Renters in Christchurch are finding more frequently prices out of the market as rental prices soar on New Zealand’s South Island. A new report shows prices increased 26% in the last 12 months due in large part to an imbalance between supply and demand. Many other cities are also experiencing rate increases, while the Auckland market has remained flat. Experts say more people want to buy homes in Auckland rather than rent, which is causing a decrease in demand in the city. For more on this continue reading the following article from Property Wire.
Rents in Christchurch have increased some 26% in the last 12 months, well above the national average property rental rises of 4%.
The latest price report from Trade Me Property for the three months ending in June compared with the same quarter last year show that people are being priced out of the Christchurch rental market as demand exceeds supply. Listings of houses for rent in Christchurch are down 34% but demand is up 47%.
‘The news for prospective Christchurch tenants is still grim,’ said Brendon Skipper, head of Trade Me Property adding that there are ‘pressure cooker’ suburbs such as the central city, Linwood and St Albans.
‘We’ve seen the number of properties available for rent in these three suburbs plummet more than 40% compared with a year ago and, on the flipside, the properties that do get listed are attracting huge volumes of enquiry,’ he explained.
While shortages of houses to rent in the Auckland rental market have hit the headlines in the past, Trade Me found listings are up 20% while demand is down 18%. In Manukau, listings are up 21% while demand is down 4%.
The reports also shows that North Shore listings are up 7% and demand down 2% but the Waitakere market is much tighter with listings down 10% and enquiries up 7%.
‘Autumn has wound down and the winter hibernation period sees tenants hunker down so we often see listing numbers swell and demand taper off,’ Skipper said.
He pointed out that one surprise is the increase in listings and reduced demand in central Auckland hasn’t led to lower asking rents. Average rents in Auckland city are flat while Manukau’s and Waitakere’s are up 4% and North Shore’s are up 5%.
One reason demand has softened in Auckland is that tenants are looking to become home owners, he said. ‘Over the quarter, we’ve seen a 16% increase in enquiries from potential buyers compared to the same time in 2011 but they’ll be finding the market challenging too,’ said Skipper.
‘Listings are flat and there’s plenty of healthy competition in Auckland in particular. Of course, that means it’s a good time to list your property if you’re thinking of selling,’ he added.
Elsewhere in the country, listings in Palmerston North are up 30% and rents are up 3% but demand is down 14%. In Dunedin listings are up 17%, rents are up 3% and demand is up 4%, while in Hamilton listings are down 2%, rents are up 1% and demand is up 1%.
In Wellington, listings are up 1%, rents are down 2%, the only major centre to show a decline, and demand is down 4%. In Lower Hutt, where rents are unchanged, listings are up 15% but demand is down 4%.
Skipper said landlords in areas in which listings have shot up shouldn’t panic because more than half of all rental listings stay on Trade Me for 20 days or less.
This article was republished with permission from Property Wire.