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Rental supply on the up
Our Trade Me Property team has run some numbers and spreadsheets about the state of play in the national rental market. Here's a short media release setting out their findings and observations.
The national supply shortage for rental property has come to a halt in many parts of New Zealand, according to an analysis of the listings on Trade Me Property in the past three months.
Across the country, the number of rentals listed in the quarter to 31 December was up 1% compared to the same period in 2009. This was a turnaround after declines of 12% and 18% in the previous two quarters.
The resurgence of rental property listings was led by the major metropolitan areas of Wellington and Hamilton, and backed up by increases in listings from regional areas such as Taranaki, West Coast and Marlborough.
Brendon Skipper, the Head of Trade Me Property, said there were clearly some “reluctant landlords” with unsold property who had turned to the rental market. “Confidence in the property market is coming back, but it’s slow and owners are keen to see some income to tide them over until the recovery takes hold. Supply will undoubtedly tighten up again once the confidence returns and sales start to lift again.”
Supply issues in Auckland and Christchurch
The most significant drops in supply were in Auckland City and Christchurch (both down 16%).
Mr Skipper said Auckland featured here as it remained the most likely destination for Kiwis, both returning and new. “The city is a magnet for young people returning from their OEs, students at tertiary institutions, staff moving to head office, and for migrants starting a new life in New Zealand. All of these people are seeking out and soaking up the available rental accommodation. We’re hearing some gobsmacking stories about the demand from prospective tenants for rental properties in some areas.”
He said supply continued to be tight in Christchurch after the quake had taken a toll on housing stock in the city. “With less rental homes and apartments available, those that are up for rent are hot property in the city at present.”
Demand capped, rent ticks up again
The upward trend in the nationwide supply of rental housing has kept a cap on demand, with the number of enquiries per listing at virtually the same level when compared to the same period last year.
There was good news for landlords and bad news for tenants across the country, as the average weekly rent went north again.
“It was up 3% to $378 per week with rental properties boasting 3 bedrooms or more leading the way,” Mr Skipper said. “Although the rent increase looks like it might be tailing off given it was up 5% in the previous quarter, it’s worth noting that it still outstripped the Consumers Price Increase of 2.3% in the quarter.”
Apartments: a different story
In the apartment market, the state of play was quite different from the broader New Zealand tenancy market. Central Auckland – which dominates the apartment market – saw supply down 26% and demand from tenants up 24%.
In contrast, there was a 21% increase in the number of apartments listed in Wellington, and a 12% decrease in demand.
Mr Skipper said the market would tighten up with the return of students and Government employees chased rental stock in January and February.
2010 was flat
Looking at the 2010 calendar year, Mr Skipper said the New Zealand rental market was best described as “lukewarm” compared with 2009. “The high water mark for listings was back in the first quarter of 2009. Over the 12 months of 2010 we saw 12% less listings and as a result demand was up by 15%.”
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