20 Nov 2017

Renters caught out as supply falls

4:41 pm on 20 November 2017

People needing to rent a house are finding it tough across the country, with too many would-be tenants chasing too few rental homes, according to TradeMe figures.

houses

houses Photo: RNZ

Renters are finding it particularly hard in the capital, with the total stock of rental properties in Wellington down by 69 percent.

TradeMe Property spokesperson Nigel Jeffries said a lot of property owners were not offering rentals in the first place, leaving potential tenants with nowhere to go.

"At a national level the total stock [of rental properties] was 50 percent lower than it was a year ago."

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Photo: www.quinovickentterrace.co.nz

The drop in the number of rental properties was made worse with demand up across New Zealand, Mr Jeffries said.

"If you look at the volume of tenants looking at properties, what we can say is that the average rental property is now receiving 28 percent more inquiries in the first week that it is listed, compared with a year ago."

Mr Jeffries said people renting homes would now stay in them for longer, when earlier they would already have moved on to home ownership.

High prices for homes and tough lending rules for banks left them needing to rent for longer than earlier generations had to endure.

It also meant they were not vacating their rental home in favour of a newer generation of tenants, because they had nowhere else to go.

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Photo: www.quinovickentterrace.co.nz

Wellington Property Investors Association president Richard Bacon said this problem could be exacerbated if the Labour-led government followed earlier patterns and hired more public servants - crowding the capital still further.

"We are coming into summer and there is always a tightening of the rental market in the summer and I think we are going to have a tight rental season.

"The new government is likely to bring in more people to the Wellington CBD looking for property. It will play into the tightness of the market."

Mr Bacon also believed a year of free tertiary education - as promised by Labour - could attract students and add to the pressure and see rents rise even faster.

Trademe figures showed rents rose 7.1 percent annually in Wellington.

That was almost four times the price rise for just about everything else, with the Consumers Price Index rising just 1.9 percent in the past year.

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