The number of rooms in flats being advertised for rent is rising sharply in the main centres but fewer potential flatmates are looking at renting them, according to the latest data from TradeMe Property.
Across the entire country, the number of rooms to rent (flatmates wanted) advertised on Trade Me is up 18% compared to a year ago, with Auckland having the biggest increase at 38%, followed by Christchurch 26% and Wellington City 5%.
However demand for those rooms, as measured by online enquiries on the website, was down 57% nationally, with the biggest decrease in demand occurring in Christchurch -67%, followed by Auckland -63% and Wellington City -62%.
Trade Me Property Sales Director Gavin Lloyd said there were several factors that could be contributing to the influx of listings and the drop in demand, including the record number of young people leaving the country to seek better opportunities overseas, and more young New Zealand opting to keep living at home with parents or relatives because of the high cost of living.
"It's a new tenant's market with many more options available," Lloyd said.
"This allows those looking to move into an existing house to be more selective."
His advice to people looking to fill a room in a flat was to start viewings as early as possible, to get the best chance of finding a new flatmate that was the right fit.
"If you're struggling to find someone, it may be worth considering adjusting your rent to make the room more affordable for someone coming in, especially in Auckland where there is a stark difference between supply and demand," he said.
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77 Comments
I have to ask: Is TradeMe still the main conduit for locating flatmates? I genuinely don't know myself, but I would have thought various social media sites would be more instantly appealing to the younger demographic, in much the same way specialist internet forums died down markedly with the rise of Facebook groups.
For example, we're selling a rural product online, and our hit rate for FB vs TM is something like 7:1.
"It's a new tenant's market with many more options available," Lloyd said.
"This allows those looking to move into an existing house to be more selective."
Seems that the pricing power has swung into the favour of tenants after having been in the favour of landlords for so long.
Landlords under cashflow stress may find that their operating costs are increasing faster than rents. Landlords may be unable pass on higher cost increases to tenants and learn that their pricing power is determined by market forces.
I listed a room in a house on Trademe a month or two ago and it went fairly quickly, something like 2 weeks listed for higher than what market was asking, and it went pretty fast. I guess people are asking either too much or the existing 'flatmates' are not desirable.
I don't think people in flatting situations want to necessarily live with children or another family.
There's been a lot of new houses added in the last few years.
Them's that haven't cottoned onto the effects of the NPS/UD, MDRS, new zoning rules, etc. that all allow for far higher densities will get burned buying 'rentals' at current prices. I look forward to the day in 20 years time and people will say, "Remember back in the good old day where property doubled every 10 years and tax free capital gains made you rich? Those were great times."
I live opposite a 3 bedroom home with 17 tenants in it. All immigrants.
I know of 6 young people that have left NZ for good in the last 12m, all Auckland based. Each one has left a room in a flat. We're replacing them with people that are happy to share a bedroom with 5-6 others
Go figure. Make property into a ponzi that restricts potential of people and they'll leave. Replace them with poorer people that won't pay that much, a new problem emerges.
Who could've thought this might happen lol
I live opposite a 3 bedroom home with 286 tenants in it. All immigrants.
I know of 165 young people that have left NZ for good in the last 12minutes, all Auckland based. Each one has left a room in a flat. We're replacing them with people that are happy to share a bedroom with 50-60 others
Go figure. Make property into a ponzi that restricts potential of people and they'll leave. Replace them with poorer people that won't pay that much, a new problem emerges.
Who could've thought this might happen lol
Having sold up a couple of years ago i have been renting rooms on the shore, Noticed the room i vacated a few months ago is still being advertised .Also most of the rooms for rent are in your bog standard kiwi homes not the newer chinese townhouses which i find a bit surprising as these have been rented out as they have failed to sell in the current market . Can only assume families are in these and flatmates are in the older type places and possible leaky plaster ones
I know a few flatters / renters who much prefer a well located newer townhouse over a crappy old house. Flatters and singles typically don't need a section, so why pay lots to rent an old place worth $2 mil+ when there is a cheaper / newer / warmer / quieter option available.
Auckland (and probably the other main centres) really needs an area close to the CBD which is almost completely townhouses for younger people to live in. Unfortunately those areas are supposedly heritage / viewshafts / too nice / too rich to apply market forces to.
