The earthquake that struck Christchurch, New Zealand, in February 2011 is still sending shockwaves through the country’s property market, particularly with regard to rental properties in the stricken town. Supply there had been contracting before the quake hit, and now landlords are reporting a 42% increase in inquiries for rental properties. Experts recommend prospective renters to have all of their paperwork, applications and monies in order because landlords have the pick of the litter when it comes to tenants. The trend is reverberating through other areas like Wellington and Auckland, where some rentals are on the market for six days or less. For more on this continue reading the following article from Property Wire.
There is a severe shortage of rental properties in Christchurch, New Zealand, with the supply down 40% compared to a year ago, according to figures from Trade Me Property.
Brendon Skipper, head of Trade Me Property, said supply had started to contract as far back as September 2010 and had never recovered.
‘When the first major earthquake struck, we saw supply begin to come under pressure, and the February 2011 earthquake exacerbated the shortage. Supply has continued to plummet, and the current level of rental inventory for the city is the lowest we have seen for years,’ he explained.
Landlords in the city have seen a 42% increase in the number of enquiries from potential tenants. ‘It is a classic case of supply and demand, and is now flowing through to rent. We've seen the average asking rent go up 15% Christchurch, well ahead of the national increase of 4%,’ explained Skipper.
His advice for prospective tenants was to have all references, bonds and forms at the ready, as landlords had the luxury of choosing tenants who were low maintenance and easy to deal with.
Elsewhere, the rental picture is much tamer. Overall listing supply is down 7% across the country, with Wellington down 12% and Hamilton down 9%. Supply remains strong in the student cities of Palmerston North where it is up 13% and Dunedin where it is up 17%.
Across New Zealand, the average asking rent was up by 4% compared to a year ago, underpinned by Christchurch but also reflecting a 7% increase in central Auckland.
Skipper said although more listings were coming onto the portal they were not sticking around for long. ‘So far this year, about a quarter of all listings in Auckland, Wellington and Christchurch were onsite for six days or less, which is great for landlords but another indicator of that strong tenant demand,’ he said.
Skipper said there were signs that pressure in the rental market was pushing prospective tenants to consider the option of buying a house. ‘Looking at our property for sale activity, we can see demand from potential buyers has increased by 13% over the quarter, while sales inventory remains flat,’ he pointed out.
This article was republished with permission from Property Wire.