation, and ventilation. However, future legislation may introduce even stricter requirements. Proactive retrofitting ensures landlords stay ahead of compliance changes, avoiding penalties and rushed, costly upgrades later.

5. Better Environmental Outcomes

Older homes are significant contributors to carbon emissions due to their inefficient energy use. Retrofitting with energy-efficient heating, insulation, and appliances reduces a property’s carbon footprint. This aligns with New Zealand’s broader sustainability goals and contributes to a cleaner, greener future.

What Retrofitting Looks Like in Practice

Retrofitting doesn’t have to mean a full-scale renovation. Even targeted upgrades can make a significant difference:

· Insulation: Ceiling and underfloor insulation help retain heat, making the home more energy-efficient.

· Heating & Ventilation: Installing heat pumps and range hoods in kitchens improves air quality and reduces dampness.

· Double Glazing: Replacing single-pane windows with double glazing helps with heat retention and noise reduction.

· LED Lighting & Efficient Appliances: Energy-efficient lighting and modern appliances reduce power consumption and costs.

The Way Forward

With the average home in our portfolio dating back to 1946, it’s clear that retrofitting needs to be a priority. Not only does it increase the value of the asset, but it also enhances the tenant experience and contributes to better environmental and health outcomes.

For landlords, investing in upgrades isn’t just about compliance, it’s about staying competitive in an evolving rental market. As tenant expectations shift and government regulations tighten, those who take action now will reap the long-term benefits.

If you’re a landlord considering retrofitting your property, our team at Property Brokers is here to help. We can guide you through the process, recommend cost-effective upgrades, and connect you with trusted professionals.

The future of property investment isn’t just about owning real estate, it’s about making that real estate work smarter, not harder.

Want to know more about Property Brokers' superior property management service? Check out our FREE guide here!