National rental supply was down 7% on a year ago in the September quarter, driven by significant drops in the number of properties listed in Auckland, Wellington and Christchurch, Trade Me says.
Head of Trade Me Property, Brendon Skipper, said the fall in the number of properties listed for rent had been led by major metropolitan areas with Auckland down 13%, Christchurch down 27%, and Wellington down 30%.
“As the rental market tightens, tenants can expect to be competing against plenty of other prospective tenants for rental homes,” Skipper said.
“We’ve already seen this start to occur, with the number of enquiries sent to landlords via the site up 10% nationwide on a year ago, and spiking more than 20% in Manukau, Wellington and Christchurch.”
One factor that had emerged over the quarter, alongside the decline in rental properties, was a rise in homes listed for sale, Skipper said.
“Homes listed for sale are up 14% on the same period a year ago. It’s a bit early to get carried away so we will be watching to see if a trend develops, but we could be seeing the impact of Government tax changes or confidence in the for sale market starting to return,” he said.
Tightening; what Trade Me said ...
"In Auckland supply remains tight with a 13% drop in listings, a consistent trend in the area for 6 months. The number of enquiries per listing has increased by 10%, with a similar increase in prices. This is likely to ease as we head into summer and World Cup fever subsides. It’s a similar story on the North Shore where listings dropped by 12%. Rental asking prices have risen by 7%. Demand has also increased by 7% (after a 2% decline last quarter)."
"In Christchurch listings took another hit and demand levels increased by 27%. Although it has obviously become a hard place to find a home, there are no signs of landlords taking advantage of the situation – asking rents have only increased by 6%, in line with the national average."
"Wellington’s 30% listings drop was the largest decline of any of the major centres. Enquiries from prospective tenants leapt 23%, and so far asking rents have remained relatively flat but look set to come under pressure over coming months."
33 Comments
More peasants realising the right way is the rent way and to an increase in the rent subsidy handed to landlords by govt...plus the landlords operate a business and so they will claim all the costs involved as legit...as they are...leading to falling govt tax revenue.....fewer peasants owning or wanting to own will not be good news. Think of the massive reno market...why paint and paper and tart stuff up...the DIY market shrinking like an old balloon.
This guy always put the cart before the horse...maybe he don't know which is cart and which is horse....
Rentals decreasing and sale unit increasing means you cannot make anymore money in the rental business...so you give up and put it up for sale !!......the next fool who bought it has to rent it out again ...unless he was renting before in which case he won't be renting any longer...and the reduction in rental units won't make any difference.....
I never said there will be a reduction of rental stock...only in relation to the person who sold it.
On the contrary, my opinion is that rental stock will increase DESPITE the low building rate as owners in debt problems consolidate and move their owned stock into rental stock...especially if you are underwater and cannot afford to top up your losses with the bank.
Some ownders i know are moving into rentals and renting out their units instead as a way to improve cashflows with their banks.....
As for you comments below, the reason house building is not increasing (doubtful if really true) is because they cannot be sold...and they cannot be sold because they are too expensive vis a vis cost of mortgage. The answer (which will come sooner or later) is lower property values either due to lower land cost or construction materials/labour cost or both.
To expect rentals to goup just because of reduced rentals unit cannot be logical because rental payment is a function of income and not housing stock....until we reach a point of people living in garages with families.
Think about this way.
When you rent, you have four flatmates, because it is not your house.
After you purched a house, you are not taking flatmates any more because you don't want other people damage your owen house.
So now, One and a half houses are required to accomodating same amount of people.
As the numbers show with fewer houses being constructed and the ones that are being constructed are for owner occupiers, so no rental stock is being created.
Those landlords that have decided to sell for what ever reason, mainly leaving to Australia, are getting better prices from emotive want to be owners, as we know informed property investors dont get caught up in bidding up prices.
Fletchers, Methven, Cavalier are now starting to feel the real numbers, not the anticipated work on the continuos horizon.
with over 2000 kiwi builders now in NSW and Qld get ready for a long term housing shortage and a rise in prices that will make your eyes water.
the erosion of capabilities in the building sector will take a decade to repair.
very few homes being constructed and even less rentals, get ready for long term private rental leases as in the UK, if you cant sign a lease for 3 years your not even eligible.
So Govt accomodation allowances are going to have to rise or Govt will have to underwrite leases or lower wage or beneficiaries wont even be contenders for private rentals.
State intervention to distort the tax rules to get people out of rental property investing, the private sector gets out of of rental property investing, so a shortage of rental housing, especially for the lower income group, so, pursuant to The Nation two weekends ago, now as a taxpayer I have to fork out for building thousands of state houses.
Proving a social(alist) democracy is also a Moronacy.
Just get government and busy-bodies like Bernard and the Big KaTaker, and police state departments like the IRD, out of the damned economy. Let us have laissez faire and the free, classical liberal society.
Just get government and busy-bodies like Bernard and the Big KaTaker, and police state departments like the IRD, out of the damned economy..
Yup, get the government out of distorting the rental market - I agree!!!
Which starts by getting rid of the whole Accommodation Supplement nightmare. Rental prices are higher than they would be if there was no such subsidy to meet these "market rents". I have to laugh when the government uses this wording to legitimate the Accommodation Supplement policy - given the "market rents" would be lower if the large rental accommodation clientele (i.e. beneficiaries and those on low incomes) weren't the middle man for passing on government subsidies to private sector landlords.
