Wellington landlords “in box seat,” with growing shortage of rental properties

Press Release – Trade Me Limited
The rental market in Wellington declined by 17% in the last quarter of 2013, compared with the same period last year.

“We saw a dip in properties for rent in Wellington, primarily driven by a softer apartment rental market. There were several new apartment complexes looking for tenants this time last year, but it’s quieter this year,” said Trade Me Property’s Jimmy McGee.

Tenant enquiry levels were up by 21% across the region with Newtown (+41%) and Karori (+24%) proving the most popular. “With the supply side tightening, it’s no surprise to see the demand from prospective tenants increase. Landlords in Wellington with good properties are in the box seat at present,” he said.

Nationwide the number of properties available for rent in the three months to December was down 2% on a year ago. The level of enquiry from tenants was up across the country, rising 5% on the same time last year, while average rent was up 6%.

Christchurch continued its “record-level growth” with the number of listings in the city increasing 24%. The central city had the biggest jump in available properties, with listing numbers up 37%. St Albans and Merivale were up 12% and 9% respectively.

“There were nearly 1,000 more listings on Trade Me Property in Canterbury in the final quarter of 2013 than a year ago,” Mr McGee said. “The rebuild phenomenon continues to drive listings growth and rent increases in the city. We’re still seeing a significant proportion of short-term, high-rent listings driving the market as displaced home owners move out for insurance repairs.”

While Canterbury’s average rent remains the highest in the country ($535) underpinned by short-term rentals, its median rent was $453, below Auckland’s median rent of $480. “A number of high-priced properties pushed Canterbury’s average rent to the top of the list,” said Mr McGee.

Mr McGee said the Auckland rental market was “steady as she goes” compared to the other major metropolitan areas. “We’ve seen the number of available listings dip 3% on last year, average rent is up 3% across the region and tenant enquiries were up 2%,” he said. Mount Roskill saw the most growth in the region with listings up 31% and a corresponding decline in the average level of enquiries per listing, down 20%.

Mr McGee said one of the key drivers of the rental market may be the banks’ new loan-to-value lending ratios. “As the LVR rules lock potential house owners out of the market, more people will be forced to sit tight in their rental homes as they keep saving hard for a deposit.” But Mr McGee said the bigger driving force may be the improvement in the economic outlook. “There’s strong underlying demand for rental properties. Rising consumer confidence means that asking prices may continue to rise strongly.”

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