Why? Young people just need access to public transport to the city, so anywhere near a train station will do. They dont need to be ripping up nice character areas and replacing them with low quality housing that will become future slums. You can stick those anywhere.
Seems backwards to have the young who want to be out and about and contributing to night life, and who would be able to use active transport, stuck out in the sticks to maintain a dead zone inhabited by elderly people wedded to their cars.
Why not build some nice character areas out in in the sticks, near a highway?
If they want to be in the city, then they can live in an apartment in the city. Build up in the CBD, instead of destroying suburbs like Ponsonby/Thorndon/Merivale. If they dont want to live in the city, then live close to a train station at the end of the line. Makes no difference if you are one stop from the CBD or ten.
"Yield slip sliding away" Nah surely not. Someone once said here that in times of capital loss, Landlords just raise rents to compensate their pockets. The methodology was based on the devaluation rental car companies endure - priceless!
Back in reality land, much like Landlords that are well capitalized and in it for the long term charging reasonable rent for well maintained digs, good tenants are also like gold and make for happier lives all round. Smart Landlords will willingly reduce rent to retain good tenants.
Silly Retired Poppy....
Yields are only used for the valuation of commercial property....
Residential uses other more metaphysical concepts, that Yvil is still yet to explain to me....
(I have a spreadsheet but I do not understand the FINDING a bigger sucker calculation)
As I've argued before, there is more underutilisation of dwellings in boom times. Not what a naive 'supply and demand' model would suggest, but the housing market is way more complicated than 'economics 101'.
Those that are banking on ever increasing rental prices paying for their ever increasing holding costs are in for a bad time. Part of the process of this market correction is a return to better utilisation (and that means more competition in the long term rental market).
As an aside, I'm seeing anecdotal evidence for a major downturn in AirBnB bookings. Many are going to opt for the security of the long term rental market in response. Just one example of how utilisation will improve as the market corrects.
All these negative, whining comments about how bad things are. Great time to dip your toes in the water and take a few risks. Anyone been to Westgate shopping centre recently and noticed the huge amount of construction underway?
It doesn't matter how bad things are, there's always opportunities. Buy in gloom, sell in boom.
I think you've misunderstood the tone of the comments. While they may seem negative and critical, they actually express hope. With prices steadily decreasing, there's optimism that the situation will improve for the country and for those struggling to afford housing.
It's really curious to me that so many people with 'man' in their Interest.co.nz names come across as self-centered, narcissistic, I've got mine so screw everyone else type people.
LMFAO I’m not a socialist, I just have a strong sense of justice compared to the shit constantly promoted by some on this site.
These are the same people who complain when their businesses can’t survive without interest deductibility and low interest rates. They’re the ones who buy multiple properties using equity (essentially a pyramid scheme) and then whine when their businesses don't make money from rent, since it was always about the capital gain.
I'd say you're definitely a socialist. I came from a pretty average background, so I know what living without is like. My parents bought second hand presents for my birthdays.
I've been renting properties for decades, and if it's a 'pyramid scheme' as you allege, how come I didn't go broke?
It's an investment, right, so why doesn't housing investment get the same tax treatment as all other 'investment property'?
Because your friend, Comrade Arden, decided otherwise.
Increasingly shrill there Wingman, getting nervous about your wife's 100% guaranteed 1000% profit, 30% discounted, definitely not a floodplain, all adjacent sections selling like hotcakes 30% over CV, property.
Chill man, keep the faith, you're going to make a killing.
"I've been renting properties for decades, and if it's a 'pyramid scheme' as you allege, how come I didn't go broke? "
Your comment perfectly explained it. If you can't see it I'll try ELI5 for you - did you consider just maybe you got in on the pyramid scheme on the ground floor! The first people in a pyramid typically do very well.
I've never slept more soundly than since I purchased those few acres in Riverhead, and that's a pretty good indication I've got it 100% right.
If it's good enough for Fletchers and The Botanic to spend a few hundred million in Riverhead, I guess it's good enough for me to spend a couple.
Ever been to West Harbour? I was the very first person to buy a waterfront section there, along with 3 other sections. How canny was that?
Did I make a killing? Is the Pope a Catholic?
I'm driving to Riverhead shortly, you guys are giving the place so much exposure I'll probably run into a few interest.co.nz subscribers scouting the place out.
