As sellers fail to sell their homes, a surge of rental properties has come onto the market across all regions, says First National’s John Stewart, although precise numbers are hard to quantify.
Thursday, July 3rd 2008, 9:12AM
by The Landlord
“Our property managers have experienced a small increase in the number of rentals but many people have chosen not to use a commercial property management company and are going it alone. One of our Rotorua agents noticed an increase of available rentals on the TradeMe site rising by 300% in the past two months – from 70 to 220.”
Stewart says First National expects some private landlords to transfer from private management to commercial property managers once they discover what it’s like to be a landlord.
“One of our members recently had a first-time landlord approach him and ask for help to get back $1,400 in unpaid rent. Property investors who stretched themselves to purchase and don’t have the money to make their property attractive to tenants may be caught out with longer vacancy periods.”
Stewart expects scruffier properties to remain vacant longer.
“Owners may have to spend more money to make sure their rentals are up to scratch.”
While more rentals have arrived on the market, rent prices are not dropping as consistently as you might expect. “Most rental prices around the regions appear to be static,” says Stewart.
In Christchurch, First National agents have more rentals on their books, but they expect the pressure to come on as supply increases.
In Wellington’s northern suburbs, rental prices have increased by 8% from last year. In April/May last year the average rental for the area was $370 per week and for the same period this year it was $400. In Auckland’s eastern suburbs, rental prices have risen by about 10%.
But there have also been price reductions in places like Alexandra and Tauranga.