So, how do we fix this distortion?
The Big Kahuna = the end to the Accommodation Supplement and the return to real/affordable market rental prices.
Great - you agree the government subsidy is a distortion.
We're getting somewhere!
But I hadn't suggested that the State take ownership of private rentals... quite the contrary, because as soon as they remove the subsidy, the value of those assets will plummet!!!
But, take heart - the lower value means you'll pay less capital tax on them.
Accomodation Suppliment helps adjust for locality, otherwise beneficies in Eketahuna would be getting the same benefit as those seeking work in Auckland.
And indeed in doing so, it not only distorts the rental market, but also the business/employment market.
Let's say there was no unemployment benefit and no accomodation supplement (as per the Big Kahuna proposal). Those without jobs don't have to be proving to WINZ that they are seeking employment - so they don't need to live near the larger volumes of existing employment opportunities if they don't want to. They can move to Eketahuna if the standard of rental accommodation there gets them more bang for their buck (i.e. their Universal Basic Income) than it does in Auckland.
Likely, many would move out of the cities and into the provinces - and they'd likely have bigger sections and could grow their own veggies - maybe even having a housecow or a milking goat too. Land is cheap in Eketahuna - lots of empty small lifestyle blocks. The Eketahuna district council might even make some council-owned land available for communal grazing as a means to attract newcomers to their community - or they could use the now empty community hall as an entry-free all weather community trade and exchange venue.
Soon, two things happen. Auckland employers have to start paying higher wages because there is not a ready supply of anxious WINZ clients lining up in their thousands for a job at a supermarket. And employment opportunities begin to increase in Eketahuna as the retail and services sector expands in accordance with the new migrants from the city.
What's wrong with this scenario? It is the scenario of no government interference in what you choose to do or where you choose live.
It's the Big Kahuna.
Stable, if I had to chose from the two options. But that will be as a result of displacement of talent ( the young) and those with assets to protect ( the older - like Chairman Moa and myself, who I will soon join in Queensland!), and the replacement population for Auckland will be less qualified ( those seeking employment here from other parts of New Zealand, that can't or don't want to seek it o/s) and...poorer, financially ( they are moving from relatively cheaper to more expensive). What I see about me, is a replacement ethnically as well. As the 'Chinse buyers' are being replaced by Indian buyers.and from where I sit, it's the Chineses buyer cashing up and selling to the newly arrived Indians! - I note Bank of India openid up here last week, to make it two, with Baroda, subcontinental banks here now.
At Christmas, as your properties no doubt tell you Your Landlord, a mass comes onto the market in Auckland as the students head back to wherever home is. But in February next year, if it's like this year, and the O/S chappies don't come back.... you'll get to see what a real glut of rentals on the market looks like! Take cover, YL...
Your rents are up, mine is down. It happens. And I repeat, my view is that I will never buy again in my lifetime. So crash? Maybe..but I see it more as a never ending grid down, year after year of accummulating loses for property owners; interspersed with periods of false hope and a return to continuous gloom....for owners, of course :)
If property crashes (ie 50%+) and you pay little for it...then why "I will never buy again in my lifetime" ? if the asset is stable in price ie its bottomed and gives a positive return.....
Assuming rents also crash but less than your firesale price buy's Im a bit stuck in saying never buy. I mean you will have to get income from somewhere and ppl will need housing.....
regards
Because there will be no need to buy.Renting will be the most viable use of funds for' shelter', as it will be far more attractive for most of us to employ our capital elsehere. We are going to have a world to rebuild after this lot is over! It doesn't mean that renting-as-a-business will not happen; it will. That's why I believe that rents should always be higher than the cost of owning a similar property, and substantially so. But in my case, I do not see a better use for my funds than in 'non property realated busiess'. Many are going to see the same, and property will be returned to a viable business model at lower and lower capital cost. It has to, as less and less in ploughed into it. ( similar to the way it is in Germany, today)
Psst, Your Landlord, there is no 'shortage' of rentals in Auckland, just a lesser number to choose from. Tenants are staying-put and not returning the stock to market. But they are looking about, as the enquiry levels show, for...cheaper accommodation, I'd guess. That's all in keeping with lower rents in due course, as the more expensive ones have to lower their sights to get some sort of income. And, it's good to see that those who see the writing on the wall are puting them onto the 'For Sale' market..as the stats appear to show.Smart landlords, those ones.....
The article obviously doesn't excite the regular doomsters. It does however reflect my personal experience and regular viewing of Trademe listings. Central Auckland landlords at least should be very comfortable with tenancy rates, rental price trends and interest rates. Tenants on the other hand must be feeling nervous when their fixed term tenancies come up.
Yes, and we can solve this ridiculous market distortion that is Auckland City by scrapping unemployment monitoring by WINZ - leave those without jobs free to move to the country, where their kids have space to run without getting run over, where the air isn't laden with diesel and petrol fumes, and where there isn't a liquor outlet on every street corner.
How - well, just in case you haven't heard before - it's called the Big Kahuna.
Landlords are it's principle opponent.
PS - I'm not a doomster - there is hope in change. Maybe not the change you are hoping for, however!
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