There's loads of other work going on in the area - massive roadworks, school extension, new subdivisions, the Country Club Huapai, Westgate, next to NZ's most expensive suburb......can't miss.
BTW, Fletchers aren't in it on their own, it's a consortium of 3 very big developers. Neil Group and Matvin Group.
How on earth is a pyramid scheme!
Any business relies on each stage making money until the final user pays more than the initial business.
Is this a pyramid scheme.
The problem is the previous government kept giving away borrowed money to people for staying at home and we also have too many reliant on welfare which is a failure for the country.
We need people to start taking care of their own lives, be more responsible and stop moaning and not being jealous of what other people have achieved.
Wingman, unfortunately too many do not want to go out and improve their financial position.
Far easier to keep moaning about the price of houses, and all these people are leaving and going to OZ!
I personally haven’t known anyone I know in Chch that has left in the last five years.
Of course it is financially difficult for many at the moment due to mismanagement of the country by the previous government and now too many are paying for it.
I can appreciate it is not easy to buy in Auckland and Wellington etc. but it is even harder in the Australian cities, the cost of living is worse from what I have seen.
The market is the market and you can not change the market on your own and by moaning and groaning just puts you into a head space that is not good.
As Wingman says, there are opportunities in every market and we are certainly actively involved at the moment and yes it is profitable in Chch.
Not too sure how property investors are narcissists, got me beat?
There are always opportunities in every market, no one would deny that. They seem to be very binary in their thinking. For example, CN IT or RP will discusses a hypothetical FHB scenario and all they can offer is buy buy buy right now no matter what. They will never provide specific examples or links to data that refute other arguments. Don’t get me wrong, someone who says the market is going to zero with no evidence or data is just as annoying. Commentators like Jfoe are really good examples of what makes these comment threads educational. Robust discussions and data to back up the point of view and always willing to address counter arguments. If I want utter crap comments, I’ll stick to Stuff and other terrible forums.
Please remember that wingman and Theman3 are involved in the property business (construction of newbuild, property trading, etc). That is their experience and perspective - they're in the profit seeking side of property. There are others in that category such as property investors, builders, and developers who are also commenters who speak from that perspective.
This is very different to many other commentators who are speaking to an owner occupier buyer audience buying in the existing dwelling market or the new build market for personal use primarily, & not primarily for profit. (I.e the majority of the population of NZ)
That isn't true, I'm not a builder or trader, I'm a casual observer that's on my 5th new build, I've owned and renovated a number of others, including 2 industrial properties.
It's been an interesting and profitable hobby. I was involved in the aviation industry before I retired.
If you're not looking to make a profit what the hell are you doing tinkering with property?
P.S. I've never had a mortgage that wasn't tax deductible...have a think about that.
“Never had a mortgage that wasn’t tax deductible”…. Businesses use loans, not mortgages. Tell me again why you should load your personal debt on to properties and get favourable tax treatment.
While I am at it, West Harbour is a shit hole. If you like water front you’ll know that there is no such thing out there. Mangroves, narrow channels and a shitty marina. Prices on those places don’t reflect the premium for water front.
I sold my last place at West Harbour about September last year. Cost me $140,000 total to build and sold it for $1.3m. And got years of rent off it.
I made a fortune in West Harbour, and that's what counts. Who cares whether the property's in Otara or Remuera, the aim is to make-a da moolah.
Zachary, unfortunately it seems like if you are financially well off investing in property and providing shelter, we have done something wrong?
Now I would love it if everyone who wants to and is prepared to work to achieve a home, however it just does not seem like a lot on here are actually in that state of mind.
Reality is it would be far easier if I sold every property and kept the money in something far easier than rental property ownership, it is not all beer and skittles and I know many have put in so much work and time , that they deserve their financial gains.
Whst do know is that the Chch market will only go up as building costs dont drop, demand is huge and it is a happy city.
Because I have a point of view that is different to most on here, I am a Troll?
Seriously, if people want to moan and grown about things like they have for the last decade and think things are going to change, then clearly I am just wasting my time.
I wish you all the very best and hope that all your financial wishes come true.
Prefer to associate with people who wish to get ahead, have a good life, as reading the moans continuously is rather brain numbing, and achieves nothing
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