Landlords have not realised the urgency with which they need to insulate their rental properties.
From July 1, 2019, rental properties must have ceiling and underfloor insulation, wherever possible.
Those that do not comply can be hit with a $4000 penalty.
The Insulation Association of New Zealand said there were still 170,000 rental properties around the country that needed to be insulated.
President Stu Henwood said its member companies reported limited demand from property investors. They had insulated only 10,000 out of the 180,000 rental properties the Ministry of Business, Innovation and Employment indicated needed insulation.
He said members of his association had assessed more than 36,000 rental properties and almost 60 per cent did not meet the new requirements.
"This leaves a mountain of about 170,000 uninsulated rental houses to be insulated in less than two years. At its peak, the insulation industry was insulating about 50,000 – 60,000 houses a year so there's a serious risk many landlords will miss out and risk penalties when the deadline for the new tenancy regulations kicks in," he said.
Real estate firm Barfoot & Thompson said a typical 100 sq m property would cost $3000 or more, plus GST, to insulate the floor and ceiling.
"We want landlords to think seriously about insulating now. We also know from tenant feedback that it is a drawcard for rental properties, making them warmer, dryer and cheaper to heat," said Barfoot & Thompson director Kiri Barfoot.
But Andrew King, executive officer of the New Zealand Property Investors Federation, said the numbers could be overstated.
He said the MBIE data looked to be based on the numbers of homes where the government subsidy had been used to insulate. Landlords could get half-price insulation if they had low-income tenants in houses built before 2000.
But he said a lot of landlords had opted not to use it. "It was 50 per cent off but it was 50 per cent off a very, very inflated price. A lot of investors found they could get other installers who were not government-approved to do it for a cheaper price. A lot of them did it themselves for an even cheaper price," he said.
"The whole idea is the less you spend on this the less pressure there is for rent to go up."
He said a survey of his association's members showed 8 per cent of properties were not insulated.
Another survey after the regulations were revealed showed 17 per cent would need to do some work to meet the new standards.
But he said he was more concerned about investors who were not association members.
"We need to realise that 75 per cent of residential property investors only own one property. They are ordinary working people who might have bought an investment property for their retirement. They've got a job, lives. This is just one aspect of their lives and they may not be giving it the attention it deserves."
He said it was good to remind investors that they needed to check whether their properties complied with the new rules.
"It's better to check now and make sure you're compliant and if not get on to it very quickly."