26 Jun 2015

Signs Christchurch rental market cooling

6:33 am on 26 June 2015

The heat appears to be going out of the Christchurch rental market as rebuild workers settle in and people move back into their repaired homes.

230414. Photo Diego Opatowski / RNZ. Christchurch. Houses on the hills in Lyttelton.

Houses on the hills in Lyttelton, Christchurch. Photo: RNZ / Diego Opatowski

The Ministry of Building, Innovation and Employment said the city's average weekly rent was already down from $430 at the beginning of the year to $408.

TradeMe said its figures showed there were 300 more rentals on the market than at the same point two years ago, though average rentals were more like $440 a week.

TradeMe head of property Nigel Jeffries said it was about time things cooled off.

"If you look at the change in rents over the last five years, Christchurch has stood out," he said.

"May 2010 to May 2015, there was a 47 percent increase [in the average rent], and that's compared to a national increase of 23 percent."

He said it was smaller properties that were becoming available, rather than family homes.

Pineacres Holiday Park in Kaiapoi owner Wayne Curragh said his 170 cabins and caravans were always full.

He said families were no better off.

"Every day of the week I'm having people ring up to ask for rooms and I'm having to turn them down," he said.

"A lot of them are people who are finally, after five years, getting their homes fixed, but they can't find anywhere to go in the meantime because accommodation is so short.

"I found one the other day - the landlord wanted a $5000 bond - who can afford that sort of thing?"

Owner of property management company Ray White McPherson, Tony McPherson, said he was seeing more rentals on the market than before the quakes.

"A three bedroom house which might have been around the $500-a-week range is now in the mid $400's or even a bit below that," he said.

Economist Robin Clements, from UBS Bank, said prices could fall even further, but he warned that wouldn't always be the case.

"The flow of workers - it's less clear if there'll be another surge when the major projects get underway like the Convention Centre," he said.

Meanwhile, the latest Real Estate Institute figures showed house prices in Christchurch had fallen almost 5 percent in the past year.

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